Cardiac AI: Recurring Revenue Reshapes Billion Dollar Market Sizing

The way we value healthcare AI is changing fast, especially in cardiac diagnostics. Growth equity and public market analysts have stopped counting procedures to size a market. They’re now looking at recurring revenue, and recent market activity shows just how much a service-based model can completely rewrite an investment thesis for cardiac AI.

HeartFlow’s Listing and the Revenue Model Reset

Take HeartFlow’s IPO in August 2025. It’s the perfect example. The company pulled in $364M and listed with an implied valuation of $1.54B, which has since climbed to a market cap of $4.28 billion as of September 2026. The market wasn’t just looking at the tech. It was looking at the $176M in full-year 2025 revenue, which showed a 40% year-over-year jump, and the more recent trailing 12-month revenue of $212 million as of June 30, 2026. That growth rate, not the number of scans they ran, is what repriced the entire category and made HeartFlow the new benchmark. HeartFlow’s strength is its per-analysis business model, a far cry from traditional medical device companies that depend on one-time hardware sales. Every time a doctor uses the AI platform, it generates revenue, creating a predictable and scalable stream that compounds with adoption. This is the kind of durable model investors love, and it’s why savvy players like Bain Capital backed HeartFlow during its private years, they saw where the money was going to be made.

The Compounding Effect of Per-Analysis Models

Switching from a one-time transaction to a recurring per-analysis fee completely changes how the market values a cardiac AI company. With traditional hardware, your growth is always limited by the installed base or how many new boxes you can sell. A per-analysis model blows that ceiling off. As more hospitals and clinics adopt the software and weave it into their standard diagnostic workflow, the revenue grows organically. You’re embedding a continuous service directly into the clinical pathway. This is especially true in cardiac AI, where the software is often a SaMD (Software as a Medical Device) FDA definition of SaMD. The value isn’t a physical object. It’s the intelligence that can be delivered again and again without shipping new hardware after the initial setup. So what’s the primary constraint on the business? It’s simply adoption. If you can show consistent use, you can show a compounding revenue stream that justifies a high valuation based on future earnings, not just today’s procedure volume.

Cleerly and the Expanding Cardiac Imaging Peer Set

HeartFlow isn’t the only one playing this game. Cleerly is a key peer in cardiac imaging, focusing on the exact same thing, plaque analysis from the same modality. As a Series C company that’s already raised $578M, Cleerly is absolutely part of the group whose market size will be judged through this recurring revenue lens. The pack of healthcare AI companies that analysts are watching is filled with those who have a clear, believable plan for creating repeatable, billable services. For any analyst in growth equity or the public markets, getting the details of these revenue models right is everything. A company like Cleerly, which uses AI for deep analysis of cardiac images, is set up for recurring revenue, but only if it can get widespread clinical adoption and (this is the big one) reimbursement. Showing investors a clear path to clinical integration and getting paid for it is what separates a science project from a real business.

CMS Coverage Decisions as the Pricing Pivot

All this talk about recurring revenue is theoretical until you can actually send a bill. The moment a clinical analysis becomes a billable service is when the Centers for Medicare & Medicaid Services (CMS) issues a coverage decision on the analysis pathway CMS National Coverage Determinations. That’s the market signal every healthcare AI investment thesis is waiting for before putting a price on a category. Without reimbursement, even the best AI tool is dead in the water. We’re already seeing this happen. CMS set national Medicare payment rates for AI-powered ECG analysis (effective January 1, 2025) and for algorithmic analysis of coronary artery calcium (effective April 1, 2026). As of January 2026, there are 26 CPT codes for clinical AI, and CMS is even proposing a new payment path for algorithm-driven diagnostic software (they’re calling it Software as a Medical Service). A positive CMS decision means the service is medically necessary, which opens the floodgates for other payers to follow. This decision turns promising tech into a viable product. The conversation shifts from “Can this improve outcomes?” to “How fast can we deploy this and start generating revenue?” For cardiac AI, getting a coverage decision validates the technology and solidifies the recurring revenue streams that investors are now using to size the market. Explanation of CPT codes and reimbursement The road from a cool clinical idea to a Wall Street valuation is now dictated by the strength of the revenue model which itself depends entirely on getting those regulatory and reimbursement wins. The HeartFlow IPO and the way we now look at peers like Cleerly prove a simple truth for analysts: cardiac AI market sizing follows the revenue model, and the revenue model follows the coverage decision. It’s a clear sequence that lays out the investment potential for any company in this space.