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01/10 17:26
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The company demonstrates strong financial performance with increased revenue, gross profit, and net profit. The positive cash flow and substantial cash reserves further enhance financial stability. The raised revenue guidance and promising market expansion initiatives are optimistic. The Q&A section reveals potential growth through accelerated protocols and minority investments, despite some management ambiguity. Overall, the company's strategic investments and market expansion efforts indicate a positive outlook, likely resulting in a stock price increase within the 2% to 8% range.
Quarterly Revenue $13.5 million, a 29% increase compared to the same period last year ($10.5 million). The increase is attributed to strong market demand and the success of the multiyear lease agreement sales model.
Deep TMS Systems Shipped 90 systems shipped, a 43% increase compared to the same period last year. This growth reflects the scalability of the business and strong customer retention.
Gross Profit $10.2 million, up $2.4 million from $7.7 million in the prior year period. Gross margin remained strong at 75%, compared to 74% last year, due to the recurring revenue model and disciplined cost management.
Sales and Marketing Expenses $4.7 million, an increase of $0.6 million from $4.1 million in Q3 2024. The increase is driven by targeted investment in commercial expansion and marketing programs.
Research and Development Expenses $2.4 million, an increase of $0.6 million from $1.8 million last year. The increase is primarily due to ongoing clinical trials and development activities.
General and Administrative Expenses $1.8 million, an increase of $0.3 million from $1.5 million in the prior year period. The increase is partly due to additional legal fees and due diligence costs related to new investments.
Operating Profit $1.3 million, a $1 million increase compared to $0.3 million reported for the same period last year. This reflects the operating leverage in the business model.
Adjusted EBITDA $2 million, up from $1.1 million in the prior year period. This increase demonstrates improved operational efficiency and scale.
Net Profit $1.6 million, compared to $0.7 million in the same period of 2024. This growth highlights the operating leverage as the company scales.
Cash and Cash Equivalents $70.7 million, up $1.1 million from $69.6 million at year-end 2024. The increase is driven by strong collections despite deploying $7.3 million for minority equity investments.
Remaining Performance Obligations $65 million, a 37% year-over-year increase. This growth provides strong visibility into future revenues.
Cash Flow from Operations Positive for the quarter, reinforcing the strength of the recurring revenue model and high collection efficiency.
FDA approval for accelerated protocol for MDD treatment: The U.S. FDA granted an expansion of the treatment protocol for the Deep TMS system to include an accelerated protocol for major depressive disorder (MDD) treatment. This protocol shortens the acute treatment phase, making it more convenient and appealing to patients.
NIH grant for AUD study: The U.S. NIH awarded a $2.5 million grant for a clinical study evaluating the accelerated Deep TMS protocol for alcohol use disorder (AUD). The study will use the Deep TMS 360 system, designed for more comprehensive neuron stimulation.
Global expansion and health system integration: BrainsWay continues to broaden patient access through global expansion and health system integration, supported by regulatory approvals and clinical data.
Strategic investments in mental health providers: BrainsWay made minority investments in mental health providers like Stella Mental Health and Axis, leading to a 50% increase in Deep TMS system utilization at these clinics.
Record quarterly revenue: Achieved $13.5 million in Q3 2025, a 29% increase year-over-year.
Increased system placements: Shipped 90 Deep TMS systems in Q3 2025, a 43% increase year-over-year, bringing the total installed base to over 1,600 systems globally.
Recurring revenue model: Approximately 70% of customer engagements are now multiyear lease agreements, ensuring steady revenue and high customer retention.
Strategic equity investment by Valor Equity Partners: Received a $20 million investment to support minority interest investments in complementary enterprises.
Investment in Neurolief LTD: BrainsWay invested in Neurolief LTD, a developer of wearable brain neuromodulation platforms, with an option to fully acquire the company.
Geopolitical and supply chain factors: The company acknowledges risks from shifting market conditions due to geopolitical and supply chain factors, which could impact operations and financial performance.
Regulatory hurdles: The company's growth and market leadership depend on regulatory approvals and clinical data, which could pose challenges if regulatory requirements change or approvals are delayed.
Strategic investments: The company has made significant investments in minority interests and new technologies, which carry risks related to execution, integration, and achieving expected returns.
Increased operating expenses: Sales, marketing, R&D, and administrative expenses have increased, which could pressure margins if revenue growth does not keep pace.
Customer retention and lease agreements: While customer retention is high, the reliance on multiyear lease agreements could pose risks if customers do not renew or expand their agreements.
Economic uncertainties: Economic conditions could impact customer spending and the adoption of the company's Deep TMS systems, affecting revenue growth.
Revenue Guidance: The company has raised its revenue guidance for the full year 2025 to a range of $51 million to $52 million, up from the previous guidance of $50 million to $52 million. This represents a year-over-year growth rate of 24% to 27%.
Operating Profit Guidance: Operating profit is now expected to be in the range of 6% to 7% of revenue, up from the previous guidance of 4% to 5%.
Adjusted EBITDA Guidance: Adjusted EBITDA is projected to be in the range of 13% to 14% for the year, up from the previous guidance of 12% to 13%.
Market Demand and Revenue Trajectory: The company reported a book-to-bill ratio of 1.3x, indicating strong bookings above billings. Remaining performance obligations under existing customer agreements were $65 million at the end of the quarter, reflecting strong market demand and providing confidence in forward revenue visibility.
Regulatory and Clinical Developments: The U.S. FDA granted an expansion of the treatment protocol for the Deep TMS system to include an accelerated protocol for major depressive disorder (MDD) treatment. The company is also supporting evaluations of accelerated protocols for other indications, such as alcohol use disorder (AUD), with a $2.5 million NIH grant for a clinical study.
Strategic Investments: The company is pursuing minority interest investments in mental health providers and complementary enterprises. Recent investments include Neurolief LTD, with milestone-based funding of up to $11 million and an option for full acquisition. These investments aim to enhance market awareness, R&D capabilities, and access to Deep TMS.
The selected topic was not discussed during the call.
The company demonstrates strong financial performance with increased revenue, gross profit, and net profit. The positive cash flow and substantial cash reserves further enhance financial stability. The raised revenue guidance and promising market expansion initiatives are optimistic. The Q&A section reveals potential growth through accelerated protocols and minority investments, despite some management ambiguity. Overall, the company's strategic investments and market expansion efforts indicate a positive outlook, likely resulting in a stock price increase within the 2% to 8% range.
The earnings call presented strong financial performance with a 26% revenue increase, robust gross profit margins, and a significant net profit rise. The Q&A section highlighted positive developments like potential FDA clearance, strategic financing, and successful collaborations. Despite increased expenses, efficient cost management and strong cash position support financial health. The reiterated revenue guidance and strategic expansions further bolster a positive outlook. Given these factors, the stock price is likely to experience a positive movement in the short term.
The earnings call reflects strong financial performance with a 27% revenue increase and significant growth in Deep TMS system shipments. The company is expanding internationally and maintaining robust margins. Despite geopolitical risks and supply chain concerns, management remains optimistic, supported by positive clinical data and market expansion strategies. The lack of a share repurchase program is a minor negative, but overall, the guidance and financial health suggest a positive market reaction over the next two weeks.
The company reported strong financial performance with a significant increase in revenue and profitability, alongside optimistic guidance. The Q&A highlighted high demand and potential growth in OCD and MDD treatments. While there are risks like regulatory scrutiny and supply chain challenges, the positive market response to new product developments and stable gross margins contribute to a favorable outlook. Despite the lack of a shareholder return plan, the overall sentiment is positive due to the promising market potential and financial health.
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