NeurAxis, Inc. (NRXS) Q4 2025 Earnings Call Transcript
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
Overview
The earnings call presented mixed signals. While there's optimism around future revenue growth and the new CPT code, immediate financial performance showed declining margins and increased losses. The Q&A revealed strong adoption among some hospitals but also highlighted barriers like prior authorization delays and unclear guidance. The lack of specific revenue guidance and increased operating expenses adds uncertainty. Overall, the strategic plans for 2026 seem positive, but current challenges temper immediate stock price impact, leading to a neutral sentiment.
Key Financial Performance
Revenue (Q4 2025) $968,000, up 27% year-over-year from $761,000 in Q4 2024. The increase was driven by volume growth from patients with full reimbursement health insurance and a market shift from discounted financial assistance programs to higher-margin full reimbursement patients.
Revenue (Fiscal Year 2025) $3.6 million, an increase of 33% year-over-year from $2.7 million in Fiscal Year 2024. Growth was attributed to increased unit deliveries, driven by both full reimbursement health insurance coverage and discounted financial assistance programs.
Gross Margin (Q4 2025) 85.4%, compared to 86.4% in Q4 2024, a decrease of 100 basis points. The decline was due to reserves for excess and obsolete inventory and the growth of the RED device, which has a lower gross margin.
Gross Margin (Fiscal Year 2025) 84.2%, compared to 86.5% in Fiscal Year 2024, a decrease of 230 basis points. The decline was due to higher discounting, growth in financial assistance programs, and excess and obsolete inventory charges related to the RED device.
Operating Expenses (Q4 2025) $2.5 million, an increase of 20% year-over-year from $2.1 million in Q4 2024. The increase was driven by higher sales commissions, targeted marketing costs, and a temporary commission structure to facilitate growth.
Operating Expenses (Fiscal Year 2025) $10.8 million, an increase of 14% year-over-year from $9.5 million in Fiscal Year 2024. The increase was due to higher selling expenses, marketing costs, and a one-time legal settlement.
Net Loss (Q4 2025) $1.7 million, an 18% increase year-over-year from $1.4 million in Q4 2024. The higher loss was due to increased operating expenses despite higher gross profit.
Net Loss (Fiscal Year 2025) $7.8 million, a 5% decrease year-over-year from $8.2 million in Fiscal Year 2024. The decrease was due to higher sales and the absence of one-time nonrecurring settlements incurred in 2024.
Cash on Hand (End of 2025) $5 million. The company raised an additional $2.6 million in Q1 2026 through equity facilities and warrant exercises, bringing the current cash balance to over $6 million.
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Operating Highlights
IB-Stim commercialization: Continued execution of commercialization strategy for IB-Stim, a neuromodulation technology for pediatric and adult patients. Focus on scaling commercial footprint and reimbursement access.
Category 1 CPT code: Secured a Category 1 CPT code effective January 1, 2026, enabling widespread sustainable growth and reimbursement for IB-Stim.
Federal FSS contract: Granted a federal FSS contract for IB-Stim, allowing sales within the VA healthcare system.
Adult IB-Stim opportunity: Executed agreement with Cleveland Clinic for a randomized controlled trial to evaluate IB-Stim in adult patients with functional dyspepsia.
Insurance coverage expansion: Achieved written insurance policy coverage for 45 million health plan members and expanded to 100 million covered lives. Focused on securing additional payer coverage for broader adoption.
VA healthcare system: Awarded a Federal Supply Schedule contract, enabling access to the VA system, which serves nearly 7 million active patients annually.
Revenue growth: Achieved double-digit revenue growth for six consecutive quarters, with Q4 2025 revenue up 27% year-over-year.
Operational efficiency: Improved gross margins and operating expense leverage. Focused on transitioning discounted device sales to full reimbursement revenue.
Hiring and team expansion: Hiring medical science liaisons, market development specialists, digital marketing experts, and salespeople to support commercial expansion.
Commercial strategy refinement: Refined commercial strategy based on Q1 learnings, focusing on addressing gaps in adoption and scaling commercial infrastructure.
Adult market entry: Strategic focus on adult market through clinical trials and VA system access, while prioritizing pediatric market expansion.
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Risk or Challenges
Insurance Coverage Challenges: Payers do not provide coverage based solely on the CPT code, requiring written medical policy coverage for reimbursement. This creates barriers for institutions with partial or limited policy coverage, leading to fewer patient submissions and slower adoption.
Commercial Footprint Expansion: Expansion of the commercial footprint is essential for growth, but scaling these capabilities alongside growing reimbursement access remains a challenge.
Adult Market Coverage: Broad medical policy coverage for adults is not expected in the near term, requiring a large randomized controlled trial to support future medical policy coverage.
Operational Gaps in Children's Hospitals: Children's hospitals lacking strong insurance policy coverage, a physician champion, or adequate IB-Stim clinic time face barriers to adoption and patient access.
VA System Adoption: Adoption timelines within the Veterans Administration system are slow, with multiple facilities still moving through the process.
Revenue and Financial Challenges: Despite revenue growth, operating losses remain significant, and the company faces challenges in managing operating expenses and achieving profitability.
Staffing and Resource Allocation: Hiring experienced personnel across multiple roles is critical but poses challenges in ensuring adequate coverage and resource allocation.
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Guidance & Outlook
Revenue Growth: The company expects continued revenue growth in the coming quarters, driven by the implementation of the Category 1 CPT code, expanded insurance coverage, and increased patient utilization.
Insurance Coverage Expansion: The company is focused on securing additional payer coverage, particularly for pediatric patients, and expects policy changes and prior authorization improvements to unfold gradually through the first half of 2026.
Commercial Footprint Expansion: Plans to scale commercial capabilities alongside growing reimbursement access, including hiring medical science liaisons, market development specialists, digital marketing experts, and salespeople to support growth.
Adult Market Strategy: The company is pursuing the adult IB-Stim opportunity through a randomized controlled trial with the Cleveland Clinic and leveraging the Federal Supply Schedule contract to access the U.S. Department of Veteran Affairs.
Operational Focus for 2026: The company is prioritizing execution, expanding medical policy coverage, and scaling utilization across hospitals, payers, and federal healthcare systems to drive growth.
Clinical and Economic Value Communication: Efforts to educate stakeholders on the clinical and economic benefits of IB-Stim, including direct engagement with children's hospitals and financial modeling for administrators.
Liquidity Position: The company has sufficient capital to execute growth plans, with over $6 million in cash and additional funding options available.
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Shareholder Return Plan
The selected topic was not discussed during the call.
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Key Q&A
Q:Can you provide a sense of the magnitude of inflection in PA requests and any improvement in PA rates since the Level 1 code?
A:The submission rate for prior authorizations has increased nearly 10x compared to 2025. However, the approval rate is not as high. More specific numbers and approval percentages will be shared in the Q1 call.
Q:Is there a prior authorization required under the large payer coverage policy?
A:No, prior authorization is not required under the large payer coverage policy as long as the correct diagnosis codes are in place. This has been beneficial for revenue in areas where the payer has a significant presence.
Q:Can you provide a sense of the number of new accounts since January 1 and utilization trends among highest adopters?
A:The adoption has been strong among children's hospitals with access to the large payer and IB-Stim clinic time. However, hospitals without sufficient IB-Stim clinic time or with only one payer are slower to adopt. For example, one state with 80% of patients under the large payer submitted 20 patients in 8 weeks, but only 25% were from that payer.
Q:What are your initial thoughts on revenue inflection for Q1 and 2026 guidance?
A:No specific guidance was provided. Management mentioned Q1 could be light or in line with Q4 due to delays in prior authorizations and IB-Stim clinic setup. Detailed KPIs will be shared in the next call.
Q:What is the right way to think about SG&A growth in 2026?
A:SG&A growth will align with expanding commercial capabilities. Selling and R&D expenses are expected to increase, while G&A expenses are expected to remain flat or decrease. Operating expense leverage is anticipated as revenue grows.
Q:What staff and barriers are involved in hospital rollouts for IB-Stim?
A:Staff required includes a nurse practitioner, physician's assistant, or physician to place the device. Barriers include scheduling IB-Stim clinic time, approval from multiple committees, and ensuring financial viability for hospitals. Only one children's hospital is currently treating at capacity.
Q:Can you discuss the Veterans Affairs (VA) program and hiring plans for Q2?
A:The VA program has received strong reception, with several facilities placing orders and reorders. Additional staff will be hired in Q2 as adoption grows. The company plans to integrate VA and children's hospital sales teams by 2027.
Q:Do you have adult data to support IB-Stim treatment in Veterans Affairs Hospitals?
A:Yes, there is adult data, including fMRI studies and data from patients in their 20s. A large randomized controlled trial at the Cleveland Clinic is underway to strengthen evidence for adult use. Results are expected in about 18 months.
Q:What are your plans for additional indications beyond IBS and dyspepsia?
A:The company is conducting a randomized controlled trial for cyclic vomiting syndrome, expected to take 18 months. Another study on post-op pain and opioid reduction in open bowel surgeries is expected to conclude this spring.
Q:Review of Unclear Management Responses
A:Management avoided providing specific revenue guidance for Q1 and 2026, citing delays in prior authorizations and IB-Stim clinic setup. They also refrained from discussing details about additional large payers or specific KPIs until the next call.
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Earnings Word Cloud
The most frequently occurring keywords in this quarter's earning call
FSS contract
Number
VA
adoption
care system
champion IB
channel
code policy
coverage adult
coverage health
coverage patient
coverage utilization
development period
driver
economics
facility
focus
footprint
front
gap
health insurance
health plan
insurer
inventory RED
knowledge
liquidity position
loss sale
marketing
mix shift
note
patient physician
patient reimbursement
payer coverage
people
physician champion
plan member
presentation
progress
research development
selling research
NRXS Transcript
NeurAxis, Inc. (NRXS) Q4 2025 Earnings Call Transcript
Unknown3-19
The earnings call presented mixed signals. While there's optimism around future revenue growth and the new CPT code, immediate financial performance showed declining margins and increased losses. The Q&A revealed strong adoption among some hospitals but also highlighted barriers like prior authorization delays and unclear guidance. The lack of specific revenue guidance and increased operating expenses adds uncertainty. Overall, the strategic plans for 2026 seem positive, but current challenges temper immediate stock price impact, leading to a neutral sentiment.
NeurAxis, Inc. (NRXS) Q3 2025 Earnings Call Transcript
Unknown11-11
The earnings call reveals mixed sentiments. Basic financial performance shows revenue growth but also increased losses and expenses. Product updates, like the RED launch, face adoption challenges, and there's uncertainty in market strategy due to reliance on the new CPT code. The Q&A highlights cautious optimism but lacks concrete details, leading to investor uncertainty. Despite positive long-term prospects, short-term hurdles and management's vague responses temper enthusiasm. Overall, the sentiment remains neutral, expecting minimal stock price movement in the short term.
NeurAxis, Inc. (NRXS) Q2 2025 Earnings Call Transcript
Positive8-12
The earnings call revealed strong revenue growth (39% in Q1 2025) and a significant increase in unit sales (58% YoY), despite a slight decline in gross margin. Operating expenses and losses decreased, showing improved cost management. The Q&A highlighted positive responses from insurance payers and potential for expanded insurance coverage, which could boost future sales. While there are uncertainties in policy writing speed and coverage timelines, the overall sentiment is positive due to revenue growth, cost management, and optimistic insurance coverage outlook.
NeurAxis, Inc. (NRXS) Q1 2025 Earnings Call Transcript
Neutral5-12
NRXS Report
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