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01/11 04:08
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call presents mixed signals: strong revenue growth and optimistic guidance are offset by risks related to integration, regulatory scrutiny, and increased expenses. The Q&A reveals management's confidence in BMP and SPRAVATO growth, but also highlights concerns about cash flow and operational integration. The lack of a shareholder return plan and widening losses further weigh on sentiment. With a narrowed guidance and no major catalysts, the stock is likely to remain neutral, with fluctuations within -2% to 2%.
Total Revenue $32,000,000, an increase of 84% compared to $17,400,000 in Q1 2024, primarily driven by the Green Brook acquisition.
NeuroStar System Revenue $2,800,000, with 31 systems shipped.
US Treatment Session Revenue $9,600,000, a decrease of 26% year over year, primarily due to the elimination of Green Brook revenue in 2025.
US Clinic Revenue $18,700,000, representing revenue generated by treatment centers from the Green Brook acquisition.
Gross Margin 49%, compared to 75% in the prior year quarter, primarily due to the inclusion of Green Brook’s clinic business, which operates at a lower margin.
Operating Expenses $26,800,000, an increase of $6,900,000 or 35% compared to $19,900,000 in Q1 2024, mainly attributable to the inclusion of Green Brook’s operating expenses of $9,500,000.
Net Loss Negative $12,700,000 or negative $0.21 per share, compared to a net loss of negative $7,900,000 or negative $0.27 per share in the prior year quarter.
EBITDA Negative $10,100,000, compared to negative $6,300,000 in the prior year quarter.
Cash and Cash Equivalents $20,200,000, compared to $18,500,000 as of 12/31/2024.
Cash Used in Operations $17,000,000 for Q1 2025.
SPRAVATO Rollout: SPRAVATO is now offered in 75 of the 95 Greenbrook clinics, up from 35 clinics at the beginning of the quarter, with implementation progressing on schedule.
Adolescent Treatment Capability: Since receiving FDA clearance in March 2024, the number of adolescent patients receiving treatment has grown 38% in Q1 2025 compared to Q1 2024.
NeuroStar Connection Network: Launched to build awareness of NeuroStar TMS among primary care physicians, with 69% of patients with depression being treated within primary care.
Targeted TV Marketing Campaigns: A successful campaign in Tampa doubled awareness despite interruptions, and a new campaign in Baltimore reached over a million viewers.
Operational Efficiencies: Significant improvements in Greenbrook’s revenue cycle management and the transition to advanced MD patient record billing platform are enhancing operational efficiency.
Cost Synergies: Identified approximately $22,500,000 of annualized synergies post-Greenbrook acquisition, with 95% realized by the end of 2024.
Greenbrook Integration and Growth Strategy: Focused on optimizing Regional Account Managers, standardizing operations, and enhancing patient consultations.
BMP Program Expansion: Over 385 active BMP sites with another 110 working to meet program standards, showing increased patient treatment rates.
Revenue Growth Risks: The company reported a significant increase in revenue due to the Greenbrook acquisition, but there are risks associated with the integration and performance of the acquired business, which could impact future revenue growth.
Regulatory Risks: The company is expanding its treatment options, including SPRAVATO, which may face regulatory scrutiny and compliance challenges that could affect its rollout and revenue.
Supply Chain Challenges: The company sources some components from outside the U.S., which exposes it to potential supply chain disruptions and tariff impacts, estimated at $500 per NeuroStar system.
Economic Factors: The current macroeconomic environment is expected to have a negligible impact on the business, but any unforeseen economic downturns could affect patient access to treatments and overall demand.
Operational Integration Risks: The integration of Greenbrook's operations has led to temporary challenges, including a lag in collections and increased operational expenses, which could affect cash flow and profitability.
Cash Flow Management: The company has increased cash burn due to proactive vendor payments and integration costs, which could strain cash flow if not managed effectively.
Market Competition: The company faces competitive pressures in the mental health treatment market, which could impact its market share and pricing strategies.
Greenbrook Integration and Growth Strategy: Focus on optimizing Regional Account Managers (RAMs), rollout of SPRAVATO in 75 clinics, and standardization of operations across the Greenbrook network.
BMP Program Expansion: Ongoing expansion of the Better Meat Provider (BMP) program with over 385 active sites and 110 sites working to meet program standards.
NeuroStar Connection Network: Building awareness of NeuroStar TMS among primary care physicians to expand patient access.
Adolescent Treatment Capability: Significant growth in adolescent treatment since FDA clearance, with a 38% increase in patients treated in Q1 2025.
Q2 Revenue Guidance: Expected revenue of $36 million to $38 million.
Full Year Revenue Guidance: Narrowed to $149 million to $155 million.
Gross Margin Guidance: Expected to be approximately 55% for the full year.
Operating Expenses Guidance: Expected to be in the range of $90 million to $98 million.
Cash Flow Positivity: Anticipated to achieve cash flow positivity in Q3 2025.
Shareholder Return Plan: Neuronetics has not announced any specific share buyback program or dividend program during this call. However, they have indicated a focus on achieving cash flow positivity by Q3 2025, which may imply future considerations for shareholder returns.
Despite record revenue growth and improved cash flow, the stock may not experience significant movement due to lowered gross margin guidance and unchanged operational efficiencies. Although Q4 guidance is optimistic, the market may remain cautious due to uncertainties in purchasing patterns and margin pressures. The Q&A session revealed confidence in growth segments but lacked detailed operational efficiency metrics, contributing to a neutral sentiment.
The earnings call indicates several positive developments: improved cash management, operational efficiencies, and strong adolescent patient growth. Despite a consistent net loss, the per-share loss improved, and EBITDA showed progress. The Q&A reveals strategic shifts and revenue cycle improvements, with optimistic guidance for Q4. However, some concerns remain, such as slower traditional STIM business and lack of specific targets. Overall, the positive aspects, including the potential for cash flow positivity and revenue growth, suggest a positive stock price movement.
The earnings call presents mixed signals: strong revenue growth and optimistic guidance are offset by risks related to integration, regulatory scrutiny, and increased expenses. The Q&A reveals management's confidence in BMP and SPRAVATO growth, but also highlights concerns about cash flow and operational integration. The lack of a shareholder return plan and widening losses further weigh on sentiment. With a narrowed guidance and no major catalysts, the stock is likely to remain neutral, with fluctuations within -2% to 2%.
Despite the strong revenue growth and optimistic guidance, the earnings call highlights several concerns: declining gross margins, increased operating expenses, and significant cash burn. The public offering raises capital but may dilute shareholder value. The Q&A session reveals unclear management responses, particularly regarding revenue mix and capital outlay, raising investor concerns. The market reaction is likely to be neutral, as positive revenue growth is offset by these concerns and uncertainties. The lack of market cap information limits the assessment of stock sensitivity, but overall sentiment remains balanced.
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