Neuronetics, Inc. (STIM) Q4 2025 Earnings Call Transcript
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
Overview
The earnings call reflects mixed signals: improved financial performance, but lower gross margins and ongoing CID investigation. Positive aspects include increased treatment and clinic revenues, reduced net loss, and optimistic guidance. However, the Q&A session highlighted risks, such as the CID investigation and vague details on COMP360 profitability and exclusivity. The lack of clear guidance and lower Q1 expectations due to seasonality and weather also contribute to a neutral outlook. The mixed sentiment is balanced by operational improvements and growth in SPRAVATO treatments.
Key Financial Performance
Adjusted Pro Forma Revenue Growth 23% year-over-year increase in Q4 2025, driven by strong capital shipment and momentum across the Greenbrook clinic network.
Full Year Clinic Revenue Growth 28% year-over-year increase on an adjusted pro forma basis, supported by higher field engagement and increased patient referrals.
Patient Referrals in Q4 46% year-over-year increase, attributed to improved referral-to-treatment conversion and enhanced patient engagement tools.
Total Treatment Volume 18% year-over-year increase in Q4 2025, driven by SPRAVATO rollout and optimized billing practices.
NeuroStar System Revenue $4.4 million in Q4 2025, a 15% year-over-year increase on a pro forma basis, with 49 systems shipped.
Treatment Session Revenue $12.4 million in Q4 2025, a 6% year-over-year increase on a pro forma basis, driven by strong treatment utilization growth of 11%.
Clinic Revenue $23.5 million in Q4 2025, a 37% year-over-year increase on an adjusted pro forma basis, driven by growth in NeuroStar TMS and SPRAVATO treatments.
Gross Margin 52% in Q4 2025, down from 66% in Q4 2024, due to the inclusion of Greenbrook's lower-margin clinic business, but highest quarterly margin of the year due to efficiency efforts.
Operating Expenses $26.7 million in Q4 2025, a 1.4% year-over-year increase, primarily due to Greenbrook's general and administration expenses, offset by reduced R&D expenses.
Net Loss $7.2 million in Q4 2025, compared to $12.7 million in Q4 2024, reflecting improved financial performance.
EBITDA Negative $4.3 million in Q4 2025, compared to negative $11 million in Q4 2024, showing significant improvement.
Cash Provided by Operations Positive $0.9 million in Q4 2025, compared to negative $17 million in Q1 2025, reflecting steady improvement throughout the year.
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Operating Highlights
NeuroStar TMS systems: Strong finish to the year with 49 systems shipped in Q4, exceeding the target average selling price for the fourth consecutive quarter. Focused on TMS-ready accounts for faster integration and treatment.
SPRAVATO rollout: Nearly complete with 84 clinics now providing the treatment. Optimized billing practices by state, payer, and clinic, driving an 18% year-over-year increase in total treatment volume in Q4.
COMP360 psilocybin collaboration: Preparing for potential FDA approval of this new treatment for treatment-resistant depression. Initial rollout centers identified, leveraging existing infrastructure for launch.
Greenbrook clinic network expansion: Clinic revenue grew 28% year-over-year on an adjusted pro forma basis. Added 430 new referring providers in Q4, a 25% increase year-over-year, and over 1,300 new referrals in 2025.
Adolescent TMS treatment: TRICARE West expanded coverage for TMS therapy to adolescents aged 15 and older across 26 states, enhancing market reach.
Operational efficiencies: Achieved positive operating cash flow in Q4. Deployed tablet kiosks across clinics for streamlined check-ins and piloted a patient portal for digital intake.
AI in benefits investigation: Leveraged AI to improve claims filing accuracy and speed, increasing first-pass acceptance rates and reducing labor.
Greenbrook acquisition integration: Successfully integrated Greenbrook, creating a vertically integrated mental health platform. Achieved 23% adjusted pro forma revenue growth in Q4.
New therapy options: Positioned Greenbrook clinics to lead in offering new therapies like COMP360 psilocybin and other psychedelic-class treatments for mental health conditions.
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Risk or Challenges
Greenbrook integration: The integration of Greenbrook clinics into Neuronetics' operations has led to increased complexity in standardizing operations, billing practices, and deploying new technologies across a large network. This could pose challenges in maintaining operational efficiency and consistency.
SPRAVATO rollout: The rollout of SPRAVATO treatment across clinics requires careful optimization of billing practices and adherence to state-specific regulations, which could lead to operational inefficiencies and financial risks if not managed properly.
Gross margin pressure: The inclusion of Greenbrook's clinic business, which operates at a lower margin, has reduced overall gross margins. This could impact profitability if not offset by efficiency improvements.
Debt obligations: Neuronetics has significant debt obligations, and while they have made progress in reducing these, the financial burden remains a risk, especially if revenue growth slows or operational costs increase.
Cash flow management: Although the company achieved positive operating cash flow in Q4 2025, sustaining this improvement will require continued revenue growth, expense discipline, and operational efficiencies. Any deviation could strain financial resources.
Market competition: The company faces competitive pressures in the mental health treatment market, particularly in expanding the NeuroStar TMS system and SPRAVATO treatments. Failure to differentiate or maintain market share could impact growth.
Regulatory hurdles: The potential launch of new treatments like COMP360 psilocybin will require navigating complex regulatory approvals and payer coverage policies, which could delay or limit market entry.
Economic uncertainties: Broader economic conditions could impact patient volumes, payer reimbursements, and overall demand for mental health treatments, posing a risk to revenue stability.
Strategic execution risks: The company’s plans to expand NeuroStar TMS systems and integrate new treatments like COMP360 psilocybin involve significant strategic execution risks, including operational scalability and market adoption challenges.
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Guidance & Outlook
Revenue Guidance for 2026: Neuronetics expects total revenue of between $160 million and $166 million for the full year 2026, representing greater than 9% growth compared to 2025. For the first quarter of 2026, revenue is projected to be between $33 million and $35 million.
Clinic Business Growth: The company anticipates strong revenue performance in its clinic business, with growth year-over-year in the double digits to mid-teens.
NeuroStar Business Growth: Revenue growth for the NeuroStar business is expected to be in the low to mid-single digits year-over-year.
Gross Margin for 2026: Full year gross margin is expected to be between 47% and 49%, reflecting efficiency efforts within the clinic network and product mix associated with higher clinic revenue growth.
Operating Expenses for 2026: Operating expenses are projected to be between $100 million and $105 million for the full year, including approximately $8.5 million of noncash stock-based compensation. The company expects to achieve an annualized run rate of less than $100 million by the fourth quarter of 2026.
Cash Flow Projections for 2026: Operating cash flow is expected to be between negative $13 million and negative $17 million for the full year, with positive operating cash flow anticipated during the second half of the year.
New Therapy Options: Neuronetics is preparing to commercially offer COMP360 psilocybin for treatment-resistant depression upon FDA approval, expected by year-end 2026. The company is collaborating with Compass Pathways and has identified initial centers for rollout.
Expansion of NeuroStar TMS Systems: The company is piloting new models to expand how NeuroStar TMS systems are brought to market, allowing customers to utilize the technology in ways that best suit their needs. Updates on these approaches will be provided throughout 2026.
Greenbrook Clinic Growth: Neuronetics expects continued strong growth in demand for depression treatment at Greenbrook clinics, driven by therapies like NeuroStar TMS and SPRAVATO.
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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 any details on the CID investigation in Florida and Michigan, and is it related to Greenbrook?
A:The investigation is ongoing, and the company is providing all requested information to the U.S. Attorney Office in the Middle District of Florida. The documentation requested pertains to billing practices prior to the acquisition of Greenbrook.
Q:What are the differences in patient time in the facility and profitability between COMP360 and SPRAVATO treatments?
A:COMP360 is administered in supervised doses within the clinic setting, with durable treatment effects after one or two administrations. It requires certified healthcare settings, trained staff, and patient monitoring, similar to SPRAVATO. The company is working with Compass to understand reimbursement and ensure profitability, similar to SPRAVATO's model.
Q:Did the $5 million paid to Perceptive come from restricted or non-restricted cash, and how does the company feel about its cash position given the projected Q1 cash burn?
A:The $5 million did not come from restricted cash. After the payment, the pro forma cash balance is $29 million, with an expected year-end cash balance of $14-15 million. The company is comfortable with this position, focusing on efficiency and reducing expenses. The payment also reduces interest expenses by approximately $600,000 annually.
Q:Can you elaborate on the 7% to 11% top-line guidance for the overall business, including clinic and NeuroStar growth?
A:The majority of clinic growth is expected from volume, with significant SPRAVATO growth in Q1 due to buy-and-bill (B&B). SPRAVATO treatments grew from 30% to 35% of total treatments in 2025 and are expected to continue growing. On the NeuroStar side, capital shipments are expected to increase from 40 to 45 per quarter, with growth matching overall guidance.
Q:Why is Q1 guidance lower than Street expectations, and are there any deviations from past trends?
A:Q1 is impacted by seasonality, with lower new starts in clinics during the holidays and lighter capital shipments due to customer budget cycles. Weather impacts in January and February also affected patient visits. These factors contribute to Q1 being the lowest revenue quarter of the year.
Q:Can you provide more details on the Compass collaboration and its exclusivity?
A:Greenbrook has been collaborating with Compass for three years to prepare for the commercial launch of COMP360. Greenbrook is one of seven strategic collaborators, and there is no exclusivity at this point. Discussions on preparations for the launch are ongoing.
Q:What updates are needed for the Compass collaboration, and how seamlessly can it integrate into the current infrastructure?
A:Greenbrook's existing infrastructure, including experienced clinical staff, back-office support for patient access, and a network of referring providers, is largely sufficient for COMP360 treatments. The company is well-prepared to integrate the new therapy into its clinics.
Q:How quickly do newer converted clinics ramp up SPRAVATO utilization?
A:The company monitors utilization, marketing, and conversion rates daily. For the remaining five locations, marketing efforts are being built up to ensure they generate SPRAVATO at the proper level with appropriate billing processes.
Q:Review of Unclear Management Responses
A:Management avoided providing specific details on the CID investigation, stating only that it is ongoing and that they are cooperating fully. Additionally, they did not provide concrete profitability metrics for COMP360, stating that they are still working with Compass to understand reimbursement. Similarly, no exclusivity details were provided for the Compass collaboration, and the response was vague about potential future exclusivity.
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Earnings Word Cloud
The most frequently occurring keywords in this quarter's earning call
Officer Neuronetics
TMS practice
basis account
basis treatment
benefit investigation
business
capital
clinic network
context
debt
digit
discipline
efficiency effort
effort clinic
engagement
field
flow cash
forma basis
increase forma
increase inclusion
infrastructure
insurance
intercompany
interest
investment efficiency
margin efficiency
noncash stock
outreach
partner
patient treatment
payer
product mix
program care
program patient
provider patient
reduction
referral
session forma
shipment
site end
state
system ASP
thesis
volume
STIM Transcript
Neuronetics, Inc. (STIM) Q4 2025 Earnings Call Transcript
Unknown3-17
The earnings call reflects mixed signals: improved financial performance, but lower gross margins and ongoing CID investigation. Positive aspects include increased treatment and clinic revenues, reduced net loss, and optimistic guidance. However, the Q&A session highlighted risks, such as the CID investigation and vague details on COMP360 profitability and exclusivity. The lack of clear guidance and lower Q1 expectations due to seasonality and weather also contribute to a neutral outlook. The mixed sentiment is balanced by operational improvements and growth in SPRAVATO treatments.
Neuronetics, Inc. (STIM) Q3 2025 Earnings Call Transcript
Unknown11-4
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.
Neuronetics, Inc. (STIM) Q2 2025 Earnings Call Transcript
Positive8-5
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.
Earnings call transcript: Neuronetics Q1 2025 misses EPS, stock drops 22%
Unknown5-6
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%.
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