Neuronetics(STIM) - 2025 Q2 - Quarterly Results

Overview of Q2 2025 Performance Neuronetics reported strong Q2 2025 results with $38.1 million revenue, 18% adjusted pro forma growth, and reduced operational cash burn Financial & Operational Highlights Neuronetics achieved $38.1 million in Q2 2025 revenue, an 18% adjusted pro forma growth, driven by Greenbrook integration and reduced cash burn | Metric | Value | Note | | :--- | :--- | :--- | | Total Revenue | $38.1 million | 18% adjusted pro forma growth YoY | | Greenbrook Clinic Revenue | $23.0 million | Record quarterly performance | | Cash Used in Operations | $3.5 million | Beat guidance of under $5 million | | Additional Funding | $10 million | From Perceptive Advisors debt agreement | | U.S. Treatment Session Revenue | $10.8 million | 13% pro forma increase YoY | | NeuroStar Systems Shipped | 41 systems | - | | Patients Treated (Global) | > 209,000 | > 7.6 million treatment sessions | - The company appointed Steven Pfanstiel as its new Chief Financial Officer, effective July 15, 2025[5] - Recent clinical data demonstrated strong real-world efficacy of NeuroStar TMS in treating depression in adolescents and young adults[5] Management Commentary Management lauded strong Q2 revenue growth and Greenbrook integration, reducing cash usage and targeting positive cash flow in 2025 - Management emphasized strong quarterly performance, driven by solid revenue growth and record clinic revenue from the Greenbrook integration[4] - The company successfully reduced cash used in operations to $3.5 million, outperforming its target of under $5 million[4] - The CEO expressed confidence that the strong results position the company to achieve positive cash flow from operations in 2025[4] Detailed Financial Results Q2 2025 saw 132% revenue growth to $38.1 million, a gross margin decline to 46.6%, and a flat net loss of $(9.8) million Revenue Analysis Total Q2 2025 revenue surged 132% to $38.1 million, primarily from Greenbrook clinics, despite a decline in U.S. NeuroStar system revenue | Revenue by Geography (Q2 2025) | Amount (in thousands) | % Change YoY | | :--- | :--- | :--- | | U.S. | $37,656 | 133% | | International | $452 | 41% | | Total Revenues | $38,108 | 132% | | U.S. Revenue by Product (Q2 2025) | Amount (in thousands) | % Change YoY | | :--- | :--- | :--- | | NeuroStar Advanced Therapy System | $3,484 | (13)% | | Treatment sessions | $10,773 | (8)% | | Clinic revenue | $23,024 | N/A | | Other | $375 | (20)% | | Total U.S. Revenues | $37,656 | 133% | - The significant increase in total revenue was primarily driven by the acquisition of Greenbrook, which added $23.0 million in U.S. clinic revenue[6][9] - The decline in U.S. treatment session revenue was mainly due to the absence of $2.1 million in revenue from Greenbrook (now internalized), but on a pro forma basis, this revenue stream grew 13% YoY to a record high[8] Profitability Analysis Q2 2025 gross margin fell to 46.6% due to Greenbrook integration, while operating expenses rose 25%, yet net loss remained flat at $(9.8) million | Profitability Metric | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | Gross Margin | 46.6% | 74.0% | (27.4 p.p.) | | Operating Expenses | $25.8 million | $20.7 million | +25% | | Net Loss | $(9.8) million | $(9.8) million | 0% | | Net Loss Per Share | $(0.15) | $(0.33) | +$0.18 | - The primary reason for the decline in gross margin was the inclusion of Greenbrook's clinic business[9] - The increase in operating expenses was mainly attributable to the inclusion of Greenbrook's general and administrative expenses of $6.1 million[10] Financial Position and Cash Flow As of June 30, 2025, total cash was $17.5 million, with cash used in operations significantly reduced to $3.5 million for the quarter | Cash Position | As of June 30, 2025 | | :--- | :--- | | Cash and cash equivalents | $11.0 million | | Restricted cash | $6.5 million | | Total Cash | $17.5 million | - Cash used in operations for the second quarter was $3.5 million, a significant reduction[12] Corporate Developments Neuronetics secured $10 million in additional funding, reported strong NeuroStar clinical efficacy, and appointed a new Chief Financial Officer Additional Funding Neuronetics secured an additional $10.0 million in debt funding in August 2025, meeting revenue milestones and extending a key liquidity covenant - The company received $10.0 million in additional debt funding in August 2025[13] - Eligibility for the funds was triggered by achieving specific revenue conditions under the Tranche 2 terms[13] - The $2 million minimum liquidity requirement was extended from September 2025 to September 2026[13] Clinical & Product Updates A study confirmed NeuroStar TMS's strong real-world efficacy for depression in adolescents, with nearly 70% showing clinically meaningful improvement - A study of over 1,200 patients aged 12–21 showed that nearly 70% experienced clinically meaningful improvement in depression symptoms with NeuroStar TMS[14] - The results, drawn from the world's largest depression outcomes dataset, mirror outcomes in adults and support the FDA-cleared use of NeuroStar as an adjunct therapy for younger patients[14] Management Changes Steven Pfanstiel was appointed as the new Chief Financial Officer, bringing over two decades of healthcare sector experience - Steven Pfanstiel was appointed as the new CFO, succeeding Stephen Furlong[15] - Mr. Pfanstiel has over 20 years of experience in the healthcare sector, including leadership roles at Marinus Pharmaceuticals, Lifescan, and Johnson & Johnson[15] Business Outlook (Guidance) Neuronetics provided Q3 and full-year 2025 revenue guidance, updated gross margin and operating expense forecasts, and shifted positive cash flow to Q4 2025 Revenue Guidance Neuronetics projects Q3 2025 revenue between $37.0 million and $39.0 million, maintaining full-year guidance of $149.0 million to $155.0 million | Period | Guidance Range | | :--- | :--- | | Q3 2025 Revenue | $37.0 million - $39.0 million | | Full Year 2025 Revenue | $149.0 million - $155.0 million (maintained) | Margin, Expense, and Cash Flow Guidance Full-year 2025 guidance includes a revised gross margin of 48%-50%, increased operating expenses of $100M-$105M, and positive operating cash flow expected in Q4 2025 | Full Year 2025 Guidance | New Guidance | Previous Guidance | | :--- | :--- | :--- | | Gross Margin | 48% - 50% | Not specified (updated) | | Total Operating Expenses | $100.0M - $105.0M | $90M - $98M | | Positive Operating Cash Flow | Expected in Q4 2025 | Expected in Q3 2025 | | Year-End Total Cash | $25M - $28M | Not specified | - The gross margin forecast was adjusted due to a higher-than-expected percentage of total revenue coming from Greenbrook clinics and the mix of Spravato business[18] - Operating expense guidance was raised to augment critical areas, including the claims collections team, and to allow more time to realize integration synergies[19] Consolidated Financial Statements Q2 2025 saw $38.1 million revenue, a $(10.1) million net loss, $134.7 million in total assets, and $(20.5) million cash used in operations Consolidated Statements of Operations Q2 2025 revenues increased 132% to $38.1 million, with gross profit rising to $17.8 million, and net loss at $(10.1) million or $(0.15) per share | (in thousands, except per share data) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :--- | :--- | :--- | | Revenues | $38,108 | $16,450 | | Gross profit | $17,758 | $12,179 | | Loss from operations | $(8,058) | $(8,507) | | Net loss | $(9,839) | $(9,832) | | Net loss per share | $(0.15) | $(0.33) | Consolidated Balance Sheets As of June 30, 2025, total assets were $134.7 million, total liabilities $103.1 million, and total equity $31.5 million | (in thousands) | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $10,969 | $18,459 | | Total current assets | $56,139 | $58,122 | | Total assets | $134,650 | $140,903 | | Total current liabilities | $27,803 | $31,265 | | Total liabilities | $103,143 | $109,104 | | Total equity | $31,507 | $31,799 | Consolidated Statements of Cash Flows For H1 2025, net cash used in operations was $(20.5) million, offset by $19.0 million from financing, resulting in a $(2.0) million net cash decrease | (in thousands) | Six Months Ended June 30, 2025 | | :--- | :--- | | Net Cash used in Operating activities | $(20,497) | | Net Cash used in Investing activities | $(472) | | Net Cash provided by Financing activities | $18,978 | | Net decrease in Cash, Cash equivalents and Restricted cash | $(1,990) | Non-GAAP Financial Measures Non-GAAP EBITDA improved to a $(7.2) million loss in Q2 2025, with adjusted pro forma revenue for Q2 2024 at $32.2 million Reconciliation of Net Loss to EBITDA Non-GAAP EBITDA for Q2 2025 was a $(7.2) million loss, an improvement from $(8.0) million in Q2 2024, after adjustments | (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net loss | $(9,839) | $(9,832) | | Interest expense, net | $1,781 | $1,325 | | Depreciation and amortization | $901 | $555 | | EBITDA | $(7,157) | $(7,952) | Pro Forma Revenue Information Adjusted pro forma revenue for Q2 2024 was $32.2 million, indicating an 18% year-over-year growth compared to Q2 2025 reported revenue | Pro Forma Revenue (Q2 2024) | Amount (in thousands) | | :--- | :--- | | Neuronetics Revenue | $16,450 | | Greenbrook Revenue | $20,408 | | Intercompany revenue elimination | $(2,283) | | Total Pro forma Revenue | $34,575 | | Adjustment for clinic closures | $(2,404) | | Adjusted Pro forma Revenue | $32,171 |