Brainsway(BWAY) - 2025 Q2 - Quarterly Report

Q2 2025 Earnings Release Overview Key Financial Highlights BrainsWay achieved record quarterly revenue of $12.6 million in Q2 2025, an increase of 26% compared to Q2 2024, alongside positive operating profit and increased Adjusted EBITDA Key Financial Highlights (Millions) | Metric | Q2 2025 (Millions) | | :---------------- | :----------------- | | Revenue | $12.6 | | Operating Profit | $0.6 | | Adjusted EBITDA | $1.5 | - Achieved record quarterly revenue of $12.6 million in Q2 2025, an increase of 26% compared to Q2 2024[1] Key Operational Highlights The company reported a significant year-over-year increase in remaining performance obligations, indicating strong future revenue streams from multi-year agreements - Remaining performance obligations increased by 25% year-over-year to $62 million[1] Updated Full-Year 2025 Guidance BrainsWay raised its full-year 2025 revenue and EBITDA guidance, reflecting improved visibility and business momentum - Raised full-year 2025 Revenue and EBITDA guidance[1] Recent Financial and Operational Highlights Q2 2025 Financial Performance BrainsWay reported strong Q2 2025 financial results, with significant year-over-year growth in revenue, net profit, and Adjusted EBITDA, while maintaining a high gross margin Q2 2025 Financial Performance (Millions) | Metric | Q2 2025 | Q2 2024 | YoY Change | | :------------------------------------------------------- | :------ | :------ | :--------- | | Revenue | $12.6M | $10.0M | +26% | | Gross Margin | 75% | 75% | 0% | | Operating Income | $0.6M | $0.6M | 0% | | Adjusted EBITDA | $1.5M | $1.3M | +16% | | Net Profit | $2.0M | $0.6M | +233% | | Cash, Cash Equivalents, Restricted Cash, and Short-term Deposits (as of June 30, 2025) | $78.3M | N/A | N/A | Q2 2025 Operational Achievements The company significantly increased its Deep TMS system shipments and expanded its installed base, with a majority of new customer engagements structured as multi-year lease agreements - Shipped a net total of 88 Deep TMS™ systems in the second quarter of 2025, a 35% increase compared to the same period last year, bringing the total installed base to 1,522 systems[6] - Approximately 70% of recent customer engagements are structured as multi-year lease agreements, contributing to $62 million in remaining performance obligations[6] Strategic Initiatives and Business Momentum BrainsWay is actively pursuing strategic minority equity investments in high-performing mental health providers and made progress with regulatory submissions and clinical programs - Entered an equity financing transaction with Stella MSO, LLC, a management services organization servicing over 20 mental health clinics[6] - Actively seeking to ramp up strategic initiative with additional minority equity investments in high-performing mental health providers, partnering with Valor Equity Partners[6] - Submitted data to the FDA from its randomized, multicenter U.S. clinical trial evaluating an accelerated Deep TMS treatment protocol[6] - Continued progress with Israel Ministry of Defense's Rehabilitation Department in qualifying patients with post-traumatic stress disorder (PTSD) for Deep TMS[6] Full-Year 2025 Financial Guidance BrainsWay raised its full-year 2025 financial guidance, projecting higher revenue, operating income, and Adjusted EBITDA, driven by strong Q2 results and improved business momentum Full-Year 2025 Financial Guidance | Metric | New Guidance (2025) | Previous Guidance (2025) | | :---------------- | :---------------------- | :----------------------- | | Revenue | $50M - $52M | $49M - $51M | | Operating Income | 4% - 5% | 3% - 4% | | Adjusted EBITDA | 12% - 13% | 11% - 12% | Management Commentary Q2 Performance and Growth Strategy CEO Hadar Levy highlighted strong Q2 results, attributing success to momentum in the core market, successful execution of the growth strategy, and stable recurring revenue streams from multi-year agreements - BrainsWay's second quarter results were strong, demonstrating momentum across the core market and successful execution of the growth strategy[4] - The stable growth reflects recurring revenue streams built over the past few years through multi-year agreements, which now make up approximately 70% of the new installed base[4] - Achieved an extensive order of systems with a multi-phased delivery plan through the end of the year by a fast-growing U.S. mental health network[4] Strategic Equity Investments Mr. Levy emphasized the strategic initiative to secure minority equity investments in high-performing mental health providers, aiming to significantly increase patient awareness of Deep TMS technology - Successes have given rise to exciting new opportunities, including a strategic initiative aimed at securing minority equity investments in high-performing mental health providers[5] - This program has already led to several opportunities being explored and is expected to significantly increase awareness among patients of the benefits of transformative care, including Deep TMS technology[5] Conference Call and Webcast BrainsWay's management hosted a conference call on August 13, 2025, to discuss the Q2 results, with details provided for accessing the call via phone and webcast - BrainsWay's management hosted a conference call on Wednesday, August 13, 2025, at 8:30 a.m. Eastern Time to discuss results and answer questions[6] - Dial-in numbers were provided for the United States, International, and Israel, along with a Conference ID[7] - The conference call was broadcast live and made available for replay for 30 days on the Company's investor relations website[7] Non-IFRS Financial Measures Definition and Purpose of Adjusted EBITDA Adjusted EBITDA is presented as a non-IFRS measure to evaluate operating performance, defined as net profit adjusted for specific non-operating and non-cash items, providing a clearer view of operational efficiency and comparability - Adjusted EBITDA is a non-IFRS measure defined as net profit adjusted for depreciation and amortization, finance income, finance expenses, income taxes, cost of share-based payments, and one-time restructuring and litigation expenses[8] - It is used by management and investors for period-to-period comparisons, understanding operating results, and assessing operational efficiency, as it excludes items that can vary substantially between companies[9][13] - Adjusted EBITDA should not be considered an alternative to operating profit or net profit under IFRS and may not be comparable to similarly titled measures from other companies[9][10] About BrainsWay BrainsWay is a global leader in advanced noninvasive neurostimulation treatments for mental health disorders, utilizing its proprietary Deep TMS™ technology with three FDA-cleared indications, and is committed to advancing neuroscience through clinical evidence and global access - BrainsWay is a global leader in advanced noninvasive neurostimulation treatments for mental health disorders, utilizing its proprietary Deep Transcranial Magnetic Stimulation (Deep TMS™) platform technology[11] - The company is the first and only TMS company to obtain three FDA-cleared indications backed by pivotal clinical studies: major depressive disorder (including anxious depression), obsessive-compulsive disorder, and smoking addiction[11] - BrainsWay is dedicated to leading through superior science, building on its clinical evidence, and conducting additional clinical trials for Deep TMS in various psychiatric, neurological, and addiction disorders[11] Forward-Looking Statement This section contains standard forward-looking statements, which are subject to various factors and uncertainties that could cause actual results to differ materially from projections, and the company undertakes no obligation to update them - This press release contains "forward-looking statements" under the Private Securities Litigation Reform Act of 1995, including financial guidance and projections[12] - These statements are based on current management expectations and are subject to numerous factors and uncertainties that could cause actual results to differ materially from those described[12] - The company undertakes no obligation to publicly update or review any forward-looking statement, except as may be required by applicable securities laws[15] Contacts Contact information for BrainsWay's Chief Financial Officer and Investor Relations is provided for inquiries - BrainsWay Contact: Ido Marom, Chief Financial Officer (Ido.Marom@BrainsWay.com)[16] - Investors Contact: Brian Ritchie, LifeSci Advisors LLC (britchie@lifesciadvisors.com)[16] Consolidated Financial Statements Consolidated Statements of Financial Position (Balance Sheet) The balance sheet shows an increase in total assets to $111.56 million as of June 30, 2025, primarily driven by an increase in current assets and investments in financial assets, with a corresponding increase in deferred revenues and equity Consolidated Statements of Financial Position (U.S. dollars in thousands) | Metric (U.S. dollars in thousands) | June 30, 2025 (Unaudited) | December 31, 2024 (Audited) | Change | | :--------------------------------- | :------------------------ | :-------------------------- | :----- | | ASSETS | | | | | Current Assets | $89,490 | $79,670 | +$9,820 | | Non-Current Assets | $22,074 | $14,646 | +$7,428 | | Total Assets | $111,564 | $94,316 | +$17,248 | | LIABILITIES AND EQUITY | | | | | Current Liabilities | $25,508 | $15,346 | +$10,162 | | Non-Current Liabilities | $17,924 | $16,657 | +$1,267 | | Equity | $68,132 | $62,313 | +$5,819 | | Total Liabilities and Equity | $111,564 | $94,316 | +$17,248 | Consolidated Statements of Comprehensive Profit (Loss) (Income Statement) For Q2 2025, BrainsWay reported significant revenue growth and a substantial increase in net profit compared to the prior year, primarily driven by higher finance income Consolidated Statements of Comprehensive Profit (Loss) (U.S. dollars in thousands) | Metric (U.S. dollars in thousands) | Q2 2025 (Unaudited) | Q2 2024 (Unaudited) | YoY Change | H1 2025 (Unaudited) | H1 2024 (Unaudited) | YoY Change | | :--------------------------------- | :------------------ | :------------------ | :--------- | :------------------ | :------------------ | :--------- | | Revenues | $12,632 | $10,005 | +26.3% | $24,168 | $19,100 | +26.5% | | Gross profit | $9,499 | $7,537 | +26.0% | $18,109 | $14,349 | +26.2% | | Operating profit | $578 | $586 | -1.4% | $1,154 | $679 | +69.9% | | Finance income | $2,303 | $518 | +344.6% | $3,414 | $1,115 | +206.2% | | Finance Expense | $784 | $401 | +95.5% | $1,207 | $808 | +49.4% | | Net profit and total comprehensive profit | $2,027 | $600 | +237.8% | $3,134 | $711 | +340.8% | | Basic net income per share | $0.05 | $0.02 | +150.0% | $0.08 | $0.02 | +300.0% | | Diluted net income per share | $0.05 | $0.02 | +150.0% | $0.07 | $0.02 | +250.0% | Consolidated Statements of Cash Flows In Q2 2025, net cash provided by operating activities significantly increased, while investing activities resulted in a net cash outflow due to purchases of financial assets and short-term deposits Consolidated Statements of Cash Flows (U.S. dollars in thousands) | Metric (U.S. dollars in thousands) | Q2 2025 (Unaudited) | Q2 2024 (Unaudited) | H1 2025 (Unaudited) | H1 2024 (Unaudited) | | :--------------------------------- | :------------------ | :------------------ | :------------------ | :------------------ | | Net cash provided by operating activities | $12,383 | $1,348 | $17,393 | $4,526 | | Net cash provided by (used in) investing activities | $(15,859) | $34,198 | $(17,825) | $33,488 | | Net cash used in financing activities | $(264) | $(35) | $(1,019) | $(624) | | Increase (decrease) in cash and cash equivalents | $(3,689) | $35,482 | $(1,433) | $37,344 | | Cash and cash equivalents at the end of the period | $67,912 | $47,864 | $67,912 | $47,864 | Reconciliation of Adjusted EBITDA to Net Profit The reconciliation shows that Adjusted EBITDA for Q2 2025 was $1.45 million, an increase from $1.25 million in Q2 2024, after adjusting net profit for non-cash and non-operating items Reconciliation of Adjusted EBITDA to Net Profit (U.S. dollars in thousands) | Metric (U.S. dollars in thousands) | Q2 2025 (Unaudited) | Q2 2024 (Unaudited) | H1 2025 (Unaudited) | H1 2024 (Unaudited) | | :--------------------------------- | :------------------ | :------------------ | :------------------ | :------------------ | | Net profit and total comprehensive profit | $2,027 | $600 | $3,134 | $711 | | Finance income, net | $(1,519) | $(117) | $(2,207) | $(307) | | Income taxes | $70 | $103 | $227 | $275 | | Depreciation and amortization | $180 | $58 | $371 | $120 | | Depreciation of leased systems | $208 | $240 | $411 | $495 | | Cost of share based payment | $227 | $364 | $552 | $669 | | Restructuring and litigation Cost | $258 | $0 | $258 | $0 | | Adjusted EBITDA | $1,451 | $1,248 | $2,746 | $1,963 |