Core Insights - NeurAxis, Inc. (NRXS) shares have declined 8.6% since the Q3 2025 earnings report, underperforming the S&P 500 Index's 1.7% decline during the same period [1] - The stock has experienced a significant drop of 36.4% over the past month, contrasting with a slight growth of 0.1% in the S&P 500 [1] Financial Performance - Q3 2025 revenues reached $0.8 million, a 21.7% increase from $0.7 million in the same quarter last year, marking the fifth consecutive quarter of double-digit growth [2] - Unit deliveries increased by 38% year over year, driven by the financial assistance program that provides discounted devices to uninsured patients [2] - Operating loss widened to $2.1 million from $1.7 million a year earlier, primarily due to a 125.3% year-over-year increase in selling expenses outpacing revenue growth [2] Margins and Losses - Gross margin decreased to 83.3% from 85.4%, attributed to increased discounting and expired inventory charges related to the Rectal Expulsion Device (RED) [3] - Net loss for the quarter was $2.1 million, compared to $1.8 million in the prior-year quarter [3] Liquidity and Cash Flow - NeurAxis ended the quarter with $4.4 million in cash and improved its liquidity by raising an additional $2.8 million through an equity offering and warrant exercises in October 2025 [4] - Free cash flow burn remained stable at approximately $1.5 million for the quarter, with increased inventory purchases in anticipation of demand once reimbursement improves [4] Management Insights - Management believes Q3 2025 set the stage for a significant scaling phase expected to begin in 2026, with a new CPT Category I code effective January 1, 2026, anticipated to streamline billing and reduce administrative hurdles [6] - Executives highlighted efforts to enhance payer engagement, supported by new clinical practice guidelines and outreach to large insurers, aiming for broader national medical policy coverage [6] Revenue Drivers and Expenses - Revenue growth was primarily driven by increased patient volume, particularly from the financial assistance program, and the soft launch of the RED product line [7] - Operating expenses rose significantly due to higher commissions from increased sales activity, targeted advertising, and preparatory spending ahead of the new CPT code launch [7] R&D and Administrative Costs - Research and development expenses increased by 3.6% year over year as NeurAxis continued to invest in clinical programs related to expanded FDA indications [8] - General and administrative costs rose by 7.2% year over year due to a new long-term incentive plan and system-related expenditures [8] Future Guidance - While no formal numerical guidance was provided, management expressed confidence in continued revenue growth for Q4 2025, supported by strong provider momentum [9] - The outlook for 2026 includes expectations for improved reimbursement clarity and broader patient access, although policy changes are anticipated to occur gradually [9][10] Regulatory and Market Developments - NeurAxis achieved several regulatory milestones, including FDA clearances for expanded indications of IB-Stim and the RED device for anorectal function testing [11] - The company secured academic society guideline recommendations for its technology, expanded total covered lives to approximately 55 million, and received a new Category I CPT code effective January 1, 2026, enhancing long-term reimbursement prospects [12]
NRXS Stock Declines Post Q3 Earnings Despite Continued Revenue Growth