Neuronetics(US:STIM)2024-05-07 21:16Financial Data and Key Metrics Changes - Total revenue for Q1 2024 was $17.4 million, a 12% increase from $15.5 million in Q1 2023, primarily driven by increased treatment session sales [6][91] - U.S. Treatment Session revenue reached a record $13 million, reflecting a 22% year-over-year increase, attributed to strong performance in the local consumable customer segment [7][100] - Gross margin improved to 75.1% from 73.3% in the prior year, an increase of 180 basis points, driven by a higher mix of treatment session revenue [9] - Operating expenses decreased by 7% to $20 million compared to $21.3 million in Q1 2023, due to prudent cost management [10] - Net loss for Q1 2024 was $7.9 million, or $0.27 per share, an improvement from a net loss of $10.5 million, or $0.38 per share, in the prior year [11] Business Line Data and Key Metrics Changes - U.S. NeuroStar Advanced Therapy System revenue was $3.3 million with 41 systems shipped during the quarter, slightly below the target of 45 to 50 systems [6][92] - Revenue per active site increased to approximately $11,300 from $9,700 in the prior year, reflecting ongoing success in commercial initiatives [7][8] Market Data and Key Metrics Changes - The total addressable market for Major Depressive Disorder (MDD) has increased by approximately 35% due to the recent adolescent indication approval [3] - The adolescent patient population is estimated to impact around 4.3 million patients in the U.S., with increasing prevalence since the COVID-19 pandemic [2] Company Strategy and Development Direction - The company is focused on expanding its commercial partnerships and increasing access to NeuroStar therapy, particularly targeting the adolescent market [4][98] - The Better Me Guarantee Provider Program aims to enhance patient care and responsiveness, with plans to expand participation to over 300 sites [15][102] - The company anticipates significant media coverage and interest from the adolescent psychiatric community, expecting material impact in 2025 [23][36] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in returning to profitability and cash flow positivity by Q4 2024, despite current challenges from the Change Healthcare cybersecurity incident [12][13] - The company expects Q2 revenues to be between $18 million and $19 million, with a rebound anticipated once the cybersecurity issues are resolved [14][30] Other Important Information - The company has received its eighth FDA 510(k) clearance for NeuroStar as a first-line adjunct treatment for adolescents aged 15 to 21 suffering from MDD [79] - The Better Me Guarantee Provider sites are seeing significant improvements in patient follow-up and treatment initiation times, indicating the program's effectiveness [75][76] Q&A Session Summary Question: Why maintain flat guidance despite strong treatment revenues? - Management cited uncertainty due to the cyber breach impacting system sales, leading to cautious guidance [28][30] Question: Anticipated headwinds in Q2? - Management estimated a $3 million shortfall in collections due to the cybersecurity issue, impacting cash flow [35] Question: Impact of adolescent approval on marketing spend? - Marketing spend will remain consistent, with more efficient allocation towards the Better Me Guarantee Program [64][65] Question: Trends in treatment sales growth? - Management noted strong growth in treatment sessions, with the Better Me Guarantee Program contributing positively [52][56] Question: Will the statistics for participants in the programs improve over time? - Yes, participants in the Better Me Guarantee Program continue to show improved metrics over time [57][59]