Neuronetics ((STIM)) has held its Q3 earnings call. Read on for the main highlights of the call.
Elevate Your Investing Strategy:
- Take advantage of TipRanks Premium at 50% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence.
Neuronetics’ recent earnings call painted a picture of mixed sentiments, with notable achievements in revenue growth and cash flow management overshadowed by challenges such as declining NeuroStar revenue and reduced gross margins. The cautious tone was set against a backdrop of operational efficiencies and strategic partnerships, indicating a company navigating both progress and obstacles.
Total Revenue Growth
Neuronetics reported a remarkable total revenue of $37.3 million for the third quarter of 2025, marking a 101% increase from the $18.5 million recorded in the same quarter of 2024. This substantial growth underscores the company’s successful integration of Greenbrook operations, which has been a significant driver of revenue.
Greenbrook Clinics Performance
The Greenbrook clinics have been a bright spot for Neuronetics, generating $21.8 million in revenue, which represents a 25% increase on an adjusted pro forma basis compared to the previous year. This performance highlights the clinics’ role in bolstering the company’s overall financial health.
SPRAVATO Rollout Progress
Neuronetics continues to make strides with its SPRAVATO rollout, with 84 out of 89 eligible clinics now offering the therapy. This progress reflects the company’s commitment to expanding its treatment offerings and enhancing patient care.
Cash Flow Improvement
A significant improvement in cash flow was noted, with cash used in operations dropping to $0.8 million in the third quarter, a stark contrast to the $17 million used in the first quarter. This improvement is indicative of Neuronetics’ efforts to enhance operational efficiencies.
Adolescent Treatment Uptick
The company observed an increase in adolescent patient starts, driven by the provider connection network. This uptick suggests a growing demand for Neuronetics’ treatments among younger populations.
NeuroStar Revenue Decline
Despite overall revenue growth, the NeuroStar segment saw a 4% decline in revenue on a pro forma basis compared to the previous year. This decline points to challenges within this business line that the company will need to address.
Gross Margin Decline
Gross margins fell to 45.9% from 75.6% in the prior year quarter, primarily due to the inclusion of Greenbrook’s clinic business. This decline in margins highlights the financial impact of integrating new operations.
Net Loss for the Quarter
Neuronetics reported a net loss of $9.4 million, or $0.13 per share, for the third quarter, an improvement from the $13.3 million, or $0.44 per share, loss in the previous year. This reduction in net loss reflects the company’s efforts to streamline operations and reduce costs.
Guidance Reduction
The company adjusted its full-year 2025 revenue guidance to between $147 million and $150 million, down from the previous range of $149 million to $155 million. This revision was influenced by strategic shifts in their SPRAVATO offering, optimizing for reimbursement dynamics.
Forward-Looking Guidance
Neuronetics provided revenue guidance for the fourth quarter of 2025, anticipating net revenue between $40 million and $43 million. The company aims for cash flow positivity, targeting an operating cash flow range of $2 million positive to $2 million negative. These projections reflect Neuronetics’ strategic adjustments and focus on achieving financial stability.
In conclusion, Neuronetics’ earnings call revealed a company in transition, with strong revenue growth tempered by challenges in certain business segments. While the sentiment remains cautious, the company’s strategic initiatives and operational improvements provide a foundation for potential future success.