BrainsWay Ltd. (BWAY) Q3 2025 Earnings Call Transcript
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
Overview
The company demonstrates strong financial performance with increased revenue, gross profit, and net profit. The positive cash flow and substantial cash reserves further enhance financial stability. The raised revenue guidance and promising market expansion initiatives are optimistic. The Q&A section reveals potential growth through accelerated protocols and minority investments, despite some management ambiguity. Overall, the company's strategic investments and market expansion efforts indicate a positive outlook, likely resulting in a stock price increase within the 2% to 8% range.
Key Financial Performance
Quarterly Revenue $13.5 million, a 29% increase compared to the same period last year ($10.5 million). The increase is attributed to strong market demand and the success of the multiyear lease agreement sales model.
Deep TMS Systems Shipped 90 systems shipped, a 43% increase compared to the same period last year. This growth reflects the scalability of the business and strong customer retention.
Gross Profit $10.2 million, up $2.4 million from $7.7 million in the prior year period. Gross margin remained strong at 75%, compared to 74% last year, due to the recurring revenue model and disciplined cost management.
Sales and Marketing Expenses $4.7 million, an increase of $0.6 million from $4.1 million in Q3 2024. The increase is driven by targeted investment in commercial expansion and marketing programs.
Research and Development Expenses $2.4 million, an increase of $0.6 million from $1.8 million last year. The increase is primarily due to ongoing clinical trials and development activities.
General and Administrative Expenses $1.8 million, an increase of $0.3 million from $1.5 million in the prior year period. The increase is partly due to additional legal fees and due diligence costs related to new investments.
Operating Profit $1.3 million, a $1 million increase compared to $0.3 million reported for the same period last year. This reflects the operating leverage in the business model.
Adjusted EBITDA $2 million, up from $1.1 million in the prior year period. This increase demonstrates improved operational efficiency and scale.
Net Profit $1.6 million, compared to $0.7 million in the same period of 2024. This growth highlights the operating leverage as the company scales.
Cash and Cash Equivalents $70.7 million, up $1.1 million from $69.6 million at year-end 2024. The increase is driven by strong collections despite deploying $7.3 million for minority equity investments.
Remaining Performance Obligations $65 million, a 37% year-over-year increase. This growth provides strong visibility into future revenues.
Cash Flow from Operations Positive for the quarter, reinforcing the strength of the recurring revenue model and high collection efficiency.
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Operating Highlights
FDA approval for accelerated protocol for MDD treatment: The U.S. FDA granted an expansion of the treatment protocol for the Deep TMS system to include an accelerated protocol for major depressive disorder (MDD) treatment. This protocol shortens the acute treatment phase, making it more convenient and appealing to patients.
NIH grant for AUD study: The U.S. NIH awarded a $2.5 million grant for a clinical study evaluating the accelerated Deep TMS protocol for alcohol use disorder (AUD). The study will use the Deep TMS 360 system, designed for more comprehensive neuron stimulation.
Global expansion and health system integration: BrainsWay continues to broaden patient access through global expansion and health system integration, supported by regulatory approvals and clinical data.
Strategic investments in mental health providers: BrainsWay made minority investments in mental health providers like Stella Mental Health and Axis, leading to a 50% increase in Deep TMS system utilization at these clinics.
Record quarterly revenue: Achieved $13.5 million in Q3 2025, a 29% increase year-over-year.
Increased system placements: Shipped 90 Deep TMS systems in Q3 2025, a 43% increase year-over-year, bringing the total installed base to over 1,600 systems globally.
Recurring revenue model: Approximately 70% of customer engagements are now multiyear lease agreements, ensuring steady revenue and high customer retention.
Strategic equity investment by Valor Equity Partners: Received a $20 million investment to support minority interest investments in complementary enterprises.
Investment in Neurolief LTD: BrainsWay invested in Neurolief LTD, a developer of wearable brain neuromodulation platforms, with an option to fully acquire the company.
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Risk or Challenges
Geopolitical and supply chain factors: The company acknowledges risks from shifting market conditions due to geopolitical and supply chain factors, which could impact operations and financial performance.
Regulatory hurdles: The company's growth and market leadership depend on regulatory approvals and clinical data, which could pose challenges if regulatory requirements change or approvals are delayed.
Strategic investments: The company has made significant investments in minority interests and new technologies, which carry risks related to execution, integration, and achieving expected returns.
Increased operating expenses: Sales, marketing, R&D, and administrative expenses have increased, which could pressure margins if revenue growth does not keep pace.
Customer retention and lease agreements: While customer retention is high, the reliance on multiyear lease agreements could pose risks if customers do not renew or expand their agreements.
Economic uncertainties: Economic conditions could impact customer spending and the adoption of the company's Deep TMS systems, affecting revenue growth.
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Guidance & Outlook
Revenue Guidance: The company has raised its revenue guidance for the full year 2025 to a range of $51 million to $52 million, up from the previous guidance of $50 million to $52 million. This represents a year-over-year growth rate of 24% to 27%.
Operating Profit Guidance: Operating profit is now expected to be in the range of 6% to 7% of revenue, up from the previous guidance of 4% to 5%.
Adjusted EBITDA Guidance: Adjusted EBITDA is projected to be in the range of 13% to 14% for the year, up from the previous guidance of 12% to 13%.
Market Demand and Revenue Trajectory: The company reported a book-to-bill ratio of 1.3x, indicating strong bookings above billings. Remaining performance obligations under existing customer agreements were $65 million at the end of the quarter, reflecting strong market demand and providing confidence in forward revenue visibility.
Regulatory and Clinical Developments: The U.S. FDA granted an expansion of the treatment protocol for the Deep TMS system to include an accelerated protocol for major depressive disorder (MDD) treatment. The company is also supporting evaluations of accelerated protocols for other indications, such as alcohol use disorder (AUD), with a $2.5 million NIH grant for a clinical study.
Strategic Investments: The company is pursuing minority interest investments in mental health providers and complementary enterprises. Recent investments include Neurolief LTD, with milestone-based funding of up to $11 million and an option for full acquisition. These investments aim to enhance market awareness, R&D capabilities, and access to Deep TMS.
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Shareholder Return Plan
The selected topic was not discussed during the call.
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Key Q&A
Q:Could you talk about the accelerated protocol and give us some sense of current treatments that are taking on the accelerated protocol and what you may expect over the coming quarters?
A:The accelerated protocol shortens the acute phase protocol from 4 weeks to 6 days, increasing the dosage to 5 treatments per day. Demand looks promising and is driving company growth.
Q:Could you talk about minority equity investments and what might we expect as far as the pipeline and other investments over the coming quarters?
A:The company is exploring options with a pipeline of minority investments, ensuring due diligence on profitability and management. The goal is to sign at least one more investment by year-end, with additional opportunities for 2026.
Q:Could you give us an update on Neurolief as far as any activity currently going on in Japan and EU and then talk about U.S. timing or anticipated activities here?
A:Neurolief is anticipated to receive FDA clearance by year-end, though delays are possible. Once cleared, the device will be distributed through various channels, including VA, IDNs, and TMS clinics.
Q:What are you seeing in terms of system placements from the minority partners thus far, and what should we expect potentially in terms of incremental system placements?
A:Minority investments plan to expand by opening 10-15 new clinics annually. Early investments like Stella Mental Health and Axis have grown utilization rates by over 50% since collaboration.
Q:How do you think you will alter metrics reporting going forward, and can we expect greater granularity on growth in total installed base and performance of minority investments?
A:Metrics will include systems shipped, additional indications sold, and book-to-bill ratio. More details will be shared on Analyst Day on December 1. International growth is strong, particularly in Asia Pacific and Europe.
Q:Could you elaborate on where you are with respect to the upgrade cycle across the installed base and how you expect that to play out over the coming quarters?
A:The company is strengthening distribution channels in Asia Pacific and Europe, with strong demand in Japan, China, South Korea, and other regions. Growth is aligned with expectations, with potential for faster expansion with additional indications.
Q:Do you have any plans to alter the way in which you report revenue, particularly given the minority stakes that you are acquiring?
A:Minority investments will not impact top-line revenue. They will be recorded as fair value or equity under operating profit, subject to auditor review at year-end.
Q:Review of Unclear Management Responses
A:Management avoided providing specific data on the current installed base from minority investments and did not offer detailed granularity on the upgrade cycle or international growth metrics. Additionally, there was no clear explanation of how revenue reporting might change due to minority stakes.
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Earnings Word Cloud
The most frequently occurring keywords in this quarter's earning call
AUD study
Alto Veterans
Analyst Day
Axis collaboration
Day progress
Dr Stanford
Eastern accordance
Equity Partner
FDA expansion
Form tomorrow
Health Axis
MDD
RD road
acute
awareness RD
brain
core
date
detail
engagement
focus
initiative
lease agreement
market awareness
model
phase place
place treatment
protocol week
reminder
road map
shareholder
system protocol
treatment day
visibility
BWAY Transcript
BrainsWay Ltd. (BWAY) Q1 2026 Earnings Call Transcript
Unknown5-13
The earnings call summary presents a mixed picture. Financially, there's a positive increase in revenue and gross margin, along with a reduced net loss, indicating operational improvements. However, geopolitical risks and potential supply chain disruptions pose significant threats. The lack of strategic initiatives or operational updates in the call and stable cash reserves suggest limited immediate growth catalysts. Without market cap data, it's prudent to predict a neutral stock price movement, considering both positive financials and external risks.
BrainsWay Ltd. (BWAY) Q4 2025 Earnings Call Transcript
Positive3-11
The earnings call summary and Q&A reveal strong financial performance with increased revenue, profit, and cash position. The company raised its guidance, indicating optimism. Strategic investments and regulatory advancements, particularly FDA approvals, boost confidence. Despite risks related to minority investments and FDA dependence, the Q&A responses were clear and positive, showing strong demand and strategic partnerships. Overall, the sentiment leans positive, suggesting a potential stock price increase in the short term.
BrainsWay Ltd. (BWAY) Q3 2025 Earnings Call Transcript
Positive11-11
The company demonstrates strong financial performance with increased revenue, gross profit, and net profit. The positive cash flow and substantial cash reserves further enhance financial stability. The raised revenue guidance and promising market expansion initiatives are optimistic. The Q&A section reveals potential growth through accelerated protocols and minority investments, despite some management ambiguity. Overall, the company's strategic investments and market expansion efforts indicate a positive outlook, likely resulting in a stock price increase within the 2% to 8% range.
BrainsWay Ltd. (BWAY) Q2 2025 Earnings Call Transcript
Positive8-13
The earnings call presented strong financial performance with a 26% revenue increase, robust gross profit margins, and a significant net profit rise. The Q&A section highlighted positive developments like potential FDA clearance, strategic financing, and successful collaborations. Despite increased expenses, efficient cost management and strong cash position support financial health. The reiterated revenue guidance and strategic expansions further bolster a positive outlook. Given these factors, the stock price is likely to experience a positive movement in the short term.
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