BrainsWay Ltd. (BWAY) Q2 2025 Earnings Call Transcript
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
Overview
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.
Key Financial Performance
Revenue $12.6 million, representing a 26% increase compared to $10 million in the same period last year. The increase is attributed to strong sales performance and growth in recurring revenue streams through multiyear lease agreements.
Deep TMS Systems Shipped 88 systems shipped during the quarter, representing a 35% increase compared to the same period last year. This growth is due to increased demand and successful customer engagement strategies.
Gross Profit $9.5 million, up $2 million from $7.5 million in the prior year period, maintaining a strong gross margin of 75% in both periods. The stability reflects the strength of the recurring revenue model and disciplined cost management.
Sales and Marketing Expenses $4.9 million compared to $3.8 million in Q2 2024, an increase of $1.1 million. The rise is driven by targeted investment in commercial expansions and marketing programs.
Research and Development Expenses $2.3 million compared to $1.7 million last year, an increase of $0.6 million. The increase is primarily from ongoing clinical trials and development activities.
General and Administrative Expenses $1.6 million compared to $1.4 million in the prior year period, an increase of $0.2 million. The rise is mainly due to additional legal fees and due diligence costs related to the Stella investment and other initiatives.
Operating Profit Approximately $600,000, in line with the same period last year. Stability in operating profit reflects disciplined cost management and strong revenue growth.
Adjusted EBITDA $1.5 million, up from $1.3 million in the prior year period. The increase is attributed to strong revenue growth and efficient cost management.
Net Profit $2 million compared to $0.6 million in the same period of 2024. The significant increase is driven by strong revenue growth and operational efficiency.
Cash Position $78.3 million in cash, cash equivalents, restricted cash, and short-term deposits, up $8.7 million from the end of 2024 and up $30.2 million from the same point last year. The increase is driven by strong collections and offset by a $5 million investment in Stella MSO.
Deferred Revenue $62 million, a 25% year-over-year increase. The growth is largely due to advanced collection from a significant multiyear agreement with a growing mental health network.
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Operating Highlights
Deep TMS systems: Shipped 88 systems in Q2 2025, a 35% increase compared to the same period last year, bringing the total installed base to 1,522 systems.
Accelerated treatment protocol: Submitted data to the FDA for a new protocol for major depressive disorder treatment, aiming to improve convenience and appeal to patients.
Global expansion: Focused on broadening patient access through global expansion and health system integration.
U.S. mental health network partnership: Secured an extensive order of systems with a multiphase delivery plan through the end of the year by a fast-growing U.S. mental health network in the Western and Southern U.S.
Recurring revenue model: 70% of customer engagements are multiyear lease agreements, with a backlog of $62 million in signed agreements.
Financial performance: Achieved record quarterly revenue of $12.6 million, a 26% increase year-over-year, and maintained a strong gross margin of 75%.
Minority investments: Made a $5 million investment in Stella MSO, a management services organization for mental health clinics, as part of a broader strategy to invest in complementary enterprises.
Educational initiatives: Funded two new CME courses to expand clinician knowledge and confidence in Deep TMS usage.
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Risk or Challenges
Geopolitical and Supply Chain Factors: The company acknowledges risks from shifts in market conditions due to geopolitical and supply chain factors, which could impact operations and financial performance.
Regulatory Approvals and Clinical Data: Dependence on regulatory approvals and clinical data for market differentiation poses a risk if approvals are delayed or clinical data does not support product claims.
Accelerated Treatment Protocol: The success of the accelerated treatment protocol for Deep TMS is uncertain and could impact the company's ability to attract prospective patients if not well-received.
Investment in Mental Health Providers: The strategy to invest in mental health providers carries risks, including potential financial losses and challenges in managing partnerships effectively.
Increased Operating Expenses: Rising sales, marketing, and R&D expenses could pressure profitability if revenue growth does not keep pace.
Customer Retention and Multiyear Agreements: While customer retention is high, any decline in renewals or multiyear agreements could impact recurring revenue streams and financial stability.
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Guidance & Outlook
Revenue Guidance: The company has raised its full-year 2025 revenue guidance to a range of $50 million to $52 million, representing 22% to 27% growth over 2024 revenue.
Operating Profit and Adjusted EBITDA: BrainsWay expects operating profit in the range of 4% to 5% of revenue and adjusted EBITDA in the range of 12% to 13% for the year.
Market Expansion and Strategic Investments: The company is actively pursuing investments in mental health providers and enterprises complementary to its business, with plans for additional investments following the $5 million financing transaction with Stella MSO. These initiatives aim to expand market awareness, R&D capabilities, and access to Deep TMS.
Clinical Advancements: BrainsWay is progressing with an accelerated treatment protocol for Deep TMS for major depressive disorder, which could improve convenience and appeal to prospective patients. The company is also working with the Israel Ministry of Defense to qualify PTSD patients for Deep TMS.
Deferred Revenue and Backlog: The company has a backlog of signed agreements with remaining performance obligations totaling approximately $62 million, providing strong visibility into future revenues.
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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 in terms of treatment days, potential pricing, and payer flow domestically?
A:The data has been submitted to the FDA, and initial results are positive. An FDA response is expected in Q4, with potential clearance by year-end. The protocol reduces clinic visits from 6 weeks to 6 days, making it more convenient for patients. Current reimbursement allows up to 2 treatments per day, and efforts are underway to improve this to align with the new protocol for 2026.
Q:Could you discuss the FTEs and the size of the commercial organization, including changes over the past year and future outlook?
A:The sales team consists of 16 direct salespeople in the U.S., supported by 10 FTE practice development staff for training and installation, totaling 26 people involved in sales activities.
Q:Are there any updates on TMS 360 and the pilot study?
A:The TMS 360 will launch with the alcohol use disorder trial by the end of September. Feasibility studies are also being conducted for cognitive behavior and Parkinson's in the U.S. and possibly Europe. The TMS 360 will be the main system for the alcohol use disorder trial this year.
Q:Could you elaborate on the backlog, particularly regarding enterprise customers, and provide the OCD placements during the quarter?
A:The backlog is primarily from enterprise accounts with multiyear lease agreements, providing visibility for at least the next year. 30 OCD systems were shipped in Q2.
Q:How many more strategic financing arrangements are planned this year, and what is the expected capital outlay?
A:The goal is to sign at least 5 contracts by year-end and 10 more by 2026, totaling 15 contracts. Investments range from $2 million to $5 million, depending on the mental health network's size and profitability. Active discussions are ongoing to meet these targets.
Q:How has the Stella financing arrangement been working out so far?
A:The collaboration with Stella has led to over a 50% increase in TMS patient utilization. The focus has been on technology, education, and training to improve patient yield, and this model will be replicated in future collaborations.
Q:Review of Unclear Management Responses
A:None of the questions were avoided or lacked clarity. All responses were direct and provided sufficient detail.
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Earnings Word Cloud
The most frequently occurring keywords in this quarter's earning call
Advisors conference
BrainsWay grant
CME course
Carl Edward
Co Inc
Cohen Ladenburg
Conference today
Department patient
Division Jeffrey
Division Russell
ET day
Edward Byrnes
FDA multicenter
FDA peer
Form reminder
RD road
Research Division
access
activity
acute
awareness RD
core
customer engagement
evidence
focus
health clinic
initiative
investment health
market awareness
model
phase
platform
road map
role
visibility
BWAY Transcript
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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.
BWAY Report
Frequently Asked Questions
Where does this earnings call transcript come from?
All transcripts are sourced directly from the official live webcast or the company’s official investor relations website. We use the exact words spoken during the call with no paraphrasing of the core discussion.
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Why do some answers appear as “Unclear” or “Inaudible”?
When audio quality is poor or multiple speakers talk over each other, we mark the section instead of guessing. This ensures complete accuracy rather than introducing potential errors.
Who creates the AI Summary and Key Q&A highlights shown above the transcript?
They are generated by a specialized financial-language model trained exclusively on 15+ years of earnings transcripts. The model extracts financial figures, guidance, and tone with 97%+ accuracy and is regularly validated against human analysts. The full raw transcript always remains available for verification.
