Neuronetics, Inc. (STIM) Q2 2025 Earnings Call Transcript
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
Overview
The earnings call indicates several positive developments: improved cash management, operational efficiencies, and strong adolescent patient growth. Despite a consistent net loss, the per-share loss improved, and EBITDA showed progress. The Q&A reveals strategic shifts and revenue cycle improvements, with optimistic guidance for Q4. However, some concerns remain, such as slower traditional STIM business and lack of specific targets. Overall, the positive aspects, including the potential for cash flow positivity and revenue growth, suggest a positive stock price movement.
Key Financial Performance
Total Revenue $38.1 million, an 18% year-over-year increase on an adjusted pro forma basis. The increase was driven by the inclusion of Greenbrook operations following the acquisition.
NeuroStar Business Revenue $15.1 million, including NeuroStar system revenue of $3.5 million with 41 systems shipped, and U.S. treatment session revenue of $10.8 million, up 13% on a pro forma basis. Growth attributed to increased system ASP and treatment session revenue.
U.S. Clinic Revenue $23 million, the largest quarterly clinic revenue to date, representing a 23% sequential increase over the first quarter. Growth driven by operational improvements and the Greenbrook integration.
Gross Margin 46.6%, compared to 74% in the prior year quarter. The decline was due to the inclusion of Greenbrook's clinic business, which operates at a lower margin, and a higher mix of clinic revenue associated with buy and bill SPRAVATO treatments.
Operating Expenses $25.8 million, a 25% increase compared to $20.7 million in the second quarter of 2024. The increase was primarily due to the inclusion of Greenbrook's general and administrative expenses, partially offset by savings in sales and marketing expenses.
Net Loss $9.8 million or $0.15 per share, consistent with the prior year quarter's net loss of $9.8 million but improved on a per-share basis from $0.33 per share.
EBITDA Negative $7.2 million, compared to negative $8 million in the prior year quarter. Improvement attributed to operational efficiencies and cost management.
Cash Used in Operations $3.5 million, better than the previously guided target of under $5 million and a significant improvement from $17 million in the first quarter. Improvement driven by better cash management and operational efficiencies.
Adolescent Patient Growth 25% growth in adolescent new patient starts in the first half of 2025 compared to 2024, supported by expanded insurance coverage and increased awareness.
You have reached the limit. Sign up to access full content
Get started
Operating Highlights
NeuroStar system revenue: $3.5 million with 41 systems shipped, demonstrating value in a competitive market.
SPRAVATO rollout: 77 of 83 eligible clinics now offering therapy, with full rollout expected by year-end.
Adolescent treatment growth: 25% growth in adolescent new patient starts in the first half of 2025 compared to 2024, supported by expanded insurance coverage.
Greenbrook growth strategy: Achieved $23 million in U.S. clinic revenue, the strongest quarterly performance to date, driven by enhanced patient connection capabilities and regional account manager program.
Provider Connection Program: Expanded outreach to primary care physicians and other healthcare providers, resulting in increased referrals to NeuroStar accounts and BMP providers.
Operational efficiencies: Implemented self-check-in kiosks at 11 locations, improving patient flow and reducing staff workload.
Cash collections optimization: Addressed legacy payer issues, reduced claim rejections, and improved cash flow reliability.
Greenbrook integration: Exceeded expectations with operational standardization and enhanced patient conversion rates.
SPRAVATO buy and bill model: Adopted an analytical approach to expansion, focusing on opportunities with good margins.
You have reached the limit. Sign up to access full content
Get started
Risk or Challenges
Greenbrook Operations Optimization: Challenges in optimizing the efficiency of Greenbrook operations post-acquisition, requiring fine-tuning and operational standardization.
SPRAVATO Reimbursement Landscape: Navigating a complex and inconsistent reimbursement landscape for SPRAVATO, with payers reimbursing at significantly different rates and timings, impacting margins and cash flow.
Operational Efficiencies: Need for further operational efficiencies and cost savings across the Greenbrook network, including reliance on consultants to identify optimization opportunities.
Cash Collections: Legacy issues with payers, including prepayment audits and incorrect billing submissions, leading to delays and challenges in cash collections.
Gross Margin Pressure: Lower gross margins due to the inclusion of Greenbrook's clinic business and the mix of SPRAVATO buy and bill revenue, which operates at a lower margin.
Increased Operating Expenses: Higher operating expenses due to the integration of Greenbrook's general and administrative costs and the need to augment critical areas like claims collections.
Financial Liquidity: Dependence on external funding, including debt agreements, to maintain liquidity and support operations, with minimum liquidity requirements increasing in 2026.
You have reached the limit. Sign up to access full content
Get started
Guidance & Outlook
Revenue Guidance: For the third quarter of 2025, the company expects net revenue to be between $37 million and $39 million. For the full year 2025, total revenue is projected to be between $149 million and $155 million.
Gross Margin Guidance: Full-year gross margin is expected to be between 48% and 50%, revised from the prior guidance of approximately 55%. The change is attributed to a higher mix of clinic revenue and the SPRAVATO buy and bill model, which carries a lower gross margin.
Operating Expenses: Operating expenses for the full year 2025 are projected to be between $100 million and $105 million, reflecting adjustments for Greenbrook integration and strategic investments in claims collections and operational capabilities.
Cash Flow Projections: The company targets cash flow from operations to range from negative $3 million to breakeven in Q3 2025, turning positive in Q4 2025. Year-end 2025 total cash, including restricted cash, is projected to be between $25 million and $28 million.
SPRAVATO Rollout: The company plans to complete the rollout of SPRAVATO across all eligible clinics by the end of 2025. The buy and bill model will be expanded selectively to maximize profitability.
Adolescent Patient Growth: Neuronetics aims to continue driving growth among adolescent patients, supported by expanded insurance coverage and clinical data demonstrating the effectiveness of NeuroStar TMS in this demographic.
Operational Improvements: The company plans to implement further operational efficiencies, including a full network rollout of self-check-in kiosks and additional cost-saving measures identified through a consultant review.
You have reached the limit. Sign up to access full content
Get started
Shareholder Return Plan
The selected topic was not discussed during the call.
You have reached the limit. Sign up to access full content
Get started
Key Q&A
Q:Can you help us understand the dynamics of the traditional STIM business being slower than expected?
A:The company shifted its strategy to focus on the Provider Connection Program, which educates primary care physicians (PCPs) through digital and social media platforms. This approach aims to create a more efficient use of marketing dollars and improve patient conversion rates. The shift is expected to take a few months to gain traction, but the company still delivered 13% growth this quarter.
Q:What type of impact on marketing dollars does the new referral strategy have longer-term?
A:The new strategy is expected to make marketing dollars more efficient, potentially lowering the overall spend. However, there will still be costs associated with trade shows and educational meetings for PCPs. The company is following a similar playbook to its RAM program, which has shown success in the past.
Q:How much dollars are involved in the resubmitted claims, and what is the likelihood of collection?
A:The company is improving its revenue cycle management by reducing the time to collect on initial claims and addressing aged accounts receivable (AR). They are collecting 10% more revenue in the first month after treatments compared to earlier this year. The team is also catching up on aged claims from 2024 and earlier, which is expected to provide a tailwind through 2026.
Q:What is the company’s approach to optimizing the SPRAVATO buy and bill (BMB) program?
A:The BMB program allows access to more patients and plans that require both A&O and BMB. The company is ensuring adequate reimbursement to maintain profitability. While the gross profit margin percentage may be lower for BMB compared to A&O, the per-treatment gross profit dollars are expected to be higher due to the increased drug cost.
Q:What is the normalized level of clinical sales per site for Greenbrook, and how should we think about this metric long-term?
A:The company has not set a specific target for clinical sales per site. Currently, Greenbrook accounts for about 60% of total revenue, and this is expected to remain consistent. The company sees potential for growth by adding beds and expanding site sizes, with strong volume growth observed in the Greenbrook business.
Q:What is the marketing strategy for the adolescent indication?
A:The company is targeting providers who care for adolescent patients through the Provider Connection Program. This includes attending trade shows and conducting educational meetings in provider offices to explain the benefits of TMS for adolescent patients. The strategy has shown positive results.
Q:How should we think about the revenue guidance for the back half of the year, particularly the Q3 to Q4 ramp?
A:The company expects seasonality to impact Q3 due to holidays and summer vacations, leading to slower growth. However, a significant increase is anticipated in Q4 as seasonality effects reverse. The guidance reflects this expected pattern, with a similar increase in revenue from Q3 to Q4 as seen from Q1 to Q2.
Q:What is the trajectory of gross margins over the medium term, particularly for the combined business?
A:Gross margins are influenced by the revenue mix between NeuroStar and Greenbrook. NeuroStar margins are around 74-75%, while Greenbrook margins are approximately 30%. The company sees potential for margin improvement by leveraging fixed clinical infrastructure at Greenbrook and optimizing the BMB program to ensure adequate reimbursement and pricing.
Q:Review of Unclear Management Responses
A:Management avoided providing specific dollar amounts for resubmitted claims and the likelihood of collection. They also did not set a specific target for clinical sales per site for Greenbrook, citing variability due to potential site expansions and other factors. Additionally, no specific guidance was provided for gross margins in 2026, with only general trends discussed.
You have reached the limit. Sign up to access full content
Get started
Earnings Word Cloud
The most frequently occurring keywords in this quarter's earning call
AO
Connection Program
NeuroStar account
Provider Connection
Research Division
Tranche
approach
basis clinic
campaign
care physician
cash collection
check program
condition
database
effectiveness
efficiency cash
flow cash
focus area
forma basis
fund
funding
healthcare provider
increase forma
increase inclusion
learning
life Neuronetics
margin mix
meeting
mix clinic
patient life
patient marketing
patient referral
payer
place
progress cash
psychiatrist care
referral provider
review
saving
STIM Transcript
Neuronetics, Inc. (STIM) Q1 2026 Earnings Call Transcript
Positive5-5
The earnings call summary indicates a positive outlook with a 12% revenue increase and improved gross margin. Operating expenses grew modestly, while net loss decreased, showing operational efficiency. The lack of strategic initiatives or return discussions in the call is balanced by strong financial performance and improved margins, suggesting a positive sentiment.
Neuronetics, Inc. (STIM) Q4 2025 Earnings Call Transcript
Unknown3-17
The earnings call reflects mixed signals: improved financial performance, but lower gross margins and ongoing CID investigation. Positive aspects include increased treatment and clinic revenues, reduced net loss, and optimistic guidance. However, the Q&A session highlighted risks, such as the CID investigation and vague details on COMP360 profitability and exclusivity. The lack of clear guidance and lower Q1 expectations due to seasonality and weather also contribute to a neutral outlook. The mixed sentiment is balanced by operational improvements and growth in SPRAVATO treatments.
Neuronetics, Inc. (STIM) Q3 2025 Earnings Call Transcript
Unknown11-4
Despite record revenue growth and improved cash flow, the stock may not experience significant movement due to lowered gross margin guidance and unchanged operational efficiencies. Although Q4 guidance is optimistic, the market may remain cautious due to uncertainties in purchasing patterns and margin pressures. The Q&A session revealed confidence in growth segments but lacked detailed operational efficiency metrics, contributing to a neutral sentiment.
Neuronetics, Inc. (STIM) Q2 2025 Earnings Call Transcript
Positive8-5
The earnings call indicates several positive developments: improved cash management, operational efficiencies, and strong adolescent patient growth. Despite a consistent net loss, the per-share loss improved, and EBITDA showed progress. The Q&A reveals strategic shifts and revenue cycle improvements, with optimistic guidance for Q4. However, some concerns remain, such as slower traditional STIM business and lack of specific targets. Overall, the positive aspects, including the potential for cash flow positivity and revenue growth, suggest a positive stock price movement.
STIM Slides
STIM 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.
How soon is the transcript available after the earnings call ends?
Full verbatim transcripts are typically published within 4–12 hours after the call ends. Same-day availability is guaranteed for all S&P 500 and most mid-cap companies.
Is the transcript edited or altered in any way?
No material content is ever changed or summarized in the “Full Transcript” section. We only correct obvious spoken typos (e.g., “um”, “ah”, repeated 10 times”, or clear misspoken ticker symbols) and add speaker names/titles for readability. Every substantive sentence remains 100% as spoken.
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.
