electroCore, Inc. (ECOR)·Q2 2025 Earnings Summary

Executive Summary

• Record revenue and a top-line beat: Q2 2025 net sales were $7.38M (+20% y/y, +9.8% q/q), above S&P Global consensus revenue of $7.24M; GAAP EPS was -$0.44 vs -$0.325 consensus, reflecting higher SG&A and a TAC-STIM bad debt charge. Revenue beat; EPS miss. (Consensus values from S&P Global)*
• Gross margin remained strong at 87% (vs 86% y/y; 85% in Q1), driven by VA channel growth and Truvaga, despite increased operating investments.
• Reiterated FY25 revenue guidance of ~$30.0M; raised net cash usage outlook for the remainder of 2025 to $3.9–$4.4M (from $3.8–$4.3M in Q1).
• Liquidity and investment to accelerate growth: closed a $7.2M net term debt facility with Avenue Capital; management increased the revenue level needed for cash breakeven to ~$11.5–$12.0M per quarter (from ~$9.5M), prioritizing long-term growth.
• Key catalysts: VA channel re-acceleration, Quell Fibromyalgia launch into VA, Truvaga scaling (Apple Health integration), and expanded commercial talent; risks include higher near-term OpEx, TAC‑STIM receivable risk, and ongoing IP litigation with an alleged copycat.

What Went Well and What Went Wrong

• What Went Well

  • VA returned to sequential growth; VA revenue rose from $4.72M in Q1 to $5.19M in Q2, underpinning the record quarter. “The VA hospital system continues to be our largest customer and…returned to above market growth in that channel.”
  • Strong gross margins sustained at 87% (vs 86% y/y; 85% in Q1), supporting operating leverage as top line scales.
  • Truvaga DTC momentum y/y with Apple Health integration and executive hire; Q2 Truvaga sales were $0.99M (+74% y/y), and the $500 Truvaga Plus SKU now accounts for ~80% of mix.

• What Went Wrong

  • EPS miss driven by elevated SG&A: SG&A rose to $9.44M (+$2.18M y/y), including $0.55M of TAC-STIM receivables bad debt; GAAP net loss widened to -$3.67M.
  • Truvaga sequential softness: despite +74% y/y, management called the sequential decline “frustrating,” citing media efficiency ratio dipping to ~2.0 vs higher levels late last year.
  • Increased breakeven target: management raised the revenue level needed to reach cash positivity to ~$11.5–$12.0M/quarter (from ~$9.5M) due to accelerated growth investments, delaying profitability.

Financial Results

Actual vs. S&P Global Consensus – Q2 2025

Values marked with * retrieved from S&P Global.

Channel/Segment detail – Q2 2025

KPIs and Operating Metrics

Guidance Changes

Earnings Call Themes & Trends

Management Commentary

• “Electrocore posted record revenue in the second quarter and continues to evolve from a single product into a broad based bioelectronic technology company.”
• “We model gross margins in the mid-80s going forward.”
• “We are now investing in people, marketing and product to accelerate growth…likely delaying company wide profitability.”
• “We entered into a term debt facility with Avenue Capital…$7.2M of additional net cash at closing…up to $2.5M convertible at $8.46 per share.”
• “We’ll now need $11.5M–$12.0M of quarterly revenue to…demonstrate positive cash from operations… I expect that we’ll be able to hit those metrics later in 2026.”
• CFO: “We are reiterating our full year revenue outlook…approximately $30.0M and net cash used…between $3.9M and $4.4M.”

Q&A Highlights

• Truvaga SKU mix: “Our $500 Truvaga Plus…is accounting for about 80% of our revenue in the category.”
• Patent/IP: Cross-complaints filed in U.S. District Court (NJ); management will not comment beyond public filings.
• Quell ramp: Production line up in Rockaway; samples/demos in late June; expect material revenue contribution in 2H25.
• Marketing spend cadence: SG&A variable elements scale with revenue (~30% blended); media efficiency ~2.0x in Q2; goal to improve KPIs with new digital health leadership.
• Amazon: Early-stage; resolving plumbing/fulfillment; cautious on economics but see potential.

Estimates Context

• Q2 2025 revenue beat: $7.381M actual vs $7.237M consensus; EPS miss: -$0.44 vs -$0.325 consensus; coverage depth: 4 estimates (revenue and EPS). (Values retrieved from S&P Global)*
• Implications: Modest top-line upside from VA and Truvaga/TAC‑STIM, but higher SG&A (growth investments and receivable charge) weighed on EPS; models likely raise 2H OpEx and cash use, while keeping FY revenue intact given reiterated outlook.

Key Takeaways for Investors

• Top-line trajectory intact with VA re-acceleration and early Quell contribution; FY25 ~$30M revenue reiterated.
• Near-term profitability deferred as ECOR intentionally leans into growth; breakeven quarterly revenue lifted to ~$11.5–$12.0M. Expect higher OpEx through 2H25.
• Liquidity improved via Avenue Capital debt; pro forma YE cash ≈$10.5M supports execution without near-term equity. Monitor covenants/convertible feature.
• DTC opportunity remains attractive despite Q2 sequential softness; ROAS recovery initiatives (Apple Health integration, senior DTC hire) are key 2H catalysts.
• Watch VA KPIs (facility count, veterans served) and Quell VA uptake as leading indicators of sustained growth into 2026.
• Risk checks: TAC‑STIM receivable quality (bad debt expense), legal/IP costs, and potential variability in government/military procurement timing.
• Setup: Balanced—revenue momentum and platform expansion vs higher burn in 2H; stock likely most sensitive to evidence of ROAS improvement, Quell VA ramp, and VA sequential growth.

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Values marked with * retrieved from S&P Global.

Sources:

• Q2 2025 press release and 8-K: revenue, P&L, channel mix, guidance, non-GAAP reconciliation, balance sheet, Avenue Capital financing
• Q2 2025 earnings call: strategy, VA/Truvaga/Quell details, breakeven threshold, tariff exposure, sales force, Q&A specifics
• Q1 2025 press and call: sequential comps, DTC metrics, preliminary FY25 guidance
• Q4 2024 call: historical KPIs, ROAS context, VA footprint baseline
• Apple Health integration (Truvaga) press release