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    electroCore, Inc. (ECOR)

    Q3 2024 Earnings Summary

    Reported on Mar 21, 2025 (After Market Close)
    Pre-Earnings Price$13.40Last close (Nov 13, 2024)
    Post-Earnings Price$11.75Open (Nov 14, 2024)
    Price Change
    $-1.65(-12.31%)

    What went well

    • Significant Growth Potential in the VA Channel: Currently, electroCore's gammaCore therapy has penetrated only about 1% of the total addressable headache market within the VA hospital system, indicating substantial room for expansion. With post-pandemic access to facilities improving, the company plans to aggressively expand its sales force to accelerate penetration and revenue growth. Additionally, pursuing a PTSD label could significantly enlarge the addressable market within the VA system.
    • Strong Market Adoption and Recognition of Truvaga Plus: The Truvaga Plus device is outselling the Truvaga 350, even at a higher price point, demonstrating strong consumer acceptance. The recent Men's Health 2025 Tech Award recognition provides enhanced brand visibility. Upcoming expansions into new channels like Amazon and platforms like Perks at Work, along with potential viral marketing through social media and influencers, are expected to drive further growth.
    • Significant Military Contracts with Potential for Future Growth: ElectroCore received a $548,000 order from the Air Force for TAC-STIM Black on October 1st, indicating substantial demand from military channels. While revenue from TAC-STIM may remain variable in the near term, there is optimism for securing more predictable master contracts in the coming years, which could lead to significant and stable revenue growth from this segment.

    What went wrong

    • The company is delaying international expansion of its Truvaga product until achieving cash flow positivity, potentially limiting near-term growth opportunities and confining sales to the U.S. market.
    • Sales of the TAC-STIM product line are variable and unpredictable, with significant revenue contributions not expected until 2026 or 2027, adding uncertainty to future earnings.
    • The company is not providing top-line revenue guidance and is not planning to do so in the near future, creating uncertainty for investors regarding future revenue prospects.

    Q&A Summary

    1. Top-Line Guidance
      Q: When will you start providing top-line guidance?
      A: Joshua Lev said that while providing top-line guidance isn't currently planned, they'll reevaluate this as they enter the new year, discussing it internally and potentially offering guidance in the future.

    2. Military Contracts Predictability
      Q: Will military revenue become predictable?
      A: Daniel Goldberger explained that the recent $548,000 order was for TAC-STIM black, shipped on October 1st at the Air Force's request. He expects military revenue in 2025 to be back-end loaded in the third and fourth quarters, with hopes for a more predictable master contract in the 2026–2027 revenue cycles.

    3. VA Revenue Growth Strategies
      Q: How can VA revenue growth accelerate?
      A: Goldberger noted that as pandemic restrictions lifted, they can aggressively add sales reps to penetrate existing and new hospitals. Additionally, they're working toward a PTSD label, which will substantially grow the VA's total addressable market in 2025–2026.

    4. Truvaga Plus Growth
      Q: How will you grow Truvaga Plus adoption?
      A: Goldberger mentioned leveraging their e-commerce platform, search, and social media. New channels like affiliate sales, the Perks at Work platform, and an Amazon launch next year are upcoming opportunities. They must balance revenue growth with contribution margin, as channels like Amazon have higher costs.

    5. Kaiser Permanente Expansion
      Q: Will prescriber use expand across Kaiser Permanente?
      A: Goldberger said gammaCore is on formulary in Southern and Northern California, where most of the 25 prescribers are located. There's potential for expansion into other regions like Washington and Oregon. All prescribers are revenue prescribers since Kaiser forbids samples.

    6. Price Flexibility in VA Contracts
      Q: Can you increase prices in VA contracts?
      A: Goldberger stated that while they have an opportunity to increase prices, they're holding prices constant. The FSS contract has been extended three times, and they expect the revised contract to maintain current pricing.

    7. International Expansion Plans
      Q: Will Truvaga launch internationally?
      A: Goldberger said Truvaga is a US-only product for now. They're focusing on achieving cash-positive status before investing in certifications for the EU and Asian markets.

    8. M&A Prospects
      Q: Any updates on M&A or wellness products?
      A: Goldberger mentioned they're focused on vagus nerve stimulation and, while there are opportunities to add products or co-market, there's nothing to discuss at this time.

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