Executive Summary

Q3 2025 revenue grew 21.7% year over year to $0.81M, but missed Wall Street consensus; diluted EPS was -$0.24, also below consensus. Gross margin slipped to 83.3% on a higher mix of discounted Patient Assistance volume and expired RED inventory, and operating loss widened to $2.10M .
Versus estimates: Revenue $0.81M vs $1.00M consensus; EPS -$0.24 vs -$0.20; similar small misses in Q2, and a Q1 revenue beat with an EPS miss (see Estimates Context) (*Values retrieved from S&P Global).
Strategic catalysts accelerated: (1) FDA 510(k) clearance expanding PENFS to adult FD-related pain and nausea; (2) covered lives increased to ~55M; (3) CPT Category I code effective Jan 1, 2026, expected to streamline billing and add RVUs, paving the way for broader adoption .
Liquidity/stock reaction: Cash was $4.4M at quarter-end; subsequent ATM issuance in late October raised ~$2.73M, plus ~$0.10M via warrant exercises. Shares declined ~8.6% since reporting, reflecting misses and margin pressure ahead of 2026 reimbursement catalysts .

What Went Well and What Went Wrong

What Went Well

FDA expansion: PENFS cleared for adult FD-related pain and associated nausea symptoms, materially broadening addressable market beyond pediatrics .
Coverage momentum: Total covered lives expanded to ~55M, improving reimbursement access ahead of CPT Category I activation .
CEO tone on scaling: “We remain highly optimistic as we lay the foundation for what we expect will be a major scaling phase in 2026… [with] Category I code… and [clinical] guidelines” .

What Went Wrong

Estimate misses and margin compression: Q3 revenue (-$0.19M vs consensus) and EPS (-$0.04 vs consensus) missed; gross margin fell to 83.3% due to larger discounted volume and RED expired inventory (*Values retrieved from S&P Global).
Operating loss widened: Operating loss increased to $2.10M (+27% y/y), with selling expenses up 125% y/y amid commissions and advertising ahead of CPT code go-live .
Continued going-concern disclosure and internal control weaknesses: Management reiterated substantial doubt about going concern and disclosed material weaknesses in internal controls through Q3 .

Financial Results

Metric	Q1 2025	Q2 2025	Q3 2025
Revenue ($USD)	$895,655	$894,086	$811,414
Diluted EPS ($USD)	-$0.33	-$0.22	-$0.24
Gross Margin %	84.4%	83.6%	83.3%
Operating Loss ($USD)	($2,295,098)	($1,717,858)	($2,100,085)
Net Loss ($USD)	($2,278,684)	($1,690,418)	($2,122,796)
Cash and Equivalents ($USD)	$2,005,370	$5,988,456	$4,377,109

Segment breakdown: NeurAxis operates one reportable segment (IB-STIM). Net sales above reflect total IB-STIM segment revenue .

KPIs and commercial indicators:

KPI	Q1 2025	Q2 2025	Q3 2025
Covered Lives (approx.)	~51M (management commentary)	n/a	~55M
Unit Deliveries YoY	n/a	n/a	+38% YoY (management commentary)
Devices per Patient (label)	3–4 typical	3–4 typical	Up to 4 under expanded labeling (management commentary)

Versus Estimates

Metric	Q1 2025	Q2 2025	Q3 2025
Revenue Consensus ($USD)	$725,000*	$983,620*	$1,000,000*
Revenue Actual ($USD)	$895,655	$894,086	$811,414
Primary EPS Consensus Mean ($)	-$0.24*	-$0.19*	-$0.20*
Primary EPS Actual ($)	-$0.33	-$0.22	-$0.24

Values retrieved from S&P Global.*

Guidance Changes

NeurAxis did not issue formal numerical guidance; management indicated continued revenue growth momentum into Q4 2025 and a major scaling phase beginning in 2026 with CPT Category I activation and broader payer policy coverage.

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue	Q4 2025	None	Continued growth expected (qualitative)	Maintained qualitative outlook
Reimbursement/Payers	2026	None	Expect broader policy coverage aided by CPT Category I code	Qualitative positive
Margins	2026	None	Anticipate margin expansion as discounted volume converts to reimbursed pricing	Qualitative positive

Earnings Call Themes & Trends

Topic	Previous Mentions (Q1 & Q2)	Current Period (Q3)	Trend
CPT Category I code (effective 1/1/2026)	Awarded; central to scaling and RVUs; major catalyst highlighted	Reinforced as primary 2026 commercialization enabler (billing/RVUs)	Positive, nearing activation
Insurance coverage (covered lives)	~51M covered lives; payer guidelines expected to drive expansion	~55M covered lives; multiple large insurers in review cycles	Positive, accelerating
RED commercialization	Soft launch; learning curve in adult GI practices	Continued soft launch; expired inventory impacted margins	Gradual adoption; near-term margin drag
FDA expansions	IB-STIM label to 8–21 y/o; RED cleared; FD submission in pediatrics	Adult FD pain/nausea clearance; broader adult opportunity	Positive pipeline expansion
Internal controls/going concern	Material weaknesses disclosed; remediation ongoing	Material weaknesses remain; going concern reiterated	Neutral/negative until remediated
Liquidity and financing	Q2 raised $5.0M; warrants exercised	Post-Q3 ATM $2.73M; warrants $0.10M	Adequate near-term runway; dilution risk persists

Management Commentary

CEO on scaling readiness: “We remain highly optimistic as we lay the foundation for what we expect will be a major scaling phase in 2026… With the Category I code effective January 1, 2026, and our proprietary PENFS technology now included in leading clinical practice guidelines, we believe NeurAxis is well positioned for substantial revenue growth and margin expansion.”
CFO on breakeven path (Q1 context): Cash flow breakeven achievable with guidelines, CPT code effectiveness, and growth in covered lives; leveraging operating expenses as a percent of sales over time .
Strategy emphasis: Broader medical policy coverage and RVU-based physician compensation are pivotal; payer engagement is ongoing with multiple large insurers approaching review cycles .

Q&A Highlights

Payer policy timelines and coverage expansion: Management continues discussions with major insurers; expects gradual but improving coverage over the next eight months into CPT code activation .
RED adoption curve: Adult GI practice uptake is steady but paced by committee processes; near-term margin impact from expired inventory .
Cash runway and potential financing: Balanced approach; post-quarter ATM and warrants enhanced liquidity; management maintains flexibility to support growth .
Operating expense leverage: Expect to invest in sales/marketing, but Opex as % of sales to decline as revenue scales (reiterated from earlier calls) .

Estimates Context

Q3 2025: Revenue $0.81M vs $1.00M consensus (miss), EPS -$0.24 vs -$0.20 (miss) (*Values retrieved from S&P Global).
Q2 2025: Revenue $0.89M vs $0.98M consensus (miss), EPS -$0.22 vs -$0.19 (miss) (*Values retrieved from S&P Global).
Q1 2025: Revenue $0.90M vs $0.73M consensus (beat), EPS -$0.33 vs -$0.24 (miss) (*Values retrieved from S&P Global).
Estimate revisions should reflect: (1) coverage expansion trajectory and CPT Category I activation on Jan 1, 2026 supporting ASP/margin normalization; (2) RED adoption pacing; (3) opex investment into commercialization .

Key Takeaways for Investors

Near-term: Expect continued revenue growth but potential margin pressure until reimbursed ASPs replace discounted Patient Assistance volume; stock may be sensitive to payer coverage announcements and CPT code-related updates .
Medium-term (2026): CPT Category I code activation and growing covered lives should support pricing/margin normalization and scale in children’s hospitals (physician RVUs), potentially improving unit economics and EPS trajectory .
Pipeline/regulatory: Adult FD expansion and pediatric FD/FAP broaden TAM; watch for incremental FDA indications and RED uptake to diversify revenue .
Execution watchpoints: Coverage wins, RED commercialization velocity, opex discipline, and remediation of internal controls are key milestones to de-risk the story .
Liquidity: Post-Q3 equity raises strengthen near-term runway but add dilution; further capital may be needed if scaling takes longer than expected .
Trading catalysts: Policy coverage press releases, hospital adoption updates, and margin inflection signals (e.g., ASP mix shifting to reimbursed) are likely to move shares .

Citations:

Q3 2025 8-K Item 2.02 (prelim): cash ~$4.4M; net sales ~$0.8M; gross profit ~$0.7M; operating loss ~$2.1M .
Q3 2025 10-Q financials and MD&A: revenue, EPS, margins, operating loss, net loss, cash, subsequent events ATM/warrants; going concern; internal controls .
Q2 2025 10-Q: revenue, EPS, margins, financing, coverage, RED commentary .
Q1 2025 10-Q and earnings call: revenue, EPS, CEO/CFO remarks; covered lives; guidelines timing; RED adoption .
FDA clearance and ATM expansion press releases: .
Stock reaction and estimate snapshots: .

Neuraxis, INC (NRXS)·Q3 2025 Earnings Summary