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Neuraxis, INC (NRXS)·Q4 2024 Earnings Summary

Executive Summary

  • Q4 2024 revenue was $0.761M (+43% y/y); gross margin held at 86.4%, operating loss improved to $1.5M, and net loss narrowed to $1.5M, supported by rising insurance coverage and unit growth .
  • Preliminary 8‑K on Jan 8 guided Q4 revenue “approximately $0.8M” (+50% y/y) and FY2024 revenue $2.7M (+11%), creating a small variance versus the finalized $0.761M reported in the call; cash at 12/31/24 was ~$3.7M .
  • Covered lives expanded sharply: ~35M by Q3, ~45M by Jan 8, and ~51M by the Q4 call; management highlighted Category 1 CPT code effective Jan 1, 2026 and 8–21 age expansion as structural catalysts for access and reimbursement .
  • RED (Rectal Expulsion Device) received FDA clearance on Dec 6, booked its first order in Q1 2025, and is expected to pick up demand in Q2 and 2H25; it carries an existing Category 1 CPT and national reimbursement, allowing immediate commercialization .
  • Street consensus was unavailable via S&P Global in this session; near-term estimate revisions likely focus on accelerating revenue trajectory (Q3/Q4 y/y growth) and incremental RED ramp, while gross margin expansion is expected post-Category 1 CPT in 2026+ .

What Went Well and What Went Wrong

What Went Well

  • Strong y/y revenue acceleration: +40% in Q3 to $0.667M and +43% in Q4 to $0.761M; unit sales grew ~50% in Q3 and ~45% in Q4, signaling demand and improved reimbursement mix .
  • Insurance coverage expanded materially, from ~4–4.5M covered lives a year ago to ~45M by Jan 8 and ~51M by the Q4 call, unlocking access and ASP uplift over time .
  • Strategic milestones secured: Category 1 CPT code effective Jan 1, 2026 and IB‑Stim age expansion to 8–21 years; CEO: “We are inching very close to the final insurance policy coverage and effectiveness of the CAT 1 CPT code… which we believe sets the stage for significant growth and profitability” .

What Went Wrong

  • Gross margin blended in the mid–high 80s held flat y/y in Q4 (86.4%) due to mix headwinds from financial assistance units; margin expansion deferred until broader insurance coverage and Category 1 CPT take hold in 2026+ .
  • SG&A ticked up modestly in Q4 to $2.1M on market access and sales build-out, incentives, and higher advertising, tempering operating leverage near term .
  • ASP pressure persists: average financial assistance price is ~65% below list price ($1,195/device), leaving “significant dollars on the table” until coverage broadens; management reiterated reimbursement barriers as the main drag on monetization .

Financial Results

MetricQ2 2024Q3 2024Q4 2024
Revenue ($USD)$611,500 $667,000 $761,000
Revenue YoY Growth (%)-5.3% +40.0% +43.3%
Gross Margin (%)88.0% 85.4% 86.4%
SG&A ($USD)$2,628,288 $2,052,996 $2,100,000
Operating Loss ($USD)$(2,206,832) $(1,700,000) $(1,500,000)
Net Loss ($USD)$(2,917,710) $(1,800,000) $(1,500,000)
Cash and Equivalents ($USD)$1,800,000 $261,000 $3,700,000

KPIs and coverage trajectory:

KPIQ2 2024Q3 2024Q4 2024
Covered Lives (millions)~22.5 ~35.0 ~45.0 (as of Jan 8)
Unit Sales YoY Growth (%)n/a~50% ~45%
List Price per Device ($)$1,195 (company list) $1,195 $1,195
Avg Financial Assistance Discount~65% below list ~65% below list ~65% below list
12M Cases Treatedn/an/a>1,000

Note: Covered lives reached ~51M by the Mar 20 call as additional payers came online .

Segment breakdown: The company does not present formal segments; IB‑Stim is the core revenue driver and RED is entering commercialization .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Cash Flow Breakeven Revenue ($)Futuren/a~$10–12M breakeven at current burn New
Gross Margin (%)2026+Mid–high 80s run-rate Expansion expected as mix shifts to full reimbursement post Cat 1 CPT Raised
SG&A Run-Rate ($)2025~$2.0M/quarter cash run-rate expected Q4 actual $2.1M; maintain ~$2.0M cash view for 2025 Maintained
Revenue TrajectoryQ1 2025Growth to continue post Q3 “Strong momentum… continued into Q1” Maintained
Insurance Coverage2024–2025Target ~50M by YE’24 ~45M (Jan 8) → ~51M (Mar 20) Raised vs initial target (by Mar)
CPT CodeJan 1, 2026Category 1 code obtained Effective 1/1/2026; replaces Cat 3; RVUs and permanent reimbursement Maintained/confirmed
RED Commercialization2025Late Q4’24 launch; meaningful 2025 revenues FDA cleared Dec 6; first order booked Q1’25; demand to pick up in Q2 Maintained/confirmed

Earnings Call Themes & Trends

TopicPrevious Mentions (Q2 2024)Previous Mentions (Q3 2024)Current Period (Q4 2024)Trend
Insurance Coverage Expansion~22.5M covered lives; several BCBS policies and large plan commitment ~35M covered lives; many payers in review; aiming for ~50M by YE ~45M (Jan 8) → ~51M (Mar 20); continued payer additions Accelerating
Category 1 CPT CodeApplication pending/advocacy Obtained; effective 1/1/2026; key for RVUs and billing Reinforced benefits for billing, prior auth, physician RVUs Structural positive
FDA IndicationsRED submission; IB‑Stim age expansion planned IB‑Stim age expansion to 8–21 awarded Oct 30 RED cleared Dec 6; functional dyspepsia indication submitted (8–21) Pipeline advancing
RED CommercializationExpected Q4’24 clearance/launch “Soft launch” planning; synergy with GI practices First order booked Q1’25; stronger-than-expected physician usage expectations Early ramp positive
Gross Margin Dynamics88.0% GM; assistance units impact 85.4% GM; assistance units outpaced full reimbursed growth 86.4% GM; margin expansion expected 2026+ with coverage/CPT Near-term flat; LT up
Breakeven & OpExHigher G&A for public company build-out G&A ~$2.0M/quarter cash expected Breakeven at ~$10–12M revenue; SG&A ~$2.1M in Q4 Path clarified
Manufacturing/Tariffsn/an/a~95% sourced/manufactured in U.S.; minimal tariff exposure Neutral

Management Commentary

  • CEO on catalysts: “We are inching very close to the final insurance policy coverage and effectiveness of the CAT 1 CPT code… which we believe sets the stage for seamless patient treatment and result in significant growth and profitability.”
  • CFO on momentum: “The strong momentum that began in the third quarter last year continued in the fourth quarter and we're even seeing it into the first quarter…”
  • CFO on margins: “Reported gross margins are in the mid to high 80s… We fully expect that our gross margins when we move into 2026 and beyond will increase as a result of that transition from the CPT Category 1 code.”
  • CEO on RED: “We actually booked our first order in the first quarter of 2025 and expect demand to pick up in the second quarter, through the rest of fiscal year 2025.”

Q&A Highlights

  • Category 1 CPT significance: Management emphasized RVUs, streamlined prior authorizations, permanent reimbursement, and payer credibility as key accelerants to adoption and revenue cycle efficiency .
  • Gross margin outlook: Blend constrained by assistance pricing (~65% discount), but margins are higher on insured patients; expansion expected as coverage broadens post-2026 .
  • RED ramp: Early physician feedback exceeds expectations; commercial force and conferences positive; usage expected to scale through Q2–Q4 2025 .
  • Breakeven target: Cash burn ~$6M annually implies breakeven revenues in the ~$10–12M range under current cost structure .
  • Tariffs/supply chain: ~95% U.S. sourced/manufactured; minimal anticipated tariff exposure .
  • Product roadmap: Generation 2 IB‑Stim targeted for 2026 with potential usability indicators and features to improve outcomes prediction .

Estimates Context

  • Wall Street consensus estimates via S&P Global were unavailable in this session; therefore, a beat/miss assessment vs consensus cannot be determined.
  • Reference points: Q4 actual revenue was $0.761M (+43% y/y), while the preliminary 8‑K press release indicated ~ $0.8M (+50% y/y), reflecting normalization from preliminary unaudited figures to final reported results .
  • Given multi-quarter acceleration (Q3 +40% y/y; Q4 +43% y/y) and initial RED orders, analysts may focus on near-term revenue cadence and 2026+ margin inflection tied to Category 1 CPT effectiveness .

Key Takeaways for Investors

  • Revenue trajectory is improving with consecutive y/y growth quarters and early Q1 continuation; watch payer policy additions and insurance mix improvements for ASP uplift .
  • Structural catalysts (Category 1 CPT effective 1/1/2026, age expansion to 8–21) should streamline billing, add RVUs, and facilitate broader payer acceptance; this underpins longer-term margin expansion .
  • Coverage runway expanding: ~45M covered lives (Jan 8) to ~51M (Mar 20) suggests accelerating access; monitor additional payer policies and timing lags between policy and order flow .
  • RED can be a meaningful incremental revenue stream in 2025 given existing CPT and reimbursement; first order in Q1 2025 with expected demand uptick in Q2 supports a second leg of growth .
  • Near-term profitability remains constrained by SG&A and assistance pricing mix; breakeven revenue targeted at ~$10–12M offers a clear milestone for investors tracking scaling progress .
  • Risk monitor: Continued dependence on payer policy timing, assistance mix, and operational ramp at children’s hospitals; note 120‑day onboarding lag at non‑utilizing institutions after policy issuance .
  • Trading lens: Narrative catalysts include payer wins, RED adoption data, and any update on academic society guidelines publication—each can drive estimate revisions and sentiment .
Cross-references and discrepancies:
- Preliminary Q4 revenue (~$0.8M) in 8‑K (Jan 8) vs final $0.761M in Q4 call; treat press release as unaudited preliminary figures **[1933567_0001493152-25-001323_ex99-1.htm:0]** **[1933567_NRXS_3421109_4]**.
- Covered lives rose from ~45M (press release) to ~51M by the call following additional payer uptake **[1933567_0001493152-25-001323_ex99-1.htm:0]** **[1933567_NRXS_3421109_1]**.