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Neuronetics, Inc. (STIM)·Q1 2025 Earnings Summary

Executive Summary

  • Q1 2025 revenue was $32.0M, up 84% year over year and above S&P Global consensus ($29.1M); EPS was a larger loss than expected at $(0.21) vs consensus $(0.12), reflecting mix shift from Greenbrook clinics and lower-margin service revenue. Revenue beat; EPS miss. *
  • Gross margin fell to 49.2% (vs 75.1% in Q1 2024) due to consolidation of Greenbrook clinics; operating expenses rose 35% to $26.8M largely from Greenbrook G&A, driving net loss of $(12.7)M.
  • Guidance raised at the midpoint: FY 2025 revenue to $149–$155M (prior $145–$155M); Q2 2025 revenue guided to $36–$38M; full-year gross margin ~55% and OpEx $90–$98M maintained.
  • Integration progressing: SPRAVATO now in 75 of 95 clinics (buy‑and‑bill at 42), BMP network expansion (>385 active sites), and ~95% of ~$22.5M annual cost synergies realized; management reiterated target to be cash-flow positive in Q3 2025.
  • Potential catalysts: sustained clinic utilization and SPRAVATO buy‑and‑bill ramp, adolescent coverage expansion (Evernorth/Cigna) increasing TAM, and margin cadence improving with scale per guidance commentary.

What Went Well and What Went Wrong

What Went Well

  • Top-line momentum: $32.0M revenue (+84% y/y) with U.S. clinic revenue of $18.7M post‑Greenbrook and treatment sessions of $9.6M. “2025 is off to a great start…” (CEO).
  • SPRAVATO rollout and buy‑and‑bill economics: offered in 75 clinics; buy‑and‑bill active in 42 clinics and generates ~3x revenue vs administer‑and‑observe model.
  • Adolescent coverage expansion: Evernorth/Cigna joined Humana, Aetna and BCBS entities in covering adolescents 15+, bolstering long‑term growth drivers.

What Went Wrong

  • Margin pressure and earnings: gross margin fell to 49.2% on clinic mix; EPS of $(0.21) missed consensus (mix plus higher Opex from integration). *
  • Core product softness y/y: U.S. NeuroStar system revenue decreased 14% to $2.8M (31 systems shipped), and treatment session revenue decreased 26% due to elimination of prior‑year Greenbrook purchases.
  • Elevated cash burn in Q1: cash used in operations was $(17.0)M as STIM proactively settled legacy vendor plans and accelerated expenses; management expects Q2 operational cash usage < $5M and year‑end cash > $20M.

Financial Results

Quarterly trend vs prior periods

MetricQ3 2024Q4 2024Q1 2025
Revenue ($USD Millions)$18.5 $22.5 $32.0
Gross Margin %75.6% 66.2% 49.2%
Operating Expenses ($USD Millions)$21.7 $25.8 $26.8
Net Loss ($USD Millions)$(13.3) $(12.2) $(12.7)
Diluted EPS ($USD)$(0.44) $(0.33) $(0.21)

Q1 2025 results vs S&P Global consensus (Wall Street)

MetricConsensusActualSurprise
Revenue ($USD Millions)$29.07*$32.0 +$2.93*
EPS ($USD)$(0.12)*$(0.21) −$0.09*

Values with asterisks retrieved from S&P Global.

Segment breakdown (U.S. product categories)

MetricQ1 2024Q1 2025
U.S. NeuroStar Advanced Therapy System ($USD Millions)$3.31 $2.85
U.S. Treatment Sessions ($USD Millions)$12.99 $9.61
U.S. Clinic Revenue ($USD Millions)—$18.66
U.S. Other ($USD Millions)$0.50 $0.37
Total U.S. Revenues ($USD Millions)$16.79 $31.48
International Revenues ($USD Millions)$0.62 $0.49
Total Revenues ($USD Millions)$17.42 $31.98

Key KPIs

KPIQ1 2024Q1 2025
Systems shipped (#)—31
NeuroStar system ASP y/y—+9%
Gross Margin %75.1% 49.2%
Cash & Cash Equivalents ($USD Millions)$47.7 $20.2
SPRAVATO clinics (#)—75 (42 buy‑and‑bill active)
BMP active sites (#)—>385

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
RevenueQ2 2025—$36.0–$38.0M New
RevenueFY 2025$145.0–$155.0M $149.0–$155.0M Raised midpoint
Gross MarginFY 2025~55% ~55% Maintained
Total Operating ExpensesFY 2025$90.0–$98.0M $90.0–$98.0M Maintained
Operational Cash UsageQ2 2025—< $5.0M New
Year‑End CashFY 2025—> $20.0M New

Earnings Call Themes & Trends

TopicQ3 2024 (Prior-2)Q4 2024 (Prior-1)Q1 2025 (Current)Trend
Greenbrook integration & synergiesTransaction approved; clinic synergies identified; cash-flow breakeven expected by Q2 2025 Acquisition closed; >$21M of $22M synergies executed ~95% of ~$22.5M synergies realized by end 2024; expecting >$23M total Positive realization
SPRAVATO rollout & buy‑and‑billRoadmap to accelerate rollout post-transaction 68 centers offering; planned expansion 75 clinics offering; buy‑and‑bill in 42 clinics; ~3x revenue vs administer‑and‑observe Accelerating
BMP provider networkBMP efficacy highlighted; faster patient starts Continued expansion targets >385 active sites; PDMs building primary care referral network Expanding utilization
Tariffs/macro exposureNot highlightedNot highlightedMinimal impact: ~$500 per system; < $250k on treatment packs despite 145% tariff Manageable
Margin cadence75.6% on mix/one-time benefits 66.2% with clinic mix ~49%; guided to ~55% with scale in Q2/Q3 Improving with scale
Cash & OpEx profileCash $20.9M; elevated losses Cash $18.5M; OpEx $25.8M Q1 OpEx $26.8M; normalize to $23–$24M in Q2; cash ops use < $5M in Q2 Normalizing

Management Commentary

  • “Our growth initiatives for the Greenbrook clinics continue to exceed expectations… roll out SPRAVATO® across our network and institute the buy‑and‑bill model… Better Me Provider program continues to prove its effectiveness… remaining on the path to achieving positive cash flow in the third quarter of this year.” — Keith J. Sullivan, CEO.
  • “SPRAVATO is now offered… in 75 of our 95 Greenbrook clinics… buy‑and‑bill treatments are generating approximately 3x the revenue… remain on track to offer buy‑and‑bill SPRAVATO in all appropriate Greenbrook clinics by the end of 2025.” — Keith J. Sullivan.
  • “We had identified approximately $22.5 million of annualized synergies… 95% of these were realized by the end of 2024… believe that total realized synergies will exceed $23 million.” — Keith J. Sullivan.
  • “We proactively took steps to settle Greenbrook’s legacy vendor payment plans and pull forward certain expenses… cash used in operations for the first quarter was $17 million. We expect cash used in operations for the second quarter to be less than $5 million.” — Stephen Furlong, CFO.
  • “Gross margin… will get pretty close to that 55% number in the next couple of quarters… additional improvement as we get to Q4.” — Stephen Furlong.

Q&A Highlights

  • BMP pipeline and site growth: ~113 sites working to enter program; continued expansion expected through upcoming summits.
  • Guidance split reaffirmed: FY 2025 revenue split ~$65–$70M Neuronetics and $80–$85M Greenbrook; near-term growth drivers are clinic utilization and SPRAVATO.
  • Gross margin cadence: expected improvement with revenue scale to approach ~55% in Q2–Q3.
  • SPRAVATO buy‑and‑bill working capital: pursuing LOC to align cash cycle (~60-day collections vs 120-day payables) to mitigate cash burden of conversions.
  • OpEx normalization: Q1 included ~$5M of pulls (software, payroll synchronization, marketing, audit); normalized OpEx expected $23–$24M in Q2.

Estimates Context

  • Q1 2025: Revenue beat consensus ($32.0M vs $29.1M*), but EPS missed ($(0.21) vs $(0.12)). Mix shift to clinic services and higher OpEx from integration were the primary drivers of the EPS shortfall.
  • Q2 2025: Company midpoint guidance (~$37.0M) is in line with consensus ($36.9M*); margin improvement expected with scale, suggesting estimate models may need higher gross margin assumptions in H2. *
  • FY 2025: Guidance raised to $149–$155M (consensus $148.1M*); consensus EPS at $(0.60)* appears conservative if margin trajectory and SPRAVATO adoption meet management commentary. *

Values with asterisks retrieved from S&P Global.

Key Takeaways for Investors

  • Top-line outperformance with clinic integration driving scale; monitor sustained clinic utilization and adolescent coverage tailwinds.
  • Margin recovery path credible: guided gross margin ~55% with cadence tied to revenue scale; watch Q2/Q3 progression vs targets.
  • SPRAVATO buy‑and‑bill ramp is a key revenue mix lever (3x economics) and should lift clinic revenue density; financing measures (LOC) mitigate cash strain.
  • BMP expansion and primary care referral network are improving patient flow and utilization at partner sites; this supports treatment sessions and controlled capital sales.
  • Cash burn spike in Q1 was strategic; management guides Q2 operating cash use < $5M and year‑end cash > $20M, de‑risking near‑term liquidity.
  • FY revenue guidance raised; near‑term catalysts include Q2 print vs guidance and confirmation of margin improvements; medium‑term thesis hinges on integrated model (device + clinics) and adolescent TAM expansion.
  • Governance/transition: CFO retirement announced (Mar 31, 2026) with succession process underway; continuity planned.