Sign in

You're signed outSign in or to get full access.

NI

Neuronetics, Inc. (STIM)·Q2 2025 Earnings Summary

Executive Summary

  • Q2 2025 revenue was $38.1M, up 18% on an adjusted pro forma basis and up 132% year over year; U.S. clinic revenue (Greenbrook) reached a record $23.0M, while NeuroStar system shipments were 41 with ASP >$85k .
  • Versus Wall Street, revenue beat consensus ($36.94M*) but EPS missed (actual -$0.15 vs -$0.08*), reflecting mix shift toward lower-margin clinic and SPRAVATO buy-and-bill revenues .
  • Guidance: FY25 revenue maintained ($149–$155M), gross margin lowered to 48–50% from ~55%, OpEx raised to $100–$105M, and cash flow positive now targeted for Q4 (Q3 revised to -$3M to breakeven) .
  • Liquidity/funding: drew $10M from Perceptive Tranche 2 in August, extended the $2M minimum liquidity covenant to September 2026; remains eligible for an additional $5M Tranche 2 .
  • Likely stock reaction catalysts: revenue beat, margin guide-down and cash flow timing revision, record clinic performance, and continued SPRAVATO rollout with mix optimization .

What Went Well and What Went Wrong

What Went Well

  • Record clinic revenue: “U.S. clinic revenue…was $23.0 million…representing the strongest Greenbrook quarterly clinic performance to date” .
  • NeuroStar system ASP strength: “ASP was over $85,000 which was the highest ASP in the past 5 years” with 41 systems shipped .
  • Operating cash burn improved: cash used in operations reduced to $3.5M, beating the “under $5M” target .
  • Management quote: “We’re extremely pleased with our second quarter performance…We also reduced cash used in operations to just $3.5 million, better than our target” — CEO Keith Sullivan .

What Went Wrong

  • Gross margin compression: GM fell to 46.6% from 74.0% YoY, driven by clinic mix and SPRAVATO buy-and-bill margin profile .
  • EPS miss vs Street: reported -$0.15 vs consensus -$0.08*, as OpEx rose with Greenbrook G&A integration and claims collections resourcing .
  • Cash flow timeline revised: CFO now guides Q3 cash flow from operations to -$3M to breakeven (prior: positive in Q3), with positivity pushed to Q4 .

Financial Results

MetricQ2 2024Q4 2024Q1 2025Q2 2025
Revenue ($USD Millions)$16.45 $22.49 $31.98 $38.11
GAAP Diluted EPS ($)-$0.33 -$0.33 -$0.21 -$0.15
Gross Margin %74.0% 66.2% 49.2% 46.6%
Operating Expenses ($USD Millions)$20.69 $25.84 $26.75 $25.82
Loss from Operations ($USD Millions)-$8.51 -$10.95 -$11.01 -$8.06
Revenue Consensus Mean ($USD Millions)$18.65*$18.98*$29.07*$36.94*
Primary EPS Consensus Mean ($)-$0.27*-$0.2425*-$0.1167*-$0.08*

Values with * retrieved from S&P Global.

Segment breakdown (U.S. + International):

Metric ($USD Millions)Q1 2025Q2 2025
U.S. NeuroStar Systems$2.85 $3.48
U.S. Treatment Sessions$9.61 $10.77
U.S. Clinic Revenue$18.66 $23.02
U.S. Other$0.37 $0.38
International Revenue$0.49 $0.45
Total Revenue$31.98 $38.11

KPIs and operating metrics:

KPIQ1 2025Q2 2025
NeuroStar Systems Shipped (#)31 41
System ASP> prior quarter (+9% vs Q1’24) >$85,000 (5-year high)
Cash Used in Operations ($USD Millions)$17.0 $3.5
Total Cash (Cash + Restricted) ($USD Millions)$21.22 $17.47
GM %49.2% 46.6%
EBITDA ($USD Millions)-$10.10 -$7.16

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
RevenueQ3 2025—$37.0M–$39.0M New
RevenueFY 2025$149.0M–$155.0M $149.0M–$155.0M Maintained
Gross Margin %FY 2025~55% 48%–50% Lowered
Total Operating ExpensesFY 2025$90M–$98M $100M–$105M Raised
Cash Flow from OperationsQ3 2025Positive starting Q3 -$3M to breakeven Lowered/Delayed
Cash Flow from OperationsQ4 2025—Positive New
Year-End Total CashFY 2025>$20M $25M–$28M (incl. $10M Perceptive) Raised
Funding/Liquidity CovenantFY 2025–2026—Draw $10M Tranche 2; $2M minimum liquidity extended to Sept 2026; eligible +$5M Added/Extended

Earnings Call Themes & Trends

TopicPrevious Mentions (Q4 2024, Q1 2025)Current Period (Q2 2025)Trend
Greenbrook integration & clinic revenueAcquisition closed; >$21M annualized cost synergies executed (Q4) “Strongest Greenbrook clinic revenue quarter…$23.0M” Improving
SPRAVATO rollout & buy-and-bill68 centers offering; targeting 80+ in FY25 (Q4) 77 of 83 eligible clinics now offering; optimizing buy-and-bill vs A&O to improve margin Cautious expansion; margin mix-aware
BMP program expansion350+ BMP clinics; faster patient initiation (Q4) 395 active BMP, 113 in qualification; higher throughput and faster response Expanding
Provider connection & referralsEmphasis on physician education (Q1) RAM/provider connection program scaling with strong referral conversion; 350+ meetings scheduled Scaling
Adolescent TMS & payor coverageAdolescent indication adds ~35% TAM; coverage expanding (Q4/Q1) 25% growth in adolescent starts vs 2024; JAACAP Open publication highlights ~70% improvement Accelerating
Cash collections & RCMExpect cash flow positive Q3 (Q1) Faster claim payments, resubmissions, fixing first-pass submissions; Q3 revised to -$3M to breakeven Operationally improving; timing delayed
Seasonality/macro cadenceNot emphasizedQ3 seasonal slowdown; Q4 rebound expected Newly highlighted

Management Commentary

  • CEO Keith Sullivan: “Our Greenbrook integration continues to progress well, with record clinic revenue. We also reduced cash used in operations to just $3.5 million, better than our target” .
  • CFO Steven Pfanstiel: “We now expect our full year [gross margin] to be between 48–50%…The key driver…is the shift in revenue mix, with clinic revenue representing a greater percentage of total revenue…[and] the mix of SPRAVATO bill-and-buy” .
  • CEO on strategy: “We are calling this comprehensive approach our provider connection program…patients are receiving referrals from their trusted health care providers…this will be an effective use of our marketing dollars” .
  • CFO on collections: “We’re collecting 10% more of that revenue from June in the first month…we expect this will continue to be a tailwind…into 2026” .

Q&A Highlights

  • Strategy shift to provider referrals: Management emphasized reallocating marketing to provider education and coordinated referral pathways to BMP accounts, expecting higher conversion while still delivering 13% pro forma treatment session growth .
  • SPRAVATO buy-and-bill optimization: Management is pausing indiscriminate expansion to focus on payors/locations with adequate reimbursement and profitability per treatment; seeks incremental access without sacrificing GP dollars .
  • Clinic productivity/steady-state: While no per-site target was set, Greenbrook is ~60% of revenue YTD; upward potential from more beds and throughput; sequential clinic revenue growth noted .
  • Cadence/seasonality: Q3 slower due to holidays/vacations; expect significant Q4 uptick consistent with historical trends .
  • Gross margin trajectory: 2026 improvement to be driven by leveraging fixed clinical infrastructure and optimizing buy-and-bill mix; NeuroStar standalone margins mid-70s remain intact .

Estimates Context

  • Q2 2025: Revenue beat consensus ($38.11M vs $36.94M*); EPS missed (actual -$0.15 vs -$0.08*), driven by lower-margin clinic mix and SPRAVATO buy-and-bill .
  • Q1 2025: Revenue beat ($31.98M vs $29.07M*); EPS missed (-$0.21 vs -$0.1167*) .
  • FY 2025 Street: Revenue consensus ~$148.08M*, aligned with maintained guidance ($149–$155M), suggesting potential upward revisions if clinic momentum and SPRAVATO optimization sustain; margin guide-down may temper EPS expectations .

Values with * retrieved from S&P Global.

Key Takeaways for Investors

  • Combined model is scaling: record $23.0M clinic revenue and strong sequential revenue growth to $38.1M underscore integration momentum and demand in Greenbrook clinics .
  • Margin mix matters: GM guide-down to 48–50% reflects clinic and SPRAVATO buy-and-bill mix; management is actively optimizing reimbursement and mix to improve profitability in 2H25 and into 2026 .
  • Cash flow trajectory: operational cash burn improved markedly; guidance reset to Q4 positive cash flow reduces near-term risk from delayed breakeven and signals disciplined collections/RCM execution .
  • NeuroStar durability: ASP strength (> $85k) and 41 shipments demonstrate pricing power and product value amid competitive dynamics; BMP expansion should support treatment session growth .
  • Adolescent growth lever: new data in JAACAP Open and expanding payer coverage support adolescent TMS adoption, broadening TAM and referrals across PCPs and specialists .
  • Funding flexibility: additional $10M debt draw and covenant extension enhance liquidity runway as integration and SPRAVATO rollout proceed; potential for +$5M tranche subject to conditions .
  • Near-term trading setup: revenue beat vs Street vs margin/CF guide-down creates a mixed print; watch SPRAVATO mix, Q3 seasonality, and Q4 cash flow inflection as key narrative drivers into year-end .