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Neuronetics, Inc. (STIM)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 2025 revenue was $37.30M, up 11% on an adjusted pro forma basis YoY but slightly below Wall Street consensus; diluted EPS was ($0.13), also modestly below consensus .
  • Greenbrook clinic revenue reached $21.80M (+25% adjusted pro forma YoY), while U.S. NeuroStar system sales were $3.51M on 40 systems shipped; treatment session utilization grew 11% YoY on a pro forma basis .
  • Guidance was lowered: FY25 revenue to $147–$150M (from $149–$155M) and FY25 gross margin to 47%–49% (from 48%–50%); Q4 revenue guidance introduced at $40–$43M; year-end cash outlook raised to $32–$36M .
  • Cash used in operations improved to $0.8M in Q3 (vs $3.5M in Q2 and $17.0M in Q1), with management still targeting roughly breakeven operating cash flow in Q4; CEO Keith Sullivan announced a planned retirement effective June 30, 2026 .

What Went Well and What Went Wrong

What Went Well

  • Greenbrook clinic revenue strength: $21.80M in Q3, +25% adjusted pro forma YoY; management highlighted the RAM program and SPRAVATO scaling as growth contributors .
  • Cash collection and operations: “For the first time, we collected more cash in the quarter than we booked as revenue,” aided by check-in kiosks and revenue cycle improvements; operating cash burn fell to $0.8M .
  • System ASPs and utilization: Third consecutive quarter with system ASP above target; NeuroStar treatment session utilization grew ~11% YoY on a pro forma basis .

What Went Wrong

  • Mix-driven revenue and margin pressure: Shift toward SPRAVATO administer-and-observe (A&O) reduced revenue per patient in Q3; CFO estimated Q3 revenue would have been ~$38.0M if A&O mix had remained flat; gross margin declined to 45.9% on clinic mix .
  • NeuroStar treatment session revenue headwinds: U.S. treatment session revenue fell to $10.54M (down 21% YoY) largely due to the absence of $2.2M Greenbrook intercompany revenue in the prior year and normalized customer inventory behavior versus 2024 .
  • Lowered FY guidance: FY25 revenue range cut to $147–$150M and gross margin to 47%–49% as management optimizes SPRAVATO buy-and-bill selectively by payer/state economics .

Financial Results

Consolidated P&L and Profitability (oldest → newest)

MetricQ1 2025Q2 2025Q3 2025
Revenue ($USD Millions)$31.98 $38.11 $37.30
Gross Margin (%)49.2% 46.6% 45.9%
Total Operating Expenses ($USD Millions)$26.75 $25.82 $24.43
Net Loss ($USD Millions)$(12.69) $(9.84) $(9.40)
Diluted EPS ($USD)$(0.21) $(0.15) $(0.13)
EBITDA ($USD Millions)$(10.10) $(7.16) $(6.44)

Revenue Breakdown (oldest → newest)

MetricQ1 2025Q2 2025Q3 2025
U.S. NeuroStar System Revenue ($USD Millions)$2.85 $3.48 $3.51
U.S. Treatment Session Revenue ($USD Millions)$9.61 $10.77 $10.54
U.S. Clinic Revenue ($USD Millions)$18.66 $23.02 $21.81
U.S. Other Revenue ($USD Millions)$0.37 $0.38 $0.39
International Revenue ($USD Millions)$0.49 $0.45 $1.05
Total Revenue ($USD Millions)$31.98 $38.11 $37.30

KPIs and Cash (oldest → newest)

KPIQ1 2025Q2 2025Q3 2025
Systems Shipped (units)31 41 40
Cash Used in Operations ($USD Millions)$17.00 $3.50 $0.80
Total Cash (Cash + Restricted) End of Period ($USD Millions)$21.22 $17.47 $34.47

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Total Revenue ($USD Millions)FY 2025$149–$155 $147–$150 Lowered
Gross Margin (%)FY 202548–50 47–49 Lowered
Total Operating Expenses ($USD Millions)FY 2025$100–$105 $100–$105 Maintained
Total Revenue ($USD Millions)Q4 2025N/A$40–$43 Initiated
Cash Flow from OperationsQ4 2025 timingPositive beginning in Q3 2025 Target +$2M to -$2M in Q4 2025 Pushed out
Total Cash ($USD Millions)YE 2025$25–$28 $32–$36 Raised

Earnings Call Themes & Trends

TopicQ1 2025 (summary)Q2 2025 (summary)Q3 2025 (current)Trend
SPRAVATO rollout & mix75 clinics offering; 42 buy-and-bill; aiming for broad buy-and-bill in 2025 84 of 89 clinics offering; mix impacted GM; sequential volume up A&O 86% (↑300 bps vs Q2); revenue impact ($0.75M); buy-and-bill optimized by payer/state Mix favoring A&O, optimizing B&B selectively
Treatment session utilization & inventoryPro forma revenue growth; adolescent coverage expanding Record clinic revenue; normalized inventory vs 2024 Utilization +11% YoY pro forma; prior-year inventory build distorted comps Healthy utilization, comps normalizing
RAM & Provider ConnectionRAM training; BMP scaling Building primary care awareness 350 physician meetings; >2,200 referred patients; PCP outreach scaling Expanding referral-driven demand
Operational excellence & cashAdvancedMD integration temporarily lagged collections; plan to improve Cash burn improved; Perceptive funding Kiosks live; “collected more cash than booked revenue”; cash burn near breakeven Rapid improvements in RCM and collections
GuidanceRaised to $149–$155M FY revenue Maintained revenue; GM to 48–50%; OpEx to $100–$105M FY revenue to $147–$150M; GM to 47–49%; YE cash raised Revenue/GM trimmed; cash outlook improved
Financing & liquidity$18.9M net equity raise +$10M Perceptive tranche; $2M min liquidity to Sep-26 ATM net $7.8M; Perceptive tranche reiterated Strengthening balance sheet
Coverage & reimbursementEvernorth (Cigna) adolescent coverage added —NY Medicaid TMS coverage expansion ; TriWest TRICARE adolescent coverage (Nov) Positive coverage momentum

Management Commentary

  • “On an adjusted pro forma basis, we delivered 11% revenue growth, with particularly strong performance from our Greenbrook clinics... taking advantage of our combined scale, which is driving meaningful progress toward cash flow positivity.” — Keith Sullivan, CEO .
  • “Our operating cash burn has decreased from $17M in Q1 to $3.5M in Q2 and now just $0.8M in Q3.” — Steve Pfanstiel, CFO .
  • “In the third quarter, A&O represented about 86% of our SPRAVATO volume... if we had held our percentage of A&O flat from Q2 to Q3, our Q3 revenue would have been $38 million.” — Steve Pfanstiel, CFO .
  • “For the first time, we collected more cash in the quarter than we booked as revenue.” — Keith Sullivan, CEO .
  • Board Chair Rob Cascella on CEO transition: “The strategic acquisition of Greenbrook TMS has vertically integrated the Company’s value chain and positioned the Company well for long-term growth.” .

Q&A Highlights

  • Growth divergence: Greenbrook strength vs NeuroStar sessions — CFO cited normalized customer inventory in 2024 and double-digit utilization growth as key drivers of apparent divergence .
  • Gross margin trajectory: CFO emphasized mix impacts (clinic revenue), optimization of SPRAVATO economics, and noted ~60bps sequential effect from non-recurring Compass revenue between Q2 and Q3 .
  • Cost savings quantification: CFO flagged ongoing investments (kiosks, patient text alerts) that may offset near-term gains, with more detail expected in 2026 planning .
  • Q4 guidance composition: CFO detailed the A&O/B&B mix impact, reiterating strong SPRAVATO volume growth but revenue sensitivity to reimbursement economics .
  • Sales/marketing spend: CFO framed Q4 as balancing targeted marketing investments with disciplined cost controls to sustain top-line while driving efficiencies .
  • Adolescent indication: CEO noted quarterly uptick in adolescent treatment starts, attributing momentum to Provider Connection awareness among PCPs .

Estimates Context

  • Q3 2025: Revenue $37.30M vs consensus $37.85M* (miss ~1.5%); EPS ($0.13) vs ($0.12)* (miss $0.01); EBITDA ($6.44M) vs ($4.80M)* (miss) .
  • Q2 2025: Revenue $38.11M vs $36.94M* (beat ~3.1%); EPS ($0.15) vs ($0.08)* (miss); EBITDA ($7.16M) vs ($0.70M)* (miss) .
  • Q1 2025: Revenue $31.98M vs $29.07M* (beat ~10%); EPS ($0.21) vs ($0.117)* (miss); EBITDA ($10.10M) vs ($3.50M)* (miss) .
MetricQ1 2025Q2 2025Q3 2025
Revenue Consensus Mean ($USD Millions)29.07*36.94*37.85*
Revenue Actual ($USD Millions)31.98 38.11 37.30
Primary EPS Consensus Mean ($USD)(0.117)*(0.08)*(0.12)*
Primary EPS Actual ($USD)(0.21) (0.15) (0.13)
EBITDA Consensus Mean ($USD Millions)(3.50)*(0.70)*(4.80)*
EBITDA Actual ($USD Millions)(10.10) (7.16) (6.44)

Values retrieved from S&P Global.*

Estimated revisions likely skew lower on EBITDA/margins given management’s shift toward A&O in certain geographies and lowered FY gross margin guidance (47–49%) .

Key Takeaways for Investors

  • Mixed quarter relative to Street: modest revenue and EPS misses in Q3, with healthy clinic growth offset by SPRAVATO mix-driven revenue compression; monitor SPRAVATO A&O/B&B mix by state/payer as a near-term swing factor .
  • Cash trajectory improving fast: sequential operating cash burn improvement (Q1 $17.0M → Q2 $3.5M → Q3 $0.8M) and YE cash outlook raised to $32–$36M support liquidity and optionality into 2026 .
  • Guidance trimmed but execution intact: FY revenue and GM lowered, yet Q4 revenue guide of $40–$43M and reiterated OpEx discipline indicate continued scaling with prudent economics .
  • Clinic infrastructure leverage: RAM and Provider Connection are scaling referral-driven demand (>2,200 patients referred in Q3), with kiosks and RCM improvements enhancing collections; watch margin leverage as volumes grow .
  • Coverage catalysts: NY Medicaid expansion and TriWest/TRICARE adolescent coverage broaden addressable market and could underpin utilization growth in 2026 (post-Q3 development) .
  • CEO transition: orderly succession process into mid-2026; unlikely to disrupt near-term operations, but represents a governance catalyst; Board emphasized strategic achievements under current leadership .
  • Trading lens: Near-term stock moves likely keyed to Q4 revenue/mix, SPRAVATO economics, and progress to operating cash flow breakeven; medium-term thesis hinges on integrated clinic/device model driving stable utilization and eventual margin accretion .

Additional Context and Notes

  • Press release and 8-K highlight: Q3 total revenue $37.30M; U.S. clinic revenue $21.80M; gross margin 45.9%; cash & restricted cash $34.47M at quarter end; ATM net proceeds ~$7.8M; +$10M Perceptive funding, minimum liquidity extended to Sep-26 .
  • Elite DNA partnership: exclusive three-year TMS device agreement and fee-based operational services pilot commenced in Q4 2025, expanding NeuroStar footprint and monetizing Greenbrook capabilities .