Sign in

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

ZI

ZYNEX INC (ZYXI)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 2025 revenue fell sharply to $13.36M vs $49.97M in Q3 2024, driven by the TRICARE payment suspension, a $2.8M revenue reduction related to TRICARE, payer denials/delays, and earlier workforce reductions impacting orders and onboarding .
  • Gross margin compressed to 60% (from 80% YoY) and the quarter included a non‑cash impairment of $30.74M for Zynex Monitoring Solutions, producing a net loss of $(42.91)M and $(1.42) EPS .
  • Liquidity and capital structure are front-and-center: the company entered a 30‑day grace period and did not make the $1.5M interest payment due Nov 17 on $60M convertible notes maturing May 2026; notes are reclassified as current liabilities .
  • Management installed a new leadership team, engaged Province to evaluate strategic alternatives, formed a Board Special Committee, and implemented a stricter resupply order confirmation policy to improve compliance and patient experience .
  • No Wall Street consensus estimates were available via S&P Global for EPS or revenue; assessment vs. estimates is not possible at this time (S&P Global consensus unavailable).

What Went Well and What Went Wrong

What Went Well

  • New management actions and governance enhancements: Province engaged to assess capital raise/recap/restructuring; Special Committee led by Paul Aronzon; Bret Wise appointed Audit Chair, strengthening oversight and compliance .
  • Compliance-focused operating changes: “Under this new policy, we do not process resupply orders unless a patient first confirms their need,” with early positive patient response .
  • Expense reductions: Sales & marketing down 54% YoY to $9.48M; G&A down to $11.82M YoY, reflecting headcount reductions and cost control .

What Went Wrong

  • Core revenue deterioration: Q3 net revenue $13.36M vs $49.97M YoY; device revenue $7.06M and supplies $6.30M as TRICARE suspension, payer denials/delays, and prior workforce reductions weighed on orders and completions .
  • Profitability and cash flow strain: Net loss $(42.91)M including a $30.74M impairment; adjusted EBITDA $(12.34)M; cash from operations $(6.30)M for Q3; cash ended at $13.26M .
  • Balance sheet pressure: $60M converts due May 2026; company entered grace period and did not pay $1.5M interest due Nov 17, indicating liquidity stress and elevating refinancing/restructuring risk .

Financial Results

Quarterly Performance vs Prior Periods

MetricQ1 2025Q2 2025Q3 2025
Revenue ($USD Millions)$26.58 $22.29 $13.36
Gross Profit ($USD Millions)$18.20 $15.20 $8.10
Gross Margin (%)69% 68% 60%
Operating Income ($USD Millions)$(13.10) $(10.28) $(43.96)
Net Income ($USD Millions)$(10.40) $(20.03) $(42.91)
Diluted EPS ($)$(0.33) $(0.66) $(1.42)

Year-over-Year – Q3

MetricQ3 2024Q3 2025
Revenue ($USD Millions)$49.97 $13.36
Gross Profit ($USD Millions)$39.80 $8.10
Gross Margin (%)80% 60%
Net Income ($USD Millions)$2.38 $(42.91)
Diluted EPS ($)$0.07 $(1.42)
Adjusted EBITDA ($USD Millions)$5.05 $(12.34)

Segment Breakdown (Devices vs Supplies)

Segment Revenue ($USD Millions)Q3 2024Q1 2025Q2 2025Q3 2025
Devices$14.86 $11.90 $11.03 $7.06
Supplies$35.11 $14.68 $11.26 $6.30
Total$49.97 $26.58 $22.29 $13.36

KPIs and Operating Metrics

KPIQ1 2025Q2 2025Q3 2025
Cash from Operations ($USD Millions)$(10.50) $(6.20) $(6.30)
Cash & Cash Equivalents ($USD Millions)$23.85 $17.54 $13.26
Sales & Marketing Expense ($USD Millions)$16.94 $12.81 $9.48
G&A Expense ($USD Millions)$14.37 $12.71 $11.82
Adjusted EBITDA ($USD Millions)$(11.78) $(8.90) $(12.34)
Impairment Charges ($USD Millions)——$30.74
Convertible Notes Outstanding$58.82M (LT) $59.07M current portion $59.33M current portion

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
RevenueQ2 2025≥$27M (from Q1 release) Guidance suspended (Q2 update) Suspended
EPSQ2 2025Loss per share expected $(0.20) or better (from Q1) Guidance suspended (Q2 update) Suspended
RevenueQ3 2025Guidance suspended (as of Q2) No guidance provided (maintained suspension) Maintained
Interest on Convertible NotesNov 17, 2025 paymentNot previously disclosed as suspendedEntered 30‑day grace period; did not pay $1.5M interest Lowered/Deferred

Earnings Call Themes & Trends

TopicPrevious Mentions (Q-2 and Q-1)Current Period (Q3 2025)Trend
Compliance and TRICAREQ1 disclosed TRICARE payment suspension; cost actions; appeal ongoing . Q2 noted continued impact on revenue and margins .New resupply confirmation policy; proactive engagement with agencies; no certainty on TRICARE reinstatement .Heightened compliance focus; path to resolution still uncertain .
Liquidity/Convertible NotesQ1 showed converts as long-term ($58.82M) . Q2 reclassified to current portion; guidance suspended .Entered grace period and skipped $1.5M interest; notes due May 2026; advisors engaged .Liquidity risk increased; active restructuring exploration .
Sales Force/ProductivityQ1 headcount reduced 15%; focus on productivity . Q2 cost savings ($40M annualized) and restructuring .Orders recently stabilized despite reduced sales force; commissions simplified; targeted account focus .Stabilization signs after declines .
VA ChannelNot highlighted in Q1/Q2.New VA partner; early signs of increased penetration .Emerging opportunity .
Patient Monitoring/NiCO Pulse OximeterQ2: FDA submission for NiCO laser pulse oximeter .Monitoring assets impaired ($30.74M) at Zynex Monitoring Solutions; no NiCO update in Q3 release/call .Mixed: strategic impairment; product pathway unclear near-term .
Strategic AlternativesNot in Q1; Q2: new CEO, cost program .Province engaged; Special Committee formed; discussions with debt holders .Active evaluation and governance strengthening .

Management Commentary

  • “We are taking decisive steps to ensure Zynex is well-positioned going forward. The engagement of Province and the formation of the Special Committee reflect our commitment to exploring all avenues to create a new future for Zynex.” — CEO Steven Dyson .
  • “Under this new policy, we do not process resupply orders unless a patient first confirms their need… our patients are responding positively.” — CEO Steven Dyson on resupply changes .
  • CFO reiterated Q3 metrics and grace period decision: “Net revenue was $13.4 million… we did not make a $1.5 million interest payment due November 17, 2025… convertible debt of $60 million is due May 2026” .

Q&A Highlights

  • The call consisted of prepared remarks by CEO and CFO; no analyst Q&A was transcribed in the materials provided .
  • Management clarified liquidity actions (grace period, debt holder discussions), compliance initiatives (resupply policy), and early signs of order stabilization despite a smaller sales force .
  • Guidance remained suspended, and the company emphasized evaluation of strategic alternatives with advisors and the Special Committee .

Estimates Context

  • S&P Global consensus estimates for Q3 2025 EPS and revenue were unavailable; as a result, beat/miss vs. Street cannot be assessed at this time.
  • Without consensus, the near-term narrative for revisions likely centers on TRICARE reinstatement outcomes, liquidity/debt restructuring progress, cost trajectory, and stabilization of orders .
  • Note: S&P Global consensus unavailable at time of analysis; values typically retrieved from S&P Global.

Key Takeaways for Investors

  • Liquidity and capital structure are now critical: skipping the $1.5M interest payment and reclassifying converts as current highlight urgency; watch for restructuring or capital raising outcomes led by Province/Special Committee .
  • Operational overhaul is underway: resupply confirmation policy, sales productivity initiatives, and VA channel partnership are aimed at improving revenue quality and collections .
  • TRICARE remains the single largest near-term revenue overhang; reinstatement timing is uncertain; YoY revenue decline and margin compression underscore sensitivity to payer dynamics .
  • Monitoring segment reset: $30.74M impairment signals reassessment of the monitoring assets’ near-term value; follow-on clarity on NiCO pulse oximeter path vs. broader restructuring will be important .
  • Cost reductions are material: S&M down 54% YoY; G&A lower YoY; adjusted EBITDA still negative, but order stabilization hints at early traction from productivity efforts .
  • Near-term trading catalysts: any update on TRICARE status; debt holder agreements or term sheet visibility; additional governance changes; early VA wins; and Q4 cash trajectory vs. limited cash balance .
  • With guidance suspended and no consensus available, focus on qualitative milestones and sequential progress (orders, collections, opex) while monitoring covenant/going-concern disclosures in forthcoming filings .