BrainsWay Ltd. Q3 FY2024 earnings call

• Strong revenue growth: Global market demand for Deep TMS system was strong, leading to 26% year-over-year revenue increase in Q3 2024.
• Positive financials: Consecutive quarters of positive net income, adjusted EBITDA, and cash flow from operations.
• Investments: Focus on developing next-generation Deep TMS 360 system, conducting clinical trials, and expanding commercial presence.
• Strategic financing: Completed $20 million equity financing with Valor Equity Partners, enhancing ability to explore new markets and partnerships.
• Distribution and sales: Expanded global distribution network with new placements in Taiwan, South Korea, and ongoing efforts in other regions like Europe and Asia.
• Clinical trial: Multicenter clinical trial for accelerated TMS treatment protocol for major depressive disorder is underway.
• Leadership change: Welcomed Dr. Richard Bermudes as new Chief Medical Officer.

For the third quarter of 2024, BrainsWay reported revenue of $10.5 million, a 26% year-over-year increase. Gross profit was $7.7 million with a 74% gross margin. Sales and marketing expenses were $4.1 million, research and development expenses were $1.8 million, and general and administrative expenses were $1.5 million. Operating profit for the quarter was approximately $300,000, adjusted EBITDA was $1.1 million, and net income was $650,000. In the third quarter, 63 Deep TMS systems were placed, and the total installed base was 1,278 systems as of September 30, 2024.

• Full year 2024 revenue guidance increased to $40 million to $41 million, representing 26% to 29% growth over 2023.
• Anticipate operating income of 3% to 4% and adjusted EBITDA of 10% to 11% for full year 2024.
• Outlook for Q4 2024 remains highly positive.

• Geopolitical, supply chain, and market conditions as potential risks to future operating and financial performance.
• Regulatory uncertainties related to approvals and reimbursement coverage.

Q: Can you talk about where you think you can leverage Valor Equity Partners' expertise the most?

A: Valor is expert in scaling growth ventures, helping with access to large enterprise accounts, reimbursement, and operations.

Q: How quickly do you anticipate the accelerated TMS trial to enroll and when could data be seen?

A: Hoping to complete recruitment in Q1 2025, submission in second or third quarter of 2025, with FDA clearance likely in 2025.

Q: Do you expect disruption to Israeli business from geopolitical risk?

A: No current disruption, with continuity plans in place and exploration of moving operations outside Israel.

Q: What additional clinical indications do you expect to assess with Deep TMS?

A: Looking to get FDA approval for accelerated TMS protocol, expand labeling for adolescents with major depression and PTSD, and plan multicenter trials in addiction and neurology.