BrainsWay Ltd. Q4 FY2024 earnings call

• Completed 2024 with rapidly growing sales of Deep TMS system, 27% Y/Y revenue increase. Shipped 75 systems in Q4 2024, 25% Y/Y increase.
• Multi-year agreements with large enterprise networks strengthen partnerships. Lease-based model expands recurring revenue.
• Optimized sales force to expand in US and international markets, with presence in Canada, Asia, India, Europe.
• Strong gross margin (75% in Q4 2024 and full year), positive net income for fifth consecutive quarter, positive adjusted EBITDA and cash flow from operations for sixth consecutive quarter.
• Focus on advancing next-gen Deep TMS 360 system, clinical trials for expanded treatments, and strengthening commercial presence.
• Positive pilot data on Deep TMS for alcohol use disorder, publication on combination with psychedelics, progress on MDD clinical trial, and reimbursement approval for PTSD in Israel.

In the fourth quarter of 2024, BrainsWay generated $11.4 million in revenue, a 27% year-over-year increase. Shipped 75 Deep TMS systems, a 25% increase from the same period prior year. Full year 2024 revenue was $41 million, a 29% increase from 2023. Gross margin was 75% in both the fourth quarter of 2024 and the full year. Revenue contribution from the Deep TMS system is the primary segment, with strong growth in sales and recurring revenue from lease-based models.

• Anticipates 2025 revenue in range of $49 million to $51 million, representing 20%-24% growth over 2024.
• Projects operating income of 3%-4% and adjusted EBITDA of 11%-12% for full year 2025.
• Focus on leveraging sales momentum and strategic investments in R&D, clinical trials, and commercial presence.

• Shifting market conditions resulting from geopolitical, supply chain, and other factors.
• Use of non-GAAP financial information, with risks detailed in SEC filings including Form 20-F Risk Factors section.

Q: What were the drivers behind the 75 placements in Q4?

A: Enterprise accounts, increased demand for OCD (H7 Coil), increased utilization for MDD, anxious depression, and elderly patients.

Q: When might data on the accelerated treatment protocol for MDD be available?

A: Intention to finish follow-up period around 30 days, expect news in third quarter of 2025.

Q: Thoughts on psychedelics and Deep TMS integration in centers?

A: More psychedelic clinics are opening and looking to embed Deep TMS, with potential for growth through this channel.

Q: Impact of macroeconomic and geopolitical situation on BrainsWay?

A: No current impact on costs, see positive tailwinds from new mental health indications, and mitigation on financial side through partnerships.

Q: Impact of NIH funding cutbacks on Deep TMS work?

A: Not aware of any pushback, no restrictions on funding for current projects.