BrainsWay Ltd. Q1 FY2025 earnings call

• Strong momentum carried from 2024 into 2025 with Q1 revenue up 27% YOY and 81 systems shipped, up 42% YOY.
• Signed backlog and remaining performance obligation near $60 million. Commercial growth in the U.S. driven by adoption of Deep TMS for OCD, anxious depression, etc.
• Focus on strengthening customer base with multi-year agreements and elevating customer service. Scaling pay-per-use and lease-based models for recurring revenue.
• Technological and clinical differentiation with Deep TMS, with over 60% of OCD patients responding positively to therapy. Progress in trials for PTSD and MDD accelerated protocols.
• Strong gross margin of 75%, increased operating income and adjusted EBITDA margin, and positive cash flow from operations.

In the first quarter of 2025, BrainsWay generated $11.5 million in revenue, marking a 27% increase year-over-year. They shipped 81 Deep TMS systems, a 42% increase compared to Q1 2024. The backlog and remaining performance obligation totaled nearly $60 million. Gross profit for Q1 2025 was $8.6 million, resulting in a 75% gross margin. Revenue contribution from product segments is not explicitly broken down further in the transcript, but overall revenue growth and system shipments are highlighted as key performance indicators.

• Reiterated full-year 2025 revenue guidance of $49 million to $51 million, representing a 20% to 24% growth over 2024.
• Anticipates operating income of 3% to 4% and adjusted EBITDA of 11% to 12% for full year 2025.

• Actively monitoring geopolitical, supply chain, and tariff policies, but currently does not see a material impact on gross margin for the current year.

Q: Steve Lichtman from Oppenheimer & Company asked about greenfield opportunity vs competitive conversions.

A: Hadar Levy responded that roughly 80% of new sales are from greenfield (new customers) and 20% from competitive conversions.

Q: Destiny from Ladenburg Thalmann asked about OCD coils shipped and TMS 360.

A: Hadar Levy said 57 OCD coils were shipped, bringing total to close to 850 globally, and discussed TMS 360 as a mix of new installations and upgrades depending on customer segmentation.

Q: Ram Selvaraju with H.C. Wainwright asked about geopolitical risk and stock repurchase.

A: Hadar Levy said they are monitoring geopolitical factors but see no material impact currently, and not considering a stock repurchase program at the moment, but will evaluate toward year-end after assessing opportunities.