BrainsWay Ltd. Q3 FY2025 earnings call

• BrainsWay reported record quarterly revenue of $13.5 million, a 29% increase year-over-year, and shipped 90 Deep TMS systems, a 43% year-over-year increase.
• Raised full-year 2025 guidance: revenue guidance is now $51 million to $52 million (previously $50 million to $52 million), operating profit is expected to be 6% to 7% of revenue (up from 4% to 5% previously), and adjusted EBITDA is expected to be 13% to 14% for the year (up from 12% to 13% previously).
• Focused on selling to large enterprise customers with multiyear lease agreements, with approximately 70% of recent customer engagements being lease agreements and high customer retention.
• U.S. FDA expanded the treatment protocol for the Deep TMS system to include an accelerated protocol for major depressive disorder (MDD).
• Announced a $2.5 million 5-year grant from the U.S. NIH for a clinical study evaluating the accelerated Deep TMS protocol for alcohol use disorder.
• Made minority interest investments in mental health providers and complementary enterprises, with Valor Equity Partner making a $20 million strategic equity investment, and initial investment in Neurolief LTD targeting FDA clearance by the end of 2025.

In the third quarter of 2025, BrainsWay achieved record quarterly revenue of $13.5 million, a 29% increase compared to the same period last year. They shipped 90 Deep TMS systems, a 43% year-over-year increase, with a total installed base exceeding 1,600 systems globally. Gross profit for the quarter was $10.2 million, up from $7.7 million in the prior year, while maintaining a strong gross margin of 75% (compared to 74% in the same period last year). Sales and marketing expenses totaled $4.7 million, research and development expenses were $2.4 million, and general and administrative expenses were $1.8 million. Operating profit was approximately $1.3 million, and adjusted EBITDA increased to $2 million.

• Raised full-year 2025 revenue guidance to a range of $51 million to $52 million, up from the previous range of $50 million to $52 million.
• Expect operating profit in the range of 6% to 7% of revenue, up from the previous range of 4% to 5%.
• Anticipate adjusted EBITDA in the range of 13% to 14% for the year, up from the previous range of 12% to 13%.

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

Q: Could you talk about the accelerated protocol and current treatments taking on the accelerated protocol?

A: The accelerated protocol shortens the acute phase from 4 weeks to 6 days with 5 treatments per day, and demand for it looks good, driving company growth.

Q: Could you talk about minority equity investments and the pipeline for the coming quarters?

A: There is a pipeline of minority investments, with the goal to sign at least one more by the end of the year, and promising opportunities in 2026.

Q: Could you give an update on Neurolief as far as activity in Japan, EU, and U.S. timing?

A: Anticipate FDA clearance for Neurolief's device by the end of 2025, and it will be ready to market through various channels once cleared.

Q: What are you seeing in terms of system placements from minority partners and incremental system placements?

A: Minority investments plan to open 10 to 15 new clinics annually, with early investments like with Stella Mental Health and Axis seeing over 50% utilization growth since collaboration.

Q: How will you alter metrics reporting, update on upgrade cycle, and international growth?

A: Will share more metrics on the Analyst Day meeting on December 1. International growth is strong in Asia Pacific, Europe, and Israel, driven by increased awareness and new indications.

Q: Do you have plans to alter the way you report revenue given minority stakes?

A: Minority investments won't impact top-line revenue; they will be accounted for as equity under operating profit, to be examined with auditors for financial statements at year-end