Neuronetics, Inc. Q2 FY2025 earnings call

• Strong second quarter with accelerated top line growth and progress towards cash flow positivity. - Greenbrook integration showing strength, with U.S. clinic revenue at $23M, largest quarterly to date. - NeuroStar business had system revenue of $3.5M (41 systems shipped), U.S. treatment session revenue $10.8M (up 13% pro forma). - Better Me Provider program: 395 active sites, 113 working towards qualification; BMP sites treat 3x more patients per site per quarter than non-BMP. - Operational efficiencies: Rolled out self-check-in program at pilot locations, expanding to more; engaged consultant to review operations team structure. - Adolescent patient growth: 25% increase in adolescent new patient starts H1 2025 vs 2024, with clinical data published in journal showing effectiveness of NeuroStar in adolescents.

Total revenue was $38.1 million, an 18% year-over-year increase on an adjusted pro forma basis. Revenue from the NeuroStar business was $15.1 million, comprising NeuroStar system revenue of $3.5 million with 41 systems shipped, U.S. treatment session revenue of $10.8 million (up 13% on a pro forma basis) and other revenue of $375,000. U.S. clinic revenue was $23 million, the largest quarterly clinic revenue to date and only the second time Greenbrook generated over $20 million in a single quarter. NeuroStar system revenue contributed 9.2% to total revenue ($3.5M / $38.1M), U.S. treatment session revenue contributed 28.3% ($10.8M / $38.1M), other NeuroStar revenue contributed 0.98% ($375k / $38.1M), and U.S. clinic revenue contributed 60.4% ($23M / $38.1M).

• Third quarter net revenue expected to be between $37 million to $39 million. - Full year 2025 total revenue expected between $149 million and $155 million. - Full year gross margin now expected between 48% and 50% vs prior guidance of ~55%, due to revenue mix shift and SPRAVATO buy and bill mix. - Operating expenses projected to be between $100 million and $105 million for full year. - Cash used in operations expected to be negative $3 million to breakeven in Q3, turning positive in Q4 2025. - Year-end 2025 total cash (inclusive of cash, cash equivalents, restricted cash) expected in range of $25 million to $28 million, inclusive of recent Perceptive funding.

• Forward-looking statements subject to risks and uncertainties associated with the business, including those in SEC filings. - Uncertainties in reimbursement landscape for SPRAVATO buy and bill model could impact margins and cash flow. - Operational integration challenges could affect expected synergies and financial performance.

Q: Bill Plovanic asked about dynamics between traditional STIM business and Greenbrook, specifically referrals and marketing strategy.

A: Keith Sullivan responded that the strategy shifted to the Provider Connection Program focusing on educating primary care physicians, expecting more efficient marketing and higher conversion rates over time.

Q: Adam Maeder asked about Greenbrook clinical sales per site and normalized level.

A: Steven Pfanstiel stated they look at total revenue trends, with Greenbrook revenue expected to remain ~60% of total, and site basis challenging to target specifically but volume growth seen.

Q: Dan Stauder asked about adolescent patient outreach marketing strategy.

A: Keith Sullivan mentioned targeting providers of adolescent patients through the Provider Connection Program, educating them in their offices.

Q: Kyle (on behalf of Adam Maeder) asked about guidance cadence and gross margin trajectory.

A: Steven Pfanstiel explained seasonality impacts Q3, with Q4 expected to see significant increase, and gross margin mix to be key, with upside on Greenbrook side leveraging fixed infrastructure and optimizing buy and bill SPRAVATO.