Neuronetics, Inc. Q1 FY2026 earnings call

Dan Revers has 35 years in med tech, most recently as CEO of Tactile Medical. He was drawn to Neuronetics by its mission. He spent a month on a listening tour, saw opportunity to broaden Neurostar go-to-market, focus on Greenbrook clinics' workflows and revenue cycle management, and has a talented team. There was a CFO transition with Steve Fanstiel departing. The board is evaluating the business with an open mind. Neurostar shipped 34 systems up 10% Y/Y, modernizing support. Greenbrook clinic revenue grew 15%, TMS volumes impacted by weather and ad spend, Spravato growth in buy-in bill and A&O segments. Focus on disciplined execution, sharpening go-to-market, and driving to cash flow positive. Pilots in Neurostar to expand reach, and focus on Greenbrook's workflow, collections, and efficiency.

Total revenue in Q1 was $34.5 million, up 8% from $32 million in Q1 2025. NeuroStar business revenue was $12.9 million, down 3% Y/Y. U.S. Neurostar system revenue was $3.2 million, up 13% Y/Y with 34 systems shipped (up ~10% Y/Y). U.S. treatment session revenue was $9.1 million, down 5% despite 3.5% increase in system treatment utilization, offset by reduction in customer inventory levels. U.S. clinic revenue was $21.5 million, up 15% Y/Y driven by Spravato growth and pricing improvement. Gross margin was 46.9% in Q1 2026 vs. 49.2% in prior year, due to revenue mix and Spravato buy-in bill impact. Operating expenses were $25.1 million, down $1.6 million Y/Y. Net loss was $10.8 million vs. $12.7 million in prior year. Adjusted EBITDA was negative $6.6 million vs. negative $8.6 million in prior year, an improvement of $2 million. Cash as of March 31st was $19 million, cash used by operations in Q1 was $9.4 million vs. $17 million in Q1 2025.

Total revenue expected between $160 - $166 million, gross margins 47 - 49%, operating expenses $100 - $105 million (inclusive of ~$8.5 million non-cash stock-based compensation), cash flow from operations between negative $13 - $17 million. Operating cash flow projected to improve starting in Q2 and be flat to positive in second half. Q2 expected mid-single-digit growth. Priorities include disciplined execution, sharpening go-to-market, and driving to cash flow positive. Pilots in Neurostar to expand reach, and focus on Greenbrook's workflow, collections, and efficiency. Compass Pathways' psilocybin therapy's regulatory process is noted, with expectation of Greenbrook being equipped to deliver if approved, but revenue ramp expected to be measured.

Q: Clarity on Greenbrook sites performance, TMS volumes down year over year.

A: TMS volumes in Greenbrook down due to weather in Jan-Feb and ad spend lumpy, but better in March. Spravato growth in buy-in bill and A&O segments.

Q: Color on team intactness.

A: Impressed with mission permeating, people connected, no turnover spikes.

Q: Thoughts on cash with $19 million cash.

A: Evaluating balance sheet, math leads to 14 million at year end, assumptions of flat to positive in second half, sufficient headroom.

Q: Weather impact on TMS volumes, Neurostar headwind.

A: Greenbrook TMS volumes impacted by weather, Neurostar saw some impact but overall utilization up, revenue soft due to customer inventory.

Q: Commercial strategy for TMS, balance between utilization per site and expanding install base.

A: Continue to drive utilization, expand capital unit placements, demonstrate value with support, working on pilots.

Q: Compass collaboration, reimbursement pathway.

A: Trump executive order shortens fuse on approval, impact on reimbursement separate, momentum positive.

Q: TMS coverage expansion to nurse practitioners.

A: UHC and Optum policy change allows nurse pracs to deliver TMS, added accounts to target list, early days.