Zynex, Inc. Q3 FY2024 earnings call

• Zynex has diversified its revenue stream and aims to be a leading provider of non-opioid pain management and patient monitoring solutions. 2024 revenue is over 50% higher than three years ago.
• Restructured the sales force across 800 U.S. sales regions, with order growth up 13% Y/Y in Q3, and revenue per sales rep annualized at $530,000 (+25% Y/Y).
• New products: TensWave received FDA clearance for pain relief via TENS, and NiCO monitoring solutions are in final phases of manufacturing transfer, clinical trials, and 510(k) submission.
• Rehabilitation products: NexWave private label rehab products made up over 31% of total orders in Q3, diversifying revenue streams.

In the third quarter, device revenue was $14.9 million and supplies revenue was $35.1 million, totaling $50 million. Device revenue accounted for approximately 29.8% of the total revenue, while supplies revenue made up around 70.2%. The pain management segment saw device revenue decrease compared to the prior year due to sales rep pruning, but supplies revenue increased. The monitoring solutions division, working on the NiCO pulse oximeter, is progressing with clinical trials and 510(k) submission plans.

• 2024 revenue expected to be at least $200 million (+9% vs 2023) with diluted EPS of at least $0.20.
• Q4 2024 revenue expected at least $53.6 million (13% above Q4 2023) with diluted EPS of $0.09.
• October 2024 orders up 17% Y/Y, expecting high teens order growth going forward.

• Factors such as product development, regulatory environment, sales and marketing strategies, capital resources, or operating performance could cause actual results to differ materially from forward-looking statements.

Q: On order growth deceleration in Q3 and Q4 trends, A: Thomas states October 2024 orders are 17% Y/Y higher, expecting high teens order growth going forward.

Q: Update on strategic review process, A: Continues, no immediate closure, received a couple of letters of intent but not imminent.

Q: TensWave and NexWave usage, A: TensWave is a TENS only device, not used simultaneously with NexWave as indications and insurance coverage differ.

Q: Share repurchase in Q3, A: No buyback during Q3, plan remains open but no purchases in Q3.

Q: Rehab business top line revenue, A: Closing in on 10% of the business.

Q: Sales ramp and NiCO sales force, A: Adding 10 reps monthly, NiCO launch with couple of reps initially, ramping up through 2025 and 2026.

Q: Monitor division profitability, A: Independent, expected to be profitable long term with a ramp to reach that point.