Zynex, Inc. Q4 FY2024 earnings call

• Diversification of revenue streams with new products in bracing, cold, and compression. Expanded sales force focus to new prescribers like workers’ comp and VA. - Tricare temporarily suspended payments; meeting with Defense Health Agency in early April to appeal. Tricare represents 20%-25% of revenue. - NiCO pulse oximeter completed human trials at Duke and UCSF, showing superior performance for darker skin; FDA submission expected soon. - Restructured sales force and management; annual savings of ~$35M from 15% staff reduction in corporate and sales. Revenue increased 4% in 2024, order growth 16%, revenue per rep up 22% to $490,000.

In the fourth quarter of 2024, device revenue was $14.8 million, down from $16.3 million in the same period of 2023. Supplies revenue was $31.2 million, up from $31 million in Q4 2023. Device revenue was lower due to a product mix shift to lower-priced items like braces. Supplies contributed a larger portion of the revenue. Device revenue was 32.2% of total revenue ($14.8M / $46M) and supplies revenue was 67.8% ($31.2M / $46M).

• No full 2025 annual guidance due to Tricare payment uncertainty. - Anticipate Q1 2025 revenue ~$30 million. - Expect net loss in Q1 between $9M-$10M due to ongoing restructuring. - Patient monitoring division’s NiCO expected to generate revenue post-FDA clearance.

• Tricare payment suspension could lead to significant revenue loss if upheld (represents 20%-25% of revenue). - Uncertainty in FDA approval timeline for NiCO pulse oximeter. - Regulatory reviews and potential challenges with other payers similar to Tricare.

Q: What was the nature of the 2022 audit by Tricare related to billing practices?

A: It was a routine post-payment audit, adjustments were made and compliance demonstrated since.

Q: Why don't you have visibility into 2025 sales due to Tricare?

A: Tricare is a major payer, and uncertainty around payment suspension makes full guidance impossible.

Q: Hypothesize on NiCO's commercial path to market?

A: Leveraging direct sales, partners, and indirect sales forces; plan to ramp in 2026 post-clearance.

Q: Specific factors triggering Tricare review?

A: Unclear, but post-payment reviews are common; payment suspension is not unheard of.

Q: Territories for Tricare claims?

A: National, across the country.