Yahoo Finance Neuronetics Inc (STIM) (Q1 2024) Earnings Call Transcript Highlights: Strategic Growth Amidst ...
Total Revenue: $17.4 million, up 12% year-over-year.
NeuroStar System Revenue: $3.3 million from 41 systems shipped.
U.S. Treatment Session Revenue: $13 million, a 22% increase year-over-year.
Gross Margin: Increased to 75.1% from 73.3% year-over-year.
Net Loss: Reduced to $7.9 million from $10.5 million year-over-year.
Earnings Per Share (EPS): Loss of $0.27 per share, improved from a loss of $0.38 per share year-over-year.
EBITDA: Improved to negative $6.3 million from negative $9.4 million year-over-year.
Cash and Cash Equivalents: $47.7 million as of March 31, 2024.
Q2 Revenue Guidance: Expected to be between $18 million and $19 million.
Full Year Revenue Forecast: Anticipated to be between $78 million and $80 million.
Full Year Operating Expenses: Expected to range from $80 million to $84 million.
Release Date: May 07, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
Neuronetics Inc (NASDAQ:STIM) reported a total revenue of $17.4 million, marking a 12% increase from the first quarter of 2023, driven by increased treatment session sales.
U.S. treatment session revenue reached a record $13 million, a 22% increase year-over-year, fueled by a more than 32% increase in local consumable revenue.
Neuronetics Inc (NASDAQ:STIM) received FDA clearance for NeuroStar as a first-line adjunct treatment for adolescents aged 15 to 21 with major depressive disorder, expanding the total addressable market by approximately 35%.
The company has successfully launched the Better May Guarantee Provider (BMGP) program, showing significant positive trends and improvements in patient follow-up and treatment initiation times.
Neuronetics Inc (NASDAQ:STIM) has formed a five-year exclusive partnership with Transformational Care Network, enhancing their commercial strategy and expanding access to NeuroStar therapy.
Negative Points
Neuronetics Inc (NASDAQ:STIM) shipped only 41 systems in the quarter, falling short of the planned 45 to 50 systems, partly due to customers facing challenges in securing credit for capital purchases.
The cybersecurity incident at Change Healthcare negatively impacted the company's ability to collect payments and affected customer purchases, leading to delayed financial transactions.
Despite the overall revenue growth, the company reported a net loss of $7.9 million for the quarter, although this was an improvement from the previous year's loss of $10.5 million.
The ongoing issues with Change Healthcare have continued to affect the company's operations, including delays in patient eligibility verification and claims submissions by providers.
There are concerns about the impact of the cybersecurity issues on future quarters, with anticipated modest impacts on revenue and cash collections as noted in the Q2 guidance.
Q & A Highlights
Q: Can you discuss the impact of the cybersecurity issue on Q1 performance and expectations for recovery? A: Stephen Furlong, CFO, noted that the cybersecurity issue primarily impacted capital equipment sales by about $500,000 in Q1. They anticipate a recovery in Q2 through Q4. The issue also significantly affected collections, estimating a shortfall of about $3 million, which they expect to recover as the security issue resolves.
Q: What are the expectations for the adolescent market following the recent FDA approval for NeuroStar as a treatment for adolescents with depression? A: Keith Sullivan, CEO, expressed that the approval is a significant milestone and they are prepared with a comprehensive marketing strategy targeting adolescent psychiatrists, nurse practitioners, and parents. They anticipate this new indication to contribute materially to their business starting in the second half of the year, with a more significant impact expected in 2025.
Q: How is the Better May Guarantee Provider (BMGP) program influencing treatment session growth? A: Keith Sullivan explained that the BMGP program is exceeding expectations, with participating sites showing significantly higher patient treatment rates compared to non-participating sites. They plan to expand the program, which should sustain growth as more sites meet the program's standards.
Q: What is the impact of the new adolescent treatment indication on your marketing strategy and budget? A: Keith Sullivan stated that their marketing budget has been consistent over the past three years and will remain so. The budget will be used efficiently to target the adolescent segment without any planned increase, leveraging the BMGP program to enhance marketing effectiveness.
Q: Can you provide insights into the Q2 revenue guidance and the expected impact of ongoing challenges? A: Stephen Furlong addressed that while they anticipate some ongoing impact from the cybersecurity issue, the guidance reflects a responsible approach given the uncertainty. They remain optimistic about recovery and reaffirmed their full-year revenue guidance, indicating confidence in the underlying strength of the business.
Q: How are the treatment session revenues trending, and what are the drivers behind the recent growth? A: Keith Sullivan highlighted that treatment session revenues have been growing strongly, driven by increased utilization and the success of their commercial strategies, including the BMGP program. This trend is expected to continue as they further expand these initiatives.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.
