Neuronetics Reports Record First Quarter 2024 Financial and Operating Results
Neuronetics reported record first-quarter 2024 financial and operating results with revenue of $17.4 million, a 12% increase year-over-year. The U.S. treatment session revenue increased by 22%, and NeuroStar Advanced Therapy system revenue was $3.3 million. The company achieved a major milestone with FDA clearance for NeuroStar as a first-line adjunct treatment for adolescent major depressive disorder. Operating expenses decreased, resulting in a net loss of $(7.9) million for the quarter.
Record revenue of $17.4 million, a 12% increase year-over-year
FDA clearance for NeuroStar Advanced Therapy as a first-line adjunct for adolescent depression
Expanded exclusive commercial partnership with Transformations Care Network
Milestone of over 175,000 global patients treated with 6.4 million total treatment sessions
Improved gross margin of 75.1% and EBITDA performance compared to the previous year
Decrease in NeuroStar Advanced Therapy system revenue by 14%
Net loss of $(7.9) million for the first quarter of 2024
Decline in the number of systems shipped due to credit challenges faced by customers
Cash and cash equivalents decreased from $59.7 million to $47.7 million
Operating expenses of $19.9 million, a 7% decrease year-over-year
Insights
MALVERN, Pa., May 07, 2024 (GLOBE NEWSWIRE) -- Neuronetics, Inc. (NASDAQ: STIM) (the “Company” or “Neuronetics”) a commercial stage medical technology company with a strategic vision of transforming the lives of patients whenever and wherever they need help, with the best neurohealth therapies in the world, today announced its financial and operating results for the first quarter of 2024.
First Quarter 2024 Highlights
- First quarter 2024 revenue of
$17.4 million , a12% increase as compared to the first quarter 2023 - U.S. treatment session revenue increased by
22% versus the first quarter of 2023 - U.S. NeuroStar Advanced Therapy system revenue of
$3.3 million , in the quarter; the Company shipped 41 systems
Recent Operational and Marketing Highlights
- NeuroStar Advanced Therapy received FDA clearance as a first line, adjunct treatment for major depressive disorder in adolescents aged 15-21
- Launched second cohort within the “Better Me Guarantee Provider” pilot program in January 2024 and the third cohort in April 2024
- Announced an expanded exclusive commercial partnership with Transformations Care Network ("TCN")
- Achieved milestone of over 175,000 global patients treated with 6.4 million treatment sessions
"Neuronetics had a strong start to 2024, with our first quarter results demonstrating the execution of our commercial initiatives to drive system expansion and significantly grow treatment session revenues. Beyond our operational performance, we achieved a major regulatory milestone: NeuroStar is now the first and only TMS treatment to be cleared for use as first-line, adjunct therapy for the treatment of major depressive disorder in adolescent patients aged 15-21. Adolescent depression is a large and growing mental health condition for which there are currently limited treatment options available, and with this clearance, the market opportunity for NeuroStar within MDD increased by approximately
First Quarter 2024 Financial and Operating Results for the Three Months Ended March 31, 2024
| Revenues by Geography | |||||||||||
| Three Months Ended March 31, | |||||||||||
| 2024 | 2023 | ||||||||||
| Amount | Amount | % Change | |||||||||
| (in thousands, except percentages) | |||||||||||
| U.S. | $ | 16,793 | $ | 14,964 | 12 | % | |||||
| International | 624 | 576 | 8 | % | |||||||
| Total revenues | $ | 17,417 | $ | 15,540 | 12 | % | |||||
Total revenue for the three months ended March 31, 2024, was
| U.S. Revenues by Product Category | ||||||||||||
| Three Months Ended March 31, | ||||||||||||
| 2024 | 2023 | |||||||||||
| Amount | Amount | % Change | ||||||||||
| (in thousands, except percentages) | ||||||||||||
| NeuroStar Advanced Therapy System | $ | 3,310 | $ | 3,850 | (14 | ) | % | |||||
| Treatment sessions | 12,988 | $ | 10,643 | 22 | % | |||||||
| Other | 495 | $ | 471 | 5 | % | |||||||
| Total U.S. revenues | $ | 16,793 | $ | 14,964 | 12 | % | ||||||
U.S. NeuroStar Advanced Therapy System revenue for the three months ended March 31, 2024 was
U.S. treatment session revenue for the three months ended March 31, 2024, was
In the first quarter of 2024, U.S. treatment session revenue per active site was
Gross margin for the first quarter of 2024 was
Operating expenses during the first quarter of 2024 were
Net loss for the first quarter of 2024 was
EBITDA for the first quarter of 2024 was
Cash and cash equivalents were
FDA Clearance as a First-Line Add-On Treatment for Adolescents with Depression
In late March, Neuronetics received U.S. Food and Drug Administration (“FDA”) clearance for its NeuroStar Advanced Therapy as the first and only transcranial magnetic stimulation (“TMS”) treatment cleared as a first line, adjunct for major depressive disorder (“MDD”) in adolescents aged 15-21. The FDA clearance was supported by real-world data from our TrakStar database showing
Launched Second Cohort of Customers within the Better Me Guarantee Provider Pilot Program
Following its initial pilot launch during late 2023, the Company enrolled its second pilot cohort within the Better Me Guarantee Provider (“BMGP”) pilot program, which consisted of approximately 100 customer sites in January of 2024. The BMGP program creates a nationwide group of accounts that are committed to meeting certain standards of patient care and responsiveness developed in collaboration with medical experts. Regardless of practice size or tenure, this program aims to address reported responsiveness issues and lack of knowledge of TMS therapy that have negatively impacted patient access to care. Participating providers agree to attend advanced training at NeuroStar University, ensure that office phones are answered during business hours, advise patients of the benefits of treating to the full course of 36 sessions when medically appropriate, assign medical personnel to promptly respond to PHQ-10 assessments, and update websites and social media platforms to educate potential patients about the benefits of NeuroStar TMS therapy and its availability as a potential treatment option. In April 2024, the Company launched the third cohort of 100 customer sites. The Company currently has over 200 customer sites participating in the pilot program. The Company plans to continue its measured pilot roll-out with the next cohort of providers slated for inclusion in May 2024.
5-Year Exclusive Partnership with Transformations Care Network
Neuronetics announced an expanded five-year exclusive commercial partnership with Transformations Care Network, one of the nation’s largest mental health care providers. Under the new agreement, Neuronetics will be the exclusive supplier of new TMS equipment to Transformations Care Network, increasing the availability of Neuronetics’ NeuroStar TMS therapy to patients across Transformations Care Network’s facilities in six states. As part of the detail, Transformations agreed to convert from its prior fixed price treatment sessions to our consumable purchase model.
Business Outlook
For the second quarter of 2024, the Company expects total worldwide revenue between
For the full year 2024, the Company expects total worldwide revenue to be between
For the full year 2024, the Company expects total operating expenses to be between
Webcast and Conference Call Information
Neuronetics’ management team will host a conference call on May 7, 2024, beginning at 8:30 a.m. Eastern Time.
The conference call will be broadcast live in listen-only mode via webcast at https://edge.media-server.com/mmc/p/i3t5h9gs. To listen to the conference call on your telephone, you may register for the call here. While it is not required, it is recommended you join 10 minutes prior to the event start. To access the live audio webcast or subsequent archived recording, visit the Investor Relations section of Neuronetics’ website at ir.neuronetics.com.
About Neuronetics
Neuronetics, Inc. believes that mental health is as important as physical health. As a global leader in neuroscience, Neuronetics is redefining patient and physician expectations with its NeuroStar Advanced Therapy for Mental Health. NeuroStar is a non-drug, noninvasive treatment that can improve the quality of life for people suffering from neurohealth conditions when traditional medication hasn’t helped. The NeuroStar Advanced Therapy System is cleared by the FDA for adults with MDD, as an adjunct for adults with obsessive-compulsive disorder, and to decrease anxiety symptoms in adult patients with MDD that may exhibit comorbid anxiety symptoms (anxious depression), and as a first line adjunct for the treatment of MDD in adolescent patients aged 15-21. NeuroStar Advanced Therapy is the leading TMS treatment for MDD in adults with more than 6.4 million treatments delivered. NeuroStar is backed by the largest clinical data set of any TMS treatment system for depression, including the world’s largest depression outcomes registry. Neuronetics is committed to transforming lives by offering an exceptional treatment that produces extraordinary results. For safety information and indications for use, visit NeuroStar.com.
“Safe harbor” statement under the Private Securities Litigation Reform Act of 1995:
Statements in the press release regarding the Company that are not historical facts constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements may be identified by terms such as “outlook,” “potential,” “believe,” “expect,” “plan,” “anticipate,” “predict,” “may,” “will,” “could,” “would” and “should” as well as the negative of these terms and similar expressions. These statements include those relating to the Company’s business outlook and current expectations for upcoming quarters and fiscal year 2024, including with respect to revenue, expenses, growth, and any statements of assumptions underlying any of the foregoing items. These statements are subject to significant risks and uncertainties and actual results could differ materially from those projected. The Company cautions investors not to place undue reliance on the forward-looking statements contained in this release. These risks and uncertainties include, without limitation, risks and uncertainties related to: the Company’s ability to execute its business strategy; the Company’s ability to achieve or sustain profitable operations due to its history of losses; the Company’s reliance on the sale and use of its NeuroStar Advanced Therapy system to generate revenues; the scale and efficacy of the Company’s salesforce; the Company’s ability to retain talent; availability of coverage and reimbursement from third-party payors for treatments using the Company’s products; physician and patient demand for treatments using the Company’s products; developments in competing technologies and therapies for the indications that the Company’s products treat; product defects; our revenue has been concentrated among a small number of customers; the Company’s ability to obtain and maintain intellectual property protection for its technology; developments in clinical trials or regulatory review of NeuroStar Advanced Therapy system for additional indications; developments in regulation in the U.S. and other applicable jurisdictions; the terms of our credit facility; our ability to successfully roll-out our BMGP program on the planned timeline; our self-sustainability and existing cash balances; and our ability to achieve cash flow break-even for the fourth quarter 2024 and on a full-year basis in 2025. For a discussion of these and other related risks, please refer to the Company’s recent filings with the U.S. Securities and Exchange Commission (the “SEC”), which are available on the SEC’s website at www.sec.gov. These forward-looking statements are based on the Company’s expectations and assumptions as of the date of this press release. Except as required by law, the Company undertakes no duty or obligation to update any forward-looking statements contained in this press release as a result of new information, future events, or changes in the Company’s expectations.
Investor Contact:
Mike Vallie or Mark Klausner
Westwicke Partners
443-213-0499
ir@neuronetics.com
Media Contact:
EvolveMKD
646-517-4220
NeuroStar@evolvemkd.com
| NEURONETICS, INC. Statements of Operations (In thousands, except per share data) | ||||||||
| Three Months ended | ||||||||
| March 31, | ||||||||
| 2024 | 2023 | |||||||
| Revenues | $ | 17,417 | $ | 15,540 | ||||
| Cost of revenues | 4,329 | 4,144 | ||||||
| Gross profit | 13,088 | 11,396 | ||||||
| Operating expenses: | ||||||||
| Sales and marketing | 11,641 | 11,902 | ||||||
| General and administrative | 5,957 | 6,611 | ||||||
| Research and development | 2,349 | 2,790 | ||||||
| Total operating expenses | 19,947 | 21,303 | ||||||
| Loss from operations | (6,859 | ) | (9,907 | ) | ||||
| Other (income) expense: | ||||||||
| Interest expense | 1,826 | 1,253 | ||||||
| Other income, net | (812 | ) | (640 | ) | ||||
| Net loss | $ | (7,873 | ) | $ | (10,520 | ) | ||
| Net loss per share of common stock outstanding, basic and diluted | $ | (0.27 | ) | $ | (0.38 | ) | ||
| Weighted average common shares outstanding, basic and diluted | 29,472 | 28,034 | ||||||
| NEURONETICS, INC. Balance Sheets (In thousands, except per share data) | ||||||||
| March 31, | December 31, | |||||||
| 2024 | 2023 | |||||||
| Assets | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 47,730 | $ | 59,677 | ||||
| Accounts receivable, net | 17,504 | 15,782 | ||||||
| Inventory | 6,694 | 8,093 | ||||||
| Current portion of net investments in sales-type leases | 816 | 905 | ||||||
| Current portion of prepaid commission expense | 2,630 | 2,514 | ||||||
| Current portion of note receivables | 2,121 | 2,056 | ||||||
| Prepaid expenses and other current assets | 4,370 | 4,766 | ||||||
| Total current assets | 81,865 | 93,793 | ||||||
| Property and equipment, net | 1,847 | 2,009 | ||||||
| Operating lease right-of-use assets | 2,628 | 2,773 | ||||||
| Net investments in sales-type leases | 517 | 661 | ||||||
| Prepaid commission expense | 8,408 | 8,370 | ||||||
| Long-term notes receivable | 3,663 | 3,795 | ||||||
| Other assets | 4,883 | 4,430 | ||||||
| Total assets | $ | 103,811 | $ | 115,831 | ||||
| Liabilities and Stockholders’ Equity | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 2,979 | $ | 4,752 | ||||
| Accrued expenses | 9,045 | 12,595 | ||||||
| Deferred revenue | 1,623 | 1,620 | ||||||
| Current portion of operating lease liabilities | 851 | 845 | ||||||
| Total current liabilities | 14,498 | 19,812 | ||||||
| Long-term debt, net | 59,444 | 59,283 | ||||||
| Deferred revenue | 35 | 200 | ||||||
| Operating lease liabilities | 2,179 | 2,346 | ||||||
| Total liabilities | 76,156 | 81,641 | ||||||
| Commitments and contingencies (Note 18) | — | — | ||||||
| Stockholders’ equity: | ||||||||
| Preferred stock, | — | — | ||||||
| Common stock, | 300 | 291 | ||||||
| Additional paid-in capital | 411,309 | 409,980 | ||||||
| Accumulated deficit | (383,954 | ) | (376,081 | ) | ||||
| Total Stockholders’ equity | 27,655 | 34,190 | ||||||
| Total liabilities and Stockholders’ equity | $ | 103,811 | $ | 115,831 | ||||
| NEURONETICS, INC. Statements of Cash Flows (In thousands) | ||||||||
| Three months ended March 31, | ||||||||
| 2024 | 2023 | |||||||
| Cash flows from Operating activities: | ||||||||
| Net loss | $ | (7,873 | ) | $ | (10,520 | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Depreciation and amortization | 560 | 516 | ||||||
| Allowance for credit losses | 566 | 330 | ||||||
| Inventory impairment | 71 | — | ||||||
| Share-based compensation | 1,338 | 1,805 | ||||||
| Non-cash interest expense | 161 | 188 | ||||||
| Changes in certain assets and liabilities: | ||||||||
| Accounts receivable, net | (2,667 | ) | (2,337 | ) | ||||
| Inventory | 1,328 | (243 | ) | |||||
| Net investment in sales-type leases | 234 | 535 | ||||||
| Prepaid commission expense | (154 | ) | (175 | ) | ||||
| Prepaid expenses and other assets | 116 | 131 | ||||||
| Accounts payable | (1,983 | ) | 2,484 | |||||
| Accrued expenses | (3,549 | ) | (7,680 | ) | ||||
| Deferred revenue | (163 | ) | (247 | ) | ||||
| Net Cash used in Operating activities | (12,015 | ) | (15,213 | ) | ||||
| Cash flows from Investing activities: | ||||||||
| Purchases of property and equipment and capitalized software | (375 | ) | (234 | ) | ||||
| Repayment of notes receivable | 443 | 51 | ||||||
| Net Cash provided by (used in) Investing activities | 68 | (183 | ) | |||||
| Cash flows from Financing activities: | ||||||||
| Payments of debt issuance costs | — | (801 | ) | |||||
| Proceeds from issuance of long-term debt | — | 2,500 | ||||||
| Repayment of long-term debt | — | (1,200 | ) | |||||
| Net Cash provided by Financing activities | — | 499 | ||||||
| Net decrease in Cash and Cash equivalents | (11,947 | ) | (14,897 | ) | ||||
| Cash and Cash equivalents, Beginning of Period | 59,677 | 70,340 | ||||||
| Cash and Cash equivalents, End of Period | $ | 47,730 | $ | 55,443 | ||||
Non-GAAP Financial Measures (Unaudited)
EBITDA is not a measure of financial performance under generally accepted accounting principles in the U.S. (“GAAP”), and should not be construed as a substitute for, or superior to, GAAP net loss. However, management uses both the GAAP and non-GAAP financial measures internally to evaluate and manage the Company’s operations and to better understand its business. Further, management believes that the addition of the non-GAAP financial measure provides meaningful supplementary information to, and facilitates analysis by, investors in evaluating the Company’s financial performance, results of operations and trends. The Company’s calculation of EBITDA may not be comparable to similarly designated measures reported by other companies, because companies and investors may differ as to what type of events warrant adjustment.
The following table reconciles reported net loss to EBITDA:
| Three Months ended | ||||||||
| March 31, | ||||||||
| 2024 | 2023 | |||||||
| (in thousands) | ||||||||
| Net loss | $ | (7,873 | ) | $ | (10,520 | ) | ||
| Interest expense, net | 1,014 | 613 | ||||||
| Income taxes | — | — | ||||||
| Depreciation and amortization | 560 | 516 | ||||||
| EBITDA | $ | (6,299 | ) | $ | (9,391 | ) | ||
FAQ
What was Neuronetics' revenue for the first quarter of 2024?
What was the increase in U.S. treatment session revenue for Neuronetics in the first quarter of 2024?
What was the reason behind the decrease in NeuroStar Advanced Therapy system revenue in the first quarter of 2024?
What was Neuronetics' net loss for the first quarter of 2024?
What was Neuronetics' cash and cash equivalents as of March 31, 2024?
