Earnings call transcript: Neuronetics Q2 2025 Misses EPS Forecast, Stock Drops

Neuronetics Inc. reported its financial results for the second quarter of 2025, revealing a larger-than-expected loss per share and a revenue beat. The company posted an earnings per share (EPS) of -$0.15, missing the forecast of -$0.08. This surprise resulted in an 87.5% deviation from expectations. Revenue came in at $38.1 million, surpassing the forecast of $36.59 million by 4.15%. In response, Neuronetics’ stock fell 12.77% to $4.15 in pre-market trading. According to InvestingPro data, the stock’s RSI indicates overbought territory, while its beta of 1.78 suggests higher volatility than the market. Despite today’s drop, the stock has delivered an impressive YTD return of 189%.

Want deeper insights? InvestingPro offers 8 additional key tips about Neuronetics’ market position and growth prospects.

Key Takeaways

• Neuronetics reported a larger-than-expected loss per share of -$0.15.
• Revenue exceeded forecasts, reaching $38.1 million.
• Stock dropped 12.77% in pre-market trading following the earnings release.
• Gross margin decreased to 46.6% from 74% a year ago.
• The company anticipates reaching cash flow positivity by Q4 2025.

Company Performance

Neuronetics demonstrated a strong revenue performance, with a 132% year-over-year increase. The company shipped 41 NeuroStar systems, contributing to a $3.5 million revenue from this segment. Despite the revenue growth, the company’s net loss widened to $9.8 million, or $0.15 per share, highlighting ongoing financial challenges. The gross margin also declined significantly to 46.6%, down from 74% the previous year, indicating increased cost pressures. InvestingPro analysis shows the company maintains a healthy current ratio of 2.44, with liquid assets exceeding short-term obligations. However, the company’s overall Financial Health Score stands at "FAIR" with a rating of 2.36 out of 5.

Financial Highlights

• Revenue: $38.1 million, up 132% year-over-year.
• Earnings per share: -$0.15, compared to the forecast of -$0.08.
• Gross margin: 46.6%, down from 74% a year ago.
• Cash used in operations: $3.5 million, better than guided.

Earnings vs. Forecast

Neuronetics’ EPS of -$0.15 missed the forecast of -$0.08 by 87.5%, marking a significant surprise. In contrast, revenue exceeded expectations by 4.15%, reaching $38.1 million against a forecast of $36.59 million. The earnings miss is notable compared to previous quarters, where the company had managed closer alignments with forecasts.

Market Reaction

Following the earnings announcement, Neuronetics’ stock fell 12.77% to $4.15 in pre-market trading. This decline reflects investor disappointment with the earnings miss, despite the positive revenue surprise. While the stock trades significantly above its 52-week low of $0.52, InvestingPro data shows analyst targets ranging from $5.50 to $8.00, suggesting potential upside. The stock currently trades at a Price/Book ratio of 8.69, indicating premium valuation compared to peers.

For comprehensive valuation analysis and detailed financial metrics, explore Neuronetics’ full Pro Research Report, available exclusively on InvestingPro.

Outlook & Guidance

Neuronetics provided guidance for the upcoming quarter, expecting revenue between $37 million and $39 million. The company aims for a gross margin of 48-50% and projects to become cash flow positive by the fourth quarter of 2025. For the full year, revenue is anticipated to be in the range of $149 million to $155 million, with year-end total cash projected between $25 million and $28 million.

Executive Commentary

CEO Keith Sullivan highlighted the integration of Neuronetics and Greenbrook, stating, "The integration of Neuronetics and Greenbrook is creating exactly the value we anticipated." CFO Steve Fanstiel emphasized the company’s financial targets, saying, "We are targeting cash flow from operations to be in the range of negative $3M to breakeven in the third quarter."

Risks and Challenges

• Declining gross margins could pressure profitability.
• The larger-than-expected EPS loss may affect investor confidence.
• Competition in the mental health treatment market remains intense.
• Macroeconomic factors could impact consumer spending on healthcare.
• Operational cost savings initiatives need to be effectively executed.

Q&A

During the earnings call, analysts inquired about the shift in marketing strategy towards a provider connection program and the optimization of Greenbrook clinic performance. Executives also addressed concerns about the SPRAVATO buy and bill model reimbursement, emphasizing the importance of efficient patient referrals through primary care physicians.

Full transcript - Neuronetics Inc (STIM) Q2 2025:

Conference Operator: Welcome to the Neuronetics Reports Second Quarter twenty twenty five Financial and Operating Results. At this time, all participants are in a listen only mode. After the speakers’ presentation, there will be a question and answer session. To ask a question during the session, you will need to press 11 on your telephone. You will then hear an automated message advising your hand is raised.

To withdraw your question, please press 11 again. Please be advised that today’s conference is being recorded. I would now like to hand the call over to Mark Klausner. Please go ahead.

Mark Klausner, Investor Relations, Neuronetics: Good morning, and thank you for joining us for the Neuronetics second quarter twenty twenty five conference call. Joining me on today’s call are Neuronetics President and Chief Executive Officer, Keith Sullivan and Steve Fanstiel, Neuronetics recently appointed Chief Financial Officer. Before we begin, I would like to caution listeners that certain information discussed by management during this conference call will include forward looking statements covered under the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995, including statements related to our business, strategy, financial and revenue guidance, the Green Brook integration and other operational issues and metrics. Actual results can differ materially from those stated or implied by these forward looking statements due to risks and uncertainties associated with the company’s business. For a discussion of risks and uncertainties associated with Neuronetics business, I encourage you to review the company’s filings with the Securities and Exchange Commission, including the company’s quarterly report on Form 10 Q, which will be filed later today.

The company disclaims any obligation to update any forward looking statements made during the course of this call, except as required by law. During the call, we’ll also discuss certain information on a non GAAP basis, including EBITDA. Management believes that non GAAP financial information taken in conjunction with US GAAP financial measures provide useful information for both management and investors by excluding certain non cash and other expenses that are not indicative of trends in our operating results. Management uses non GAAP financial measures to compare our performance relative to forecast and strategic plans, to benchmark our performance externally against competitors and for certain compensation decisions. Reconciliations between US GAAP and non GAAP results are presented in the tables accompanying our press release, which can be viewed on our website.

With that, it’s my pleasure to turn the call over to Neuronetics’ President and Chief Executive Officer, Keith Sullivan.

Keith Sullivan, President and Chief Executive Officer, Neuronetics: Thanks, Mark. Good morning, everyone, and thank you for joining us today. I’ll begin by providing an overview of our second quarter performance and our key operational updates. Steve Van Steele will then provide a brief introduction and review our financial results. I’ll conclude with our outlook before turning to Q and A.

We had a strong second quarter at Neuronetics, both in terms of our ability to drive accelerated top line growth and progress towards cash flow positivity. While we still have some fine tuning to do to optimize of the Green Brook operations, we are excited about the strength in the underlying business and feel the early results validate our thesis for the combination. Total revenue was 38,100,000.0 an 18% year over year increase on an adjusted pro form a basis. Revenue from the NeuroStar business was $15,100,000 comprised of NeuroStar system revenue of $3,500,000 with 41 systems shipped. US treatment session revenue of 10,800,000.0, up 13% on a pro form a basis, and other revenue of $375,000 US clinic revenue was $23,000,000 our largest quarterly clinic revenue to date, and only the second time Green Brook generated over $20,000,000 in a single quarter.

Beyond the strength of the revenue performance, we made progress on our path to cash flow positivity. Cash used in operations was $3,500,000 better than the previously guided target of under $5,000,000 and a significant improvement from the first quarter. As we move through 2025, we continue to focus on three clear strategic priorities. First, executing on our Green Brook growth strategy. Second, continuing to scale our Better Me Provider or BMP program third, continuing to improve operating efficiencies and optimize cash collections.

Our Green Brook growth strategy continues to exceed expectations. The optimization of our Regional Account Manager, or RAM program, is delivering strong results. We have seen significantly improved patient conversion rates through the implementation of our enhanced patient connection capabilities, including automated patient transfer processes, QR codes, and the coordinated intake team that engage patients while they are still at the referring physician’s office. During a recent awareness campaign, we scheduled over three fifty meetings for our RAM team, with physicians anxious to learn how the Green Brook clinics can provide care for their patients and help them experience relief from their depression. These meetings are taking place this quarter and next and should have an impact on the referrals to our clinics going forward.

We know that a direct referral from a trusted provider has a much higher conversion into treatment than a marketing lead. We also continued to improve our operational standardization by placing patient coordinators across most Green Brook clinics to enable more efficient in person consultations. Our SPRAVATO rollout continues its strong momentum with 77 of 83 SPRAVATO eligible clinics now offering the therapy, up from 75 in Q1, keeping us on track for a full rollout across all eligible clinics by year end. Additionally, we are taking a thoughtful approach to our buy and bill model expansion based on key learnings from q two. As pioneers in the rollout of SPRAVATO’s buy and bill model, we are navigating a reimbursement landscape that is not well traveled, creating valuable learnings for both us and the payers in the space.

What we have learned is that the payers reimburse SPRAVATO at a significantly different rates with different timings. With the knowledge we now have, we are taking a more analytical approach to buy and bill expansion, focusing on opportunities that deliver good margins. As we balance our mix of buy and bill and administer and observe, our revenue and gross margins should increase. Building off of the momentum from Q1, the collective execution of these initiatives across the Greenbrook network led us to achieving the strongest Green Brook clinic revenue quarter in the history of the business, a performance trend we expect to continue as our operational initiatives are more widely implemented in the business. Turning to our second focus area.

Our Better Me provider program expansion remains a key driver to our business. Currently, we have 395 active BMP sites with another 113 sites working towards qualification. The performance metrics of the program continue to validate its effectiveness. BMP sites treat three times more patients in need per site per quarter than a non BMP practice. And these sites respond to patients approximately two times faster than nonparticipating sites.

These strong BMP performance metrics have fine tuned our broader marketing approach as we have learned what patients want. This led us to refocus our marketing strategy around educating physicians about the NeuroStar treatment and the benefits of referring their patients. What we learned from the Green Brook is powerful. A referral from a medical provider is 10 times more likely to result in a new patient start relative to traditional marketing. We have expanded our outreach beyond psychiatrists to include primary care physicians, gynecologists, and other health care providers who treat large populations of patients suffering from depression.

We are educating these providers about our services and help them evaluate whether to refer their depressed patients for NeuroStar treatment. As I mentioned earlier, we recently conducted a successful pilot program leveraging our intake and coordinator teams to schedule meetings for our RANDS with depression care providers, including psychiatrists and primary care physicians who care for the majority of patients battling depression. Leveraging the learnings from that program, we conducted a similar campaign for our PDMs. Through this effort, we systematically identified providers surrounding our Neuro Star accounts and secured meetings with over two ten new primary care practices in just a few days. The level of interest in these educational meetings has been high, and we have already seen referrals to our NeuroStar accounts and BMP providers in particular.

Going forward, I am confident that this will be an effective use of our marketing dollars and time well spent for our PDM team. We are calling this comprehensive approach our provider connection program, and it works because patients are receiving referrals from their trusted health care providers, and primary care physicians are particularly excited about what BMP accounts offer. We have found that community physicians prefer to send patients to BMP sites based on their commitment to the patient responsiveness and education standards. This provider connection program complements our other marketing efforts, including our successful TV campaigns and our co op marketing program that continue to drive results. Our digital marketing efforts continue to drive brand search impression growth, and we are pleased with the overall marketing efficiency improvements we are achieving across the combined organization.

Turning to our third focus area, continuing to improve operational efficiencies and optimize cash collections. Since the closing of the Greenbrook acquisition, we have made significant strides in driving operational efficiencies across the network, but there are still more opportunities in front of us. For example, in June, we successfully rolled out a self check-in program using kiosks at four pilot locations, which allow patients to check-in for their appointment and pay their copay independently. The implementation was so seamless that we quickly expanded it to seven additional locations, and we are now planning a full network rollout. We have also integrated this through our AMD system, which will streamline room management and improve overall patient flow efficiency.

This system not only improves the patient experiences, but optimizes the time spent by our technicians and intake coordinators, allowing them to help care for more patients on a daily basis without the need for additional headcount. Beyond the self check-in program, we have engaged a consultant to conduct a comprehensive review of our operations team structure across the Green Brook network. This review will identify additional cost savings and optimization opportunities that we expect to implement through the remainder of 2025, further improving our operational efficiencies and cost structure. Turning to cash collections. The initiatives we have put into place are delivering meaningful results.

Claims are being paid more quickly and more reliably than ever as we continue to systematically address legacy issues with payers, including the resolution of historical challenges with prepayment audits. We have also implemented processes to identify and resubmit previously uncollected claims. Most importantly, we have analyzed why claims have been denied in the past, mostly due to incorrect billing submissions. We are putting fixes in place to ensure correct information is submitted the first time, which should reduce rejections and accelerate cash flow going forward. Beyond these three strategic priorities, we continue to focus on driving growth amongst adolescent patients.

We have seen 25% growth in adolescent new patient starts in the 2025 compared to 2024, driven by a 2.6 times increase among fifteen to seventeen year olds. In the 2025, we treated more than double the number of adolescent patients treated in all of 2023. This growth has been supported by expanded insurance coverage for adolescent treatments over the past year, and this remains an important growth opportunity for us. I am also proud to announce the publication of real world clinical data in the Journal of the American Academy of Child and Adolescent Psychiatry Open, demonstrating the effectiveness of the NeuroStar TMS system in adolescents and young adults with major depressive disorder. Drawing from the NeuroStar TrackStar clinical database, the world’s largest depression outcome database, The study included 1,200 patients ages 12 to 21, and revealed nearly seventy percent experienced clinically meaningful improvement, with less than one percent reporting worsening symptoms.

With depression affecting one in five adolescents and limited safe treatment options available, we offer a much needed therapy for these patients. Overall, I am extremely pleased with the second quarter results. We delivered strong financial performance that exceeded our expectations while making meaningful progress on our key strategic initiatives. The operational momentum we have built gives me confidence that we are successfully executing on the significant value creation potential of the combined business. Before we run through the financials, I’d like to take a moment to introduce Steve Fanstiel, who joined us as chief financial officer on July 15.

Steve brings over two decades of health care experience and has already made valuable contributions to our team in the first few weeks. I am confident he will be an excellent leader for our finance organization. Steve, would you like to say a few words about your first few weeks with the company?

Steve Fanstiel, Chief Financial Officer, Neuronetics: Thank you, Keith, and good morning, everyone. It’s a pleasure to be here today. I’m excited to be a part of the Neuronetics team. Throughout my career, I have always had a passion for healthcare, specifically in delivering solutions that make a difference in patients’ lives. I was drawn to neuroinetics by the significant opportunity in mental health care, where there continues to be a profound and growing need to improve patients’ lives.

Neuroinetics has built a unique and significant position in this space through its combination of the leading TMS treatment system in NeuroStar and through the breadth of its clinical presence with the Green Brook network. In just a few short weeks, I’ve been able to see the dedication which Keith and the whole Neuronetics team bring every day to helping patients, and it’s an honor to be part of this team. I will now turn to reviewing the financial results. Unless otherwise noted, all performance comparisons are being made for the 2025 versus the 2024. In the quarter, total revenue was $38,100,000 an increase of 132% compared to revenue of $16,500,000 in the 2024, primarily driven by the inclusion of Green Brook operations following our acquisition.

On an adjusted pro form a basis, adjusting for the impact of the Green Brook acquisition and site closures, revenue increased 18%. Revenue from our NeuroStar business, representing our system revenue as well as U. S. Treatment Session revenue, was $15,100,000 U. S.

NeuroStar system revenue was $3,500,000 and we shipped 41 systems. This represents our second consecutive quarter of system ASP greater than 85,000, demonstrating the value of our system and its features in an increasingly competitive market. US treatment session revenue was $10,800,000 a 13% increase compared to $9,600,000 in the prior year quarter on a pro form a basis. U. S.

Clinic revenue, which represents revenue generated by treatment centers from the Greenbrook acquisition, was $23,000,000 for the three months ended 06/30/2025, representing the strongest Greenbrook quarterly clinic performance to date and a 23% sequential increase over the first quarter. Gross margin was 46.6% compared to 74% in the prior year quarter. This change in gross margin was primarily a result of the inclusion of Green Brook’s clinic business, which operates at a lower margin, as well as a higher mix of clinic revenue associated with the buy and bill SPRAVATO treatments. Operating expenses during the quarter were $25,800,000 an increase of $5,100,000 or 25% compared to $20,700,000 in the 2024. The increase was primarily attributable to inclusion of Green Brook’s general and administrative expenses of $6,100,000 partially offset by savings in sales and marketing expenses.

During the quarter, we incurred approximately 1,800,000 of non cash stock based compensation expense. Net loss for the quarter was $9,800,000 or $0.15 per share as compared to a net loss of $9,800,000 or $0.33 per share in the prior year quarter. EBITDA was negative $7,200,000 as compared to negative $8,000,000 in the prior year quarter. Turning to the balance sheet. As of 06/30/2025, total cash was $17,500,000 consisting of cash and cash equivalents of $11,000,000 and restricted cash of $6,500,000 This compares to total cash of $19,500,000 as of 12/31/2024, which consists of cash and cash equivalents of 18,500,000.0 million dollars The $5,500,000 increase in restricted cash in the 2025 was related to establishing a cash collateral account to support our SPRAVATO operations.

Our distributor for SPRAVATO provides us with one hundred and twenty day payment terms for purchases, which we have backed by placing 5,500,000 of cash into a designated interest bearing collateral account. Additionally, I’m pleased to report that in August 2025, we became eligible for and received an additional 10,000,000 of funding under our existing debt agreement with Perceptive Advisors. We became eligible for these funds as a result of achieving required revenue conditions under the tranche two funds. We also remain eligible for an additional $5,000,000 of tranche two funding, subject to conditions described in the agreement. Furthermore, the existing $2,000,000 minimum liquidity requirement has been extended from September 2025 through September 2026, after which the requirement becomes $5,000,000 This enhanced financial flexibility strengthens our position as we execute our strategic initiatives and progress towards positive cash flow from operations.

Our cash used in operations for the second quarter was $3,500,000 better than our previously guided target of under $5,000,000 and significantly improved from $17,000,000 in the first quarter, which, as a reminder, included steps to settle Green Book’s legacy vendor payment plans and the pull forward of certain expenses to secure favorable vendor concessions. Now turning to guidance. For the third quarter, we expect net revenue of between $37,000,000 to $39,000,000 For the full year 2025, we continue to expect total revenue of between $149,000,000 and $155,000,000 For gross margin, we now expect our full year to be between 4850% versus our prior guidance of approximately 55%. The key driver of the change is the shift in revenue mix, with clinic revenue representing a greater percentage of total revenue than previously expected. In addition, margin will be impacted by the mix of SPRAVATO bill and buy revenue, which carries a lower gross margin versus the A and O model.

In the balance of the year, we anticipate gross margin improvement relative to Q2 as we optimize the SPRAVATO buy and bill rollout relative to our A and O business and leverage our fixed infrastructure through continued growth. To reiterate the point Keith made earlier in his remarks, we are looking to maximize the overall profitability of our SPRAVATO offering. Operating expenses are now projected to be between 100,000,000 and $105,000,000 for the full year versus the prior guidance of 90,000,000 to 98,000,000 The updated guidance reflects approximately $20,000,000 in realized annual cost savings from our efforts in 2024 and associated with the Greenbrook integration. The change in guidance for 2025 reflects the need to augment some critical areas, including our claims collections team, which is crucial to our cash management and additional time needed to fully assess and implement other synergies. This guidance includes approximately $6,000,000 of non cash stock based compensation expense for the full year.

We continue to make progress in our cash flow and we are targeting cash flow from operations to be in the range of negative $3,000,000 to breakeven in the third quarter and then turning positive in the 2025. This compares to our prior guidance of positive cash flow from operations beginning in the 2025, which has been impacted by our updated expectations for gross margin mix and the strategic investments in operational capabilities I just described. We further project year end 2025 total cash, inclusive of cash, cash equivalents and restricted cash, to be in the range of $25,000,000 and $28,000,000 inclusive of the recent Percepta funding. I’ll now turn it back to Keith for his closing remarks.

Keith Sullivan, President and Chief Executive Officer, Neuronetics: As we look forward to the remainder of 2025, I’m confident that we are well positioned to continue executing on the three strategic priorities and to drive sustainable growth for our shareholders. Our Greenberg integration and growth strategy exceeded our expectations in Q2, demonstrating the significant value creation potential for this combination. Going forward, we will continue the systematic rollout of Spervato and the buy and bill model, advance our operational improvement initiatives, while simultaneously expanding our BMP program across our customer base. Most importantly, we remain focused on achieving cash flow positive from operations in 2025. Our strong second quarter performance combined with our learnings on billing of SPRAVATO, ongoing operational improvements, and cost synergy realization gives us the confidence in reaching this important milestone in the fourth quarter.

The integration of Neuronetics and Greenbrook is creating exactly the value we anticipated when we announced this transaction, a vertically integrated organization capable of providing broad access to innovative mental health treatments while driving sustainable growth and profitability. With that overview, I will now open the call for questions. Operator?

Conference Operator: Thank you. At this time, we will conduct the question and answer session. As a reminder, to ask a question, you will need to press 11 on your telephone and wait for your name to be announced. To withdraw your question, please press 11 again. One moment while we compile the Q and A roster.

Our first question comes from Bill Polvonik from Canaccord Genuity. Your line is now open.

Bill Polvonik, Analyst, Canaccord Genuity: Great, thanks. Good morning. Can you hear me okay?

Keith Sullivan, President and Chief Executive Officer, Neuronetics: We can. Good morning, Bill.

Bill Polvonik, Analyst, Canaccord Genuity: Hey, good morning. So a couple of things. One, obviously Green Brick is doing very well. You’ve done a great job integrating that. I’m just kind of curious as we look at the traditional STEM business kind of maybe a little slower than what we were looking for.

Can you help us understand the dynamics? Are the referrals being pushed to the Green Brick centers from the physicians because the BMP and they just have better kind of efficiencies? Or is there anything specific going on that’s maybe making the traditional NeuroNEXT platform maybe not as successful as the Green Brook?

Keith Sullivan, President and Chief Executive Officer, Neuronetics: No, thanks for the question, Bill. After our analysis of the RAN referral approach to patient education and awareness, it became clear to us that the more efficient use of the marketing dollar and the time of our PDMs was to use both to follow-up on the provider connection path. So under this program, our marketing dollars goes towards educating of the PCPs through our digital and social media platform. So once we have these educational meetings with the PCPs and their staff set up and we deploy the conduits for the referrals to our NeuroStar customers and to primarily our BMP sites, So which we then have a simple way for patients to go from one office to the providers. So we know from the RAM program that this shift in strategy would take a few months to gain traction.

And we felt that this quarter was the best time to start it. We were able to deliver 13% growth in spite of the shift, but we believe that the provider connection program is way more efficient and will eventually turn to a higher conversion rate for our patients.

Bill Polvonik, Analyst, Canaccord Genuity: Okay. And then so it’s basically you’ve shifted the strategy to the referrals versus maybe just driving patients and conversions in the traditional accounts, if I read that correctly. I’m just what type of impact on your marketing dollars does this have longer term? It seems it would be it’s human focus and maybe less spend on external kind of marketing. Is that a right way to think about it?

Keith Sullivan, President and Chief Executive Officer, Neuronetics: I think, as I said, it’ll make our marketing dollars more efficient, which may give us an opportunity to lower that dollar volume. But in going to primary care physicians, we do have to go to some additional trade shows associated with it. We are providing educational meetings in localities. So, we still have a marketing spend to help educate them. But similar to what we have seen with the RAMs, once we educate these offices and they get a patient sent to one of our BMP accounts, and they see the results, then we can expand further and wider into those practices.

So honestly, think we’re looking at the RAM example and we’re following that same playbook for the BMP accounts.

Bill Polvonik, Analyst, Canaccord Genuity: Okay, and then for Steven, welcome aboard. Just on the resubmitted claims, how much dollars are we talking about? What’s the age of those? What’s the percentage belief that you’ll collect on those? And then just on optimizing this bravado buy and bill, it just sounds like to me, in layman’s terms, you’re going to halt kind of expanding that program for now until you get the actual dollar reimbursement and timing of getting that cash flow in the door?

And thanks for taking my questions.

Steve Fanstiel, Chief Financial Officer, Neuronetics: Yes. Good morning, Bill. Yes, kind of two questions there. I’ll try to tackle each of those. In terms of the revenue cycle management, we’re really going after two things.

I think you mentioned the aged AR, but we’re also doing a much better job, and I’m looking at say January versus June of this year, in terms of our time to collect on that initial claim, wherein, when we look at June, we’re collecting 10% more of that revenue from June in the first month after those, treatments happen. So we’re getting very efficient on just collecting what’s due to us on time. But yes, we’ve got still, open AR from 2024 and earlier this year that as we’ve gotten more efficient, we’re catching up on that piece. I think the problem is as you have any errors or issues with the submissions, you have to resubmit. That’s a longer, kind of time, commitment there.

But I think as the team is fixed that we’re getting first pass, we go back and we know what we need to do on those other pieces. So I expect this will continue to be a tailwind, both catching up on age claims, but also just improving on that time to clip of recent treatments. And I think that gives us lift through the balance of the year, and into 2026 as well. In terms of B and B, I would make two comments there. I think the B and B offering, has a potential kind of in two places.

One is it allows us to, increase the number of patients we have access to. There are plans where, they’re asked for both A and O and B and B, to be a part of that program, be able to offer A and O, other places where only B and B is an offering. So that’s an opportunity for us to seek out and drive additional treatments, access to patients, we didn’t have. With that said, we have to make sure that the reimbursement is adequate, so that we’re getting appropriate profit, on those treatments. And I think there’s a couple of ways to look at that.

Certainly that, drug cost, when you think about B and B, is a pretty significant increase. So we may not get the same GP percent margin when we think about B and B versus A and L, but on a per treatment basis, we would want those GP dollars, to be incremental or higher, because of the increased burden that we have of buying that drug. So that’s how we think about it, giving us access to incremental patients and driving growth. But also, it shouldn’t be a step backward in terms of profitability on a per treatment basis.

Bill Polvonik, Analyst, Canaccord Genuity: Great. Thanks for taking my questions.

Conference Operator: Thank you. Our next question comes from Adam Mader of Piper Sandler. Your line is now open. Adam Mader from Piper Sandler, your line is now open. One moment for our next question.

Our next question comes from Dan Stauder of Citizens JMP. Your line is now open.

Dan Stauder, Analyst, Citizens JMP: Yeah. Thanks for the questions. Just first on Green Brook, the clinical sales per site, It was 196,000 last quarter. This quarter I think it was closer to 240,000 if I did that math right. But I just want to ask your opinion or get any commentary high level on how we should be thinking about this metric more steady state?

You know, it should be ramping up this year with SPRAVATO and some of the other optimization initiatives you’re implementing, but long term, what’s the normalized level we should think about in our models?

Steve Fanstiel, Chief Financial Officer, Neuronetics: Yeah, let me make sure I’ve got that, Dan. So you’re asking about just what you think kind of it is on a per clinic or per site basis on the Green Brook side?

Dan Stauder, Analyst, Citizens JMP: Yes, that’s right. Just I think $196,000 you gave last quarter, I don’t think

Kyle, Analyst, Piper Sandler: you gave it this quarter,

Dan Stauder, Analyst, Citizens JMP: but just backing in from the 95 sites on the total clinic revenue.

Steve Fanstiel, Chief Financial Officer, Neuronetics: Yes, I don’t think we’ve put out a target for that. I think I would just continue to look at the total revenue trends, for the business and what we’ve seen first half to second half. I mean, now when we look at, first half year to date performance overall, it’s been about 60% clinic revenue business. We expect that will continue to remain about that 60% level, and we provided guidance for the full year. So that kind of gives you an ability to track into what we see that Greenbrook revenue, looking like for the full year.

I think on a site basis, where it can be a little challenging to say there’s a target there, certainly we can add beds, we can expand, the size of some of these sites. So I think there’s upward potential there and we’re seeing very nice volume growth on the Greenberg side of the business. We saw that as we talk about the NeuroStar business on the treatment side as well, 13% on an adjusted pro form a basis. So I think that site number can go up continue to go up at a pretty high level.

Dan Stauder, Analyst, Citizens JMP: Great. Appreciate that. And then just one follow-up on the adolescent indication. Great to see the progress here as well as the positive updates on the clinical and reimbursement side. But just as far as patient outreach, I imagine the marketing strategy here has to be a little bit more nuanced.

So could you just give us any color on your approach and how are you driving awareness and adoption and what’s driving that on your end? Thank you.

Keith Sullivan, President and Chief Executive Officer, Neuronetics: Dave, we have the data for each one of our providers, and so we know which are taking care of adolescent patients, And we have targeted those folks through our Provider Connection program and are educating them both by going to trade shows that they attend, but primarily in their offices. And it gives us a more intimate opportunity to explain to them the benefits that TMS can provide to those patients. So we’ve seen a very nice uplift from the Provider Connection Program when we can identify exactly who those providers are.

Dan Stauder, Analyst, Citizens JMP: Great, thanks very much.

Conference Operator: Our next question comes from Adam Mader of Piper Sandler. Your line is now open.

Kyle, Analyst, Piper Sandler: Hi. Can you guys hear me?

Keith Sullivan, President and Chief Executive Officer, Neuronetics: We can, Adam. How are you?

Kyle, Analyst, Piper Sandler: This is actually Kyle on for Adam. Thanks for taking the questions. Sorry about the technical difficulties there.

Keith Sullivan, President and Chief Executive Officer, Neuronetics: No problem.

Steve Fanstiel, Chief Financial Officer, Neuronetics: I just wanted to ask,

Kyle, Analyst, Piper Sandler: I guess, just one on kind of the cadence for the guidance here and how we’re thinking about the back half. So, I guess if my math is right, just kind of looking at the Q3 guidance, I think we’re kind of contemplating a steep ramp here in Q4. So just kind of trying to get an idea between kind of Q3 and Q4 for revenue and the different pieces there. Thanks.

Steve Fanstiel, Chief Financial Officer, Neuronetics: Yes, Kyle. I mean, maybe the first point to make is we had a strong Q2 sales results. So we went from $32,000,000 in sales in Q1 to over $38,000,000 I mean, we were very pleased with that. We exceeded the guidance and the consensus for the quarter. I think in Q3, we just had seasonality in the business.

That’s a result of the July 4 holiday, summer vacation season. That generally impacts the overall treatments, just driving slower growth, for that first half of the third quarter here. I think what we expect to see and what we’ve seen historically is pretty significant increase as we go from Q3 to Q4, where we see the offsetting benefit, that the tailwind of that seasonality coming back in Q4. That’s how we kind of look at this. That’s where the guidance is set up.

So having a $6,000,000 increase from Q1 to Q2 and then having a similar increase Q3 to Q4, I think that’s consistent with what we’re seeing in the business and then just the seasonality piece driving that.

Kyle, Analyst, Piper Sandler: Perfect. Thanks, Stephen. That’s super helpful. And then maybe another one for you, just on the gross margin guide down a little bit, which I understand is just a function of Green Brick becoming a larger portion of the mix. And you talked about back half, maybe you can get up kind of towards the higher end of that range since I think the front half was about 48%.

How should we kind of expect maybe the trajectory of gross margins over the medium term as we look out at 2026 for the combined business kind of on this trend?

Steve Fanstiel, Chief Financial Officer, Neuronetics: Yes. We haven’t provided any specific 2026 guidance, but I would say the mix is really going to be the biggest product revenue, right? And that difference between NeuroStar and Green Brook. If you look when we are standalone, the NeuroStar margins were around mid-seventy percent, 74%, 75% and nothing’s fundamentally changed in that cost structure. Green Brook, if you just do the math on our 48% year to date, the Green Brook gross profit margin is around 30.

I think that the biggest thing we have going, once you account for that mix piece, we do have upside, I think especially on the Green Brook side, just leveraging that fixed clinical infrastructure. The more efficient, the more treatments per chair you do in those Green Brook clinics, you are leveraging that fixed overhead. I think that’s going to help us on a continual basis, even throughout 2026. And then I think the optimizing the BNB piece to drive incremental, but we know versus Q2, we’re going to optimize where we make that offering and ensure we’ve got adequate reimbursement and pricing. So I think we’ll be able to optimize relative to what I would consider a lower Q2 base on the buy and bill portion of Survivata.

Kyle, Analyst, Piper Sandler: Super helpful. Thanks. Thank

Conference Operator: you. This concludes the question and answer session. I would now like to turn the call over to Keith Sullivan for closing remarks.

Keith Sullivan, President and Chief Executive Officer, Neuronetics: Thank you for your interest in Neuronetics. We look forward to updating you on our next quarterly call. Have a great day.

Conference Operator: This concludes the conference today. Thank you for your participation. You may now disconnect.

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