Neuronetics, Inc. Quarterly Report on Form 10-Q for the Quarterly Period Ended March 31, 2024

Press release · 05/08 05:39

Neuronetics, Inc. has filed its Form 10-Q for the quarterly period ended March 31, 2024, reporting financial statements including balance sheets, statements of operations, changes in stockholders’ equity, and cash flows. The company’s management discusses financial condition and results of operations in Item 2, while Item 3 covers market risk disclosures. The filing also includes information on legal proceedings, risk factors, unregistered sales of equity securities, defaults on senior securities, mine safety disclosures, and other information.

Overview

Neuronetics is a commercial stage medical technology company focused on neurohealth disorders. Their first product, NeuroStar Advanced Therapy System, is an FDA-cleared non-invasive treatment for major depressive disorder (MDD).

Revenues were $17.4 million in Q1 2024, up 12% from $15.5 million in Q1 2023, primarily driven by a 22% increase in U.S. treatment session sales. Net loss narrowed from $10.5 million in Q1 2023 to $7.9 million in Q1 2024.

As of March 31, 2024, the company had $47.7 million in cash and cash equivalents and an accumulated deficit of $384 million. Cash used in operating activities was $12 million in Q1 2024 compared to $15.2 million in Q1 2023.

Financial Metric	Q1 2024	Q1 2023	Change
Revenue	$17.4 million	$15.5 million	+12%
Net Loss	$7.9 million	$10.5 million	Improved by 25%
Cash from Operations	-$12 million	-$15.2 million	Improved by 21%

Revenue Details

Total Q1 2024 revenue rose 12% year-over-year to $17.4 million
- U.S. revenue was up 12% to $16.8 million, representing 96% of total revenue
- International revenue grew 8% and represented 4% of total
U.S. treatment session revenue increased 22% to $13 million on 51,995 more treatment sessions sold
U.S. NeuroStar sales declined 14% to $3.3 million on 9 fewer systems sold

Profitability and Expenses

Gross margin improved from 73.3% to 75.1% on increased treatment session mix
Operating expenses declined 6% or $1.4 million
- Sales and marketing down 2% or $0.3 million
- G&A down 10% or $0.7 million
- R&D down 16% or $0.5 million
Interest expense rose 46% or $0.6 million on higher debt balances
Other income increased by $0.2 million

Cash Flow and Balance Sheet

Ended Q1 with $47.7 million in cash, down from $59.7 million
Cash used in operations improved by $3.2 million
Debt balance remained at $60 million under credit facility

The improved net loss, margin expansion, and operating cash flow reflect increasing scale and operating leverage. The company appears to have sufficient liquidity to fund near-term operations but additional financing may be needed to fuel growth.

Business Outlook

Neuronetics aims to leverage the large addressable market opportunity for its NeuroStar therapy. As of Q1 2024, the company had 1,168 active customer sites, up 87 year-over-year. With increased utilization and new sites coming online, treatment session revenue is expected to continue growing.

The company plans further investment in R&D for additional neurohealth indications which carries regulatory risks. International expansion also remains a key priority along with coverage and reimbursement efforts globally.

Neuronetics states macroeconomic conditions currently have no material impact but rising inflation and a potential recession could affect patient demand and clinician buying behavior going forward.

Overall, with an expanding install base and growing treatment session sales, the company appears positioned to continue gaining share in the market for MDD treatment alternatives. Execution risks remain around managing spending, reimbursement, product development, and global expansion.