Neuronetics (STIM) 5 Mar 242023 Q4 Earnings call transcript

Ladies and gentlemen, thank you for standing by. Welcome to Neuronetics Reports Fourth Quarter 2023 Financial and Operating Results. [Operator Instructions]. Please be advised that today's conference is being recorded.

to conference now Klausner. to like would turn over the Mark I go Please ahead.

thank us for Fourth morning, you Good and joining Conference Quarter Call. for XXXX Neuronetics the

Officer, Neuronetics Joining Furlong. Steve and call on and are me Chief Financial today's Executive Keith Officer, Sullivan; Chief President

financial management I business, of statements by risks including from to these covered the our can safe metrics. guidance, COVID-XX provisions this by and and Before under due information we business. materially strategy, revenue listeners Actual Private and certain the will uncertainties other to of Reform those related XXXX, like differ and implied the statements statements would impact begin, conference stated Act Securities associated caution or operational call to that with issues forward-looking company's discussed results the during forward-looking of Litigation include harbor

risks a company's encourage the to review I discussion associated Exchange filed For update including on business, with and to The disclaims as XX. company of with Form or call, Neuronetics XX-K, you the report Securities by on Commission, filings March of before obligation and except company's uncertainties the annual required law. be made this forward-looking any course statements any will during which the

call, not investors management EBITDA. expenses operating indicative other U.S. also GAAP both measures certain a Management During financial are information for on the in excluding in including we'll and with conjunction of discuss useful noncash our believes basis, that financial non-GAAP information certain results. taken that non-GAAP by provide trends and information

Neuronetics' our presented in to press pleasure the Officer, to viewed the turn accompanying benchmark which for U.S. With are and call on release, over and compensation Keith our forecast Sullivan. against relative and decisions. Reconciliations and to results measures financial President Chief our compare certain uses Management it's be that, performance our website. non-GAAP my competitors to strategic externally to performance Executive can between GAAP plans non-GAAP tables,

Mark, by the Steve Good review to results, everyone, and introduction. before financial thoughts an recent and XXXX I'll for will morning, an begin thank of providing by for our turning conclude you some today. on Q&A. with update. our followed thanks overview operational then joining us I'll performance,

in, jump in by dedication truly efforts of work we I'm I our all want Before the XXXX, driving have hard and success start that team. acknowledging instrumental to our in grateful and do. been they for Their

record with year and pleased We our included several milestones. the a which are XXXX, performance quarters of key throughout achievement

focused drive as sites. which utilization in utilization, during and over wrapped to training our increased solid a continued XX% year-over-year pay well consumable delivered to Greenbrook trends positive continued we initiatives session year at customers, treatment education particularly within as up quarter, have Our fourth We efforts the with local growth the off.

revenue their $XX.X XXXX. million, These an Total customers our encouraging of to and of to was the over are deliver the XX% reflect increase results collective value team patients. quarter the of effort fourth and

reflecting $X.X was steady million, systems. demand new revenue System for NeuroStar

of XX plan XX we During to our the per XX shipped quarter, systems above systems quarter.

effective pivotal a as and patients, sales strategy. role Summit in NeuroStar NeuroStar system of platform a continue to benefits customers for highly serve transformative the play educate Our our on to

recent One summit our to observed held new of quarter The a sales in was resulted practice. This NeuroStar both number system that X purchasing fourth we've event quarters the number new increasing within NeuroStar launch than practice encouraging the in to the value in to delivers. attributable trend to their the speaks TMS and system customers directly Antonio another site. outstanding San that of on patient is to more their summit

predictability we are of our efforts our drive benefits sustainability and to ongoing as awareness moving of our about of of success the sales summit, continued capital as forward. NeuroStar, the the With well optimistic

treatment represents mainly consumable for record growth compared revenue year-over-year increase XX% a revenue revenue. in quarter single more a to a increase U.S. local treatment fueled and was by XX% session's This new of is a was XXXX. than $XX.X which the session million, fourth quarter

as the marketing Furthermore, execution University, contributed X-STARS tool NeuroStar record-setting PHQ-XX of our to broader successful utilization the program, and of initiatives such our co-op solution efforts performance.

January more January accounts, Guarantee updates. sites, the let's who Now both to XXnd. officially were operational Provider the encompassing Better second Me pilot initial of sites of Pilot in and prior additional our launched includes the late we XXXX focus met program. shift that program our than late In XXX qualification standards of phase second This Greenbrook part our XXXX, to phase

a accounts it following Guarantee care of aimed TMS a collaboration standards establish responsiveness the network delivering Me with program Better Provider patient timely need most. to expert nationwide clinicians consistent in reminder, who As to and at developed and those care aims

meet Moving X program. the be forward, of standards pilot to the phase all who open key to customers NeuroStar agreed the will

a take approach standards. to to balance continue we to upholding of broader We the the rollout while the program effectively ensure measured demand

group accounts another of to XXX pulling We accounts in We in the in this plan XXX over forms from are III in from group June. of XXX April, currently another of to early signed additional accounts enroll acceptance cohort. approximately for pilot Phase striving launch preparing commitment the

highly a While still have early of number encouraging we results. seen days,

Better One these program done within Provider practices X of to success generating seeing targeted result the Xx to advertising. the pre-pilot more media which are through requests pilot as primarily is patient awareness, Me patient keys compared levels to Guarantee digital of potential efforts. is the a

of we in increase practices follow-up with driving higher we timely assessment. improvements have a participating more out program and PHQ-XX BMG have early trend potential is significant follow-up observed patients. have once completed seen the One the participants patients coming to patient increase responsiveness including performance among they in awareness, Pilot addition In a

rose was not or XX% received improvement. same an only program, hours program providers the the XX For to metric from in That providers over X%. patients within XXx percentage who for the follow-up those of in the a provider

continue the throughout number year. We program of to the pilot will closely to expand a positive of monitor we customers the impact as greater

NSU. to our Turning X-STARS enhance initiatives. offered marketing to by of understanding our customer co-op the benefits solution This continues and our attention program

past and efforts. year, has participants. XXX a University the total marketing Throughout year, fully NeuroStar our educational welcoming conducted we a the classes, over Over of become cornerstone XX booked of

drive. the In training best sold of the are customers partnering fact fourth were more Neuronetics, XX we practices highlights to coming benefits educate sites will more the utility quarter class. on NeuroStar with of systems the existing out alone, over the into that the a able and customer This they

will QX, marketing NSU success increased program, average by utilization significantly in helping make participating participate we drive had to of qualified accounts our aware opportunities lever increasing steadily accounts has than to the before, Throughout utilization. been adoption to expanded and we since of patients co-op XXXX. Moving marketing more In we continue forward, NeuroStar. co-op and XXXX, marketing co-op our ever

same In in uplift the XXXX. XXXX. fourth higher QX participate test XX% in year utilization at accounts XX% in in a look threshold utilization quarter, QX accounts XX% QX their as and the co-op We a average opportunity who the of was well quarter than saw quarter. in marketing as motor compared These to co-op uplift XXXX prior during both

customers, which significant our use our making patient approach, NeuroStar. of practices it lead from improvements in easier the XXXX ultimately to turnkey We even to introduced based awareness program to should marketing for streamlined and on our greater feedback

customer of and have are health our from they providers. with ensure suffering of concerted These programs, disorders participating very a sites these the educational XX initial we Guarantee Me effort a Greenbrook team at all Greenbrook mental that having to the successful fully awareness various number across NeuroStar pilot group XXXX, at including in made in to greater segments. programs Better been bringing of patients In

are improving participation to seen, are that very or pleased We point levels. their above where average performance sites they Greenbrook of programs, result we in the premerger a report at continued on at our to as have

regulatory clinical updates. to Turning and

criteria positive XXXX, and City, plan. November the see Plan of Dean expanded Health eligibility, X antidepressant TMS X number major mental NeuroStar. improve access effective to to required reduced BlueCross from of the TMS and earlier momentum BlueShield attempts Kansas from to to coverage changes access from Lucet their continue patients February to Health treatments. These Magellan, patient therapy granting health health before updated Between policy XXXX We medication

the facilitating addressing Payers are a trial for Plan These need a of significant prior to Dean health like crisis. eliminating the mental Additionally, represent has barriers treatments in forward health coverage to eliminated improving NeuroStar. earlier access contributing changes psychotherapy. Health step mental by and

more on streamline can tracking on advancements HIPAA-compliant, These In care. our TrakStar, and time February operation system. outcome XXXX, to Practice and and practice patient reporting administrative tasks focus management announced save updates simplifying patient by we documentation. patient proprietary

patients enhanced the regarding providers financial benefits patient responsibilities provides improvements investigation and report healthcare outcomes. upfront, for supporting insurance These patient coverage. our reflect ensuring The enhancing estimated commitment to clarity

the and December. NeuroStar front, On FDA positioning threshold to assessment easier and response Accessory our treatment. to In the in this from the coil Coil faster, simplifies regulatory customers' make received NeuroSite motor our request clearance tool Placement measurement during

patient providers' offices integrates and NeuroSite placement, NeuroSite efficacy ensures accuracy. and coil and features. for reducing [indiscernible] both legacy precise while patient setup leveraging new by unique systems steps anatomical improving maintaining

Lastly, we to therapy. of unique the utility our work expand continue to

to broaden XXX(k) the we noted, FDA a previously As have application with NeuroStar's label.

from filing the the reasons, that we in share the We can't forward near hearing specific we for progress. look FDA you While to anticipate back of term. competitive updated on keeping details

covered continued trends and quarters. revenue XXXX, in lot of several utilization in ground record-breaking We've improvements a by marked

the Steve. initiatives like upon like With and care that, to believe Me patient success. enhancing turn call the to efficiency program, and to commitment Provider of remains I'd the introduction this over we strong, Our Better provider expand Guarantee

all of of made $XX.X over $XX.X quarter of driven 'XX prior performance million, session treatment Unless million, an primarily Total increased are you, XX% fourth versus by XXXX. the being increase Thank fourth the of revenue quarter year noted, Keith. sales. otherwise revenue comparisons for was

session system Therapy by $XX.X Advanced revenue a XX U.S. XX% revenue the primarily segment. The for increase systems consumable growth NeuroStar was at we $X.X quarter. the shipped company local million, revenue performance customer driven record of year-over-year. an within strong was treatment U.S. was in our million, and

in per the of growth year. This increase the active Revenue approximately reflects quarter. given in in prior approximately the active is compared sites which past $XX,XXX growing the year site encouraging over initiatives, $XX,XXX to quarter our strategic the was success

Gross $XX.X reducing drive Achieving were demonstrates our expenses record to decrease of quarterly the in from operating ability prior prior XXX year, treatment as margins favorable XX.X% XX.X%, a the by be revenues. to continue larger revenues in of expenses mix, year compared total quarter, a or of while million session driven the quarter during basis fourth $X.X up $XX.X Operating million, X.X% quarter to were compared XXXX. to the points million percentage revenue leverage.

quarter, loss in the incurred million the loss or million During of for per quarter. $X.X the per $X.XX share as $X.X share expense. negative to Net as million stock-based million of prior the $X in million fourth $X.X compensation a we $X.XX was approximately compared quarter $X.X EBITDA compared noncash quarter. was negative or year prior year net to

This success and significant loss growth leverage EBITDA of through reduction line management. operational a prudent our top creating in proactively in expense strong reflects combination

cash of and continue We fourth of to flow flow positive In expense expected, as the our in XXXX, margins again we improving achieved generating cash reap than $X.X for achieved maintain were As and profitability We million expect this, growth quarter, cash by strong the confidence the positive cash, generated we history. in fourth earlier quarter. to combined time Because XXXX. benefits to of we management first in be significant cash previously the efforts. XX, revenue in a company's we path million. December milestone in $XX.X which equivalents with

turning guidance. to Now

$XX $XX year, For we the range of in full million the million. expect revenue to

quarter, $XX.X revenue million $XX.X For to expect million. the first we of

be for of the to in to the range We expect $XX million operating expenses $XX total year million. full

management to I top the line to like operating turn Keith. Our and all of profitability. would a over our to profile to margin back call growth, contribute stability gross careful healthy now path expense the

our point XXXX and care and positioning growth it's on program Guarantee our Thanks, are this forward driving as clear summary, across The success. for to XXXX, as Me for focal initiatives to strategic continued standards year, Provider patient elevate us Steve. Better it look In a reflect us we aims network. will that be

provide NSU program like this only but are our and ensure will customers in to Participating marketing, also our equipped initiatives co-op not that other care. advance better high-quality

also FDA work are explore continuing to We labeling expanding the to NeuroStar. with for the

of commitment all open for and support Thank about you the our optimistic to journey for We're With transformative and health treatments. access mental future the like of excited to Neuronetics. continue continued questions. your line I'd expanding to that,

comes first with The Maeder Instructions] Piper. from Adam [Operator question

that to the to would XX and can guys guidance to properly, just use Maybe the quarter, construction. sure from you've nice per okay. rating the the to that I'm XX Greenbrook you make hear be Hopefully, majority the that what for we then I assume consumables XXXX? obviously about Congratulations right thinking start finish . year. are is And business? Should progress on coming run a me at XXXX? just of been in kind for to assumption place is on the you want growth the of assuming systems the

session it that nudge it's but a We bit it's of company could We Steve. highlights found the and XX. Adam, we're the last on the will in of in And been still growth a treatment did Yes, website. presentation that up may be in majority growth the the targeting new corporate XX driver our progresses, year where to revenue. little as X years. include really our slide the be

So that be I set helpful expectations. think stage for as to XXXX the kind will of

Greenbrook, the Greenbrook has And the say legacy XXXX, very strong. been stores. would the board, across again, they performance growth in accelerated their throughout have I

'XX, to not there be overall although in drag this expect growth but do We a expect drag to a in that we them continue were our And year. on they XXXX. rate, were stable,

Greenbrook and future. for partnership foreseeable will the our So support continue of

figured like requests, about you're wanted more in And session Guarantee encouraging any cetera. That's maybe the follow-up, the can gate signs patient perfect. little at a with there's treatment if I give premature, terms sounds bit you It figures you the can awareness, Wondering . anyway. kind Steve. there et to point information like of for some ask program. in Good us certainly better there, of share but follow-up, color seeing Me Better then metrics, ask out of that that's this things I'd I time,

The has and in Keith. the accounts Better excitement were this The exactly Adam, for started done Provider we what is it on X. really our created February program Me hoping. It field. Guarantee both marketing

at be I be little in is we the program, qualify So to PHQ-XX it metrics. giving is, look the tell if to to the a to that the can you early met be standards What have lead follow-up, during doing within done effect. XX The all hours, already And has be business had as a the are to them. has accelerating. answering phone desired we their monitoring business hours, that result, things, follow-up are these the is accounts

is So top of just our marketing on efforts that.

William The with next Blair. Margaret question from comes Kaczor

I around maybe to as a about program like range? ROI, Guarantee so as just as within guess, and on. seem well way, wanted the of in of different utilization of in you're you I part that all folks in because Me Are Better guidance trends the any seeing participate kind that that It approach doesn't it assuming but . curious kind the that.

this would I not Steve. point. at it's Margaret, say

in we're in pilot III April. the again, starting second Phase And so phase with

bit to our guidance. that just include to XXXX so a in it And be premature seems

expect to would any these be significant I in accounts So upside. acceleration

as then program? a Better that Me X-year, it's too Okay. happen to maybe we X-year, of early line the kind term, you'd for to rates very trend whatever utilization participant as but I what short look think within share it utilization a And time over guess Guarantee about would you around see X-year, like that on trends,

Keith. hope We see growth consistent hope accounts. would those that would is in We XX% we -- a Margaret, this would

makes spend to be spend Me I last marketing for the been So that that's on Guarantee efficient. right our just I the years. now. metric spend. clear, consistent more The has marketing do Better X think target though, want The

the through -- answering Better and Me just by we timely who's in a Guarantee in going providers, patients It's the through spend. that leads So putting is marketing same the received it to fashion. those responding the phone a somebody to

Okay.

around and kind is see I the may, this extent X that up going the key let to upside it. to fall hopefully, and last cash if that a you question wrap you're those some through you since So referenced line. do XX% And sort To flow, this of revenues those measure to just of to kind we future, just there metrics I'll the reach on is bottom profitability metric? in at point growth of get

correct, Margaret. Yes, that's

with William The comes Plovanic from next Canaccord. question

can drags then masking you Can Steve, on understand you mix understand is like the help and And the component we at what is can then us look that revenues, pieces masked understand seems some Greenbrook maybe other a us an that help as Obviously, don't there it are your strong of of do. the us at customers helps XX% business the number. treatment but other fixed the some is XX% kind the business seeing and of kind maybe because acceleration, it or least kind of of by that. we're the component of grow.

number And on train but go that to that go the then sell systems and you reps I plan question, type would would investment to think more understand you of the you in accounts? of just now the of will these require? that capital expand why secondly, the capital, expand kind answered to and help Or what teams us and

timely very Bill, question.

website. slide question, either supplemental growing, are of indicated during your significant did our I And there financial trending aren't to revenue Adam's we by not include that as on in so And point, primarily business our segments our design. information

past roughly our years XXX NeuroStars the intention that few sell a to we've year. So is stated

$XX around million that's So that grow. doesn't

been million East between years. steady million $X.X X past the in the has Our very international and over $X business Far

price been But steady, again, fixed grow. our and company $X million then doesn't customers, a has again, not also about supports number year. So fairly significant driver. And growth a the still that

driver, a represents overall treatment BMGP segment is our comparison Again, really and the other in on at And on consumable XX% programs. primary of local so the that our really growth when look drag with rate. session and installed is most base we impact marketing which it the consolidated growth our to we that about can customers, the focus is

our in in were drag will it 'XX rebound customer, being us. consistent them an Again, from largest in so we they a again, with our again, Greenbrook, expect rate. to contribution their contribution again, on nice flat was overall and a that revenue XXXX. do But XXXX help in growth

modest. like systems be XXXX. XXX did would this And it be we to or in adding plan NeuroStar, XXX not may that XXX ASMs additional growth. in XXX in year. year. increase support the It going We approach a not would from do on Regarding And no, we're we to XXX any

on that Better it with I? Great. umbrella? to the need Was are then is out other Me Or sites still Greenbrook rolled that to the this at all there Okay. point? And -- under be Guarantee sites out their rolled Phase

QX Bill, to Greenbrook this We rolled the of is XX in out Keith. sites. it

is Like we the Greenbrook have we to store over to plan Our qualify so do by each metrics throughout all with the to customers, the as into of have we XXX customers. of our have them sites that incorporate measure our program balance other year. they all

plan up on So get June open we next I up the both opening we'll possible. think our success on the stores, and -- then into another success X. XXX program as quickly the Greenbrook the and are as Greenbrook's is X, XXX the April to legacy And

in the our program well as to as excited them customers. -- have we're and So other

could. then question, if last And I

fourth in bouncing would and consistent if then 'XX, positive would flow through expect to quarter when of 'XX? expect not, back flow the And of you cash you cash forth the quarter positive kind every positive? be or on cash 'XX flow Just

commissions, us. mean say, I burn payout flow QX and bonus around XXXX, there'll quarterly But cash to a the positive. do cash I'd growth plan of basis. for bouncing of I expect XXXX XXXX would the so say corporate think some in not a QX significant still year-end the historically be Bill. have end do it's We I Thanks, worst I top dependent 'XX on is quarter possibly more likely, case be upon rate.

Citizens JMP. from The Stauder comes next Danny with question

was just on to willing this on comment curious versus First broke if the new strong out be Congrats on adds adding sales. question customer you'd But capital quarter. between I existing And to there would how the is given system, improvement utilization? has -- in And color the that there in be fair been latter past? quarters it say more just helpful. of another any users

way Steve. X was don't customers. think it's shift another sales new same-store into I versus there sales significant a customer Danny, or

I think about was this quarter, a XX-XX split. it

a And XX-XX. I think so again, historically, it more of was

a So significant. nothing but slight shift,

the other what then other the Danny? And was question, part of your --

it just is like, changed guess it I past, hasn't was this way [ in trend No. much, the the one too it just ] but or sounds other? historically,

do capital that hard a historical when from So a incentives really see trends pushing segments, are account the sale slight -- so managers maximizing in perspective, quarter. all it's QX, their fourth across and difference in we

Great. for just X And more then me.

site sounds it treatment continue great and was look utilization sessions, any It how will as this plus, on revenues number? this customer we assume $XX,XXX in about quarter really should Just in active XXXX to but XXXX? some puts to solid per see, think like we out we existing improve, but takes should to

to at base, averaging X.X We've but Yes, I X.X Again, necessarily who participants as X expect only the to the treatments haven't all BMGP well to the our about signed continue seen those that as XXXX, during the returns commitment we're of day. the customers per form, standards. across least metric still have part, installed early would improve. early met

at rate. increasing nice Their very a is patient day per metric

systems pushing And system purchased that which to so close being to keep get every our this year. would X that's installed at that its patients NeuroStar customers. so per next Keith would necessitate we're until day Again, mentioned by X over XX%, capacity, additional us is year, going

continue installed dilution the based think slight number least rate sites. grow by should at So $XX,XXX do XX% new of that on that to I with

to closing questions time. now like I no remarks. show Sullivan further I for would call to the at Keith this turn back

the in progress We on quarterly we updating look you call. all operator, appreciate Neuronetics, Thank you your and investment next forward you, in joining the for and us . to today. thank

for your conference you This concludes call. today's participation. Thank

now may You disconnect.