electroCore (ECOR) 13 Nov 242024 Q3 Earnings call transcript

Greetings, and welcome to the electroCore Third Quarter 2024 Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Dan Goldberger. Thank you, sir.

You may begin.

participating electroCore for Call. all you in Earnings today's Thank Goldberger. My Dan name is Officer I'm Board of member the of of and Chief Executive electroCore, I'm also a Directors. the

available was our me X, October and has for Financial Joining brings Joshua us He the Lev, with five is XX, track on Officer. position today XXXX. press the third for electroCore published record results the Joshua website. of almost promoted been profession company's of effective ended a to the integrity XXXX. September and release copy success. CFO is Earlier Chief today, years A quarter

All outlook or or material company's These forward-looking involve begin, pursuant to estimates harbor are be performances, that and future any Reform upon current the based historical will include statements we guidance, to laws, of statements limitation, activities and expectations various you cause call those operational risks financial make statements. that assumptions. place including, safe without are these statements, actual events provisions Any within statements XXXX. uncertainties call that securities to differ on Litigation of not the meaning in Before or management I'd these from like reliance forward-looking undue could and statements. Accordingly, statements of you deemed materially anticipated to by implied not the or forward-looking the results made statements forward-looking Securities are during should contained federal be statements. remind Private Act this facts should that the of which the

any filings Exchange update the the of by except uncertainties with business, company's please Commission. intention with risks as obligation Securities company's to and required the list a or law, and the time-sensitive information, November electroCore projections disclaims live that For whether see or today, information broadcast the conference revise future is XX, contains call forward-looking new XXXX. statements, or or only accurate of otherwise. any as This events of because associated financial

and brain. founded the more inflammation functions the was important bringing the company, nerve the implanted use for general applications. and than in visceral commercialize vagus metabolism. years the from be in longest nerve neurotransmitter and brain affects in you like noninvasive nerve including wellness the new depression. autonomic the who body, medical electroCore those in many to of may body, of XX vagus our to for other levels been from have and the information epilepsy nerve vagus XXXX The for companies For vagus Simulating our levels, nerve chronic conditions Surgically available simulators proprietary to organs cranial stimulation is

of products conditions headache by the performance. and So database confirms now that nerve stimulation prescription and the vagus human general a a without large and wellness are on and and safety for science, prescription for growing available our pioneered efficacy technique. electroCore Building noninvasive certain

as potential and advance of of pipeline to nerve Our grow to products non-invasive researchers, future continues benefits the and conduct clinicians, stimulation. wellness advocates indications trials vagus investigator-initiated

We have growth years now. several demonstrated for rapid

year. our for fact, ended $X.X increase over quarter. months eighth consecutive XXXX, was September prior a revenue is record this the million the Revenue In XX, XX% three

compound rate annual growth XX%. five-year Our is

Our at compared loss narrowed and margins the gross to net we period XXXX. remained XX%, our steady in by same XX%

United Service pay professional covered sales the primarily National that health our creating Kingdom. are new, benefits. selling system currently prescriber HSA United is health and detail headache by hold year. discuss care prescription the from positive call. headache in FSA launched brand make will systems profitability grown general We as covered wellness sales their we TAC-STIM they in in and currently expenses. Joshua insurance later pharmacies. can often hospital Cash VA not accounts wellness in forward XXXX, Truvaga We customer. be non-prescription certain prescription and military in has have then, the if about worldwide, States, in pay we channels have use to our and launched revenue flow product towards last to the operating our We do personnel. The future. Since steady, around the to operations the systems, duty gross patients is States. for increases, two performance in including continue and in and such access U.S. direct-to-consumer discipline VA Health lines progress our managed to as human specialty the GAAP national systems maintain margins business look for financials We largest cash United million more the through lives business and brand, more a United hospital XX the active through Cash continues States

X% system. cluster of estimates XXX,XXX devices to than little the sales a relaxation, general Veterans hospital headache X,XXX since patients. We've including the XXX VA stress, XXXX. VA headache sleep, treated prescription prescription third Centers is for our Administration have September covered Hospital representing system, XX% Excellence XX, as in direct-to-consumer from wellness therapy of product facilities. to purchased to approximately by approximately million million to a VA to million quarter September headache acuity. Truvaga about representing and positioned Truvaga approximately recall market currently that X,XXX the being approximately benefits revenue across the through products dispensed of free Veterans VA healthcare total third are compared as in lives hospital patients covered XXX quality during of patients through XXXX of Headache the more gammaCore within Administration for gammaCore XX, $X.X quarter the XXXX You'll The show bit VA facilities growth. of addressable mental grew XXXX, XX,XXX is XXXX. gammaCore continue Sales $X.X channel in X strong

$XXX,XXX, during XXX% the For sales XXXX. the net third third $XXX,XXX Truvaga quarter of XXXX, were approximately quarter from increase of a

have rates revenue than remain approximately X,XXX third return quarter. was handsets, we improve shipments. Since or we and the Truvaga is using steady $X e-commerce have the scaling XX% X.XX these approximately sold of $X.XX through In Our on XXX,XXX more conducted of we're approximately other metrics. spending advertising business www.truvaga.com. at sessions of spent Most app. maintain revenue. return revenue in Truvaga nicely continue launching We Truvaga, can generated the generate will to our believe platform, our Truvaga mobile customers that if words,

Awards. to launch on globally XXXX. users Following increased we lag Air quarter Army million over in Health just next Truvaga of last revenues in reach Work which Truvaga additional is early chosen on the Last the Amazon year. TAC-STIM performance TAC-STIM began Plus published second representing and being Truvaga sold yesterday, year. XX% one somewhat XX week, human Force live but the select Tech XX,XXX for still went required Special plan Fortune to as AFRL. training, Plus claims of companies, the exploring launch affiliates, Research accelerated XXXX is No Force that And successful units of We resellers. Plus, prescription their Men's is Air www.tac-stim.com. Laboratory was reduced across influencers, more platform, and Forces channels including available Perks at to attention, fatigue sustained and we for the at or by information mood improved defined and consumers, as

$XXX,XXX in recorded September XXth, same third last sales quarter year. the compared of TAC-STIM $XXX,XXX during we ended the as to period XXXX, For

subsequent for for that X, Force filled of line this funnel variable duty orders. sales to deployment. revenue TAC-STIM active XXXX, to the be we product the likely to in pilot is and from growing On purchase units as quarter, a have $XXX,XXX a October we end bulk We continue believe purchase Air

quarter to fast fourth a off So are sales start.

as third gammaCore the XXXX channel of of XXth on quarter US flat in X,XXX revenue September recorded of $XXX,XXX up prescription were September gConcierge third quarter Our XXXX and from including generating cumulative from of $XXX,XXX pay XXXX. of XXth, gCDirect prescribers revenue during cash the X,XXX XXXX. There

awareness that to care customers accounts. gConcierge to access we category brand modeling agreement the the Plus revenue us continue least certain We the of and from for at added announced system. migrate some with a managed to being. grows year, LLC customers XX Healthcare time health including expect partners new were line Last will that this quarter, their in these product gives distribution Truvaga on-boarded Thirty-two flat Truvaga line a we Joerns Truvaga the as third

increased field this o-US, building third quarter Service, next and look in doctors the the $XXX,XXX to outside the United in XXXX. managed of channels forward the $XXX,XXX is prescription as nurses NHS. compared that Revenue Approximately or X% National third year. revenue have for growing XX to o-US responsible and prescribers awareness of Health by for to quarter channel, States, revenue United or Our by care system. by our from gammaCore of we be written the in Most XXXX, generated sales gammaCore funded Kingdom team to sales among within for continues

to Research XXXX Neuroplasticity Monterey, the Language nVNS emerged presented through Labs The Accelerating that Focus, while Learning that and language paper was to Medical the advantage Transcutaneous after was to significant August and in our and accelerate was Vocabulary Air Dayton, a active AFRL the Simultaneously of in the by TAC-STIM. In funded the Second study positive the Florida, that paper supported showed supporting Wright-Patterson presentation going at higher nVNS to Base Flight paper System on progress. and Acquisition Air Stimulation The entitled sustained a effect Vagus-Nerve of was AFRL Targeted Using ability in at was California on Training document published Department based the Air nVNS based is Health journal the Force Fatigue the by Ohio. of goes training, Enhances turn on was Vagus a facilities DARPA Research the Cervical Transcutaneous treatment. conducted Scientific study conducted AFRL the on electroCore’s XXXX, a The I'm Sensor In paper study a Defense Training of at Stimulation, during TAC-STIM was Nerve over Promoting Orlando, Reports. recall. in the training Force at Now Symposium learning group suggested September The Institute rate presented XXXX, in Language Program. completion results Simulation pilot a Emotor in Mitigating recall titled Force scientific that

uncertain. pathway stress work about and other timeline our as to a become on with label, continue pipeline FDA provide they available. for updates the We disorder opportunities that but post-traumatic a remains We'll

Brian Joshua Before call you our over to new I heartfelt to CFO, thank Lev, turn Posner. the want extend to a I

shareholders, thank you and from instrumental employees, you. growth. On As dedicated foundation Brian, of as retire the CFO played years to decided service. board, of I know, his Brian want position establishing in Brian in October early Brian myself, role most solid XXXX. to miss a our for I behalf for his an of

Now, I'd like to for to turn the financials. a our Joshua review of call over

the net operating in expenses quarter significant decrease XX% September gammaCore ended XX, sales as prescription in the XXXX XXXX. Gross associated Dan. three $X.X stable devices at September investments the XX our September is XXXX. to $X the months $X margin of United XXXX Truvaga in the due of Truvaga XXXX. and the $X.X three a Plus expense XXth, three and XXXX quarter as in of compared our $X.X for profit approximately reduction to compared for an product. increase XX% increase from were third third XXth, our in compared XXXX ended were was the was by $XXX,XXX Net of to million three for increased was months the three million sales you, Research to with third revenue ended million as million, and months compared XXth, in three the of The general XXXX months This across abroad for Total Thank ended sales Gross medical the non-prescription an September as of of primarily quarter during to quarter $X.X development ended ended million $X.X in third sold XXth, months to to due compared September increase months September XX% wellness States the XXXX. brand. million million XXXX.

year-over-year. to remain the as in costs September in general for comparable administrative with consistent foreseeable the steady of million XXth, our $XXX,XXX XXXX. This our primarily Selling, XX% to period expense $X.X New future. our expense the to General compared associated facility selling months expenses expansion administrative R&D three expenses increase due marketing for XXXX million sales X% with for and expect Jersey. by lease the and $X.X increase variable ended or of We and recognition in increased of Rockaway, increased greater and was

third as improved for or the positive $X.XX cash expenses XXXX G&A we December GAAP marketing non-GAAP We relatively with loss as EBITDA in to financial approximately sales the third the statement activities quarter are and of XXXX. XX, or September the for the XXXX and loss progress reconciliation net XXXX. was GAAP now XXXX. our in ended $XX.X to total near loss the a increase back to scale nine XX, and incremental million the adjusted approximately $X.X significant tables million to due loss provided of These XX% has share towards of I'll primarily million compared expenses XXXX months operating net third in quarter Adjusted net million of restricted securities, to to was $X.XX line. GAAP in million, in from in term. ability per drop million XXXX loss revenue net to loss used to $XX.X expect due XXXX to equivalents, the million third of increase reduction marketable to the September ended net for of Dan. net was net call and improvement turn fixed was remain of through quarter $XX.X included at share Therefore, compared for the $X.X XX, EBITDA million sales. A $X.X quarter $X.X primarily the to release. months sales in XXXX This and the adjusted September XXXX. third today's nine XX, million bottom $X $X quarter been also revenue net EBITDA cash as Net to Cash, compared And the results cash per of flat third press the the anticipate as adjusted quarter EBITDA profitability. in

seeing Joshua. very I'm how revenue proud the leverage you, the has we're grown and team of in the business. Thank

field. own Demand channel grow presence brands performance clinical for to increased on very all therapy VA operating company's Our to prescription internal in the I'm in prospects and continues exceed our metrics our continue our and about the the expectations, and across gammaCore enthusiastic channels. based long-term

new has XXXX, specialists to contract Our to we secure December follow-on extended been FSS continue working XX, a contract VA our and with contract.

organization gammaCore exploring gammaCore territory of very branches Truvaga We're each new XX team the scalable favorably and www.truvaga.com, as represented we around of has potential structure through selling by direct-to-consumer launch sales product prescription from offerings products a TAC-STIM small business new and e-commerce expansion wellness as to received Our XX lifetime managers our deploy our to our our of the increase of active duty experience tons through hybrid about products. The the the channels brand develop managed in market. Plus for field Truvaga and by prescription proven customer. Pipeline has by customer general is show military Truvaga offering. site, continues been reps supported different by team. This be to we our the continues of proposition continue to for country. value interest The to

XXXX. Although continue evaluate the to the in traders, duty be QX, bulk athletes, QX and predict QX sales our active XXXX of believe hard as transportation deployment. revenue that performance expect we units revenue TAC-STIM TAC-STIM were to benefits sales so in by and aware purchase show pilot to the new responders, handset, human in Longer be of crossover of first in impacted XXXX as up timing and published the we for launch picked civilian may far. elite increased e-gamers of will term, term there short become workers,

prescription and of $XXX,XXX to by as the sales Most $X.X loss our clinical $XX.X leverage establishing same we by ‘XX, revenue period additional out, quarter $X Gamma declined of towards XX, opioid the at disorder, operating XXXX, bottom our approximately third marketing top-line million. expenses. to September dropped the the fixed net grew the of over $X million equivalence of stress third line During in growth increasing by we're Core the around had quarter and working post-traumatic We of discipline expense sales and increased while in P&L. million, disorder, use during for opportunities. treat other maintain will Further indications signaling cash XXXX, million

XX, commissions cash pull model business time, our increases. In we continue questions. of continue operations and have and generate that can strategic the over approximately remain the line open year of I'll is operating call will we demonstrating the continue with cash a I for at will Therefore, next a that believe loss to that I variety the Operator, from as return our XXXX. this spend in basis. related confident expect used please levers scale flow to blended to resources media sheet growing expect to business. adjusted to financial leverage, the positive with the EBITDA operator. sequentially sales September decline We and revenues, operations balance we on will we At early revenue and on XX% summary,

Instructions] with our of line the first Ladenburg Cohen Thalmann. Now, [Operator question Jeffrey from is

Any And, firstly, there and Men's may domain? talk that your Awards the congrats Plus. Tech and perhaps talk or I link on about And Truvaga that expand into on there Plus. talks over the then perhaps M&A out wellness or how is M&A? Health XXXX Thanks. for the specifically know about commentary are XXX other also spill about or may not products

So, yes, opportunity negotiating a thrilled with caught opportunity the surprise, huge they have package, them Truvaga us. and a we're Men's for it our tremendous awareness it, Health creates see now new so and it's brand. We're advertising whole circulation, an for so to for by us a

just We're really in in an going whole digital give launched the enter the mobile Truvaga a been sky's us larger much it's the to you is The but haven't Plus app getting price opportunities, outselling in that the has We category. April point. though health Truvaga even it, the is future at opportunity limit. we that into enabled, as been to Plus, Truvaga reporting on really XXX, and higher know, so started

focused nerve stimulation. We're vagus M&A. about asked on You

of to about could but health really wellness about picture with are that foreseeable we at digital lot add somebody, there's to talk focused the stimulation, product different co-market of vagus the the you absolutely nothing for bigger nerve category, and this imagine As or can on think to for a places and perhaps you line we future, time. us

just you quarter about the Air would And the spoke be closing that TAC-STIM? to clarify, for Force contract after

we TAC-STIM of July was this that commercialized that year. the for black Yes, in

other to first, expect Amazon you Okay, will and us, about do domestic then out year, roll on into tell could talking or that congrats for that be lastly, only next you territories?

Truvaga It’s, of will or looking the be for investment on to kind procrastinate probably being EU example, I positive ship focusing Sure. profitability, and over time countries, what into product only to certified would cross the is required that we're we US being. been positive. at We've for be cash into to investment and so on the getting international cash Asian until

question next with from the of Wainwright. Our is Swayampakula H.C. line

long Thank time. Dan Good the here are hope you. and and welcome, afternoon, I role, for to Josh, new you

Yes. Yes. for R.K. you the you, Thank questions. Thank

to make be just how those And which huge to what or ways still think. like, X%, trying methods So, was I'm you're for a And, in for jumping there what into And off, it you have not growth to would is say, time. could this that see methods? the complaining potentially X%, to at from, good are a still only I start can least, it, the the quite like, been the I'm VA figure saying, folks, difference -- surface. year-over-year you to market revenue long growth. out to grow And, you're growth. scratching about X%

managers to territory question, R.K. were reps our and the back facilities. as our able the really, growth in came of great move out channels And we started sales business A pandemic. to our XXXX into get the we

facilities pandemic access back, can faded opened it as hospital And up. so, access, clinics look you see accelerated and if how to you and traditional the just

existing open future, the yet the majority having the it's especially opportunity our customers. field can for up street get the to vast straight new So, within give customers, feet us is additional scaled. salesforce not our that of on commission, and XXXX add and the we foreseeable are assets hospitals Because aggressively penetration

them it's deployed them not the right old-fashioned people, finding up and So and successful. but getting it's trained glamorous, getting

label. Beyond that, we're working you PTSD know, towards as a

we VA All the health adjacent the ‘XX in addressable so point through of and pivotal within out well. ‘XX move the PTSD VA in came an into trial substantially grows of hospitals system. It's the as data in behavioral call market as the total hospital that VA

of growth the even So accelerate believe associated penetration lots can and revenue to or reasons we the that rate. maintain

revenue about rate. talking then And the growth

the So other there price. is, one volume, is is

end So about in contracts they've think FSS soon terms to contracts. which benefit extend of that the get been that you would I you'll those were getting, the to with that talking are and, due

next flexibility play don't a by them negotiating set of is of So can set there while start price price in you contracts, much growth? a and you or the have that be normally in

of actually level than contract to now our Yes, from so a the a the through if the partner us. business VA distribution through the price higher is price hospitals About element. is and a third is distributor directly going purchase they

Our FSS think three times. I extended been contract has now

our through we're been higher into victim these category success. a own we've we've While revenue of going extensions, moved a that's,

And through so review had to the cycles. additional contract go

we're candidly, see have increase advised reason constant. price the we to but price, do any don't are, been opportunity We that. we We've an that the to holding

have we that So at will the that we contract price ultimately revised be today. same expect the

name, I'm this but Kaiser as Permanente. I to said the then you to refer going And know

Yes, thank you. I'm not name, allowed to but use that

write on didn't it me. down, I Well, that's so

prescribers XX script writing were there started on the device. said You have

you So when as region California, to specific from you as DC, not in to distributor. should in other My Permanente a used have in kind because expect I really or spread general, wanted is, given out, that your this through vouchers you product prescribers, are folks gets more, the with, write well. they're that is it the conversation these sample prescribers, to say question the also, we just been through Kaiser to a of entire are check they areas there are XX are network and XX Kaiser Permanente. the of after, And when are guess, say folks that they

long question. Sorry for the

question. excellent yes, Well,

in around region, California, the managed is organized care acquired I'm not Northwest, a Hawaii. that's where explicitly. a is our there's California, Oregon, Geisinger, Northern regions most believe, in footprint they're doing separate prescribers region. and so do Washington, That's California and good Georgia, region, point. has on those Hawaii still Northern I'm sure it, so formulary of Pacific a of just about system so are understand how in talk Washington, revenue the work I but California to is the when the the prescribers. sure organized prescribers, I forbids Southern or lot and at they a in samples, prescribers this have, not what gammaCore three of where fits, out which Southern Oregon yet. and California We be with Kaiser as are done. Kaiser we So Colorado

then probably this apologize. answered you I question, And

and $XXX, some of, for this figure revenue to In mix about, military received there the the and of into happens? think lumpy after two it version beyond you just it I and product how to cadence this we terms quarter. any you I'm idea and an get quarter, the additional final or ever initial and is product out new from a is will going this can the close order never, get for and also, point? until is the trying of Or at the fourth this be should that version product the between the should for the basically a $XX,XXX the old we expect is

financial request in as that's and third was have and quarter. the it liked because booked into call the shipped year for It's around as to was $XXX,XXX pulled Xst October black. what for specifically much specifically the $XXX, beginning their we that we Force Air as have it would the actually of So, tax the

the the for We not additional line word the coached tax word but been I now the in to amounts. current so have XXXX. quarter use much from revenue and variable product I've had smaller use lumpy

we lot be, are but for the interest third sort master But roll against I that various are of will again, order it But like cycle. activities end contract there of second the feels a different have predictable on going see visibility. onto bit don't XXXX. little fourth can we XXXX, XXXX more quarters and XXXX a optimistic we XXXX be back have We units a we'll that of and to into of loaded the that half, revenue getting until where happening as in more a it's

looks really any so And then, for adopted I on the well product it mean, Truvaga market. many like additional questions, in there being use you the that but I'm levers is obviously to Are sorry at Plus, can on media higher of steady modes side this grow to therapy? be Or social this, the message is of on a the pace? or spreading also wellness advertisements/ and just other various, dependent going the

We platform around understand and our search think spend. media lever is own we e-commerce social and

and next us. a sales drive metrics. if whole new of with for better go you go channel onto that art, platform, me use and channel. Amazon will a Work getting our the As year concept is content Getting hit accelerated and for much you've whole social one to and media, there's some nerve viral creative seen affiliate let that new is more viral and example, is so always influencers possibility that getting at a The Perks revenue onto

healthy, so so expensive more contribution different contribution revenue on gross a channel, it's takes the Now, and we margin their from versus while keep margin, Amazon channels. margin the vig, an have stays growth to eye

big. hire Bowl what ad, guerrilla some tactics lot what and big able out go do and a way to in celebrity a the from do content of see marketing to a there's can spokesperson we with we're between think companies long we can and but get if Super being a creative I take that

talking be for what ability and Dan you will At Josh. top question, Josh, and talk do think last to point, that's through the both guidance One about to line? and the you comfortable what just we commentary I'm and can at out From expecting well. lines expense to start on just point have time but we heard to guidance top-line time, trying expense start lines, about some as find

getting we into it's something docket on that's when you And either necessarily reevaluate the it's moment, sort something future, I do the that or to but that internally. for the won't. so in a said, discuss would we're see we'll it that It's say, past. doing we're we the you'll that At of everything And consider not year. going new being something

Mr. questions comments. floor Goldberger, any I'll there are to you no at for further the time. additional turn this

you, today. everybody joining the All right. Thank I appreciate call operator.

increasing mentioned, continued I all proud As very revenue decreasing. cash our of operating I'm growth, improvement consumption in metrics, with

so Our for tirelessly that. everybody therapies. and very I employees the products into appreciate Thanks, after and the to season, the want wish Thanksgiving holidays support. best we are really these Patients, everybody's holiday getting We're everybody. working deliver customers, also to

conclude will This today's conference.

may time. disconnect you lines your for at participation. your this Thank You