Q1 2024 BrainsWay Ltd Earnings Call
Operator: Good morning, everyone. My name is Julie, and I will be your conference operator today. At this time, I would like to welcome everyone to Brainsway's first quarter 2024 financial results conference call. All lines have been placed on mute to prevent any background noise.
Good morning, everyone. My name is Julie and I will be a conference operator today.
Julie: I would like to welcome everyone to <unk>.
Julie: First quarter 'twenty 'twenty financial results conference call.
Julie: All lines have been placed on mute to prevent any background noise.
Troy Williams: After the speaker's remarks, there will be a question and answer session. Thank you, Troy Williams, Investor Relations from Life Science Advisors. You may begin your presentation.
Julie: After the Speakers' remarks, there will be a question and answer session.
Julie: Try William invest.
Investor Relations: Investor Relations from Life Science Advisors, you May begin your conference.
Troy Williams: Thank you, Julie, and welcome to Brainsway's first quarter 2024 earnings conference call. With us today are Brainsway's Chief Executive Officer, Hadar Levy, and Chief Financial Officer, Ido Marom. The format for today's call will be a discussion of recent trends and business updates from Hadar, followed by a detailed discussion of the financials. Then we will open up the call for your questions.
William: Thank you Julie and welcome to <unk> first quarter 2024 earnings conference call with US today are brands, where it's Chief Executive Officer, Hadar Levy Chief Financial Officer, Don Morel.
William: The format for today's call will be a discussion of recent trends in the business updates from a dark.
Investor Relations: Followed by a detailed discussion of the financials.
Investor Relations: Then we will open up the call for your questions earlier.
Investor Relations: Earlier today <unk> released financial results for the three months ended March 31, 2024 copy.
Investor Relations: A copy of the press release is available on the company's Investor Relations website.
Troy Williams: Earlier today, Brainsway released financial results for the three months ended March 31st, 2020. A copy of the press release is available on the company's investor relations website. Before I turn over the call to Hadar, I would like to remind you that this conference call, including both management's prepared remarks and the question and answer session, may contain projections or other forward-looking statements regarding, among other topics, Brainsway's anticipated future operating and financial performance, Business Plans and Prospects, and Expectations for its Products and Pipeline, which are all subject to risks and uncertainties, including shifting market conditions as resulting from geopolitical, supply chain, and other factors, as well as the use of non-GAAP financial information.
Speaker Change: Before I turn over the call to Dr. I would like to remind you that this conference call, including both management's prepared remarks, and a question and answer session may contain projections or other forward looking statements regarding among other topics screens, where its anticipated future operating and financial performance business.
Speaker Change: Business plans and prospects and expectations for its products and pipeline, which are all subject to risks and uncertainties, including shifting market conditions, resulting for geopolitical supply chain and other factors as well as the use of non-GAAP financial information.
Troy Williams: Additional information regarding these and other risks is available in the company's earnings release and in its filings with the FDA, including the risk factor sections contained in Brainsway's Form 20-F. I would now like to turn the call over to Hadar.
Speaker Change: Additional information regarding these and other risks are available in the company's earnings release and in its filings with the SEC.
Speaker Change: Including the risk factors section contained in <unk> form 20-F, I would now like to turn the call over to the dark.
Hadar Levy: Thank you, Troy. Welcome, everyone, and thank you for joining us. I am thrilled to report on the continued significant tailwind present throughout our entire building. As such, our outlook for the remainder of 2024 remains highly positive, and we are well positioned to achieve the full year top line growth we anticipated and sustain the previously forecasted profitability momentum and positive cash generation. More on that in a moment.
Dark: Thank you Troy and welcome everyone and thank you for joining us today.
Speaker Change: Im thrilled to report on the continued significant tailwind present throughout our entire business as such our outlook for the remainder of 2024 remains highly positive.
Speaker Change: And we are well positioned to achieve the full year of topline growth we anticipate.
Dark: Anticipated.
Dark: And sustained the previously forecasted profitability momentum and positive cash generation.
Dark: More on that in a moment, let me begin, though with an overview of our strong results from the first quarter.
Hadar Levy: Let me begin, though, with an overview of our strong results from the first quarter. Our revenue grew 37% year-over-year in the first quarter of 2020. In addition, we generated positive quarterly net income for the second consecutive quarter. Additionally, our gross margin improved by nearly 200 basis points year over year, and we recorded positive adjusted EBITDA and cash flow from operations for the third consecutive quarter. Based on these excellent results and our expectations for continued strong performance throughout the remainder of the year, we are reiterating our previously provided full year 2024 revenue guidance of $37 million to $40 million. This would represent growth of 16% to 26% of full year 2023 revenue.
Dark: Our revenue grew 37% year over year in the first quarter of 2024. In addition, we generated positive quarterly net income for the second consecutive quarter of gross margin improved nearly 200 basis points year over year, and we recorded positive adjusted EBITDA and cash flow from <unk>.
Dark: Operations for the third consecutive quarter.
Dark: Based on this excellent results and our expectations for continued strong performance throughout the remainder of the year. We are reiterating our previously provided full year 2000 2020 for revenue guidance.
Dark: 37 million to $40 million.
Dark: Represented growth of 16% to 26% over full year 2023 revenue.
Hadar Levy: In addition, we continue to anticipate that our profitability momentum and positive cash generation will continue throughout 2025. As our first quarter results and future expectations would indicate, we remain confident in the upward trajectory of our overall business, as well as the current market dynamics and the opportunities that lay ahead. I'd now like to take a few moments to discuss the key growth drivers behind the momentum in our business. We continue to optimize our existing commercial process, including enhancing our emphasis on larger institutional and enterprise customers that are playing an increasingly important role within the industry.
Dark: In addition, we continue to anticipate that our profitability momentum and positive cash generation will continue.
Dark: Throughout 2024.
Dark: As our first quarter results and future expectation would indicate we remain confident in the upward trajectory.
Dark: Our overall business as well as the current market dynamics and the opportunity that lay ahead.
Dark: I'd now like to take a few moments to discuss the key growth drivers beyond the momentum in our business.
Dark: We continue to optimize our existing commercial process, including enhancing our emphasize on larger institutional and enterprise customers that are playing an increasingly important role within the industry.
Hadar Levy: We remain focused on adding our deep TMS technology to this expanding large mental health group and network. As our results indicate, we continue to execute well on this strategy. Recent key agreements include increased collaboration with significant existing partner Katie's Way Plus, which provides comprehensive mental health services tailored to the unique needs of active duty military members, veterans, and their families. Katie's Way Plus recently ordered an additional 18 DeepTMS systems and will now have an extensive network of approximately 40 devices.
Dark: We remain focused on adding our deep Tms technology into this expanding large mental health groups and networks as our results indicate we continue to execute well on this strategy.
Dark: Recent key agreement include increased collaboration with significant existing partner <unk>, plus which provides comprehensive mental health services.
Dark: Services tailored to the unique needs of active duty military members veterans and their families.
Dark: <unk> way plus recently ordered an additional 18 deep Tms systems and will now offer an extensive and extensive network.
Dark: Approximately 40 devices.
Hadar Levy: Moreover, our international business continues to perform extremely well. To this end, we recently installed our 11th Deep TMS system in Israel, a geography in which we have steadily increased our presence following the recent increase in reimbursement rates. Looking more closely at the first quarter, we shipped a net total of $57,000.
Dark: Moreover, our international business continued to perform extremely well to this end, we recently installed our 11th deep Tms system in Israel, a geography in which we have steadily increased our prisons. Following the recent increase in reimbursement rates there.
Dark: Looking more closely.
Dark: The first quarter, we shipped a net total of 57 system.
Hadar Levy: Moreover, demand for the OCD treatment indication continued to grow as we shipped 31 OCD coils as add-on elements to certain new and existing systems. Approximately 50% of our total installed base now includes OCD treatment capabilities. In addition, we continue to be supported by an extremely strong balance sheet with $47.8 million in cash with no debt as of March 31, 2021.
Dark: Moreover, demand for the OCD treatment indication continue to grow as we shipped 31 OECD.
Dark: Elements to certain new and existing systems.
Dark: Approximately 50% of our total installed base now includes OCD treatment capability.
Dark: In addition, we continue to be supported by an extremely strong balance sheet with 47 8 million in cash with no debt as of March 31 2024.
Hadar Levy: In order to further leverage the favorable current commercial trends in our business, we recently appointed Honig Rohrn as Vice President of International Affairs. Honi has over three decades of experience in global sales and business development within the medical technology industry, and she will be instrumental in advancing our efforts to expand Brainsway's global footprint. We are also focused on driving more long-term growth. This is being accomplished by expanding the clinical and real-world evidence in support of deep TMS in multiple large disease areas. The most recent examples of this are the previously discussed Human Neuroscience publication on Parkinson's disease and the Journal of Clinical Medicine publication on late-life depression.
Dark: In order to further leverage the favorable current commercial trends in our business, we recently appointed honey growing.
Dark: Vice President of international sales.
Dark: Tony over three decades of experience in global sales and business development within the medical technology industry and she will be instrumental in advancing our efforts to expand <unk> global footprint.
Dark: We're also focused on driving more long term growth. This is being accomplished by expanding the clinical and real world evidence in support of deep Tms in multiple large disease areas.
Dark: The most recent example of this are the previously discussed human neuroscience publication on Parkinson's disease, and the journal of clinical Medicine publication on late last depression.
Hadar Levy: Moreover, we recently appointed Dr. Gilad Mosaev as Chief Technology Officer. Dr. Mosaev has over 20 years of experience in the medical device industry, with a substantial portion of that time spent leading R&D efforts at multiple companies. You will be critical in our efforts to expand Brainsway's innovative technology platform. In closing, we believe Brainsway remains in the strongest position it has ever been in. We have started 2024 just as we ended last year, which is with strong tailwinds throughout all aspects of our business.
Dark: Moreover, we recently appointed Doctor Gila Rafael <unk>.
Dark: Chief Technology Officer.
Dark: Dr. <unk> has over 20 years of experience in the medical device industry with a substantial portion of that time spent leading R&D efforts at multiple companies.
Dark: You will be critical in our efforts to expand <unk> innovative technology platform.
Dark: In closing, we believe <unk> remains in the strongest position it has ever been.
Dark: We have started 2024, just as we ended last year.
Dark: Which is with strong tailwind tailwind throughout all aspects of our business.
Hadar Levy: To reiterate, we continue to forecast top-line growth for full year 2024 of 16-26% over full year 2023 revenue. In addition, looking even further ahead, we remain focused on driving and leading innovation within the TMS industry and are highly confident in our ability to continue capturing significant market share both in the U.S. and internationally. With that, I will now turn the call over to Ido for his review of our first quarter 2024 financial results.
Dark: We reiterate we continue to forecast top line growth for full year 2024 of 16% to 26% over full year 2023 revenue. In addition, looking even further ahead, we remain focused on driving and leading innovation within the Tms industry and are highly confident in our.
Dark: Ability to continue capturing significant market share both in the U S and internationally.
Ido Marom: Revenue for the first quarter of 2024 was $9.1 million, a 37% increase compared to the prior year period revenue of $6.6 million. We placed 57 deep TMS systems in the first quarter.
Dark: With that I will now turn the call over to Ido <unk> review for our first quarter of 2020 full financial results.
Ido: Thank you.
Ido: Revenue for the first quarter of 2024 was $9 $1 million is 37% increase compared to the prior year period revenue of $6 $6 million.
Ido: We placed 57 deep Tms systems in the first quarter.
Ido Marom: Our total installed base was 1,158 systems as of March 31, 2024, compared to 932 systems at the same point in the prior year. Gross profit for the first quarter of 2024 was $6.8 million, or a 75% gross margin. This is compared to $4.8 million, or a 73% gross margin, during the prior year period. Moving on to operating expenses,
Ido: Our total installed base was 1168 systems as of March 31, 2024, compared to 932 systems at the same point in the prior year.
Ido: Gross profit for the first quarter of 2024 was $6 $8 million or 75% gross margin.
Ido: This is compared to $4 8 million or 73% gross margin during the prior year period.
Ido Marom: For the first quarter of 2024, sales and marketing expenses were $3.8 million, compared to $4.9 million for the first quarter of 2023. Research and development expenses were $1.6 million for the first quarter of 2024, compared to $1.8 million for the first quarter of 2023. General and administrative expenses for the first quarter of 2024 were $1.3 million compared to $1.8 million for the first quarter of 2026. Total operating expenses for the first quarter of 2024 were $6.7 million compared to $8.5 million, or a 21% decrease from the prior year period.
Ido: Moving onto operating expenses.
Ido: For the first quarter of 2024 sales and marketing expenses were $3 $8 million.
Ido: Compared to $4 9 million for this first quarter of 2023.
Ido: Research and development expenses were $1 $6 million for the first quarter of 2024 compared to $1 8 million for the first quarter of 2023.
Ido: General and administrative expenses for the first quarter of 2024 were $1 $3 million compared to $1 $8 million for the first quarter of 2023.
Ido: Total operating expenses for the first quarter of 2024 were $6 7 million.
Ido: Compared to $8 $5 million or 21% decrease from the prior year period.
Ido Marom: Operating profit for the first quarter was $100,000, compared to an operating loss of $3.7 million for the same period in 2023. Adjusted EBITDA was $700,000, representing our third consecutive quarter of positive adjusted EBITDA and compared to a loss of $2.9 million for the first quarter of 2023. For the first quarter ended March 31st, 2024, we achieved a net income of $100,000 compared to a net loss of $2.4 million in the same period in 2023.
Ido: Operating profit for the first quarter was $100000 compared to an operating loss of $3 $7 million for the same period in 2023.
Ido Marom: Adjusted EBITDA was $700000, representing our third consecutive quarter of positive adjusted EBITDA and compared to a loss of $2 9 million for the first quarter of 2023.
Ido: For the first quarter ended March 31, 2024, we achieved net income of $100000 compared to a net loss of $2 $4 million in the same period of 2023.
Ido Marom: We ended the first quarter with cash, cash equivalents, and short-term deposits of $47.8 million and no debt, as compared to $46.2 million on December 31, 2023. This was the third consecutive quarter during which positive cash flow was achieved. Based on our robust U.S. pipeline and continued momentum internationally, we are reiterating our full-year 2024 revenue guidance in the range of $37 million to $40 million and anticipate positive cash flow and profitability momentum throughout the year. This concludes our prepared remarks. I will now ask the operator to please open up the call for questions.
Ido Marom: We ended the first quarter with cash cash equivalents and short term deposits were $47 $8 million and no debt as compared to $46 2 million at December 31st 2023.
Ido Marom: This was the third consecutive quarter during which <unk> cash flow was achieved.
Ido Marom: Based on our robust pipeline <unk> pipeline and continued momentum internationally, we are reiterating our full year 2020 for revenue guidance in the range of 37 million to $40 million and anticipated and anticipate positive cash flow and profitability momentum throughout the year.
Speaker Change: This concludes our prepared remarks.
Speaker Change: I'll now ask the operator to please open up the call for questions.
Speaker Change: The writer.
Operator: Thank you. Ladies and gentlemen, should you have a question, please press star 1. If you'd like to withdraw your question, please press star 2. Again, to ask a question, press star 1. One moment please for your first question. Your first question comes from Jeff Cohen from Lennonburg. Please go ahead.
Speaker Change: Thank you.
Speaker Change: And gentlemen.
Operator: Chen Please press star one if you'd like to withdraw your question. Please press star two again to ask a question press Star one one moment. Please for your first question.
Operator: Your first question comes from Jeff Cohen from Ladenburg. Please go ahead.
Jeffrey Cohen: Go ahead. Good morning, Hadar and Ido. How are you? Very good.
Jeffrey Cohen: Hi, Good morning had already though how are you.
Ido Marom: Very good. Thank you, Ido. Good. Thank you.
Jeffrey Cohen: Very good thank you Jeff Thank you.
Ido Marom: So.
Jeffrey Cohen: Firstly, any color you can provide on territory expansion or geography expansion, at least in the U.S. and abroad, perhaps some new territories and new areas of focus.
Ido Marom: Firstly.
Jeffrey Cohen: Any color you can provide on territory expansion or geography expansion at least in the U S and abroad, perhaps a new territories and new areas of focus.
Hadar Levy: In the U.S., we've got broad coverage in almost all relevant states, all the fastest growing states, so we continue to do the same. There is great potential and strong momentum in the U.S. marketplace with increasing demand. Internationally, we're seeing some very good momentum in the Far East, with Korea, Taiwan, India, which are currently the main drivers in the international market, but also in some areas in Europe as well.
Jeffrey Cohen: In the U S. We've got broad coverage.
Hadar Levy: In almost all the all day.
Hadar Levy: All relevant states all the most growing states.
Hadar Levy: It will continue.
Hadar Levy: There is great potential.
Hadar Levy: Potential and strong momentum in the U S marketplace.
Hadar Levy: With an increasing demand.
Hadar Levy: Internationally, we're seeing some very good.
Hadar Levy: Our momentum in the far east.
Hadar Levy: With Korea, Taiwan.
Hadar Levy: In the.
Hadar Levy: Currently the.
Hadar Levy: The main drivers.
Hadar Levy: On the international market, but also in.
Hadar Levy: Some areas in Europe.
Hadar Levy: Well.
Hadar Levy: Got it. Okay, that's helpful. And then what might we expect over the course of 2024 on the study front as far as anything neuro-related such as Parkinson's, epilepsy, stroke, etc.
Speaker Change: Got it Okay. That's helpful and then what might we expect.
Hadar Levy: Over the course of 2024 on the study for English learners.
Hadar Levy: Anything newer related such as Parkinson's and epilepsy stroke et cetera.
Hadar Levy: So, we are actively selling those indications internationally. We've got the C mark for the Neuro indication, and the demand is looking very good so far. We continue to collect data, and we will have some kind of internal discussion about what should be our next indication in the pipeline at the beginning of next year, either on the addiction or on the Neuro side, probably at the beginning of next year.
Hadar Levy: So.
Speaker Change: We occupant Lee.
Hadar Levy: Selling those indication internationally, we've got the CE Mark.
Hadar Levy: For the neural indication.
Hadar Levy: And the demand looking very good.
Hadar Levy: So far we continue to collect the data.
Hadar Levy: <unk>.
Hadar Levy: And we will come into.
Hadar Levy: Some kind of internal discussion what should be our next indication in the pipeline at the beginning of next year.
Hadar Levy: Either on the addiction on de Novo.
Hadar Levy: <unk> side.
Hadar Levy: Probably at the.
Hadar Levy: Beginning of next year.
Jeffrey Cohen: Got it. Okay, and then, um...
Speaker Change: Got it Okay and then.
Jeffrey Cohen: Regarding treatment, Hadar, as far as some of the shorter courses that have been talked about and offered as far as Theta Burst or a handful of treatments versus the traditional treatment. Any color on the news, U.S. or internationally, as far as some of the treatment paradigms, as far as the number of sessions that folks are receiving?
Jeffrey Cohen: Regarding treatment of door as far as some of the shorter courses.
Jeffrey Cohen: That.
Jeffrey Cohen: It had been talked about in all fruit as far as our theater burst or a handful of treatments versus the traditional treatment.
Jeffrey Cohen: Any color there.
Jeffrey Cohen: News U S or internationally as far as some of the treatment paradigm as far as number of sessions.
Hadar Levy: Sure Rajeev.
Hadar Levy: Yeah, we're seeing some very interesting trends in the accelerated TMS, which is the short protocol, and we just launched a new clinical trial together with the FDA to see the benefits from this short protocol. We really believe that's going to gain some very good demand and momentum, but definitely the ability to shorten the amount of time. I think it's crucial for the industry, and we're hoping to get some good progress this year with this clinical trial.
Hadar Levy: Yes, we're seeing some.
Hadar Levy: I'm very interesting trend on the accelerated.
Hadar Levy: <unk>, which is the short.
Hadar Levy: Protocol and we are.
Hadar Levy: We just launched a new clinical trial together with the FDA.
Hadar Levy: Just to see the benefits from this.
Hadar Levy: Sure. The protocol, we really believe that's going to be.
Hadar Levy: We will gain from some very good demand and momentum.
Hadar Levy: But definitely the ability to shorten the amount of.
Hadar Levy: Dave that you need to come to the clinic I think it's crucial to fall for the industry and where we're hoping to get some good progress this year with this clinical trial.
Jeffrey Cohen: Got it. And then, I guess, lastly, maybe for Ido, could you talk about the top line of guidance? I know you're reaffirming. 37 to 40, for the calendar year 2024. Any additional information you can provide on perhaps the cadence of those revenues or how they may play out for the year?
Hadar Levy: Got it and then.
Speaker Change: I guess lastly, maybe for <unk> could you talk about the top line guidance I know you are reaffirming.
Ido Marom: 37% to 40.
Ido Marom: For the calendar year 2024.
Ido Marom: Additional information you can provide.
Jeffrey Cohen: Perhaps the key.
Jeffrey Cohen: Cadence of those revenues.
Jeffrey Cohen: Or how they may play out for the year.
Ido Marom: I can say that we are still, as Hadar mentioned in his remarks, confident with our guidance of the range of $37 to $40 million. Our backlog is strong, and our booking as of Q1 was right on target, as we anticipated. So we believe that this target and this guidance that we gave of around $37 to $40 million is covered by a strong backlog and a strong pipeline that we have that will enable us to achieve this target.
Ido Marom: I can say that we are still as Don mentioned in his remarks, we are confident with our guidance.
Ido Marom: The range of $34 $37 million to $40 million, our backlog our backlog is strong.
Ido Marom: Our booking.
Ido Marom: Q1 was.
Ido Marom: Right on target as we anticipated so we believe that the.
Ido Marom: These target in these guidance that we gave around the 37 to 40 million is covered by a strong backlog.
Ido Marom: A strong pipeline that we have that will enable us to achieve these targets.
Jeffrey Cohen: Perfect. Okay, that does it for us. Thanks for taking the questions.
Speaker Change: Perfect. Okay that does it for us thanks for taking the questions.
Speaker Change: Thank you Jeff.
Operator: Your next question comes from Steve Lichtman from Oppenheimer. Please go ahead.
Jeffrey Cohen: Your next question comes from Steve Lichtman from Oppenheimer. Please go ahead.
Steven Lichtman: Thank you. Hi guys.
Steven Lichtman: Thank you hi, guys.
Steven Lichtman: Just on that last point relative to the pipeline can you talk a little bit more about sort of the composition of that and are you continuing to see.
Steven Lichtman: Just on that last point relative to the pipeline, can you talk a little bit more about sort of the composition of that? And are you continuing to see significant interest from large customers? Anything that's notable on that front in terms of what the makeup of that pipeline looks like for you?
Steven Lichtman: Yes.
Steven Lichtman: Significant interest out of large customers.
Steven Lichtman: Yes.
Steven Lichtman: Notable on that front in terms of what the makeup of that pipeline looks like for you.
Hadar Levy: Yeah, I think so.
Hadar Levy: Yeah, I think I would say it's kind of a mix of both, but I think the main growth is coming, and what we're seeing also in our pipeline, is coming from growing small and mid-sized accounts and also from current customers who say that the business model works for them, they're making some money, they have a good business, they see some good results, and they want to continue to grow. So I would say it's a mix of current customers and new customers, pleaded by private psychiatrists and growing enterprises.
Speaker Change: Yes, I think I would say, it's kind of a mix of bullish private there.
Hadar Levy: Offices.
Hadar Levy: But I think the main growth is.
Hadar Levy: Is coming in from the on what we are seeing Gulf Anr pipeline is coming from growing.
Hadar Levy: Small and mid size account.
Hadar Levy: <unk>.
Hadar Levy: And also from current customers.
Hadar Levy: The business model work for them, while Theyre, making some.
Hadar Levy: They are a good business they were seeing some good results and they want to continue to grow so I would say, it's a mix of.
Hadar Levy: Our current customers.
Hadar Levy: New customers treated by.
Hadar Levy: Private psychiatrist and growing enterprise account.
Speaker Change: Got it.
Steven Lichtman: Um, what, uh, what are the next steps on smoking? I know you've talked in the past about partnership potential. Can you update us on that indication?
Hadar Levy: What.
Speaker Change: What are the next steps.
Steven Lichtman: Hi.
Steven Lichtman: On smoking I know you've talked in the past about a partnership potential can you update us there on that indication.
Hadar Levy: Yes, we are having an active dialogue with potentially interested parties on a consistent basis. It's still in a kind of business development scenario, so there is no timeline related to the establishment of a formal agreement yet. But there is lots of interest in the addiction space overall, not just only in smoking. So we are speaking, we are actively speaking with some interested parties about taking this addiction indication and distributing the product and hopefully do something significant before the end of the year.
Steven Lichtman: Yes.
Steven Lichtman: And active dialogue with potentially interested parties on our content on a consistent basis.
Hadar Levy: It's still under a kind of a business development.
Hadar Levy: Scenario. So there is no timeline.
Hadar Levy: Related to Istar.
Hadar Levy: Establishment of a formal agreement yet, but there is lots of interest on the addiction space overall, not just only on the smoking.
Hadar Levy: So we are speaking we are actively speaking with some interested parties.
Hadar Levy: I'm, taking this the addiction indication and distribute the product.
Hadar Levy: Hopefully.
Hadar Levy: Do something significant before the end of the year.
Steven Lichtman: I apologize if I, if you did mention this, but on DTMS 360, how are things proceeding there in terms of that study evaluation of that new system?
Speaker Change: Got it.
Speaker Change: I apologize if I if you did mentioned this but.
Steven Lichtman: Deep Tms 360.
Steven Lichtman: How are things proceeding there in terms of that.
Steven Lichtman: The study that evaluation.
Steven Lichtman: Of that new system.
Hadar Levy: So we just, I mean, you know, TMS 360 is the next generation of our product. So we're testing two aspects. One, you know, the feasibility of the technology, and the second aspect is the clinical efficacy of this technology. We just launched it, and we've got a few patients that are enrolled in two different studies. It's too early for us to tell, but, you know, I think that based on some feasibility studies that we have done internally, we're expecting to see some good results, but more to come, and once we have some more information to share, we will do that.
Steven Lichtman: Just I.
Steven Lichtman: I mean, Tim is $3 60, that's the next generation of <unk>.
Hadar Levy: Of our product.
Hadar Levy: So we're testing.
Hadar Levy: Two aspects one now.
Hadar Levy: The feasibility of the of the technology and the second aspect is the clinical.
Hadar Levy: Secrecy from this technology, we just launched it.
Hadar Levy: And we've got a few.
Hadar Levy: A few patients that are enrolled.
Hadar Levy: Two.
Hadar Levy: Two different studies.
Hadar Levy: It's too it's too early for us to tell but I think that based on some visibility.
Hadar Levy: Ah studies that we have done internally.
Hadar Levy: We're expecting.
Hadar Levy: To see some good results, but more to come in once we're going to have some more information to share.
Hadar Levy: We will do that.
Steven Lichtman: And then just lastly, you've obviously been very disciplined on spend. Given the gross margin coming in solidly here, any thought about sort of reinvesting at a higher level to even further drive revenue growth? How are you thinking about that balance as you look ahead?
Hadar Levy: And then just lastly.
Hadar Levy: <unk>, obviously been very disciplined on.
Speaker Change: On spend.
Steven Lichtman: Given the gross margin coming in solidly here.
Speaker Change: Any thought about sort of reinvesting.
Steven Lichtman: At a higher level Q2, even further drive revenue growth how are you thinking about that balance as you look ahead.
Hadar Levy: Yes, listen, you know, I believe that we should invest the money back into the growth of our operation, and that's exactly what we're going to do. We're going to increase the number of the sales team, introduce some more marketing initiatives, and also... Thank you very much.
Speaker Change: Yes Nathan.
Hadar Levy: Ill.
Hadar Levy: I believe that we should invest the money back into.
Hadar Levy: And to the growth of.
Hadar Levy: Of our operation and that's exactly what we're going to do we are going to increase the number of <unk>.
Hadar Levy: The sales team put some more marketing initiatives.
Hadar Levy: And also.
Hadar Levy: Increased some of the investment on the on the R&D on the clinic, all the future investment will be aligned with our.
Hadar Levy: Our forecasted growth just to keep our profitability momentum into <unk>.
Hadar Levy: Be very very sensitive to the cash flow positive generation.
Steven Lichtman: Great, thanks Hadar. Thank you, Steve.
Sundar: Great. Thanks Sundar.
Speaker Change: Thank you Steve.
Operator: Ladies and gentlemen, as a reminder, should you have a question, please press star 1. Your next question comes from Ram Selvaraju from H.C. Brunwright, please go ahead.
Speaker Change: Ladies and gentlemen, as a reminder, should you have a question. Please press star one.
Ram Selvaraju: Your next question comes from Ram <unk> from H C. Bren rate. Please go ahead.
Ram Selvaraju: Hi, thanks very much for taking my questions. A couple of metrics-related questions, if I may.
Ram Selvaraju: Alright, thanks, very much for taking my questions.
Ram Selvaraju: A couple of.
Ram Selvaraju: Metrics related questions if I may.
Ram Selvaraju: Could you give us a sense of what you expect the total installed base to be at the end of 2024? As I recall, at the end of 2023, it was $1,100. I think you reported a quarter one end number of $1,158, but if you could just maybe give us a sense of what your expectations are in terms of how they conform to your financial guidance, that would be helpful.
Ram Selvaraju: Could you give us a sense of what you expect the total install base to be at the end of 2024 as I recall at the end of 2023. It was 1100 I think you reported quarter, one and number of $11 58, but if you could just maybe give us a sense of what your expectations are.
Ram Selvaraju: In terms of how they conform to your financial guidance that would be helpful.
Hadar Levy: So, you know, I think we are increasing the footprint of our install base in a very steady way. Roughly between 50 to 60 units every quarter. That should lead you to the number of installations by the end of the year.
Ram Selvaraju: So.
Ram Selvaraju: We are increasing the foot footprint.
Hadar Levy: Our installed base in a very.
Hadar Levy: Eddie way roughly between 50 to 60 units every quarter that should lead you to the.
Hadar Levy: Number of installed base by the end of the year.
Ram Selvaraju: Okay, that's helpful. Secondly, there have been some notable changes with respect to the nature of the prior authorizations, particularly in the MDD space, and I'm talking in particular about the number of failed medications that are required before DTS is deployed. Can you give us a sense of how that continues to evolve and whether you expect, ultimately, the standard to become sort of more like failure of only one or two medications as opposed to three or four?
Speaker Change: Okay. That's helpful. Secondly.
Ram Selvaraju: There have been some notable changes with respect to the nature of the prior authorizations, particularly at the Mds space.
Ram Selvaraju: And I'm talking in particular about the number of failed medications that are required before.
Ram Selvaraju: <unk> is deployed.
Ram Selvaraju: Can you give us a sense of how that continues to evolve and whether you expect ultimately the standard could become sort of more like failure of only one or two medications as opposed to three or four.
Hadar Levy: So I would say that today the standard is much more close to failing in one or two medications than in three or four. So there was definitely an improvement in the in the last two years in this segment and the main reason is the efficacy rates of the deep TMS technology and the fact that this treatment is saving money to the insurance company. So it seems like, you know, I think that in terms of the way that the market is evolving We are starting to see some more standardized of one fail before you can get the deep TMS treatment and I think the overall insurance for our technology is, I think the trends as I said in the last two years was very favorable and I don't see it changing unless there is something radical but I think that we are getting some very good momentum and very good feedback on our treatment.
Ram Selvaraju: So I would say that the data stand dart.
Hadar Levy: <unk> is much more close to failing in one or two medication then in three or four so there was definitely an improvement in the in the last two years in this segment and the main reason is the.
Hadar Levy: Is the efficacy rates.
Hadar Levy: The deep Tms technology, and the fact that this.
Hadar Levy: Treatment is saving money.
Hadar Levy: To the insurance company.
Hadar Levy: So it seems like.
Hadar Levy: I think that in terms of the way that the market is evolving.
Hadar Levy: Starting to we're starting to see some Morris Thunder days of.
Hadar Levy: One failed.
Hadar Levy: Before you can get.
Hadar Levy: The deep Tms.
Hadar Levy: Treatment.
Hadar Levy: And.
Hadar Levy: I think the overall the overall insurance.
Hadar Levy: For our technologies I think the trends as I said in the last two years was very very favorable.
Hadar Levy: I don't see it.
Hadar Levy: Changing and unless there is something radical but I think that.
Hadar Levy: We're getting some very good momentum and very good feedback.
Hadar Levy: On our treatment.
Ram Selvaraju: With respect to the comments you've previously made about KT's Way and Brainsway's relationship to KT's Way, can you comment on the A, what level of customer KT's Way is? Is it among the biggest customers you have? I'd imagine that that's the case, but just wanted to get some clarity on that. And secondly, how many other entities like KT's Way are there out there that you might be able to forge similar relationships with, particularly as this pertains to providing mental health care to active duty military personnel?
Hadar Levy: With respect to the comments, you've previously made about Casey's way and brain waves relationship to Casey's way can you comment on <unk>.
Ram Selvaraju: What level of customer <unk> way as it is is it among the biggest customers you have I would imagine that that's the case, but just wanted to get some clarity on that and secondly, how many other entities like Casey's way are there out there that you might be able to afford similar relationships with particularly as this pertains to.
Ram Selvaraju: Providing mental health care to active duty military personnel.
Hadar Levy: Yeah, um... Katie's Ways, I believe it's a wonderful story for our strategy. You know, they started as a small, mid-size mental health network with a few sites, and in the last two or three years, due to the collaboration between companies, we managed a way to grow together. So today, you know, they have an installed base of 40 systems.
Ram Selvaraju: Yes.
Ram Selvaraju: <unk>.
Hadar Levy: Kate is way I believe it's a wonderful story.
Hadar Levy: To our strategy.
Hadar Levy: They started does.
Hadar Levy: As.
Hadar Levy: Small.
Hadar Levy: Mid size meant.
Hadar Levy: Mental health network.
Hadar Levy: With.
Hadar Levy: Few sites and.
Hadar Levy: And in the last.
Hadar Levy: In the last two or three years.
Hadar Levy: Due to the collaboration between companies.
Hadar Levy: We managed the way.
Hadar Levy: Two to grow together.
Hadar Levy: So today.
Hadar Levy: They got installed base of <unk>.
Hadar Levy: 40 system.
Hadar Levy: I believe they will continue to grow, by the way, so they are spreading out. I think the business seems to be working very well. And for your other question, there are many; there are other Katie's Ways in our pipeline. So you know, I believe that due to market demand, due to the treatment and the technology that we are providing, I see no reason why we can't grow more mental health companies like Katie's Way.
Hadar Levy: I believe there will continue to grow by the way so they are spreading out the business.
Hadar Levy: It seems walking.
Speaker Change: Very well.
Hadar Levy: And for your other question.
Hadar Levy: There are many there are other katie's weigh.
Hadar Levy: In our pipeline, so I believe that due to the market demand due to the.
Hadar Levy: The treatment.
Hadar Levy: And to the technology that we're providing I see no reason why can't we grow more.
Hadar Levy: Mental health.
Hadar Levy: Companies like Kt vacated weighs a little bit more unique because they are much more targeted into the active military and veterans space. However.
Hadar Levy: Katie's Way is a little bit more unique because they are much more targeted to the active military and veterans space. However, in our pipeline, in our current install base, I can see... A lot of KD's Way, like in our customer base that has the potential to grow.
Hadar Levy: Our pipeline and our current installed base.
Hadar Levy: I can see.
Hadar Levy: A lot of <unk>.
Hadar Levy: <unk> way like.
Hadar Levy: In our customer base that has the potential to grow.
Ram Selvaraju: And then lastly, with respect to, you know, your now growing cash position, strong balance sheet, and expectations for continued profitability and sales momentum, can you give us a sense of how you are thinking strategically about efficient deployment of that capital to continue to add value? And if you are considering the possibility of licensing or acquiring additional potentially complementary technologies at this time? Yeah, yeah, in terms of the use of proceeded...
Hadar Levy: And then lastly, with respect to Europe, now growing cash position strong balance sheet and expectations for continued profitability and sales momentum.
Ram Selvaraju: Can you give us a sense of how you are thinking strategically about efficient deployment of that capital to continue to add value. If you are considering the possibility of in licensing or acquiring additional potentially complementary technologies at this time.
Hadar Levy: Yeah, in terms of the use of Proceed, we intend to grow the business organically and unorganically. So we're definitely looking for the right opportunity that is going to lay ahead of us. And there are very, very, very interesting opportunities today in the addiction space, in the neuro space, in some other areas, but you know, it's too early for me now to share them with the audience. But we're definitely looking for the right opportunity that will help us to grow the business significantly to where we want to be.
Ram Selvaraju: In terms of the use of proceeds.
Hadar Levy: We intend to grow the business organically and Inorganically. So we're definitely looking.
Hadar Levy: On the right opportunity that is going to.
Hadar Levy: Lay ahead of us and are very very very interesting opportunities today on the addiction space on the neuroscience on the.
Hadar Levy: And in some other areas that you know it's too early for me now.
Hadar Levy: To share with the audience, but we are definitely looking for the.
Hadar Levy: The right opportunities that will help us to grow the business significantly to where we want to be.
Speaker Change: Thank you.
Speaker Change: Thank you.
Operator: And there are no further questions at this time. I will turn the call back over to Hadar, CEO, for closing remarks.
Speaker Change: And there are no further questions at this time I will turn the call back over to <unk> CEO for closing remarks.
Hadar Levy: Great, thank you so much. So I would like to thank you all, investors, analysts, and other participants, for your interest in Brainsway. With that, please enjoy the rest of your day.
Hadar Levy: Great. Thank you so much so I would like to thank you all.
Speaker Change: Investors analysts and other participants for your interest in <unk> with that please enjoy the rest of your day.
Speaker Change: Have a good day.
Operator: Ladies and gentlemen, this concludes today's conference call. You may now disconnect your lines. Thank you.
Speaker Change: Ladies and gentlemen. This concludes today's conference call you may now disconnect your lines. Thank you.
Operator: [music].