Q2 2024 BrainsWay Ltd Earnings Call

Speaker Change: Good day and welcome to the Brainsway Second Quarter 2024 Earnings Conference Call.

Operator: This is a May 1, 2024, earnings conference call. All participants will be in listen-only mode.

Operator: Should you need assistance, please signal a conference specialist by pressing the star key, followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then run on your telephone keypad. To withdraw your question, please press star then 2. Please note this event is being recorded. I would now like to turn the conference over to Brian Ritchie of Lifesci Advisors. Please go ahead.

Speaker Change: All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key, followed by zero.

Speaker Change: After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then 1 on your telephone keypad. To withdraw your question, please press star then 2.

Speaker Change: Please note this event is being recorded. I would now like to turn the conference over to Brian Ritchie of Lifesci Advisors. Please go ahead.

Brian Ritchie: Thank you all and welcome to Brainsway's second 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. Brainsway released financial results for the three and six months ended June 30, 2024.

Speaker Change: Thank you all and welcome to Brainsway's second quarter 2024 earnings conference call. With us today are Brainsway's Chief Executive Officer, Hadar Levy,

Speaker Change: 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.

Speaker Change: earlier today.

Speaker Change: Brainsway released financial results for the three and six months ended June 30th 2024. A copy of the press release is available on the company's investor relations website.

Brian Ritchie: A copy of the press release is available on the company's investor relations website. Before I turn the call over 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 things, 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 uncertainty, including shifting market conditions resulting from geopolitical, supply chain, Additional information regarding these and other risks is available in the company's earnings release and in its other filings with the SEC, including the risk factors section contained in Brainsway's Form 20-F.

Speaker Change: Before I turn the call over to Hadar, I would like to remind you that this conference call, including both management's prepared remarks and the question and answer session, will be recorded.

Speaker Change: may contain projections or other forward-looking statements regarding, among other topics.

Speaker Change: Brainsway's Anticipated Future Operating and Financial Performance

Speaker Change: business plans and prospects, and expectations for its products and pipelines, which are all subject to risks and uncertainties.

Speaker Change: including shifting market conditions resulting from geopolitical, supply chain, and other factors.

Speaker Change: as well as the use of non-GAAP financial information.

Speaker Change: Additional information regarding these and other risks are available in the company's earnings release.

Speaker Change: and in its other filings with the SEC including the risk factor section contained in Brainsway's Form 20-F. I would now like to turn the call over to Hadar.

Brian Ritchie: I would now like to turn the call over to Hadar.

Hadar Levy: Thank you, Brian. Welcome, everyone, and thank you for joining us today. As reported earlier this morning, we had another outstanding quarter of growth. Most importantly, demand for our industry-leading DIPTI MS system continues to be strong, resulting in a year-over-year increase in revenues of 28% to 10 million dollars for the second quarter of 2024. In addition, we generated positive quarterly net income for the third consecutive quarter and positive adjusted EBITDA and cash flow from operations for the fourth consecutive quarter. We also continue to be supported by an extremely strong balance sheet, with $48.1 million in cash and no debt as of June 30th, 2024.

Hadar Levy: Thank you, Brian . Welcome, everyone, and thank you for joining us today.

Hadar Levy: As reported earlier this morning, we had another outstanding quarter of growth.

Hadar Levy: Most importantly, demand for our industry-leading DeepTMS system continues to be strong, resulting in a year-over-year increase in revenues of 28%

Speaker Change: to $10 million for the second quarter of 2024. In addition, we generated positive quarterly net income for the third consecutive quarter and positive adjusted EBITDA and cash flow from operations for the fourth consecutive quarter.

Hadar Levy: Our outlook for the second half of 2024 remains strong, and we are now raising the lower end of the guidance for full year 2024 revenue to a range of $38.5 million to $40 million. Therefore, we are now projecting growth of between 21% and 25% over our 2023 revenue. We also continue to anticipate that our profitability momentum and positive cash generation will extend for the full year. I would like to take a few moments to dive a little deeper into our key growth drivers.

Hadar Levy: Our outlook for the second half of 2024 remains strong and we are now raising the lower end of the guidance for full year 2024 revenue to a range of $38.5 million to $40 million.

Hadar Levy: Therefore, we are now projecting growth of between 21% and 25% over our 2023 revenues.

Hadar Levy: We also continue to anticipate that our profitability momentum and positive cash generation will extend for the full year.

Hadar Levy: I would like...

Hadar Levy: to take a few moments to dive a little deeper into our key growth drivers.

Hadar Levy: Looking more closely at the second quarter performance, we shipped a net total of 114 systems during the first two quarters, a 13% increase compared to the first half of 2023, resulting in an install base of 1,215 total DIP TMSs.

Hadar Levy: Demand for our OCD treatment indication remains strong, and we continue to maintain treatment capability for this important indication on about 50% of our total installations. We also remain laser focused on catering to the needs of our diverse customer base, their businesses, and the patients they serve. We continue to make progress in our penetration of both existing and new customer bases. This includes continuing to strengthen and expand partnerships with larger institutional and enterprise customers, which play an increasingly important role within the industry.

Hadar Levy: We also remain laser-focused on catering to the needs of our diverse customer base, their businesses, and the patients they serve. We continue to make progress in our penetration of both existing and new customer bases.

Hadar Levy: We remain committed to incorporating our proprietary Deep TMS technology into this expanding mental health group and network. We have also looked to generate new sources of growth by increasing our international footprint through existing and new strategic distribution agreements. Currently, we have exclusive distribution and agent agreements in several important countries around the globe, including in Asia and Europe.

Hadar Levy: In June, we announced Adding Canada to this list after signing an exclusive multi-year distribution agreement with a strong Canadian specialty distributor that services both the acute hospital and non-acute health care markets. This agreement offers us broad market entry into Canada via its team of over 35 self-professionals. The agreement establishes a multi-year framework of minimum quantity orders, beginning with 11 DPMS systems in the first year, with successively increasing quotas in subsequent

Hadar Levy: This agreement offers us broad market entry into Canada via its team of over 35,000 professionals.

Hadar Levy: The agreement establishes a multi-year framework of minimum quantity orders, beginning with 11 DPMS systems in the first year, with successively increasing quotas in subsequent years.

Hadar Levy: In order to support our future commercial efforts, our clinical development, medical, and regulatory teams continue their work on expanding the clinical benefits of our system. Most recently, we announced that the FDA granted us an extended indication following deep TMS treatment of major depressive disorder patients ages 22 to 86. This represents an important change from the previous upper age limit which had been set at 68.

Hadar Levy: Most recently, we announced that the FDA granted us with an extended indication following for deep TMS treatment of major depressive disorder patients ages 22 to 86.

Hadar Levy: It also marks an important regulatory achievement, making deep TMS the first and only form of TMS indicated for the treatment of patients over the age of 68 suffering from major depressive disorder, including those with comorbid anxiety symptoms. We believe this important decision by the FDA will have a direct impact on our patients since depression does not disappear at age 68. On the contrary, it is prevalent but often more challenging to treat because certain brain targets sometimes move further away from the scalp at patient age.

Hadar Levy: It also marks an important regulatory achievement, making deep TMS as the first and only form of TMS indicated for the treatment of patients over the age of 68 suffering from major depressive disorder, including those with comorbid and anxiety symptoms.

Speaker Change: On the contrary.

Speaker Change: It is prevalent, but often more challenging to treat because certain brain targets sometimes move further away from the scalp at patient age.

Hadar Levy: We believe that the deeper and broader stimulation of deep TMS helps overcome these age-related challenges, and we were able to demonstrate compelling clinical data on the efficacy of DIPTMS in older patients as part of our application to the FDA that preceded this labeling expansion. Moving on, we also recently initiated a clinical trial evaluating an accelerated depression treatment protocol for deep TMS. Previously published post-marketing data that have shown that outcomes achieved with an accelerated deep TMS protocol are comparable with those from longer traditional protocols. We believe that an accelerated treatment protocol has the potential to improve convenience and make deep TMS substantially more appealing to many prospective patients.

Hadar Levy: and we were able to demonstrate compelling clinical data on the efficacy of DIPTMS in older patients as part of our application to the FDA that preceded this labeling expansion.

Hadar Levy: Moving on, we also recently initiated a clinical trial evaluating an accelerated depression treatment protocol for a deep TMS system.

Hadar Levy: In closing, the Brainsway team has executed extremely well across multiple fronts of our corporate strategy during the first half of 2024. As a result, we have generated strong growth, increased profitability, and are opening up new pathways for future growth. I could not be prouder of the progress we have made and look forward to a strong second half of the year and beyond. With that, I will now turn the call over to Ido for his review of our second quarter 2024 financial results.

Hadar Levy: In closing, the Brainsway team has executed extremely well across multiple fronts of our corporate strategy during the first half of 2024.

Hadar Levy: As a result, we have generated strong growth, increased profitability, and are opening up new pathways for future growth.

Hadar Levy: I could not be prouder of the progress we have made and look forward to a strong second half of the year and beyond.

Hadar Levy: With that, I will now turn the call over to Ido for his review of our second quarter 2024 financial results.

Ido Marom: I want to take a minute to express my excitement around the commercial traction we continue to have, ranging from our progress with enterprise accounts in the U.S. to our continued international expansion. As Hadar just mentioned, revenue for the second quarter of 2024 was $10 million, a 28% increase compared to the prior year period revenue of $7.8 million. Gross profit for the second quarter of 2024 was $7.5 million, or a 75% gross margin. This is compared to $5.7 million, or a 73% gross margin, during the prior year period. Moving on, let's look at operating expenses.

Ido Marom: Thank you, Hadar.

Ido Marom: I want to take a minute to express my excitement around the commercial traction we continue to have, ranging from our progress with enterprise accounts in the U.S. to our continued international expansion.

Ido Marom: For the second quarter of 2024, sales and marketing expenses were $3.8 million compared to $4 million for the second quarter of 2023. Research and development expenses were $1.7 million compared to $1.9 million in the second quarter of 2023. General and administrative expenses for the second quarter of 2024 were $1.4 million compared to $1.2 million for the second quarter of 2023. Operating profit for the second quarter was $586,000 compared to an operating loss of $1.3 million for the same period in 2023.

Ido Marom: As Hadar just mentioned, revenue for the second quarter of 2024 was $10 million, a 28% increase compared to the prior year period revenue of $7.8 million.

Speaker Change: Gross profit for the second quarter of 2024 was $7.5 million, or a 75% gross margin. This is compared to $5.7 million, or a 73% gross margin, during the prior year period.

Ido Marom: Moving on to operating expenses.

Speaker Change: For the second quarter of 2024, sales and marketing expenses were $3.8 million compared to $4 million for the second quarter of 2023.

Speaker Change: Research and development expenses were $1.7 million compared to $1.9 million in the second quarter of 2023.

Ido Marom: General and administrative expenses for the second quarter of 2024 were $1.4 million compared to $1.2 million for the second quarter of 2023.

Ido Marom: Operating profit for the second quarter was $586,000 compared to an operating loss of $1.3 million for the same period in 2023.

Ido Marom: Adjusted EBITDA was $1.2 million, representing the fourth consecutive quarter of positive adjusted EBITDA, and compared to a loss of $600,000 for the second quarter of 2023. For the second quarter ended June 30th, 2024, we recorded net income of $600,000, compared to a net loss of $1.7 million in the same period of 2023. We ended the second quarter with cash, cash equivalents, and short-term deposits of $48.1 million as compared to $46.3 million at December 31st, 2023 and $47.8 million at March 31st, 2024.

Speaker Change: For the second quarter ended June 30th, 2024, we recorded net income of $600,000 compared to a net loss of $1.7 million in the same period of 2023.

Ido Marom: We ended the second quarter with cash, cash equivalents, and short-term deposits of $48.1 million, as compared to $46.3 million at December 31st, 2023, and $47.8 million at March 31st, 2024.

Ido Marom: As Hadar mentioned earlier, based on our robust U.S. pipeline and continued momentum internationally, we have narrowed our expected revenue for 2024 to be in the range of $38.5 million to $40 million and continue to anticipate positive cash flow and profitability for the full year. This concludes our prepared remarks. I will now ask the operator to please open up the calls for questions. Operator? We're rolling.

Ido Marom: We have narrowed our expected revenue for 2024 to be in the range of $38.5 million to $40 million and continue to anticipate positive cash flow and profitability for the full year.

Speaker Change: This concludes our prepared remarks. I will now ask the operator to please open up the calls for questions. Operator?

Operator: We will now begin the question and answer session. To ask a question, you may press star then 1 on your telephone keypad. If you are using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been answered and you would like to withdraw your question, please press star then 2. At this time, we will pause momentarily to assemble our roster. Our first question comes from Steve Lichtman of Oppenheimer. Go ahead, please.

Speaker Change: We will now begin the question and answer session. To ask a question, you may press star then 1 on your telephone keypad. If you are using a speakerphone, please pick up your handset before pressing the keys.

Speaker Change: If at any time your question has been addressed and you would like to withdraw your question, please press star then 2.

Speaker Change: At this time, we will pause momentarily to assemble our roster.

Steven Lichtman: Thank you. Good morning, guys. I guess just starting out on international, after the agreements that you signed Hadar over the past couple of years outside the U.S., can you update us on what percent of your installed base is international today, and where do you see the biggest geographic opportunity?

Speaker Change: Thank you. Good morning, guys.

Speaker Change: I guess just starting out on international, after the agreements that

Speaker Change: You've signed Hadar over the past couple of years outside the U.S.

Speaker Change: Can you update us on what percent of your installed base is international today and where do you see the biggest geographic opportunities?

Hadar Levy: So, I would say that today the ratio between domestic and international is 80% domestic and about 20% international. We can see that the Asia-Pacific is growing very well and we see a very big increase in demand for technology in India, in South Korea, Taiwan, Thailand, and there is definitely a very strong demand also from some European countries like France, Italy, and Spain.

Speaker Change: and I'm going to be talking about the the the the the the the the the the the the the the

Speaker Change: We can see that the

Speaker Change: Asia-Pacific is growing very well and we see a very big increase in demand.

Speaker Change: for technology in India, in South Korea, Taiwan, Thailand, and there is definitely a very strong demand also from some European countries like France, Italy and Spain.

Hadar Levy: Great, thanks. On the pipeline, can you update us on TMS 360 and on any progress in the distribution discussions for the smoking indicator?

Speaker Change: Great, thanks. On the pipeline, can you update us on TMS 360 and on any progress in distribution discussions for the smoking indication?

Hadar Levy: Yeah, so on the pipeline, you know, I think the 360 system is now in a pilot program for several indications. We're also planning, maybe, to even expand it to some other indication next year. So we are now, you know, we just launched a few feasibility studies with this machine. We believe that the rotation will be one of our main technologies, deep TMS technology for the future. And once I have more information to update, I will be more than glad to update all the investors.

Speaker Change: Yeah, so on the pipeline, you know, I think the 360 system...

Speaker Change: is now in a pilot program.

Speaker Change: for several indications and we are also planning maybe to even expand it.

Speaker Change: So, we are now, you know, we just launched a few.

Hadar Levy: On the addiction part, we're still in discussions with several partners that are showing very high interest in the addiction space. You know, not too many news to date, but I believe that I'm hoping to find the right distribution channel for us in the U.S. and also internationally.

Speaker Change: On the addiction part, we are still in discussions with several partners that are showing very high interest on the addiction space.

Speaker Change: Not too many news to date, but I believe that I'm hoping to find the right distribution channel for us in the U.S. and also internationally.

Hadar Levy: Got it. And then lastly, you obviously continue to get nice operating expense leverage. I was wondering, given the strong gross margin profile, do you see opportunities for reinvestment in sales and marketing to further accelerate the momentum that you have?

Speaker Change: Sales and Marketing to further accelerate the momentum that you have.

Hadar Levy: Absolutely, we are always looking for any possible way to accelerate growth and to expand faster. A few ways could be to invest and grow organically, and that's exactly what we do every day. We are looking for some empty territories that could potentially generate some additional footprint and additional revenue stream for us. We are also looking for some additional modalities to sell and to increase our top line revenue from each one of the centers. But that's exactly what we are going to do with our growing cash balance. We are going to inject it and invest it back to grow the top line number. Great, thanks, Dr.

Speaker Change: Absolutely, we are always looking for any possible way to accelerate the growth and to expand faster.

Speaker Change: You know, a few ways could be...

Speaker Change: to invest and grow organically.

Speaker Change: and that's exactly what we do on every day. We are looking on some empty territories.

Speaker Change: to sell and to increase our top line revenue from each one of the centers. But that's exactly what we're going to do with our growing cash balance. We're going to inject it and to invest it back to grow the top line number.

Steven Lichtman: Great, thanks Dr. Gratz for the progress report.

Speaker Change: Great, thanks Dr. Grass on the progress. Thank you, Steve.

Operator: Our next question comes from Jeffrey S. Cohen of Ladenburg Diamond & Company. Go ahead, please.

Speaker Change: Our next question comes from Jeffrey S. Cohen of Leidenberg Thalmann & Company. Go ahead, please.

Jeffrey Cohen: Hello Hadar and Ido, how are you?

Hadar Levy: Good morning, Jeff. Good. Thank you.

Speaker Change: Hello, Hadar and Ido, how are you?

Jeffrey Cohen: So a few questions from Aaron. I guess firstly, I'm looking at the study referenced in the press release, the 104 patients, and regarding the protocol, any further information you can give us besides the six-week reference as far as the treatment protocol over the time period?

Speaker Change: Good. Good morning, Jeff. Thank you.

Speaker Change: So a few questions from Aaron, I guess firstly...

Speaker Change: I'm looking at the study referenced in the press release, the 104...

Speaker Change: patients. And regarding the protocol, any further information you can give us besides the six-week reference as far as the treatment protocol over the time period?

Hadar Levy: I can just share what we already announced in some press releases. Our intention is to make this treatment much more convenient for the patient and shorten the amount of days that they need to come to the clinics. So basically, it's from 30 days to only 6 days.

Speaker Change: I can just share what we already announced on some of the press releases. Our intention is to make this treatment much more convenient.

Speaker Change: to the patient and shortened the amount of days that they need to come to the clinic. So basically it's from 30 days to only 6 days.

Jeffrey Cohen: From 30 to 6 days in 6 weeks. Thank you. Thank you. No, no, no, wait.

Speaker Change: from 30 to 6 days over 6 weeks.

Hadar Levy: No, no, no, it's multiple sessions per day over the course of six months.

Speaker Change: [inaudible]

Speaker Change: No, no, no, it's multiple sessions per day in terms of six days.

Jeffrey Cohen: Okay, perfect. That's helpful. Could you talk about the expanded label and congrats on that, taking the age from 68 to 86, but how does that look as far as the TAM for MDD from your perspective or the data that exists out there?

Speaker Change: Got it. Okay, perfect, that's helpful. Could you talk about the expanded label and congrats on that, taking the age from 68 to 86, but how does that look as far as the TAM for MDD from your perspective or data that exists out there?

Hadar Levy: Well that's definitely a huge increase and you know we're now targeting a time that was not exist for us and that's a big time and and specifically located in some of the nursing home facilities in the U.S. and you know I think one of our major target today is to try and target some of those all elderly population centers in the U.S. around the nursing home and some other facilities that can help us to generate more leads and to increase the top-line revenue.

Speaker Change: Well, that's definitely a huge increase and we're now targeting a TAM that does not exist for us. And that's a big TAM and specifically located in some of the nursing home facilities in the U.S.

Speaker Change: I think one of our major targets today is to try and target some of those elderly population centers in the U.S. around the nursing home and some other facilities.

Jeffrey Cohen: Got it, perfect. A couple more quick ones. In Canada, the 11 system placements, are they all active at this point in time?

Speaker Change: Got it, perfect. A couple more quick ones. In Canada, the 11 system placements, are they all active at this point in time?

Jeffrey Cohen: Are you referring to the systems if the systems are already active?

Speaker Change: Are you referring to the systems, if the systems are already active?

Jeffrey Cohen: Yes, that was my question, yeah, 11th place in Canada. No, no, not yet.

Hadar Levy: I mean, they should get delivered before the end of the year, that's the commitment, and, you know, we are now focusing on training and on some of the marketing aspects, and the plan is to launch this market in Q3. Okay, and then lastly, it looks like you placed 114 due TMS in the first half of the year, but it seems that Q2 was higher than Q1. So, if that's the case, would one expect that trajectory of placements to accelerate throughout Q3 and Q4, and any commentary specific on the cadence of the back half of the year? Yes,

Speaker Change: Yes, that was my question. Yeah, on the 11th place in Canada. No, no, not yet. I mean, they should get delivered before the end of the year. That's the commitment.

Speaker Change: We are now focusing on the training and on some of the marketing aspects and the plan is to launch this market in Q3.

Speaker Change: Perfect. Okay, and then lastly...

Speaker Change: Looks like you placed 114.

Speaker Change: due to TMS in the first half of the year, but...

Speaker Change: It seems that Q2 was over Q1, so if that's the case, would one expect the trajectory of placements to accelerate throughout Q3 and Q4, and any commentary specific on the cadence of the back half of the year?

Hadar Levy: Yeah, as we said, we remain very positive. You know, I think we've got a very good understanding of the market, and we see the demand continue to grow, and we feel very, very comfortable with the current pipeline and the current backlog. So we are anticipating that the... The momentum of the growth will continue to stay where it is today.

Speaker Change: Yeah, as we said, we remain very positive, you know, I think we've got...

Speaker Change: We have a very good understanding of the market and we see the demand continue to grow and we feel very very comfortable with the current pipeline and the current backlog. We are anticipating that the...

Speaker Change: The momentum of the growth will continue to stay where it is today.

Jeffrey Cohen: Cooper

Jeffrey Cohen: Cooper, thanks for taking our questions. Congratulations again. Thank you.

Speaker Change: Cooper. Thanks for taking our questions. Congrats again. Thank you, Jeff.

Operator: Our next question comes from Raghuram Selvaraju of H.C. Wainwright. Go ahead, please.

Speaker Change: Our next question comes from Raghuram Selvaraju of H.C. Wainwright. Go ahead, please.

Raghuram Selvaraju: Good morning, this is Dan Onforam. Congratulations on the earnings growth. We have a few questions. Do you expect to be sustainably profitable going forward? What might be the principal drivers of this? How do you intend to accelerate market penetration and the MDD indication? And what proportion of uptake are you expecting in the elderly patient segment? And I'd like to ask a few additional questions if there's time.

Speaker Change: Good morning, this is Dan Onferon. Congratulations on the earnings growth. We have a few questions. Do you expect to be sustainably profitable going forward? What might be the principal drivers of this?

Dan Onferon: How do you intend to accelerate market penetration in the MDD indication, and what proportion of uptake are you expecting in the elderly patient segment? And I'd like to ask a few additional questions if there's time.

Hadar Levy: Okay, I will answer the first question regarding profitability. So, in short, the answer is yes, we are planning to continue to grow. And once we are growing, and as you can see, we grow a quarter over quarter, but by $1 million in revenue, which most of it goes directly to our net profit. And our plan is to continue growing through the second half.

Speaker Change: Okay, I will answer the first question regarding the profitability.

Speaker Change: So, in short, the answer is yes. We are planning to continue to grow and once we are growing, as you can see, we grow.

Speaker Change: ¼ over ¼ but by $1 million with the revenue.

Dan Onferon: which most of it goes directly to our net profit. And our plan is to continue with our profitability through the second half of the year.

Hadar Levy: With regard to your penetration strategy, I think we are trying a few different aspects here. First of all, we are mainly focusing on the large enterprise accounts that have the ability and the demand to grow with us. So that will continue to be our main focus to penetrate faster.

Dan Onferon: with regards to your penetration strategy and you know I think that we're trying a few different

Speaker Change: So, first of all, we are mainly focusing on the large enterprise account that has the ability and the demand to grow with us.

Speaker Change: So that will continue to be our main focus.

Hadar Levy: The second is, you know, I believe that the more we see demand on the OCD and the better reimbursement for the OCD indication, that could also potentially increase the demand of our product. And also, I believe our very unique business model that the offering to our customers is very unique in terms of lease, in terms of pay-per-use, and all the support that we are providing to our customers, I believe will continue and accelerate the penetration into the market in the U.S. With regards to the elderly patients, we tried to filter down, to narrow down the number of nursing home centers in the U.S. and we're going to focus and to see what could be the demand.

Speaker Change: for to penetrate faster.

Speaker Change: The second is, you know, I believe that the more we see demand on the OCD and the better reimbursement for the OCD indication, that could also potentially increase the demand of our product.

Speaker Change: and also I believe our very unique business model that

Speaker Change: The offering to our customers is very unique in terms of lease, in terms of pay-per-use.

Speaker Change: All the support that we are providing to our customers, I believe will continue and accelerate the penetration into the market in the U.S.

Speaker Change: With regards to the elderly patients...

Speaker Change: We tried to filter down, to narrow down the number of nursing home centers in the U.S.

Speaker Change: And we're going to focus and to see what could be the demand, but you know, even today in almost every clinic in the U.S., there are elderly patients above the age of 68.

Hadar Levy: But, you know, even today, in almost every clinic in the U.S., there are elderly patients above the age of 68 and now they can treat those patients, and they can also get reimbursement to promote this. So I believe all this combination can really lead to some positive growth going forward.

Speaker Change: and now they can treat those patients and they can also get reimbursement and to promote this. So I believe all this combination can really lead to some positive growth going forward.

Raghuram Selvaraju: That's excellent. Thank you. Do you expect to publish, sorry, establish partnerships with any organizations that are similar in purpose and alignment to Katie's Way Plus? If so, in what context and on what timeline?

Speaker Change: That's excellent, thank you. Do you expect to establish partnerships with any organizations that are similar in purpose and alignment to Katie's Way Plus? If so, in what context and on what timeline? And given the achievement of sustained profitability, what are your thoughts about payment of a dividend and or share buybacks?

Raghuram Selvaraju: And given the achievement of sustained profitability, what are your thoughts about payment of the dividend and or share buybacks? And how is the progress on system placements in Israel and South Korea going respectively? And what are those expectations? Okay.

Speaker Change: And how is the progress on system placements in Israel and South Korea going respectively and what are those expectations?

Hadar Levy: Okay, so, yes, I believe that the market should expect some additional news from the company about reporting on some additional partnerships, significant partnerships in the U.S. and internationally, because that's our main focus, that's exactly what we do when we wake up every morning, and we believe that's the best way to promote and grow in terms of the expansion in Israel, so I believe that the demand in Israel continues to grow in the hospital and also in the private market There is very good reimbursement in Israel, and that's probably the main driver for growth in Israel.

Speaker Change: Okay, so, yes, I believe that, you know, I think the market should expect some additional news.

Speaker Change: from the company about reporting on some additional...

Speaker Change: [inaudible]

Speaker Change: In terms of the...

Speaker Change: In terms of the expansion in Israel, I believe that the demand in Israel continues to grow.

Speaker Change: in the hospital and also on the private

Speaker Change: There is a very good reimbursement in Israel and that's probably the main driver for growth in Israel. We also, you know, I believe that in Israel we potentially can also...

Hadar Levy: We also, you know, I believe that in Israel we could potentially treat some other indications, all based on need and reimbursement. So I do project that the Israeli market will continue to grow. And you also mentioned the other distribution channels, like Korea and Taiwan. So, you know, each one of them has a minimum quantity of systems that they need to order from us on a yearly basis. Based on what I'm seeing and the visibility that we see, we remain very, very positive that they will order at least a minimum quantity, if not even more.

Speaker Change: I do project that the Israeli market will continue to grow. And you also mentioned the other distribution channels like Korea and Taiwan.

Speaker Change: So, you know, each one of them have a minimal quantity of system that they need to order from us on a yearly basis.

Speaker Change: Based on what I'm seeing and the visibility that we see, we remain very very positive that they will order at least a minimal quantity, if not even more.

Raghuram Selvaraju: Awesome. Sorry, what are the thoughts on given the achievement of sustained profitability through payment of dividends or share buybacks? And could you also add a little more color to the Canada Agreement, specifically what the increased purchases might look like over time?

Speaker Change: What are the thoughts about the achievement of sustained profitability on payment of dividends or share buybacks? Could you also add a little more color to the Canada Agreement, specifically what the increased purchases might look like over time?

Hadar Levy: Yeah, so the Canadian deal is a multi-year system deal that should generate some, I would say, even significant revenue for the company. As I said, this is a very, very serious distributor with over 35 sales professionals. In terms of the business model, since we don't have, we're not selling direct in Canada, and we're using distributors, we have transfer pricing between Brainsway and the distributor, so, you know, the ASP will be lower. However, I do anticipate that the demand in this market will be significant.

Speaker Change: Yeah, so the Canadian deal is a multi-year system deal.

Speaker Change: that should generate some, I would say, even significant revenue for the company. As I said, this is a very, very serious distributor with over 35 sales professionals.

Speaker Change: In terms of the business model, since we don't have, we're not selling direct in the Canadian and we're using distributor.

Speaker Change: We have a transfer pricing between Brainsway and the distributor, so the ASP will be lower, however I do anticipate that the demand in this market will be significant.

Raghuram Selvaraju: On your question, listen, I think that we are feeling very, very proud of the strong cash balance that is in our hands today. We are exploring all options on the table, so, you know, how can we invest this money back in our business to grow the business? How can we do something significant and interesting to our shareholders? Everything is in very, very preliminary discussion because we haven't been in this situation a year ago.

Speaker Change: On your question, listen, I think that we are feeling very, very proud with the strong cash balance that is in our hand today. We are exploring all options on the table.

Speaker Change: So, what you know, how can we invest this money back in our business to grow the business? How can we do something?

Speaker Change: significant and interesting to our shareholders

Speaker Change: Everything is in very, very preliminary discussion because we haven't been in this situation a year ago.

Raghuram Selvaraju: So I'm lucky that we are in this position today, in a strong position. And I believe that we will make some more updates down the road about the use of the proceeds that we have today on our balance sheet. Awesome. Thank you.

Speaker Change: So I'm lucky that we are in this position today, in a strong position, and I believe that we will make some more updates down the road about the use of proceeds that we have today on our balance sheet.

Raghuram Selvaraju: Awesome. Thank you so much for your answers, and congratulations again on their earnings. Thank you so much.

Speaker Change: Awesome, thank you so much for your answers and congratulations again on the earning. Thank you so much.

Operator: Again, if you have a question, please press star, then 1. This concludes our question and answer session. I would like to turn the conference back over to Hadar Levy, CEO of Brainsway, for any closing remarks. I would like to thank all of the investors.

Speaker Change: Again, if you have a question, please press star then 1.

Speaker Change: This concludes our question and answer session. I would like to turn the conference back over to Hadar Levy, CEO of Brainsway, for any closing remarks.

Hadar Levy: I would like to thank all of the investors, analysts, and other participants for their interest in Brainsway. With that, please enjoy the rest of your day. Thank you.

Hadar Levy: I would like to thank all of the investors, analysts, and other participants of their interest in Brainsway. With that, please enjoy the rest of your day. Thank you.

Operator: The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.

Speaker Change: The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.