Q4 2024 Neuronetics Inc Earnings Call
Okay.
Operator: Good day and thank you for standing by.
Good day, and thank you for standing by welcome to the Neuro networks fourth quarter 2024 financial and operating results conference call. At this time all participants are in a listen only mode. After the speaker's presentation. There will be a question and answer session to ask a question. During the session you will need a press star one on your telephone.
Operator: Welcome to the Neuronetics Fourth Quarter 2024 Financial and Operating Results Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during this session, you will need to press star 11 on your telephone. You will then hear an automated message advising you your hand is raised. To withdraw your question, please press star 11 again.
Speaker Change: The message is ITD be your hand is raised to withdraw your question. Please press star. One again, please be advised that today's conference is being recorded I would now like to hand, the conference over to your speaker today Mark Klossner. Please go ahead.
Operator: Please be advised that today's conference is being recorded.
Mark Klausner: I would now like to hand the conference over to your speaker today, Mark Klausner. Please go ahead.
Mark Klausner: Good morning and thank you for joining us for the Neuronetics fourth quarter 2024 conference call. Joining me on today's call are Neuronetics President and Chief Executive Officer Keith Sullivan and Chief Financial Officer Steve Furlong.
Speaker Change: Good morning, and thank you for joining us for the neuro networks fourth quarter 2024 conference call.
Speaker Change: Joining me on today's call, our neuro networks, President and Chief Executive Officer, Keith Sullivan, and Chief Financial Officer, Steve Furlong.
Mark Klausner: Before we begin, I would like to caution listeners that certain information discussed by management during this conference call will include forward-looking statements covered under the Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995, including statements related to our business, strategy, financial and revenue guidance, the Greenbrook acquisition, and other operational issues and metrics. Actual results can differ materially from those stated or implied by these forward-looking statements due to risks and uncertainties associated with the company's business.
Speaker Change: Before we begin I would like to caution listeners that certain information discussed by management. During this conference call will end.
Speaker Change: Forward looking statements covered under the Safe Harbor provisions of the private Securities Litigation Reform Act of 1995, including statements related to our business strategy financial and revenue guidance, the green brick acquisition and other operational issues and metrics.
Speaker Change: Actual results can differ materially from those stated or implied by these forward looking statements due to risks and uncertainties associated with the company's business.
Mark Klausner: For a discussion of risks and uncertainties associated with Neuronetics business, I encourage you to review the company's filings with the Securities and Exchange Commission, including the company's annual report on Form 10-K, which will be filed later this month.
Speaker Change: For a discussion of risks and uncertainties associated with narrow networks business I encourage you to review the company's filings with the Securities and Exchange Commission, including the company's annual report on Form 10-K, which will be filed later this month.
Mark Klausner: The company disclaims any obligation to update any forward-looking statements made during the course of this call, except as required by law. During the call, we'll also discuss certain information on a non-GAAP basis, including EBITDA. Management believes that non-GAAP financial information taken in conjunction with U.S. GAAP financial measures provide useful information for both management and investors by excluding certain non-cash and other expenses that are not indicative of trends in our operating results. Management uses non-GAAP financial measures to compare our performance relative to forecast and strategic plans to benchmark our performance externally against competitors and for certain compensation decisions.
Speaker Change: The company disclaims any obligation to update any forward looking statements made during the course of this call except as required by law. During the call. We'll also discuss certain information on a non-GAAP basis, including EBITDA.
Speaker Change: Management believes that non-GAAP financial information taken in conjunction with U S. GAAP financial measures provide useful information for both management and investors by excluding certain noncash and other expenses that are not indicative of trends in our operating results.
Speaker Change: Management uses non-GAAP financial measures to compare our performance relative to forecast and strategic plans.
Speaker Change: Benchmark, our performance externally against competitors and for certain compensation decisions.
Mark Klausner: Reconciliations between U.S.
Mark Klausner: GAAP and non-GAAP results are presented in the table accompanying our press release, which can be viewed on our website.
Speaker Change: Reconciliations between U S GAAP and non-GAAP results are presented in the tables accompanying our press release, which can be viewed on our website with that it's my pleasure to turn the call over to <unk>, President and Chief Executive Officer, Keith Sullivan.
Keith Sullivan: With that, it's my pleasure to turn the call over to Neuronetics President and Chief Executive Officer, Keith Sullivan. Thanks for the introduction, Mark. Good morning, everyone, and thank you for joining us today. I'll begin by providing an overview of our recent performance and key accomplishments in 2024.
Keith Sullivan: Thanks for the introduction Mark.
Speaker Change: Everyone and thank you for joining us today.
Speaker Change: Begin by providing an overview of our recent performance and key accomplishments in 2024.
Keith Sullivan: Steve will review our financial results, and I'll conclude with some thoughts on 2025 before turning to Q&A. Let me start with our performance in the quarter, which includes nearly one month of Greenbrook operations. Total revenue was $22.5 million, an increase of 11% over the fourth quarter of 2023. During the quarter, NeuroSTAR system revenue was $3.8 million. with 46 systems shipped. U.S. treatment session revenue was $12.9 million, and U.S. clinic revenue, which represents Greenbrook revenue, was $4.4 million.
Speaker Change: Steve will review, our financial results and I'll conclude with some thoughts on 2025 before turning to Q&A.
Speaker Change: Let me start with our performance in the quarter, which includes nearly one month of Greenberg operations.
Speaker Change: Total revenue was $22 5 million, an increase of 11% over the fourth quarter of 2023.
Speaker Change: During the quarter Neurostar system revenue was $3 8 million.
Speaker Change: With 46 systems shipped.
Speaker Change: U S treatment session revenue was $12 9 million and U S clinic revenue, which represents Greenberg revenue was $4 4 million.
Keith Sullivan: reflecting a solid quarter for the company and continued positive momentum.
Speaker Change: Reflecting a solid quarter for the company and continued positive momentum.
Keith Sullivan: 2024 was truly a transformative year for Neuronetics, marked by a number of significant achievements, which include number one, transforming our business to become a vertically integrated mental health care provider through the acquisition of Greenbrook TMS. Second, significantly expanding our Better Me Provider Program based on its tremendous success. Third, securing an FDA clearance for the NeuroSTAR system to treat adolescent patients, making NeuroSTAR the first and only TMS option available to treat this underserved patient population. Fourth, refinancing our debt facility to provide more financial flexibility and strength to our balance sheet. And fifth, although a 2025 event, we further strengthened our balance sheet to support our growth trajectory with our recent $18.9 million capital raise.
Speaker Change: 2024 was truly a transformative year for neuro networks marked by a number of significant achievements, which include number one transforming our business to become a vertically integrated mental health care provider through the acquisition of Green Brook Tms.
Speaker Change: Second significantly expanding our better meet provider program based on its tremendous success.
Speaker Change: Third securing an FDA clearance for the Neurostar system.
Speaker Change: <unk> adolescent patients, making neurostar, the first and only Tms option available to treat this underserved patient population.
Speaker Change: For refinancing our debt facility to provide more financial flexibility and strength to our balance sheet and fifth although a 2025 event. We further strengthened our balance sheet to support our growth trajectory with our recent $18 9 million in capital.
Speaker Change: Right.
Keith Sullivan: Steve and I will be discussing each of these achievements during our prepared remarks today.
Speaker Change: Steve and I will be discussing each of these achievements during our prepared remarks today.
Keith Sullivan: I'd like to begin by reviewing the success of the BMP program. This program is establishing a nationwide network of accounts that follow patient care and responsiveness standards that were developed in collaboration with expert TMS clinicians aimed at delivering timely and consistent care to those who need it most. The program was piloted within a select group of customer sites in 2023 and the first half of 2024. Based on the success of the pilot, we began the process of a nationwide rollout in July of 2024, expanding participation to over 350 sites. Demand to participate in the BMP program remains strong.
Speaker Change: I'd like to begin by reviewing the success of the BMP program. This program is establishing a nationwide network of account that follow patient care and responsiveness standards that were developed in collaboration with expert Tms clinicians aimed at delivering timely and consistent care to those.
Speaker Change: Who need it most the program was piloted within the select group of customer sites in 2023, and the first half of 2024.
Speaker Change: Based on the success of the pilot we began the process of a nationwide rollout in July of 2024, expanding participation to over 350 sites.
Speaker Change: Demand to participate in the BMP program remains strong there.
Keith Sullivan: There are currently more than 125 additional sites committed to the program that are actively working to achieve the five standards prior to the next enrollment date of April 15th, 2025. Through a combination of an increased number of training classes through Neurostar University and enforced adherence to our best practices, this program has been a massive success. When practices begin to implement the program standards, their patient volume, on average, increases by 36%. simply by providing a timely response to patients by a staff member that have the knowledge to educate patients about the benefits of the NeuroSTAR therapy.
Speaker Change: There are currently more than 125 additional sites committed to the program.
Speaker Change: We're actively working to achieve the <unk> standards prior to the next enrollment date of April 15, 2025 through a combination of an increased number of training classes through Neurostar University.
Speaker Change: Ending forced adherence to our best practices. This program has been a massive success.
Speaker Change: When practices begin to implement the program standards their patient volume on average increases by 36%.
Speaker Change: Simply by providing a timely response to patients by a staff member that have the knowledge to educate patients about the benefits of the Neurostar therapy.
Keith Sullivan: Once practices are fully in the BMP program, they are treating three times more patients per site, per quarter, than practices who are not in the program. On average, these sites went from treating three patients per quarter to over 10 patients per quarter. In addition, customer sites who participate in the BMP program are addressing patients in need materially faster. roughly 2.2 times faster when comparing results of 2024 versus 2023. The outcomes demonstrated by BMP validate the benefits of our model for teaching practices how to better serve their patients with NeuroSTAR.
Speaker Change: Once practices are fully in the BMP program. They are treating three times more patients per site per quarter than practices, who are not in the program.
Speaker Change: On average these sites went from treating three patients per quarter.
Speaker Change: Two over 10 patients per quarter.
Speaker Change: In addition customer site to participate in the BMP program are addressing patients in need materially faster.
Speaker Change: Our fleet to two times faster when comparing results of 2024 versus 2023.
Speaker Change: The outcomes demonstrated by BNP validate the benefits of our model for teaching practices.
Speaker Change: Better serve their patients with Neurostar. Another milestone achieved during 2024 was our acquisition of Green Brook Pms.
Keith Sullivan: Another milestone achieved during 2024 was our acquisition of Greenbrook TMS. As our largest customer for many years, we intimately understood their business and saw a unique opportunity to combine two leading TMS companies, creating an organization with the scale and expertise to revolutionize mental health care in the US. This combination makes Neuronetics a leading TMS supplier and provider in the United States. By combining our innovative technology platform, proven training process, and the BMP program with Greenbrook's established treatment center network, we are positioned to expand patient access to life-saving mental health treatment. while improving our growth and financial position.
Speaker Change: As our largest customer for many years, we intimately understood their business and saw a unique opportunity to combine two leading Tms companies, creating an organization with the scale and expertise to revolutionize mental health care in the U S.
Speaker Change: This combination makes neuro networks, a leading tms supplier and provider in the United States.
By combining our innovative technology platform proven training process and the BMP program with Green Brooks established treatment Center network, we are positioned to expand patient access to lifesaving mental health treatments.
Speaker Change: While improving our growth and financial position.
Keith Sullivan: Our integrated network now serves a broader patient population while maintaining exceptional care standards across markets. An exciting acquisition benefit is our ability to implement BMP lessons across the entire Greenbrook network. We have a clear roadmap to enhance operational efficiency and patient care by implementing BMP's comprehensive standards and workflows at Greenbrook's existing site. We view these implementations, along with a number of other Green Brook commercial initiatives, as key growth drivers for 2025. Beyond growth opportunities, we have identified significant cost synergies across both organizations. By the end of 2024, we captured over 90% of the identified $22 million in annualized cost synergies, surpassing initial targets.
Speaker Change: Our integrated network now serves a broader patient population, while maintaining exceptional care standards across markets.
Speaker Change: An exciting acquisition benefit is our ability to implement BMP lessons across the entire green brick network.
Speaker Change: We have a clear roadmap to enhance operational efficiency and patient care by implementing bmp's comprehensive standards and workflows at green bricks existing sites.
Speaker Change: We view these implementations along with a number of other Green Brook commercial initiatives as key growth drivers for 2025.
Speaker Change: Beyond growth opportunities, we have identified significant cost synergies across both organizations by the end of 2024, we captured over 90% of the identified $22 million in annualized cost synergies surpassing initial targets.
Keith Sullivan: Combined with ongoing cost structure optimization, these synergies will create a more efficient organization and give us confidence in becoming cash flow positive in the third quarter of 2025.
Speaker Change: Combined with ongoing cost structure optimization. These synergies will create a more efficient organization and give us confidence and becoming cash flow positive in the third quarter of 2025.
Keith Sullivan: Further strengthening our market position in March of 2024, NeuroStar received FDA clearance as the first and only TMS treatment approved as a first line therapy for depression in adolescents age 15 to 21. Real-world data showed 78% of adolescent patients achieve clinically meaningful improvement. This milestone expands our total addressable market for major depressive disorders. We have quickly gained traction with wins in adolescent insurance coverage, making it easier for adolescents to qualify for treatment. Treatment sessions volume ramped up throughout 2024, yielding 10% growth in new patient starts versus 2023. Since clearance, we have seen an 18% increase in customer sites treating adolescent patients.
Speaker Change: Further strengthening our market position in March of 2020 for Neurostar received FDA clearance as the first and only Tms treatment approved as a first line therapy for depression in adolescents, aged 15% to 21.
Speaker Change: Real World data showed 78% of adolescent patients achieved clinically meaningful improvement.
Speaker Change: Milestone expands our total addressable market for major depressive disorder.
Speaker Change: We have quickly gained traction with wins in adolescent insurance coverage, making it easier for adolescents to qualify for treatment.
Speaker Change: <unk> session volume ramped up throughout 2024, yielding 10% growth in new patient starts versus 2023.
Speaker Change: Since clearance, we have seen an 18% increase in customer sites treating adolescent patients, which now includes more than half of our customer base.
Keith Sullivan: which now includes more than half of our customer base. The increase in insurance coverage positions us for continued growth in this segment through 2025.
Speaker Change: The increase in insurance coverage positions us for continued growth in this segment through 2025.
Keith Sullivan: 2024 was about building a stronger, more integrated neuronetic. through our successful Better Me Provider Program. Expanding our market opportunity with the Adolescent Clearance and the Strategic Greenbrook Acquisition, we have created multiple growth drivers that work in tandem while at the same time strengthening our balance sheet.
Speaker Change: 2024 was about building a stronger more integrated narrow networks.
Speaker Change: Through our successful better meet provider program, expanding our market opportunity with the adolescent clearance and the strategic Greenberg acquisition, we have created multiple growth drivers that work in tandem while at the same time strengthening our balance sheet.
Keith Sullivan: These factors position us for accelerated, sustainable, and profitable expansion in 2025.
Speaker Change: These factors position us for accelerated sustainable and profitable expansion in 2025.
Stephen Furlong: I'll now turn the call over to Steve to review the financial results. Thank you, Keith. Unless otherwise noted, all performance comparisons are being made for the fourth quarter of 2024 versus the fourth quarter of 2023. Total revenue was $22.5 million, an increase of 11% over prior year revenue of $20.3 million. U.S. Neurostar advanced therapy system revenue was $3.8 million, and we shipped 46 systems in the quarter. U.S. treatment session revenue was $12.9 million. A decrease of 14% year-over-year, primarily due to the removal of Greenbrook treatment session revenues from this revenue line subsequent to the acquisition's close.
Steve Furlong: I'll now turn the call over to Steve to review the financial results.
Steve Furlong: Thank you Keith.
Steve Furlong: Otherwise noted outperformance comparisons are being made for the fourth quarter of 2024 versus the fourth quarter of 2023.
Steve Furlong: Total revenue was $22 5 million, an increase of 11% over prior year revenue of $23 million.
Steve Furlong: U S. Neurostar advanced therapy system revenue was $3 8 million and we shipped 46 systems in the quarter.
Steve Furlong: U S treatment session revenue was $12 $9 million.
Steve Furlong: A decrease of 14% year over year, primarily due to the removal of Greenburgh treatment session revenues from this revenue line subsequent to the acquisition close.
Stephen Furlong: U.S. clinic revenue at $4.4 million, representing Greenberg's revenues subsequent to the acquisition. Gross margin was 66.2% compared to 77.6% in the prior year quarter, down 1140 basis points from the prior year. The decrease in gross margin was primarily a result of the inclusion of the Greenberg Clinic Operating expenses during the quarter were $25.8 million, an increase of $5.6 million, or 28%, compared to $20.2 million in the fourth quarter of 2023. The increase was mainly attributable to professional fees incurred on acquisition and the inclusion of Greenbrook's expenses subsequent to the acquisition. During the quarter, we incurred approximately $1.3 million of non-cash, stock-based compensation expense.
Steve Furlong: U S clinic revenue at $4 $4 million representing.
Steve Furlong: Representing greenberg's revenues subsequent to the acquisition.
Steve Furlong: Gross margin was 66, 2% compared to 77, 6% in the prior year quarter.
Steve Furlong: <unk> 1140 basis points from the prior year the.
Steve Furlong: The decrease in gross margin was primarily a result of the inclusion of the Greenberg clinics business.
Steve Furlong: Operating expenses during the quarter were $25 8 million and.
Steve Furlong: An increase of $5 $6 million or 28% compared to $22 million in the fourth quarter of 2023.
Steve Furlong: The increase was mainly attributable to professional fees incurred on acquisition and the inclusion of green bricks expenses subsequent to the acquisition.
Steve Furlong: During the quarter, we incurred approximately $1 3 million of noncash stock based compensation expense.
Stephen Furlong: Net loss for the fourth quarter was $12.1 million, or $0.33 per share, as compared to a net loss of $5.4 million, or $0.19 per share in the prior year quarter. EBITDA was negative $10.5 million as compared to negative $3 million in the prior year quarter. EBITDA in the fourth quarter includes approximately $10.6 million in non-recurring expenses. Most of these expenses were associated with the close of the Greenbrook acquisition. Excluding these expenses, EBITDA would have been positive $0.1 million for the quarter. As of December 31st, 2024, cash and cash equivalents were $18.5 million. This compares to cash and cash equivalents of $59.7 million as of December 31, 2023.
Steve Furlong: Net loss for the fourth quarter was $12 1 million or.
Steve Furlong: <unk> 33 per share as compared to a net loss of $5 $4 million or.
Steve Furlong: <unk> 19 per share in the prior year quarter.
Steve Furlong: EBITDA was negative $10 5 million as compared to negative $3 million in the prior year quarter.
Steve Furlong: EBITDA in the fourth quarter includes approximately $10 6 million and nonrecurring expenses.
Steve Furlong: Most of these expenses were associated with the close of the Greenberg acquisition.
Steve Furlong: Excluding these expenses EBITDA would have been positive $1 million for the quarter.
Steve Furlong: As of December 31, 2024, cash and cash equivalents were $18 5 million.
Steve Furlong: This compares to cash and cash equivalents of $59 7 million as of December 31, 2023.
Stephen Furlong: In July, we secured a debt facility of up to $90 million with perceptive advice. 50 million of which we accessed in July to fully repay our SLR Capital Partners term loan. and $10 million of which we accessed in December to further support our combined enterprises operation. After the end of the year, we successfully completed the public offering, raising $18.9 million in net proceeds. Strengthening our balance sheet and providing additional flexibility to execute on our growth strategy. This financing gives us incremental flexibility, allowing us to potentially accelerate high-return initiatives, like our Buy and Build Program for Spravato, expand our Better Me Provider Program implementation, and Enhance Our Market Analytics Capabilities.
Steve Furlong: In July we secured a debt facility of up to $90 million with perceptive advisors 50.
Steve Furlong: $50 million of which we accessed in July to fully repay our SLR capital partners term loan and.
Steve Furlong: And $10 million of which we accessed in December to further support our combined enterprises operations after.
Steve Furlong: After the end of the year, we successfully completed a public offering raising $818 9 million in net proceeds strengthening our balance sheet and providing additional flexibility to execute on our growth strategy.
Steve Furlong: This financing gives us incremental flexibility, allowing us to potentially accelerate high return initiatives like our buy and Bill program for us to provide though expand our better me provider program implementation.
Steve Furlong: And enhance our market analytics capabilities.
Stephen Furlong: This additional capital positions us to pursue these value-creating programs while maintaining both a strong balance sheet and cash flow break-even in the third quarter of 2025.
Steve Furlong: This additional capital positions us to pursue these value creating programs, while maintaining both a strong balance sheet and cash flow breakeven in the third quarter of 2025.
Stephen Furlong: Now turning to guide For the first quarter, we expect revenue of $28 million to $30 million.
Steve Furlong: Now turning to guidance.
Steve Furlong: But the first quarter, we expect revenue of $28 million to $30 million.
Stephen Furlong: We expect full year revenue in the range of $145 million to $155 million. This compares to pro forma combined revenue of $129.8 million in 2024. for the full year 2025. We expect gross margin to be approximately 55% as a result of the inclusion of the Greenbrook Clinic business.
Steve Furlong: We expect full year revenue in the range of 145 million to $155 million.
Steve Furlong: This compares to pro forma combined revenue of $129 $8 million in 2024.
Steve Furlong: For the full year 2025.
Steve Furlong: We expect gross margin to be approximately 55%.
Steve Furlong: As a result of the inclusion of the Green Brook clinic business.
Stephen Furlong: We expect total operating expenses for the full year to be in the range of $90 million to $98 million.
Steve Furlong: We expect total operating expenses for the full year to be in the range of $90 million.
Steve Furlong: To $98 million.
Stephen Furlong: Regarding change healthcare, the disruptions experienced throughout 2024 are largely behind us. We have successfully implemented alternative processing solutions and restored normal operations. While this created some headwinds in 2024, we do not anticipate any material impact on our revenue in 2025, positioning us well for efficient processing going forward.
Steve Furlong: Regarding change healthcare the disruptions experienced throughout 2024 are largely behind us.
Steve Furlong: We have successfully implemented alternative processing solutions and restored normal operations. While this created some headwinds in 2024, we do not anticipate any material impact on our revenue in 2025.
Steve Furlong: Additionally, as well for efficient processing going forward.
Keith Sullivan: I would now like to turn the call back over to Keith.
Keith Sullivan: I would now like to turn the call back over to Keith.
Keith Sullivan: Thanks, Steve. Let me leave you with some key thoughts on our path forward. As we enter 2025, we have two clear strategic priorities that will drive our growth. First, We are focused on rapidly scaling our Better Me provider program across our customer base. The program's proven success in driving patient throughput represents a significant opportunity for all our qualifying customers. We plan to implement these comprehensive practice standards and accountability measures across both our existing customers and Greenbrook sites, aiming for similar performance improvements throughout our entire network. We have two action items for 2025 for the BMP program.
Keith Sullivan: Thanks, Steve.
Keith Sullivan: Let me leave you with some key thoughts on our path forward as we enter 2025, we have two clear strategic priorities that will drive our growth.
Keith Sullivan: First we are focused on rapidly scaling our better me provider program across our customer base.
Keith Sullivan: The program has proven success in driving patient throughput represents a significant opportunity for all of our qualifying customers.
Keith Sullivan: We plan to implement these comprehensive practice standards and accountability measures across both our existing customers and Green Brook sites aiming for similar performance improvements throughout our entire network.
Keith Sullivan: We have two action items for 2025 for the BMT program.
Keith Sullivan: First, we have directed our Practice Development Manager team towards increasing the number of BMP accounts. We currently have 350 sites in the program. Another 127 locations are working to enter it. On an average, each of these new sites needs to meet an additional two standards to qualify. By year end, we expect to have over 500 sites in the program, or nearly half of our customer base. We will focus training and marketing on these sites to help patients searching for non-drug alternative for their depression find our providers. Second, our capital team will focus on selling additional systems to our BMP sites as those sites grow and need more capacity.
Keith Sullivan: We have directed our practice development manager team towards increasing the number of BNP accounts.
Keith Sullivan: We currently have 350 sites in the program.
Keith Sullivan: 127 locations are working to enter it.
Keith Sullivan: On average each of these new sites needs to meet an additional two standards to qualify.
Keith Sullivan: By year end, we expect to have over 500 sites in the program or.
Keith Sullivan: Nearly half of our customer base, we will focus training and marketing on these sites to help patient searching for non drug alternative for their depression.
Keith Sullivan: Find our providers.
Keith Sullivan: Second our capital team will focus on selling additional systems to our BMP sites as those sites grow and need more capacity.
Keith Sullivan: In addition to our BMP program, we are executing our Greenbrook growth strategy with a focus on revenue capture. We have identified several opportunities to drive growth over the next several years. I'll focus on three. First, we are optimizing our regional account manager team. In mid-November, we held a training session for this team at Neurostar University. where we rolled out new messaging to educate potential referring physicians on the benefits Greenbrook can offer their patients who have failed multiple antidepressants. We have created an automated patient transfer process combining educational tools, QR codes, our intake team, and TMS and Spravato coordinators.
Keith Sullivan: In addition to our BMP program, we are executing our Green Brook growth strategy with a focus on revenue capture.
Keith Sullivan: We have identified several opportunities to drive growth over the next several years I'll focus on three <unk>.
Keith Sullivan: First we are optimizing our regional account manager team in mid November we held a training session for this team at Neurostar University.
Keith Sullivan: Where we rolled out new messaging to educate potential referring physicians on the benefits Green Brook can offer their patients who have failed multiple anti depressants.
Keith Sullivan: We have created an automated patient transfer process, combining educational tools QR codes are intake team and Tms since provider coordinators. This allows us to connect with patients while they are still at their physician's office rather than <unk>.
Keith Sullivan: This allows us to connect with patients while they are still at their physician's office, rather than requiring a follow-up contact. It is now a seamless and simple process. Second, we are nearly 40% through this bravado buy and bill rollout of our clinic. From just seven locations in December, we now have over 35 clinics utilizing this billing method, which provides access to more payers and improves revenue threefold over the administer and observe method of billing. We will offer buy and bills bravado in most Greenbrook clinics by the end of 2025.
Keith Sullivan: Hiring a follow up contact.
Keith Sullivan: It is now a seamless and simple process.
Keith Sullivan: Second we are nearly 40% through the <unk> buy and bill rollout of our clinics.
From just seven locations in December we now have over 35 clinics utilizing this billing method, which provides access to more payers and improves revenue threefold over the administer an observed method of billing.
Keith Sullivan: We will offer buy and bill to provide out in most green Brook clinics by the end of 2025.
Keith Sullivan: Finally, we are standardizing operations at Greenbrook across all 95 clinics. We have placed patient coordinators who educate the patients on the benefits of TMS and Spravato back in most clinics for in-person consultation. Knowing patients feel more comfortable when they can see and experience our center. We will continue to train to provide a consistent patient experience across all Greenbrook locations. With our combined 550-plus clinics across 49 states by year-end, which is comprised of 95 Greenbrook clinics and our anticipated over 500 BMP practices. We will have a network of clinics that will provide exceptional care with a wide geographic coverage.
Keith Sullivan: Finally, we are standardizing operations at Green Brook across all 95 clinics, we have placed patient coordinators, who educate the patients on the benefits of Tms and provider backend most clinics for in person consultations.
Keith Sullivan: Knowing patients feel more comfortable when they can see and experience our centers.
Keith Sullivan: We will continue to train to provide a consistent patient experience across all Green Brook locations.
With our combined 550, plus clinics across 49 states by year end, which is comprised of 95 Greenberg clinics and our anticipated over 500 bmp's practices.
Keith Sullivan: We will have a network of clinics that will provide exceptional care with a wide geographic coverage.
Keith Sullivan: The broad geographic coverage, in-depth market analytics, and combined QR code deployment have already improved patient referral process, reducing referral to treatment time by approximately 40%.
Keith Sullivan: Broad geographic coverage in depth market analytics, and combined QR code deployment have already improved patient referral process, reducing referral to treatment time.
Keith Sullivan: Approximately 40%.
Keith Sullivan: From a profitability perspective, we have a clear path to being cash flow positive in the third quarter of this year. Our enhanced scale, proven practice optimization program, and strengthened balance sheet gives us confidence that we will build sustainable, long-term value for our shareholders. We look forward to updating you on the progress in the coming quarters. as we work to transform our business and patient care.
Keith Sullivan: From a profitability perspective, we have a clear path to being cash flow positive in the third quarter of this year.
Keith Sullivan: Our enhanced scale proven practice optimization program and strengthened balance sheet gives us confidence that we will build sustainable long term value for our shareholders. We look forward to updating you on the progress in the coming quarters.
Keith Sullivan: As we work to transform our business and patient care.
Operator: With that, I'd like to open the line for questions. Thank you. As a reminder, to ask a question at this time, please press star 11 on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again. One moment while we compile our Q&A roster.
Keith Sullivan: With that I'd like to open the line for questions.
Speaker Change: Thank you as a reminder to ask a question at this time. Please press star one on your telephone and wait for your name to be announced to withdraw. Your question. Please press star one again, one moment, while we compile our Q&A roster.
William Plovanic: And our first question is going to come from the line of William Plovanic with Canaccord Genuity. Your line is open. Please go ahead. Great, thanks. Good morning and thanks for taking my questions. I just want to start out with just on Green Brook. You know, it's been about 80 days now, I think, since the merger. You know, you talk about implementing the BMP and standardizing. Where are you, and you say by year end, but you're already three months into this.
Speaker Change: And our first question is going to come from the line of William <unk> with Canaccord Genuity. Your line is open. Please go ahead great.
William: Great. Thanks, Good morning, and thanks for taking my questions.
Speaker Change: Wanted to start out with just kind of Green Brook.
Speaker Change: Spent about 80 days now I think since the merger you talked about implementing the BMP and standardizing.
Speaker Change: Where are you in your say by year end, but you're already three months into this number one.
Keith Sullivan: Number one, how much longer before at least all the basics are in place and implemented? And then number two, kind of what have you seen in terms of standardization in those sites and kind of the return on that in terms of patient flow and what have you?
Speaker Change: Much longer before at least all the basics are in place and implemented and then number two kind of what have you seen in terms of standardization in those in those sites and kind of the return on that in terms of patient flow and what have you.
Keith Sullivan: Good morning, Bill. This is Keith. We have conducted training on, as we've mentioned in the script, for the RAMS. We've also had several trainings for the technicians that are in the clinics.
Keith Sullivan: Good morning, Bill this is Keith.
Keith Sullivan: We have conducted.
Keith Sullivan: Training on as we've mentioned in the script.
Keith Sullivan: The Rams. We've also had several trainings for the technicians that are in the clinics and we have done Dr Grammar has done.
Keith Sullivan: And we have done, Dr. Gramer has done education of the providers. So we are, we see the changes as continuing on throughout the year. And as we identify opportunities to improve the efficiencies, we will continue to conduct these trainings. They've all been virtual, with the exception of the RAMS. So it's really an easy system for us to implement, so.
Keith Sullivan: <unk> of the providers. So we are.
Keith Sullivan: See the <unk>.
Keith Sullivan: Changes as continuing on throughout the year.
Keith Sullivan: And as we identify opportunities to improve the efficiencies. We will continue to conduct. These these trading because they've all been virtual with the exception of the Rams. So it's really easy system for us too.
Keith Sullivan: Implement so.
Stephen Furlong: Okay, and then for Steve, you know, in terms of the guidance, first on revenue, you know, the 145 to 155, just, you know, what kind of, how are you looking at that? How much of this needs to work to hit those numbers? Like, what's the spread between the low end and the high end and kind of what works or what yields you need to see off a lot of these programs to get there? And, you know, is there upside if this is done earlier or better than expected?
Steve Furlong: Okay, and then for Steve in terms of the guidance first on revenue.
Steve Furlong: The $1 45 to $1 55.
Steve Furlong: What.
Steve Furlong: How are you looking at that how much of this needs to work to hit those numbers like what's the spread between the low end and the high end and kind of what works or what yields you need to see a pull out of these programs to get there and is there upside. If this is done earlier or better than expected and then on the opex.
Stephen Furlong: And then on the OPEX side, just if I use the 6.6 million in one-time charges in the fourth quarter on the OPEX you had, you know, that gets me to 19 and change, or maybe an 80 million run rate versus the guy to 90 to 98, just wondering where the investments are going there, that incremental amount.
Steve Furlong: Side, just if I used the $6 6 million in one time charges in the fourth quarter on the Opex you had that gets me to 19 and change or maybe an $80 million run rate versus the guide to 90 to 98, just wondering where the investments are going there that incremental amount. Thanks.
Stephen Furlong: Thanks. Hi Bill, Steve, I think the best way to look at the guidance range of 145 to 155 is You know, $65 to $70 million is earmarked from stand-alone Neuronetics with $80 to $85. being earmarked from Greenbrook TMS. In terms of variables within those numbers, You know, I would say we don't have to be heroic to hit those numbers, but the programs that we're putting in place, you know, do need to continue to work. So, you know, we are forecasting growth on the neuronetic side, primarily driven by the continued success of our BMP program. And on the Greenberg side, you know, it's really the three growth drivers that we discussed.
Speaker Change: Hey, Bill Steve I think the best way to look at the guidance range of 145 to 155 is.
Speaker Change: $65 million to $70 million.
Speaker Change: Earmark from Standalone narrow networks with 80% to 85.
Speaker Change: Being earmarked from Greenberg Tms in terms of variables within those numbers.
Speaker Change: Yes.
Speaker Change: I'd say, we don't have to be heroic to hit those numbers, but the programs that we're putting in place do need to continue to work. So we are forecasting growth on the <unk> side, primarily driven by the continued success of our BMP program.
Speaker Change: And on the Greenberg side, it's really the three growth drivers that we discussed.
Stephen Furlong: It's improving utilization in the NeuroSTAR chairs within the Greenberg clinics. It's the continued rollout of Spravato to as many clinics as it makes sense. Obviously, some clinics don't have the population to support Spravato. And then the conversion from administer and observe to buy and build. And so, you know, we do have plans for all four of those initiatives throughout 2025. And they all, they are all considered as part of our guidance.
Speaker Change: Improving.
Speaker Change: Utilization in the Neurostar chairs within the Green book clinics.
Speaker Change: The continued rollout I will provide out to as many clinics as it makes sense.
Speaker Change: Obviously, some clinics don't have the population to support provide though.
Speaker Change: The conversion from administering observed to buy and bill and so we do have plans for all four of those initiatives throughout 2025.
Speaker Change: They all they are all considered.
Speaker Change: As part of our guidance.
Stephen Furlong: In terms of op-ec... You know, the one-time charges in Q4 were actually closer to $10 million. We did have a $4 million software capitalization impairment charge. You know, if I look at our OPEX, normalized, it was close to $75 or so million. But then when I factor in Greenberg's operating expenses, which are primarily their corporate expenses to support the individual clinics, you know, I do come up really with a starting point around $108 million entering into 2025. And that is without the synergies that we have identified. If you look at the $90 to $98 million guidance, it's a midpoint of $94 million.
Speaker Change: In terms of Opex.
Speaker Change: The the onetime charges in Q4 were actually closer to $10 million, we did have a $4 million software capitalization and.
Impairment charge.
Speaker Change: If I look at our Opex normalized it was close to 75 or so million.
Speaker Change: But then when I factor in Greenburg.
Speaker Change: Operating expenses, which are primarily their core.
Speaker Change: <unk> expenses to support the individual clinics.
Speaker Change: I do come up.
Speaker Change: Really what the starting point around $108 million.
Speaker Change: Entering into 2025 and that is.
Speaker Change: Without the synergies that we have identified.
Speaker Change: If you look at the 90% to $98 million guidance at the midpoint of <unk> 94, and so that would imply.
Stephen Furlong: So that would imply somewhere between $13 and $15 million of cost synergies on the operating expense side, which is what we're forecasting. And as a reminder, greater than 90 percent of those cost savings have already been realized as we enter 2025, so there's no risk in that number at this point.
Speaker Change: And we're between 13 and $15 million of cost synergies on the operating expense side.
Speaker Change: Which is what we're forecasting.
Speaker Change: As a reminder, greater than 90% of those cost savings have already been realized.
Speaker Change: As we enter 2025, so there is no risk in that number at this point.
William Plovanic: Thanks for taking my question.
Speaker Change: Thanks for taking my questions.
Bill Steve: Thanks Bill.
Operator: Thank you and one moment as we move on to our next question. Our next question comes from the line of Max Krasinski, Wills William Blair. Your line is open, please go ahead. Hey, good morning, guys.
Bill Steve: Thank you and one moment as we move on to our next question.
Bill Steve: Our next question comes from the line of Matt Chris <unk> with William Blair. Your line is open. Please go ahead.
Speaker Change: Hey, good morning, guys. It's Max on for Margaret I was just hoping you guys could touch on the margin profile of the Green book a little bit.
Max Krasinski: It's Naxon from Margaret. I was just hoping you guys could touch on the margin profile of the Green Book a little bit. You know, Core, Neurostar, gross margin floated around 75% in the past, and now with the guy down to 55% in 2025. Can you guys just speak to any levers you can pull, whether it be in 2025 or beyond to, you know, maybe help improve the margin profile a bit? Thanks. This question, Max, yes, so there's definitely opportunities for improvement, and so when we look at margins, you know, again, consolidated neuronetic margins. We're about 77 percent, you know, are operating and manufacturing teams have been able to take out costs out of the Neurostar for the past couple of years, and the margins on Neurostar are actually approaching about 60%.
Speaker Change: Court Neurostar gross margin floated around 75% in the past and now with the guide down to 55% in 2025 can you guys just speak to any levers you can pull whether it be in 2025 or beyond to maybe help.
Speaker Change: Improve the margin profile, but thanks.
Max: Good question Max.
Speaker Change: Yes, so there is definitely.
Speaker Change: Opportunities for improvement and so when we look at margins again consolidated narrow networks margins.
Speaker Change: 77%.
Speaker Change: Our operating and.
Speaker Change: Hi.
Speaker Change: Manufacturing teams have been able to take out costs out of the neurostar for the past couple of years.
Speaker Change: And the margins on Neurostar are actually approaching about 60%.
Stephen Furlong: On the treatment session side, you know, again, it's really just a computer code, but there are some ancillary items that accompany the treatment sessions, and so, you know, their net margin is about 97.5%. To your point, you know, the Clinic margins during 2024 for Greenbrook were in the 27 and 28 percent range. The implied guidance for 2025 is actually to have those margins improve to the mid-30s, so 35%. And the primary driver of that were the elimination of 35 clinics during 2024, and they were the most underperforming clinics, which were dragging down the margins. And so if I look at my 77% and their 35% margins, that's how we get to the 55% consolidated.
Speaker Change: On the treatment sessions side.
Speaker Change: It's really just the computer code, but there are some ancillary items at the company.
Speaker Change: The treatment sessions and so their net margins about 97, 5%.
Speaker Change: To your point.
Speaker Change: <unk>.
Speaker Change: Clinic margins.
Speaker Change: During 2024 for green broker in the 27% 28% range.
Speaker Change: The implied guidance for 2025 is actually they have those margins improve to the mid thirty's.
Speaker Change: 35% and the primary driver of that.
Speaker Change: The elimination of 35 clinics during 2024 and they were the most underperforming clinics.
Speaker Change: We're dragging down the margins.
Speaker Change: And so if I look at my 77% and there are 35% margins, that's how we get to the 55% consolidated.
Stephen Furlong: And we will continue to work on both sides to improve our Neurostar margins as well as the clinic margins as we work through 25. That's helpful.
Speaker Change: And we will continue to work on both sides.
Speaker Change: To improve our neurostar margins as well as the clinic margins as we worked through 'twenty five.
Max Krasinski: Thanks.
Speaker Change: That's helpful. Thanks, and then just on Green Brook would it be fair to say that the 95 accounts you guys are at now are your most productive accounts.
Max Krasinski: And then just on Greenbrook, would it be fair to say that, you know, the 95 accounts you guys are in now are your most productive accounts? And, you know, if not, you know, what percentage of these accounts would you say are the most productive? And do you have any plans to bring this number down further?
Speaker Change: What percentage of these accounts would you say are the most productive.
Speaker Change: And do you have any plans to bring this number down further.
Stephen Furlong: And then just a quick follow up to that is how many of those accounts is Spravato currently in? That's it for me. Thanks for taking the questions. Currently, we are at 95 clinics, and our plan is to stay there. They are the most profitable clinics that Greenbrook had, and we have looked at each one of those to see if we can make an impact on them and grow them this year. So, we're very comfortable at 95 clinics, and we don't have a plan to expand. We're going to focus on the ones that we currently have.
Speaker Change: And then just a quick follow up to that is how many of those accounts is to provide all currently and.
Speaker Change: That's it for me thanks for taking the questions.
Matt Chris: Hey, Matt.
Speaker Change: Currently we are at 95 clinics and our plan is to stay there. They are the most profitable clinics that Greenberg cat.
Matt Chris: And we have.
Matt Chris: Looked at each one of those to see if we can make an impact on them and grow them. This year. So.
Matt Chris: We're very comfortable at 95.
Clinics, and we don't have a plan to expand we're going to focus on the ones that we currently have.
Matt Chris: Its provider.
Stephen Furlong: For Spravato, we have 63 of our clinics that are offering Spravato, and today we have 35 of those that are capable of offering buy and fill.
Matt Chris: In <unk>.
Matt Chris: First provider, we have 63 of our clinics that are offerings per bottle and today.
Matt Chris: We have 35 of those that are capable of offering by bill.
Adam Maeder: Thank you and one moment as we move on to the next question. And our next question comes in the line of Adam Maeder with Piper Sandler. Your line is open. Please go ahead. Hi, good morning, Keith and Steve. Thanks for taking the questions and congrats on the deal.
Thank you and one moment as we move on to the next question.
Speaker Change: And our next question comes from the line of Adam <unk> with Piper Sandler. Your line is open. Please go ahead.
Adam: Hi, Good morning, Keith and Steve Thanks for taking the questions and congrats on the deal.
Adam Maeder: Maybe you want to start on the guidance. I just want to better understand quarterly sequencing of revenue on the top line. You know, I think the Q1 guide is $28 to $30 million. That's a pretty healthy ramp throughout the year that's kind of, you know, embedded there and certainly realize part of that's, you know, seasonality, but just wanted to double click on the Q1 framework and, you know, how you see the rest of the year playing out and just the level of confidence in achieving that full year outlook and that follow-up. Thanks. Thanks, Adam. Greenberg experiences the same type of seasonality that Neuronetics has, again, primarily driven by the reset of the insurance plans and also the reset of patient deductibles.
Speaker Change: Maybe wanted to start on the guidance.
Speaker Change: Wanted to better understand quarterly sequencing of revenue on the topline.
Speaker Change: I think the Q1 guide is 20% to $30 million, that's a pretty healthy ramp throughout the year, that's kind of embedded there and certainly realized part of that's seasonality, but just wanted to double click on the Q1 framework and how you see the rest of the year playing out and just the level of confidence in achieving that that full year outlook and then I'll follow up thanks.
Speaker Change: Thanks, Adam.
Speaker Change: Greenberg.
Speaker Change: Experience is the same type of seasonality that narrow networks has again, primarily driven by the reset and the insurance plans and also the reset of patient deductibles.
Stephen Furlong: And so if we go back, you know, the six years that I've been here, our Q1 revenue as a percentage of the total year is somewhere between 19 and 20 percent. And then it ramps. You know, it's a nice rebound in Q2 when a lot of the deductible issues are already behind patients. So Q2 and Q3 revenues are about 25 percent each per quarter. And then again, our strongest quarter has always been Q4, and that'll be, you know, approximately 30 percent of annual revenue.
Speaker Change: And so if we go back.
Speaker Change: Six years that I've been here, our Q1 revenue as a percentage of the total year is somewhere between 19 and 20%.
Speaker Change: And then it ramps.
Speaker Change: This rebound in Q2, when a lot of the deductible issues are already behind patients.
Speaker Change: So Q2, and Q3 revenues are about 25% each per quarter.
Speaker Change: And then again, our strongest quarter has always been Q4 and that will be.
Speaker Change: Approximately 30% of annual revenue.
Stephen Furlong: Again, as a reminder, we've been working collaboratively with Green Brook at all levels since we signed the definitive agreement in August. And so we've got, you know, six months of effort behind us, and we're already seeing dividends across the board. And so we have a high level of confidence exiting Q1 that we're going to have a lot of the process improvements, improved efficiencies, and just some changes and learnings between the two companies fully in place as we enter Q2. And so again, we're very comfortable with the Q1 guide and the remainder of 2025. That's good color, Steve.
Speaker Change: Again as a reminder, we have been working collaboratively with Greenberg.
Speaker Change: At all levels since we signed the definitive agreement in August and so we've got six months of efforts behind us and we're already seeing dividends across the board and so we have a high level of confidence exiting Q1.
We're going to have a lot of the process improvements improved efficiencies.
Speaker Change: And just some changes and learnings between the two companies fully in place as we enter Q2.
And so again, we're very comfortable with the Q1 guide.
Speaker Change: And the remainder of 2025.
Speaker Change: That's good color Steve. Thank you for all that and so the follow up I wanted to circle back just to provide aylwin.
Adam Maeder: Thank you for all that.
Adam Maeder: And for the follow up, I wanted to circle back to Spravato and the medical management opportunity for the Greenbrook centers. So I guess the first question is of the. $80 to $85 million for your Greenbrook revenue assumption for 2025. Hopefully I have that right. You know, what is attributed to Spravato and medical management? You know, where can that go in the future? And, you know, we'd just love to hear a little bit more about the buy and bill model. Thank you for taking the question.
Speaker Change: Medical management.
Speaker Change: <unk> for the green brick centers.
Speaker Change: So I guess the first question is of the.
$80 million to $85 million for your green brick revenue assumption for 2025, hopefully I have that right.
Speaker Change: What is attributed to provide medical management.
Speaker Change: Where can that go in the future and I would just love to hear a little bit more about the buy and Bill Maher.
Speaker Change: Model. Thank you for taking my questions.
Stephen Furlong: Yeah, Adam. So there's very little med management built into that guidance figure. Again, Greenbrook was founded on TMS. And essentially, their service was to offer patients TMS when the providing psychiatrist didn't offer it. And so they would refer the patient to a Greenbrook facility, they would get treated, you know, for the seven weeks, and then the patient would go back to their psychiatrist. And that really hasn't changed. And so, again, the two growth drivers are increased chair utilization, and also Spravato. And so You know, I would say. 75% of the growth is about Spravato, so both improving the 63 clinics that currently offer it to, you know, maybe 80 or 85 clinics.
Speaker Change: Yeah, Adam So theres very little Med management built into that guidance figure.
Speaker Change: Again Green brick was founded on Tms and essentially their service was to offer patients Tms.
Speaker Change: When that providing psychiatrist didn't offer it and so they would refer the patient to Green Bank facility. They would get treated for the seven weeks and then the patient will go back to their psychiatrist and that really hasnt changed.
Speaker Change: And so again the two growth drivers.
Speaker Change: Our increased share utilization.
Speaker Change: Also to provide and so.
Speaker Change: Yes, I would say.
Speaker Change: 75% of the growth.
Speaker Change: Is about to provide.
Speaker Change: So both improving the.
Speaker Change: 63 clinics that currently offer it to.
Speaker Change: Maybe 80% or 85 clinics.
Stephen Furlong: And then moving into the buy and bill type of operation. And again, Keith mentioned it, that 35, you know, if we could get that to 50 or so during the year, it would be great. And as a reminder, it's not like we're just flipping a switch, moving to buy and bill. There are a lot of behind-the-scenes activities, working with the payers and getting the contracts and negotiating the price. And so it does take a little time, even though we've already identified, you know, our ability to convert to buy and bill. You know, it does take, you know, months to get everything in place and to start submitting the claims and then collecting.
Speaker Change: And then moving into the buy and Bill type of operation and again, Keith mentioned that that 35%.
Speaker Change: We could get that to 50 or so during the year.
Speaker Change: Would be great and as a reminder, it's not like we're just flipping a switch moving to buy and bill there are a lot of behind the scenes activities working with the payers and getting the contracts and negotiating the price and so it does take a little time.
Speaker Change: Even though we have already identified our ability took.
Speaker Change: To convert to buy and balance.
Speaker Change: It does take.
Speaker Change: Months to get everything in place to start.
Speaker Change: So many of the claims and then collecting.
Adam Maeder: But again, the lion's share of the growth for Green Brook is targeted on Spravato. helpful. Thank you.
Speaker Change: But again, the lion's share of the growth for Green brick has targeted <unk> provider.
Speaker Change: Helpful. Thank you.
Operator: Thank you and one moment.
Speaker Change: Thank you and one moment.
Danny Stauder: Our final question is going to come from the line of Danny Stauder with Citizens J&P. Your line is open, please go ahead. Yeah, great. Thanks for the questions. Just want to follow up on some of the Spravato buying bill transition questions that we've heard already. Appreciate the color there.
Speaker Change: Our final question is going to come from the line of Denny starter with citizens JMP. Your line is open. Please go ahead.
Speaker Change: Okay, great. Thanks for the questions just want to follow up on some of the strip auto buying bill transition questions that we've heard already.
Speaker Change: I appreciate the color there and it sounds like this is already included in the Opex guidance, but could you comment on the capital outlay the suppliers.
Danny Stauder: And it sounds like this is already included in the OPEX guidance, but could you comment on the capital outlay this requires? Any capacity constraints that this could have as you contemplate your plans for free cash flow and 3Q25? Thanks.
Speaker Change: Capacity constraints that.
Speaker Change: It could have as you contemplate your plans for the cash flow and <unk> 25.
Stephen Furlong: Hey, Danny, it's Steve. Yeah, from a CapEx perspective, supporting this bravado rollout, it's really not that significant. So from an infrastructure perspective, you know, we do need rooms, which the majority of our clinics already have. And then it's a video or camera system and beds that the patients, you know, relax on after the treatment and then are administered or observed by the attending psychiatrist. So that's, you know, $10,000 a clinic. So not crazy at all. It's really on the inventory side that we're working with our distribution partners on. And so, you know, having to purchase a dose of bravado is approximately $800.
Steve Furlong: Hey, Danny its Steve.
Danny: Yeah from a capex perspective, supporting this provide a rollout.
Speaker Change: Really not that significant so from an infrastructure perspective, we do need rooms switch.
Danny: You already have our clinics already have.
Speaker Change: And then there's a video.
Danny: Video camera system and beds.
Danny: That the patients relax on after the treatment and then alright administered or observed by.
Speaker Change: The attending psychiatrist.
Speaker Change: $10000 in the clinic, so not not crazy at all.
Speaker Change: It's really on the inventory side that we're working with our distribution partners.
Speaker Change: And so.
Speaker Change: Having to purchase.
Speaker Change: Dose.
Speaker Change: <unk> is approximately $800 you need to keep a week's worth of inventory on hand, and as we roll that out that inventory commitment could easily approach $5 million.
Stephen Furlong: You need to keep a week's worth of inventory on hand. And as we roll that out, you know, that inventory commitment could easily approach $5 million. We are working on getting lines of credit. And now, you know, with the capital raise of nearly $19 million, we do have a little bit of leverage if we had to use our own cash to get that flow going. But it's our intention to leverage our distribution partners. And, you know, right now, Janssen does make their distributors offer 120-day terms. And so if we submit our claims and get them paid, the normal turnaround time is about 60 days.
Speaker Change: We are working on getting lines of credit.
Speaker Change: And now with the capital raise of nearly $19 million, we do have a little bit of leverage if we had to use our own cash to get that flow going but it's our intention to to leverage our distribution partners.
Speaker Change: And.
Speaker Change: Right now.
Speaker Change: Janssen does.
Speaker Change: Make there just distributors offer 120 day terms.
Speaker Change: And so if we submit our claims and get them paid the normal turnaround time is about 60 days and so again once we get that cadence and work through some of the usual early box and the claim system.
Stephen Furlong: And so, again, once we get that cadence and work through some of the usual early bugs in the claim system, we'll think that a 120-day term will be sufficient to make sure the cash flow doesn't strain my balance sheet. Great, I appreciate that.
Speaker Change: We will think that 120 day term will be sufficient to make sure the cash flow doesn't strain my balance sheet.
Speaker Change: Great I appreciate that and then just one follow up on productivity, you've talked about driving and.
Stephen Furlong: And then just one follow up on productivity. You know, you've talked about driving and improving productivity across both Greenbrook sites and existing customers. But can you just remind us what that looks like today? I think in the past, you've given us a figure of four treatments per day per system. Is that still the case? And where do you expect that to go in 2025? And where's the more steady state range or metric that you're comfortable with? Thank you.
Speaker Change: Improving productivity across both Greenberg sites in existing customers, but could you just remind us what that looks like today I think in the past you've given us a figure of four treatments per day per system is that still the case.
Speaker Change: Where do you expect that to go in 2025, and where it's a more steady state.
Speaker Change: Range or a metric that youre comfortable with thank you.
Stephen Furlong: Yeah, I mean, the comparison that we're using now for Greenbrook is with our Better Me program partners and we've seen for those sites that are in that program and have really embraced the five requirements that are in the program. They're averaging between 6 and 8 patients per day per NeuroSTAR. You are correct that Green Brook is currently averaging about 4 patients per day, and as we work through Efficiencies in 2025 and 2026, you know, we do plan on seeing We do expect to see Green Brook increasing from four to five to six to get to the levels of our BNP partners.
Yes, I mean, the comparisons that we're using now for green brick is with our better me program partners.
Speaker Change: And we've seen for those sites that are in that program and have really embraced the five and requirements.
Speaker Change: They're averaging between six and eight patients per day part in Aerostar.
Speaker Change: You are correct that green brick is currently averaging about four patients per day and as we work through.
Speaker Change: Efficiencies in 2025 and 2026.
Speaker Change: We do plan on seeing.
Speaker Change: And we do expect to see green brick increasing.
Speaker Change: Four to five to six to get to the levels of our BNP partners and so.
Stephen Furlong: And so if I look at their installed systems, active systems, if we increase that four patients per day to five patients per day, that's an approximate $10 million in annualized revenue. So, you know, I'm not implying that we're going to be able to get them to five, you know, by May. But, you know, as we work towards training and education, we're confident that we could exit 2025, you know, at or close to that level. Appreciate it.
Speaker Change: If I look at their installed systems active systems, if we increase that four patients per day to five patients per day.
Speaker Change: An approximate $10 million in annualized revenue.
Speaker Change: And so I'm not implying that we are going to be able to get them to five.
Speaker Change: By May.
Speaker Change: As we work towards training and education, we're confident that we could exit 2025.
Speaker Change: At or close to that level.
Stephen Furlong: I'll try to squeeze one more in here. Just on BNP, the 125 additional sites.
Speaker Change: I appreciate it I'll just squeeze one more in here just on BNP the 125 additional sites.
Keith Sullivan: For the April 2025 date, is it your intention to take all of those if they meet the criteria, or is there a max number of ads you're keeping in mind? Thanks. Our goal is, if they all make it, that we would add them all into the program, but they have to meet all five standards.
Speaker Change: For the April 2025 data is it your intention to take all of those if they meet the criteria or is there a max number of ads you're keeping in mind.
Speaker Change: Thanks.
Speaker Change: Our goal is if they all make it that we would add them all into the program but.
Speaker Change: They have to meet all five standards and so as a.
Keith Sullivan: And so as we get closer to April 15th, if we could get 30 to 50 of those sites in the program, it would be a home run for us. Great, appreciate the question.
Speaker Change: As we get closer to April 15, if we could get 30 to 50 of those sites in the program it would be it.
Speaker Change: It would be a home run for us.
Speaker Change: Great I appreciate the questions.
Keith Sullivan: Thank you and I would now like to hand the conference back over to Keith Sullivan for his closing remarks. Thank you all for your interest in Neuronetics. We'll look forward to updating you on our next quarterly call.
Speaker Change: Thanks, Barry Thank you Danny thank.
Speaker Change: Thank you and I would now like to hand, the conference back over to Keith Sullivan for his closing remarks.
Thank you all for your interest in neuro networks, we will look forward to updating you on our next quarterly call.
Operator: Have a great day.
Speaker Change: Have a great day.
Operator: This concludes today's conference call. Thank you for participating and you may now disconnect.
Speaker Change: This concludes today's conference call. Thank you for participating and you may now disconnect.
Speaker Change: Okay.
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