Q4 2024 BrainsWay Ltd Earnings Call
Good day, and welcome to the brain's way fourth quarter and full year 2024 earnings conference call.
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Speaker Change: Now I'd like to turn the conference over to Brian Ritchie of Lifesize Advisors. Please go ahead.
Brian Ritchie: Thank you all and welcome to Brainsway's fourth quarter and full year 2024 earnings conference. 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.
Dar Levy: Thank you all and welcome to <unk> fourth quarter and full year 2024 earnings conference call with US today are our brains waste Chief Executive officer of Dar Levy and Chief Financial Officer eat on morale.
Dar Levy: We're pace call it will be a discussion of recent trends and business updates from the Dar followed by a detailed discussion of the financials. Then we will open up the call for your questions earlier today Brain's way released financial results for the three months and full year ended December 31, two.
Operator: Then we will open up the call for your questions.
Brian Ritchie: Earlier today, Brainsway released financial results for the three months and full year ended, December 31st, 2021. 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... including both management's prepared remarks and the question and answer session. may contain projections for other forward-looking statements regarding, among other topics, Brainsway's anticipated future operating and financial performance, business plans and prospects, and expectations for its products and pipelines. which are all subject to risks and uncertainty. including Shifting Market Conditions Resulting from Geopolitical, Supply Chain, and Other Factors as well as the use of non-GAAP financial instruments.
Dar Levy: <unk> 24, a copy of the press release is available on the company's Investor Relations website.
Dar Levy: Before I turn the call over to for Dar.
Dar Levy: I'd like to remind you that this conference call, including both management's prepared remarks, and no question and answer session may contain projections or other forward looking statements regarding among other topics brain's way its anticipated future operating and financial performance.
Dar Levy: Planes and prospects and expectations for its products and pipeline, which are all subject to risks and uncertainties, including shifting market conditions, resulting from geopolitical supply chain and other factors as well as the use of non-GAAP financial information.
Brian Ritchie: Additional information regarding these and other risks are available in the company's earnings release and in its other filings with the SEC, including the Risk Factor section contained in Brainsway's Form 28.
Dar Levy: Additional information regarding these and other risks are available in the company's earnings release, and then its other filings with the SEC, including the risk factors section contained in brain choice form 20-F.
Brian Ritchie: I would now like to turn the call over to Hadar. Please go ahead. Thank you, Brian.
Doug: I would now like to turn the call over to Doug. Please go ahead for Dar.
Speaker Change: Thank you, Brian and welcome everyone and thank you for joining us today.
Hadar Levy: Welcome, everyone, and thank you for joining us today.
Hadar Levy: We are excited to announce today that we completed 2024 with another quarter of rapidly growing sales of our market leading Deep TMS. The steady rise in our performance reflects the successful execution of our strategy focused on building sales momentum and scale of our commercial distribution around the world. As you will see, these results further reinforce Brainsway's true business and technological leadership position in the TMS. On the top line, we generated $11.4 million in revenue. Marking a 27% year-over-year increase, our multi-year agreement with large enterprise networks strengthened customer partnership beyond one-time sales, ensuring alignment with their evolving needs.
Doug: We are excited to announce today that we completed 2024 with another quarter of rapidly growing so our four market leading deep Tms system.
Doug: The steady rise in our performance reflects the successful execution of our strategy focused on building sales momentum and scale of our commercial distribution around the world.
Doug: As you will see this result, further reinforced brand sways drove business and technological leadership position in the Tms shale.
Doug: On the topline, we generated $11 $4 million in revenue.
Doug: Marking a 27% year over year increase our multiyear agreement with large enterprise networks strengthen customer partnership beyond one thin film ensuring alignment with their evolving needs. Additionally.
Hadar Levy: Additionally, our lease-based business model option continues to expand our recurring revenue base, providing a more stable foundation for long-term growth. In the fourth quarter of 2024, we shipped a total of 75 DIP-TMS representing a 25% increase compared with the same period last year. I think it is worth noting that combined with our growing backlog and record revenues, we have established a positive book-to-bill ratio over the past several quarters. This underscores the exceptional execution of our commercial team as we continue to partner with larger enterprise customers. those that have consistently delivered the highest return on our sales and marketing investments.
Doug: Additionally, our lease base business model option continues to expand our recurring revenue base and providing a more stable foundation for long term growth.
Doug: In the fourth quarter of 2024, we shipped a total of 75 deep Tms system represented representing a 25% increase compared with the same period last year.
Doug: It is worth noting that combined with our growing backlog and record revenues. We have established a positive book to bill ratio over the past several quarters.
Doug: On the call the exceptional execution of our commercial team as we continue to partner with larger enterprise customers.
Doug: Those that have consistently delivered the highest return on our sales and marketing investment.
Hadar Levy: We have significantly expanded our market presence, making DeepTMS accessible to more customers than ever before. To support this growth, we optimize our sales force to accelerate expansion within larger institutional and enterprise accounts, in the U.S. and internationally. Our global reach now extends across key markets including Canada, Asia, India and Europe.
Doug: We also significantly expanded our market presence, making deep tms accessible to more customers than ever before.
Doug: All of this growth, we optimize our sales force to accelerate expansion within larger institutional and enterprise accounts in the U S and internationally.
Doug: Our global reach now extend across key markets, including Canada, Asia, India and Europe.
Hadar Levy: As we successfully transition into this new phase of growth, we are driving increased profitability, further setting us apart in our industry. This is reflected in our strong growth margin which was 75% in the fourth quarter and for the full year. We generated positive quarterly net income for the fifth consecutive quarter and positive adjusted EBITDA and cash flow from operation for the sixth consecutive quarter.
Doug: As we successfully transition into this new phase of growth, we are driving increased profitability further setting us apart in our industry.
Doug: This is reflected in our strong gross margin, which was 75% in the fourth quarter and for the full year.
Doug: We generated positive quarterly net income for the fifth consecutive quarter and positive adjusted EBITDA and cash flow from operation for the sixth consecutive quarter.
Hadar Levy: Looking ahead, we are introducing full year 2025 revenue in the range of $49 million to $51 million. This would represent a growth of 20% to 24% over 2024. We also anticipate generating operating income of 3-4% and adjusted EBITDA of 11-12% for the full year 2025.
Doug: Looking ahead, we are introducing full year 2025 revenue in the range of $49 million to $51 million. This would represent a growth of 20% to 24% over 2024.
Doug: We also anticipate generating operating income of 3% to 4% and adjusted EBITDA of 11, and 12% for the full year 2025.
Hadar Levy: We aim to further solidify our market leadership by leveraging our strong sales momentum and executing key strategic investments across three core areas. advancing our next generation DeepTMS 360 system. conducting clinical trials to expand and enhance treatment capabilities and strengthening our commercial presence through targeted sales and marketing initiatives. Our primary objectives are to drive market awareness, execute on our R&D roadmap and expand access to deep TMS. We believe that these are critical as we work to further cement our role in shaping the future of mental health treatment.
Doug: We aim to further solidify our market leadership by leveraging our strong sales momentum and executing.
Doug: <unk> investment across three core areas.
Doug: Advancing our next generation deep Tms 360 system.
Doug: Conducting clinical trials to extend and enhance treatment capabilities and strengthening our commercial presence.
Doug: Targeted sales and marketing initiatives.
Doug: Our primary objectives are to drive market awareness execute on our R&D roadmap and expand access to deep Tms.
Doug: We believe that these are critical as we work to further.
Doug: And our role in shaping the future of mental health treatment.
Hadar Levy: On the commercial front, we expect to see increased sales around OCD in 2025, as our system is the first TMS therapy approved for obsessive-compulsive disorder. OCD is a difficult-to-treat disease with limited treatment options, with a substantial potential market of roughly 400,000 patients annually who are resistant to current treatment options. As a reminder, our most recent data for this indication are very positive with over 60% of patients responding to deep TMS. Turning to depression, doctors have been reporting an increase in anxious depression deep TMS treatment in the U.S. As a reminder, this refers to the patients with major depressive disorder who also exhibit comorbid anxiety symptoms. This is a large addressable medical need that affects approximately 10 to 60 million adults in the U.S.
Speaker Change: On the commercial front, we expect to see increased solve their own those CD. In 2025 is our system is the first Tms therapy approved for obsessive compulsive disorder.
Speaker Change: OCD is a difficult to treat disease with limited treatment options with subset with.
Speaker Change: Sure potential market, the roughly 400000 patients.
Speaker Change: Or resistant to current.
Speaker Change: Treatment options.
Speaker Change: As a reminder, our most recent data for this indication are very positive with over 60% of patients responding to deep Tms treatment.
Speaker Change: Turning to depression doctors have been reporting an increase in interest depression deep Tms treatment in the U S.
Speaker Change: A reminder, this refers to the patients with major depressive disorder also exhibit comorbid unexciting symptoms.
Speaker Change: This is a large addressable medical need that affect approximately 10% to 60 million adults in the U S. Each year.
Hadar Levy: each year. As a reminder, our system was the first TMS device cleared by the FDA to effectively treat this condition. We have also seen an increase in utilization of DeepTMS to treat elderly patients with MDD in the second half of 2024.
Speaker Change: As a reminder, our system was the first Tms device cleared by the FDA to effectively treat this condition.
Speaker Change: We have also seen an increase in utilization of deep Tms to treat elderly patient with <unk> in the second half of 2020 for.
Hadar Levy: Destruction in the market follows the U.S. FDA's groundbreaking decision to raise the uprage limit from 68 to 86 years old for the indication in June 2024. As life expectancies continue to rise, many are looking for innovative therapeutic solutions to alleviate the significant burden this condition places on our aging population.
Speaker Change: This traction in the market follows the Usda's groundbreaking decision to raise the upper age limit from 68 to 86 years old for the indication in June 2024.
Speaker Change: As life expectancy continues to rise many are looking for innovative therapeutic solutions.
Speaker Change: To alleviate the significant burden this condition places on our aging population. This clearance made our system the first and only Tms device approved to treat elderly patient with MTT.
Hadar Levy: This clearance made our system the first and only TMS device approved to treat elderly patients with MDD.
Hadar Levy: We are also working on collecting data on deep TMS for potential treatment for adolescent depression patients. and we'll update you all to the extent we make progress on this front as well.
Speaker Change: We are also walking on collecting data on deep Tms for potential treatment for adolescent depression patients.
Speaker Change: And we'll update you all to the extent, we make progress on this front as well.
Hadar Levy: In September, we announced that the Israeli Ministry of Defense Rehabilitation Department granted approval for the reimbursement of deep TMS therapy for qualifying patients at Israeli public hospitals with post-traumatic stress disorder or PTSD. We will continue working to expand the available reimbursement for PTSD in Israel with the goal of potentially including more Israeli medical centers as well as adding private clinics.
Speaker Change: In September we announced that the Israelis.
Speaker Change: Mystery of Defense rehabilitation Department granted approval for the reimbursement.
Speaker Change: Tms therapy for quantifying patient Israeli public hospitals, with posttraumatic stress disorder or PTSD.
Speaker Change: We will continue walking to expand the available reimbursement for PTSD in Israel with the goal of potentially including more he's ready medical centers.
Speaker Change: Well as adding private clinic setting.
Speaker Change: Yeah.
Hadar Levy: Another recent development on the research front was a recent publication in the Journal of Psychiatric Research showing that deep TMS therapy combined with psychedelic therapies was significantly more effective in reducing depression levels among adult patients compared with standard medication alone. We believe this promising data supports additional research into the potential benefits of treating depression with a combination of deep TMS and psychedelic therapy. Importantly, we continue to make progress in our randomized multi-center U.S. clinical trial evaluating an accelerated treatment protocol for the deep TMS system for MDD treatment as compared to the current standard of care deep TMS protocol.
Speaker Change: In other recent development on the research front was the recent publication in the journal of psychiatric research showing that deep Tms therapy combined with psychedelic therapies was significantly more effective in reducing depression levels among adult patients compared with standup medication alone.
Speaker Change: Yeah.
Speaker Change: We believe this promising data support additional research into the potential benefits of treating depression with a combination of deep Tms and psychedelic therapies.
Speaker Change: Importantly, we continue to make progress in a randomized multi center U S clinical trial.
Speaker Change: Evaluating and accelerated treat treatment protocol for the deep Tms system, how MDT treatment as compared to the current standard of care deep Tms protocol.
Hadar Levy: As a reminder, the traditional Deep TMS protocol involves a four-week acute treatment phase with one session on each day of the treatment. This is now being compared to an accelerated protocol which involves a significantly shorter acute phase taking place over several treatment days. This has the potential to improve convenience and thereby make deep TMS substantially more appealing to many prospective patients.
Speaker Change: As a reminder, the traditional deep Tms protocol involves a four week acute treatment phase with one session on each day of the treatment.
Speaker Change: This is now being compared to an accelerated protocol, which involves a significantly shorter acute phase taking place over several treatment days.
Speaker Change: This has the potential to improve convenience and fit and thereby make deep tms substantially more appealing to many prospective patients.
Hadar Levy: Turing to Alcohol Use Disorder, or AUD. We recently announced positive pilot data from a small independent third-party study conducted at Stanford University evaluating an accelerated protocol using our DeepTMS technology to treat alcohol addiction patients, which was reported in a publication in the Brain Stimulation Journal. We believe these promising preliminary results will pave the way for further research into the potential benefit of treating AUD and other addictions with deep TMS using an accelerated protocol.
Speaker Change: Turning to alcohol use disorder or <unk>.
Speaker Change: We recently announced positive final data from a small independent third party study.
Speaker Change: <unk> at Stanford University, evaluating an accelerated protocols using our deep Tms technology to treat alcohol.
Speaker Change: Addiction patient, which was reported in a publication in the brain stimulation or now we believe this promising preliminary results. We have paved the way for further research into the potential benefit of treating <unk> and other addiction with deep Tms using an accelerated protocol.
Hadar Levy: This critical investment in our long-term R&D and clinical vision are supported by a strong balance sheet with no debt. On December 31st, 2024, we reported $69.4 million in cash. This includes approximately $20 million in gross proceeds received to date from our equity financing successfully completed with VALOR Equity Pass. This financing will be used to support the key action items I just discussed, which are aimed at extending our commercial footprint and supporting broader access for patients to Deep TM. Obviously, the most important aspect of our growth strategy centers around our innovative DeepTMS system and the large enterprise customers we are focused on servicing.
Speaker Change: This is critical investments in our long term R&D and clinical vision are supported by a strong balance sheet with no debt.
Speaker Change: At December 31, 2020, full we reported $69 $4 million in cash.
Speaker Change: This includes approximately $20 million in gross proceeds received to date from our equity financing.
Speaker Change: Successfully completed with Valeo equity partner.
Speaker Change: This financing will be used to support the key action items.
Speaker Change: This cost which are aimed at expanding our commercial footprint and supporting broader access for patients to deep Tms.
Speaker Change: Obviously the.
Speaker Change: The most important aspect of our growth strategy centers around our innovative deep Tms system and the large enterprise customer we are focused on servicing.
Hadar Levy: As a growing segment of our customer base, these enterprise accounts have been a major driver behind the larger and repeat order for our deep TMS systems over the past In addition, by elevating our customer base, we have seen new doors open to additional enterprise customers of the same size and caliber, if not larger. With the opportunity to achieve additional large and repeat orders from both new and existing enterprise customers, we see additional meaningful room to grow in the years to come.
Speaker Change: As a growing segment of our customer base the central price accounts have been a major driver behind the larger and repeat order for our deep Tms systems over the past year.
Speaker Change: In addition by elevating our customer base, we have seen new doors open to additional enterprise customers of the same size and colleague Bill if not larger.
Speaker Change: With the opportunity to achieve additional large and repeat orders from both new and existing enterprise customers, we see additional meaningful room to grow in the years to come.
Hadar Levy: In closing. Our team is executing our strategy on several fronts. As a result, we now stand as the clear leader in TMS therapy.
Speaker Change: In closing.
Speaker Change: Our team is executing our strategy on several fronts.
Speaker Change: As a result, we now stand as the clear leader in Tms therapy.
Hadar Levy: uniquely positioned to expand mental health access while delivering shareholder value through transformative therapies, innovation, operational excellence, and sustainable growth.
Speaker Change: Uniquely position to expand mental health access, while delivering shareholder value through transformative therapies innovation operational excellence excellence and sustainable growth.
Ido Marom: With that, I will now turn the call over to Ido for his review of our fourth quarter and full year 2024 financial results. Ido? Thank you, Hadar. Revenue for the fourth quarter of 2024 was $11.4 million, a 27% increase compared to the prior year period revenue of $9 million. We placed 75 net deep TMS systems in the fourth quarter. Our total installed base was 1,353 systems as of December 31, 2024, compared to 1,101 systems at the same point in the prior year. As a result of our strong performance in the fourth quarter, we hit the top end of our guidance with $41 million of revenue recorded for the full year 2024.
Speaker Change: With that I will now turn the call over to adult for his review of our fourth quarter and full year 2020 full financial results.
Speaker Change: Yes.
Speaker Change: Yes.
Speaker Change: Thank you.
Speaker Change: Revenue for the fourth quarter of 2024 was 11 4, million% to 27% increase compared to the prior year period revenue of $9 million.
Speaker Change: We placed 75 net deep Tms systems in the fourth quarter.
Speaker Change: Our total installed base with 1353 system as of December 31, 2024, compared to 1101 system at the same point in the prior year.
Speaker Change: And as a result of our strong performance in the fourth quarter. We had the top end of our guidance with 41 million of revenue recorded for the full year 2024.
Ido Marom: This represents a 29% increase compared to the $31.8 million reported for 2023. Gross profit for the fourth quarter of 2024 was $8.5 million or a 75% gross margin. This is compared to $6.7 million during the prior year period at the same gross margin. Gross profit for the full year 2024 was $30.6 million or a 75% gross margin. This is compared to $23.5 million or a 74% gross margin during 2023.
Speaker Change: This represents a 29, 29% increase compared to the $31 $8 million reported for 2023.
Speaker Change: Gross profit for the fourth quarter of 2024 was $8 5 million.
Speaker Change: Or 75% gross margin.
Speaker Change: This is compared to $6 7 million during the prior year period at the same gross margin.
Speaker Change: Gross profit for the full year 2024.
Speaker Change: $36 million or 75% gross margin this is compared to $23 5 million.
Speaker Change: Or 74% gross margin during 2023.
Ido Marom: Moving on to operating expenses. For the fourth quarter of 2024, sales and marketing expenses were $4.5 million, compared to $4 million for the fourth quarter of 2023. For full year 2024, sales and marketing expenses were $16.2 million compared to $16.5 million for 2023. Research and development expenses were $2 million compared to $1.4 million in the fourth quarter of 2023. R&D expenses for the full year 2024 were $7.2 million compared to $6.7 million in 2020. General and administrative expenses for the fourth quarter of 2024 were $1.6 million compared to $1.2 million for the fourth quarter of 2023.
Speaker Change: Moving onto operating expenses.
Speaker Change: For the fourth quarter of 2020 for sales and marketing expenses were $4 $5 million.
Speaker Change: Compared to $4 million for the fourth quarter of 2023.
Speaker Change: For full year, 2024 sales and marketing expenses were $16 2 million comp.
Speaker Change: Compared to $16 5 million.
Speaker Change: For 2023.
Speaker Change: Research and development expenses were $2 million compared to $1 4 million in the fourth quarter of 2023.
Speaker Change: R&D expenses for the full year of 2024 were $7 2 million compared to $6 7 million in 2023.
Speaker Change: General and administrative expenses for the fourth quarter of 2024 were $1 6 million compared to $1 2 million for the fourth quarter of 2023.
Ido Marom: General and administrative expenses for the 12 months ended December 31, 2024 were $5.8 million compared to $5.3 million for 2026. Operating profit for the fourth quarter was approximately $430,000 compared to approximately $180,000 for the same period in 2023. Operating profit for the full year 2024 was approximately $1.4 million compared to an operating loss of $5 million for 2026. Adjusted EBITDA was $1.4 million, representing the 6th consecutive quarter of positive adjusted EBITDA, compared to approximately $750,000 for the 4th quarter of 2023. For the full year 2024, we reported adjusted EBITDA of $4.5 million, which is also at the top end of our guidance, representing 11% of revenue.
Speaker Change: General and administrative expenses for the 12 months ended December 31st 2024, well five.
Speaker Change: $5 8 million.
Speaker Change: Compared to $5 $3 million for 2023.
Speaker Change: Operating profit for the fourth quarter was approximately $430000 compared to approximately $180000 for the same period in 2023.
Speaker Change: Operating profit for the full year 2024 was approximately $1 4 million compared to an operating loss of $5 million for 2023.
Speaker Change: Adjusted EBITDA was $1 $4 million, representing the sixth consecutive quarter of positive adjusted EBITDA compared to approximately $750000 for the fourth quarter of 2023.
Speaker Change: For the full year 2024, we reported adjusted EBITDA of $4 5 million, which is also at the top end of our guidance representing 11% of revenue.
Ido Marom: This is compared to an adjusted EBITDA loss of $2.4 million for 2023. For the fourth quarter ended December 31st, 2024, we recorded net income of $1.5 million, including $1 million due to a positive impact from the valuation of warrants issued to Valor Equity partners, compared to $127,000 in the same period of 2023. For full year 2024, we recorded net income of approximately $2.9 million compared to a net loss of $4.2 million in 2023. We ended the year with cash, cash equivalents and short-term deposits of $69.4 million on December 31, 2024, which includes the $20 million in gross proceeds received to date from the private equity investment by Valor Equity Partners announced this past September.
Speaker Change: This is compared to a net.
Speaker Change: Adjusted EBITDA loss of $2 4 million for 2023.
Speaker Change: Okay.
Speaker Change: For the fourth quarter ended December 31, 2024, we recorded net income of $1 $5 million, including 1 million due to a positive impact from devaluation of warrants issued to below equity partners compared to $127000 in the same period of 2023.
Speaker Change: For full year 2024, we recorded net income of approximately $2 $9 million.
Speaker Change: Compared to a net loss of $4 2 million in 2023.
We ended the year with cash cash equivalents and short term deposits of $69 4 million on December 31, 2024, which includes between $20 million in gross proceeds received to date from the private equity investment by a fellow equity partner and now this past September.
Ido Marom: As Hadar mentioned earlier, based on our backlog and U.S. pipeline and continued momentum internationally, we expect revenue in the range of 49 to 51 million dollars for full year 2025, which represents 20 to 24 percent growth over 2024 revenue. In addition, we anticipate reporting operating income of 3-4% of revenue and adjusted EBITDA of 11-12% for the full year 2025.
Yeah, So Don mentioned earlier based on our backlog and U S pipeline and continued momentum internationally, we expect revenue in the range of $49 million to $51 million for full year 2025.
Speaker Change: Which represent 20% to 24% growth over 2020 for revenue.
Speaker Change: In addition, we anticipate reporting operating income of 3% to 4% of revenue and adjusted EBITDA of 11, 12% for the full year 2025.
Operator: This concludes our prepared remarks. I will now ask the operator to please open up the call for questions. Operator?
Speaker Change: This concludes our prepared remarks I will now ask the operator to please open up the call for questions.
Speaker Change: Later.
Operator: We will now... 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 addressed and you would like to withdraw your question, please press star then 2.
Speaker Change: We will now begin the question and answer session.
Speaker Change: Quick question you May Press Star then one on your telephone keypad.
Speaker Change: Using a speakerphone please pick up your handset before pressing the keys.
Speaker Change: Is that any time. Your question has been addressed and you would like to withdraw. Your question. Please press Star then queue. At this time, we will pause momentarily to assemble our roster.
Operator: At this time, we will pause momentarily.
Speaker Change: The first question comes from Steven Lichtman with Oppenheimer. Please go ahead.
Stephen Lichtman: Good morning, Hadar and Ido, and congratulations on the quarter and the year. The 75 placements were certainly a standout. Were there particular drivers this quarter that stood out that you'd like to highlight, whether it be enterprise network sales, international acceleration?
Steven Lichtman: Good morning had already Don congratulations on the quarter and year.
Steven Lichtman: The 75 placements with certainly a standout where their particular drivers this quarter that stood out that you'd like to highlight whether the enterprise network sales international acceleration. So any further color on.
Stephen Lichtman: Is there any folder color on some of the drivers in the quarter?
Steven Lichtman: Some of the drivers in the quarter.
Hadar Levy: Hi Stephen and thank you for your question. As always, the fourth quarter is always the strongest quarter for the company. However, we do see some specific trends that I expect to continue also in 2025. Obviously, the main driver are the enterprise accounts that are contributing significantly to our future sales. Very high demand is coming from those enterprise accounts. The other two aspects of it are the increased use and demand for the OCD, which is also the H7 calls. We see a constant growing demand for this important indication. And I also mentioned, I think the last thing that is important also to add is the increasing utilization in our devices, both from the need from MDD, anxious depression, and also treating elderly patients.
Steven Lichtman: Yeah.
Steven Lichtman: And thank you for your question.
Steven Lichtman: As always you know the fourth quarter is always the strongest.
Steven Lichtman: Quarter of for the company.
Steven Lichtman: However, we see is we do see some some specific trends that I'm expected to continue also in 2025.
Steven Lichtman: Obviously the main driver is the are the enterprise accounts are now contributing significantly.
Steven Lichtman: To our future.
Steven Lichtman: <unk>.
Steven Lichtman: Very high demand is coming from those enterprise accounts.
Steven Lichtman: The other two aspects of it are the.
Steven Lichtman: Increase.
Steven Lichtman: Use a fall in demand for the OCD.
Steven Lichtman: Which is also the eight seven calls we see a constant growing demand.
Steven Lichtman: For this important indication and I also mentioned I think the last thing that is important also to add.
Steven Lichtman: Yes.
Steven Lichtman: The increase in utilization in our devices.
Steven Lichtman: Both from the.
Steven Lichtman: They need from MDT anxious depression, and also treating elderly patients all of those together are managed to to increase the demand in the fourth quarter.
Stephen Lichtman: All of those together are managed to increase the demand in the fourth quarter. Great.
Steven Lichtman: Great.
Stephen Lichtman: You mentioned progress on the accelerated treatment protocol. What's the latest in terms of timing there when we could see data? So, we're on the final stage of the recruitment for this very, very important indication. Our intention is to finish the follow-up period, which is around 30 days, and then start analyzing the data and submit it to the FDA. I do expect to come up with some news about this indication in the third quarter of 2024. Got it.
Speaker Change: You mentioned progress on the accelerated treatment.
Speaker Change: Protocol, what's the latest in terms of timing there when we could see data.
Speaker Change: Yes so.
Speaker Change: We were in the final stage of the recruitment.
Speaker Change: For this very very important indication our intention is to finish.
Speaker Change: Finish the follow up period, which is around.
Speaker Change: 30 days and then start analyzing the.
Speaker Change: The data and submit it to to the FDA I do expect to.
Speaker Change: To come up with.
Speaker Change: Some news about this indication in the third quarter of 2025.
Speaker Change: Got it.
Stephen Lichtman: And just lastly, I'll jump back in queue on margin in 2025.
Speaker Change: Just last one I'll jump back in queue on margin in 2025.
Hadar Levy: Can you talk to what you anticipate for gross margin this year? Thank you. Yeah, so we do expect the gross margin to keep the gross margin on the same level as 2024 around 75%. I'm always saying there is more room for improvement on the gross margin, and we are taking the necessary steps to try and improve it, but we are expecting the gross margin to keep the same level as 2024 around 75% and also to keep the same profitability levels also on the bottom line and the EBITDA. Great. Thanks, Hadar. Thank you, Steven.
Speaker Change: Can you talk to what you anticipate for gross margin.
Speaker Change: This year. Thank you.
Speaker Change: Yeah. So.
Speaker Change: We do expect the gross margin too.
Speaker Change: To keep the gross margin on the same level.
Speaker Change: 2024 around.
Speaker Change: Around 75% I'm always saying that there is more room for improvement on the on the gross margin and we are taking the.
Speaker Change: Necessary step to try and improve it but we are expecting the gross margin for 2025% to want to stay on the same level as 2024.
Speaker Change: Our own 75% and.
Speaker Change: And same in also to keep the same profitability levels also on the.
Speaker Change: On the bottom line and the and the EBITDA.
Sundar: Great. Thanks Sundar.
Speaker Change: Thank you Steven.
Speaker Change: Our next question comes from Jeffrey Cohen with Ladenburg Thalmann. Please go ahead.
Jeffrey Cohen: Good morning, Hadar and Ido, and thank you for taking our questions. There's a couple on there and then I wonder if you could talk about the psychedelics at current centers and newly placed centers. Are you seeing that?
Speaker Change: Good morning, and thank you for taking our questions.
Speaker Change: Couple of unearned and I Wonder if you could talk about the.
Speaker Change: <unk> current centers and new replace centers are you seeing that.
Jeffrey Cohen: Current centers have an increasing level of psychedelic therapy as far as percentage and what are you seeing also with new placements as far as centers out there?
Speaker Change: Current centers have an increasing level of psychedelics therapy as far as percentage and what are you seeing also with new placements as far as those tenders out there.
Hadar Levy: Yeah, thank you, Jeff.
Speaker Change: Yeah.
Speaker Change: Thank you Jeff good morning.
Hadar Levy: Good morning. What we're seeing is more and more psychedelic clinics are open and are looking to embed the deep TMS technology in their facilities. The main reason for that is that they already got a designated room, they got the staff, and most of them are shooting for interventional psychiatry therapy. So some of them want to try a combination of those two treatments, but there is definitely a big demand from those centers, from what I'm seeing in the market.
Speaker Change: What we're seeing is.
Speaker Change: More and more.
Speaker Change: Psychedelic clinics are open and are looking to embed deep Tms technology in their facilities. The main reason for that is.
Speaker Change: That the already.
Speaker Change: Got to designated room, they got the staff and most of them are shooting for intervention of psychiatry therapy. So some of them wants to Oh.
Speaker Change: Try.
Speaker Change: A combination of those two.
Speaker Change: Two treatments.
Speaker Change: But there is differently and a big demur.
Speaker Change: Demand.
Speaker Change: From those centers.
From what I'm seeing in the market what will be the impact going forward I think it's hard to tell but there is definitely a room.
Hadar Levy: What will be the impact going forward? I think it's hard to tell, but there is definitely a room for us to grow through this channel. I see all those centers potentially offering our deep TMS technology going forward. Okay, got it.
Speaker Change: For us to grow.
Speaker Change: Through this.
Speaker Change: Channel I see all those centers.
Speaker Change: Potentially offering.
Speaker Change: Our deep Tms technology going forward.
Speaker Change: Okay got it and could you talk about M. D D. A little bit are you seeing any changes on the treatment paradigm with the payers out there in the marketplace.
Jeffrey Cohen: And could you talk about MDD a little bit? Are you seeing any changes on the treatment paradigm with the payers out there in the marketplace for MDD and also perhaps for OCD? You know I would say that the paradigm for MDD was very positive in the last few years. You know they reduced the number of failures that are eligible for treatment from four failures in the past to only one or two. I do see some constant increase in some of the fees per procedure so I think that the paradigm has been positive and and I think it will stay positive as far as I see it because at the end of the day this is a very effective treatment that is saving money for the for the peers.
Speaker Change: Or MTG and also perhaps for OCD.
Speaker Change: You know I would say that the paradigm for awful MVD was very positive in the last few years.
Speaker Change: They reduce the number of.
Speaker Change: Our failures.
Speaker Change: That are eligible.
Speaker Change: For treatment former from full trailer has in the past only one or two.
Speaker Change: I do see some.
Speaker Change: Constant increase in some of the.
Speaker Change: <unk> procedure, so I think that the paradigm.
Speaker Change: Been positive and I think it will stay positive.
Speaker Change: As far as I see it because at the end of the day. This is a very effective treatment that is saving money for the.
Jeffrey Cohen: As for OCD we also see a very steady and slow growth on the coverage by our peers. Today we've got coverage for close to 100 people lives in the U.S. We need to do some more work with continuing increase this also for the OCD because that's the only available treatment effective treatment by TMS for those patients and I'm expecting the peers to continue and embrace this technology and to cover it in the near future. Got it.
Speaker Change: <unk> also OCD, we also see a very steady and slow growth on the coverage by.
Speaker Change: By our peers.
Speaker Change: Today, we've got coverage for close to 100.
Speaker Change: People lives in the U S. We need to do some more work with a continuing increase this also for the OCD because that's the only available.
Speaker Change: Treatment effective treatment.
Speaker Change: <unk> Bye bye Tms.
Speaker Change: For those patients and I'm expecting to Paris to continue and embrace this technology and to cover it in the near future.
George: Got it and then lastly for us to George could you talk about the.
Jeffrey Cohen: And then lastly for us, Hadar, could you talk about the 360 system and perhaps give us a sense of during 2025, what we may expect to hear about as far as any studies or indication or any regulatory pathway? Yeah, so. I think the most exciting thing for us on the clinical side with the next gen, the TMS 360, is to launch the multicenter trial in the U.S. with this specific 360 system. We believe it represents the future of the TMS segment, so the first use with this device on a multicenter trial in the U.S. will be done through this multicenter trial that we plan to launch on the second half of 2025.
George: The 360 system and perhaps give us a sense of during 2020 for what we may expect.
George: Did you hear about as far as any study.
George: Studies or indication or any regulatory path for us.
George: Yes so.
George: I think the most exciting.
George: For us on the clinical.
George: Ah side with the next Gen to Tms 360 is to launch the multicenter trial.
George: In in the U S with these specific.
George: 360 system.
George: We believe it represents the future of the.
George: Tms.
George: Segment.
George: The first use with this device.
George: On a multicenter trial in the U S will be done through this a multicenter trial that we planned to.
George: To launch in the second half of 2025.
Jeffrey Cohen: On the same time, we do aim to use and to launch some feasibility studies with the TMS 360 for Alzheimer's disease and Parkinson's because we believe that this groundbreaking technology could be a benefit for these two indications, but we need to start to do some small feasibility studies with this technology. Okay, and when you talk about a back half launch of a multi-center trial, are you referring to MDD specifically as the indication? No, I'm referring for the AUD clinical trial on the second half of 2024. Got it. Okay, perfect.
George: On the same time, we do aiming also.
George: To use and to launch some feasibility studies.
George: With the Tms 360 for Alzheimers disease, and Parkinson's because we believe that.
George: These aren't breaking technology could be benefit.
George: Aimed for these two indications, but we need to start to do some.
George: Our feasibility small feasibility studies.
George: With this technology.
George: Okay and the when you talk about a put.
George: The back half launch over a multi center trial are you referring to M. D. D. Specifically is the indication.
George: No I'm referring.
George: I think for the for the <unk>.
George: Clinical trial in the second half of 2025.
Speaker Change: Got it okay perfect. Thank you very much particular questions. Thank you Jeff.
Jeffrey Cohen: Thank you very much for taking our questions. Thank you, Jeff. Thanks for the question and congratulations on the quarter.
Speaker Change: Our next question comes from Carl Byrnes with Northland Capital markets. Please go ahead.
Carl Byrnes: Thanks for the question and congratulations on the quarter I'm, just wondering given the cash build that you have do you see any opportunities for complementary acquisitions or anything that might be in the business development.
Carl: I'm just wondering, given the cash build that you have, do you see any opportunities for complimentary acquisitions or anything that might be in the business development space that we should be looking for potentially in the next? 12 to 18 months.
Speaker Change: Space that we should be looking for potentially in the next.
Carl Byrnes: 12 months to 18 months or less.
Hadar Levy: Thank you Carl and good morning. Yes, we do have a very stable situation with our balance sheet, but I think that 2025 is going to be a pivotal year for the company, mostly on the innovative side. We're going to do lots of interesting and compelling studies in 2025. But we're also looking to continue and build our future and start planting all the right seeds for a long-term growth for the company, which means to continue and strengthen our relationship and partnership with growing and profitable enterprise accounts. Our intention is to grow organically, but also looking for some interesting collaboration and partnership with growing mental health and potentially also addiction centers that can really increase our backlog for the long run.
Carl Byrnes: Yes, Thank you Carl.
Speaker Change: And good morning.
Carl Byrnes: Yes, we do.
Carl Byrnes: Very stable.
Carl Byrnes: Our situation with our.
Carl Byrnes: Our balance sheet.
Carl Byrnes: But I think that 2025 is going to be a pivotal year for the company.
Carl Byrnes: Mostly on the innovative side, we're going to.
Carl Byrnes: There are lots of.
Carl Byrnes: Interesting and compelling.
Carl Byrnes: In 2025.
Carl Byrnes: But we're also looking to continue and build our future.
Carl Byrnes: And start planting all the right seeds for long term growth for the company, which means to continue and strength our relationship and partnership with entered with a growing and profitable enterprise accounts.
Carl Byrnes: So and so our intention is to grow organically, but also looking for some interesting collaboration and partnership.
Carl Byrnes: With growing mental health and potentially also addiction centers.
Carl Byrnes: That can really increase our backlog for the for the long run in.
Hadar Levy: In terms of acquisition, we are not actively looking for an acquisition on the horizon. We are always looking for some interesting technologies that could be an option. to the deep TMS system in the clinic, but we're also developing some new technologies that we believe could help us to bring new product to the market. So just to summarize, we are looking to invest this money back into expanded growth for the company, enhance our collaboration with growing enterprise account, and continue to invest in the future of mental health and addiction arena. Great. Thank you. Thank you, Karl.
Carl Byrnes: In terms of acquisition, we are not actively looking for.
Carl Byrnes: An acquisition on the Horizon, we are always looking on some interesting.
Carl Byrnes: Technologies that could be and EM.
Carl Byrnes: Completing technology too.
Carl Byrnes: To the deep Tms system.
Carl Byrnes: System in the clinic.
Carl Byrnes: But were also developing some new technologies that we believe could help us to bring new product to the market.
Carl Byrnes: So just to summarize we are looking to it.
Carl Byrnes: We invest this money back into.
Carl Byrnes: <unk> expanded the growth for the company.
Carl Byrnes: Enhance our collaboration with <unk>.
Carl Byrnes: Growing enterprise account and continue to to invest in the future of <unk>.
Carl Byrnes: Of mental health and and.
Carl Byrnes: And addiction arena.
Carl Byrnes: Yeah.
Carl Byrnes: Great. Thank you.
Carl Byrnes: Thank you Paul.
Speaker Change: Ken. Thank you have a question. Please press Star then one.
Speaker Change: Next question comes from from Silver.
Wainwright: Wainwright. Please go ahead.
Carl: Thanks very much for taking my questions and congratulations on a very solid end to 2024.
Silver Wainwright: Thanks, very much for taking my questions and congratulations on a very solid into 2024, Firstly I wanted to ask if you could comment on the current broader macroeconomic and geopolitical situation and if you expect any of this to pose any.
Carl: Firstly, I wanted to ask if you could comment on the current broader macroeconomic and geopolitical situation, and if you expect any of this to pose any unaccustomed challenges or possible opportunities for Brainsway as we look ahead to the rest of 2025, particularly as this pertains to pricing dynamics as well as uptake in emergent indications for the DPMF. Yeah, we don't see, as of today, any impact on the macroeconomics changes, you know, on custom, you know, Brainsway is a U.S. based company. Most of our business is in the U.S. and most of our team is also based in the U.S.
Silver Wainwright: On a custom challenges or possible opportunities for brain's way as we look ahead to the rest of 2025, particularly as it pertains to pricing dynamics as well as uptake in emergent indications for the deep Tms system.
Silver Wainwright: Yes.
Silver Wainwright: We don't see.
Silver Wainwright: As of today any impact on the macro economics.
Silver Wainwright: Uh huh.
Silver Wainwright: Changes you know on cost immune our brain freeze.
Silver Wainwright: Is the U S b.
Silver Wainwright: Based company.
Silver Wainwright: Most of our business is.
Silver Wainwright: As in the U S and most of our team is also based on.
Silver Wainwright: In the in.
Hadar Levy: market.
Silver Wainwright: In the U S market. However.
Hadar Levy: However, we do see lots of positive tailwinds to our business, specifically around some of the new indications that we're about to bring to the market that relates to the mental health industry. I do believe that the accelerated DIPTMS protocol could really mitigate some of the trends that we're seeing in the market. I do think that the PTSD treatment that has been approved by the, for reimbursement in Israel, and we're currently, there's some few indications from a very favorable result that has been used by the VA in the U.S. might increase the interest also on the macroeconomics and might, we potentially may benefit from it at the end.
Silver Wainwright: We do see lots of positive tail winds.
Silver Wainwright: To our business specifically.
Silver Wainwright: Around some of the new indication that we're about to bring to the market.
Silver Wainwright: That relates to the mental health industry.
Silver Wainwright: Do believe that the accelerated.
Silver Wainwright: Deep Tms protocol could really mitigate some of the trends that we're seeing in the market I do think that.
Speaker Change: PTSD treatment that has been approved by Dr.
Silver Wainwright: For reimbursement in Israel, and we are currently.
Silver Wainwright: There is some few publication.
Silver Wainwright: From a very favorable results that has been used.
Silver Wainwright: By the VA in the U S.
Silver Wainwright: Might increase the interest also on the macro economics and.
Silver Wainwright: And might we potentially may benefit from from it at the end but.
Hadar Levy: But for your question, the way that we see some of the microeconomics, we've got lots of mitigation on the financial side and the way that we are partnering with our partners down the road. So we remain very positive at that.
Silver Wainwright: For your question.
Silver Wainwright: That we think we see some of the microeconomics.
Silver Wainwright: We've got lots of mitigation on the financial fly on the financial side and the way that we are partnering with our.
Silver Wainwright: Partners.
Silver Wainwright: On the road. So we remain very positive on that front.
Carl: Just as a follow-on to that question, I wanted to ask if you can confirm whether there has been, in fact, no impact to any governmental funding of exploratory work with the DTMS system. In particular, I recall that one of these initiatives was being supported by NIH funding, as we all have heard. There are cutbacks going on at NIH right now. I just wanted to confirm that this, in fact, does not affect any of the work that is being done with yours. Yeah, that's a very good question. I'm not aware of any of any pushback. You know, I think we made some kind of a publication of granting from the NIH for the specific study.
Silver Wainwright: Just as a follow on to that question I wanted to ask if you can confirm whether there has been in fact, no impact to any governmental funding of our exploratory work with the deep Tms system in particular, I recall that a one off.
Silver Wainwright: These initiatives was being supported by NIH funding as we all have heard there are cutbacks going on at NIH right. Now just wanted to confirm that this in fact does not affect any of the work that is being done with your system.
Silver Wainwright: Yes, that's a very good question I'm not aware of any of any pushback.
Silver Wainwright: You know I think we made some kind of a publication.
Silver Wainwright: Granting from the NIH for this specific study.
Hadar Levy: I would say on the contrary, I think that, you know, the funding that we I think announced was relates to the addiction side, which is a very, very compelling and important disease that I believe the government and also the public wants to see some progress. But as of today, there was no restrictions for any kind of funding to some of our projects.
Silver Wainwright:
Silver Wainwright: I would say on the account on the contrary I think that.
Silver Wainwright: You know the funding that we I think announced.
Silver Wainwright: Was relates to the addiction side, which is a very very compelling and important.
Diseases that.
Silver Wainwright: I believe.
Silver Wainwright: The government and also the public wants to see some.
Silver Wainwright: Progress.
Silver Wainwright: But as of to date, there was no restrictions for any kind of funding to some of our project.
Hadar Levy: Thank you very much. So I would like to thank all of the investors, analysts and other participants for their interest in Brainsway.
Thank you very much.
Silver Wainwright: Yeah.
Silver Wainwright: This concludes our question and answer session.
Speaker Change: I would like to turn the conference back over to have a doctor for any closing remarks.
Speaker Change: So I would like to thank all of the invest both analysts and other participants for their interest in <unk>.
Hadar Levy: With that, please enjoy the rest of your day. Thank you.
Speaker Change: With that please enjoy the rest of your day. Thank you.
Speaker Change: Yes.
Speaker Change: The conference has now concluded. Thank you for attending today's presentation you may now disconnect.