Q1 2025 Neuronetics Inc Earnings Call

May 6, 2025

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Mark Klausner: GAAP and non-GAAP results are presented in the tables accompanying our press release, which can be viewed on our website.

Please be advised that today's conference is being recorded I would now like to hand, the conference over to your first speaker today Mark Klausner. Please go ahead.

Keith Sullivan: With that, it's my pleasure to turn the call over to Neuronetics President and Chief Executive Officer, Keith Sullivan. Mark, thanks for the introduction. Good morning, everyone, and thank you for joining the call today. Let me start with our performance in the quarter, which represents our first full quarter inclusive of Greenbrook's financial results. Total revenue was $32 million, an increase of 84% over the first quarter of 2024. On a pro forma basis, total revenue increased 7% over pro forma revenue of $29.8 million for the first quarter of 2024. During the quarter, Neurostar's system revenue was $2.8 million, with 31 systems shipped.

Good day and thank you for standing by. Welcome.

Yeah.

Mark Klausner: Good morning, and thank you for joining us for <unk> first quarter of 2025 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.

To ask a question during the session you will need to press star one one on your telephone you will then hear an automated message advising that your hand is raised to withdraw your question. Please press star one one again.

Speaker Change: 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 $19 95 <unk>.

Please be advised that today's conference is being recorded I would now like to hand, the conference over to your first speaker today Mark Clark Sir. Please go ahead.

Speaker Change: Including statements related to our business strategy financial and revenue guidance, the Green book acquisition, and other operational issues and metrics.

Yeah.

Good morning, and thank you for joining us for the neural networks first quarter 2025 conference call.

Keith Sullivan: U.S. treatment session revenue was $9.6 million.

Speaker Change: Joining me on today's call are <unk>, President and Chief Executive Officer, Keith Sullivan, and Chief Financial Officer, Steve Furlong.

Speaker Change: Actual results could differ materially from those stated or implied by these forward looking statements due to risks and uncertainties associated with the Companys business.

Keith Sullivan: and U.S. clinic revenue, which represents Greenberg revenue, was $18.7 million. reflecting continued positive momentum following our transformative 2024.

Speaker Change: For a discussion of risks and uncertainties associated with the <unk> 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 was filed in March.

Keith Sullivan: I'd like to give you an overview of our strategic priorities for 2025 and our progress on them in the first quarter. As we move through 2025, we are focused on two clear strategic priorities. Number one, executing our Greenberg integration and growth strategy. and number two, continuing to scale our Better Me provider or BMP program.

Speaker Change: Including statements related to our business strategy financial and revenue guidance, the green brick acquisition and other operational issues and metrics.

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.

Speaker Change: During the call, we'll also discuss certain information on a non-GAAP basis, including EBITDA.

Speaker Change: Actual results could differ materially from those stated or implied by these forward looking statements due to risks and uncertainties associated with the Companys business.

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.

Keith Sullivan: beginning with Kramer. We are focused on three key initiatives. First, the optimization of our regional account manager or RAM. Following their comprehensive training at Neurostar University in November, our RAM team is successfully implementing the new automated patient transfer process. The educational tools, QR codes, and coordinated intake team are allowing us to connect with patients more effectively while they are still at their referring physician's office. Significantly Improving Conversion Rate.

Speaker Change: Management uses non-GAAP financial measures to compare our performance relative to forecast and strategic plans to.

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.

Speaker Change: To benchmark, our performance externally against competitors and for certain compensation decisions.

Speaker Change: During the call, we'll also discuss certain information on a non-GAAP basis, including EBITDA.

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 narrow networks, President and Chief Executive Officer, Keith Sullivan.

Keith Sullivan: Second, the rollout of Spravato. Spravato is now offered as a treatment option in 75 of our 95 Greenberg clinics. up from 35 clinics at the beginning of the quarter. This represents 75% of the Green Brook network, with implementation progressing on schedule. In 42 of these clinics, we have begun treating patients using the buy-and-bill model. which is already delivering the expected revenue improvement. Buy and build treatments are generating approximately three times the revenue compared with the administer and observe model. We remain on track to offer buy and bills bravado in all appropriate Greenberg clinics by the end of 2025.

Speaker Change: Mark Thanks for the introduction and good morning, everyone and thank you for joining the call today.

Speaker Change: Management uses non-GAAP financial measures to compare our performance relative to forecast and strategic plans.

Speaker Change: Let me start with our performance in the quarter, which represents our first full quarter inclusive of Greenburgh financial results <unk>.

Speaker Change: To benchmark, our performance externally against competitors and for certain compensation decisions.

Total revenue was $32 million, an increase of 84% over the first quarter of 2024.

Speaker Change: On a pro forma basis total revenue increased 7% over pro forma revenue of $29 8 million for the first quarter of 2024.

During the quarter Neurostar system revenue was $2 $8 million.

Speaker Change: Mark Thanks for the introduction and good morning, everyone and thank you for joining the call today.

Speaker Change: With 31 system shift.

Speaker Change: Let me start with our performance in the quarter, which represents our first full quarter inclusive of Green Brooks financial results.

Speaker Change: U S treatment session revenue was $9 6 million.

Speaker Change: And U S clinic revenue, which represents green broke revenue was $18 $7 million.

Speaker Change: Total revenue was $32 million, an increase of 84% over the first quarter of 2024.

Keith Sullivan: Third is the standardization of operations across the Green-Brook network. We have continued to execute well against this objection. with patient coordinators now placed in the majority of our clinics, enabling more effective in-person consultation. These coordinators are crucial in educating patients on the benefits of Neurostar TMS and Spravato treatment. Our training programs to ensure consistent patient experiences continue to show positive results. We have also made significant improvements to Greenberg's Revenue Cycle Management. including changes in leadership. and transitioning to advanced MD patient record billing platform, which is already enhancing our operational efficiency. Within our Green Book network, total clinic revenue was approximately $196,000 in Q1 of 2025, compared to approximately $139,000 in Q1 of 2024, a 41% increase.

Speaker Change: Reflecting continued positive momentum following our transformative 2024.

Speaker Change: On a pro forma basis total revenue increased 7% over pro forma revenue of $29 8 million for the first quarter of 2024.

Speaker Change: I'd like to give you an overview of our strategic priorities for 2025, and our progress on them in the first quarter.

Speaker Change: During the quarter Neurostar system revenue was $2 $8 million.

Speaker Change: As we move through 2025, we are focused on two clear strategic priorities number one executing our greenberg integration and growth strategy and number two continuing to scale, our better Ma provider or BMP program.

Speaker Change: With 31 systems shipped.

Speaker Change: U S treatment session revenue was $9 6 million and U S clinic revenue, which represents Green Brook revenue was $18 7 million.

Speaker Change: Beginning with Greenberg.

Speaker Change: Reflecting continued positive momentum following our transformative 2024.

Speaker Change: We are focused on three key initiatives first the optimization of our regional account manager or Rams.

Speaker Change: I'd like to give you an overview of our strategic priorities for 2025, and our progress on them in the first quarter.

Speaker Change: Following their comprehensive training at Neurostar University in November our Ram team is successfully implementing the new automated patient transfer process.

Speaker Change: As we move through 2025, we are focused on two clear strategic priorities number one executing our greenberg integration and growth strategy and.

Speaker Change: The educational tools QR codes and coordinated intake team are allowing us to connect with patients more effectively.

Speaker Change: And number two continuing to scale, our better meet provider or BMP program.

Speaker Change: While they are still at their referring physicians office significantly improving conversion rates.

Speaker Change: Beginning with Greenberg.

Keith Sullivan: This increase was driven by optimization of our clinic footprint and strong Neurostar TMS performance at the Greenberg Clinic in the quarter. On the same clinic basis, Neurostar TMS revenue increased 8% versus last year as a result of the actions described above. Our combined company cost synergy realization remains on track. As we integrated the Green Brook operations, we have continued to identify and realize synergies. When we initially announced the transaction, we had identified $15 million of expected annualized synergies. After closing, by the end of 2024, we had identified approximately $22.5 million of annualized synergies. I'm pleased to report that 95% of these were realized by the end of 2024.

Speaker Change: We are focused on three key initiatives first the optimization of our regional account manager or Rams.

Speaker Change: Second the rollout of <unk> provider.

Speaker Change: So <unk> is now offered as a treatment option in 75 of our 95 Greenberg clinics.

Speaker Change: Following their comprehensive training at Neurostar University in November our Ram team is successfully implementing the new automated patient transfer process.

Speaker Change: Up from 35 clinics at the beginning of the quarter.

Speaker Change: This represents 75% of the Green broke network with implementation progressing on schedule.

Speaker Change: The educational tools QR codes and coordinated intake team are allowing us to connect with patients more effectively while they are still at their referring physicians office significantly improving conversion rates.

Speaker Change: In 42 of these clinics, we have begun treating patients using the buy and bill model.

Speaker Change: Which is already delivering the expected revenue improvements.

Speaker Change: Second the rollout of <unk> provider.

By Unbilled treatments are generating approximately three times the revenue compared with the administer and observed model.

Speaker Change: <unk> is now offered as a treatment option in 75 of our 95 Greenberg clinics.

Speaker Change: We remain on track to offer buy and bill provider in all appropriate Greenberg clinics by the end of 2025.

Speaker Change: Up from 35 clinics at the beginning of the quarter.

Speaker Change: This represents 75% of the Green broke network with implementation progressing on schedule.

Speaker Change: Third is the standardization of operations across the Greenberg network.

Keith Sullivan: as we continue to integrate operations. We are actively looking for additional synergy opportunities and currently believe that total realized synergies will exceed 23 million dollars.

Speaker Change: In 42 of these clinics, we have begun treating patients using the buy and bill model.

Speaker Change: We have continued to execute well against this objective with patient coordinators now placed in the majority of our clinics, enabling more effective in person consultation.

Speaker Change: Which is already delivering the expected revenue improvements.

Speaker Change: By Unbilled treatments are generating approximately three times, the revenue compared with the administer and observe model.

Keith Sullivan: These efficiencies, combined with our revenue growth initiatives, keep us on path towards achieving cash flow positivity in the third quarter of this year, as we have previously guided.

Speaker Change: These coordinators are crucial and educating patients on the benefits of Neurostar Tms and provider of treatments.

Speaker Change: We remain on track to offer buy and bill provider in all appropriate Greenberg clinics by the end of 2025.

Speaker Change: Our training programs to ensure consistent patient experiences continuing to show positive results.

Keith Sullivan: Our second strategic priority is the ongoing expansion of our BMP program across our customer base. As a reminder, BMP sites are those who agree to meet our patient responsiveness and educational standards. The program continues to gain momentum. We currently have over 385 active sites, with another 110 sites currently working to achieve the program standard. Our Practice Development Manager team, or PDMs, are making significant progress in teaching these sites how to meet the remaining standards needed to qualify for the program. As a result, we expect a steady flow of new sites to enter the program over the coming enrollment periods this year.

Speaker Change: We have also made significant improvements to green Brooks revenue cycle management include.

Speaker Change: Third is the standardization of operations across the Greenberg network.

Speaker Change: Including changes in leadership.

Speaker Change: We have continued to execute well against this objective with patient coordinators now placed in the majority of our clinics, enabling more effective in person consultation. These.

Speaker Change: And transitioning to advanced AMD patient record billing platform, which is already enhancing our operational efficiency.

Speaker Change: These coordinators are crucial and educating patients on the benefits of Neurostar Tms and provider treatments.

Speaker Change: Within our Greenberg network total clinic revenue was approximately $196000 in Q1 of 2025.

Speaker Change: Our training programs to ensure consistent patient experiences continuing to show positive results.

Speaker Change: Impaired to approximately $139000 in Q1 of 2020 for a 41% increase.

Speaker Change: We have also made significant improvements to green Brooks revenue cycle management.

Speaker Change: This increase was driven by optimization of our clinic footprint and strong Neurostar Tms performance at the Greenberg clinics in the quarter.

Speaker Change: Including changes in leadership.

Speaker Change: Transitioning to advanced AMD patient record billing platform, which is already enhancing our operational efficiency.

Speaker Change: On the same clinic basis, Neurostar Tms revenue increased 8% versus last year as a result of the actions described above.

Keith Sullivan: The performance metrics of BMP sites continue to validate the efficacy of the program. with these locations consistently helping more patients and delivering care faster. Once practices are fully in the BMP program, they treat three times more patients per site per quarter than practices who are not in the program. On average, these BMP sites go from treating 3 patients per quarter to over 10 patients per quarter. In addition, Customer sites that participate in the BMP program are addressing patient needs about two times faster when comparing results of Q1 2025 to Q1 2024. The outcomes demonstrated by BMP validate the lasting benefits of our model for teaching practices and better serve their patients with NeuroSTAR.

Speaker Change: Within our Greenberg network total clinic revenue was approximately $196000 in Q1 of 2025 compared to approximately $139000 in Q1 of 2020 for a 41% increase.

Speaker Change: Our combined company cost synergy realization remains on track.

Speaker Change: As we integrated the Green broke operations, we have continued to identify and realize synergies.

Speaker Change: This increase was driven by optimization of our clinic footprint and strong Neurostar Tms performance at the Greenberg clinics in the quarter.

Speaker Change: When we initially announced the transaction, we had identified $15 million of expected annualized synergies.

Speaker Change: After closing by the end of 2024, we had identified approximately $22 5 million.

Speaker Change: On a same clinic basis, Neurostar Tms revenue increased 8% versus last year as a result of the actions described above.

Speaker Change: Of annualized synergies.

Speaker Change: I am pleased to report that 95% of these were realized by the end of 2024.

Speaker Change: Our combined company cost synergy realization remains on track.

Speaker Change: As we continue to integrate operations, we are actively looking for additional synergy opportunities and currently believe that total realized synergies will exceed $23 million.

Speaker Change: As we integrated the Green book operations, we have continued to identify and realize synergies.

Speaker Change: When we initially announced the transaction, we had identified $15 million of expected annualized synergies.

Speaker Change: These efficiencies combined with our revenue growth initiatives keep us on path.

Keith Sullivan: Accordingly, we continue to focus our efforts supporting these BMP practices based on their commitment to patient responsiveness and advanced training. Importantly, we have observed that treatment session utilization is outpacing purchases at these sites, indicating strong patient flow and utilization of existing equipment.

Speaker Change: After closing by the end of 2024, we had identified approximately $22 5 million of annualized synergies.

Speaker Change: Towards achieving cash flow positivity in the third quarter of this year as we have previously guided.

Speaker Change: I am pleased to report that 95% of these were realized by the end of 2024.

Speaker Change: Our second strategic priority is the ongoing expansion of our BMP program across our customer base. As a reminder, BMP sites are those who agreed to meet our patient responsiveness and educational standards.

Speaker Change: As we continue to integrate operations, we are actively looking for additional synergy opportunities and currently believe that total realized synergies will exceed $23 million.

Keith Sullivan: Based on Greenberg's success in educating primary care physicians and non-interventional psychiatrists about our advanced treatment options, we have recently launched the Neurostar Connection Network. through which our PDMs are building awareness of the NeuroSTAR TMS among 69% of patients with depression being treated within primary care. In these conversations, we give primary care physicians the option of working with our NeuroSTAR provider in their area, including our BMP staff. This is a critical development in our strategy to expand patient access to Neurostar TMS treatment. It should be no surprise that primary care providers prefer BMP sites who are committed to our patient responsiveness and education standards.

Speaker Change: The program continues to gain momentum.

Speaker Change: These efficiencies.

Speaker Change: We currently have over 385 active sites with another 110 sites currently working to achieve the program standards.

Speaker Change: With our revenue growth initiatives keep us on path.

Speaker Change: Towards achieving cash flow positivity in the third quarter of this year as we have previously guided.

Speaker Change: Our practice development manager team or Pbms are making significant progress in teaching these sites had to meet the remaining standards needed to qualify for the program.

Speaker Change: As a result, we expect a steady flow of new sites to enter the program over the coming enrollment periods. This year.

Speaker Change: The program continues to gain momentum.

Speaker Change: The performance metrics of BMP sites continue to validate the efficacy of the program.

Speaker Change: We currently have over 385 active sites with another 110 sites currently working to achieve the program standards.

Speaker Change: With these locations consistently helping more patients and delivering care faster.

Speaker Change: Our practice development manager team or Pbms are making significant progress in teaching these sites had to meet the remaining standards needed to qualify for the program.

Speaker Change: Once practices are fully in the BMP program. They treat three times more patients per site per quarter than practices, who are not in the program.

Keith Sullivan: So we have quickly seen BMP providers form the backbone of this program. The standard protocols and consistent patient experience at BMP sites give referring physicians confidence that their patients will receive high quality care and remission rates that are unachievable with antidepressants. Early data indicates that practices participating in the BMP program are seeing a meaningful increase in patients from local primary care networks. further validating the value of a comprehensive approach to patients.

Speaker Change: As a result, we expect a steady flow of new sites to enter the program over the coming enrollment periods. This year.

Speaker Change: On average these BMP sites go from treating three patients per quarter to over 10 patients per quarter.

Speaker Change: The performance metrics of BMP sites continue to validate the efficacy of the program.

Speaker Change: In addition.

Speaker Change: Customer sites that participate in the BMP program are addressing patient needs about two times faster when comparing results of Q1 2025 for Q1 2024.

Speaker Change: With these locations consistently helping more patients and delivering care faster.

Speaker Change: Once practices are fully in the BMP program they treat.

Speaker Change: The outcomes demonstrated by BNP validate the lasting benefits of our model for teaching practices had better serve their patients with neurostar.

Speaker Change: Three times more patients per site per quarter than practices, who are not in the program on.

Speaker Change: On average these BMP sites go from treating three patients per quarter to over 10 patients per quarter.

Keith Sullivan: Now for some updates on other marketing initiatives. starting with our targeted TV marketing campaign. In the fall of 2024, we ran a successful campaign in Tampa, Florida, that doubled awareness, despite being interrupted by two hurricanes that hit the area during the campaign. Our mission to elevate consumer awareness of the Neurostar brand continues to gain momentum through the targeted offline media programs, which include radio, TV, and billboards. In late March, we launched a six-week TV campaign in the Baltimore area, reaching over a million viewers and laying the groundwork for broader market impact. Within the first two weeks of the campaign, preliminary results have been very encouraging, as we are seeing 2 1⁄2 times more Neurostar brand search impressions.

Speaker Change: Accordingly, we continue to focus our efforts supporting these BMP practices based on their commitment to patient responsiveness at advanced training.

Speaker Change: In addition.

Speaker Change: Customer sites that participate in the BMP program are addressing patient needs about two times faster when comparing results of Q1 2025 for Q1 2024.

Speaker Change: Importantly, we have observed that treatment session utilization is outpacing purchases at these sites in this indicating strong patient flow and utilization of existing equipment.

Speaker Change: The outcomes demonstrated by BNP validate the lasting benefits of our model for teaching practices had better serve their patients with neurostar.

Speaker Change: Based on Greenberg success, and educating primary care physicians and non interventional psychiatrist about our advanced treatment options. We have recently launched the Neurostar connection network.

Speaker Change: Accordingly, we continue to focus our efforts supporting these BNP practices based on their commitment to patient response events at.

Speaker Change: Through which our <unk> are building awareness of Neurostar, Tms amongst 69% of patients with depression being treated within primary care.

Speaker Change: In advanced training.

Speaker Change: In these conversations.

Speaker Change: We give primary care physicians the option of working with our neurostar provider in their area, including our BMP sites.

Keith Sullivan: on Google and Neurostar.com. compared to the searches prior to the start of the campaign. Over 100 potential patients have requested consultation. and we expect this number to grow as the campaign reaches more viewers in the coming weeks.

Speaker Change: Based on Greenberg success, and educating primary care physicians and non interventional psychiatrists.

Speaker Change: This is a critical development and our strategy to expand patient access to Neurostar Tms treatment.

Speaker Change: Our advanced treatment options, we have recently launched the Neurostar connection network.

Speaker Change: It should be no surprise that primary care providers prefer BMP sites, who are committed to our patient responsiveness and education standards.

Keith Sullivan: Additionally, our co-op marketing program continues to drive measurable results. Accounts who participated in co-op in the prior two consecutive quarters showed a 20% uplift in utilization and an 18% uplift in motor thresholds in Q1 of 2025 compared to Q1 of 2024.

Speaker Change: Through which our PD arms are building awareness of the Neurostar Tms amongst 69% of patients with depression being treated within primary care.

Speaker Change: So we have quickly seen BMP providers form the backbone of this program.

Speaker Change: In these conversations we give primary care physicians the option of working with our neurostar provider in their area, including our BMP sites.

Speaker Change: Standard protocols and consistent patient experience at BMP sites get referring physicians confidence that their patients will receive high quality care and remission rates that are unachievable with anti depressants.

Speaker Change: This is a critical development and our strategy to expand patient access to Neurostar Tms treatment.

Keith Sullivan: Another key growth driver continues to be the adolescent treatment capability. Since receiving FDA clearance in March of 2024 as the first TMS treatment approved for depression in adolescents age 15 to 21, we have seen meaningful traction in this segment. The number of adolescent patients receiving treatment has grown 38% in the first quarter of 2025 versus the first quarter of 2024. with the total number of adolescent patients age 15 to 17 treated in Q1 of 2025. seeing all the patients treated in the full year of 2023. We are seeing encouraging adoption rates across our provider network, and insurance coverage for the Adolescent NeuroSTAR TMS treatment continues to improve significantly.

Speaker Change: It should be no surprise that primary care providers prefer BMP sites, who are committed to our patient responsiveness and education standards.

Speaker Change: Early data indicates that practices participating in the BMP program are seeing a meaningful increase in patients from local primary care networks further validating the value of a comprehensive approach to patient care.

Speaker Change: So we have quickly seen BMP providers form the backbone of this program.

Speaker Change: The standard protocols and consistent patient experience at BMP sites give referring physicians confidence that their patients will receive high quality care and remission rates that are unachievable with anti depressants.

Speaker Change: Now for some updates on other marketing initiatives.

Speaker Change: Starting with our targeted television marketing campaigns in the fall of 2024, we ran a successful campaign in Tampa, Florida that doubled awareness despite being interrupted by two hurricanes that hit the area during the campaign.

Speaker Change: Our mission to elevate consumer awareness of the Neurostar brand continues to gain momentum through the targeted offline media programs, which include radio television and Billboards.

Keith Sullivan: with Ever North Health Services, a Cigna Group subsidiary, recently expanding Neurostar TMS coverage to include adolescents 15 and older with MDD. joining our major insurers like Humana, Aetna, and several Blue Cross Blue Shield entities that have updated policies since our FDA clearance as the first first-line add-on treatment for adolescent MDD.

Speaker Change: Now for some updates on other marketing initiatives.

Speaker Change: In late March we launched a six week PV campaign in the Baltimore area, reaching over 1 million viewers and laying the groundwork for broader market impact.

Speaker Change: Within the first two weeks of the campaign preliminary results have been very encouraging as we are seeing two five times more neurostar brand search impressions on Google and Neurostar Dot Com <unk>.

Speaker Change: Compared to the searches prior to the start of the campaign.

Keith Sullivan: In summary, our first quarter performance demonstrates that strategic initiatives we implemented through 2024 are driving tangible results. Our integrated business model, combining innovative technology with a robust care delivery network, positions us to expand access to effective mental health treatments while improving our growth trajectory and financial performance.

Speaker Change: Over 100 potential patients have requested consultations and we expect this number to grow as the campaign reaches more viewers in the coming weeks.

Speaker Change: In late March we launched a six week PV campaign in the Baltimore area, reaching over 1 million viewers and laying the groundwork for broader market impact.

Speaker Change: Additionally, our co op marketing program continues to drive measurable results.

Speaker Change: <unk> participated in co op in the prior two consecutive quarters showed a 20% uplift in utilization and an 18% uplift in motor thresholds in Q1 of 2025 compared to Q1 of 2024.

Stephen Furlong: I will now turn the call over to Steve to review our financial results. Thank you, Keith. Unless otherwise noted, all performance comparisons are being made for the first quarter of 2025 versus the first quarter of 2024. Total revenue was $32 million, an increase of 84% compared to the revenue of $17.4 million in the first quarter of 2024, primarily driven by the Greenberg acquisition.

Speaker Change: Compared to the searches prior to the start of the campaign.

Speaker Change: Over 100 potential patients have requested consultations and we expect this number to grow as the campaign reaches more viewers in the coming weeks.

Speaker Change: Another key growth driver continues to be the adolescent treatment capability.

Speaker Change: Since receiving FDA clearance in March of 2024, as the first Tms treatment approved for depression in adolescents, aged 15% to 21, we have seen meaningful traction in this segment.

Speaker Change: Additionally, our co op marketing program continues to drive measurable results.

Speaker Change: <unk>, who participated in co op in the prior two consecutive quarters showed a 20% uplift in utilization and an 18% uplift in motor thresholds in Q1 of 2025 compared to Q1 of 2024.

Speaker Change: The number of adolescent patients receiving treatment has grown 38% in the first quarter of 2025 versus the first quarter of 2024.

Stephen Furlong: U.S. Neurostar advanced therapy system revenue was $2.8 million, and we shipped 31 systems in the quarter.

Speaker Change: With the total number of adolescent patients aged 15 to 17 treated in Q1 of 2025.

Speaker Change: Another key growth driver continues to be the adolescent treatment capability.

Stephen Furlong: U.S. treatment session revenue was $9.6 million, a decrease of 26% year-over-year, primarily due to the elimination of Green Book revenue in our 2025 results.

Speaker Change: Receiving FDA clearance in March of 2024, as the first Tms treatment approved for depression in adolescents age 15% to 21, we have seen meaningful traction in this segment.

Speaker Change: Exceeding all of the patients treated in the full year of 2023.

Speaker Change: We are seeing encouraging adoption rates across our provider network and insurance coverage for the adolescent Neurostar Tms treatment continues to improve significantly.

Stephen Furlong: U.S. clinic revenue, which represents revenue generated by treatment centers from the Greenbrook acquisition, was $18.7 million for the three months ended March 31, 2025. Gross margin was 49% compared to 75% in the prior year quarter. This change in gross margin was primarily a result of the inclusion of Greenbrook's clinic business, which operates at a lower margin and the elimination of Greenbrook treatment session revenues. Operating expenses during the quarter were $26.8 million, an increase of $6.9 million, or 35%, compared to $19.9 million in the first quarter of 2024. The change was mainly attributable to the inclusion of Greenberg's operating expenses of $9.5 million.

Speaker Change: The number of adolescent patients receiving treatment as growth, 38% in the first quarter of 2025% versus the first quarter of 2024.

Speaker Change: With ever North Health services, a Cigna group subsidiary recently, expanding Neurostar Tms coverage to include adolescents 15, and older with M. D D.

Speaker Change: With the total number of adolescent patients aged 15 to 17 treated in Q1 of 2025.

Speaker Change: Joining our major insurers like Humana, Aetna and several Blue Cross Blue shield entities that have updated policies since our FDA clearance as the first first line add on treatment for adolescent MTV.

Speaker Change: Exceeding all of the patients treated in the full year of 2023.

Speaker Change: We are seeing encouraging adoption rates across our provider network and insurance coverage for the adolescent Neurostar Tms treatment continues to improve significantly.

Speaker Change: In summary, our first quarter performance demonstrates the strategic initiatives, we implemented through 2024 are driving tangible results.

Speaker Change: With ever North Health services, a Cigna group subsidiary recently, expanding Neurostar Tms coverage to include adolescents 15 and older with MTB.

Speaker Change: Our integrated business model, combining innovative technology with a robust care delivery network positions us to expand access to effective mental health treatments, while improving our growth trajectory.

Stephen Furlong: During the quarter, we incurred approximately $1.4 million of non-cash, stock-based compensation expenses. Net loss for the quarter was negative 12.7 million dollars or negative 21 cents per share as compared to a net loss of negative 7.9 million dollars or negative 27 cents per share in the prior year quarter. EBITDA was negative $10.1 million, as compared to negative $6.3 million in the prior year quarter. As of March 31, 2025, cash and cash equivalents were $20.2 million. This compares to cash and cash equivalents of $18.5 million as of December 31st, 2024. Our capital position was strengthened by our successful public offering in February, which raised $18.9 million in net proceeds.

Speaker Change: And financial performance.

Speaker Change: I will now turn the call over to Steve to review our financial results.

Speaker Change: In summary, our first quarter performance demonstrates that our strategic initiatives, we implemented through 2024 are driving tangible results.

Steve Furlong: Thank you Keith unless otherwise noted our performance comparisons are being made for the first quarter of 2025 versus the first quarter of 2024.

Steve Furlong: Total revenue was $32 million, an increase of 84% compared to the revenue of $17 4 million in the first quarter of 2024, primarily driven by the green brick acquisition.

Speaker Change: And financial performance.

Steve Furlong: U S. Neurostar advanced therapy system revenue was $2 8 million and we shipped 31 systems in the quarter.

Speaker Change: I will now turn the call over to Steve to review our financial results.

Speaker Change: Yes.

Steve: Thank you Keith.

Speaker Change: Otherwise noted outperformance comparisons are being made for the first quarter of 2025.

Steve Furlong: U S treatment session revenue was $9 6 million a decrease of 26% year over year, primarily due to the elimination of Greenbrier revenue in our 2025 results.

Steve: Versus the first quarter of 2024.

Steve: Total revenue was $32 million, an increase of 84% compared to the revenue of $17 4 million in the first quarter of 2024, primarily driven by the green brick acquisition.

Steve Furlong: U S clinic revenue, which represents revenue generated by treatment centers from the Greenberg acquisition was $18 $7 million for the three months ended March 31 2025.

Stephen Furlong: This financing has provided us with enhanced flexibility to execute on our growth initiatives while maintaining our path to cash flow breakeven in the third quarter of 2025. As a result, in the increased strength of the balance sheet due to the follow-on offering, we proactively took steps to settle Greenbrook's legacy vendor payment plan. and pull forward certain expenses in order to secure favorable vendor concessions by paying them early. While this increased our cash burn to levels above what would typically be seen in the first quarter, this decision will ultimately reduce our overall net spend with those vendors during 2025.

Steve: U S. Neurostar advanced therapy system revenue was $2 8 million and we shipped 31 systems in the quarter.

Steve Furlong: Gross margin was 49% compared to 75% in the prior year quarter.

Steve: U S treatment session revenue was $9 6 million a decrease of 26% year over year, primarily due to the elimination of Greenbrier revenue in our 2025 results.

Steve Furlong: This change in gross margin was primarily a result of the inclusion of Green Brooks clinic business, which operates at a lower margin and the elimination of Greenburgh treatment session revenue.

Steve: U S clinic revenue, which represents revenue generated by treatment centers from the Greenberg acquisition.

Steve Furlong: Operating expenses during the quarter.

Steve Furlong: Were $26 8 million, an increase of $6 9 million or 35%.

Steve: With $18 $7 million for three months ended March 31 2025.

Steve Furlong: Compared to $19 $9 million in the first quarter of 2024.

Steve: Gross margin was 49% compared to 75% in the prior year quarter.

Stephen Furlong: We also realized Greenberg's bonus payout and merit cycles and experienced a temporary lag in Greenberg collections as we integrated the new advanced MD software into our revenue cycle management. We are already seeing marked improvements in collections over the past two weeks as the new systems become fully operational. Due to these measures, cash used in operations for the first quarter was $17 million. We expect cash used in operations for the second quarter to be less than $5 million. And after the end of the year, we anticipate cash on the balance sheet to be greater than $20 million.

Steve Furlong: The change was mainly attributable to the inclusion of Green <unk> operating expenses of $9 $5 million.

Steve: This change in gross margin was primarily a result of the inclusion of Green Brooks clinic business, which operates at a lower margin and the elimination of Greenburgh treatment session revenue.

Steve Furlong: During the quarter, we incurred approximately $1 4 million of noncash stock based compensation expense.

Operating expenses during the quarter.

Steve Furlong: Net loss for the quarter was negative $12 7 million or negative <unk> 21 per share as compared to a net loss of negative $7 9 million or negative <unk> 27 per share in the prior year quarter.

Steve: Were $26 8 million, an increase of $6 9 million.

Steve: 435%.

Steve: Compared to $19 $9 million in the first quarter of 2024.

Steve: The change was mainly attributable to the inclusion of Green <unk> operating expenses of $9 $5 million.

Steve Furlong: EBITDA was negative $10 $1 million.

Steve Furlong: As compared to negative $6 3 million in the prior year quarter.

Steve: During the quarter, we incurred approximately $1 4 million of noncash stock based compensation expense.

Stephen Furlong: Now turning to guidance. For the second quarter, we expect revenue of $36 million to $38 million. We are narrowing our full-year revenue guidance to be in the range of $149 million to $155 million. compared to prior guidance of $145 million to $155 million. For the full year 2025, we continue to expect gross margin to be approximately 55% as a result of the inclusion of the Greenbrook Clinic business and the elimination of Greenbrook Treatment Session purchases. We continue to expect total operating expenses for the full year to be in the range of $90 million to $98 million.

Steve Furlong: As of March 31, 2025, cash and cash equivalents were $22 million.

Steve: Net loss for the quarter was negative $12 $7 million.

Steve Furlong: This compares to cash and cash equivalents of $18 5 million as of December 31st 2024.

Steve: Our negative <unk> 21 per share as compared to a net loss of negative $7 $9 million.

Steve Furlong: Our capital position was strengthened by.

Steve: Negative <unk> 27 per share in the prior year quarter.

Steve Furlong: By our successful public offering in February.

Steve: EBITDA was negative $10 1 million.

Steve Furlong: Raised $18 9 million in net proceeds.

Steve: As compared to negative $6 3 million in the prior year quarter.

Steve Furlong: This financing has provided us with enhanced flexibility to execute on our growth initiatives, while maintaining our path to cash flow breakeven in the third quarter of 2025.

Steve: As of March 31, 2025, cash and cash equivalents were $20 2 million.

Steve: This compares to cash and cash equivalents of $18 $5 million as.

Steve Furlong: As a result.

Steve Furlong: And the increased strength of the balance sheet due to the follow on offering we proactively took steps to settle green Brooks legacy vendor payment plans.

Steve: 31st 2024.

Stephen Furlong: I am pleased to report that the current macro environment will have a negligible impact on the business. We anticipate a limited impact from tariffs as the majority of our sourcing is inside the U.S. and our manufacturing is based in San Diego. We do source some plastic components from outside the USA, along with the Neurostar chair, but we estimate the net impact to be about $500 per Neurostar system, which is very manageable within our overall cost structure. From a treatment session standpoint, we sourced the treatment packs out of China and would estimate that the impact from the current tariffs of 145% would be less than $250,000 for the balance of the year.

Steve: Our capital position was strengthened.

Steve: By our successful public offering in February.

Steve Furlong: And pulled forward certain expenses in order to secure favorable vendor concessions by paying them early.

Steve: Which raised $18 9 million in net proceeds.

Steve: This financing has provided us with enhanced flexibility to execute on our growth initiatives, while maintaining our path to cash flow breakeven in the third quarter of 2025.

Steve Furlong: While this increased our cash burn to levels above what would typically be seen in the first quarter. This decision will ultimately reduce our overall net spend with those vendors during 2025.

Steve: As a result.

Steve: And the increased strength of the balance sheet due to the follow on offering we proactively took steps to settle green Brooks legacy vendor payment plans.

Steve Furlong: We also realized greenberg's bonus payout and merit cycles and experienced a temporary lag in Greenbrier collections as we integrated the new advanced MD software into our revenue cycle management.

Steve: And pulled forward certain expenses in order to secure favorable vendor concessions by paying them early.

Steve Furlong: We are already seeing marked improvements in collections over the past two weeks as the new systems become fully operational.

Steve: While this increased our cash burn to levels above what would typically be seen in the first quarter. This decision will ultimately reduce our overall net spend with those vendors during 2025.

Stephen Furlong: Moving through Q2, we continue to focus on execution of our expansion of our Spravato rollout, the implementation of buy and build, optimization of our revenue cycle processes. and Remaining Car Synergies. These efforts, along with our planned revenue growth, support our path to become cash flow positive in Q3.

Steve Furlong: Due to these measures cash used in operations for the first quarter was $17 million.

Steve Furlong: We expect cash used in operations for the second quarter to be less than $5 million and after the end of the year, we anticipate cash on the balance sheet to be greater than $20 million.

Steve: We also realized greenberg's bonus payout and merit cycles and experienced a temporary lag in greenburgh collections as we integrated the new advanced MD software into our revenue cycle management.

Steve Furlong: Now turning to guidance.

Keith Sullivan: I would now like to turn the call back over to Keith. Thank you, Steve. As we look ahead to the remainder of 2025, I am confident that we are well positioned to continue executing on our strategic initiatives and drive sustainable growth. For Greenberg operations, we will continue the systematic rollout of Spravato and the buy and build model with an aim to complete implementation across all appropriate sites by the end of the year. We will continue to see a meaningful uplift in our Neurostar TMS treatment. and we'll continue to strive to increase our treatment sessions per system per day.

Steve Furlong: For the second quarter, we expect revenue of $36 million to $38 million.

Steve: We are already seeing marked improvements in collections over the past two weeks.

Steve: As the new becomes fully operational.

Steve Furlong: We are narrowing our full year revenue guidance to be in the range of $149 million to $155 million.

Steve: Due to these measures cash used in operations for the first quarter was $17 million.

Steve: We expect cash used in operations for the second quarter could be less than $5 million and after the end of the year, we anticipate cash on the balance sheet to be greater than $20 million.

Steve Furlong: Compared to prior guidance of $145 million.

Steve Furlong: To $155 million.

Steve Furlong: For the full year 2025, we continue to expect gross margin to be approximately 55% as a result of the inclusion of the Green Brooks claim expense and the elimination of Greenburgh treatment session purchases.

Steve: Now turning to guidance for.

Steve: For the second quarter, we expect revenue of $36 million to $38 million.

Keith Sullivan: In the coming quarters, we will continue advancing our operational improvement initiatives with plans to fully implement our revenue cycle management transition, finalize our patient coordinator initiative, and standardize our training programs across the entire clinic network. The early results we are seeing affirm the substantial revenue opportunity this represents. Our BMP program continues to show positive momentum. The connections between primary care physicians and BMP locations are helping to expand patient access to treatment. As we progress through the year, this network is expected to grow its treatment session utilization and support controlled system sales. The performance data from BMP sites continues to reinforce the value of our approach to standardizing patient experience and practice operations.

Steve: We are narrowing our full year revenue guidance to be in the range of $149 million to $155 million.

Steve Furlong: We continue to expect total operating expenses for the full year to be in the range of $90 billion.

Steve Furlong: To $98 million.

Steve Furlong: I am pleased to report that the current macro environment will have a negligible impact on the business, we anticipate a limited impact from tariffs as the majority of our sourcing is inside the U S.

Steve: Compared to prior guidance of $145 million to $155 million.

Steve: For the full year 2025, we continue to expect gross margin to be approximately 55% as a result of the inclusion of the Green Brooks claim expense and the elimination of Greenburgh treatment session purchases.

Steve Furlong: And our manufacturing is based in San Diego.

Steve Furlong: We do source some plastic components from outside the USA, along with the Neurostar chair, but we estimate the net impact to be about $500 per neurostar system, which is very manageable within our overall cost structure.

Steve: We continue to expect total operating expenses for the full year to be in the range of 90 million.

Steve: To $98 million.

Steve: I am pleased to report that the current macro environment, we will have a negligible impact on the business, we anticipate a limited impact from tariffs as the majority of our sourcing is inside the U S.

Steve Furlong: From a treatment session standpoint, we sourced the treatment packs out of China and would estimate that the impact from the current tariffs of 145% would be less than $250000 for the balance of the year.

Steve: And our manufacturing is based in San Diego.

Keith Sullivan: The adolescent opportunity continues to be a growth driver. since our FDA clearance last year. Our recent NeuroSTAR Summit provided strong validation of this opportunity with three-quarters of the attending practices already implementing or developing adolescent programs within their practice. This enthusiastic adoption reflects both the clinical need in this underserved population and the expanded insurance coverage we have secured. We are seeing providers eager to offer this treatment option to younger patients who have limited alternatives. Most importantly, we remain committed to being cash flow positive in the third quarter, as previously guided. Our successful February raise has strengthened our balance.

Steve Furlong: Moving through Q2, we continued to focus on execution of our expansion of our provider rollout the implementation of buy and bill opt.

Steve: We do source some plastic components from outside the USA, along with the neuro start chair, but we estimate the net impact to be about $500 per neuroscience system, which is very manageable within our overall cost structure.

Steve Furlong: Optimization of our revenue cycle processes.

Steve Furlong: And remaining cost synergies.

Steve Furlong: These efforts along with our planned revenue growth support our path to become cash flow positive in Q3 I.

Steve: From a treatment session standpoint, we source the treatment packs out of China and would estimate that the impact from the current tariffs of 145% would be less than $250000 for the balance of the year.

Keith Sullivan: I would now like to turn the call back over to Keith.

Keith Sullivan: Thank you Steve as we look ahead to the remainder of 2025 I am confident that we are well positioned to continue executing on our strategic initiatives and drive sustainable growth for.

Steve: Moving through Q2, we continue to focus on execution of our expansion of our provider rollout the implementation of buy and bill opt.

Keith Sullivan: For <unk> operations, we will continue the systematic rollout of provider and the buy and Bill model with an aim to complete implementation across all appropriate sites by the end of the year.

Steve: Optimization of our revenue cycle processes.

Steve: And remaining cost synergies.

Steve: These efforts along with our planned revenue growth support our path to become cash flow positive in Q3.

Keith Sullivan: giving us the resources needed to execute on these strategic initiatives while maintaining our path to profitability.

Keith Sullivan: We will continue to see a meaningful uplift in our Neurostar Tms treatments.

Keith Sullivan: I would now like to turn the call back over to Keith.

Keith Sullivan: And we will continue to strive to increase our treatment sessions per system per day.

Keith Sullivan: Before we conclude, I'd like to share some news regarding our leadership team. After serving as our Chief Financial Officer since 2019, Steve Furlong has announced his intention to retire on March 31, 2026. Steve continues his current position until his successor is hired, and will remain as an advisor until the end of March to ensure a smooth transition. We have initiated a comprehensive search process to identify his success.

Keith Sullivan: The early results, we are seeing a firm with substantial revenue opportunity. This represents.

Keith Sullivan: We will continue to see a meaningful uplift in our Neurostar Tms treatments and.

Keith Sullivan: Our BMT program continues to show positive momentum.

Keith Sullivan: And we will continue to strive to increase our treatment sessions per system per day.

Keith Sullivan: The connections between primary care physicians and BNP locations are helping to expand patient access to treatment.

Keith Sullivan: In closing, the first quarter results demonstrate that our integrated business model is working, creating value for patients, providers, and shareholders. We are excited about the remainder of 2025 and look forward to updating you on our progress in the quarters ahead.

Keith Sullivan: As we progress through the year. This network is expected to grow its treatment session utilization and support controlled system sales.

Keith Sullivan: The performance data from BNP sites continues to reinforce the value of our approach to standardizing patient experience and practice operation.

Operator: I'll now open the call for questions. Thank you. At this time, we will conduct the question and answer session.

Keith Sullivan: The early results, we are seeing a firm with substantial revenue opportunity. This represents.

Keith Sullivan: Our BMT program continues to show positive momentum.

Operator: As a reminder, to ask a question, you will need to press star 11 on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again. Please stand by while we compile the Q&A roster.

Keith Sullivan: The adolescent opportunity continues to be a growth driver.

Keith Sullivan: The connections between primary care physicians and BNP locations are helping to expand patient access to treatment.

Keith Sullivan: Since our FDA clearance last year.

Keith Sullivan: Our recent Neurostar summit provided strong validation of this opportunity with three quarters of the attending practices already implementing or developing adolescent programs within their practices.

Keith Sullivan: As we progress through the year. This network is expected to grow its treatment session utilization and support controlled system sales.

Malgorzata Andrew: Our first question is from Margaret Kasler Andrew with William Blair. Your line is now open. Hey, good morning, everyone. Thanks for taking the questions. Maybe just to start out with, maybe we can focus on the BNP sites on the Neuronetic side, or the Neurostar side, excuse me, more specifically. So, the number of sites is growing. Funnels may be getting a little bit smaller, at least versus last quarter. So, just wanted to see, you know, is this a one-time dynamic? Should we assume that funnel increases again? You know, are you reiterating that over 500 by end of year?

Keith Sullivan: This enthusiastic adoption reflects both the clinical need in this underserved population and the expanded insurance coverage we have secured.

Keith Sullivan: The performance data from BNP sites continues to reinforce the value of our approach to standardizing patient experience and practice operation.

Keith Sullivan: We are seeing providers eager to offer this treatment option to younger patients who have limited alternatives.

Keith Sullivan: The adolescent opportunity continues to be a growth driver.

Keith Sullivan: Since our FDA clearance last year.

Keith Sullivan: Most importantly, we remain committed to being cash flow positive in the third quarter as previously guided our.

Keith Sullivan: Our successful February raise has strengthened our balance sheet, giving us the resources needed to execute on these strategic initiatives, while maintaining our path to profitability.

Keith Sullivan: This enthusiastic adoption reflects both the clinical need in this underserved population and the expanded insurance coverage we have secured.

Keith Sullivan: And, you know, what causes that? So we just had a influx of new accounts enter the program, Margaret. So there's a natural dip as as that happens. So we will be building that pipeline back up right now. We have one hundred and thirteen sites that are working to get into the program.

Keith Sullivan: Before we conclude I would like to share some news regarding our leadership team.

Keith Sullivan: We are seeing providers eager to offer this treatment option to younger patients who have limited alternatives.

Keith Sullivan: After serving as our Chief Financial Officer since 2019, Steve Furlong has announced his intention to retire on March 31 2026.

Keith Sullivan: Most importantly, we remain committed to being cash flow positive in the third quarter as previously guided our.

Keith Sullivan: Steve continues his current position until his successor is higher and we will remain as an advisor until the end of March to ensure a smooth transition.

Malgorzata Andrew: I expect that to grow with with our next summit, which is actually this weekend. So. Okay, that's helpful.

Malgorzata Andrew: And so, you know, as we, as we look at that, maybe in more detail, kind of the progress of these BNT sites, both this year, and then almost more importantly, as we go into 2026, you know, that the number of these sites continues to grow, but what drives utilization, I guess, at those sites in that mid-term outlook? And anything that you guys can, can provide around utilization trends, both at those sites versus maybe non-BNT sites over the last few quarters. Thank you. Sorry, I know that was a lot. I can repeat any of that. That's okay.

Keith Sullivan: We have initiated a comprehensive search process to identify his successor.

Keith Sullivan: Before we conclude I would like to share some news regarding our leadership team.

Keith Sullivan: In closing the first quarter results demonstrate that our integrated business model is working creating.

Keith Sullivan: After serving as our Chief Financial Officer since 2019, Steve Furlong has announced his intention to retire on March 31 2026.

Keith Sullivan: <unk> for patients providers and shareholders. We are excited about the remainder of 2025 and look forward to updating you on our progress in the quarters ahead.

Keith Sullivan: Steve continues his current position until his successor is higher and we will remain as an advisor until the end of March to ensure a smooth transition.

Keith Sullivan: I will now open the call for questions.

Speaker Change: Thank you at this time, we will conduct a question and answer session. As a reminder to ask a question you will need to press star one on your telephone and wait training to be announced to withdraw. Your question. Please press star one again please.

Keith Sullivan: We have initiated a comprehensive search process to identify his successor.

Keith Sullivan: In closing the first quarter results demonstrate that our integrated business model is working and creating value for patients providers and shareholders. We are excited about the remainder of 2025 and look forward to updating you on our progress in the quarters ahead.

Keith Sullivan: I'll remember as much as I can. The BMP sites are our focus of our marketing efforts, and I think Lisa Rosas has done a fabulous job of monitoring our BMP sites and being able to utilize digital marketing as well as traditional marketing, radio, TV, and billboards to be able to drive awareness and educate those patients. So, I think we're, we are comfortable that we can continue to have utilization grow in those sites. But in the script, we also talked about our, our network connection. So, we do, we have asked our PDMs to go to primary care, non-interventional psychiatrists, and GYN physicians that are taking care of patients battling depression who can't get help elsewhere, educate them on the benefits of the NeuroSTAR treatment, and have those physicians choose who they want to refer to.

Keith Sullivan: Please standby, while we compile the Q&A roster.

Speaker Change: Our first question is from Margaret Kessler, Andrew with William Blair. Your line is now open.

Margaret Kessler: Hey, good morning, everyone. Thanks for taking my questions.

Keith Sullivan: I will now open the call for questions.

Speaker Change: Maybe just to start out with.

Keith Sullivan: Thank you at this time, we will conduct a question and answer session.

Margaret Kessler: Okay.

Margaret Kessler: And maybe we can focus on that.

Keith Sullivan: Reminder, to ask a question you will need to press star one on your telephone and wait for your name to be announced to withdraw. Your question. Please press star one one again please.

Margaret Kessler: BNP sites.

Margaret Kessler: Our own attic side or the Neurostar side excuse me.

Margaret Kessler: More specifically so the number of sites is growing our funnel is maybe getting a little bit smaller at least versus last quarter or so.

Keith Sullivan: Please standby, while we compile the Q&A roster.

Margaret Kessler: Just wanted to see some onetime dynamics.

Speaker Change: Our first question is from Margaret Counselor, Andrew with William Blair. Your line is now open.

Margaret Kessler: Dynamics should we assume that fall increases again are you reiterating that over 500 by end of year and half.

Margaret Counselor: Hey, good morning, everyone. Thanks for taking my questions.

Margaret Kessler: What causes that.

Speaker Change: Maybe just to start out with.

Speaker Change: So we just had a influx of new accounts to enter the program Margaret.

Speaker Change: And maybe we can focus on that.

Speaker Change: E&P sites.

Speaker Change: So there's a natural dip as that happens so we will be.

Speaker Change: On that side.

Speaker Change: Aerostar side excuse me.

Speaker Change: More specifically the number of places growing funnel is maybe getting a little bit smaller at least versus last quarter or so.

Speaker Change: The building that pipeline back up right now we have 113 sites that are working to get into the program.

Malgorzata Andrew: And as we said in the script, most are referring to our BMP sites. So, I think that this new program that we have actually perfected on the Greenbrook side of the business will be a tremendous help in continuing to grow utilization in BMP sites. Okay, great.

Speaker Change: Just wanted to see some onetime dynamics.

Speaker Change: I expect that to grow.

Speaker Change: With with our next summit, which is actually this weekend so.

Speaker Change: Dynamics should we assume that fall increases again are you reiterating that over 500 by end of year end.

Speaker Change: Okay.

Speaker Change: Helpful and so as we as we look at that maybe in more detail and kind.

Speaker Change: What causes that.

Speaker Change: So we just had a influx of new accounts to enter the program Margaret.

Speaker Change: Kind of the progress of these BMT sites. This year and then almost more importantly, as we go into 2026.

Stephen Furlong: And just last question, maybe on the guidance, you know, as we're looking at, you know, towards that, I guess, full year 25, can you provide any breakdown between Greenbrook, maybe expectations for utilization at Greenbrook, and then, you know, same question on the Neurostar side. Thank you. Welcome, Margaret, Steve. Yeah, Greenberg's performance in the first quarter was actually quite good. relative to TMS improvements. Again, we're using our BNP account metrics as really measurement criteria for Greenbrook. And so they actually increased their utilization per NeuroSTAR chair to just under five patients per day. And so really up to a great start in 2025.

Speaker Change: So there's a natural that as that happens so we will be.

Speaker Change: The number of the sites continues to grow but what drives the utilization I guess at those sites in that mid tier mid term outlook.

Speaker Change: The building that pipeline back up right now we have 113 sites that are working to get into the program.

Speaker Change: Anything that you guys can can provide.

Speaker Change: I expect that to grow.

Speaker Change: Around utilization trends, both at those sites versus maybe non BNP sites over the last few quarters. Thank you.

Speaker Change: With with our next summit, which is actually this weekend so.

Speaker Change: Okay.

Speaker Change: Helpful and so as we as we look at that maybe in more detail.

Speaker Change: Alright.

Speaker Change: What I can repeat any of that.

Speaker Change: The progress of these BMT sites. This year and then almost more importantly, as we go into 2026.

Speaker Change: That's okay, I'll remember as much as I can.

Speaker Change: Yeah.

Speaker Change: The BNP sites are focus of our marketing efforts.

Speaker Change: The number of these sites continues to grow but what drives utilization I guess at those sites in that mid tier.

Speaker Change: And I think Lisa <unk> has done a fabulous job of monitoring our BMP sites and being able to utilize digital marketing as well as traditional marketing radio TV and billboards to be able to drive awareness and educate those patients.

Speaker Change: Term outlook.

Speaker Change: And anything that you guys can can provide.

Speaker Change: Around utilization trends, both at those sites versus maybe non BNP sites over the last few quarters. Thank you.

Stephen Furlong: Looking at guidance, again, the primary growth drivers are really going to be patient utilization in the Greenberg chairs and also spravato. His bravado did increase about 50% year-over-year. Again, that's natural given the low starting point in 24, but also the pretty impressive rollout across all clinics and also the conversion to buy and bill. So, you know, I think as we go forward. You know, every increase that we will see going forward will be related to the Greenberg side. Thank you.

Speaker Change: So.

Speaker Change: Alright.

Speaker Change: Think where we are comfortable that we can continue.

Speaker Change: I can repeat any of that.

Speaker Change: That's okay, I'll remember as much as I can.

Speaker Change: To have utilization growing those sites.

Speaker Change: The BNP sites are focus of our marketing efforts.

Speaker Change: But.

Speaker Change: In the script, we also talked about our our network connection. So we do we have asked our PD EMS.

Speaker Change: To go to primary care non.

Speaker Change: Interventional psychiatrist.

Speaker Change: Gyn's physicians that are taking care of patients battling depression, who can't get help elsewhere educate them on the benefits of the neurostar treatment.

Speaker Change: I think where we are comfortable that we can continue.

William Plovanic: Please stand by for our next question. Our next question comes from William Plovanic with Kano Corp Genuity. Your line is now open. Great, thanks. Good morning, and congratulations on that solid top line. Just on the business itself, I think when you gave the 25 guide, you had the legacy neuromedics business at $65 to $70 million and the Greenbrook at $80 to $85. Any change in that? And then just to dig into the Greenbrook outperformance, you mentioned Spravato. If I kind of broke it up, how much was utilization versus how much of that year-over-year growth was Spravato?

Speaker Change: To have utilization growing those sites.

And.

Speaker Change: Have those physicians choose who they want to refer to and as we said in his script most are referring to our BMP sites. So I think that this new program that we have actually.

Speaker Change: But.

Speaker Change: In the script, we also talked about our our network connection. So we do we have asked our pbms to.

Speaker Change: You go to primary care non.

Speaker Change: Protected on the Green Brook side of the business.

Speaker Change: Interventional psychiatrist.

Speaker Change: We will be a tremendous help and continuing to grow utilization in BMP sites.

Speaker Change: Gyn's physicians that are taking care of patients battling depression, who can't get help elsewhere educate them on the benefits of the neurostar treatment.

Speaker Change: Okay.

Speaker Change: Okay, Great and just last question maybe on the guidance.

Speaker Change: We're looking at.

Speaker Change: And towards that that I guess full year 25 can you provide any breakdown between.

Speaker Change: And.

Speaker Change: Have those physicians choose who they want to refer to and as we said in his script most are referring to.

Speaker Change: Green for rock maybe.

Stephen Furlong: And then on the core neuronetics business, I mean, that was off a lot more than we were expecting. How much of that was Greenbrook versus how much of that was kind of the legacy neuromedics? Yeah, again, Bill, the Q1 performance we thought was extremely strong on both sides of the business. So, again... Greenbrook's clinic TMS business was up 8% year over year that we've mentioned in the script. And again, Spravada was 50%. Those figures are same store clinic. So last year in Q1, we had 130 operating clinics. Now we have 95. Those growth rates are apples to apples with the 95.

Speaker Change: <unk> broker and then St.

Speaker Change: Our BMP sites. So I think that this new program that we have actually.

Speaker Change: Same question on the neuroscience start.

Speaker Change: Aerostar.

Speaker Change: Protected on the Green book side of the business.

Speaker Change: I appreciate it guys.

Speaker Change: Welcome Margaret Steve Yeah, Greenbacks performance in the first quarter was actually quite good.

Speaker Change: We will be a tremendous help and continuing.

Speaker Change: Grow utilization and BNP sites.

Speaker Change: Relative to Tms improvements.

Speaker Change: Okay.

Speaker Change: Okay, great and.

Speaker Change: And just last question maybe on the guidance.

Speaker Change: Again, we are using our BNP accounts metrics as really measurement criteria for Green Brook.

Speaker Change: We're looking at that.

Speaker Change: And towards that that I guess full year 25 can you provide any breakdown between Greensboro.

Speaker Change: And so they actually increase their utilization pardon aerostar chair to just under five patients per day, and so really off to a great start in 2025.

Speaker Change: Maybe expectations for utilization at grain broke and then Sam.

Speaker Change: Same question on the neuroscience start.

Speaker Change: Aerostar side. Thank you.

Speaker Change: Looking at guidance again, the primary growth drivers are really going to be.

Speaker Change: Yes.

Steve Greenberg: Welcome Margaret Steve Yeah, Greenberg's performance in the first quarter was actually quite good.

Stephen Furlong: From a Neuronetics perspective, really the biggest variance was the $2.6 million in Greenberg treatment session sales that we had last year that obviously don't recur since we're now one company and they get eliminated. Aside from that, you know, we were, I would say, pretty spot on from a Neuronetics perspective. Measuring Q1 Actual Performance to our plan. So, again, we thought we got off to a great start. Again, the increased utilization at Greenbrook and TMS was great, as is the continued role of Escorvado. And then on the spend, it looks like your GNA was maybe four million higher than what we were looking for.

Speaker Change: Patient utilization in the Greenberg chairs and also to provide us.

Speaker Change: Relative to CMS improvements.

Speaker Change: It's provided did increase about 50% year over year.

Steve Greenberg: Again, we're using our BNP account metrics.

Speaker Change: Again, thats natural given the low starting point in 'twenty four but also the pretty impressive rollout.

Steve Greenberg: Metrics as really measurement criteria for Green Brook.

Steve Greenberg: And so they actually increase their utilization pardon aerostar chair to just under five patients per day, and so really off to a great start in 2025.

Speaker Change: Cross all clinics and also the conversion to buy and Bill.

Speaker Change: I think as we go forward.

Speaker Change: Every increase.

Speaker Change: That we will see going forward will be related to the green dot side.

Steve Greenberg: Looking at guidance again, the primary growth drivers are really going to be.

Speaker Change: Okay. Thank you.

Steve Greenberg: Patient utilization in the Greenberg chairs and also to provide us.

Speaker Change: Thank you. Please standby for your next question.

Steve Greenberg: And it's provided did increase about 50% year over year.

Speaker Change: Our next question comes from William <unk> with Canaccord Genuity. Your line is now open.

Steve Greenberg: Again, thats natural given the low starting point in 'twenty four but also the pretty impressive rollout.

Speaker Change: Great. Thanks, good morning, and congratulations on a solid top line.

Stephen Furlong: You know, I know you've had the merger and a lot of things going on. Was there any one-time costs in there? And I'm trying to just titrate the model here, but what should we expect in kind of a Q2 GNA spend and how should that look going forward? I'm just trying to walk to the cash flow positive in Q3. Yeah, you know, you won't see increases in GNA as we work through the balance of 2025. We pulled in approximately $5 million in Q1 from a cash perspective. And that was really just taking advantage of our 18.9 million dollar follow on.

Steve Greenberg: Cross all clinics and also the conversion to buy and Bill.

Speaker Change: Just on the business itself I think when you gave the 25 guide yet legacy.

Steve Greenberg: I think as we go forward.

Steve Greenberg: Every increase.

Speaker Change: <unk> business is $65 million to $70 million of the Greenberg at AED five.

Steve Greenberg: That we will see going forward will be related to the green dot side.

Speaker Change: Any change in that and then just to dig into the green brick outperformance.

Speaker Change: Okay. Thank you.

Speaker Change: Thank you. Please standby for your next question.

Speaker Change: You mentioned to provide.

Speaker Change: I kind of broke it out how much was utilization versus how much of that year over year growth was for <unk> and then on the core narrow networks business I mean that was off a lot more than we were expecting.

Speaker Change: Our next question comes from William <unk> with Canaccord Genuity. Your line is now open.

William <unk>: Great. Thanks, good morning, and congratulations on a solid top line.

Speaker Change: Just on the.

Speaker Change: How much of that was green brick versus how much of that was kind of the legacy neuro.

Speaker Change: The business itself, but I think when you gave the 25 guide yet legacy.

Stephen Furlong: And what we did is we pulled in expenses that were budgeted from either an expense or a cash flow perspective. To really improve our vendor relations with some key vendors that Greenberg had. And they were put on payment plans because in fairness to them, you know, during 23 and 24. It's not like they were flushed with cash. So they were managing expenses really to the detriment of relationships. And so, you know, we pulled in software payments, we synchronized payroll, so Greenbook's bonus and merit cycles, which were planned for later in the year, were pulled into the quarter.

Speaker Change: <unk> business is $65 million to $70 million of the Greenberg at AED five.

Speaker Change: <unk>.

Speaker Change: Yeah again, Bill the Q1 performance, we thought it was extremely strong on both sides of the business.

Speaker Change: Any change in that and then just to dig into the Greenberg outperformance.

Speaker Change: And so again.

Speaker Change: You mentioned to provide.

Speaker Change: Green Brooks clinic, Tms business was up 8% year over year that we've mentioned in the script and against provided with 50%.

Speaker Change: If I kind of broke it out how much was utilization versus how much of that year over year growth was for <unk> and then on the core narrow networks business I mean that was off a lot more than we were expecting.

Speaker Change: Those figures are same store clinics. So last year in Q1, we had 130 operating clinics now we have 95% those growth rates are apples to apples with the 95.

Speaker Change: How much of that was green brick versus how much of that was kind of the legacy neuro.

Speaker Change: <unk>.

Speaker Change: From a narrowed that ex perspective really the biggest variance was the $2 $6 million and Greenberg treatment session sales that we had last year that obviously don't recur since we're now one company they get eliminated.

Stephen Furlong: We did pull in some marketing spend into Q1 and Q2. We did have increased auditing fees. just related to the combined company in February and March. So, again, I think from an expense perspective. You know, with the increase, you'll notice that we did not change operating expense guidance for the year and still believe we'll be. pretty much at that midpoint. when we finish 2025. Okay, but Steve, you did $27 million in OPEX in Q1, you're guiding $90 million, $98 million, you're annualizing at $104 million. What is the normalized OPEX spend as we go into Q2?

Speaker Change: Yes, again bill the Q1 performance, we thought it was extremely strong on both sides of the business.

Speaker Change: And so again.

Speaker Change: Green Brooks clinic, Tms business was up 8% year over year that we've mentioned in the script and against provided with 50%.

Speaker Change: From that we were.

Speaker Change: I would say pretty spot on from an <unk> perspective.

Speaker Change: Those figures are same store clinics. So last year in Q1, we had 130 operating clinics now we have 95% those growth rates are apples to apples with the 95.

Speaker Change: Measuring Q1 actual performance to our plan.

Speaker Change: So again, we felt we got off to a great start.

Speaker Change: Again, the increase utilization that green brick and Tms was.

Speaker Change: From a narrow networks perspective really the biggest variance was the $2 $6 million and Greenberg treatment session sales that we had last year that obviously don't recur since we're now one company and they get eliminated.

Speaker Change: <unk>.

Speaker Change: As the continued rollout of Nevada.

Speaker Change: And then on the spend it looks like your G&A was maybe $4 million higher than what we were looking for.

Operator: It'll be in the... 23, 24 million range. Great, I'll circle back. Thanks. One moment for our next question.

Speaker Change: Aside from that we were I would say pretty spot on from a narrow net ex perspective.

Speaker Change: I know you've had the merger and a lot of things going on or was there any one time costs in there kind of im trying to titrate the model here, but what should we expect in kind of a Q2 G&A spend and how should that look going forward I'm just trying to walk to the cash flow positive in Q3.

Speaker Change: Measuring Q1 actual performance to our plan.

Speaker Change: So again, we felt we got off to a great start.

Speaker Change: Again the increase.

Speaker Change: Increased utilization at Green brick and Tms was great.

Speaker Change: Yes.

Speaker Change: Don't see increases in G&A as we work through the balance of 2025.

Speaker Change: As the continued rollout of Nevada.

Adam Maeder: Our next question comes from Adam Maeder with Piper Sandler. Your line is now open. Hey guys, good morning. Thank you for taking the questions.

Speaker Change: And then on the spend it looks like your G&A was maybe $4 million higher than what we were looking for.

Speaker Change: We pulled in approximately $5 million in Q1 from a cash perspective and that was really just taking advantage of our $18 $9 million follow on and what we did is we pulled in expenses that were budgeted from either an expense or a cash flow perspective to really improve.

Adam Maeder: A couple from me and kind of wanted to start with where Bill just left off, you know, around some of the puts and takes on the guidance front, the standalone revenue guidance for the year, is that still 65 to 70 million, or did that change? And then, yeah, I have a follow-up or two. Thanks. Yeah, I mean that the split we communicated At the beginning of the year, you know, again, in that 65 to 70 range for Neuronetics and 80 to 85 million for Greenbrook is still, I would say, the current target. Okay, that's helpful, Steve.

Speaker Change: <unk> had the merger and a lot of things going on or was there any one time costs in there kind of im trying to titrate the model here, but what should we expect in kind of a Q2 G&A spend and how should that look going forward I'm just trying to walk to the cash flow positive in Q3.

Speaker Change: Our vendor relations.

Speaker Change: With some key vendors that Greenbrier CAD and they were put on payment plans because in fairness to them during 'twenty three 'twenty four.

Speaker Change: Yes.

Speaker Change: You won't see increases in G&A as we work through the balance of 2025.

Speaker Change: Not like they were flushed with cash so they were managing expenses relate to the detriment of relationships and so we pulled in software payments, we synchronize payroll so green books bonus and merit cycles, which were planned for later in the year were pulled into the quarter.

Speaker Change: We pulled in approximately $5 million in Q1 from a cash perspective.

Speaker Change: And that was really just taking advantage of our $18 $9 million follow on and what we did is we pulled in expenses that were budgeted from either an expense or a cash flow perspective to really improve our vendor relations with some key vendors that greenbrier CAD and they were put on payment plans.

Adam Maeder: Good to hear that.

Stephen Furlong: And, you know, just around the Q1 performance for the Greenbrook clinics, you know, good performance in the quarter. Are you able just to give us a little bit more insight around kind of the revenue mix between TMS, Bravado, and other, you know, I heard some growth rates thrown out, but I think it'd be helpful just to kind of get a sense of the magnitude of revenue for each of those different, you know, products at Greenbrook as we think about, you know, that business kind of ramping throughout the remainder of the year. Sure, and Adam, I think it's important to note that these ratios are going to change significantly as we continue to roll out green Spravato, as well as buying bill.

Speaker Change: We did pull in some marketing spend into Q1 and Q2.

Speaker Change: Did have increased auditing fees.

Speaker Change: Just related to the combined company in February and March so.

Speaker Change: In fairness to them during 'twenty three 'twenty four it's not like they were flushed with cash. So they were managing expenses relate to the detriment of relationships and so we've pulled and software payments, we synchronized payroll so green books bonus and merit cycles wished for.

Speaker Change: Again, I think from an expense perspective.

Speaker Change: With the increase you'll notice that we did not change operating expense guidance for the year.

Speaker Change: Still believe will be.

Speaker Change: Pretty much at that midpoint.

Speaker Change: When we finished 2025.

Speaker Change: Planned for later in the year were pulled into the quarter.

Speaker Change: But Steve you did $27 million in Opex in Q1, you're guiding 90, 98 Youre Annualizing at 104, what is the normalized opex spend as we go into Q2.

Speaker Change: We did pull in some marketing spend into Q1 and Q2.

Speaker Change: We did have increased auditing fees.

Speaker Change: Just related to the combined company in February and March though.

Speaker Change: It'll be in the.

Speaker Change: Again, I think from an expense perspective.

Speaker Change: 23 $24 million range.

Stephen Furlong: And so, for for color TMS performance was essentially double Spravato, but. You know, that number will change pretty significantly as we work through Q2, 3 and 4. So, yeah, maybe it's a nice starting point, but I'm not sure the relevance when you're modeling, you know, for the remainder of 25. Okay, okay, that's helpful. Appreciate the incremental color.

Speaker Change: With the increase you'll notice that we did not change operating expense guidance for the year.

Speaker Change: Yeah.

Speaker Change: Great I'll circle back thanks.

Speaker Change: And still believe we will be.

Speaker Change: Alright.

Speaker Change: Yes pretty much at that midpoint.

Speaker Change: When we finished 2025.

Speaker Change: Okay, but Steve you did $27 million in Opex in Q1, you're guiding 90, 98 Youre Annualizing at 104, what is the normalized opex spend as we go into Q2.

Speaker Change: One moment our next question.

Stephen Furlong: And then maybe just one on the gross margin front. It looks like the gross margin guidance for the year, 55% unchanged. You know, Q1 did come in a little bit lighter than we were modeling, I think 49% or so. I'm assuming that's a function of mix, but would just love a little bit of, you know, detail there. And then as we think about kind of the cadence of gross margin and subsequent quarters, just any more color you can provide would be helpful. Thank you. Yes, so Adam, once again. You know, where we finished for the quarter was actually what we had planned, so we were pleased with the margin profile in the first quarter.

Speaker Change: Our next question comes from Adam <unk> with Piper Sandler Your line is now open.

Speaker Change: It'll be in the.

Speaker Change: Hey, guys. Good morning, and thank you for taking the questions.

Speaker Change: 23 $24 million range.

Speaker Change: A couple from me and kind of wanted to start with where bill just left off.

Speaker Change: Yeah.

Speaker Change: Great I'll circle back thanks.

Speaker Change: On some of the puts and takes on the guidance front.

Speaker Change: Alright.

Speaker Change: The Standalone revenue guidance for the year is that still $65 million to $70 million or did that change.

Speaker Change: And then I have a follow up on <unk>. Thanks.

Speaker Change: One moment our next question.

Speaker Change: Yeah, I mean, the split we communicated.

Speaker Change: Our next question comes from Adam <unk> with Piper Sandler Your line is now open.

Speaker Change: At the beginning of the year again in that 65% to 70 range for <unk> and 80% to $85 million for Greenbrier is still I would say the current targets for the combined companies.

Speaker Change: Hey, guys. Good morning, and thank you for taking the questions.

Speaker Change: A couple from me and kind of wanted to start with where bill just left off.

Stephen Furlong: You will see, you know, a nice improvement in Q2 and Q3, really related to the revenue scale. And so, you know, we go from 32 to a $37 million. Midpoint guide for Q2 and Q3. And so, you know, we're going to get pretty close to that 55% number in the next couple quarters. And then, you know, additional improvement as we get to Q4. You know, Q4 will have 28% of our annual revenue in that quarter. So it's just. A natural function of being able to leverage. The clinical cost foundations and really the only variable costs within a clinic.

Speaker Change: On some of the puts and takes on the guidance front.

Steve Furlong: Okay. That's helpful. Steve.

Speaker Change: The Standalone revenue guidance for the year is that still $65 million to $70 million or did that change.

Steve Furlong: Good to hear that.

Steve Furlong: Just around the Q1 performance for the green brick clinics.

Steve Furlong: Good performance in the quarter.

Speaker Change: <unk>.

Speaker Change: And then I have a follow up on <unk>. Thanks.

Steve Furlong: Are you able just to give us a little bit more insight around kind of the revenue mix between Tms.

Speaker Change: Yes.

Speaker Change: <unk> communicated.

Speaker Change: At the beginning of the year again in that 65% to 70 range from <unk> $80 million to $85 million for Greenbrier is still I would say the current targets for the combined companies.

Steve Furlong: <unk> and other.

Steve Furlong: I heard some growth rates thrown out, but I think it would be helpful. Just to kind of get a sense for the magnitude of revenue for.

Steve Furlong: Each of those different.

Steve Furlong: Products that at Green brick as we think about.

Steve Furlong: That business kind of ramping throughout the remainder of the year.

Speaker Change: Okay. That's helpful. Steve good to hear that.

Stephen Furlong: And if they go up, our revenue goes up. So it's a good. Thanks for the call, Steve. Helpful. Thank you.

Steve: Just around the Q1 performance for the Green brick clinics good performance in the quarter.

Steve Furlong: Sure.

Speaker Change: Adam I think it's important to note that these ratios are going to change significantly as we continue to rollout green provider as well as buy and bill.

Steve: Are you able just to give us a little bit more insight around kind of the revenue mix between Tms.

Danny Stauder: One moment for our final question. Our final question comes from Danny Stauder with Citizens JMP. Your line is now open. Yeah, great, thanks. So, just following up on some of the Scrivato questions, specific to the buy and bill transition, we appreciate the color there. It sounds like it's including your guidance, but could you comment on any capital outlay this requires as we look at a cash flow statement and, you know, contemplate your plans for free cash flow on 3 to 25, you know, are there any constraints to getting these conversions? Just because I know there's an upfront cash expense, just any more color there would be great.

Steve: <unk> and other.

Speaker Change: And so for color Tms performance was essentially doubles provider.

Steve: I heard some growth rates thrown out, but I think it would be helpful. Just to kind of get a sense for the magnitude of revenue for.

Speaker Change: But.

Speaker Change: That number will change pretty significantly as we work through Q2, three and four so.

Steve: Each of those different.

Steve: Product set at Green brick as we think about.

Speaker Change: Maybe it's a nice starting point, but im not sure of the relevance when youre modeling for the remainder of 'twenty five.

Steve: That business kind of ramping throughout the remainder of the year.

Steve: Sure and Adam I think it's important to note that these ratios are going to change significantly as we continue to rollout.

Speaker Change: Okay. Okay. That's helpful. I appreciate the incremental color.

Speaker Change: And then maybe just one on the gross margin front.

Steve: <unk> provider as.

Speaker Change: It looks like the gross margin guidance for the year of 55% unchanged Q1 did come in.

Steve: As well as buy and bill and so for color Tms performance was essentially doubles provider.

Speaker Change: A little bit lighter than we were modeling I think 49% or so.

Stephen Furlong: Hey, Danny. It's Steve. Yeah, so we did have higher provided buy and bill expenses in the 1st quarter. But again, once we completed the follow on, you know, we chose to. Continue to invest in the business again with a pull in and marketing, but also an acceleration. Of the conversion to buy and bill. I am in the process of increasing our credit line with an LLC to lessen the cash burn burden. On the company again, it's it's a balance between the level of the LLC. The Inventory Requirements and just the overall impact on our cash flow.

Steve: But.

Speaker Change: I'm, assuming that's a function of mix, but would just love a little bit.

Steve: That number will change pretty significantly as we work through Q2, three and four so maybe it's a nice starting point, but im not sure of the relevance when youre modeling for the remainder of 'twenty five.

Speaker Change: Detail there and then as we think about kind of the cadence of gross margin in subsequent quarters.

Speaker Change: Just any more color you can provide would be helpful. Thank you.

Speaker Change: Okay. Okay. That's helpful. I appreciate the incremental color.

Adam: Yes, so Adam once again.

Adam: Where we finished for the quarter was actually what we had planned and so.

Steve: And then maybe just one on the gross margin front.

Steve: It looks like the gross margin guidance for the year of 55% unchanged Q1 did come in.

Adam: We were pleased with the margin profile in the first quarter.

Adam: You will see a <unk>.

Steve: A little bit lighter than we were modeling and I think 49% or so.

Adam: This improvement in Q2, and Q3 really related to the revenue scale and so we go from $32 million to $37 million.

Steve: I'm, assuming that's a function of mix, but would just love a little bit.

Steve: <unk> there and then as we think about kind of the cadence of gross margin in subsequent quarters.

Adam: Midpoint guide for Q2 and Q3.

Operator: I will say our... Distributors are very good to work with. You know, we do have 128-day payment, 120-day payment terms. And so, once we get into a regular cadence of claim submission, collections, and then the ultimate payment, it should not be a cash flow issue for us. You know, we should collect in 60 days, and I don't have to pay in until 120 days. So, again, we're working with different sources to secure that LOC, and we'll be balancing that impact on cash as we continue that rollout. Great, that's it for me. Thank you. I'm showing no further questions at this time.

Adam: So we're going to get pretty close to that 55% number.

Steve: Just any more color you can provide would be helpful. Thank you.

Adam: In the next couple of quarters and then additionally.

Adam: Yes, so Adam once again.

Adam: Additional improvement as we get to Q4 Q.

Adam: Where we finished for the quarter was actually what we had planned I think so.

Adam: Q4 will have 28% of our annual revenue in that quarter. So its just a natural function of being able to leverage to the <unk>.

Adam: We were pleased with the margin profile in the first quarter.

Adam: You will see a <unk>.

Adam: Medical costs foundations, and really the only variable costs within the clinic.

Adam: This improvement in Q2, and Q3 really related to the revenue scale and so we go from $32 million to $37 million.

Adam: Our doctor fees.

Adam: And if they go up our revenue goes up so it's a good thing.

Adam: Midpoint guide for Q2, and Q3, and so we're going to get pretty close to that 5% number.

Speaker Change: Thanks for that color is helpful.

Adam: Okay.

Adam: Thank you.

Adam: In the next couple of quarters and Thats.

Adam: One moment for our final question.

Adam: Additional improvement as we get to Q4 Q.

Speaker Change: Our final question comes from Danny starter with citizens JMP. Your line is now open.

Keith Sullivan: I would now like to turn it back to Keith Sullivan for closing remarks. Thank you, operator, and thank you all for joining us today for our first quarter earnings call. We appreciate your support and we look forward to updating you on the next quarterly call.

Adam: Q4 will have 28% of our annual revenue in that quarter. So its just a natural function of being able to leverage <unk>.

Speaker Change: Okay, great. Thanks, So just following up on some of the <unk> questions concerning to the buy and Bill transition and we appreciate the color there. It sounds like it's included in your guidance, but could you comment on any capital outlay. This requires as we look at the cash flow statement and contemplate.

Adam: Clinical costs foundations, and really the only variable costs within the clinic.

Adam: Our doctor fees.

Adam: And if they go up our revenue goes up so it's a good thing.

Operator: This does conclude today's conference. You may now disconnect.

Speaker Change: Thanks for that color is helpful.

Speaker Change: Lans for free cash flow on page 25 are there any constraints to.

Adam: Yes.

Adam: Thank you.

Adam: One moment for our final question.

Speaker Change: Given these conversions just upfront.

Speaker Change: Our final question comes from Danny starter with citizens JMP. Your line is now open.

Speaker Change: Cash.

Speaker Change: Expense just any more color there okay.

Speaker Change: Hey, Dan it's Steve.

Danny: Okay, great. Thanks.

Speaker Change: So we did have higher provide a buy and bill expenses in the first quarter.

Danny: Following up on some of the scrip auto questions concerning to the buy and bill transition and we appreciate the color there. It sounds like it's included in your guidance, but could you comment on any capital outlay. This requires as we look at the cash flow statement and contemplate your plans for free cash flow on page 25 are there any <unk>.

Speaker Change: But again once we completed the follow on we chose to continue to invest in the business again with a pull in in marketing, but also an acceleration of the conversion to buy and bill.

Speaker Change: I am in the process of increasing our credit line with an LLC to lessen the cash burn burden on the company.

Danny: Strange too.

Danny: Giving these conversions.

Danny: Upfront.

Danny: Cash expense just any more color there okay.

Speaker Change: Again, it's a balance between the level of the LLC.

Danny: Hey, Danny and Steve.

Danny: Yes, so we did have higher provide a buy and bill expenses in the first quarter.

Speaker Change: The inventory requirements.

Speaker Change: And just the overall impact on our cash flow.

Danny: But again once we completed the follow on we chose to continue to invest in the business again with a pull in in marketing, but also an acceleration of the conversion to buy and bill.

Speaker Change: I will say our distributors.

Speaker Change: A very good to work with we do have a 128 day obtained 120 day payment terms.

Speaker Change: And so once we get into a regular cadence of claims submission collections and then the ultimate payment.

Danny: I am in the process of increasing our credit line with an LLC to lessen the cash burn burden on the company.

Speaker Change: It should not be a cash flow issue for us we should collect in 60 days and I don't have to pay and until 120 days. So.

Danny: Again, it's a balance between the level of the LLC.

Danny: The inventory requirements.

Speaker Change: Again, where we.

Speaker Change: We're working with different sources to secure that LLC and we'll be balancing that impact on cash as we continue.

Danny: And just the overall impact on our cash flow.

Danny: I will say our distributors.

Speaker Change: Continue that rollout.

Danny: A very good to work with we do have 128 day obtained 120 day payment terms.

Speaker Change: Great that's it for me thank.

Speaker Change: Thank you.

Speaker Change: Oh.

Speaker Change: I'm showing no further questions at this time I would now like to turn it back to Keith Sullivan for closing remarks.

Danny: And so once we get into a regular cadence of claims submission collections and then the ultimate payment.

Keith Sullivan: Thank you operator, and thank you all for joining us today for our first quarter earnings call. We appreciate your support and we look forward to updating you on the next quarterly call.

Danny: It should not be a cash flow issue for us we should collect in 60 days and I don't have to pay and until 120 days. So.

Danny: Again, where we.

Danny: We're working with different sources to secure that LLC and we'll be balancing that impact on cash as we continue.

Speaker Change: This does conclude today's conference you may now disconnect.

Danny: Continue that rollout.

Danny: Great Thats it from me.

Danny: Thank you.

Danny: Oh.

Speaker Change: I'm showing no further questions at this time I would now like to turn it back to Keith Sullivan for closing remarks.

Speaker Change: This does conclude today's conference you may now disconnect.

Speaker Change: Yes.

Speaker Change: [music].

Speaker Change: Okay.

Speaker Change: Yes.

Speaker Change: [music].

Speaker Change: Yes.

Speaker Change: [music].

Speaker Change: <unk>.

Speaker Change: Okay.

Speaker Change: [music].

Speaker Change: Good day, and thank you for standing by welcome.

Speaker Change: To the narrow Netflix reports first quarter 2025 financial and operating results conference call. At this time, all participants are in a listen only mode.

Speaker Change: After the Speakers' presentation, there'll be a question and answer session.

Speaker Change: To ask a question during the session you will need to press star one one on your telephone.

Speaker Change: We'll then hear an automated message advising that your hand is raised to withdraw your question. Please press star one one again.

Speaker Change: Please be advised that today's conference is being recorded I would now like to hand, the conference over to your first speaker today Mark Klossner. Please go ahead.

Speaker Change: Okay.

Speaker Change: Good morning, and thank you for joining us for the <unk> first quarter of 2025 conference call.

Speaker Change: Joining me on today's call, our neuro genetics, President and Chief Executive Officer, Keith Sullivan, and Chief Financial Officer, Steve Furlong.

Speaker Change: Including statements related to our business strategy financial and revenue guidance, the Green book acquisition, and other operational issues and metrics.

Speaker Change: Actual results could 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: For a discussion of risks and uncertainties associated with the neuro networks business I encourage you to review the company's filings with the Securities and Exchange Commission.

Speaker Change: <unk> the company's annual report on Form 10-K, which was filed in March.

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.

Speaker Change: During the call, we'll also discuss certain information on a non-GAAP basis, including EBITDA.

Speaker Change: Management uses non-GAAP financial measures to compare our performance relative to forecast and strategic plans.

Speaker Change: To benchmark, our performance externally against competitors and for certain compensation decisions.

Speaker Change: Mark Thanks for the introduction and good morning, everyone and thank you for joining the call today.

Speaker Change: Let me start with our performance in the quarter, which represents our first full quarter inclusive of Greenburgh financial results.

Speaker Change: Total revenue was $32 million, an increase of 84% over the first quarter of 2024.

Speaker Change: On a pro forma basis.

Speaker Change: Total revenue increased 7% over pro forma revenue of $29 8 million for the first quarter of 2024.

Speaker Change: During the quarter Neurostar system revenue was $2 $8 million.

Speaker Change: With 31 systems shipped.

Speaker Change: U S treatment session revenue was $9 6 million.

Speaker Change: And U S clinic revenue, which represents green broke revenue was $18 $7 million.

Speaker Change: Reflecting continued positive momentum following our transformative 2024.

Speaker Change: I'd like to give you an overview of our strategic priorities for 2025, and our progress on them in the first quarter.

Speaker Change: As we move through 2025, we are focused on two clear strategic priorities number one executing our greenberg integration and growth strategy.

Speaker Change: Number two continuing to scale, our better made provider or BMP program.

Speaker Change: Beginning with Greenbrier.

Speaker Change: We are focused on three key initiatives first the optimization of our regional account manager or Rams.

Speaker Change: Following their comprehensive training at Neurostar University in November our Ram team is successfully implementing the new automated patient transfer process.

Speaker Change: The educational tools QR codes and coordinated intake team are allowing us to connect with patients more effectively.

Speaker Change: While they are still at their referring physicians office significantly improving conversion rates.

Speaker Change: Second the rollout of its bravado.

Speaker Change: So <unk> is now offered as a treatment option in 75 of our 95 Greenberg clinics.

Speaker Change: Up from 35 clinics at the beginning of the quarter.

Speaker Change: This represents 75% of the Green broke network with implementation progressing on schedule.

Speaker Change: In 42 of these clinics, we have begun treating patients using the buy and bill model.

Speaker Change: Which is already delivering the expected revenue improvements.

Speaker Change: <unk> build treatments are generating approximately three times the revenue compared with the administer and observe model.

Speaker Change: We remain on track to offer buy in builds provider in all appropriate Greenberg clinics by the end of 2025.

Speaker Change: Third is the standardization of operations across the Greenberg network.

Speaker Change: We have continued to execute well against this objective with patient coordinators now placed in the majority of our clinics, enabling more effective in person consultations.

Speaker Change: These coordinators are crucial and educating patients on the benefits of Neurostar Tms and provider of treatments.

Speaker Change: Our training programs to ensure consistent patient experiences continuing to show positive results.

Speaker Change: We have also made significant improvements to green Brooks revenue cycle management include.

Speaker Change: Including changes in leadership.

Speaker Change: And transitioning to advanced AMD patient record billing platform, which is already enhancing our operational efficiency.

Steve Greenberg: Within our Greenberg network total clinic revenue was approximately $196000 in Q1 of 2025 compared to approximately $139000 in Q1 of 2020 for a 41% increase.

Steve Greenberg: This increase was driven by optimization of our clinic footprint and strong Neurostar Tms performance at the Greenberg clinics in the quarter.

Steve Greenberg: On a same clinic basis, Neurostar Tms revenue increased 8% versus last year as a result of the actions described above.

Steve Greenberg: Our combined company cost synergy realization remains on track.

Steve Greenberg: As we integrated the green brick operations, we have continued to identify and realize synergies.

Steve Greenberg: When we initially announced the transaction, we had identified $15 million of expected annualized synergies.

Steve Greenberg: After closing by the end of 2024, we had identified approximately $22 5 million of annualized synergies.

Steve Greenberg: I am pleased to report that 95% of these were realized by the end of 2024.

Steve Greenberg: As we continue to integrate operations, we are actively looking for additional synergy opportunities and currently believe that total realized synergies will exceed $23 million.

Steve Greenberg: These efficiencies.

Steve Greenberg: With our revenue growth initiatives keep us on path.

Steve Greenberg: Towards achieving cash flow positivity in the third quarter of this year as we have previously guided.

Steve Greenberg: Our second strategic priority is the ongoing expansion of our BMP program across our customer base. As a reminder, BMP sites are those who agreed to meet our patient responsiveness and educational standards.

Steve Greenberg: The program continues to gain momentum.

Steve Greenberg: We currently have over 385 active sites with another 110 sites currently working to achieve the program standards.

Steve Greenberg: Our practice development manager team or Pbms are making significant progress in teaching these sites had to meet the remaining standards needed to qualify for the program.

Steve Greenberg: As a result, we expect a steady flow of new sites to enter the program over the coming enrollment periods. This year.

Steve Greenberg: The performance metrics of BMP sites continue to validate the efficacy of the program.

Steve Greenberg: With these locations consistently helping more patients and delivering care faster.

Steve Greenberg: Once practices are fully in the BMP program.

Steve Greenberg: Three times more patients per site per quarter than practices, who are not in the program.

Steve Greenberg: On average these BNP sites go from treating three patients per quarter to over 10 patients per quarter.

Steve Greenberg: In addition.

Steve Greenberg: Customer sites that participate in the BMP program are addressing patient needs about two times faster when comparing results of Q1 2025 for Q1 2024.

Steve Greenberg: The outcomes demonstrated by BNP validate the lasting benefits of our model for teaching practices had better serve their patients with neurostar.

Steve Greenberg: Accordingly, we continue to focus our efforts supporting these BMP practices based on their commitment to patient responsiveness at advanced training.

Steve Greenberg: Importantly, we have observed that treatment session utilization is outpacing purchases at these sites in this indicating strong patient flow and utilization of existing equipment.

Steve Greenberg: Based on Greenberg success, and educating primary care physicians and non interventional psychiatrist about our advanced treatment options. We have recently launched the Neurostar connection network.

Steve Greenberg: Through which our <unk> are building awareness of the Neurostar Tms amongst 69% of patients with depression being treated within primary care.

Steve Greenberg: And these conversations we give primary care physicians the option of working with our neurostar provider in their area, including our BMP sites.

Steve Greenberg: This is a critical development and our strategy to expand patient access to Neurostar Tms treatment.

Steve Greenberg: It should be no surprise that primary care providers prefer BMP sites, who are committed to our patient responsiveness and education standards.

Steve Greenberg: So we have quickly seen BNP providers form the backbone of this program.

Steve Greenberg: Standard protocols and consistent patient experience at BMP sites keep referring physicians confidence that their patients will receive high quality care and remission rates that are under achievable with anti depressants.

Steve Greenberg: Early data indicates that practices participating in the BMP program are seeing a meaningful increase in patients from local primary care networks further validating the value of a comprehensive approach to patient care.

Steve Greenberg: Now for some updates on other marketing initiatives.

Steve Greenberg: Starting with our targeted television marketing campaigns in the fall of 2024, we ran a successful campaign in Tampa, Florida that doubled awareness despite being interrupted by two hurricanes that hit the area during the campaign.

Steve Greenberg: Our mission to elevate consumer awareness of Neurostar brand continues to gain momentum through the targeted offline media programs, which include radio television and Billboards.

Steve Greenberg: In late March we launched a six week PV campaign in the Baltimore area, reaching over a million viewers and laying the groundwork for broader market impact.

Steve Greenberg: Within the first two weeks of the campaign preliminary results have been very encouraging as we are seeing two five times more neurostar brand search impressions on Google and Neurostar Dot Com <unk>.

Steve Greenberg: Compared to the searches prior to the start of the campaign.

Steve Greenberg: Over 100 potential patients have requested consultations and we expect this number to grow as the campaign reaches more viewers in the coming weeks.

Steve Greenberg: Additionally, our co op marketing program continues to drive measurable results.

Speaker Change: <unk> participated in co op in the prior two consecutive quarters showed a 20% uplift in utilization and an 18% uplift in motor thresholds in Q1 of 2025 compared to Q1 of 2024.

Speaker Change: Another key growth driver continues to be the adolescent treatment capability.

Speaker Change: Since receiving FDA clearance in March of 2024, as the first Tms treatment approved for depression in adolescents age 15% to 21, we are seeing meaningful traction in this segment.

Speaker Change: The number of adolescent patients receiving treatment as growth, 38% in the first quarter of 2025% versus the first quarter of 2024.

Speaker Change: With the total number of adolescent patients aged 15 to 17 treated in Q1 of 2025.

Speaker Change: Exceeding all of the patients treated in the full year of 2023.

Speaker Change: We are seeing encouraging adoption rates across our provider network and insurance coverage for the adolescent Neurostar Tms treatment continues to improve significantly.

Speaker Change: With ever North Health services, a cigna group's subsidiary recently, expanding Neurostar Tms coverage to include adolescents 15 and older with MTT.

Speaker Change: In summary, our first quarter performance demonstrates that strategic initiatives, we implemented through 2024 are driving tangible results.

Speaker Change: And financial performance.

Speaker Change: I will now turn the call over to Steve to review our financial results.

Speaker Change: Thank you Keith unless otherwise noted our performance comparisons are being made for the first quarter of 2025.

Speaker Change: Versus the first quarter of 2024.

Speaker Change: Total revenue was $32 million an increase.

Speaker Change: <unk> of 84% compared to the revenue of $17 4 million in the first quarter of 2024, primarily driven by the green brick acquisition.

Speaker Change: U S. Neurostar advanced therapy system revenue was $2 8 million.

Speaker Change: And we shipped 31 systems in the quarter.

Speaker Change: U S treatment session revenue was $9 $6 million.

Speaker Change: A decrease of 26% year over year, primarily due to the elimination of Greenbrier revenue in our 2025 results.

Speaker Change: U S clinic revenue, which represents revenue generated by treatment centers from the Greenberg acquisition was $18 $7 million for the three months ended March 31 2025.

Speaker Change: Gross margin was 49% compared to 75% in the prior year quarter.

Speaker Change: This change in gross margin was primarily a result of the inclusion of Green <unk> clinic business, which operates at a lower margin and the elimination of Greenburgh treatment session revenue.

Speaker Change: Operating expenses during the quarter.

Speaker Change: Were $26 8 million, an increase of $6 9 million or.

Speaker Change: 435% compared to $19 9 million in the first quarter of 2024.

Speaker Change: The change was mainly attributable to the inclusion of Green <unk> operating expenses of $9 $5 million.

Speaker Change: During the quarter, we incurred approximately $1 4 million of noncash stock based compensation expense.

Speaker Change: Net loss for the quarter was negative $12 $7 million.

Speaker Change: Or negative <unk> 21 per share as compared to a net loss of negative $7 9 million or negative <unk> 27 per share in the prior year quarter.

Speaker Change: EBITDA was negative $10 $1 million.

Speaker Change: As compared to negative $6 3 million in the prior year quarter.

Speaker Change: As of March 31, 2025, cash and cash equivalents were $20 2 million.

Speaker Change: This compares to cash and cash equivalents of $18 5 million as of December 31st 2024.

Speaker Change: Our capital position was strengthened by.

Speaker Change: By our successful public offering in February.

Speaker Change: <unk> raised $18 9 million in net proceeds.

Speaker Change: This financing has provided us with enhanced flexibility to execute on our growth initiatives, while maintaining our path to cash flow breakeven in the third quarter of 2025.

Speaker Change: As a result.

Speaker Change: And the increased strength of the balance sheet due to the follow on offering we proactively took steps to settle green Brooks legacy vendor payment plans.

Speaker Change: And pulled forward certain expenses in order to secure favorable vendor concessions by paying them early.

Speaker Change: While this increased our cash burn to levels above what would typically be seen in the first quarter. This decision will ultimately reduce our overall net spend with those vendors during 2025.

We also realized greenberg's bonus payout and merit cycles and experienced a temporary lag in greenburgh collections as we integrated the new advanced MD software into our revenue cycle management.

Speaker Change: We are already seeing marked improvements in collections over the past two weeks as the new systems become fully operational.

Speaker Change: Due to these measures cash used in operations for the first quarter was $17 million.

Speaker Change: We expect cash used in operations for the second quarter could be less than $5 million and after the end of the year, we anticipate cash on the balance sheet to be greater than $20 million.

Speaker Change: Now turning to guidance for.

Speaker Change: For the second quarter, we expect revenue of $36 million to $38 million.

Speaker Change: We are narrowing our full year revenue guidance to be in the range of $149 million to $155 million.

Speaker Change: Compared to prior guidance of $145 million.

Speaker Change: To $155 million.

Speaker Change: For the full year 2025, we continue to expect gross margin to be approximately 55% as a result of the inclusion of the Green Brook claim expense.

Speaker Change: And the elimination of Greenburgh treatment session purchases.

Speaker Change: We continue to expect total operating expenses for the full year to be in the range of 90 million.

Speaker Change: To $98 million.

Speaker Change: I am pleased to report that the current macro environment will have a negligible impact on the business, we anticipate a limited impact from tariffs as the majority of our sourcing is inside the U S.

Speaker Change: And our manufacturing is based in San Diego.

Speaker Change: We do source some plastic components from outside the USA, along with the Neurostar chair, but we estimate the net impact to be about $500 per neurostar system, which is very manageable within our overall cost structure.

Speaker Change: From a treatment session standpoint, we source the treatment packs out of China and would estimate that the impact from the current tariffs of 145% would be less than $250000 for the balance of the year.

Speaker Change: Moving through Q2, we continue to focus on execution of our expansion of our <unk> provide a rollout the.

Speaker Change: Patient of buy and Bill.

Speaker Change: Optimization of our revenue cycle processes.

Speaker Change: And remaining cost synergies.

Speaker Change: These efforts along with our planned revenue growth support our path to become cash flow positive in Q3.

Keith Sullivan: I would now like to turn the call back over to Keith.

Keith Sullivan: We will continue to see a meaningful uplift in our Neurostar Tms treatments and we will continue to strive to increase our treatment sessions per system per day.

Keith Sullivan: The early results, we are seeing a firm with substantial revenue opportunity. This represents.

Keith Sullivan: Our BMP program continues to show positive momentum.

Keith Sullivan: The connections between primary care physicians and BMP locations are helping to expand patient access to treatment.

Keith Sullivan: As we progress through the year. This network is expected to grow its treatment session utilization and support controlled system sales.

Keith Sullivan: The performance data from BNP sites continues to reinforce the value of our approach to standardizing patient experience and practice operation.

Keith Sullivan: The adolescent opportunity continues to be a growth driver.

Keith Sullivan: Since our FDA clearance last year.

Keith Sullivan: This enthusiastic adoption reflects both the clinical need in this underserved population and the expanded insurance coverage we have secured.

Keith Sullivan: We are seeing providers eager to offer this treatment option to younger patients who have limited alternatives.

Keith Sullivan: Most importantly, we remain committed to being cash flow positive in the third quarter as previously guided.

Keith Sullivan: Our successful February raise has strengthened our balance sheet.

Keith Sullivan: Giving us the resources needed to execute on these strategic initiatives, while maintaining our path to profitability.

Keith Sullivan: Before we conclude I would like to share some news regarding our leadership team.

Keith Sullivan: After serving as our Chief Financial Officer since 2019, Steve Furlong has announced his intention to retire on March 31 2026.

Keith Sullivan: <unk> continues his current position until his successor is higher and we will remain as an advisor until the end of March to ensure a smooth transition.

Keith Sullivan: We have initiated a comprehensive search process to identify his successor.

Keith Sullivan: In closing the first quarter results demonstrate that our integrated business model is working creating value for patients providers and shareholders. We are excited about the remainder of 2025 and look forward to updating you on our progress in the quarters ahead.

Keith Sullivan: Now open the call for questions.

Keith Sullivan: Thank you at this time, we will conduct a question and answer session. As a reminder to ask a question you will need to press star one on your telephone and wait for your name to be announced to withdraw your question. Please press star one again.

Keith Sullivan: Please standby, while we compile the Q&A roster.

Keith Sullivan: Our first question is from Margaret Kessler, Andrew with William Blair. Your line is now open.

Margaret Kessler: Hey, good morning, everyone. Thanks for taking my questions.

Keith Sullivan: And maybe just to start out with.

Keith Sullivan: Thanks.

Keith Sullivan: And maybe we can focus on that.

Keith Sullivan: A&P sites on the neuro network side.

Keith Sullivan: Aerostar side excuse me.

Keith Sullivan: More specifically so the number of places growing funnel is maybe getting a little bit smaller at least versus last quarter or so.

Keith Sullivan: Just wanted to see some onetime.

Keith Sullivan: Dynamics should we assume that fall increases again are you reiterating that over 500 by end of year end.

Keith Sullivan: What causes that.

Speaker Change: So we just had a influx of new accounts to enter the program Margaret.

Speaker Change: So there's a natural dip at that happened so we will be.

Speaker Change: The building that pipeline back up right now we have 113 sites that are working to get into the program.

Speaker Change: I expect that to grow.

Speaker Change: With with our next summit, which is actually this weekend so.

Speaker Change: Okay.

Speaker Change: And so as we as we look at that maybe in more detail.

Speaker Change: The progress of these BMT sites. This year and then almost more importantly, as we go into 2026.

Speaker Change: The number of the sites continues to grow but what drives utilization I guess at those sites in that mid tier mid term outlook.

Speaker Change: And anything that you guys Ken can provide.

Speaker Change: Around utilization trends, both at those sites versus maybe non BNP sites over the last few quarters. Thank you.

Speaker Change: Alright.

Speaker Change: I can repeat any of that.

Speaker Change: That's okay, I'll remember as much as I can.

Speaker Change: The BNP sites are focus of our marketing efforts.

Speaker Change: And I think Lee cirrhosis has done a fabulous job of monitoring our BMP sites and being able to utilize digital marketing as well as traditional marketing radio TV and billboards to be able to drive awareness and educate those patients.

Speaker Change: I think where we are comfortable that we can continue.

Speaker Change: To have utilization grow in those sites.

Speaker Change: But.

Speaker Change: In the script, we also talked about our our network connection. So we do we have asked our pbms to go to primary care non interventional.

Speaker Change: Intervention tools psychiatrist.

Speaker Change: G Y and physicians that are taking care of patients battling depression, who can't get help elsewhere educate them on the benefits of the neurostar treatment.

Speaker Change: And.

Speaker Change: Have those physicians choose who they want to refer to and as we said in his script most are referring to.

Speaker Change: Our BMP sites. So I think that this new program that we have actually.

Speaker Change: Protected on the Green Brook side of the business.

Speaker Change: We will be a tremendous help and continuing to grow utilization in BMP sites.

Speaker Change: Okay.

Speaker Change: Okay, Great and just last question maybe on the guidance.

Speaker Change: We're looking at.

Speaker Change: Towards that that I guess full year 'twenty five can you provide any breakdown between green Brook maybe.

Speaker Change: Patients for utilization at Green broker and then St.

Speaker Change: Same question on the neuroscience start.

Speaker Change: Neurostar side. Thank you.

Speaker Change: Yes.

Speaker Change: Welcome Margaret Steve Yeah, Greenbacks performance in the first quarter was actually quite good.

Speaker Change: Relative to Tms improvements.

Speaker Change: Again, we are using our BNP account metrics.

Speaker Change: Metrics as really measurement criteria for Green Brook.

Speaker Change: And so they actually increased their utilization pardon aerostar chair to just under five patients per day, and so really off to a great start in 2025.

Speaker Change: Looking at guidance again, the primary growth drivers are really going to be.

Speaker Change: Patient utilization in the Greenberg chairs and also provide us.

Speaker Change: And it's provided did increase about 50% year over year.

Speaker Change: Thats natural given the low starting point in 'twenty, four but also the pretty impressive rollout.

Speaker Change: Across all clinics and also the conversion to buy and bill.

Speaker Change: So I think as we go forward.

Speaker Change: Every increase.

Speaker Change: We will see going forward will be related to the green box side.

Speaker Change: Okay. Thank you.

Speaker Change: Thank you please standby for our next question.

Speaker Change: Our next question comes from William <unk> with Canaccord Genuity. Your line is now open.

William: Great. Thanks, good morning, and congratulations on a solid top line.

Speaker Change: Just on the.

Speaker Change: The business itself I think when you gave the 25 guide yet legacy.

Speaker Change: Your next business at $65 million to $70 million of the Greenberg at AED five.

Speaker Change: Any change in that and then just to dig into the green brick outperformance.

Speaker Change: You mentioned to provide if I.

Speaker Change: Kind of broke it up how much with utilization versus how much of that year over year growth was for <unk> and then on the.

Speaker Change: The core narrow networks business I mean that was up a lot more than we were expecting.

Speaker Change: How much of that was green brick versus how much of that was kind of the legacy.

Speaker Change: <unk>.

Speaker Change: Yes, again Bell the Q1 performance, we thought was extremely strong on both sides of the business.

Speaker Change: And so again.

Speaker Change: Green bricks clinic, Tms business was up 8% year over year that we've mentioned in the script and against provided with 50%.

Speaker Change: Those figures are same store clinic. So last year in Q1, we had 130 operating clinics now we have 95 those growth rates are apples to apples with the 95.

Speaker Change: From that we were I would say pretty spot on from an <unk> perspective.

Speaker Change: Measuring Q1 actual performance to our plan.

Speaker Change: Again, we thought we got off to a great start.

Speaker Change: Again, the increase utilization that green brick and Tms was great.

Speaker Change: As the continued rollout of Nevada.

Speaker Change: And then on the spend it looks like your G&A was maybe $4 million higher than what we were looking for.

Speaker Change: I know you've had the merger and a lot of things going on or was there any one time costs in there kind of im trying to titrate the model here, but what should we expect any kind of a Q2 G&A spend and how should that look going forward I am just trying to walk to the cash flow positive in Q3.

Speaker Change: Yes.

Speaker Change: See increases in G&A as we work through the balance of 2025.

Speaker Change: We pulled in approximately $5 million in Q1 from a cash perspective.

Speaker Change: With some key vendors that Greenbrier CAD and they were put on payment plans because in fairness to them during 'twenty three and 'twenty four.

Speaker Change: Not like they were flushed with cash so they were managing expenses relate to the detriment of relationships and so we pulled in software payments, we synchronized payroll so green books bonus and merit cycles, which were planned for later in the year were pulled into the quarter.

Speaker Change: We did pull in some marketing spend into Q1 and Q2.

Speaker Change: Did have increased auditing fees.

Speaker Change: Related to the combined company.

Speaker Change: In February and March though.

Speaker Change: Again, I think from an expense perspective.

Speaker Change: With the increase you'll notice that we did not change operating expense guidance for the year.

Speaker Change: And still believe we will be pretty.

Speaker Change: Pretty much at that midpoint.

Speaker Change: When we finished 2025.

Speaker Change: Okay, but.

Speaker Change: You did $27 million in Opex in Q1, you're guiding 90, 98 Youre Annualizing at 104, what is the normalized opex spend as we go into Q2.

Speaker Change: It'll be in the.

Speaker Change: 'twenty three 'twenty $4 million range.

Speaker Change: Great.

Speaker Change: Thanks.

Speaker Change: Alright.

Speaker Change: One moment our next question.

Speaker Change: Our next question comes from Adam <unk> with Piper Sandler Your line is now open.

Adam: Hey, guys. Good morning, and thank you for taking the questions.

Speaker Change: Couple from me and kind of wanted to start with.

Speaker Change: Bill just left off.

Adam: Around some of the puts and takes on the guidance front.

Adam: The Standalone revenue guidance for the year is that still $65 million to $70 million or did that change.

Adam: And then I have a follow up on <unk>. Thanks.

Adam: Yeah, I mean, the split we communicated.

Adam: At the beginning of the year again in that 65% to 70 range for <unk>.

Adam: 80% to $85 million for Greenbrier is still I would say the current targets for the combined companies.

Steve: Okay. That's helpful. Steve.

Steve: Good to hear that.

Steve: Just around the Q1 performance for the green brick clinics.

Steve: Good performance in the quarter.

Steve: Are you able just to give us a little bit more insight around kind of the revenue mix between Tms.

Steve: <unk> and other.

Steve: I heard some growth rates thrown out, but I think it would be helpful. Just to kind of get a sense for the magnitude of revenue for.

Steve: Each of those different.

Steve: Products at Green brick as we think about.

Steve: That business kind of ramping throughout the remainder of the year.

Steve: Sure.

Speaker Change: Adam I think it's important to note that these ratios are going to change significantly as we continue to rollout green provide though.

Speaker Change: As well as buy and bill and so for color Tms performance was essentially doubles provider.

Speaker Change: But.

Speaker Change: That number will change pretty significantly as we work through Q2, three and four so.

Speaker Change: Maybe it's a nice starting point, but I'm not sure of the relevant when you're modeling for the remainder of 'twenty five.

Speaker Change: Okay. Okay. That's helpful. I appreciate the incremental color.

Speaker Change: And then maybe just one on the gross margin front.

Speaker Change: Sure.

Speaker Change: It looks like the gross margin guidance for the year of 55% unchanged Q1 did come in.

Speaker Change: A little bit lighter than we were modeling and I think 49% or so.

Speaker Change: I'm, assuming that's a function of mix.

Speaker Change: Would just love a little bit.

Speaker Change: The detail there and then as we think about kind of the cadence of gross margin in subsequent quarters.

Speaker Change: Just any more color you can provide there would be helpful. Thank you.

Adam: Yes, so Adam once again.

Where we finished for the quarter was actually what we had planned and so we were pleased with the margin profile in the first quarter.

Adam: You will see a nice improvement in Q2, and Q3 really related to the revenue scale and so we go from $32 million to $37 million.

Adam: Midpoint guide for Q2, and Q3, and so we're going to get pretty close to that 55% number.

Adam: In the next couple of quarters and then additionally.

Adam: Additional improvement as we get to Q4 Q.

Adam: Q4 will have 28% of our annual revenue in that quarter. So its just a natural function of being able to leverage <unk>.

Adam: Clinical costs foundations, and really the only variable costs within a clinic or doctor fees.

Adam: And if they go up our revenue goes up so it's a good thing.

Speaker Change: Thanks for the color scheme is helpful.

Adam: Yes.

Adam: Thank you.

Adam: One moment for our final question.

Danny: Our final question comes from Danny starter with citizens JMP. Your line is now open.

Danny: Okay, great. Thanks, So just following up on some of the <unk>.

Danny: <unk>.

Danny: <unk> just to get to the final bill transition and we appreciate the color there. It sounds like it's included in your guidance, but could you comment on any capital outlay. This requires as we look at the cash flow statement, then contemplate your plans for free cash flow and 25 are there any constraints to.

Danny: Getting these conversions just upfront.

Danny: Cash.

Danny: Expense just any more color there okay.

Danny: Hey, Danny and Steve.

Danny: Yes, so we did have higher provide a buy and bill expenses in the first quarter.

Danny: But again once we completed the follow on we chose to continue to invest in the business again with a pull in in marketing, but also an acceleration of the conversion to buy and bill.

Danny: I am in the process of increasing our credit line with an LLC to lessen the cash burn burden on the company.

Danny: Again, it's a balance between the level of the LLC.

Danny: The inventory requirements.

Danny: And just the overall impact on our cash flow.

Danny: I will say our distributors.

Danny: Very good to work with we do have the 128 day obtained 120 day payment terms.

Danny: And so once we get into a regular cadence of claims submission collections and then the ultimate payment.

Danny: It should not be a cash flow issue for us we should collect in 60 days and I don't have to pay and until 120 days. So.

Danny: Again, where we.

Danny: We're working with different sources to secure that LLC, and we will be balancing that impact on cash as we continue.

Danny: Continue that rollout.

Danny: Great that's it for me.

Speaker Change: Thank you.

Danny: Oh.

Danny: I'm showing no further questions at this time I would now like to turn it back to Keith Sullivan for closing remarks.

Speaker Change: This does conclude today's conference you may now disconnect.

Q1 2025 Neuronetics Inc Earnings Call

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