Q1 2025 Ekso Bionics Holdings Inc Earnings Call
Speaker Change: and greetings and welcome to the Ekso Bionics' first quarter 2025 financial results conference. At this time, all participants are in a listen on the mode. A question and answer session will follow the formal presentation.
Pennywood should acquire operator assistance, please press store zero and your cell phone keybed.
As a reminder, this conference has been reported.
Speaker Change: If it's not my pleasure to introduce your host, Stephen Comer of Invest Relations. Thank you, you may begin.
Thank you, operator, and good afternoon, everyone.
Speaker Change: Earlier today, Ekso Bionics released financial results for the first quarter and in March 31st, 2025.
Speaker Change: A copy of the press release is available on our website.
Speaker Change: I would like to point out that management will make statements during this call that include foreign-license statements within the meaning of the Federal Security Laws, which are made pursuant to the safe harbor provisions of the Private Security's litigation reform act of 1995.
Speaker Change: Any statements made during this call that are not statements of historical facts should be deemed to be forward-looking statements.
Speaker Change: All four of the statements, including statements regarding our business strategy, future financial performance or operational expectations, or our expectations of the regulatory landscape governing our products and operations are based upon management's current estimates and various assumptions.
Speaker Change: These statements involve material risks and uncertainties that could cause actual results or events to materially differ from those anticipated or implied by these foreign-legged statements.
Accordingly, you should not place undue reliance on these statements [inaudible]
Speaker Change: For a list in the description of the risks and uncertainties associated with the company's businesses, please see its filings with the Securities and Exchange Commission.
Speaker Change: Any forward-looking statements made on this call speak only as of the date of this call.
Speaker Change: representing Ekso Bionics today, or Scott Davis, or Chief Executive Officer, Jerome Wong, or Chief Financial Officer, and Jason Jones, or Chief Operating Officer.
Jerome: With that said, I'll turn the call over to Jerome.
Jerome Wong: Thank you, Steve. Good afternoon, everyone, and welcome to our first quarter 2025 conference call.
Speaker Change: On behalf of the management team and everyone at Ekso Bionics, I would like to thank you for your interest in our company and for those who are shareholders, we appreciate your support.
Speaker Change: For the benefit of those who are new to the Ekso Bionics story, I would like to take a moment to summarize our business.
Speaker Change: ExoDesigns, Develops, and Martis Exoskeleton products that augment human strength endurance and mobility. The primary end market for Exoskeleton technology is healthcare, where technology primarily serves people with physical disabilities or impairments in both physical rehabilitation and mobility.
Speaker Change: We operate as one operating and reportable segment with two markets, enterprise health and personal health.
Speaker Change: Our legacy enterprise health products consists mainly of our exonr device, which has a wearable robotic exoskeleton specifically designed to be used in a rehabilitation setting to assist individuals recovering from both acute and chronic conditions.
Both products also include support and maintenance contracts.
Speaker Change: I will turn the call over to Scott in a moment for an update on our commercial activities and growth plans However, before I do I would like to provide a brief summary of our financial results [inaudible]
Speaker Change: To streamline things, all the numbers I've referred to have been rounded, so they are approximate.
Speaker Change: The company recorded revenue of $3.4 million in the first quarter of 2025 compared to $3.8 million for the same period in 2024.
Speaker Change: This reduction was due to capital budget impact from certain inpatient rehabilitation facilities or IRFs related to our exo-NR enterprise health product.
Speaker Change: The change in growth profit was driven by a decrease in revenues from enterprise health devices partially offset by cost savings in supply chain and a reduction in service costs.
Speaker Change: The increase in gross margin was primarily due to cost savings in supply chain and reduction in service costs, partially offset by lower margin sales related to increased volume
Speaker Change: Operating expenses for the first quarter of 2025, which consists of R&D, GNA and sale to marketing expenses were $5.3 million, essentially unchanged from $5.2 million for the first quarter of 2024.
Speaker Change: NetLoss, applicable to common stockholders for the 2025 first quarter, was $2.9 million or $12 cents per basic and diluted share compared to a net loss of $3.4 million or $20 cents per basic and diluted share for the same period of 2024.
Speaker Change: For the fourth quarter of 2025, the company used $2 million of net cash in operations compared to $3.5 million for the same period in 2025.
Speaker Change: As of March 31, 2025, the company had cash and restricted cash of $8.1 million up from $6.5 million as of the end of 2024.
Thank you, Drone.
Speaker Change: While we saw some softness in our legacy enterprise business in Q1, as we had several customers whose capital budgets were at least temporarily impacted by reactions to macroeconomic uncertainties, that was partially offset by good growth from our exo and ego personal.
Speaker Change: As we have discussed in the past, CMS established pricing determination for our indigo personal exoskeleton in Q2 of 2024.
Speaker Change: This regulatory change created a significant opportunity to help Medicare enrollees living with a spinal cord injury by removing what had historically been a primary barrier to assessing our exoskeleton.
Speaker Change: Accordingly, we immediately set out to establish a go-to-market strategy aimed at notifying as many early position and provider adopters as possible of the new CMS benefit category re-determination and the fee-schedule listing.
Speaker Change: Additionally, we began working closely with our extensive network of neuro rehabilitation partners across the country focused on education efforts and on appropriate patient selection and process for patients prescribed in exo and to go personal for the home and community setting.
Speaker Change: As we discussed on our Q4 call just a few weeks ago, one of the key changes we made was to engage pre-help care, one of the leaders in market access services, which has been instrumental in the successful commercialization of over 300 medical devices.
Speaker Change: As a quick status update, we also recently announced bringing on Bionic P&O as a new and our first O&P distributor.
Speaker Change: and we're excited to report that they already submitted their first patient claim for the indigo personal exoskeleton to Medicare and Q1 and with exos focused marketing efforts, we've now developed a pipeline of more than 35 Medicare beneficiaries that we believe are qualified candidates for exo indigo personal in 2025.
Speaker Change: That's up 37% from where we were on our Q4 call in early March.
Speaker Change: Factors considered for the candidates to be represented in our pipeline include, among other things, Medicare enrollment, and appropriate indication for use, and medical necessity.
Speaker Change: Moving forward, we believe working with our growing distribution network and leveraging our new relationship with Priya throughout the claims process, places qualified candidates in a good position of having their claims successfully processed.
Speaker Change: That said, and as we cautioned on our last call, we obviously cannot guarantee that all of our pipeline will result in new claim submissions.
A curve within this time frame, or ultimately be paid.
Speaker Change: Nevertheless, we believe that we can leverage our experience over the past year.
Speaker Change: and the capabilities and reach of our new partners to navigate the complexities of coding, coverage, and payment.
Speaker Change: In summary, with a strong focus on business development activities, Ekso is building what we believe is a more scalable go-to-market strategy for our Ekso Indigo personal.
Speaker Change: This is exemplified by our most recent separate but clearly related moves.
Speaker Change: where we named national seating and mobility as the company's exclusive distributor of the device within the US complex rehabilitation technology or CRT industry.
Speaker Change: As I mentioned a moment ago, our most recent engagement with Bionic P&O has a non-exclusive distributor of Indigo Personal within the orthotics and prosthetics industry.
Speaker Change: We believe that NSM and Bionic P&O will significantly broaden access to our portable exoskeleton device for individuals living with spinal cord injuries and longer term perhaps other mobility challenges across the United States.
Speaker Change: NSM brings a network of over 180 locations and more than 2,400 team members who support more than 250,000.
Speaker Change: Mobility Solutions each year. And Bionic P&O, a leading national provider of prosthetic and orthotic solutions is an ABC accredited independent clinical practice group that now operates across 12 states.
Speaker Change: While the majority of our revenue in 2025 will still come from enterprise health, we believe with our significant investment in these scalable programs, we will continue to see rapidly increasing contribution from our personal health products throughout 2025.
Speaker Change: In summary, the first quarter was another period of significant progress for exo-bionics marked by a growing shift between legacy enterprise and newer personal revenue contributions.
Speaker Change: Good Gross margins, lower cash burn, a stronger balance sheet, a growing pipeline of Medicare beneficiaries, and what we believe are excellent candidates for Indigo Personal in 2025.
Speaker Change: and the continued building of a scalable go-to-market strategy for Indigo Personal, supported by both established and new industry leading, DME, O&P, and market access partners.
Speaker Change: This ends our prepared remarks for today. With that, we're happy to take any questions that you might have. Operator?
Speaker Change: Thank you. We now be conducting a question and answer session. If you'd like to ask a question please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue.
Speaker Change: May press start 2 to remove yourself from the queue.
Speaker Change: For participants using speaker equipment, it may be necessary to pick up your handbag before pressing the spark keys.
Ben Hainer: Our first question here is from Ben Haynor, from Leak Street Capital Markets. Please go ahead.
Good afternoon, gentlemen. Thanks for taking the questions.
Ben Hainer: First of all, for me, now that you've got the ONP channel covered with Bionics, or at least initially cover, and you have the complex rehabilitation therapy channel, the traditional, the kind of Medicare DME, along with the kind of post-acute rehab clinics on the more...
Ben Hainer: Enterprise side. How should investors kind of think about where the patients will fall this year in terms of the indigo personal and kind of?
Ben Hainer: You know, as a kind of a third, a third, a third, a third with CRT, O and P, and the traditional channel, and then what do you expect from your enterprise folks?
Okay, great question.
Ben, thank you.
Ben Hainer: We, again, the majority of our business historically has come out of our enterprise health product portfolio. And in general, as we move through 2025, we still expect that enterprise product will represent.
Ben Hainer: You know, the large majority of what we do, you know, 75-80% of our business represented.
Ben Hainer: by that product category, moving into the personal product, again as we have...
Ben Hainer: Works to develop our initial channels into that segment and we've really scaled up our market access capabilities and we've driven a good pipeline.
Ben Hainer: We do expect solid contribution, growing quarter over quarter as we move through the year with really the balance of our business represented from that segment, as far as how that falls out between, you know,
C-R-T and O-N-P space.
Ben Hainer: I think there's a bit more of a familiarity in the O&P space, they're the product.
Ben Hainer: sort of lends itself a little bit more to reimbursement through on-keep providers, however.
Ben Hainer: There's a big investment with NSM in space, so we do expect that as the year progresses we'll see a good contribution from there as well. So how that actually falls as we move through the year, we're uncertain of.
Ben Hainer: But, you know, it could be as much as 50-50, it could be a little less, we just won't know until that program where you start to wrap up on the CRC side.
Okay, let's turn off the minute.
Ben Hainer: with pre, I guess any more color on how things are going there, are you getting a sense of what's kind of a no-go submission, if you don't have certain documentation or things of that nature that you need or don't need and kind of...
Ben Hainer: submitted, you know, past claims and we've had a claim that ended up in ALJ which gave us a very clear indication of
[inaudible]
Ben Hainer: perhaps what they were looking for. And we believe that what we've...
Put together right now, as far as [inaudible]
[inaudible]
Ben Hainer: The requirements for what we consider to be a solid claim or a successful claim and we believe we have them.
Strong understanding of that [inaudible]
Ben Hainer: That being said, you know, there has not been, you know, a definitive set of criteria that have been most [inaudible]
Ben Hainer: who published through CMS or through the DME MAX, which indicate what is...
Ben Hainer: They're a definition of exactly what's required in those claims. However, based on what we've seen, our interactions, and what we learned through
Ben Hainer: Our engagement with Priya, we feel like the claims that are being submitted today are very comprehensive and have a high probability of going through.
Speaker Change: That's encouraging. And then on kind of the IDN front, it sounds like there's still some budget constraints, obviously there's a lot of uncertainty out there just generally speaking.
Speaker Change: You know what these folks are looking at on the capital budget inside later this year, how much of a read through do you have on that sort of part of the business?
Speaker Change: Yeah, I mean, so as I had, you know, talked about in previous quarters, we had talked about
You know, 2024 being an off-cycle year for IDNs.
Speaker Change: We do have a lot of renewals coming up with IDNs in 2025 and those appear to be on track at the moment so that we expect in North America that to be a...
Speaker Change: of a solid contribution to our enterprise health business in 2024. We also have a lot of inpatient rehab facilities that maybe are part of larger health networks.
independent, you know, independent
hospital for that.
have capital budgets where we've been working with them, for some of them for...
You know, years, others for months.
Speaker Change: Those capital budgets, we've seen a little bit of softness, certainly in Q1, around that, around economic uncertainties, and we've seen those capital budgets which were there, disappear rather suddenly.
You know, we also have.
Speaker Change: Many of our capital customers who receive federal grants for some of this technology and so
you know, the status of those graces is uncertain.
at the moment as well, so...
Speaker Change: You know, while we have a strong pipeline, you know, on the enterprise business
Speaker Change: We are seeing budgets impact at least temporarily around some of those purposes that certainly affected us in Q1.
Speaker Change: and it's something that we are preparing ourselves as we move through 2025 that this could be at.
Okay, got it and it left me for me on the
Speaker Change: You know, Gross Margin, it's been four to six, of course, they've been north of 53% and it, you know, it looks like you're clearly trending in the right direction there. I mean, is this kind of a new sort of baseline and now it's revenues expand from here, you know, you can move, Gross Margin higher with that.
Speaker Change: We believe so. The operations team, Jason and the operations team have done just an amazing job.
Speaker Change: as it relates to keeping our costs down, raw material costs, bill material costs.
Speaker Change: on the product. And the impact, we frankly expected margins to be a bit higher. In Q1, it was really just driven by, you know, just a lower volume of products and put out the tata.
Speaker Change: that had an impact to those markings, some of it was mixed when we had, again, a fair contribution from Europe as well.
That's what we'll tell you to take in the questions, guys.
and Matt Steinberg, Scott Davis, Scott Davis, Scott Davis,
Appreciate it Ben. Thank you
Speaker Change: Next question here is from Swayampakula Ramakanth, from H.C. Winwright, please go ahead.
Thank you. Good afternoon, Scott.
Jerome, OK, how are you?
Speaker Change: When I take a quick look at where their locations are, obviously Bionic is a smaller set compared
What I'm trying to understand is like, will their clientele...
Speaker Change: then being in certain areas, similar areas in certain geographies. Will that be an issue for you or actually that will actually enhance your product in these geographies?
Speaker Change: Yes, so we believe that these partnerships actually enhance our value because of the strength of these organizations and the...
and they have existing…
Speaker Change: They have existing relationships with processing large numbers of claims through the DME and Max, they are experts, certainly a national seeding mobility.
is an expert on mobility.
Speaker Change: they understand, you know, how to work with the patient, with the parents, physicians around that. And when we look at Bionic, you know, they are used to dealing with complex orthotics.
and, you know, they,
Speaker Change: You know, again, can really help coordinate that experience for that patient in helping them gain what they need from their from their position as well as other healthcare providers who work with the payer.
Speaker Change: to ensure that they have a solid claim. So they're both geared toward that for national seating and mobility. There are quite a large organization, so maintaining the right.
Speaker Change: Certifications and taxonomy on a state-by-state basis is something that they're working on and building out. So as they build out their coverage, they do have full national coverage. So as they build that out, you know, that...
Speaker Change: You know, the reach will expand with them and Bionic P&O is currently in 12 states. As it turns out, we have a lot of folks that we have in our
that are within our-
Speaker Change: growing pipeline of potential beneficiaries. We have a lot of crossover.
Speaker Change: in their states. We're also continuing to develop the programs so that we have good coverage across all 50 states to ensure that.
Speaker Change: You know, individuals who qualify for this technology have a convenient location and a convenient partner to work with. So we do believe that their expertise, absolutely helps, can facilitate.
and Cleaner and Better Submissions.
and then having these relationships.
Speaker Change: I'm just trying to understand you know how much of a
Speaker Change: How does it give you in terms of your DNA expenses?
Speaker Change: because you don't have to have that many feet on the ground, so to speak, but at the same time, how much of that gets neutralized by the amount of pay-away that you'll need to do to these two groups?
Speaker Change: Sure, and again, as we look at the...
Speaker Change: That was just something that we do ourselves, do we build this capability in-house or do we
Speaker Change: You know, a significant investment in-house for Exo to be able to hire a number of people that we need to be able to process all of these claims, to be able to, you know, be a local point of presence.
Speaker Change: as these fitness and, you know, screenings are happening. It would be incredibly challenging for us.
Speaker Change: to do that. So, you know, by setting up a distribution network, you know, this allows us to leverage these much larger organizations that have, you know, wider teams with regional and national coverage.
Speaker Change: You know, of course, that is at the trade-off. You know, now we have, you know, a two-tier Gale model, so we need to be able to support the margins for our distributors.
Speaker Change: and through the good work that Jason and his team have been doing in ensuring that we maintain good cost controls on our devices and continually improve our operating efficiency.
Speaker Change: both inside as well as through outside contract manufacturers. We are, as the volume increases, we expect to be able to.
Speaker Change: you know, are within, you know, within what people are used to seeing from us in those, you know, high high 50s plus.
Thank you. Thank you, Scott, for taking my questions.
Thanks, okay.
Speaker Change: This concludes the question and answer session. I'd like to turn the forward back to management for any closing comments.
Speaker Change: Thank you, Matt. And thank you to everyone for joining us today. We look forward to updating you as we continue to progress.
Speaker Change: This concludes today's teleconference. You may disconnect your eyes at this time. Thank you again for your participation.