Q1 2026 Neuronetics Inc Earnings Call

May 5, 2026

Operator: Good day. Thank you for standing by. Welcome to the Neuronetics Q1 2026 Financial and Operating Results Call. At this time, all participants are in listen-only mode. After the speaker's presentation, there will be a question-and-answer session. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today.

Speaker #2: Good day and thank you for standing by. Welcome to the Neuronetics First Quarter 2026 Financial and Operating Results call. At this time, all participants are in listen-only mode.

Speaker #2: After the speaker's presentation, there will be a question-and-answer session. To ask a question during the session, you will need to press star 11 on your telephone.

Speaker #2: You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 11 again. Please be advised that today's conference is being recorded.

Speaker #2: I would now like to hand the conference over to your first speaker today.

Mark Klausner: Good morning, thank you for joining us for the Neuronetics Q1 2026 conference call. Joining me on today's call is Neuronetics President and Chief Executive Officer, Dan Reuvers. Before we begin, I would like to caution listeners that certain information discussed by management during this conference call will include forward-looking statements covered under the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995, including statements related to our business, strategy, financial and revenue guidance, and other operational issues and metrics. Actual results can differ materially from those stated or implied by these forward-looking statements due to risks and uncertainties associated with the company's business.

Speaker #3: Good morning and thank you for joining us for the Neuronetics First Quarter 2026 conference call. Joining me on today's call is Neuronetics President and Chief Executive Officer Dan Rivers.

Speaker #3: Before we begin, I would like to caution listeners that certain information discussed by management during this conference call will include forward-looking statements covered under the Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995.

Speaker #3: Including statements related to our business strategy, financial and revenue guidance, and other operational issues and metrics. Actual results can differ materially from those stated or implied by these forward-looking statements due to risks and uncertainties associated with the company's business.

Speaker #3: For a discussion of risks and uncertainties associated with Neuronetics business, I encourage you to review the company's filings with the Securities and Exchange Commission, including the company's annual report on Form 10-K, which was filed in March, and the company's quarterly report on Form 10-Q for the quarter-ended March 31, 2026.

Mark Klausner: For a discussion of risks and uncertainties associated with Neuronetics business, I encourage you to review the company's filings with the Securities and Exchange Commission, including the company's annual report on Form 10-K, which was filed in March, and the company's quarterly report on Form 10-Q for the Q1 ended 31 March 2026. The company disclaims any obligation to update any forward-looking statements made during the course of this call, except as required by law. During the call, we'll also discuss certain information on a non-GAAP basis, including EBITDA and adjusted EBITDA. Management believes that non-GAAP financial information taken in conjunction with U.S. GAAP financial measures provides useful information for both management and investors by excluding certain non-cash and other expenses that are not indicative of trends in our operating results.

Speaker #3: The company disclaims any obligation to update any forward-looking statements made during the course of this call, except as required by law. During the call, we'll also discuss certain information on a non-GAAP basis, including EBITDA and adjusted EBITDA.

Speaker #3: Management believes that non-GAAP financial information taken in conjunction with US GAAP financial measures provides useful information for both management and investors by excluding certain non-cash and other expenses that are not indicative of trends in our operating results.

Speaker #3: Reconciliations between US 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 Neuronetics President and Chief Executive Officer Dan Rivers.

Mark Klausner: 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 Neuronetics President and Chief Executive Officer, Dan Reuvers.

Speaker #4: Thanks, Mark. And welcome, everyone, to our first quarter 2026 earnings call. I'll begin by sharing some perspectives on my background and why I joined the company.

Dan Reuvers: Thanks, Mark, and welcome everyone to our Q1 2026 earnings call. I'll begin by sharing some perspectives on my background and why I joined the company, discuss some early observations, and I'll walk through the key drivers of our performance in the quarter. I'll walk through our quarterly financial results in greater detail, and I'll conclude with my perspective on the rest of 2026 before opening the line for questions. This is my first earnings call as CEO of Neuronetics, and I'm pleased to be here. I've spent about 35 years in the med tech industry, and most of my career has been in businesses where patient impact, execution, and operational rigor drive the outcome. Most recently, I served as CEO of Tactile Medical, where we grew revenue from $187 million to approximately $300 million.

Speaker #4: Discuss some early observations and then I'll walk through the key drivers of our performance in the quarter. Then I'll walk through our quarterly financial results, in greater detail.

Speaker #4: And I'll conclude with my perspective on the rest of 2026 before opening the line for questions. This is my first earnings call as CEO of Neuronetics.

Speaker #4: And I'm pleased to be here. I've spent about 35 years in the medtech industry. And most of my career has been in businesses where patient impact execution and operational rigor drive the outcome.

Speaker #4: Most recently, I served as CEO of Tactile Medical, where we grew revenue from $187 million to approximately $300 million. During that time, we expanded patient reach, grew gross margins, delivered record earnings, and cash flow generation.

Dan Reuvers: During that time, we expanded patient reach, grew gross margins, delivered record earnings, and cash flow generation. Before that, I spent 12 years with Integra LifeSciences, where I led the $1 billion Codman Neurosurgery division. Earlier in my career, I held leadership roles at several other med tech companies. There were a couple things that drew me to this role. First, our mission to renew lives by restoring hope for patients and their families is one that I'm passionate about. It's amazing how many people have reached out to me since taking the role, sharing their stories of how they or someone they knew have either suffered from depression or, better yet, benefited from one of our therapies. Second, I think my background gives me a great perspective on how to move this business forward.

Speaker #4: Before that, I spent 12 years with Integra Life Science, where I led the $1 billion Codman neurosurgery division. And earlier in my career, I held leadership roles at several other medtech companies.

Speaker #4: There were a couple of things that drew me to this role. First, our mission to renew lives by restoring hope for patients and their families is one that I'm passionate about.

Speaker #4: It's amazing how many people have reached out to me since taking the role, sharing their stories of how they or someone they knew have either suffered from depression or, better yet, benefited from one of our therapies.

Speaker #4: Second, I think my background gives me a great perspective on how to move this business forward. My experience in the device space will allow me to come up to speed on the NeuroStar business quickly.

Dan Reuvers: My experience in the device space will allow me to come up to speed on the NeuroStar business quickly. It's notable that Tactile was vertically integrated, meaning we designed, manufactured, and sold our therapy solutions, but also directly billed third-party payers, an experience I expect to draw on as we continue to improve efficiency within our Greenbrook clinics. Since stepping into the role, I've spent the bulk of the last month on a listening tour. I've been on the road with our field team, inside our clinics, and meeting with customers. I've also engaged with shareholders, analysts, and others, helping me shape my understanding of the business. My approach has been deliberate and comprehensive, intended to allow me to fully understand this business before making decisions about where to lean in, where to adjust, and how we maximize the value of what we have.

Speaker #4: And it's notable that Tactile was vertically integrated, meaning we designed, manufactured, and sold our therapy solutions but also directly build third-party payers, an experience I expect to draw on as we continue to improve efficiency within our Green Brook clinics.

Speaker #4: Since stepping into the role, I've spent the bulk of the last month on a listening tour. I've been on the road with our field team, inside our clinics, and meeting with customers.

Speaker #4: I've also engaged with shareholders and analysts and others, helping me shape my understanding of the business. My approach has been deliberate and comprehensive. Intended to allow me to fully understand this business before making decisions about where to lean in, where to adjust, and how we maximize the value of what we have.

Speaker #4: With that said, what I've seen in my first few weeks has reinforced my conviction in the underlying opportunity that exists for us. First, on the NeuroStar side, I see a clear opportunity to broaden how we go to market and reach customer segments where we've not historically been positioned to compete.

Dan Reuvers: With that said, what I've seen in my first few weeks has reinforced my conviction in the underlying opportunity that exists for us. First, on the NeuroStar side, I see a clear opportunity to broaden how we go to market and reach customer segments where we've not historically been positioned to compete. I'll talk more about that in a moment. Second, with the Greenbrook clinics, workflows are key to optimizing profitability in our clinics, not only ensuring that patients have an efficient path to initiate their treatment and gain relief, but also to minimize operational handoffs. Revenue cycle management is also an area where I've spent time in my previous role, and what I've seen inside our clinic operations tells me there is more opportunity ahead.

Speaker #4: I'll talk more about that in a moment. Second, with the Green Brook clinics, workflows are key to optimizing profitability in our clinics. Not only ensuring that patients have an efficient path to initiate their treatment and gain relief, but also to minimize operational handoffs.

Speaker #4: Revenue cycle management is also an area where I've spent time in my previous role. And what I've seen inside our clinic operations tells me there is more opportunity ahead.

Speaker #4: Lastly, we have a talented team that's focused and executing. And I've been genuinely impressed with the quality of the people and the conviction toward our mission across the organization.

Dan Reuvers: Lastly, we have a talented team that's focused and executing, and I've been genuinely impressed with the quality of the people and the conviction toward our mission across the organization. Before I walk through the quarter, I'd like to briefly address two items. First, on our recently announced CFO transition. Steven Pfanstiel departed earlier this month to pursue an opportunity outside Neuronetics. We've initiated a comprehensive search to identify his successor. We appreciate Steven's contributions during his time at Neuronetics, and we'll provide updates as the search progresses. Ultimately, this allows me to select a partner that I'm confident can help me lead our next chapter. Second, I want to share some perspective on the comments made by certain shareholders about our business.

Speaker #4: And before I walk through the quarter, I'd like to briefly address two items. First, on our recently announced CFO transition. Steve Pfanstiel departed earlier this month to pursue an opportunity outside Neuronetics.

Speaker #4: We've initiated a comprehensive search to identify his successor. We appreciate Steve's contributions during his time at Neuronetics, and we'll provide updates as the search progresses.

Speaker #4: Ultimately, this allows me to select a partner that I'm confident can help me lead our next chapter. Second, I want to share some perspective on the comments made by certain shareholders about our business.

Speaker #4: While we believe that the integrated NeuroStar and Green Brook businesses provide us with a strong foundation to grow from, we respect some shareholders' views that the separation of the business could potentially unlock shareholder value.

Dan Reuvers: While we believe that the integrated NeuroStar and Greenbrook businesses provide us with a strong foundation to grow from, we respect some shareholders' views that the separation of the business could potentially unlock shareholder value. The board and I are aligned on operating this business with discipline and on making decisions that create long-term value for our shareholders. I assure you that I'm evaluating this business with an open mind, and I appreciate everyone's patience as I work through my process. With that context, let me share a bit more about our performance in the quarter. Our Q1 results were largely in line with expectations, and we're making progress on the commercial and operational priorities already in motion. Starting with the NeuroStar business. During the quarter, we shipped 34 systems, up 10% year over year.

Speaker #4: The board and I are aligned on operating this business with discipline, and on making decisions that create long-term value for our shareholders. I assure you that I'm evaluating this business with an open mind.

Speaker #4: And I appreciate everyone's patience as I work through my process. With that context, let me share a bit more about our performance in the quarter.

Speaker #4: Our Q1 results were largely in line with expectations, and we're making progress on the commercial and operational priorities already in motion. Starting with the NeuroStar business.

Speaker #4: During the quarter, we shipped 34 systems, up 10% year over year. We continued to support our installed base with the most comprehensive training and clinical resources in the category.

Dan Reuvers: We continued to support our installed base with the most comprehensive training and clinical resources in the category. We're also modernizing how we deliver that support with more virtual, on-demand, and real-time engagement tools that provide customers with choices on how they want to be supported. We're piloting an expanded set of commercial models for NeuroStar. Customers exist with a range of needs, and while we have a history of providing unparalleled ongoing support to our customers, we also know that not all customers' needs are the same. Expanding our go-to-market menu is a priority. I'm convinced that we can compete on a broader horizon by listening to customers and responding in kind. Early feedback's been positive, and I'll have more to share in August. Now a few comments on Greenbrook. Clinic revenue grew 15% in the quarter.

Speaker #4: We're also modernizing how we deliver that support with more virtual on-demand and real-time engagement tools that provide customers with choices on how they want to be supported.

Speaker #4: We're piloting an expanded set of commercial models for NeuroStar. Customers exist with a range of needs. And while we have a history of providing unparalleled ongoing support to our customers, we also know that not all customers' needs are the same.

Speaker #4: So expanding our go-to-market menu is a priority. I'm convinced that we can compete on a broader horizon by listening to customers and responding in kind.

Speaker #4: Early feedback's been positive, and I'll have more to share in August. Now, if your comments on Green Brook. Clinic revenue grew 15% in the quarter.

Speaker #4: Growth in the quarter was driven by continued strength in Spravato, with treatment growth year over year and expansion of buy and bill. On the TMS side, within our clinics, volumes were modestly below prior year levels in the quarter.

Dan Reuvers: Growth in the quarter was driven by continued strength in SPRAVATO with treatment growth year over year and expansion of buy-and-bill. On the TMS side, within our clinics, volumes were modestly below prior year levels in the quarter, which we attribute in part to weather disruption across portions of our footprint during the first 2 months of the quarter. We saw patient flow normalize as the quarter progressed, and we expect to return to more typical volume trends as we move into Q2. Within our clinic operations more broadly, the focus remains on workflow and revenue cycle management. The teams made real progress on collections and operational efficiency, and we see continued runway. We've also leveled our marketing investment across the year rather than front-loading it, which we believe is the right cadence for the business. We acted during the quarter to better align our cost structure.

Speaker #4: Which we attribute in part to weather disruption across portions of our footprint during the first two months of the quarter. We saw patient flow normalize as the quarter progressed, and we expect a return to more typical volume trends as we move into the second quarter.

Speaker #4: Within our clinic operations more broadly, the focus remains on workflow and revenue cycle management. The team's made real progress on collections and operational efficiency, and we see continued runway.

Speaker #4: We've also leveled our marketing investment across the year rather than front-loading it, which we believe is the right cadence for the business. We acted during the quarter to better align our cost structure.

Speaker #4: These steps are expected to deliver annualized savings of approximately $2.5 to $3 million. With net savings beginning in the third quarter. Profitability and cash are top priorities.

Dan Reuvers: These steps are expected to deliver annualized savings of approximately two and a half to three million dollars, with net savings beginning in Q3. Profitability and cash are top priorities and will be a focus of mine going forward. Taken together, the quarter reflects a business that's executing on the priorities already in motion while we lay the groundwork for our next phase of growth. With that, I'll walk through the financial results in greater detail. Unless otherwise noted, all performance comparisons are being made to Q1 2026 versus Q1 2025. Total revenue in Q1 was $34.5 million, an increase of 8% compared to revenue of $32 million in Q1 2025. The increase in revenue was primarily driven by higher US clinic revenue.

Speaker #4: And we'll be a focus of mine going forward. Taken together, the quarter reflects a business that's executing on the priorities already in motion, while we lay the groundwork for our next phase of growth.

Speaker #4: With that, I'll walk through the financial results in greater detail. Unless otherwise noted, all performance comparisons are being made to the first quarter of 2026 versus the first quarter of 2025.

Speaker #4: Total revenue in the first quarter was $34.5 million, an increase of 8% compared to revenue of $32 million in the first quarter of 2025.

Speaker #4: The increase in revenue was primarily driven by higher US clinic revenue. Total revenue from our NeuroStar business, inclusive of our system revenue, as well as treatment session revenue, was $12.9 million, in the first quarter of 2026.

Dan Reuvers: Total revenue from our NeuroStar business, inclusive of our system revenue as well as treatment session revenue, was $12.9 million in Q1 2026. This represents a decrease of 3% versus the prior year. US NeuroStar system revenue was $3.2 million, an increase of 13% on a year-over-year basis. We shipped 34 systems in the quarter, an increase of approximately 10% versus the prior year. US treatment session revenue was $9.1 million, a decrease of 5%. While system treatment utilization increased 3.5%, this was offset primarily by a reduction in customer inventory levels. US clinic revenue was $21.5 million, a 15% increase year over year. The results were driven by continued strong SPRAVATO growth and overall pricing improvement.

Speaker #4: This represents a decrease of 3% versus the prior year. US NeuroStar system revenue was $3.2 million, an increase of 13% on a year-over-year basis.

Speaker #4: And we shipped 34 systems in the quarter. An increase of approximately 10% versus the prior year. US treatment session revenue was $9.1 million, a decrease of 5%.

Speaker #4: While system treatment utilization increased 3.5%, this was offset primarily by a reduction in customer inventory levels. US clinic revenue was $21.5 million, a 15% increase year over year.

Speaker #4: The results were driven by continued strong Spravato growth and overall pricing improvement. Gross margin was 46.9% in the first quarter of 2026 compared to 49.2% in the prior year quarter.

Dan Reuvers: Gross margin was 46.9% in Q1 2026 compared to 49.2% in Q1 2025. The decrease in gross margin is a result of revenue mix, with clinic revenues representing a higher portion of our overall revenues. We also saw some negative impact from the increase in SPRAVATO buy-and-bill from Q1 2025 when we were still launching that offering. Operating expenses during the quarter were $25.1 million, a decrease of $1.6 million or approximately 6% compared to $26.8 million in Q1 2025. The decrease was primarily attributable to savings in SG&A expenses, where we have driven and will continue to drive efficiencies.

Speaker #4: The decrease in gross margin is a result of revenue mix with clinic revenues representing a higher portion of our overall revenues. We also saw some negative impact from the increase in Spravato buy and bill from Q1 of last year, when we were still launching that offering.

Speaker #4: Operating expenses during the quarter were $25.1 million, a decrease of 1.6 million dollars, or approximately 6% compared to 26.8 million in the first quarter of 2025.

Speaker #4: The decrease was primarily attributable to savings in SG&A expenses where we have driven and will continue to drive efficiencies. Net loss for the quarter was $10.8 million, or 16 cents per share, as compared to a net loss of $12.7 million or 21 cents per share in the prior year.

Dan Reuvers: Net loss for the quarter was $10.8 million or $0.16 per share as compared to a net loss of $12.7 million or $0.21 per share in the prior year. Q1 2026 adjusted EBITDA was -$6.6 million as compared to -$8.6 million in the prior year, an improvement of $2 million. Moving to the balance sheet and cash flow. As of 31 March, total cash was $19 million, consisting of cash and cash equivalents and restricted cash, as compared to $34.1 million as of 31 December. Cash used by operations in Q1 was $9.4 million. This compares to an operating cash use of $17 million in Q1 2025, an improvement of $7.6 million versus the prior Q1.

Speaker #4: First quarter 2026 adjusted EBITDA was negative $6.6 million, as compared to negative $8.6 million in the prior year, an improvement of $2 million.

Speaker #4: Moving to the balance sheet and cash flow. As of March 31st, total cash was $19 million, consisting of cash and cash equivalents and restricted cash, as compared to 34.1 million dollars as of December 31st.

Speaker #4: Cash used by operations in the first quarter was $9.4 million. This compares to an operating cash use of $17 million, in Q1 of 2025, an improvement of 7.6 million dollars, versus the prior Q1.

Speaker #4: As previously disclosed, in March 2026, we amended our debt agreement with Perceptive Advisors, which reduces our outstanding debt obligation and interest expense. Under the amendment, we made a one-time principal payment of $5 million to Perceptive Advisors, along with adjustments to the existing debt covenants.

Dan Reuvers: As previously disclosed, in March 2026, we amended our debt agreement with Perceptive Advisors, which reduces our outstanding debt obligation and interest expense. Under the amendment, we made a one-time principal payment of $5 million to Perceptive Advisors, along with adjustments to the existing debt covenants. Turning to guidance, which remains unchanged. We continue to expect total revenue between $160 and $166 million. Gross margins to be between 47% and 49%. Operating expenses in the range of $100 to $105 million, inclusive of approximately $8.5 million of non-cash stock-based compensation. Cash flow from operations between -$13 and -$17 million.

Speaker #4: Now, turning to guidance, which remains unchanged. We continue to expect total revenue between $160 and $166 million, gross margins to be between 47 and 49 percent, operating expenses in the range of $100 to $105 million, inclusive of approximately $8.5 million of non-cash stock-based compensation.

Speaker #4: Cash flow from operations between negative $13 million and negative $17 million. As a reminder, our operating cash flow is projected to improve beginning in the second quarter and then sequentially through the remainder of the year, with operating cash flow being flat to positive during the second half of the year.

Dan Reuvers: As a reminder, our operating cash flow is projected to improve beginning in Q2 and then sequentially through the remainder of the year, with operating cash flow being flat to positive during H2 of the year. In Q2, we expect to see mid-single-digit growth. As we look ahead to the remainder of 2026, our priorities are clear. We're focused on disciplined execution, sharpening how we go to market, and continuing to drive the business towards being cash flow positive. The pilots we have underway in the NeuroStar side of the business are designed to expand our reach, and within our clinic operations, we'll continue to focus on workflow, collections, and operational efficiency. We expect these benefits to continue building throughout the year. Looking further out, I want to briefly touch on Compass Pathways' pending psilocybin therapy.

Speaker #4: And in the second quarter, we expect to see mid-single-digit growth. As we look ahead to the remainder of 2026, our priorities are clear. We're focused on disciplined execution, sharpening how we go to market, and continuing to drive the business towards being cash flow positive.

Speaker #4: The pilots we have underway in the NeuroStar side of the business are designed to expand our reach, and within our clinic operations, we'll continue to focus on workflow, collections, and operational efficiency.

Speaker #4: We expect these benefits to continue building throughout the year. Looking further out, I want to briefly touch on Compass Pathway's pending psilocybin therapy. The regulatory process is Compass's to navigate, but the Trump administration's recent executive order prioritizing such submissions is certainly encouraging.

Dan Reuvers: The regulatory process is complex to navigate, the Trump administration's recent executive order prioritizing such submissions is certainly encouraging. If approved, we believe Greenbrook is among a very small number of providers genuinely equipped to deliver it. The protocol requires certified settings, trained clinical staff, and a proven back-office infrastructure for benefits investigation and prior authorization, all of which we already have in place through our SPRAVATO operations. While we will be prepared to execute if the product is approved, similar to SPRAVATO, we'd expect the revenue ramp to be measured in the first year of launch. The narrow pool of providers capable of delivering this therapy represents a durable advantage for our business. As I mentioned earlier, my approach in these first few weeks has been deliberate.

Speaker #4: If approved, we believe Greenbrook is among a very small number of providers genuinely equipped to deliver it. The protocol requires certified settings, trained clinical staff, and a proven back-office infrastructure for benefits investigation and prior authorization, all of which we already have in place through our Spravato operations.

Speaker #4: While we will be prepared to execute if the product is approved, similar to Spravato, we'd expect the revenue ramp to be measured in the first year of launch.

Speaker #4: But the narrow pool of providers capable of delivering this therapy represents a durable advantage for our business. As I mentioned earlier, my approach in these first few weeks has been deliberate.

Speaker #4: I'm committed to making decisions that balance the interests of our patients, physicians, colleagues, and shareholders. And I expect to be able to share an even more grounded view of where we're headed when we report next quarter.

Dan Reuvers: I'm committed to making decisions that balance the interests of our patients, physicians, colleagues, and shareholders, and I expect to be able to share an even more grounded view of where we're headed when we report next quarter. I want to thank the Neuronetics team for the work they've put in this quarter and for the welcome they've given me. I look forward to updating you all on our progress in August. With that, I'll open the call for questions. Operator.

Speaker #4: I want to thank the Neuronetics team for the work they've put in this quarter and for the welcome they've given me. I look forward to updating you all on our progress in August, and with that, I'll open the call for questions.

Speaker #4: Operator?

Speaker #1: Thank you. At this time, we will conduct the question-and-answer session. Our first question comes from the line of sorry, Bill Plavonic from Canaccord Genewa.

Operator: Thank you. At this time, we will conduct the question-and-answer session. Our first question comes from the line of William Plovanic from Canaccord Genuity. One moment while I bring him to the stage.

Speaker #1: One moment while I bring him to the stage. Bill, your line is now open.

William Plovanic: Hello. Good morning. Can you hear me?

Bill Plovanic: Hello. Good morning. Can you hear me?

Operator: Bill, your line is now open.

Speaker #2: Yeah. Okay. Great. Good morning. Yeah. Okay. Thank you. So, three questions for you, Dan, if I could. One is just clarity on the performance in the Greenbrook sites.

Dan Reuvers: Yeah. How are you?

Dan Reuvers: Okay, great. Good morning. Yeah. Okay. Thank you. Three questions for you, Dan, if I could. One is just clarity on the performance in the Greenbrook sites. I just want to make sure I heard that the Was it the, the treatment revenue and number of treatments was down year over year backing out the SPRAVATO? I just want to get to make sure I heard that correctly.

Dan Reuvers: Okay, great. Good morning.

Bill Plovanic: Yeah. Okay. Thank you. Three questions for you, Dan, if I could. One is just clarity on the performance in the Greenbrook sites. I just want to make sure I heard that the Was it the, the treatment revenue and number of treatments was down year over year backing out the SPRAVATO? I just want to get to make sure I heard that correctly.

Speaker #2: I just want to make sure I heard that the was it the treatment revenue and number of treatments was down year over year backing out the Spravato?

Speaker #2: I just want to get to make sure I heard that correctly.

Dan Reuvers: Overall, we were pleased with the Greenbrook performance. We were up double digits, as we said, about 15%. The TMS volumes were off a little bit, Bill. We think that that was related to a couple things. One, weather, which we, you know, pretty concentration up here in the Northeast. We were a little lumpy in our ad spend as we exited last year. Smoothing that this year, I think is going to bring that more in line with consistency. We also saw better performance in March than we did in January and February. Was, you know, we don't think that that was a trend as much in as an event.

Speaker #3: Yeah. Yeah. Overall, we were pleased with the Greenbrook performance. We were up double digits, as we said, about 15%. The TMS volumes were off a little bit, Bill.

Speaker #3: And we think that that was related to a couple of things. One, weather, which we pretty concentration up here in the Northeast. And then we were a little lumpy in our ad spend as we exited last year.

Speaker #3: So smoothing that this year, I think, is going to bring that more in line with consistency. But we also saw better performance in March than we did in January and February.

Speaker #3: So it was we don't think that that was a trend as much as an event. On the Spravato side, we saw growth in both the buy-and-bill and the A&O segments, double digit in both segments.

Dan Reuvers: On the SPRAVATO side, we saw growth in both the buy-and-bill and the A&O segments, double digit in both segments. Yeah, buy-and-bill was up as a mix compared to Q1 of last year. I think it's worth noting that we've also seen that kind of equilibrate over the last couple of quarters as far as mix between that and A&O.

Speaker #3: And yet buy-and-bill was up as a mix compared to Q1 of last year. But I think it's worth noting that we've also seen that kind of equilibrate over the last couple of quarters as far as mix between that and A&O.

Speaker #2: Okay. Great. And then thank you for that. And then just secondly, one of the biggest challenges new executives face when they come into a company is just making sure to keep the team intact.

William Plovanic: Okay, great. Thank you for that. Just secondly, you know, one of the biggest challenges, you know, new executives face when they come into a company is just making sure to keep the team intact and turnover. I just wanted to see if you could provide any color on, you know, what you've seen thus far. I know it's only been 45 days, just kind of what you've seen across the organization thus far.

Bill Plovanic: Okay, great. Thank you for that. Just secondly, you know, one of the biggest challenges, you know, new executives face when they come into a company is just making sure to keep the team intact and turnover. I just wanted to see if you could provide any color on, you know, what you've seen thus far. I know it's only been 45 days, just kind of what you've seen across the organization thus far.

Speaker #2: And turnover and I just wanted to see if you could provide any caller on what you've seen thus far. I know it's only been 45 days, but just kind of what you've seen across the organization thus far.

Speaker #3: Yeah. Yeah. First of all, I've been really impressed with how much the mission permeates through the company. People are really connected with the impact that we're making on patients' lives.

Dan Reuvers: Yeah. Yeah. First of all, I've been really impressed with how much the mission permeates through the company. People are really connected with the impact that we're making on patients' lives. I mentioned in my opening comments that I've been on a listening tour for the first month for the most part, and that gave me an opportunity to go out and spend time with folks in the field, as well as having spent a good amount of time in the office. I've met with a lot of people. I've been trying to connect as best I can with things like podcasts and town halls. So far, I've been pleased with, as I said, kind of where people's attitudes are.

Speaker #3: I mentioned in my opening comments that I was on a I've been on a listening tour for the first month for the most part.

Speaker #3: And that gave me an opportunity to go out and spend time with folks in the field. As well as having spent a good amount of time in the office.

Speaker #3: So I've met with a lot of people. I've been trying to connect as best I can with things like podcasts and town halls. And so far, I've been pleased with, as I said, kind of where people's attitudes are.

Speaker #3: I think there's an anxious enthusiasm to think about how we might do things different. How we might continue to find ways to get better.

Dan Reuvers: I think there's an anxious enthusiasm to think about how we might do things different, how we might continue to find ways to get better. Overall, I would say quite good. I haven't seen anything as far as turnover spikes or anything that would've, I would say, raised an eyebrow for me.

Speaker #3: So overall, I would say quite good. And I haven't seen anything as far as turnover spikes or anything that would have I would say raised an eyebrow for me.

Speaker #2: Okay. Anything just the last question is really the elephant in the room. I mean, you addressed it, but I just wanted to hit home on it.

William Plovanic: Okay. I think just the last question is really the elephant in the room. I mean, you addressed it, but I just wanted to hit home on it. Just, you know, you ended the quarter with $19 million in cash, $13 million unrestricted. You know, it sounds like, you know, given the guidance that would tell us you'll use $4 to 8 million of that during the full year. I would expect most of that would be in the Q2, given, you know, the guidance that the H2 would be positive. I just, you know, any thoughts, comments? Is that enough to get you through with working capital? Just how are you thinking about that today? Thanks for taking my questions, Dan.

Bill Plovanic: Okay. I think just the last question is really the elephant in the room. I mean, you addressed it, but I just wanted to hit home on it. Just, you know, you ended the quarter with $19 million in cash, $13 million unrestricted. You know, it sounds like, you know, given the guidance that would tell us you'll use $4 to 8 million of that during the full year. I would expect most of that would be in the Q2, given, you know, the guidance that the H2 would be positive. I just, you know, any thoughts, comments? Is that enough to get you through with working capital? Just how are you thinking about that today? Thanks for taking my questions, Dan.

Speaker #2: Just you ended the quarter with 19 million of cash, 13 million unrestricted. It sounds like given the guidance that would tell us you'll use four to eight million of that during the full year, I would expect most of that would be in the second quarter given the guidance that the back half would be positive.

Speaker #2: I just any thoughts, comments? Has that enough to get you through with working capital and just how are you thinking about that today? And thanks for taking my questions, Dan.

Dan Reuvers: Yeah. Yeah. I mean, we're always evaluating the balance sheet, but I think as we shared, at the midpoint of $15 million of burn for the full year, the math would lead you to $14 million at year-end. You know, and you're also right in that our assumptions are that we would be flat to positive in H2 of the year. You know, based on the current plan, we feel like we've got sufficient headroom in the balance sheet to take us through the year.

Speaker #3: Yeah. Yeah. I mean, we're always evaluating the balance sheet. But I think as we shared at the midpoint of 15 million of burned for the full year, the math would lead you to 14 million at year-end.

Speaker #3: So and you're also right in that our assumptions are that we would be flat depositive in the second half of the year. So based on the current plan, we feel like we've got sufficient headroom in the balance sheet to get us to take us through the year.

William Plovanic: Great. Thanks.

Bill Plovanic: Great. Thanks.

Speaker #2: Great. Thanks.

Operator: Thank you. Our next question comes from Adam Maeder of Piper Sandler. Your line is now open.

Speaker #1: Thank you. Our next question comes from Adam Mater of Piper Sandler.

Speaker #2: Your line is now open.

Adam Maeder: Good morning. Hey, Dan. Hopefully you can hear me okay. Congrats on the new role, and look forward to working with you again. Two from me, one kind of housekeeping question and one bigger picture question. Just on the housekeeping item, you know, weather. It sounded like there was an impact to TMS volumes at Greenbrook clinics. I was hoping you could kind of quantify that for us. Is it also reasonable to assume that your standalone NeuroStar business also saw some headwind from weather? You know, how do we think about how quickly these patients can potentially kind of be, their sessions can be recaptured? I had a follow-up. Thanks.

Speaker #4: Hey, Dan. Hopefully, you can hear me okay. Congrats on the new role and look forward to working with you again. Two from me. One kind of housekeeping question and one bigger picture question.

Speaker #4: Just on the housekeeping item—weather. It sounded like there was an impact to TMS volumes at Greenbrook Clinics. I was hoping you could kind of quantify that for us.

Speaker #4: Is it also reasonable to assume that your standalone NeuroStar business also saw some headwind from weather? And how do we think about how quickly these patients can potentially, kind of, be—their sessions can be recaptured?

Speaker #4: And then I had a follow-up. Thanks.

Speaker #3: Yeah. Not going to quantify on the Greenbrook side, Adam. But we did see we do think that there was some of the impact there, particularly because we saw more of the weakness in January and February than we did in March.

Dan Reuvers: I'm not gonna quantify on the Greenbrook side, Adam, we do think that there was some of the impact there, particularly because we saw more of the weakness in January and February than we did in March. It's also worth noting on the NeuroStar side that TMS patients are coming in every single day. Trying to manage a schedule around weather is more difficult than SPRAVATO patients that are coming in more episodically and have a lot more latitude in scheduling. I think that was one of the reasons that we saw the impact within Greenbrook. On the NeuroStar side, we think that we saw, you know, some of the same kind of impact from weather.

Speaker #3: It's also worth noting, on the NeuroStar side, that TMS patients are coming in every single day. So, trying to manage a schedule around weather is more difficult than for Spravato patients, who are coming in more episodically.

Speaker #3: And have a lot more latitude in scheduling. So I think that was one of the reasons that we saw the impact within Greenbrook. On the NeuroStar side, we think that we saw some of the same kind of impact from weather.

Speaker #3: But that said, from a total utilization standpoint, we were actually up low single digits. On absolute utilization within our NeuroStar business as far as treatment sessions, we're concerned.

Dan Reuvers: That said, from a total utilization standpoint, we were actually up low single digits on absolute utilization within our NeuroStar business as far as treatment sessions were concerned. We saw a little softness in the revenue rec just because we had a little bit of customer inventory on hand that folks are working through. Overall, you know, I would say the business held up quite well in spite of the weather.

Speaker #3: We saw a little softness in the revenue rec just because we had a little bit of customer inventory on hand that folks are working through.

Speaker #3: But overall, I would say the business held up quite well in spite of the weather.

Speaker #2: Okay. Fantastic. And then for my follow-up, Dan, in the press release, you talked about significant value. In the business that's yet to be fully realized.

Adam Maeder: Okay, fantastic. And then for my follow-up, you know, Dan, in the press release, you talked about significant value in the business that's yet to be fully realized. You also have a large shareholder who issued a letter last month for asking for a strategic review and potentially a sale of the TMS business. You know, you touched on it in the prepared remarks. I think I heard you're evaluating the business with an open mind. I guess I was hoping you could share a little bit more color here on your early learnings and thoughts as you think about kind of the broader makeup of Neuronetics. You know, one question that I sometimes get from investors is, you know, the NeuroStar business, the standalone business, why can't that business grow faster given the size of the total addressable market, and what are the plans to kind of catalyze that business? Sorry for the multi-part question.

Speaker #2: You also have a large shareholder who issued a letter last month for asking for a strategic review and potentially a sale of the TMS business.

Speaker #2: And you touched on it in the prepared remarks. I think I heard your evaluating the business with an open mind. I guess I was hoping you could share a little bit more color here on your early learnings.

Speaker #2: And thoughts as you think about kind of the broader makeup of NeuroNetics, and one question that I sometimes get from investors is, the NeuroStar business, the standalone business, why can't that business grow faster given the size of the total addressable market?

Adam Maeder: You know, one question that I sometimes get from investors is, you know, the NeuroStar business, the standalone business, why can't that business grow faster given the size of the total addressable market, and what are the plans to kind of catalyze that business? Sorry for the multi-part question.

Speaker #2: And what are the plans to kind of catalyze that business? And sorry for the multi-part question.

Speaker #3: Yep. Yep. No problem. So first, as it relates to the shareholder, letter that we saw, as I said in my opening remarks, I mean, I really have been on a listening tour.

Dan Reuvers: Yep. Yep, no problem. First, as it relates to the shareholder letter that we saw, you know, as I said in my opening remarks, I mean, I really have been on a listening tour, and I've had outreach to that shareholder along with others. Just to make sure that I'm hearing some of their thoughts and concerns. Yeah, I think there's some frustration there, and quite frankly, I appreciate it. I think that what I'm still trying to do is really look at the business through a variety of different lenses. I'm pretty pragmatic about it. I mean, I'm not wed to a predetermined conclusion, but I'm also not inclined to be impetuous and make sure that I look at the business overall.

Speaker #3: And I've had outreach to that shareholder along with others. Just to make sure that I'm hearing some of their thoughts and concerns. I think there's some frustration there.

Speaker #3: And, quite frankly, I appreciate it. I think that what I'm still trying to do is really look at the business through a variety of different lenses.

Speaker #3: And I'm pretty pragmatic about it. I mean, I'm not wed to a predetermined conclusion. But I'm also not inclined to be impetuous and make sure that I look at the business overall.

Speaker #3: I think as it relates to what can we do to continue to demonstrate strength and growth, which under any outcome scenario adds long-term value for shareholders, it's looking at the NeuroStar business.

Dan Reuvers: I think as it relates to what can we do to continue to demonstrate strength and growth, which under any outcome scenario adds long-term value for shareholders, it's, you know, looking at the NeuroStar business, I do think that, we probably under-punched our weight here lately. The opportunity to expand our go-to-market menu is one of the things that I believe is gonna be a helpful catalyst for us. We're still in pilot phases on that, Adam, but, you know, ultimately, we have taken an approach that has, conveyed what I would call unparalleled support to our TMS customers. I don't think any other competitor out there comes even close to the kind of support we provide to our customers. But that said, not all customers' needs are the same.

Speaker #3: I do think that we probably underpunched our weight here lately. And the opportunity to expand our go-to-market menu is one of the things that I believe is going to be a helpful catalyst for us.

Speaker #3: And we're still in pilot phases on that, Adam. But ultimately, we have taken an approach that has conveyed what I would call unparalleled support to our TMS customers.

Speaker #3: I don't think any other competitor out there comes even close to the kind of support we provide to our customers. But that said, not all customers' needs are the same.

Speaker #3: So I think it's important for us to expand our menu and allow customers to kind of establish which parts of value they want and make sure that we've got kind of a broader berth of go-to-market menus that they can select from.

Dan Reuvers: I think it's important for us to expand our menu and allow customers to kind of establish which parts of value they want and make sure that we've got kind of a broader berth of go-to-market menus that they can select from. We're in the midst of doing some pilots right now. I think, you know, we'll have a lot more clarity over the next couple of months, but it includes making sure that we're looking at incentive comp, that it's aligned with our direction, that we have an opportunity to revisit our funnel and make sure that, you know, we've slotted those in the right in the right spaces.

Speaker #3: So we're in the midst of doing some pilots right now. I think we'll have a lot more clarity over the next couple of months.

Speaker #3: But it includes making sure that we're looking at incentive comp, that it's aligned with our direction, that we have an opportunity to revisit our funnel and make sure that we've slotted those in the right spaces.

Dan Reuvers: More work to do, but I think that as we continue to really reevaluate our go-to-market and with an open mind, look at how we can make sure that we're matching the right level of support to that which the customer wants to pay for. I think that's a, you know, that's a ratio that I expect will bear some fruit.

Speaker #3: So more work to do. But I think that as we continue to really reevaluate our go-to-market and with an open mind look at how we can make sure that we're matching the right level of support to that which the customer wants to pay for, I think that's a ratio that I expect will bear some fruit.

Speaker #2: Thank you.

Adam Maeder: Thank you.

Speaker #4: Thank you. Our final question comes from the line of Danny Stouter of Citizen JMP. Your line is open.

Operator: Thank you. Our final question comes from the line of Daniel Stauder of Citizens JMP. Your line is open.

Speaker #2: Yeah. Great. Thanks for the questions. Just my first one, following up on kind of the TMS question. But Dan, I wanted to ask about the TMS.

Daniel Stauder: Yeah, great. Thanks for the questions. Just, my first one, following up on kinda the TMS question, Dan, I wanted to ask about the commercial strategy for TMS. We know there was a realignment of the capital sales team, and system sales have been strong the last 2 quarters. As you sit here in the early days of your tenure, just broadly, how do you think about the balance between focusing on driving utilization per site versus expanding the install base? Are there any potential strategic changes here or, you know, how do you think about that balance?

Speaker #2: We know there was a realignment of the capital sales team. And system sales have been strong the last two quarters. But as you sit here in the early days of your tenure, just broadly, how do you think about the balance between focusing on driving utilization per site versus expanding the install base?

Speaker #2: Are there any potential strategic changes here? Or how do you think about that balance?

Speaker #3: Well, I think continuing to drive utilization is an important one. Because whether we're on a sessions model or otherwise, it's what's the underlying creation of demand.

Dan Reuvers: Well, I think continuing to drive utilization is an important one, because whether we're on a sessions model or otherwise, it's what's the underlying creation of demand. The more utilization, our customers continue to find more patients they can help, one way or another, that's gonna lead to an expansion of our business. I think we're, you know, we're gonna continue to look to, how we can expand our socket placement, or our placement of new capital units. I think that's one of the places where we've probably slipped a bit. Focusing on new placements and expansion of capital, and making sure that it's our unit that resides in those clinics, whether regardless, I guess, of what economic model is in place.

Speaker #3: And the more utilization our customers continue to find more patients they can help, one way or another, that's going to lead to an expansion of our business.

Speaker #3: So I think we're going to continue to look to how we can expand our socket placement, or our placement of new capital units. I think that's one of the places where we've probably slipped a bit.

Speaker #3: And focusing on new placements and expansion of capital, and making sure that it's our unit that resides in those clinics—regardless, I guess, of what economic model is in place.

Speaker #3: We just want to make sure that we're demonstrating the most value across the competitive landscape. And I think that between the support we provide with our account managers in the field, with benefits investigation, our cold marketing, training, service, the cloud-based TrackStar utility that we've got, I just don't think anybody can compare there.

Dan Reuvers: We just wanna make sure that we're demonstrating the most value across the competitive landscape. I think that, you know, between the support we provide with our account managers in the field, with benefits investigation, our co-marketing, training, service, the cloud-based TrakStar utility that we've got, I just don't think anybody can compare there. You know, we're gonna, as I said, continue to work through a couple of pilots, but the things that got us there, I think will continue to be durable areas of value. How we structure that, I think is some of the things that we're still titrating a bit.

Speaker #3: And we're going to, as I said, continue to work through a couple of pilots. But the things that got us there, I think, will continue to be durable areas of value and how we structure that, I think, is some of the things that we're still titrating a bit.

Daniel Stauder: Great. Appreciate that. Just one on the Compass collaboration. Obviously, the recent update from the administration is good news. I just wanna get a sense of how meaningful this could be. Obviously, Compass is already pretty far along in terms of the approval process, but do you feel this recent update could be more important on the reimbursement pathway? I know that's been a focal point for eventual contribution. Just any thoughts you have there would be appreciated.

Speaker #2: Great. Appreciate that. And then just one on the Compass collaboration. Obviously, the recent updates on the administration is good news. But I just want to get a meaningful this could be?

Speaker #2: Obviously, Compass is already pretty far along in terms of the approval process. But do you feel this recent update could be more important on the reimbursement pathway?

Speaker #2: I know that's been a focal point for eventual contribution. So just any thoughts you have there would be appreciated.

Speaker #3: Yeah. Well, first of all, I think that the whole Compass opportunity and psychedelics at large represent a big opportunity for us given our footprint and our infrastructure.

Dan Reuvers: Well, first of all, I think that the whole Compass opportunity and psychedelics at large represent a big opportunity for us, given our footprint and our infrastructure. I was really excited in my first month to see the Trump executive order leaning into the FDA process on some of these. I think that it probably adds or it shortens the fuse. How much, I don't know, but it probably shortens the fuse on the path to approval, which I think is encouraging for all of us that are in this space. I'm not sure how much it impacts reimbursement. I think that's probably a separate track, but certainly the pursuit of that in tandem on Compass's behalf. All of those things sort of point to faster than slower.

Speaker #3: I was really excited in my first month to see the Trump executive order leaning into the FDA process on some of these so I think that it probably adds or it shortens the fuse how much, I don't know.

Speaker #3: But it probably shortens the fuse on the path to approval, which I think is encouraging for all of us that are in this space.

Speaker #3: I'm not sure how much it impacts reimbursement. I think that's probably a separate track. But certainly, the pursuit of that in tandem on Compass's behalf, all of those things sort of point to faster-than-slower and as we get into 2027, we'll certainly look forward to being able to try and better quantify what we think that means to us.

Dan Reuvers: You know, as we get into 2027, we'll certainly look forward to being able to try and better quantify what we think that means to us. I think if you look at the SPRAVATO rollout from the early days, as much enthusiasm as there was, it's a bit measured in its early adoption. I think that the momentum is certainly moving in the right direction on this one.

Speaker #3: I think if you look at the Spravato rollout from the early days, as much enthusiasm as there was, it's a bit measured in its early adoption.

Speaker #3: But I think that the momentum is certainly moving in the right direction on this one.

Speaker #2: Great. I appreciate that. And just one last one from me. Just wanted to ask on some of the TMS coverage expansion to include nurse practitioners.

Daniel Stauder: Great. I appreciate that. Just one last one from me. Just wanted to ask on some of the TMS coverage expansion to include nurse practitioners. I was just curious at, you know, high level, if there have been any incremental conversations with accounts on this topic. Have you seen that customers are waiting for this, maybe some with higher demand? Just anything more on how this could impact utilization and how you think it will play out in 2026 and beyond would be great. Thank you.

Speaker #2: I was just curious at high level if there have been any incremental conversations with accounts on this topic. Have you seen that customers are waiting for this?

Speaker #2: Maybe some with higher demand? Just anything more on how this could impact utilization and how you think it will play out in '26 and beyond would be great.

Speaker #2: Thank you.

Dan Reuvers: That's the reference to the UnitedHealthcare and the Optum coverage policy change, where nurse practitioners can now be eligible to deliver TMS versus licensed psychiatrists. I think it's a good move. We got a lot of really quality nurse practitioner caregivers out there. I don't know that they were waiting for it as much because maybe they didn't. Sometimes you never know if it's ever coming. There are 35 million covered lives in the 26 states that'll be affected. I think what it will allow us to do, or has allowed us to do, is go revisit some of those clinics that are managed by nurse practitioners, where TMS just wasn't a viable option because of the reimbursement limitations.

Speaker #3: Yeah. So that's the reference to the UHC and the Optum. Coverage policy change where nurse pracs can now be eligible to deliver TMS versus licensed psychiatrists.

Speaker #3: I think it's a good move we got a lot of really quality nurse prac caregivers out there. I don't know that they were waiting for it as much because maybe they didn't sometimes you never know if it's ever coming.

Speaker #3: But there are 35 million covered lives in the 206 states that will be affected. And I think what it will allow us to do or has allowed us to do is go revisit some of those clinics that are managed by nurse pracs where TMS just wasn't a viable option because of the reimbursement limitations.

Speaker #3: So I think it probably added a number of accounts to our target list. But still early days since we're, I think, a month in.

Dan Reuvers: You know, I think it probably added a number of accounts to our target list, but still early days since we're, I think, a month in.

Speaker #2: Great. Appreciate the questions.

Daniel Stauder: Great. Appreciate the question.

Speaker #3: Yep. Thank you.

Dan Reuvers: Yep. Thank you.

Operator: This concludes the question and answer session. I would now like to turn it back to Dan Reuvers for closing remarks.

Speaker #1: This concludes the question and answer session. I would now like to turn it back to Dan Rivers for closing remarks.

Speaker #3: Yeah. I just wanted to thank all of our employees for a hard-fought quarter as they all are as we continue to try and restore hope to patients and their families.

Dan Reuvers: Yeah, I just wanted to thank all of our employees for a hard-fought quarter, as they all are, as we continue to try and restore hope to patients and their families. Wanted to thank our shareholders for their support, and I look forward to sharing an update on our progress when we have an opportunity to share the results of our Q2. Thank you.

Speaker #3: And wanted to thank our shareholders for their support. And I look forward to sharing an update on our progress when we have an opportunity to share the results of our second quarter.

Speaker #3: Thank you.

Operator: Thank you for your participation in today's conference. This does conclude the program. You may now disconnect.