How did STIM's Q4 2024 earnings surprise analysts?

Neuronetics Inc (STIM) reported Q4 2024 earnings that surprised analysts with a revenue beat but an EPS miss.

1. **Revenue Surpass Estimates**: Neuronetics achieved revenue of $22.5 million in Q4 2024, surpassing the estimated $19.63 million. This marked an 11% increase from Q4 2023, driven by the acquisition of Greenbrook TMS and the inclusion of their clinic business. The company's total worldwide revenue for the quarter was $22.49 million, which also exceeded the previous year's $20.31 million.

2. **EPS Misses Analyst Expectations**: However, the company reported a net loss of $(0.33) per share in Q4 2024, missing the estimated EPS of $(0.17). This reflected higher operating expenses and the impact of acquisitions. The net loss for the quarter was expanded to $(12.2) million compared to $(5.4) million in the same period the previous year.
3. **Contextual Insights**: Despite the EPS miss, the revenue surpassing estimates and the strategic acquisition of Greenbrook TMS highlight Neuronetics' efforts to expand its market position. The company's gross margin declined to 66.2% in Q4 2024, down from 77.6% in Q4 2023, primarily due to the inclusion of Greenbrook's clinic business. Operating expenses increased by 28% to $25.8 million, driven by acquisition-related costs and Greenbrook's expenses. Adjusted EBITDA improved to $0.1 million in Q4 2024 from $(3.0) million in Q4 2023, indicating better core operational performance post-acquisition.

In conclusion, while Neuronetics' Q4 2024 earnings showed a strong revenue performance and strategic growth through acquisitions, the EPS miss highlights the challenges of integrating new operations and managing increased expenses.