Zynex's 2025 Outlook: Contradictions in TriCare Payments, Revenue Guidance, and NiCo Launch Strategy

None



Revenue Impact of TriCare Suspension:
- Zynex reported net revenue of $26.6 million for Q1 2025, a significant decrease from $46.5 million in Q1 2024.
- This decline was primarily due to TriCare's temporary payment suspension, impacting the ability to recognize and receive revenue from claimed claims.
- The suspension was placed while TriCare investigates compliance with their policies, leading to a decrease in recognized revenue.

Sales and Marketing Expense Reduction:
- Zynex's sales and marketing expenses decreased by 28% to $16.9 million in Q1 2025 compared to the previous year.
- This reduction was primarily due to a decrease in headcount, as the company adjusted its sales force to improve productivity and address lower sales headcount.
- The restructuring efforts aim to optimize expenses and maintain profitability amid uncertain revenue streams.

NiCO Pulse Oximeter Market Opportunity:
- Zynex is preparing to submit its NiCO pulse oximeter for FDA approval in May, with expectations for a six-month approval process.
- The company anticipates significant market opportunities with this product, as it addresses bias in pulse oximetry related to skin pigmentation and thickness.
- The launch of the NiCO pulse oximeter is expected to drive growth in the patient monitoring division and expand Zynex's presence in the multibillion-dollar patient monitoring market.

Cost Containment and Restructuring:
- Zynex implemented a 15% reduction in overall staff, primarily in the corporate office, expected to result in annual savings of approximately $35 million.
- This restructuring effort, along with other reductions, aims to position the company to operate without TriCare business in a worst-case scenario and maintain financial stability.
- The focus is on refocusing sales efforts on new revenue opportunities to offset potential revenue losses from TriCare.

Diversification of Revenue Streams:
- Zynex is pursuing growth opportunities with various insurers beyond TriCare, including expansion into new areas like personal injury.
- The company's goal is to create revenue diversification by increasing call points, product offerings, and end users.
- This strategic shift aims to mitigate the impact of any one insurer's payment suspension and ensure sustained growth across multiple revenue streams.