Zynex's Q2 2025 Earnings Call: Unpacking Contradictions in TRICARE Revenue, Cost Management, and FDA Approvals

TRICARE patient service and impact on revenue, sales and marketing expenses reduction, FDA interaction and approval timeline for NiCO, sales and marketing expense management, and FDA clearance timeline for NiCO are the key contradictions discussed in Zynex's latest 2025Q2 earnings call.



Financial Performance and TRICARE Impact:
- Zynex reported net revenue of $22 million in Q2 2025, a significant decline from $49.9 million in Q2 2024.
- Gross profit was $15.2 million or 68% of revenue, down from $39.9 million or 80% of revenue in Q2 2024.
- The decline in revenue was primarily due to the temporary payment suspension from TRICARE and slower order growth.

Cost Reduction and Sales Force Optimization:
- Zynex implemented a reduction in overall staff by an additional 14%, primarily in the corporate office, aiming for an annual savings of up to $40 million.
- This was part of an effort to refocus the sales force and redirect them to different call points, leading to improved sales rep productivity.

Payer Focus and Diversification:
- The company categorized payers into different tiers and shifted focus to the most favorable segments, resulting in a more efficient use of inventories and supply chain management.
- This strategy is expected to drive greater patient outcomes and operational sustainability over time.

Niko Pulse Oximeter Submission and Market Opportunity:
- Zynex submitted the FDA application for the Niko laser pulse oximeter in May, expecting FDA clearance within approximately 6 months.
- The Niko technology is poised to address accuracy issues in existing pulse oximeters and unlock the $1 billion invasive lab-based co-oximetry market with noninvasive laser pulse oximetry technology.

Leadership Changes and Strategic Focus:
- Stephen Dyson was appointed as the new CEO, bringing over 25 years of experience in the medical technology sector.
- The company is focused on returning to positive cash flow by the end of the year and optimizing its payer mix to drive growth.