Zynex's Q4 2024: Unraveling Contradictions in Tricare Audits, Sales Visibility, and Strategic Directions

These are the key contradictions discussed in Zynex's latest 2024Q4 earnings call, specifically including: Tricare audit and payment suspension, visibility into sales, expenses reduction strategies, and strategic alternatives progress:



Revenue Trends and Tricare Suspension:
- Zynex reported net revenue of $46 million for Q4 2024, down from $47.3 million in Q4 2023.
- The decline was primarily due to a temporary suspension of payments from Tricare, which represents between 20% to 25% of Zynex's revenue.

Cost Containment and Restructuring:
- Zynex implemented a 15% reduction in staff levels, affecting both corporate and sales teams, resulting in approximate annual savings of $35 million.
- This restructuring was part of a normal business practice and due to a potential decrease in short-term revenue.

NiCO Pulse Oximeter and FDA Submission:
- Zynex's NiCO pulse oximeter achieved major milestones, including successful human trials and third-party regulatory testing.
- The company is expecting FDA submission within the next 60 days, with an anticipated clearance by the fourth quarter of 2025.

Patient Monitoring Business Expansion:
- Zynex's patient monitoring business is set to contribute to revenue late in 2025 or early 2026 upon FDA clearance of the NiCO pulse oximeter.
- The company aims to penetrate the multi-billion dollar market with a superior product capable of meaningfully improving patient care.