Neuronetics 2025 Q1 Earnings Mixed Results as Net Income Declines 61.2%

Neuronetics, Inc. (NASDAQ: STIM) reported its fiscal 2025 Q1 earnings on May 06th, 2025. The company experienced substantial revenue growth, largely driven by the Greenbrook acquisition, but faced challenges as net income declined significantly. Neuronetics reported $32 million in revenue for the first quarter of 2025, representing an 84% increase compared to the same period in 2024. This performance was primarily attributed to Greenbrook's contribution. The company adjusted its guidance upward, projecting total worldwide revenue for 2025 to be between $149 million and $155 million. Despite these positive developments, Neuronetics posted a net loss, indicating ongoing financial pressures.

Revenue

Neuronetics saw its total revenue increase by 83.6% to $31.98 million in Q1 2025, compared to $17.42 million in Q1 2024. The NeuroStar Advanced Therapy System generated $2.85 million in revenue, while treatment sessions brought in $9.61 million. Clinic revenue, largely driven by the Greenbrook acquisition, contributed significantly with $18.66 million. Other revenue sources added $366,000, bringing total revenues to $31.48 million.

Earnings/Net Income

Neuronetics narrowed its per-share losses to $0.21 in Q1 2025 from $0.27 in Q1 2024, marking a 22.2% improvement. However, the company's net loss widened to $-12.69 million, a 61.2% increase from the $-7.87 million loss recorded in Q1 2024. This indicates ongoing financial headwinds despite some progress.

Price Action

The stock price of Neuronetics surged 22.62% during the latest trading day, edged up 1.58% during the most recent full trading week, and surged 25.00% month-to-date.

Post-Earnings Price Action Review

Neuronetics has shown strong share price momentum in recent months, driven by a strategic approach of buying shares after a revenue drop and holding them for 30 days. Over the past five years, despite a 17% drop in stock price, the company managed a remarkable 181% gain in the last quarter, suggesting potential for reversal. Insider purchases and positive market responses to future earnings forecasts indicate growing confidence in Neuronetics' long-term prospects. The company faced a 16% annual revenue drop over the past five years, which might have been a buying opportunity if the market anticipated a turnaround. Despite a consistent 3% annual share price decline, a 34% uptick in the last quarter hints at recovery. Analysts project significant earnings improvements, supporting recent price increases. Although past performance lagged, a remarkable 96% gain in the last year and a 44% increase over the past three months demonstrate strong momentum. These trends, along with insider optimism and market focus on revenue growth, bolster the investment case for holding Neuronetics shares for the next 30 days, particularly considering potential future earnings growth.

CEO Commentary

"2025 is off to a great start as our approach to innovative mental health treatment is improving access to care for patients and delivering value for providers," said Keith J. Sullivan, President and Chief Executive Officer of Neuronetics. The company’s growth initiatives, particularly in the Greenbrook clinics, are exceeding expectations, driven by a proven operating model and the rollout of SPRAVATO®. The Better Me Provider program is showing effectiveness, leading to increased patient treatment rates and quicker initiation of therapy with NeuroStar TMS. The company is focused on expanding access to mental health treatments while strengthening its financial position and aims for positive cash flow in the third quarter of 2025.

Guidance

Neuronetics projects achieving cash flow positivity in the third quarter of 2025. The company expects continued growth from its Greenbrook clinic initiatives and anticipates further expansion of insurance coverage for adolescent TMS treatment. The strategic focus on both operational integration and market expansion underlines the company's commitment to enhancing patient access to effective mental health treatments, reflecting an optimistic outlook for the upcoming quarters.

Additional News

Neuronetics recently completed the acquisition of Greenbrook TMS, significantly enhancing its operational scale and treatment capabilities. This acquisition has allowed Neuronetics to integrate Greenbrook's clinic network, resulting in substantial revenue growth. Additionally, Chief Financial Officer Steve Furlong announced his retirement effective March 2026, with the company currently undergoing a comprehensive search for his successor. Neuronetics also expanded insurance coverage for its adolescent TMS therapy, with Evernorth Health Services joining other major insurers in covering adolescents aged 15 and older, further increasing access to mental health services.