Neuronetics' Q3 2025: Contradictions Emerge on Greenbrook/NeuroStar Revenue Dynamics, Gross Margins, and Utilization Growth

Date of Call: November 4, 2025

Financials Results

• Revenue: $37.3M, up 101% YOY (11% adjusted pro forma vs prior year)
• EPS: $0.13 loss per share, compared to $0.44 loss per share in the prior year quarter
• Gross Margin: 45.9%, compared to 75.6% in the prior year quarter

Guidance:

• Q4 2025 net revenue expected $40M–$43M.
• Full-year 2025 revenue now expected $147M–$150M (prior $149M–$155M), driven by SPRAVATO Buy & Bill mix assumptions.
• Full-year gross margin expected 47%–49% (prior ~48%–50%).
• Full-year operating expenses expected $100M–$105M.
• Targeting Q4 2025 operating cash flow between $2M positive and $2M negative.
• Projected year-end 2025 cash (cash, equivalents, restricted) $32M–$36M.

Business Commentary:

• Revenue Growth and Greenbrook Integration:
• Neuronetics reported total revenue of $37.3 million for Q3 2025, an 11% increase on a pro forma basis compared to the prior year quarter. Greenbrook clinics alone generated $21.8 million in revenue, up 25% on an adjusted pro forma basis.

• The growth was primarily driven by strong performance at Greenbrook clinics and high treatment volumes across both NeuroStar TMS and SPRAVATO patients.

• NeuroStar System Sales and Utilization:

• NeuroStar system sales included shipping 40 systems in Q3 2025, marking an average selling price above the target for the third consecutive quarter.

• Total NeuroStar treatment session utilization in the third quarter grew 11% versus the prior year on a pro forma basis, driven by strong customer value in technology and support.

• Operational Efficiency and Cash Collections:

• Neuronetics made significant strides towards cash flow positivity through careful expense management and improved cash collections.

• The company's cash used in operations for Q3 was $0.8 million, representing a substantial improvement from $17 million in Q1.

• SPRAVATO Rollout and Billing Strategy:

• By Q3 2025, 84 of 89 SPRAVATO-eligible clinics were offering the therapy, with a full rollout expected by year-end.
• The company shifted to a higher percentage of administer and observe billing due to favorable reimbursement dynamics in certain states and clinics.
  

  Sentiment Analysis:

  Overall Tone: Positive

  • Management: "We built real momentum" and "Greenbrook integration keeps beating our expectations." CFO: cash used in operations improved to $0.8M (second consecutive quarter of substantial improvement) and "we continue to target positive cash flow from operations in the fourth quarter of 2025." These statements emphasize execution, integration progress and improving cash flow.

Q&A:

• Question from William Plovanic (Canaccord Genuity): Just to kick it off, I was wondering, definitely, you're seeing solid growth on pro forma in the Greenbrook sites and maybe less so in the former NeuroStar sites. I'm just kind of curious what's really driving those dynamics?
  Response: Greenbrook growth is driven by SPRAVATO and TMS volume; NeuroStar utilization rose ~11% YOY but revenue didn't grow because customers bought elevated inventory in Q3 2024 — management expects inventory normalization in 2026.

• Question from William Plovanic (Canaccord Genuity): And then just on the gross margin dynamics, it's really been different, the reality or the outcomes versus what the expectations were at the time of the Greenbrook merger. And I'm just trying to figure out kind of what changed different than expected? And are there any onetime headwinds kind of hitting things today? How should we think about this?
  Response: Margin decline is principally a mix effect from adding lower‑margin Greenbrook clinics; the ~70 bps QoQ decline was largely due to episodic items (capital sales mix, Compass revenue, SPRAVATO reimbursement mix), with planned long‑term improvement via SPRAVATO mix optimization and clinic efficiencies.

• Question from William Plovanic (Canaccord Genuity): And then lastly, as I think about some of the operational efficiencies you announced that you're finding even a year later after the deal, I was wondering if you can quantify that for us. Is this another $2 million, another $5 million in cost savings?
  Response: No quantified run‑rate provided; management said short‑term investments (kiosks, automation, patient alerts) will offset near‑term savings but expects meaningful long‑term cost reductions and will disclose more detail next year.

• Question from Kyle Edward Winborne (Piper Sandler): This is Kyle Winborne on for Adam. Maybe just to try a little bit more on the treatment session revenue in the quarter. Even when you add back kind of the $2.2 million that was attributable to Greenbrook, it was still down year-over-year. ... any additional color would be helpful kind of as we think about the treatment session business going forward?
  Response: Leading indicators—NeuroStar utilization +11% YOY and Greenbrook clinic visits +28% YOY—show underlying demand and management is confident referral programs and resources will support both businesses without material cannibalization.

• Question from Kyle Edward Winborne (Piper Sandler): Super helpful color. And then maybe, I guess, last one for me on guidance, the $40 million to $43 million for Q4. I was curious if you could kind of just unpack the different businesses there. Just since this was a little bit below where we were and where the Street was for Q4, just would be helpful to kind of hear how you're thinking about the business trends for these different businesses looking out to the year-end.
  Response: Q4 guidance is primarily driven by SPRAVATO A&O versus B&B mix (higher A&O lowers per‑patient revenue); aside from that, NeuroStar benefits from typical Q4 capital seasonality.

• Question from Daniel Stauder (Citizens JMP Securities): First question I have was just on operating expense. It looks like you're making good progress on the G&A line, but I wanted to ask how we should be thinking about the sales and marketing spend, both as we contemplate fourth quarter and 2026. ... any strategy you have going forward.
  Response: OpEx guidance remains $100M–$105M; company will pursue targeted S&M and technology investments to drive efficient growth while seeking further cost reductions, with additional detail in 2026.

• Question from Daniel Stauder (Citizens JMP Securities): And just one follow-up for me. I wanted to ask on the adolescent indication. I think last quarter, you mentioned you saw an uptick in patient starts here and saw some pretty good trends. ... what you're seeing there in the third quarter and what we should expect in the rest of '25 and into '26? And also wanted to ask with this indication in mind, are you seeing more of a benefit from the provider connection program for these patients?
  Response: Adolescent patient starts are increasing quarter‑over‑quarter, largely coming via the provider connection program, and management is awaiting FDA feedback on a recent submission that could further expand access.

Contradiction Point 1

Greenbrook and NeuroStar Revenue Dynamics

It involves the differing explanations for the gap between utilization and revenue growth in the Greenbrook and NeuroStar segments, which could impact investor understanding of the company's financial performance.

What is driving the growth dynamics between Greenbrook and former NeuroStar sites? - William Plovanic(Canaccord Genuity)

2025Q3: The NeuroStar side shows a utilization increase of over 11% year-over-year, but this has not translated to revenue growth due to changes in customer purchasing patterns. - Steven Pfanstiel(CFO)

Why is the traditional STIM business slower than expected? - William John Plovanic(Canaccord Genuity Corp., Research Division)

2025Q2: The utilization of NeuroStar systems has increased about 9% year-over-year during the quarter. - Steven Pfanstiel(CFO)

Contradiction Point 2

Gross Margin Expectations

It involves changes in financial forecasts, specifically regarding gross margin expectations, which are critical indicators for investors.

How will the Greenbrook merger affect gross margin dynamics? - William Plovanic(Canaccord Genuity)

2025Q3: We expect gross margins will improve slightly in Q4, rounding to the mid-70s. - Steven Pfanstiel(CFO)

What's the long-term outlook for the clinical sales per site metric? What normalized level should be used in models? - Daniel Walker Stauder(Citizens JMP Securities, LLC, Research Division)

2025Q2: We now expect full year gross margins in the mid-70s. - Steven Pfanstiel(CFO)

Contradiction Point 3

Utilization and Revenue Growth Dynamics between Greenbrook and NeuroStar

It highlights differing perspectives on the relationship between utilization and revenue growth for Greenbrook and NeuroStar, which could impact investor expectations and financial forecasts.

What is driving the growth differences between Greenbrook and former NeuroStar sites? - William Plovanic(Canaccord Genuity)

2025Q3: On the Greenbrook side, the growth is attributed to SPRAVATO, including the Buy & Bill offering, and continued growth in the TMS segment. The NeuroStar side shows a utilization increase of over 11% year-over-year, but this has not translated to revenue growth due to changes in customer purchasing patterns. The gap in utilization and revenue is due to customers buying more treatment sessions than they used in 2024, which is expected to normalize in 2026. - Steven Pfanstiel(CFO)

How much longer until Greenbrook integration is fully implemented? How is standardization progressing at those sites and what is the impact on patient flow? - William Plovanic(Canaccord Genuity)

2024Q4: NeuroStar is moving very nicely. We have 90 clinics delivering results every day. We need more sites, that's for sure, but the product is surpassing our expectations because our sales and marketing capabilities moving across Greenbrook's 95 clinics and our site team that was already with NeuroStar is generating more important revenue for us at the site. - Keith Sullivan(CEO)