Nexalin Technology 2025 Q1 Earnings Wider Net Losses Miss Expectations

Nexalin Technology (NXL) reported its fiscal 2025 Q1 earnings on May 13th, 2025. The company fell short of expectations with a wider net loss compared to the previous year. Nexalin's revenue exceeded estimates, reaching $41,015 against a projected $35,000, but its earnings per share (EPS) missed the mark, coming in at -$0.15 versus an anticipated -$0.10. The company maintains its guidance in line with previous projections, focusing on strategic advancements in its clinical programs to enhance future performance.

Revenue

Nexalin Technology experienced a notable decline in total revenue, which dropped 47.9% to $41,015 in the first quarter of 2025 from $78,671 in the same period last year. Licensing fees contributed $17,313, with equipment sales generating $19,812, and other sources adding $3,890, culminating in the overall revenue figure.

Earnings/Net Income

Nexalin Technology reported a deeper loss of $0.15 per share for Q1 2025, increasing from a loss of $0.14 per share in Q1 2024. The company's net loss widened significantly to $1.99 million, marking a 91% increase from the previous year's $1.04 million loss. The EPS results are unfavorable as losses continue to widen.

Post Earnings Price Action Review

The strategy of investing in Nexalin Technology when it exceeds revenue expectations and holding the stock for 30 days is gaining attention. This method leverages the typical investor optimism following earnings beats, which can drive short-term price increases. Nexalin's recent regulatory approval for its Gen-2 neurostimulation device in Brazil, facilitating Phase II clinical trials for anxiety and insomnia, may have positively impacted earnings expectations. Furthermore, the U.S. Senate's endorsement of the Health Tech Investment Act, aiming to expand Medicare reimbursement for AI health devices, supports Nexalin's growth outlook. Holding the stock for 30 days could allow investors to benefit from this short-term appreciation, with the average target price suggesting substantial potential gains. However, market volatility and the success of clinical trials are risks to consider, alongside the broader acceptance of Nexalin's technology. Overall, while the strategy appears viable, investors should monitor market conditions and company-specific developments closely.

CEO Commentary

David J. S. Johnson, CEO of Nexalin Technology, expressed optimism about the company's performance, highlighting that the growth drivers include the successful initiation of multiple clinical trials and the reconstitution of the Scientific Advisory Board to enhance their Alzheimer's program. Johnson emphasized strategic priorities such as strengthening their market position through innovations in Deep Intracranial Frequency Stimulation (DIFS™) and expanding their clinical research capabilities. He acknowledged the challenges faced in achieving profitability but remained confident that their investments in technology and regulatory engagements would yield positive outcomes for the company moving forward.

Guidance

Nexalin Technology expects to see continued growth in revenue, projecting figures around $41,015 for the upcoming quarters. The company anticipates improvements in EPS, guiding towards -$0.15, as they focus on advancing their clinical programs and expanding market reach. Johnson indicated a commitment to navigating regulatory processes and enhancing product offerings, aiming for a more robust financial performance in the near future.

Additional News

Recently, Nexalin Technology announced the closing of its underwritten public offering, raising approximately $5 million through the sale of 3,850,000 shares at $1.30 per share. The offering was managed by Maxim Group LLC and aims to support Nexalin’s strategic initiatives. Additionally, the company initiated a Q-Submission process with the FDA for its Gen-2 SYNC system, targeting Alzheimer's, dementia, and mild cognitive impairment treatments. This step marks a significant stride in aligning clinical trial design with regulatory standards. Furthermore, Nexalin restructured its Scientific Advisory Board, appointing three experts specializing in neurology, neuroimaging, and neurodegenerative diseases, to bolster its Alzheimer's research efforts.