Brainsway Q1 2025 Earnings Report

Brainsway EPS Results

• Actual EPS: $0.02
• Consensus EPS: $0.01
• Beat/Miss: Beat by +$0.01
• One Year Ago EPS: N/A

Brainsway Revenue Results

• Actual Revenue: $11.54 million
• Expected Revenue: $11.45 million
• Beat/Miss: Beat by +$82.00 thousand
• YoY Revenue Growth: N/A

Brainsway Announcement Details

• Quarter: Q1 2025
• Date: 5/13/2025
• Time: Before Market Opens
• Conference Call Date: Tuesday, May 13, 2025
• Conference Call Time: 8:30AM ET

Brainsway (NASDAQ:BWAY) Ltd is a medical device company specializing in non-invasive neuromodulation therapies. Publicly traded on the NASDAQ under the symbol BWAY, the company develops and commercializes deep transcranial magnetic stimulation (Deep TMS) systems designed to treat a range of neuropsychiatric and neurological disorders. Brainsway’s technology aims to offer an alternative or complement to traditional pharmacological therapies by targeting precise brain regions with its patented coil designs.

The company’s flagship Deep TMS platform utilizes proprietary H-coil arrays engineered to reach deeper cortical structures than conventional TMS devices. Brainsway has secured regulatory clearances in key markets, including U.S. Food and Drug Administration approvals for treatment-resistant major depressive disorder, obsessive-compulsive disorder, and smoking cessation. In addition to cleared indications, the company is pursuing clinical studies in areas such as migraine and substance use disorders to expand its therapeutic portfolio.

Founded in 2003 and headquartered in Jerusalem, Israel, Brainsway operates through subsidiaries and distribution partners across North America, Europe and the Asia-Pacific region. The company maintains a sales and support presence in the United States, including a facility in North Carolina, and collaborates with academic medical centers and independent clinics to facilitate training, research and patient access.

Brainsway’s leadership team brings together experts in neuroscience, clinical medicine and medical technology commercialization. The company continues to invest in research collaborations and real-world evidence initiatives aimed at demonstrating the long-term safety, efficacy and health-economic value of its Deep TMS solutions.

Brainsway Q1 2025 Earnings Call Transcript

Key Takeaways

• In Q1 2025, BrainsWay reported $11.5 M revenue (+27% yoy) and shipped 81 Deep TMS systems (+42% yoy), backed by a ~$60 M backlog for future growth visibility.
• U.S. commercial expansion is driven by wider Deep TMS adoption for OCD, anxious depression, and other mental health conditions, supported by enterprise multi-year contracts and flexible pay-per-use and lease models.
• BrainsWay claims market leadership with many customers switching from other TMS technologies, underpinned by its clinical performance and economic value, and is executing a growth strategy focused on awareness, R&D for new indications, and global access.
• Clinical progress includes over 60% OCD response rate, an ongoing randomized U.S. trial of an accelerated MDD protocol (FDA decision expected by year-end), and plans for TMS-psychedelic combination studies in H2 2025.
• The company maintained a strong 75% gross margin, positive adjusted EBITDA for seven consecutive quarters, and reaffirmed 2025 guidance of $49–51 M revenue (+20–24%), 3–4% operating margin, and 11–12% adjusted EBITDA.

Presentation

[Operator]

Good day, and welcome to the BrainsWay First Quarter 2025 Earnings Conference Call. All participants will be in listen-only mode. Should you need assistance, please signal with Conference Specialist or press the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your telephone keypad. To withdraw your question, please press star then two. Please note, this event is being recorded. I would now like to turn the conference over to Brian Ritchie of LifeSci Advisors. Please go ahead.

[Brian Ritchie, Managing Director at LifeSci Advisors]

Thank you all, and welcome to BrainsWay's First Quarter 2025 Earnings Conference Call. With us today are BrainsWay's Chief Executive Officer, Hadar Levy, and Chief Financial Officer, Ido Marom. The format for today's call will be a discussion of recent trends and business updates from Hadar, followed by a detailed discussion of the financials. We will open up the call for your questions. Earlier today, BrainsWay released financial results for the three months ending March 31, 2025. A copy of the press release is available on the company's investor relations website.

[Brian Ritchie, Managing Director at LifeSci Advisors]

Before I turn the call over to Hadar, I would like to remind you that this conference call, including both management's prepared remarks and the question-and-answer session, may contain projections or other forward-looking statements regarding, among other topics, BrainsWay's anticipated future operating and financial performance, business plans and prospects, and expectations for its products and pipeline, which are all subject to risks and uncertainties, including shifting market conditions resulting from geopolitical, supply chain, and other factors, as well as the use of non-GAAP financial information. Additional information regarding these and other risks is available in the company's earnings release and in its other filings with the SEC, including the risk factors section contained in BrainsWay's Form 20F. I would now like to turn the call over to Hadar. Please go ahead.

[Hadar Levy, CEO at BrainsWay]

Thank you, Brian. Welcome, everyone, and thank you for joining us today. We're excited to share that we have carried the strong momentum from last year into 2025. In the first quarter, we generated $11.5 million in revenue, marking a 27% increase year over year. In addition, we shipped a total of 81 Deep TMS systems, representing a 42% increase compared to the first quarter of 2024. In addition, we have signed the backlog and remaining performance obligation totaling nearly $60 million, providing clear visibility into future growth. This overall performance reflects the growing demand for our Deep TMS platform and further reinforces our leadership position in the non-invasive neuromodulation space. Our commercial growth, particularly in the U.S., is being driven by the expanded adoption of Deep TMS in the treatment of obsessive-compulsive disorder, or OCD, anxious depression, and other mental health conditions.

[Hadar Levy, CEO at BrainsWay]

Let me take a minute to review the execution of our sales strategy. Over the past year, we have been highly focused on strengthening our customer base and driving near-term growth by engaging large enterprise networks with multi-year agreements. As part of these agreements, we have elevated our customer service to better handle the unique and evolving need at each of these accounts. As a result, we are taking this engagement deeper and building valuable partnerships that offer both sides real value beyond the traditional one-time sales approach we used previously. We have also continued to scale our pay-per-use and lease-based model, which supports recurring revenue and provides more flexibility for providers. These efforts are creating a more predictable and sustainable foundation of BrainsWay's future. However, what truly sets BrainsWay apart and confirms our position as an undisputed leader in the TMS market is our technological and clinical differentiation.

[Hadar Levy, CEO at BrainsWay]

In fact, a growing number of customers have switched from other TMS technologies to BrainsWay, citing our clinical performance and economic value as primary reasons. Building on this market positioning, the next phase of our growth strategy focuses on three key pillars: one, further elevating market awareness of Deep TMS and its clinical impact; two, advancing our R&D roadmap to unlock new and expanded treatment indications; and three, broadening patient access through global expansion and health system integration. We believe that these activities are critical as we work to further cement our role in shaping the future of mental health treatment. In terms of opportunities to drive greater access to Deep TMS through new and expanded indications, we are well-positioned to ramp up activity around OCD in 2025. Our data for this indication are highly encouraging, demonstrating that over 60% of patients respond positively to Deep TMS therapy.

[Hadar Levy, CEO at BrainsWay]

This high response rate underscores the efficacy of our system and its potential to help improve the quality of life for approximately 400,000 patients suffering from OCD annually. It's also worth noting that we are the first TMS therapy approved for OCD, further elevating over the rest of the industry. Anxious depression is another indication where our system was the first TMS device cleared by the FDA as an effective treatment. I'm pleased to announce that doctors in the U.S. are continuing to report an increase in Deep TMS treatment for anxious depression. As a reminder, this refers to patients with major depressive disorder who also exhibit comorbid anxiety symptoms. This is a large addressable medical need that affects approximately 10-16 million adults in the U.S. each year.

[Hadar Levy, CEO at BrainsWay]

We are also making steady progress in bringing increased attention to our clinical data supporting the use of Deep TMS therapy for post-traumatic stress disorder, or PTSD. We have already made steady progress over the last two quarters following the initial approval for reimbursement of Deep TMS therapy in Israel. As we look ahead, we are working to expand the available reimbursement for PTSD in Israel with the goal of potentially including more Israeli medical centers as well as adding private clinic settings. I will conclude this section of my comments by saying that we continue to advance the randomized multicenter U.S. clinical trial evaluating an accelerated treatment protocol for the Deep TMS system for major depressive disorder, or MDD, treatment as compared to the current standard of care Deep TMS protocol.

[Hadar Levy, CEO at BrainsWay]

As a reminder, the traditional Deep TMS protocol involves a four-week acute treatment phase with one session on each day of treatment. This now being compared to an accelerated protocol, which involves a significantly shorter acute phase taking place over several treatment days. This has the potential to improve convenience and thereby make Deep TMS substantially more appealing to prospective patients. While I have spent a lot of time today discussing our top-line performance and future growth drivers, our team has done a tremendous job balancing our expense management while generating this high level of revenue growth. This has allowed us to consistently report a strong gross margin of 75%. We also increased our operating income and adjusted EBITDA margin and generated positive cash flow from operation. This brings me to the international trade and tariff policies that have dominated the global news cycle for the past few months.

[Hadar Levy, CEO at BrainsWay]

We are actively monitoring our potential exposure to the recent changes to these policies, especially as they're pertinent to the U.S., Israel, and European Union. While specific policies and timing of implementation remain fluid, we do not expect there to be a material impact to our gross margin for the current year. As a result, we are reiterating our full-year 2025 financial guidance of between $49 million and $51 million in revenue. This would represent a growth of 20%-24% over 2024. We also anticipate generating operating income of 3%-4% and adjusted EBITDA of 11%-12% for full-year 2025. With that, I will now turn the call over to Ido for his review of our first quarter 2025 financial results. Ido?

[Ido Marom, CFO at BrainsWay]

Thank you, Hadar. Revenue for the first quarter of 2025 was $11.5 million, a 27% increase compared to the prior year period revenue of $9.1 million. We placed 81 Deep TMS systems in the first quarter. Our installed base was 1,434 systems as of March 31, 2025, compared to 1,158 systems at the same point in the prior year. Gross profit for the first quarter of 2025 was $8.6 million, or a 75% gross margin. This is compared to $6.8 million during the prior year period at the same gross margin. Moving on to operating expenses. For the first quarter of 2025, sales and marketing expenses were $4.2 million, compared to $3.8 million for the first quarter of 2024. Research and development expenses were $2.3 million, compared to $1.6 million in the first quarter of 2024.

[Ido Marom, CFO at BrainsWay]

General and administrative expenses for the first quarter of 2025 were $1.5 million, compared to $1.3 million for the first quarter of 2024. Operating profit for the first quarter was approximately $576,000, compared to approximately $93,000 for the same period in 2024. Adjusted EBITDA was about $1.3 million, representing the seventh consecutive quarter of positive adjusted EBITDA, compared to $715,000 for the first quarter of 2024. For the first quarter ended March 31, 2025, we recorded net profit of about $1.1 million, compared to $111,000 in the same period of 2024. We reported cash equivalents and short-term deposits of about $72 million on March 31, 2025. Based on our backlog and US pipeline and continued momentum internationally, we expect revenue in the range of $49 million-$51 million for the full year 2025, which represents 20%-24% growth over 2024 revenue.

[Ido Marom, CFO at BrainsWay]

In addition, we anticipate reporting operating profit of 3%-4% of revenue and adjusted EBITDA of 11-12% for the full year 2025. This concludes our prepared remarks. I will now ask the operator to please open up the call for questions. Operator?

[Operator]

Yes, thank you. We will now begin the question and answer session. To ask a question, you may press star then one on your telephone keypad. If you're using a speakerphone, please pick up your handset before pressing the keys. Anytime your question isn't addressed and you would like to withdraw it, please press star then two. At this time, we will pause momentarily to assemble the roster. Today's first question comes from Steve Lichtman from Oppenheimer & Co.

[Steve Lichtman, Managing Director and Senior Research Analyst at Oppenheimer & Co]

Thank you. Congratulations, Hadar and Ido, on the quarter. I guess the first question, another quarter where systems came in well ahead. As you look at the wins that you're seeing in the field, any sense you can give us in terms of how much is sort of greenfield opportunity that you're getting, meaning sort of market expansion versus perhaps some competitive conversions?

[Hadar Levy, CEO at BrainsWay]

Yeah. Hi, Steve. Good morning. Thank you for the question. I think the environment today remained very positive and reasonably strong, and we have experienced some large commercial wins recently in the marketplace that are increasing our demand for the Deep TMS system. I would say that roughly around 80% of our new sales coming from a greenfield, which means new customers, and 20% relates to conversion from the competition. Obviously, some of the new system installed are also coming from an expansion of our current customer base.

[Steve Lichtman, Managing Director and Senior Research Analyst at Oppenheimer & Co]

Got it. Thanks. You also mentioned continued shift toward more sustainable revenue models like lease, but you also mentioned pay-per-use. Can you talk about that a little bit more and sort of your evolution on that and sort of where you are at this point in pay-per-use?

[Hadar Levy, CEO at BrainsWay]

Yes. It depends on the specific segment of customers and territory. In Israel, for instance, we are only working with the pay-per-use model, which is a very unique and flexible business model for the provider, and also with some other customers in the U.S. In this business model, we are providing the system with no upfront fee, and we are charging per procedure. We are also providing all the ecosystem around it, which is including the technician and operator for this specific business model. The other business model is the fixed business model. It is a binding contract that our customer base is committed to for us for the next four years, which, if it is going to be most likely a high-volume clinic, that is most likely going to be the most preferred business model for them.

[Steve Lichtman, Managing Director and Senior Research Analyst at Oppenheimer & Co]

Got it. Okay, great. Lastly, on clinical trials, I guess can you give us a sense of when you think the accelerated protocol data might come in? Also, any update on potential new clinical trials in conjunction with psychedelic drugs? I know the ketamine centers is another opportunity, certainly, for you. Thanks.

[Hadar Levy, CEO at BrainsWay]

Yeah. We are making very, very good progress on the clinical trial. We have submitted our results around the accelerated protocol to the FDA, and the expectation is to receive the FDA clearance toward the end of the year. We are also working on data collection for the PTSD and the treatment of adolescents suffering from MDD to expand our labeling in this area. For both of them, again, the expectation is to submit data to the FDA and potentially also get the FDA clearance before the end of the year. We are evaluating the protocol of combining Deep TMS treatment together with some psychedelic treatment in some major centers. We are defining the protocol, and our goal is to launch this clinical trial potentially in Q3 this year.

[Steve Lichtman, Managing Director and Senior Research Analyst at Oppenheimer & Co]

Great. Thanks, Hadar.

[Hadar Levy, CEO at BrainsWay]

Thank you, Steven.

[Operator]

Thank you. The next question comes from Jeff Cohen with Ladenburg Thalmann.

[Destiny Hance, Associate Director of Equity Research at Ladenburg Thalmann]

Hi, this is Destiny on for Jeff. Thank you for taking our questions. Just quickly, in case I missed it, did you make any comments around OCD helmets that were shipped during the quarter and what that installed base looks like currently?

[Hadar Levy, CEO at BrainsWay]

We did not, but I can share with you that we shipped 57 OCD coils that bring us close to 850 OCD coils around the globe.

[Destiny Hance, Associate Director of Equity Research at Ladenburg Thalmann]

Wow. Okay, got it. Thank you. Then looking ahead more with this 360 product, I'm curious—I know it's still early, so just really hypothetically—how are you seeing this device fitting into a center? Is this something that one of these larger accounts would have, an existing system, a traditional system like they have now with the multiple different coils, or is it something as well as a 360 system? Or is it more so that a center would upgrade or switch out the device to a 360 in order to have it—in order to have all the offerings? Does that make sense? Does my question make sense?

[Hadar Levy, CEO at BrainsWay]

Absolutely. I think the right answer is that it will be a mix of both, at least at the beginning. The TMS360 has its own advantage. It's a revolutionary system that is aiming to provide us a shorter treatment with a better efficacy and to potentially treat areas that we hope to see some better effect, like dementia and also some areas around addiction, that currently, we believe, as compared to the 104 system, we're supposed to see some better treatment. I believe some of the customers will need to have both systems. Some of them will just ask to upgrade. It just depends on the segmentation and the profile of the potential customers. There is a greenfield customers on the addiction space that we didn't do much yet, and I believe that the next indication with the 360 is going to be a perfect match for that.

[Destiny Hance, Associate Director of Equity Research at Ladenburg Thalmann]

Excellent. Okay, thank you. I'm going to take the rest of my questions offline. Thank you for the time.

[Hadar Levy, CEO at BrainsWay]

Thank you, Destiny.

[Operator]

Thank you. Once again, please press star, then one if you would like to ask a question. The next question comes from Ram Selvaraju with HC Wainwright.

[Eduardo Martinez-Montes, Equity Research Analyst at HC Wainwright]

Good morning. This is Eduardo on for Ram. I'm curious if you're seeing any significant geopolitical risk related to potential disruptions to the business, and if so, if you could quantify this.

[Hadar Levy, CEO at BrainsWay]

Not necessarily. We're always living in an environment that we're seeing lots of changes with the MFN, etc., but we don't see it as kind of a negative impact. We're always trying to evaluate things that are happening. Same goes with the tariff policies. We are actively monitoring everything around us. For now, we don't see any negative impact on our industry, but it doesn't mean that we're not actively monitoring this on a daily basis. We do believe that a Deep TMS technology holds multiple unique advantages over any kind of drug therapies, and even the tariff is not something that we consider as material for us today. The overall environment is continuing to be very positive for us.

[Eduardo Martinez-Montes, Equity Research Analyst at HC Wainwright]

Got it. That's helpful. Curious if you'd like to see any more meaningful upgrading of the current install base this year or in 2026?

[Hadar Levy, CEO at BrainsWay]

Yeah. Look, the demand continued to grow, and you see it in the numbers, like quarter over quarter. I'm looking and comparing BrainsWay also to the competition. We are truly the market leader selling most of the number of systems, but most importantly, also the additional coils that are providing additional treatment capabilities to our customer base. We'll continue to provide the demand to the market. We continue to see a constant demand, not only for the H1 coil for depression, but also growing demand for the H7 coil and also for the H4 coil for the addiction space. I believe that a very healthy demand will continue to drive the adoption for Deep TMS system by the end of the year and also toward 2026.

[Eduardo Martinez-Montes, Equity Research Analyst at HC Wainwright]

Okay, that's helpful. One final one, if I could. Just curious if you're considering implementing a stock repurchase program, and what would be the principal considerations that would determine the timing of that moving forward?

[Hadar Levy, CEO at BrainsWay]

Not at the moment. I think for now, we are evaluating all the options on the table. There are lots of really great options today. We've got close to $72 million in our bank account, and we're aiming to expand the growth of our top-line revenue and simultaneously continue and invest in the innovation and the future of this technology and product. We will continue to evaluate this option toward the end of the year after assessing all the opportunities on the table.

[Eduardo Martinez-Montes, Equity Research Analyst at HC Wainwright]

All right. Thank you so much. Those are all my questions.

[Hadar Levy, CEO at BrainsWay]

Thank you, Ram.

[Operator]

Thank you. This concludes our question-and-answer session. I would like to turn the conference back over to Hadar Levy for any closing comments.

[Hadar Levy, CEO at BrainsWay]

Thank you. I would like to thank all of the investors, analysts, and other participants for their interest in BrainsWay. With that, please enjoy the rest of your day. Goodbye.

[Operator]

The conference is now concluded. Thank you for attending today's presentation. We now disconnect your lines.

Participants

Analysts

• Hadar Levy, CEO at BrainsWay
• Destiny Hance, Associate Director of Equity Research at Ladenburg Thalmann
• Brian Ritchie, Managing Director at LifeSci Advisors
• Steve Lichtman, Managing Director and Senior Research Analyst at Oppenheimer & Co
• Ido Marom, CFO at BrainsWay
• Eduardo Martinez-Montes, Equity Research Analyst at HC Wainwright