Neuronetics Q2 2026 Earnings Report

Neuronetics EPS Results

• Actual EPS: -$0.05
• Consensus EPS: -$0.12
• Beat/Miss: Beat by +$0.07
• One Year Ago EPS: N/A

Neuronetics Revenue Results

• Actual Revenue: $41.57 million
• Expected Revenue: $40.17 million
• Beat/Miss: Beat by +$1.39 million
• YoY Revenue Growth: N/A

Neuronetics Announcement Details

• Quarter: Q2 2026
• Date: 8/11/2026
• Time: Before Market Opens
• Conference Call Date: Tuesday, August 11, 2026
• Conference Call Time: 8:30AM ET

Neuronetics (NASDAQ:STIM) is a commercial‐stage medical technology company that develops and markets non-invasive neuromodulation therapies for psychiatric and neurological disorders. The company’s flagship product, the NeuroStar Advanced Therapy System, uses repetitive transcranial magnetic stimulation (rTMS) to deliver targeted magnetic pulses to areas of the brain implicated in major depressive disorder (MDD). NeuroStar Advanced Therapy has received U.S. Food and Drug Administration clearance for the treatment of adults with treatment-resistant depression and is supported by a growing body of clinical evidence demonstrating its safety and efficacy.

Founded in 2003 and headquartered in Malvern, Pennsylvania, Neuronetics focuses on advancing clinical care through innovation in neurostimulation. The company’s platform is designed for use in outpatient clinics, hospitals and psychiatry practices across the United States. Neuronetics maintains a specialized field sales force and collaborates with key channel partners to support physician training, patient education and therapy delivery. In addition to its commercial activities, the company continues to explore new indications and protocol optimizations to expand its therapeutic offerings.

Guided by a leadership team with deep experience in medical devices and neuroscience, Neuronetics strives to improve patient outcomes through research, regulatory engagement and post-market data collection. The company’s ongoing efforts include refining device features, enhancing treatment compliance and evaluating the use of its technology in other neuropsychiatric conditions. Neuronetics is publicly traded on the Nasdaq under the symbol STIM.

Neuronetics Q2 2026 Earnings Call Transcript

Key Takeaways

• Positive Sentiment: Revenue rose 9.1% to $41.6 million, while adjusted EBITDA improved to positive $0.3 million from negative $5.6 million a year ago. Net loss narrowed to $3.4 million, and cash used in operations and investing fell to $1.4 million.
• Positive Sentiment: Greenbrook revenue increased 16.8% to $26.9 million, supported by provider growth, improved reimbursement and revenue-cycle management. Management said cash collections grew faster than revenue and identified further upside from increasing clinic occupancy, with roughly 40% of capacity still unused.
• Neutral Sentiment: Neuronetics is broadening NeuroStar’s commercial model to include outright purchases, lease financing and à la carte support alongside its traditional treatment-session model. Capital sales grew double digits, but session revenue declined double digits; management expects some near-term revenue volatility as customers shift among models.
• Positive Sentiment: The company raised its full-year gross-margin outlook to 48%–50% and lowered operating-expense guidance to $95 million–$100 million, while narrowing revenue guidance to $160 million–$164 million. It expects cash flow from operations and investing of negative $10.5 million to negative $14.5 million for the year and limited net cash use in the second half.
• Positive Sentiment: Management continues preparing Greenbrook for potential psychedelic treatment launches, particularly Compass Pathways’ COMP360, leveraging existing SPRAVATO infrastructure, trained staff and available clinic capacity. The company views its combination of TMS, SPRAVATO and future therapies as a potential differentiator in interventional psychiatry.

Presentation

[Operator]

Good day, and thank you for standing by. Welcome to the Neuronetics report second quarter 2026 financial and operating results conference call. At this time, all participants are on a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during the session, you will need to press star one one on your telephone. You will then hear an automated message advising that your hand is raised. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Mike Vallie from ICR Healthcare. Please go ahead.

[Mike Vallie, Managing Director at ICR Healthcare]

Good morning, and thank you for joining us for the Neuronetics second quarter 2026 conference call. Joining me on today's call are the Neuronetics President and Chief Executive Officer, Dan Reuvers, and the company's recently appointed Chief Financial Officer, Nir Naor. Before we begin, I would like to caution listeners that certain information discussed by management during this conference call will include forward-looking statements covered under the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, including statements related to our business, strategy, financial and revenue guidance, and other operational issues and metrics. Actual results can differ materially from those stated or implied by these forward-looking statements due to risks and uncertainties associated with the company's business.

[Mike Vallie, Managing Director at ICR Healthcare]

For a discussion of risks and uncertainties associated with Neuronetics business, I encourage you to review the company's filings with the Securities and Exchange Commission, including the company's annual report on Form 10-K, which was filed in March, and the company's quarterly report on Form 10-Q for the quarter ending June 30, 2026. The company disclaims any obligation to update any forward-looking statements made during the course of this call, except as required by law. During the call, we will also discuss certain information on a non-GAAP basis, including EBITDA.

[Mike Vallie, Managing Director at ICR Healthcare]

Management believes that non-GAAP financial information, taken in conjunction with U.S. GAAP financial measures, provides useful information for both management and investors by excluding certain non-cash and other expenses that are not indicative of trends in our operating results. Reconciliations between U.S. GAAP and non-GAAP results are presented in the tables accompanying our press release, which can be viewed on our website. With that, it is my pleasure to turn the call over to Neuronetics President and Chief Executive Officer, Dan Reuvers.

[Dan Reuvers, President and CEO at Neuronetics]

Thanks, Mike, and good morning, everyone. Thank you for joining us. I'll walk you through the quarter and each side of the business, then I'll turn it to Nir to cover the financials in greater detail. Then I'll come back with how we're thinking about the rest of the year before opening it up for questions. Having now spent several months in the role, meeting with customers, spending time in our clinics, and working alongside our field team, I've gained a clearer view of where the business is performing and where opportunities exist. I'm pleased to report the second quarter began to reflect our steady execution against the goals I cited last quarter. Total revenue was $41.6 million, up approximately 9% versus the second quarter of last year. The results reflect the continued strength of Greenbrook and some early impacts of our NeuroStar TMS go-to-market pilot.

[Dan Reuvers, President and CEO at Neuronetics]

Importantly, we began to show meaningful progress towards profitability and reduced our cash burn significantly. Starting with NeuroStar, total worldwide NeuroStar revenue was $14.7 million. On the capital side, we had a strong quarter. This reflected an encouraging early reception to our second quarter go-to-market pilot, including a deliberate change in how we compete for customers. For most of our history, we offered essentially one way to work with us, a treatment session model built around a high-touch partnership between Neuronetics and our customer. It's a model we believe in and one that continues to set us apart with NeuroStar customers performing almost twice as many treatments per chair as the competitive landscape, a velocity improvement that directly reflects our unparalleled support. But as the TMS markets matured, we've seen that customers value different levels of support.

[Dan Reuvers, President and CEO at Neuronetics]

Some want that full partnership. Others simply want to own the system outright, the way they would any other piece of capital equipment. Our prior strategy did not allow us to compete within this broader customer universe. To address this, while we're continuing to offer the treatment session model, along with our comprehensive support program, we've also introduced new and different ways a customer can choose to acquire a NeuroStar system. Specifically, they can purchase one outright or opt for a lease-financed option, which allows a customer to use the system over time without a significant upfront capital commitment. For customers who elect to purchase a system, we now offer a support on an à la carte basis, allowing them to select the specific elements of our clinical and operational support that they want, rather than accessing it through a treatment session model.

[Dan Reuvers, President and CEO at Neuronetics]

In each case, customers gain access to the same market-leading technology, and those who choose the session model retain the high-touch support that's always distinguished us. We introduced these approaches on a limited basis earlier this year and expanded the pilot through the second quarter. The early reception was encouraging, and we have since moved to a broader rollout. Over time, as more customers choose to own their systems, more of that value will be reflected in capital revenue, consumables, and service, and less in recurring session revenue. That shift reflects both the demand we're seeing for a capital model and our ability to compete for business that was previously out of reach. Consistent with our expectations, NeuroStar revenue was down slightly versus prior year, with capital revenue up double digits, while treatment session revenue was down double digits versus a year ago.

[Dan Reuvers, President and CEO at Neuronetics]

Almost half of the reduction in the sessions revenue reflected the continued normalization of customer inventory, now at the lower levels we would expect to maintain. The balance was from units no longer active. Underneath that, demand for treatment sessions remained strong within accounts that were active a year ago, with utilization up approximately 10% among them. The broader point is that TMS itself continues to grow both across the industry and within our accounts, and the decline in our session revenue reflects the change in our model, not the demand for the therapy. Ultimately, as we introduce new commercial options and we see some mix shifts, our second half revenue may be a bit choppier, but the changes position us for renewed and sustainable growth as we enter 2027. We are also continuing to invest in the platform itself.

[Dan Reuvers, President and CEO at Neuronetics]

In May, we announced a strategic collaboration with ANT Neuro to co-promote their FDA-cleared neuro navigation technology with NeuroStar. Providers are looking for tools that bring more visualization, consistency, and personalization into how they plan and deliver treatment, and this partnership lets us offer that alongside the NeuroStar system. We have the largest installed base of TMS systems in the country, which gives us the ability to bring innovations like this to market and scale them across the field. Moving to Greenbrook, which was the star of the quarter. The operational discipline that we have been building into the clinic business continued. Greenbrook revenue was $26.9 million, up approximately 17% year-over-year. Beyond the top-line growth at Greenbrook, our work on revenue cycle management continued to produce results, with cash collections growing even faster than revenue.

[Dan Reuvers, President and CEO at Neuronetics]

Focusing on better qualifying patients' eligibility, cleaner claims submissions, and more efficient collections were key contributors, along with improved reimbursement rates through more effective payer contracting across both TMS and SPRAVATO. We also began using AI in the insurance authorization process, which has helped us reduce operating costs. This reflects the operational discipline that we have been building into these clinics, and it is converting into cash, not just billings, and we believe there is still runway ahead of us. The other lever is occupancy. These clinics carry a largely fixed cost base, so the more efficiently we can run each site and the more patients we treat, the more profitable each location becomes. That is where much of our operational focus continues to sit today.

[Dan Reuvers, President and CEO at Neuronetics]

With available capacity, we are closely examining our sales methods, including number of field reps, direct-to-consumer ad spend, and peer-to-peer education events, attempting to improve referrals while doing so with the most efficient patient acquisition cost. This too remains a meaningful incremental profitability driver. Before we move on, I wanted to provide an update on changes to our senior leadership team. As you might imagine, I spent a fair amount of time in my first 100 days evaluating our leadership team and structure. As a result, I made some changes to our leadership team, including reducing executive headcount and flattening our structure. This should allow us to get and stay closer to the details of the business. Some of the key changes include the recent appointment of Nir Naor as Chief Financial Officer.

[Dan Reuvers, President and CEO at Neuronetics]

Nir brings more than 20 years of finance experience across medical device and care delivery businesses, including at his last company, where he helped the business reach profitability and achieve positive cash flow within a year. That experience is directly relevant to our priorities at this stage of our business, and I'm confident he'll be a key thought partner as we execute on our priorities. We also promoted Cory Anderson to Executive Vice President and General Manager of Greenbrook. Cory has been with us more than five years, overseeing both our technology and clinical data efforts, as well as leading the commercial readiness efforts of psychedelics with our partners at Compass Pathways.

[Dan Reuvers, President and CEO at Neuronetics]

Putting a dedicated leader with a rich understanding of the interventional psychiatry space as the head of Greenbrook reflects its importance to our future and the types of initiatives that will help us continue to drive growth in that part of the business. In June, we appointed Rob Greene as Senior Vice President of Sales. Rob spent his career leading commercial organizations across healthcare and medical technology, including in capital equipment and service. As we roll out new commercial models for NeuroStar, Rob's experience will be central to executing that strategy. Separately, we consolidated roles in marketing and operations, and Andrew Macan will be stepping down as Chief Legal Officer later this month. With this team in place, we're well positioned to execute our strategy and the priorities that we're reviewing this morning.

[Dan Reuvers, President and CEO at Neuronetics]

Stepping back, we moved forward this quarter on what matters most, competing for NeuroStar customers who were previously out of reach, running our Greenbrook clinics more efficiently, and advancing our goals towards profitability and cash generation. With that, I'll turn it over to Nir to take you through the financials, and I'll come back with our outlook for the rest of the year. Nir?

[Nir Naor, CFO at Neuronetics]

Thank you, Dan, and good morning, everyone. Let me start with a few thoughts on why I joined and then walk you through the quarter. I came to Neuronetics because I saw a business with a strong core, leading technology, and a national clinic network, as well as a clear opportunity to improve how it converts that into profitability and cash. That is what I've spent my career doing, and that is what I intend to focus on here. To our financials. Unless otherwise noted, all performance comparisons are being made to the second quarter of 2026 versus the second quarter of 2025. Total revenue in the second quarter was $41.6 million, an increase of 9.1% compared to revenue of $38.1 million in the second quarter of 2025. The increase in revenue was primarily driven by higher Greenbrook revenue.

[Nir Naor, CFO at Neuronetics]

With the commercial model update that Dan mentioned in his comments, we intend to update our financial reporting on a go-forward basis to better align with the relevant operational metrics. As customers move between owning a system, financing one, purchasing support on an à la carte basis, or opting for the traditional session model, the split between capital and treatment session revenue no longer reflects the business in a consistent manner. We plan to manage the total growth of the NeuroStar franchise. With a host of contributing revenue lines such as sessions, capital, lease, service, consumables, and others, comparisons versus the past become less relevant for us. As a result, we will look at our NeuroStar business more holistically and intend to report it as a single revenue line going forward.

[Nir Naor, CFO at Neuronetics]

Accordingly, total revenue from our NeuroStar business was $14.7 million in the second quarter of 2026, a decrease of 2.7%. For context, our session revenue was down double digits and our capital sales were up double digits. Greenbrook revenue was $26.9 million, a 16.8% increase. The results were driven by strong continued provider growth and overall pricing improvement. Gross margin was 61.1% in the second quarter of 2026, compared to 46.6% in the prior year. This was a function of mix and our improving revenue cycle management efforts. Operational expenses during the quarter were $22.7 million, a decrease of $3.1 million or 12% compared to $25.8 million in the second quarter of 2025. This was largely due to lower general and administrative expenses and lower sales and marketing expenses. Continued cost efficiency measures were one of the key drivers for that change.

[Nir Naor, CFO at Neuronetics]

Net loss for the quarter was $3.4 million or $0.05 per share compared to a net loss of $10.1 million or $0.15 per share in the prior year. Adjusted EBITDA was $+0.3 million as compared to $-5.6 million in the prior year, an improvement of $5.9 million. Moving to the balance sheet and cash flow. As of June 30th, total cash was $25 million, consisting of cash equivalents, and restricted cash as compared to $19 million as of March 31st, 2026. Cash used by operations and investing in the second quarter was $1.4 million. This compares to cash used from operations and investing of $3.8 million in Q2 of 2025. During the quarter, we also raised $7.6 million in net proceeds through our at-the-market equity offering. Now turning to guidance.

[Nir Naor, CFO at Neuronetics]

We are narrowing our total revenue range to $160 million-$164 million, compared to prior guidance of $160 million-$166 million. We now expect gross margin range to be between 48% and 50%, compared to prior guidance of 47%-49%. We are lowering our OpEx guidance to $95 million-$100 million, versus our prior guidance of $100 million-$105 million. The majority of this change is driven by a decreased expectation of share-based compensation. Since share-based compensation fluctuates significantly, is a non-cash component, and is difficult to forecast going forward, we are going to guide to OpEx excluding share-based compensation. On this basis, we would expect this number to be $91 million-$96 million for the year. Our current estimate of share-based compensation is $4 million for the year.

[Nir Naor, CFO at Neuronetics]

We're also updating our cash flow guidance to include both cash flow from operations and cash flow from investing, as we consider this sum a more representative view of the company's organic cash utilization and estimate it to be in the range of $-10.5 million-$-14.5 million for the full year. This is compared to our prior guidance of cash flow from operations only in the range of $-13 million-$-17 million. We continue to target limited net cash utilization from operations and investing in the second half of the year. In summary, this was a quarter of solid financial progress.

[Nir Naor, CFO at Neuronetics]

We grew revenue, improved our margins, reduced our cash burn, and strengthened our balance sheet, all while continuing to invest in the growth of the business. Our focus is on converting that progress into sustained profitability and positive operating cash flow. With that, I will turn it back to Dan for his closing remarks.

[Dan Reuvers, President and CEO at Neuronetics]

Thanks, Nir. Let me close with a few thoughts on where we go from here. During the quarter, we continued our collaboration with Compass Pathways to prepare for the anticipated commercial launch of their psychedelic therapeutic for treatment-resistant depression, or TRD. We also shared the stage with them at an investor panel last month to continue to educate the investor community about the potential market dynamics with a new treatment option for providers to prescribe for TRD patients. With their recent phase III extended durability data readout, our enthusiasm for the opportunity continues to grow. The regulatory path is Compass to run, and I'm not going to get ahead of it, but therapies like this, when they come to market, will require exactly the kind of delivery platform that we already operate.

[Dan Reuvers, President and CEO at Neuronetics]

In-office drug delivery and monitoring, REMS programs, trained clinical staff, and the benefits investigation and prior authorization infrastructure that we run every day for SPRAVATO. As new psilocybin treatments become available, they'll need places equipped to deliver them safely and at scale. Greenbrook's experience, scale, and available capacity positions us as an early leader in that space as we look forward to providing the most comprehensive menu of interventional psychiatry options for patients.

[Dan Reuvers, President and CEO at Neuronetics]

More broadly, our priorities for the rest of the year are clear. We'll continue expanding how we compete within the TMS space with NeuroStar, keep driving operational discipline and cash generation at Greenbrook while seeking to help even more patients, expanding our occupancy, and positioning ourselves for the opportunities ahead in interventional psychiatry. Ultimately, we intend to be the destination of choice for the psychiatry community looking for the most effective treatment interventions for their patients.

[Dan Reuvers, President and CEO at Neuronetics]

We have real work in front of us, but we have the team, the resources, and the momentum to see it through. Before I close, I will note that earlier this month, we announced a constructive understanding with one of our largest shareholders, reflecting a shared commitment to maximizing long-term value for our shareholders. The board and I welcome that alignment, and it reinforces the focus we all share on executing the priorities I have laid out this morning. I want to thank our employees for a hard-fought quarter and for the work that they do every day on behalf of the patients that we serve, and our shareholders for their continued support. With that, operator, we are ready to open the line for questions.

[Operator]

Thank you. Ladies and gentlemen, as a reminder, to ask a question at this time, you will need to press star one one on your telephone and wait for your name to be announced. To withdraw your question, simply press star one one again. Please stand by while we compile the Q&A roster. The first question coming from the line of Bill Plovanic with Canaccord. Your line is now open.

[Bill Plovanic, Analyst at Canaccord]

Hey, great. Thanks. Good morning. Can you hear me okay?

[Dan Reuvers, President and CEO at Neuronetics]

Yep. Morning, Bill.

[Bill Plovanic, Analyst at Canaccord]

Good morning. First of all, congratulations on a solid quarter, definitely improving the cash flow. I am going to focus on the future rather than the past. In terms of Greenbrook, as you are leaning into this really service offering for all these new psychedelics coming to market, I was wondering if you could help us understand just with the Greenbrook footprint as you go to optimize those, one, how many rooms are typically available on average per site? Two, as you become more cash generating, could we expect you to start opening more facilities or expanding the existing facilities?

[Bill Plovanic, Analyst at Canaccord]

My understanding is the Compass product is like a six-hour versus maybe SPRAVATO with about two hours of observation. I am trying to, as new drugs come to market, they are going to have different requirements, and how do you address those capacity issues and balance that against revenue? But really it is on the Greenbrook and just leaning in there. Thanks.

[Dan Reuvers, President and CEO at Neuronetics]

Yeah. Good question. Thanks, Bill. I think first of all, I will talk about psychedelics in a minute, but I think that initially there is a lot of runway that continues to be available to us simply in improving the capacity that is available within so many of our sites. We have got a fair amount of fixed costs, as you know, and we have talked about having available capacity as much as 40% that is still not consumed.

[Dan Reuvers, President and CEO at Neuronetics]

Filling those chairs with patients that can benefit from our therapies is a top priority. I think we have a lot of improvement to occur even while we are waiting for the psychedelics to be introduced. That said, we think about it more as units of time and available capacity. A lot of these rooms where we treat patients for SPRAVATO can quite easily be converted to also administer psychedelics like COMP360. I think that we have already got the capacity in the rooms, and it is a matter of making sure that we are filling these to better capacity, which is an opportunity for growth that we have even before some of the psychedelics come available. Then as they do, we have been putting a lot of energy into making sure that we are being thoughtful about how we would schedule those varying treatments.

[Dan Reuvers, President and CEO at Neuronetics]

As we know, TMS is a matter of minutes. It is a couple of hours for SPRAVATO, and to your point, probably closer to 6 hours for COMP360 in varying sequences for some of the other therapeutics to come later. We are starting to use AI for scheduling to optimize how we can make sure that we do that in the most productive way. I think there is a lot of opportunity for us to continue to fill that capacity. Once we do, once we start to get closer to that and we need more space, certainly more sites for expanding those footprints is well within our roadmap. But initially, I think there's so much unused capacity, we're really focused there first, and then sequentially, there will be an opportunity for us to look at expansion.

[Bill Plovanic, Analyst at Canaccord]

Excellent. If I could have one follow-up just on, you've come in and you've cut a lot of costs, definitely have improved the operating structure of the business. As you think of that mission from here forward with the recent announcements you've made and the changes in management, are you through kind of the bulk of the changes, and here it's more incremental tweaking from a cost structure? Or just how should we think about the opportunity for further efficiency gains in the operating structure? Thanks.

[Dan Reuvers, President and CEO at Neuronetics]

Yeah. I think that a natural thing is sometimes we don't always look in the mirror first as executives. So starting with the leadership ranks and trying to make sure that the structure and the people that fill the right roles was established, I feel really good about where we sit today. I think we've added some really good talent. I think we've redistributed some of the assignments to some really talented up-and-coming folks within the organization. So I feel like we sit quite well there. I think there's probably still opportunities for us.

[Dan Reuvers, President and CEO at Neuronetics]

I think this is where having a new CFO flanking me with just a couple of weeks under his belt, he and I will have an opportunity to more comprehensively continue to examine where those additional opportunities might exist. But organizationally, I feel like we've made a lot of progress, and I'm feeling very good about how we've anchored ourselves at this point.

[Bill Plovanic, Analyst at Canaccord]

Great. Thank you.

[Dan Reuvers, President and CEO at Neuronetics]

Thanks, Bill.

[Operator]

Thank you. Our next question in queue coming from the line of Danny Stauder with Citizens Bank. Your line is now open.

[Danny Stauder, Analyst at Citizens Bank]

Yeah, great. Thank you for the questions. Really nice quarter and, Nir, congrats on the new role, and it's great to have you on the call. Just on my first one, I want to make sure I'm kind of understanding the NeuroStar treatment session dynamic here. So it sounds like the normalization of inventory should continue through the rest of the year, so should continue to be down, maybe with some offset from gains in capital. So just want to make sure that's the right way to be thinking about it. And do you think this is more of a dynamic for just new customers, or do you expect a larger portion of your existing customers to transition to some of these other models and offerings that you have? Thank you.

[Dan Reuvers, President and CEO at Neuronetics]

Yeah. Thanks, Danny. Appreciate the question. I think on the sessions inventory, just to be clear, we feel like the inventories are down about as low as we would expect them to be maintained. I do not see any continued inventory reductions in the back half of the year. I think we have, after the second quarter, largely equilibrated to where we think normal, sustainable inventories would be. I don't see that as much of a headwind in the back half as perhaps in the second quarter. I think from an existing customer standpoint, one of the things I want to make sure does not get lost is a comment I made in the prepared remarks. We know that our chairs receive almost twice as much patient velocity as the competitive landscape.

[Dan Reuvers, President and CEO at Neuronetics]

We certainly think that a lot of the customers that have selected us did so largely because of the comprehensive support we provide and the kind of improvements it makes in their own practice. I think that we expect that an awful, I think the majority probably, of those sessions customers who have benefited from that level of comprehensive service will continue in that vein. We will certainly offer more options, and that is what we have been talking about in our new go-to-market strategy is, we want to let the customer decide where they see the value and how they want to pay for it. I think the other point to be made is that if a new customer, for example, chose the capital route versus the traditional sessions route, they will still pay for things like service and consumables and training.

[Dan Reuvers, President and CEO at Neuronetics]

Those things are currently embedded in the sessions structure. It is one of the reasons that we chose to start to report on this on a more holistic basis, because there is probably going to be some noise moving back and forth. I think that it is important to appreciate that some of the consumables, some of the service, that revenue that we have gotten has been embedded in the sessions revenue side. We are going to give customers the option to decide how they want to pay for the value that we bring. But ultimately, I think that while we will expect to open ourselves up to new socket placements with this broader go-to-market, we are also hearing that there is a big segment of our customer base that remind us why they picked us in the first place, and that is that comprehensive support that we provide.

[Danny Stauder, Analyst at Citizens Bank]

No, that is great. Appreciate that. Then just one quick follow-up from me. It is great to see the improvement on operating expenses and below the top line. I wanted to focus on gross margin, just that line was really strong, even with clinic revenue being the primary driver of growth and making up a larger mix of sales. Could you just give us a little bit more color on what drove that gross margin expansion here? I think you called out some pricing improvement within clinics, so any color there or just anything else on the execution would be great. Thank you.

[Dan Reuvers, President and CEO at Neuronetics]

Sure. That's certainly a high point for the quarter. As you know, we raised our guidance on gross margin for the full year. We think that some of these improvements are durable. The good news, I think, also is that we saw support or strength in the gross margin on both the Greenbrook and the NeuroStar side. On the Greenbrook side, a lot of it has to do with improved revenue cycle management. That is as we make sure that we're being more disciplined about patient qualification, which is good for the patient as well. They don't want to find out that they don't meet the right criteria when they're three sessions in. That's been a focus. That leads to cleaner claims and more efficient accounts receivable.

[Dan Reuvers, President and CEO at Neuronetics]

All of those things mean you capture a bit better revenue on a billed dollar than we did in the past. I think those are durable, and those are clearly things that are contributing to the better gross margin on Greenbrook, along with some pricing, relative to our team's work with some of the third-party payers. On the NeuroStar side, while sessions revenue was off a bit and capital was up, I think it also points to the fact that as our mix starts to equilibrate more, and it's not exclusively on the session side, our ASP is going up. As that growth occurs in capital, I think that can be also a sustainable good guide for us on the gross margin side. Of course, both of those considerations are embedded in our updated guidance.

[Danny Stauder, Analyst at Citizens Bank]

Great. Thank you so much for the questions.

[Dan Reuvers, President and CEO at Neuronetics]

Thank you.

[Operator]

Thank you. The final question comes from the line of Sam Eiber with BTIG. Your line is now open.

[Sam Eiber, Analyst at BTIG]

Hi. Good morning. Thanks for taking the questions here. Maybe I can start on the Greenbrook side. A really strong quarter on that side of the business. Dan, wondering if you could help parse out maybe some of the underlying trends you're seeing on the SPRAVATO side versus the TMS side of the business. Then, just as I think about Compass and psilocybin entering the market perhaps next year, maybe just talk about how your model is set up best by offering SPRAVATO, TMS, psilocybin, and why that's the best model for patients.

[Dan Reuvers, President and CEO at Neuronetics]

Yeah. Just making a quick note here. I think first of all, on the SPRAVATO versus TMS, we saw a bit more strength probably from SPRAVATO even than TMS. But I think the fact that the overall business is growing is just a good reflection of the fact that Greenbrook's becoming an increasing destination of choice for referral sources. The SPRAVATO business is certainly more durable. As I think I've alluded to in the past, the duration between treatments, even after an initial round, continues to be more sustainable. I guess that's good for us. From a patient standpoint, it means they have to revisit us a bit more frequently. So those patients tend to stay more active for a longer period of time within our network.

[Dan Reuvers, President and CEO at Neuronetics]

I think on the Compass side, I think there's a number of things that I alluded to in our comments earlier that really position us well. I think we're really poised to be a first-mover benefactor, just in part because of the close collaboration we've had with them and some of the preparation benefits, but also the infrastructure that we talked about that already exists because of our SPRAVATO participation.

[Dan Reuvers, President and CEO at Neuronetics]

The REMS certification, the rooms setups, the capacity availability, all of those things, I think, lend themselves to positioning us in kind of a pole position. I think the other one, Sam, is a little bit about your question about the blend. We really want to position ourselves with referral sources as the destination of choice for whatever intervention is best suited for that patient within the interventional psychiatry scope.

[Dan Reuvers, President and CEO at Neuronetics]

I think that we've already done that with TMS, with SPRAVATO. We look forward to doing it with Compass. I think as additional new therapeutics come out, we are positioning ourselves, both infrastructure and on brand, that we really want to be the destination that they can entrust their patients. The fact that we don't do medical management and psychotherapy also gives those referral sources the confidence that they can send their patients to us and know that they'll get them back. I think all of those are important parts of the ecosystem we're trying to build.

[Sam Eiber, Analyst at BTIG]

Yeah, that's really helpful, Dan. Thanks for the added color there. Maybe I can just use a follow-up here on some of the comments around different sales methods you're going to be evaluating with regard to field reps and direct-to-consumer spending. Are there certain KPIs that you'll be tracking or that we should be mindful of as you, I guess, evaluate efficiently getting more patients through the door here?

[Dan Reuvers, President and CEO at Neuronetics]

Yeah. So externally, KPIs, I think you can ultimately look at our operating expenses, of course. Internally, patient acquisition cost is one that we're taking a more scrutinizing look at. I can say quite confidently that the account managers that support the Greenbrook community are proving to be a very effective source for referral generation. I think we want to take a closer look at the balance in spend between our field team and some of our direct-to-consumer ad spend, along with some of the other things that we do from a peer-to-peer education. We're just trying to be a lot more thoughtful about trying to evaluate what are each one of those costs and which ones are returning the most effectively.

[Dan Reuvers, President and CEO at Neuronetics]

I would expect that we will probably pull and push on some levers, try and rebalance our spend in the most effective paths and at the expense of some of the others. Some of that work continued to go on. There's a lot of analytics that we're working on. But at the end of the day, I think it really comes down to our patient acquisition costs and what's the most efficient way to get the right patient who can benefit from our therapies in a chair.

[Sam Eiber, Analyst at BTIG]

Okay. Very good. Thanks for taking the questions.

[Operator]

Thank you. I am now showing no further questions in the queue. I will now turn the call back over to Mr. Dan Reuvers for any closing comments.

[Dan Reuvers, President and CEO at Neuronetics]

Thanks, operator. Thank you to everyone for joining today's call. We really look forward to updating you on our progress during our next quarterly call, and hope everybody has a good rest of the summer. Thank you.

[Operator]

This concludes today's conference call. Thank you for your participation, and you may now disconnect.

Participants

Executives

• Dan Reuvers, President and CEO
• Nir Naor, CFO

Analysts

• Mike Vallie, Managing Director at ICR Healthcare
• Bill Plovanic, Analyst at Canaccord
• Danny Stauder, Analyst at Citizens Bank
• Sam Eiber, Analyst at BTIG