What Brainsway (BWAY) Said on Its Q3 Earnings Call

Key Points

• Q3 revenue rose 34% to $18.1 million, while operating income more than doubled to about $2.6 million. Adjusted EBITDA increased 92% to $3.9 million, and operating cash flow reached $6.2 million.
• BrainsWay expects full-year results at the upper end of its prior guidance, with potential to modestly exceed it. Deep TMS shipments rose 44% to 130 systems, and the installed base surpassed 2,000.
• Reimbursement coverage for the SWIFT accelerated protocol reached more than 70 million U.S. lives, ahead of expectations; OCD coverage reached about 180 million. Management said SWIFT accounted for close to half of new customer demand and requests.

Brainsway NASDAQ: BWAY reported 34% revenue growth and a more than doubling of operating income in the third quarter of 2026, as shipments of its Deep TMS systems increased and reimbursement coverage expanded for its accelerated treatment protocol.

The company expects full-year results to land at the upper end of its previously issued guidance ranges, with the potential to modestly exceed them, Chief Financial Officer Ido Marom said on the earnings call. Management did not provide the numerical ranges during the call.

Revenue rose to $18.1 million from $13.5 million a year earlier. The company shipped 130 Deep TMS systems during the quarter, up 44% year over year, and its global installed base surpassed 2,000 systems, Chief Executive Officer Hadar Levy said.

Profitability and cash flow improve

Gross profit increased 39% to $14.1 million, and gross margin widened to 78% from 75% a year earlier. Operating income rose to approximately $2.6 million from $1.3 million, with operating margin expanding to 14% from 9%.

Levy attributed the gross margin improvement partly to lower manufacturing costs as production volume increased and to reduced royalty payments. He said the company expects those benefits to remain in place into 2027.

Operating expenses increased to $11.5 million from $8.9 million. Marom said the quarter included approximately $1 million in additional one-time expenses related to share-based compensation and other nonrecurring payments compared with the prior-year period.

Net income rose 42% to $2.2 million. Marom said finance expenses tied to the periodic valuation of the company’s loan affected reported net income but did not reflect the performance of its core operations. Adjusted earnings before interest, taxes, depreciation and amortization increased 92% to $3.9 million.

Operating cash flow was approximately $6.2 million, compared with $1.4 million a year earlier, and cash stood at $63.4 million at the end of September. Remaining performance obligations reached approximately $85 million, up 31% year over year.

Levy said the company expects operating expenses to rise 15% to 20% next year, while management continues to pursue margin improvement. BrainsWay has not issued formal guidance for 2027.

SWIFT coverage and clinical programs

Following the quarter, BrainsWay announced that more than 70 million people in the U.S. had reimbursement policies covering its SWIFT accelerated protocol. Coverage for obsessive-compulsive disorder treatment reached approximately 180 million lives, Levy said.

The CEO said coverage was ahead of the company’s expectations and estimated that SWIFT accounted for close to half of new customer demand and requests. He also identified OCD as a driver of system deployment and said the company had surpassed 1,000 deployed OCD systems.

On clinical development, Levy discussed a peer-reviewed secondary analysis of a randomized trial comparing SWIFT with standard once-daily Deep TMS. Among 89 patients with major depressive disorder, the number experiencing suicidal ideation fell from 20 at baseline to six after six weeks, with improvements observed across both protocols.

He also cited a 12-patient pilot study involving depression and early-stage Alzheimer’s disease that reported an 83% response rate and a 50% remission rate in depressive symptoms. The company described the findings as preliminary. Deep TMS is not FDA-cleared for suicidal ideation or for treating Alzheimer’s disease.

BrainsWay is working through regulatory review for post-traumatic stress disorder among patients with coexisting depression, Levy said. For its Alzheimer’s-related research, he expects a feasibility study to conclude around the end of 2027, after which the company may seek a strategic partner for a potential multicenter U.S. trial.

Partnerships and international expansion

BrainsWay invested $3 million in Radial Health’s Series A financing during the quarter. After the quarter, it announced a commercial collaboration with Inland Psychiatric Medical Group that included a multi-system order.

Levy said the company has made close to 10 minority investments, follow-on investments or partnerships and expects to share more information about their progress in 2027. He said system orders from partners may take time as they secure locations, credentials and staff.

The company also has an $11 million convertible loan investment in Neurolief, whose FDA-approved Proliv Rx home-use system remains in early commercialization. Levy said Neurolief is a private company and is not consolidated into BrainsWay’s financial results.

Internationally, Levy cited demand across Asia-Pacific, Europe and Israel, as well as expansion into Latin American markets. He also identified Japan, where he said reimbursement has been established, as a potential growth driver.

About Brainsway (NASDAQ:BWAY)

BrainsWay Ltd. NASDAQ: BWAY is a medical technology company that develops and commercializes noninvasive therapies for brain disorders. Its core technology, Deep Transcranial Magnetic Stimulation (Deep TMS), uses a helmet-like device to deliver magnetic stimulation to targeted areas of the brain.

The company's Deep TMS systems are used in the treatment of major depressive disorder and obsessive-compulsive disorder, and have also received regulatory clearances for certain additional indications, including smoking cessation.

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