Neuronetics, Inc.

2025 Financial and Operating Results Conference Call. At this time, all participants are in 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 11 on your telephone. You will then hear an automated message advising that your hand is raised. To withdraw your question, please press star 11 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Mark Klausner. Please go ahead.

Good morning, and thank you for joining us for the Neuronetics first quarter of 2025 conference call. Joining me on today's call are Neuronetics President and Chief Executive Officer Keith Sullivan and Chief Financial Officer Steve Furlong. 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, the Greenbrook acquisition, 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. For discussion of risks and uncertainties associated with the 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. 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'll also discuss certain information on a non-GAAP basis, including EBITDA. Management believes that non-GAAP financial information taken in conjunction with U.S. GAAP financial measures provide 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. Management uses non-GAAP financial measures to compare our performance relative to forecast and strategic plans, to benchmark our performance externally against competitors and for certain compensation decisions. Reconciliations between US GAAP and non-GAAP results are presented in the tables accompanying our press release, which can be viewed on our website. With that, it's my pleasure to turn the call over to Neuronetics President and Chief Executive Officer Keith Sullivan.

Mark, thanks for the introduction. Good morning, everyone, and thank you for joining the call today. Let me start with our performance in the quarter. which represents our first full quarter inclusive of Greenbrook's financial results. Total revenue was $32 million, an increase of 84% over the first quarter of 2024. On a pro forma basis, total revenue increased 7% over pro forma revenue of $29.8 million for the first quarter of 2024. During the quarter, Neurostar system revenue was $2.8 million with 31 systems shipped. U.S. treatment session revenue was $9.6 million. And U.S. clinic revenue, which represents Greenbrook revenue, was $18.7 million, reflecting continued positive momentum following our transformative 2024. I'd like to give you an overview of our strategic priorities for 2025. and our progress on them in the first quarter. As we move through 2025, we are focused on two clear strategic priorities. Number one, executing our Greenbrook integration and growth strategy. And number two, continuing to scale our Better Me provider or BMP program. Beginning with Greenbrook, we are focused on three key initiatives. First, the optimization of our regional account manager, or RAMs. Following their comprehensive training at Neurostar University in November, our RAM team is successfully implementing the new automated patient transfer process. The educational tools, QR codes, and coordinated intake team are allowing us to connect with patients more effectively while they are still at their referring physician's office, significantly improving conversion rates. Second, the rollout of Spravato. Spravato is now offered as a treatment option in 75 of our 95 Greenbrook clinics, up from 35 clinics at the beginning of the quarter. This represents 75% of the Greenbrook network, with implementation progressing on schedule. In 42 of these clinics, we have begun treating patients using the buy and bill model, which is already delivering the expected revenue improvements. Buy and bill treatments are generating approximately three times the revenue compared with the administer and observe model. We remain on track to offer buy and bills bravado in all appropriate Greenbrook clinics by the end of 2025. Third is the standardization of operations across the Greenbrook network. We have continued to execute well against this objective, with patient coordinators now placed in the majority of our clinics, enabling more effective in-person consultations. These coordinators are crucial in educating patients on the benefits of Neurostar TMS and Spravato treatments. Our training programs to ensure consistent patient experiences continue to show positive results. We have also made significant improvements to Greenbrook's revenue cycle management, including changes in leadership and transitioning to advanced MD patient record billing platform, which is already enhancing our operational efficiency. Within our Greenbrook network, total clinic revenue was approximately $196,000 in Q1 of 2025, compared to approximately $139,000 in Q1 of 2024, a 41% increase. This increase was driven by optimization of our clinic footprint and strong Neurostar TMS performance at the Greenberg Clinic in the quarter. On the same clinic basis, Neurostar TMS revenue increased 8% versus last year, as a result of the actions described above. Our combined company cost synergy realization remains on track. As we integrated the Greenbrook operations, we have continued to identify and realize synergies. When we initially announced the transaction, we had identified $15 million of expected annualized synergies. After closing, by the end of 2024, we had identified approximately $22.5 million of annualized synergies. I'm pleased to report that 95% of these were realized by the end of 2024. As we continue to integrate operations, we are actively looking for additional synergy opportunities and currently believe that total realized synergies will exceed $23 million. These efficiencies combined with our revenue growth initiatives, keep us on path towards achieving cash flow positivity in the third quarter of this year, as we have previously guided. Our second strategic priority is the ongoing expansion of our BMP program across our customer base. As a reminder, BMP sites are those who agree to meet our patient responsiveness and educational standards. the program continues to gain momentum. We currently have over 385 active sites with another 110 sites currently working to achieve the program standards. Our practice development manager team, or PDMs, are making significant progress in teaching these sites how to meet the remaining standards needed to qualify for the program. As a result, We expect a steady flow of new sites to enter the program over the coming enrollment periods this year. The performance metrics of BMP sites continue to validate the efficacy of the program, with these locations consistently helping more patients and delivering care faster. Once practices are fully in the BMP program, they treat three times more patients per site per quarter than practices who are not in the program. On average, these BMP sites go from treating three patients per quarter to over 10 patients per quarter. In addition, customer sites that participate in the BMP program are addressing patient needs about two times faster when comparing results of Q1 2025 to Q1 2024. The outcomes demonstrated by BMP validate the lasting benefits of our model for teaching practices and better serve their patients with NeuroStar. Accordingly, we continue to focus our efforts supporting these BMP practices based on their commitment to patient responsiveness and advanced training. Importantly, we have observed that treatment session utilization is outpacing purchases at these sites, indicating strong patient flow and utilization of existing equipment. Based on Greenberg's success in educating primary care physicians and non-interventional psychiatrists about our advanced treatment options, we have recently launched the Neurostar Connection Network through which our PDMs are building awareness of the Neurostar TMS among 69% of patients with depression being treated within primary care. In these conversations, we give primary care physicians the option of working with our Neurostar provider in their area, including our BMP sites. This is a critical development in our strategy to expand patient access to Neurostar TMS treatment. It should be no surprise that primary care providers prefer BMP sites who are committed to our patient responsiveness and education standards. So we have quickly seen BMP providers form the backbone of this program. The standard protocols and consistent patient experience at BMP sites give referring physicians confidence that their patients will receive high-quality care. and remission rates that are unachievable with antidepressants. Early data indicates that practices participating in the BMP program are seeing a meaningful increase in patients from local primary care networks, further validating the value of a comprehensive approach to patient care. Now for some updates on other marketing initiatives. Starting with our targeted TV marketing campaigns. In the fall of 2024, we ran a successful campaign in Tampa, Florida that doubled awareness despite being interrupted by two hurricanes that hit the area during the campaign. Our mission to elevate consumer awareness of the Neurostar brand continues to gain momentum through the targeted offline media programs, which include radio, TV, and billboards. In late March, We launched a six-week TV campaign in the Baltimore area, reaching over a million viewers and laying the groundwork for broader market impact. Within the first two weeks of the campaign, preliminary results have been very encouraging, as we are seeing two and a half times more Neurostar brand search impressions on Google and Neurostar.com compared to the searches prior to the start of the campaign. Over 100 potential patients have requested consultations, and we expect this number to grow as the campaign reaches more viewers in the coming weeks. Additionally, our co-op marketing program continues to drive measurable results. Accounts who participated in co-op in the prior two consecutive quarters showed a 20% uplift in utilization and an 18% uplift in motor thresholds in Q1 of 2025 compared to Q1 of 2024. Another key growth driver continues to be the adolescent treatment capability. Since receiving FDA clearance in March of 2024 as the first TMS treatment approved for depression in adolescents age 15 to 21, we have seen meaningful traction in this segment. the number of adolescent patients receiving treatment has grown 38% in the first quarter of 2025 versus the first quarter of 2024. With the total number of adolescent patients aged 15 to 17 treated in Q1 of 2025, exceeding all the patients treated in the full year of 2023. We are seeing encouraging adoption rates across our provider network. And insurance coverage for the adolescent Neurostar TMS treatment continues to improve significantly. With Evernorth Health Services, a Cigna Group subsidiary, recently expanding Neurostar TMS coverage to include adolescents 15 and older with MDD. Joining our major insurers like Humana, Aetna, and several Blue Cross Blue Shield entities that have updated policies since our FDA clearance as the first first-line add-on treatment for adolescent MDD. In summary, our first quarter performance demonstrates that strategic initiatives we implemented through 2024 are driving tangible results. Our integrated business model, combining innovative technology with a robust care delivery network, positions us to expand access to effective mental health treatments while improving our growth trajectory and financial performance. I will now turn the call over to Steve to review our financial results.