Release Date: August 06, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- BrainsWay Ltd (BRSYF, Financial) reported a 28% year-over-year increase in revenues, reaching $10 million for the second quarter of 2024.
- The company achieved positive quarterly net income for the third consecutive quarter and positive adjusted EBITDA and cash flow from operations for the fourth consecutive quarter.
- BrainsWay Ltd (BRSYF) has a strong balance sheet with $48.1 million in cash and no debt as of June 30, 2024.
- The company expanded its international footprint, including a new multi-year distribution agreement in Canada, enhancing market entry and growth potential.
- The FDA granted an expanded indication for Deep TMS treatment of major depressive disorder for patients aged 22 to 86, making it the first TMS indicated for patients over 68, which could significantly increase the target market.
Negative Points
- Operating expenses remain a concern, with general and administrative expenses increasing to $1.4 million from $1.2 million in the same quarter of the previous year.
- Despite international expansion, 80% of the installed base remains domestic, indicating potential over-reliance on the US market.
- The Canadian distribution agreement systems are not yet active, with delivery and activation expected by the end of the year, which may delay revenue realization.
- The company is still in discussions for distribution channels for its addiction treatment, indicating potential delays in market entry for this segment.
- The company faces challenges in accelerating market penetration for its MDD indication, particularly in the elderly patient segment, which requires targeted strategies and partnerships.
Q & A Highlights
Q: Can you update us on what percent of your installed base is international today and where do you see the biggest geographic opportunities?
A: Today, the ratio is 80% domestic and 20% international. We see significant growth in the Asia Pacific, particularly in India, South Korea, Taiwan, and Thailand, as well as strong demand from European countries like France, Italy, and Spain. - Hadar Levy, CEO
Q: Can you update us on TMS 360 and any progress in distribution discussions for the smoking indication?
A: The 360 system is in a pilot program for several indications, with plans to expand next year. We are in discussions with partners interested in the addiction space, aiming to find the right distribution channels in the US and internationally. - Hadar Levy, CEO
Q: Given the strong gross margin profile, do you see opportunities for reinvestment in sales and marketing to further accelerate momentum?
A: Yes, we are looking to accelerate growth by investing in organic growth and expanding into new territories. We plan to reinvest our growing cash balance to increase top-line revenue. - Hadar Levy, CEO
Q: Could you talk about the expanded label for MDD and its impact on the total addressable market (TAM)?
A: The expanded label increases our TAM significantly, especially targeting elderly populations in nursing homes. This expansion allows us to treat patients over 68, increasing potential leads and revenue. - Hadar Levy, CEO
Q: Do you expect to be sustainably profitable going forward, and what are the principal drivers?
A: Yes, we plan to continue growing, with revenue growth directly impacting net profit. Our focus on large enterprise accounts and better reimbursement for OCD indications will drive penetration and profitability. - Ido Marom, CFO
Q: Could you provide more details on the Canada agreement and expectations for increased purchases over time?
A: The Canadian deal is a multi-year agreement with a significant distributor, expected to generate substantial revenue. We anticipate strong demand in this market, with a structured transfer pricing model. - Hadar Levy, CEO
Q: What are your thoughts on payment of dividends or share buybacks given sustained profitability?
A: We are exploring all options to invest back into the business and provide value to shareholders. Discussions are preliminary, but we aim to make strategic decisions with our strong cash position. - Hadar Levy, CEO
Q: How is the progress on system placements in Israel and South Korea, and what are the expectations?
A: Demand in Israel continues to grow, driven by good reimbursement. In South Korea, we expect to meet or exceed the minimum quantity of system orders, with positive visibility on demand. - Hadar Levy, CEO
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
