Release Date: November 12, 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 26% year-over-year increase in revenue for Q3 2024, reaching $10.5 million.
- The company achieved positive quarterly net income for the fourth consecutive quarter and positive adjusted EBITDA and cash flow from operations for the fifth consecutive quarter.
- BrainsWay Ltd (BRSYF) has a strong balance sheet with no debt and a cash position of approximately $68.4 million after a strategic private investment equity financing.
- The company is expanding its global distribution and sales network, with recent placements of Deep TMS systems in Taiwan and South Korea.
- BrainsWay Ltd (BRSYF) is conducting a multicenter clinical trial for an accelerated treatment protocol for its Deep TMS system, which could enhance treatment capabilities and appeal to patients.
Negative Points
- Operating expenses increased, with sales and marketing expenses rising to $4.1 million and research and development expenses to $1.8 million for Q3 2024.
- Despite revenue growth, the company faces significant competition in the TMS technology market.
- The geopolitical situation in Israel poses potential risks, although the company has contingency plans in place.
- The company is heavily reliant on enterprise accounts for large and repeat orders, which could be a risk if these relationships change.
- The timeline for FDA approval of new protocols and indications, such as accelerated Deep TMS and adolescent depression treatment, extends into 2025, delaying potential revenue from these innovations.
Q & A Highlights
Q: Can you talk about where you think you can leverage Valor Equity Partners' expertise the most?
A: Hadar Levy, CEO: We feel very blessed to partner with Valor Equity Partners. They are experts in scaling up growth ventures and opportunities around reimbursement and opening doors to large-scale enterprise accounts. Their support will help make our technology more accessible to large enterprise accounts and provide necessary support around reimbursement and operations.
Q: How quickly do you anticipate the accelerated TMS program trial enrolling, and when could we potentially see data?
A: Hadar Levy, CEO: We expect to complete recruitment in Q1 2025, with FDA submission taking additional months. We anticipate finalizing everything in the second or third quarter of 2025.
Q: How are you thinking about balancing investment versus drop-through looking forward, given the firm gross margin?
A: Hadar Levy, CEO: We plan to continue investing in research and development and clinicals to build long-term growth, while also focusing on sales and marketing. We aim to maintain a healthy growth margin similar to 2024, targeting positive EBITDA for 2025.
Q: Could you talk about year-to-date units placed and trends in lease versus sold systems?
A: Ido Marom, CFO: For the current quarter, the revenue ratio was approximately 60:40 in favor of capital sales. However, new bookings show an increase towards lease agreements, with a ratio of about 60:40 in favor of leases.
Q: Do you expect any disruption to your Israeli business due to geopolitical risks, and what are the principal drivers of growth for 2025?
A: Hadar Levy, CEO: We do not see any disruption from Israel. We have a continuity plan and enough production to support the market for the next six months. Growth in 2025 will focus on repeat sales, enterprise partnerships, and international business expansion.
Q: What additional clinical indications do you expect to assess with Deep TMS going forward?
A: Hadar Levy, CEO: We aim to get FDA approval for an accelerated Deep TMS protocol in 2025 and expand labeling for adolescents with major depression and PTSD. Long-term plans include trials for alcohol use disorder and potentially pain management or Alzheimer’s.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
