STIM - Earnings call transcript Q2 2021

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Operator

Good day, and thank you for standing by and welcome to the Neuronetics' Second Quarter 2021 Financial and Operating Results Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Mark Klausner. Please go ahead.

Mark Klausner

Good morning, and thank you for joining us for Neuronetics' Second Quarter 2021 Conference Call.

call and President Furlong. Chief today's Officer, Chief on Sullivan; Keith Financial me are and Neuronetics' Executive Joining Officer, Steve

we guidance, Private during related like information results would under our including the include begin statements listeners provisions issues the covered differ Reform financial business, revenue impact operational stated Actual and Before certain and to risks of those Act these and COVID-XX, from harbor that with and XXXX, the forward-looking metrics. to by statements discussed Litigation uncertainties forward-looking conference to this could caution business. due management of materially other safe implied associated call strategy, or company's Securities will the by I of statements

uncertainties Form disclaims XX-Q, Form Neuronetics' you will with of the For Exchange business, filings this later the to and law. on discussion review course filed to including as Securities statements risks report during XX-K encourage Commission, annual call, with be forward-looking obligation and except company's the of required any company's the any I the and made by The company which today. update associated

excluding trends to we'll against be our indicative certain to press and believes the noncash tables conjunction decisions. financial call Officer, to are not uses competitors Chief President and release, and non-GAAP presented non-GAAP our pleasure on certain operating Executive strategic plans in turn discuss including over Sullivan. for it's website. Reconciliations performance which non-GAAP EBITDA. benchmark compensation certain measures GAAP and useful information taken are Keith to basis, performance forecast provide can measures my that, financial on other relative our externally compare that results our Neuronetics' our of and With viewed Management to During information by between with accompanying U.S. and management results. call, that the investors information also financial GAAP expenses non-GAAP a in in U.S. Management both for

Keith Sullivan

to providing Good morning, an of and review thank our second for you with for operational by will performance, our will financial by I review second the revenue XX% joining with quarter update. thoughts Steve our from then I'll balance growth Q&A. in revenue. an $XX.X of second overview Starting strong XXXX, the begin turning and million, quarter. was results, driven conclude us. the year-over-year followed before XXXX the Total quarter session of treatment of by up

impact three U.S. patient up quarter our the the one, revenue increased in treatment work existing our of the in XXXX our are NPCs installed things: our was over growth XX% from second result a and three, two, of the base. to continued session accounts; the of Our as programs; train field education doing

of over result quarter, utilized XX% treatment increased quarter number a initiatives has second of the the the of during XXXX. As these sessions

experienced a As to approach the first session year-end. treatment previously have by sessions. already average we dip this the our noted, goal middle I'm year. revenues have of half May, to the XXXX for that happy XXXX we through In of treatment exceeded report goal is daily in levels

grow will accounts day X,XXX the believe our people the this Program. our call. we our transitory social as daily the mentioned Pulse Many treatment. in first that more have rather As Unless sessions of grow this back distancing rebound vaccinated. our with last months the XX on start we COVID participation per as We requirements than removing those metric you in to know, monitor the opted mask customers travel CDC Precision we we this begin time movement to continue level, causes weekly. new strain treatment was average seen utilization the of announcement and this trend same saw believe for as coincided The of their larger to disruption, for

normalized return indicator new had demand expected environment, bolstered call last the in the quarter for and of U.S. over year-over-year the capital by in increased of side, over a and positive by XX% customer the System traction capital that is to more NeuroStar team mentioned We XXXX equipment second XXXX. quarter a Therapy strong sequential grew of Advanced growth the by The first revenue second of we capital our our systems. quarter. gain On XX% sequentially

from As expected, to our several able high-quality generate opportunities. continue the first were and leads close of quarter BDMs to their

We productive balance through the the expect them more increasingly to be of year.

Attendees the large from held team on engaged event, brings were to them. over focused program is prospective NeuroStar in a to physicians an educates The During group the value and providing X the Austin, XX in-depth of throughout our customers development of quarter, business and present. unique event, Summit, customers were and existing NeuroStar understanding Success over which managers accounts Texas, the different prescriptive practice our customers highly hosted potential with ones. several which was we on a event the Stars Program, the that XX

the is event in of protocol. believe best the been and support a STAR extremely X STAR close The have patients. and To of our a months. encouraging as sales how within STAR will reminder, educate X and number additional Xis STAR subsequent results immediate at needs. reimbursement the date, staff several we STAR the to several office coming As practice, event on X and the is marketing to X systems practice. it. results clinical is is training outside very the favorable, were capital closed we marketing

awareness events expect and turnouts. just one on these Given are are like hosting third increase Events where strong of we similar these areas the and in investing the to in we we results, fourth quarter, educate physicians. planning positive are better other

We awareness the continued patients second initiated focused build request transition progress to represented on executing depression XXXX. to motivate The commercial on remain quarter towards we in initiatives and early with the NeuroStar.

the to Beginning NeuroStar. best marketing with educate on patients drugs alternative who are searching training the by this of practices our our by are an campaigns. for We accomplishing benefits showing customers to

We continue in connect channels with to our and digital them and social to their educate successfully area. leverage media physicians patients

with our over messaging in generated million engaging right ad have who on XX provider an website we driven in quarter, the increase of to A number campaigns call and are the than the leads XXXX. more have being its XXX% through we is our website appointment center. significant number ongoing are XX% with launch, center these channels, with requesting receive these quickly we but NeuroStar our year-to-date. year-to-date quarter who through are is patients with resonating of impressions, refined patients our since routed and people only of During visits. patients. the qualified appointments concierge up increase saw accounts Not The call a of emphasis these ramped percentage NeuroStar has in The over a XX% over first a requested

our interest Health. NeuroStar their for great us the highlight rates only demand continue patients to from as to which Advanced drugs. with validate to of a depression alternative messaging, as be the response possible but by for campaigns, We to and the help strong Mental customers This Therapy work strong our our beat with many not influx approach our excited for an opportunity treatment is of these

research of recall, a most XX%. awareness was alternative our of After DTC reflects you NeuroStar with recent non-drug an depression, at patients of results in X our aided as X%. marketing, initial X% If NeuroStar demonstrated our market aided months under awareness research --

We are this trend. by encouraged

its the Turning on sure of various many progressing nearly to Stars are possible. in levels. existing be able the At to the of adoption XXX% as end an second our make program continues X and customers extremely The as NPCs and update Precision high to are customers the to our were which benefit. as participating on Pulse continue our the of designed Program through the patients X educate Program, customers quarter to that assist Stars the

number interest also Pulse to currently, accounts February. out participating since during grew the in we have XX% the And We by this The the see it continue quarter. of accounts program of XX% Precision rolled strong joined Program.

see increased increased delivered. more utilization garnering to treatment of treatment second in these the participate of Program, to We awareness customers XX% progress leading participation session high in Pulse year. by the and high quarter levels and as on session Overall, expect quarter. first we Precision levels programs average, Encouragingly, being to are the accounts compared through the are

wanted and was not around person many with re-engage the a opinion the interacted technology XX event society physicians, key TMS for we great Society the in an opportunity Clinical company this to update customers presentations, as over members, served in meeting and poster months. who provide high, strong and our regulatory strategy. I event energy on year's a we at Lastly, At our major presentations, a podium. had presence clinical included The June, and sponsored on the to of and had with which presence, leaders, the

NeuroStar a a large and presented and to in an In rate analysis in completing a Dr. analysis, of This clinical a were the Harold in industry-leading during practice data presented routine and were XX% and rate. original improvement trial. has highest conference. delivered rate, the effective response a demonstrated trial, found the based data a analysis response is from This achieved medication. thought pieces clinical over the industry. which a produced key XX% continues the our outcome the some registry. NeuroStar in of an improvement on that that remission remission course Importantly, new Dr. XX% XX% Sackeim's from the be results patients remission TMS, therapy, leader Dr. found massive patient rate he response results data in Sackeim, sham-controlled by more published Sackeim's than rate early

As to additional and dialogue we it strategy, FDA with pathways label relates indications. to to to a for the clearances our expansion have regulatory productive continue explore

rescheduled the a agency. within has times with meeting to FDA scheduled conflicts previously the internal been due Our few

a during discuss for are had we the clarify to data our once disappointed FDA, from But submission path of acknowledging help able look I positive. like FDA scheduled positive confident prior year. commercial first we in Overall, response resonating. doing the am a we pleased as we with delay, to we now support strategy is number on The We bring and meet. being organization recently suffering and meeting to and half label turn are customers more expansion. execute continuing our -- I call position am both to a are letter from are to patients our initiatives the communication a market with soon FDA In Steve the we forward. mental the of leadership provide with execution market focused questions on would that we we meeting as a possible. health by our financial overall, disorders. early working the view we that seek performance as real-world right I'd patients clearance overview. the to The of -- will dialogue to upon While our our the a this our what with of that the as growth letter to the expand and with to our we suggesting consider the continued and to forward relief the to they over use get from reinforces received are staff advance

Steve Furlong

Keith. for Thank XX% million. quarter quarter of increase Total of the $X.X revenue revenue over an you, XXXX second was second million, $XX.X

quarter revenue year session and the year was the During driven revenue relative was Therapy Advanced to by an sold compared U.S. XX% over prior $X.X XX% resulting by team treatment prior million, XX of XXXX second increased a approximately million, The to in U.S. of increased quarter quarter in of to over from to relative was NeuroStar million, to session the revenue the the per growth U.S. an quarter. in XX% sold by number of from significant session sequential traction million, by up year. revenue significantly XXXX. year driven up active was gaining treatment site increase of XXXX U.S. $X.X primarily increase the was second XXXX. of was total an treatment Revenue quarter. and XX% in in the of primarily company by The On quarter, systems compared up systems, first first revenue increase increase over a quarter prior prior treatment BDM increase the System it U.S. systems NeuroStar the quarter in revenue volumes territories, XX basis, in $X,XXX driven prior year $X.X the revenue. primarily The XX XX%. our approximately XXXX, sold in compared revenue U.S. of $XX.X session quarter. up the new was first the $XX,XXX,

gross quarter active treatment primary The XXXX XXXX driver U.S. second to was calculate of sales. quarter the the by the beginning increase of we second total mix expense Gross compared XX.X%. margin of quarter dividing reminder, of and XX.X% million, metric the the treatment sites. quarter by a quarter of session $XX $X.X expenses As this of compensation margin revenue compared marketing was the product capital stock-based were driven a to million primarily of during XXXX, sessions versus Operating favorable second by an increase expenses. higher for

second quarter $X.X for negative $X.X for was second $X.X million we the of of of of $X.X quarter expense. the net million or the million $X.XX During compared of EBITDA share as of stock-based Net approximately a incurred compensation XXXX loss as million the the second million compared XXXX to XXXX. quarter, loss $X.XX was quarter per share XXXX. or during per for to second noncash $X.X quarter negative

balance sheet. the Moving to

XX, were million. cash of cash equivalents $XXX.X As XXXX, June and

guidance. Now turning to

year $XX million range in $XX consistent we issued For our the expect to of million, previously full the continue to with XXXX, revenue guidance.

there assumes patients. impact no customers major resurgences COVID guidance our are that Our or

addition, our In that progress productivity. contributions expect towards BDMs increase they experience we of during the as gain second full year the to and will continue half NPCs' and

$XX revenue For the third range XXXX, we million of to $XX in million. of quarter the expect

capital, early our were we on XXXX we seeing the As based raised communicated business. in be we we when trends would in spending evaluating

million the total would like for full expenses to and turn the projects now in customer of $XX areas the now back $XX in the be over our well a to company early operating The have growth. development marketing clinical the in our As XXXX of of and we year training result as efforts, investment to future to education our million. and from as range to call drive success these Keith. I to business research and increase decided

Keith Sullivan

Thanks, Steve.

to for the XXXX. our of expectations Turning remainder

for our be on of on alternative benefits to NeuroStar best focused awareness the NeuroStar. depression customers to who searching patients an We among training educate to continue them, drugs building practices will of on and are the

efforts, we will to optimize expand on media to the our our new programs and pieces work campaigns, place to customer launch strategy. our center in regulatory execute call Specifically, clinical and digital social and continue put concierge

fully our greater to the we to line positive and continue of XXXX time X I'd strategy by to impact base, within implement and through As our be customers. expect a we continue our we now initiatives Stars progress like Programs spend year, these encouraged to Precision as questions. NPCs a customer refine Pulse the Success the see BDMs the open population commercial of more new as with half success throughout of our And we back for XXXX. of and to into and

Operator

Blair. [Operator comes Margaret Instructions] Kaczor question with William First from

Margaret Kaczor

follow-up I terms to of in Yes. dip in wanted on comments about talked some bit you in a treatment first the the of mid-May. metrics early little

seeing that to did per month. You maybe talk about treatments rebound X,XXX back

showing that they the list hear guys delaying patients And you full is in doctor of later then on was for come could a or up did delay starts guess, patients I patient it this initial in see as visit? back you year? throughout of more So a that

Keith Sullivan

in talk saw that So, treatment. to patients blip then of weeks back off few The And sessions, you, good we treatment to we the Margaret. later. saw initial a start rebound a putting their was

Steve Furlong

our no-show that the some So rate actually of went significantly. metric Margaret, we another large up customers and surveyed

continue it's to rose to for make guidelines. patients June to in show what a delay We that customers didn't that XX%. our the to CDC of many saw early revised so, and they that May level they show just to relative sure and people up And think close of contact MT, up was new initial

Margaret Kaczor

ask next reason low utilization for over got low the to double-digit Okay. sequentially. is we've And quarters helpful. part the single-digit X the That's growth of

we're trying the CROs in a your So, assumed what or out to is little mid-teens doable growing that that with And better? well? of top as figure in is is that how guidance what's kind

Steve Furlong

the an Again, with forward. our going impact and say, session could forecasting Again, I would treatment in and at on a just and we XXXX, still utilization little, in we're unknown. We're increase yes, continued patients. it's a in have we momentum customers and variant volumes QX. Yes. right now it's concerned I if it Delta the mean, a you somewhat session strong treatment year-to-date performance our from QX environment -- forecasting that perspective. to compared look are of Obviously, are But

And so we said to where again, for plan guidance, we it's are towards pushing and would. did a loaded year, very we getting backend the but we reaffirm

Margaret Kaczor

if you I of include guidance, like maybe you're one Because that so of squeeze didn't right now? seems than it not, in more a Delta rest are impacting a worry but just because Okay. just any you it Thanks. us? bit, And your the little you seeing general like could other in business referenced

Steve Furlong

now. we're not right seeing Yes, anything

Keith Sullivan

up anything. accounts And to patients. We're be handle seeing are not able to our geared COVID

not seeing we're So, or reaction like any any close down that.

Operator

next Matt Piper Our from with Sandler. question comes O'Brien

Adam Maeder

Margaret's It's Matt. the question Adam with questioning. to of on guidance, following start I kind line on of up for on wanted a

in back upside. forward half, so your So, talked the nice the to or it you exiting about that that then about confidence in as pull maybe guide QX, if sessions implies implies extrapolate the of of the talk we back X,XXX that per guidance a rebounding day ramp range? some average year, nice just level pretty half to And

a So, that of Are guide? that seasonality follow-up. then do how Thanks. sustainable And expecting is QX? in have How we you run-rate? vacations the reconcile with I

Steve Furlong

closing second sales that we of of of robust note matter the what that didn't that's more was that the it's favorable. on team purchases session by the daily, purchases utilizations. just to the really and rebuilding capital those out essentially extremely in they end of, a track really much were new a continue their ultimately, gives XXX% remain sales utilization also we track to of real-time June, again, marketing extremely are the confidence than we confidence again, year. our is been for get and has impact funnels the year. benefits The From positive, at and the field Pulse The capital think again, the start treatment us system important From and And transactions, see that perspective, a are and metrics they incurred February perspective, do can until push side. in half And the but the were programs. Precision Between February X. funnels. only the not uptake and the I continuing

positive we how comp But into progress end more good so of to which of the is And compared level learned the utilization have half XXXX second transacting. we at been not the is programs a of customers insight real to and And some sessions, a has purchases Pulse the year. these since some XXXX, some that even June, levels Again, the treatment year-to-date, it X above Star. will because And date compared for the in with we to believe made, COVID be we are of are the that of extremely adjustments lessons with us. those the the those impact starting last and through modifications. year. it's made are again, We positive year-to-date indicator We've positive. looking fair Precision just impact really progressing of those to

Adam Maeder

there's the you're from to came forecast, things. maybe the little capital sales does you the that events, but in more into back a that. Appreciate into of year. bit current assess The side recent and capital initiative it to color. appetite customers half of How on little environment? the helpful then the just bit our of capital at would sound light the the of follow-up, status That's And going dig continue on good like a

in So, the timing guys to is you sessions? see placements just a And competitive from treatment is are really meaningful the system seeing back in priority it a towards that's build and half? impacting expectation that anything change standpoint or

Keith Sullivan

Certainly.

their get by impressive, their COVID. and practice we least very day were at especially could a and up family time the of encouraged of fact physicians coming heels XX The we a give to managers was NeuroStar of So, least our day Summit. office that on at

So -- to this down to Texas product that travel of impressive learn would all was about they us. Austin, to

out were of sold high. I encouraged of very of those And we think was the And that. we response by it. they attendees a level so -- by number systems

we out other more a as the building staff offices we get preparing and sell in As physicians to to NeuroStar expect into said remarks, their number are TMS.

environment capital is So, I think the rebounding.

I within as out awareness a is the was TMS of increasing lot about their meeting, from practice. greater volumes there of TMS discussion Society offerings think there there

five going to So, this that, equipment in the capital you to I taught you normal I've your successful see you're pipeline been are, to that sales I if have get that rebounding think swear way and always one. in close, be are systems going

they're need build just give able time we that so our team so. be up to And to doing and to pipeline,

getting they're those as at So expected would. levels building they and we quarter-over-quarter they're had

competitive first would competitors. say, side, in from I the the presence significant quarter saw On we our a

much. as This not seen have quarter we

we Star buying So, great of that. to our Pulse second that offer, customers and Precision results moving Program we our and Program are potential are customers our through and all into our X as

Operator

with Our next Bill comes question from Canaccord. Plovanic

Bill Plovanic

the could, more, I'd dig bit into Keith like and Steve. if to I a BDMs

of was in color as in stronger. mentioned us the go that And What BDMs you some QX give Thanks. could that? well. number the go into and you Any on QX? as would be funnel seen terms you've of -- where metrics turnover on today actually into are you you more type the granularity So, funnel helpful of what

Keith Sullivan

Good morning, Bill.

outside in quite mentioned of we doubled they number as quarter. had approaching departure that we a in but So, of opportunities have second second the first developed -- the filled. have -- any as that have quarter. we in not I sales And had outlined had think in I we force those we opportunities, XX that, currently XX over were that, significant XXX quarter. that I their a, haven't turnover we And think territories in a think we it We team. have I'll earlier the call But company-sponsored and far

So, that. their like quickly and pipeline certainly Summit is events helped NeuroStar the growing

Bill Plovanic

Program, And of do the the reached And How type talked you how that, just once what on then many are X Stars? accounts feeling will to performance a Star about have like get you. Thank many X for -- get X all how you understand take? how think improvement? -- as that many a on drive that XX%, is Just us that XX% funnel Stars, through you improvement? that accounts Plus, the today? they like just through is benefits and Precision that XX% as the these a Is a help you have going long

Keith Sullivan

have we protocol. our the So I is And office reimbursement star our first and so, -- needs. is as clinical mentioned, second other

to So, helping the help be of are almost them what on two front, insurance benefits our clinical be, they're and protocol offering they the welcomed accounts reimbursement practices. -- stars, listening their companies our first with identify would all in doing now all the what investigations, those should

our of So, to are involved. that that's XXX% those we close think I that gets stars, And -- I in to remarks said our accounts two us think with number.

it's outside X, -- X training person and the the practice Star star within focusing on So to how patients. these really to counselor And be desk are their practice. of second to And patients and X is part the on. talk the training X phone is and that who patients that to reception talk then it's answers the able we the their to

from Star have a I'm that their practice XX outside And a $XXX,XXX on year. we at But accounts that are today at in X that revenue regular basis. Star think practice number. level under excluding of that our a generating, are X accounts individual average, are marketing on So, service are I providers

that's X of upside only a month. at So, there's on patients that, about a $XXX,XXX, lot treating even

Bill Plovanic

And question last quarter? thank were Thank starts -- there Okay. is That's patient you. Last many second in very just the helpful. then you. me for how

Keith Sullivan

have you number. to get that exact on we'll to Bill, back

Operator

the question Thibault line of Marie [Operator We Instructions] with have a BTIG. from

Marie Thibault

utilization for the try quarter I bit bit. QX dipped just give get looks an By want to $X,XXX how a helpful. exited utilization quite per would at? the mid-May a That it average utilization by if just my us very wanted I you the like to could into And below you try the more. of And day that was? to math, dig understanding little that dip substantial to rate be

Steve Furlong

this Marie, is mid-May Again, customers, X% about perspective. that to our Yes, top XX% some utilization fluctuate. weeks. that in few of was duration Steve. surveying And lasted a the did dip from a

from think dip internally some get little in -- But again. customers did in X,XXX at when It Memorial while level suffered so, June, peak we that and I bit we And it was saw around exit to did primarily we we a quarter right is early happened. that longer, others the recovered June. Day, did back that once that level the

flat will to as able of the we because just seasonally confident usually are we Again, the our guidance. a So, reminder, QX vacations. do get to QX, be is to rates that we have built into

to co-marketing the practice took year this of are and I going programs year. be pushing and will forward But efforts our training, think vacations offset consultants exacerbated nobody our that's with. by the last that success since again, be education,

Marie Thibault

Okay.

summer pronounced about good treatment That's metric. another discussed And ask per a we to heard So X,XXX hear. seasonality. June, encouraging I contemplate metric. day guess I then because were your conference does have the just April, in treatment and And guidance at sessions you to sell-side then QX in communication

that TrakStar have this we're data, hearing you dip? is that real-time first Given about mid-May the the why

Steve Furlong

really venue to the I I what mean, after don't had forum about the is at the a point. talk this in or happened an it opportunity we the discuss to quarter think quarter.

Marie Thibault

at where Okay. for you, for QX? were And we then, the active I guess sites a housekeeping Steve, of end one at just

Steve Furlong

XXX. we sites, about were Active

Operator

like our to Mr. closing concludes turn Keith this for remarks. And the to I you. back Thank Q&A session. Sullivan call his would

Keith Sullivan

quarter. updating thank call to on next progress you, us joining on today. Thank you operator, forward you. again Thank and you We look for the the

Operator

that, with you your we And in may you participation today's for disconnect. thank conference, and now

Neuronetics (STIM) 8 Aug 212021 Q2 Earnings call transcript