BrainsWay Ltd. (BWAY) Earnings

Management highlights

### Strategic Transition to Broader Interventional Psychiatry Platform - The company is evolving from a single-product deep TMS business to a global platform for interventional psychiatry services, building on its existing strong foundation of installed systems, reimbursement access, and clinical data. - Management entered the second half of 2026 from a position of strength, with accelerating revenue growth, expanding profitability, and improving long-term revenue visibility, marking the 12th consecutive quarter of stable operational performance. ### Clinical and Regulatory Progress - Presented 20-month prospective durability data for the company's SWIFT accelerated deep TMS protocol, demonstrating sustained clinical improvement in patients for one year post-treatment. - Published results from the largest real-world study to date of deep TMS for patients with comorbid PTSD and major depressive disorder, with over 83% of patients reporting meaningful PTSD symptom improvement and substantial concurrent improvement in depression. - These data supported a recent FDA submission for clearance to treat comorbid PTSD, which would expand the clinical utility of all already installed deep TMS systems without requiring providers to purchase new capital equipment. ### Reimbursement Expansion - Coverage for the SWIFT accelerated protocol now extends to approximately 57 million covered lives in the U.S., strengthening the value proposition of the platform for providers. ### Strategic Minority Investment Program - The program is designed to partner with leading behavioral health provider organizations to expand patient access to interventional psychiatry, build market awareness, and drive deeper utilization of deep TMS, while allowing BrainsWay to remain focused on its core technology, clinical development, and commercial execution. - During Q2 2026, the company completed a strategic minority investment in Hopemark Health, a multi-clinic behavioral health platform operating in the greater Chicago area. The company has now completed 6 such investments, with a robust pipeline of additional opportunities undergoing disciplined due diligence. ### Beyond-Clinic and International Expansion - BrainsWay has an investment in Nualife (developer of the ProVivarex home neuromodulation system), which received FDA approval in March 2026 and has launched initial commercial operations; management reports early progress is encouraging. - International expansion is a long-term growth driver, with an estimated 170 million untreated patients across existing partner markets. The company builds on established partnerships and existing infrastructure for a capital-efficient path to global scaling.

Guidance

- Management upgraded full year 2026 revenue guidance from the prior range of $66 million to $68 million to a new range of $68 million to $70 million, representing an expected 30% to 34% year-over-year revenue growth if achieved. - Management narrowed guidance for full year 2026 operating margin to 13.5% to 14% (corrected from transcript typo) of revenue, and adjusted EBITDA guidance to a range of $13 million to $14 million, representing an expected 90% to 100% year-over-year growth in adjusted EBITDA compared to full year 2025. - The upward guidance revision is supported by strong order growth, 30% year-over-year growth in remaining performance obligations, and improving visibility into demand for the second half of 2026, with continued growth in backlog expected through the end of the year that also supports positive visibility into 2027.

Segment performance

BrainsWay is currently focused on its core deep TMS product segment, which accounted for 100% of reported revenue in Q2 2026. Q2 2026 total revenue was $17.1 million, a 35% increase from $12.6 million in Q2 2025. Gross profit reached $12.8 million, a 34% year-over-year increase, with gross margin holding stable at 75%. Operating income was $2.4 million, representing over a 300% increase from $0.6 million in the prior year period, with operating margin expanding to 14% (corrected from transcript typo of 40%) from 5% year-over-year. Net income was $2.7 million, a 34% increase from $2 million in Q2 2025. Adjusted EBITDA was $3.5 million, a 141% increase from $1.5 million in Q2 2025, with adjusted EBITDA margin expanding to 20% from 11% year-over-year. 125 deep TMS systems were shipped in Q2 2026, a 42% year-over-year increase, bringing total installed base to approximately 1,960 units as of June 30, 2026. Remaining performance obligations stood at $80.4 million as of quarter-end, a 30% year-over-year increase. Cash and cash equivalents totaled $62.4 million, and the company remains entirely debt-free.

Risks & headwinds

- Forward-looking statements regarding future performance, product expansion, and strategic initiatives are subject to inherent risks and uncertainties, including shifting market conditions from geopolitical volatility, supply chain disruptions, and other unforeseen macro factors. - Additional detailed risk factors are available in the company's SEC filings, including the Risk Factors section of its Form 20-F. - Early-stage initiatives including the Nualife home product commercial launch and new strategic minority investments carry execution risk, as performance of partner businesses and new product adoption cannot be guaranteed.

Analyst Q&A

• Q: The guidance was upgraded, reflecting expected 30% year-over-year growth. What factors give management confidence in this new range? /

  A: Management cites strong, growing remaining performance obligations that provide very good visibility into second half 2026 results. Continued strong demand for new systems and new orders through the end of the year supports the upward revision, with the OCD protocol in particular driving steady demand.

• Q: What feedback have you received from providers on the SWIFT protocol, and how much market education is still needed? /

  A: Provider feedback has been very strong, as the shorter 10-minute treatment protocol offers greater convenience for both patients and busy clinics. Where the protocol has secured local reimbursement, adoption has increased significantly, with SWIFT accounting for close to 50% of total deep TMS treatment in those areas.

• Q: What is driving the 30% year-over-year growth in remaining performance obligations, and do you expect this growth to continue? /

  A: A key driver of growing backlog is the company's strategic minority investment program: partnered provider platforms are expanding to new locations and growing organic deep TMS utilization, driving recurring new orders. Management expects backlog to continue growing through the end of 2026, which provides solid visibility into 2027 performance.

• Q: How is the ProVivarex commercial launch progressing, and what factors will inform BrainsWay's next steps for the product? /

  A: Nualife is conducting an initial soft launch focused primarily on the VA channel, which has already secured reimbursement, with initial deployments in VA facilities and some private clinics. Progress to date has been encouraging, but management will monitor key KPIs over the next 90 days to determine next steps for accelerating commercial rollout.