Neuronetics, Inc. (STIM) Earnings

Management highlights

### New Commercial Model for Neurostar TMS - Updated the go-to-market strategy to add new customer acquisition options alongside the traditional treatment session model: outright purchase and financed leasing, with a la carte support for customers who opt for capital ownership - The pilot of the new model saw encouraging early customer reception, and has been expanded to a broader rollout; the shift to more capital-based sales is expected to drive sustainable long-term growth starting in 2027 - Announced a strategic collaboration with A&T Neuro to co-promote their FDA-cleared neuro-navigation technology with the Neurostar system, leveraging Neuronetics' large domestic installed base to scale this innovation ### Greenbrook Operational Improvements - Implemented enhanced revenue cycle management focused on better patient eligibility verification, cleaner claim submissions, and more efficient collections, paired with improved payer contracting for both TMS and Spravato that lifted reimbursement rates - Adopted AI for insurance authorization to reduce operating costs, and continues to prioritize increasing clinic occupancy (leveraging the largely fixed-cost base of clinics) to drive incremental profitability by improving patient volume with optimized patient acquisition spending ### Leadership and Organizational Changes - Flattened the organizational structure and reduced executive headcount to improve operational agility and closer business oversight - Appointed Nir Nair as new CFO, who brings 20+ years of experience driving profitability and positive cash flow in medical device and care delivery businesses - Promoted Cory Anderson to EVP and General Manager of Greenbrook, and appointed Rob Green as SVP of Sales to lead Neurostar's new commercial model rollout ### Strategic Pipeline Preparation - Continues collaboration with Compass Pathways to prepare for commercial launch of their psilocybin therapy for treatment-resistant depression, leveraging Greenbrook's existing infrastructure for in-office treatment delivery, REMS compliance, prior authorization, and trained staff to support the new therapy when approved

Guidance

Management updated full-year 2026 guidance as follows: - Narrowed total revenue guidance to $160-$164 million, down from the prior range of $160-$166 million - Raised full-year gross margin guidance to 48%-50%, up from the prior range of 47%-49% - Lowered operating expense guidance to $95-$100 million, compared to the prior guidance of $100-$105 million; on an operating expense (excluding share-based compensation) basis, guidance is $91-$96 million, with estimated full-year share-based compensation of $4 million - Updated full-year combined cash flow from operations and investing guidance to a range of negative $10.5 million to negative $14.5 million, compared to prior guidance of negative $13 million to negative $17 million for operating cash flow only - Management maintains its target of limited net cash utilization from operations and investing in the second half of 2026

Segment performance

Total company revenue for Q2 2026 was $41.6 million, a 9.1% year-over-year increase from $38.1 million in Q2 2025. 1. **Neurostar Segment**: Total revenue was $14.7 million, a 2.7% year-over-year decrease. This segment contributed 35.3% of total company revenue. The revenue shift reflects the new commercial model: treatment session revenue declined double digits year-over-year, while capital revenue increased double digits year-over-year. Utilization of active treatment sessions increased 10% year-over-year among existing active accounts. 2. **Greenbrook Segment**: Total revenue was $26.9 million, a 16.8% year-over-year increase. This segment contributed 64.7% of total company revenue. Growth was driven by strong provider volume growth and overall pricing improvements, with cash collections growing faster than top-line revenue.

Risks & headwinds

• Actual results may differ materially from forward-looking statements due to unforeseen risks and uncertainties associated with Neuronetics' business, as detailed in the company's SEC filings • The shift to the new Neurostar commercial model is expected to create choppy revenue performance in the second half of 2026 during the transition period • Psychedelic therapy commercialization depends on successful regulatory approval by Compass Pathways, which remains ongoing and has uncertain timing and outcome • Future additional operational efficiency gains may still be identified after the recent round of organizational changes, creating uncertainty around long-term cost projections

Analyst Q&A

• Q: Analyst asks how much unused capacity Greenbrook has, how the clinic footprint can accommodate longer psychedelic treatments, and whether the company will expand facilities once psychedelics launch. /

  A: Greenbrook sites currently have ~40% unused capacity. Existing treatment rooms for Spravato can be converted for psychedelic administration, and AI-powered scheduling is being implemented to optimize capacity across varying treatment lengths (minutes for TMS, 2 hours for Spravato, 6 hours for Compass' psilocybin). Filling existing unused capacity is the top priority before pursuing new site openings or facility expansions. (243 words)

• Q: Analyst asks if the bulk of organizational cost structure changes are complete, or if further large cost cuts are expected. /

  A: Management has completed core organizational restructuring of the leadership ranks, adding new talent and reassigning roles to align with current priorities. While the new CFO will conduct a full review to identify any additional incremental efficiency opportunities, the bulk of structural changes are now complete. (106 words)

• Q: Analyst asks to confirm the trajectory of Neurostar session inventory normalization, and whether existing customers will transition to the new capital model. /

  A: Inventory normalization is now largely complete after Q2 2026, and will not be a material headwind in the second half of the year. Management expects the majority of existing session customers will retain the traditional model, as they value the comprehensive support that drives ~2x higher patient utilization vs competitors. New customers will be able to choose their preferred model, and all models still generate revenue from service, consumables, and training that was previously embedded in session pricing. (158 words)

• Q: Analyst asks to break down Greenbrook growth trends for Spravato vs TMS, and explain why Neuronetics' multi-therapy model is advantageous for future psychedelic launches. /

  A: Spravato grew slightly faster than TMS in Q2, and it has more durable recurring demand because patients return for maintenance treatments more frequently. Neuronetics is well-positioned as a first mover because it already has the required infrastructure (REMS certification, treatment rooms, trained staff, insurance authorization processes) from its Spravato business. The company positions itself as a one-stop destination for interventional psychiatry that returns patients to referring providers after treatment, which builds trust with the provider community. (145 words)