electroCore, Inc. Q1 FY2025 earnings call

• electroCore is transforming into a broader bioelectronic technology company, with the acquisition of the Quell product line from NeuroMetrix being a key component.
• In Q1 2025, revenue was $6.7 million, up 23% y-o-y; gross margins were 85%, expected to remain in the mid-80s.
• Prescription gammaCore VA revenue grew, with the VA hospital system regaining momentum after a slowdown, and field sales headcount added in Q2 2025.
• Truvaga net sales saw a 187% increase, with a high revenue return on advertising spend and expansion into channels like Amazon.
• The acquisition of NeuroMetrix brings the Quell product line, with plans to add it to prescription distribution channels and launch Sparrow Ascent in VA hospital sites.
• First quarter operating expenses were high due to seasonal and one-time costs, but net cash required for the rest of 2025 is modeled at about $4 million.

In the first quarter of 2025, electroCore reported revenue of $6.7 million, a 23% increase over the first quarter of the prior year. Prescription gammaCore VA revenue grew 22% to $4.7 million in Q1 2025, compared to $3.9 million in Q1 2024; 175 VA facilities had purchased prescription gammaCore products by March 31, 2025, vs. 151 in Q1 2024. Truvaga net sales were approximately $1.1 million in Q1 2025, a 187% increase from Q1 2024. U.S. prescription channel recorded revenue of $289,000 in Q1 2025, down 33% from Q1 2024. Revenue from OUS was $513,000 in Q1 2025, up from $449,000 in the same period last year. Quell revenue was about $170,000 in Q1 2025 based on preliminary unaudited numbers.

• Expected total revenue for 2025 is approximately $30 million, with net cash used between $3.8 million and $4.3 million.
• Anticipates net cash spending less than $2 million in Q2 2025, with further declines as revenue grows.
• Models the business could be cash neutral with quarterly revenue of about $9 million, aiming to reach this by the end of 2025 or early 2026.

• Tariff policy changes could affect component costs, but electroCore believes Quell components are less exposed.
• Uncertainties in business development, such as market acceptance of new products and the pace of expansion.

Q: What are the estimates for Quell's gross margin when manufacturing is set up?

A: Optimistic to be well above 60%, but can't be more precise now, with better numbers expected in 90 days.

Q: Are there any components of the Quell device more subject to tariff exposure?

A: Generally, electromechanical components come from domestic suppliers, with some from Southeast Asia but exposure similar to other product lines.

Q: What's the progress on the Kaiser system?

A: Has small revenues, increased the number of prescribers, and plans to focus on expanding in the West Coast in the second half of 2025.

Q: How much resources are being spent and how quickly can the VA business expand?

A: There's a five-year FSS contract, sales leadership restructured, and additional employees added, with plans to aggressively add headcount now that restructuring is complete.

Q: What's the performance of Truvaga in channels like Amazon?

A: Sold more than 200 units on Amazon since launching in February 2025, with high revenue return on advertising spend and continuing to increase media budget.

Q: When will NeuroMetrix and Sparrow products contribute meaningfully?

A: Sparrow is in pilot sites with revenue expected in 2026; Quell is supply limited now but has growth potential once manufacturing is validated.

Q: What are the trends in R&D spending?

A: R&D spend will remain steady at about $642,000, mainly for sales support and FDA-related approvals, such as for post-traumatic stress disorder indications