Neuronetics Revenue Soars Post-Acquisition, Losses Persist

TL;DR

**STIM's revenue exploded thanks to the Greenbrook acquisition, but they're still bleeding cash, so watch for sustained profitability before jumping in.**

AI Summary

Neuronetics, Inc. (STIM) reported a significant increase in revenue for the three months ended September 30, 2025, reaching $37.3 million, a substantial rise from $18.5 million in the same period of 2024. For the nine months ended September 30, 2025, revenue more than doubled to $107.4 million from $52.4 million in the prior year. Despite this revenue growth, the company posted a net loss of $9.4 million for the quarter and $31.9 million for the nine-month period, compared to losses of $13.3 million and $31.0 million, respectively, in 2024. The accumulated deficit grew to $451.6 million as of September 30, 2025. Key business changes include the acquisition of Greenbrook TMS Inc. effective December 9, 2024, which significantly expanded its treatment center operations. The company raised $18.9 million in net proceeds from a secondary public offering in February 2025 and an additional $7.8 million from an At-The-Market (ATM) equity offering program by September 30, 2025, to bolster liquidity. Operating cash flow remained negative at $21.3 million for the nine months ended September 30, 2025, though an improvement from $22.4 million in the prior year. Management anticipates operating losses to lessen due to revenue growth and cost efficiencies from the Greenbrook acquisition.

Why It Matters

Neuronetics' substantial revenue growth, driven by the Greenbrook TMS acquisition, signals a significant expansion in its market presence for transcranial magnetic stimulation (TMS) and mental healthcare services. For investors, this indicates potential for future profitability, though the continued net losses and accumulated deficit of $451.6 million highlight ongoing financial challenges. Employees and customers of Greenbrook TMS are now part of a larger, more integrated entity, potentially benefiting from Neuronetics' NeuroStar Advanced Therapy System. In the competitive mental health treatment market, this acquisition positions Neuronetics as a more dominant player, especially in office-based TMS treatments, by consolidating a leading provider of mental healthcare services.

Risk Assessment

Risk Level: medium — Neuronetics has an accumulated deficit of $451.6 million and incurred negative cash flows from operating activities of $21.3 million for the nine months ended September 30, 2025. While revenue growth is strong, the company's ability to achieve profitability and positive cash flow remains a key risk, despite management's belief that current liquidity is sufficient for the next 12 months.

Analyst Insight

Investors should monitor Neuronetics' next few quarters closely for signs of improving operating margins and a clear path to profitability, specifically looking for a reduction in the accumulated deficit and a shift to positive operating cash flow. The significant revenue growth is promising, but sustained losses indicate that the Greenbrook acquisition's synergies need to translate into bottom-line improvements.

Financial Highlights

debt To Equity

4.36

revenue

$107.4M

operating Margin

N/A

total Assets

$145.47M

total Debt

$65.67M

net Income

($31.9M)

eps

N/A

gross Margin

47.1%

cash Position

$27.97M

revenue Growth

+105%

Revenue Breakdown

Key Numbers

• $37.3M — Q3 2025 Revenue (Increased from $18.5M in Q3 2024, a 101.6% increase)
• $107.4M — YTD 2025 Revenue (Increased from $52.4M in YTD 2024, a 105% increase)
• ($9.4M) — Q3 2025 Net Loss (Improved from ($13.3M) in Q3 2024, a 29.4% reduction)
• ($31.9M) — YTD 2025 Net Loss (Slightly worsened from ($31.0M) in YTD 2024, a 2.9% increase)
• $451.6M — Accumulated Deficit (As of September 30, 2025, indicating historical losses)
• ($21.3M) — YTD 2025 Operating Cash Flow (Improved from ($22.4M) in YTD 2024, a 4.9% improvement)
• $18.9M — Net Proceeds from Secondary Offering (Received in February 2025 to boost liquidity)
• $7.8M — Net Proceeds from ATM Program (Received by September 30, 2025, from selling 2,261,835 shares)
• $70.0M — Long-term Debt Outstanding (As of September 30, 2025, maturing in July 2029)
• 68,485,922 — Common Shares Outstanding (As of October 29, 2025)

Key Players & Entities

• Neuronetics, Inc. (company) — Registrant and parent company
• Greenbrook TMS Inc. (company) — Acquired mental healthcare services provider
• Canaccord Genuity LLC (company) — Underwriter for ATM program
• $37.3 million (dollar_amount) — Revenue for Q3 2025
• $107.4 million (dollar_amount) — Revenue for nine months ended Sept 30, 2025
• $9.4 million (dollar_amount) — Net loss for Q3 2025
• $31.9 million (dollar_amount) — Net loss for nine months ended Sept 30, 2025
• $451.6 million (dollar_amount) — Accumulated deficit as of Sept 30, 2025
• $18.9 million (dollar_amount) — Net proceeds from secondary public offering in Feb 2025
• $7.8 million (dollar_amount) — Net proceeds from ATM program by Sept 30, 2025

FAQ

Risk Factors

• Accumulated Deficit and Net Losses [high — financial]: The company has an accumulated deficit of $451.6 million as of September 30, 2025, and reported net losses of $9.4 million for Q3 2025 and $31.9 million for the nine months ended September 30, 2025. This indicates a history of unprofitability and reliance on external funding.
• Integration of Greenbrook TMS Inc. [medium — operational]: The acquisition of Greenbrook TMS Inc. is a significant strategic move expected to drive cost efficiencies and revenue growth. However, integration challenges, such as achieving projected synergies and managing expanded operations, pose an operational risk.
• Reliance on Equity Offerings [medium — financial]: Neuronetics raised $18.9 million in February 2025 and $7.8 million by September 30, 2025, through equity offerings to bolster liquidity. Continued reliance on such offerings may dilute existing shareholders and is dependent on favorable market conditions.
• Healthcare Regulatory Environment [medium — regulatory]: As a medical device company operating in the healthcare sector, Neuronetics is subject to stringent regulations from bodies like the FDA. Changes in healthcare policies or reimbursement rates could impact demand for its products and services.
• Negative Operating Cash Flow [high — financial]: Despite improvements, the company reported negative operating cash flow of $21.3 million for the nine months ended September 30, 2025. Sustained negative cash flow necessitates ongoing financing to cover operational needs.

Industry Context

Neuronetics operates in the medical device sector, specifically focusing on neurohealth solutions. The industry is characterized by high R&D costs, stringent regulatory hurdles (FDA approval), and evolving reimbursement landscapes. Competition can come from established medical device companies and emerging players offering alternative therapies. The recent acquisition of Greenbrook TMS Inc. suggests a strategy to consolidate market share and expand service offerings within the neurohealth space.

Regulatory Implications

As a medical device manufacturer, Neuronetics is subject to rigorous oversight by regulatory bodies like the FDA. Compliance with manufacturing standards, product approvals, and post-market surveillance is critical. Changes in healthcare policy, particularly regarding reimbursement for treatments like transcranial magnetic stimulation (TMS), could significantly impact revenue and market access.

What Investors Should Do

1. Monitor integration progress of Greenbrook TMS Inc.
2. Analyze cash burn rate and future financing needs.
3. Evaluate gross margin trends.
4. Assess the impact of sales and marketing expenses.

Key Dates

• 2025-02-01: Secondary Public Offering — Raised $18.9 million in net proceeds to strengthen the company's liquidity position.
• 2025-09-30: ATM Equity Offering Program — Generated an additional $7.8 million in net proceeds by selling 2,261,835 shares, further enhancing liquidity.
• 2024-12-09: Acquisition of Greenbrook TMS Inc. — Significantly expanded treatment center operations and is expected to drive future revenue growth and cost efficiencies.
• 2025-09-30: End of Nine-Month Period — Reported substantial revenue growth but continued net losses and negative operating cash flow, highlighting ongoing financial challenges.

Glossary

Accumulated deficit

The total net losses of a company since its inception, minus any net profits. It represents a cumulative loss position. (Indicates the company's historical unprofitability, with a deficit of $451.6 million as of September 30, 2025.)

Sales-type leases

A lease where the lessor (Neuronetics) transfers substantially all the risks and rewards of ownership to the lessee. The lessor recognizes a profit or loss at the commencement of the lease. (Appears on the balance sheet as 'Net investments in sales-type leases,' indicating a revenue recognition model for certain equipment sales.)

Goodwill

An intangible asset that arises when a company acquires another company for a price greater than the fair value of its net identifiable assets. (The increase in goodwill from $18.6 million to $22.7 million suggests recent acquisitions, likely including Greenbrook TMS Inc.)

At-The-Market (ATM) equity offering

A type of public offering where a company sells shares directly into the open market over a period of time, typically at prevailing market prices. (Used by Neuronetics to raise $7.8 million by September 30, 2025, to supplement liquidity.)

Net investments in sales-type leases

The net present value of lease payments plus the estimated residual value of the leased asset, less any deferred profit. (Represents assets held under sales-type leases, with current and non-current portions shown on the balance sheet.)

Prepaid commission expense

Commissions paid to sales personnel in advance of earning them, typically recognized as an expense over the period the related revenue is recognized. (A significant current asset, indicating upfront sales costs that will be expensed over time.)

Year-Over-Year Comparison

Neuronetics has demonstrated impressive revenue growth, with Q3 2025 revenue more than doubling year-over-year to $37.3 million and year-to-date revenue reaching $107.4 million. However, this growth has not yet translated into profitability, as net losses have slightly widened year-to-date to $31.9 million. While operating cash flow has shown a marginal improvement, it remains negative. The company has actively bolstered its liquidity through equity offerings and the significant acquisition of Greenbrook TMS Inc., which is expected to drive future efficiencies and growth, but also introduces integration risks.

Key Financial Figures

• $0.01 — nge on which registered Common Stock ($0.01 par value) STIM The Nasdaq Global M

Filing Documents

• stim-20250930x10q.htm (10-Q) — 2361KB
• stim-20250930xex31d1.htm (EX-31.1) — 14KB
• stim-20250930xex31d2.htm (EX-31.2) — 14KB
• stim-20250930xex32d1.htm (EX-32.1) — 7KB
• stim-20250930xex32d2.htm (EX-32.2) — 7KB
• 0001104659-25-105924.txt ( ) — 10737KB
• stim-20250930.xsd (EX-101.SCH) — 67KB
• stim-20250930_cal.xml (EX-101.CAL) — 84KB
• stim-20250930_def.xml (EX-101.DEF) — 292KB
• stim-20250930_lab.xml (EX-101.LAB) — 609KB
• stim-20250930_pre.xml (EX-101.PRE) — 452KB
• stim-20250930x10q_htm.xml (XML) — 2292KB

– FINANCIAL INFORMATION

PART I – FINANCIAL INFORMATION Item 1.

Financial Statements

Financial Statements. 3 Consolidated Balance Sheets as of September 30, 2025 and December 31, 2024 3 Consolidated Statements of Operations for the Three and Nine Months ended September 30, 2025 and 2024 4 Consolidated Statements of Changes in Equity for the Three and Nine Months ended September 30, 2025 and 2024 5 Consolidated Statements of Cash Flows for the Nine Months ended September 30, 2025 and 2024 6 Notes to Interim Consolidated Financial Statements 7 Item 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations. 28 Item 3.

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk. 39 Item 4.

Controls and Procedures

Controls and Procedures. 40

– OTHER INFORMATION

PART II – OTHER INFORMATION Item 1. Legal Proceedings. 41 Item 1A . Risk Factors . 41 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds. 41 Item 3. Defaults Upon Senior Securities. 41 Item 4. Mine Safety Disclosures. 41 Item 5. Other Information. 41 Item 6. Exhibits. 42

SIGNATURES

SIGNATURES 45 Table of Contents

- FINANCIAL INFORMATION

PART I - FINANCIAL INFORMATION

Financial Statements

Item 1. Financial Statements. NEURONETICS, INC. Consolidated Balance Sheets (Unaudited; In thousands, except per share data) September 30, December 31, 2025 2024 Assets Current assets: Cash and cash equivalents $ 27,971 $ 18,459 Restricted cash and cash equivalents 6,500 1,000 Accounts receivable, net of allowance of credit losses for $ 1,065 and $ 1,930 as of September 30, 2025 and December 31, 2024, respectively 18,693 23,355 Inventory 4,322 4,248 Current portion of net investments in sales-type leases 175 206 Current portion of prepaid commission expense 3,118 3,078 Current portion of notes receivable 493 930 Prepaid expenses and other current assets 3,616 6,846 Total current assets 64,888 58,122 Property and equipment, net 4,937 6,242 Goodwill 22,664 18,634 Intangible assets, net 18,513 19,606 Operating lease right-of-use assets 24,234 27,093 Net investments in sales-type leases 94 86 Prepaid commission expense 8,021 8,902 Long-term notes receivable 221 295 Other assets 1,893 1,923 Total assets $ 145,465 $ 140,903 Liabilities and Equity Current liabilities: Accounts payable $ 11,573 $ 11,077 Accrued expenses 9,653 12,818 Current portion of deferred revenue 754 974 Deferred and contingent consideration 1,000 1,000 Other payables 376 605 Current portion of operating lease liabilities 5,584 4,791 Total current liabilities 28,940 31,265 Long-term debt, net 65,671 55,151 Deferred revenue — 2 Operating lease liabilities 19,494 22,686 Total liabilities 114,105 109,104 Commitments and contingencies (Note 20) Equity: Preferred stock, $ 0.01 par value: 10,000 shares authorized; no shares issued or outstanding on September 30, 2025 and December 31, 2024 — — Common stock, $ 0.01 par value: 250,000 shares authorized; 68,445 and 55,679 shares issued and outsta

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