Zynex Inc (ZYXI) Q1 2025 Earnings Call Highlights: Navigating Revenue Challenges and Strategic ...

GuruFocus.com
Yesterday
  • Net Revenue: $26.6 million, down from $46.5 million in Q1 2024.
  • Device Revenue: $11.9 million.
  • Supplies Revenue: $14.7 million.
  • Gross Profit: $18.2 million or 69% of revenue, compared to $37.2 million or 80% in Q1 2024.
  • Sales and Marketing Expenses: Decreased 28% to $16.9 million.
  • G&A Expenses: $14.4 million, up from $13.3 million last year.
  • Net Loss: $10.4 million or $0.33 per share, compared to net income of $10,000 last year.
  • Adjusted EBITDA Loss: $11.8 million, compared to adjusted EBITDA of $1.7 million in Q1 2024.
  • Working Capital: $40 million.
  • Cash on Hand: Approximately $24 million.
  • Q2 2025 Revenue Estimate: $27 million.
  • Q2 2025 EPS Estimate: Loss of $0.20 per share.
  • Warning! GuruFocus has detected 4 Warning Signs with ZYXI.

Release Date: April 29, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

  • Zynex Inc (NASDAQ:ZYXI) is actively pursuing new growth opportunities with various insurers, including personal injury, which is showing early signs of revenue growth.
  • The company is preparing to launch its NiCO pulse oximeter, which has completed all necessary tests and is expected to be submitted to the FDA soon.
  • Zynex Inc (NASDAQ:ZYXI) is restructuring its business to operate without TRICARE revenue, focusing on trimming excess costs and refocusing its sales force.
  • The company maintains a strong balance sheet with $40 million in working capital and approximately $24 million in cash on hand.
  • Zynex Inc (NASDAQ:ZYXI) is optimistic about the future, with plans to continue growing its sales force and exploring additional revenue streams to drive further growth.

Negative Points

  • Zynex Inc (NASDAQ:ZYXI) experienced a significant revenue decline in Q1 2025, with net revenue dropping to $26.6 million from $46.5 million in Q1 2024.
  • The temporary payment suspension from TRICARE has negatively impacted revenue and created uncertainty about future payments.
  • The company reported a net loss of $10.4 million in Q1 2025, compared to a net income of $10,000 in the same period last year.
  • Gross profit margin decreased to 69% in Q1 2025 from 80% in Q1 2024, indicating increased cost pressures.
  • Zynex Inc (NASDAQ:ZYXI) has not yet provided full-year guidance for 2025, citing the need for more clarity on the TRICARE situation.

Q & A Highlights

Q: Can you provide more details about the conversation with TRICARE and the evidence presented? Are there concerns about a domino effect with other payers? A: The claims from TRICARE for payment suspensions were vague, so we presented our compliance with their guidelines. There are no current issues with other payers, and this is not a denial of coverage but a temporary payment suspension while they verify our compliance.

Q: What factors contributed to the Q1 revenue miss, and can you provide guidance for the rest of 2025, especially regarding the non-TRICARE portion of the business? A: The Q1 revenue miss was due to various factors, including changes with payers. We haven't provided full-year guidance yet as we're waiting for more clarity on TRICARE. We expect to give guidance when we announce Q2 results.

Q: Does the first quarter revenue and second quarter guidance exclude TRICARE payments? A: Yes, both the first quarter revenue and second quarter guidance exclude TRICARE payments.

Q: If TRICARE resumes payments, will you receive a lump sum for past due payments? A: While we don't know the exact payment method, TRICARE has indicated that we will be reimbursed for claims that haven't been paid. We believe we have demonstrated compliance with their guidelines.

Q: If the outcome with TRICARE is negative, will you stop servicing TRICARE patients, and how will you make up for the lost revenue? A: We plan to refocus our sales force on other areas to generate equivalent or better revenues, depending on the clinics they target.

Q: If NiCO is approved before the end of 2025, do you expect it to generate meaningful sales in 2026 or 2027? A: We plan to launch NiCO immediately upon clearance, with 2026 being the year for revenue generation. We will start with a controlled launch to ensure we can build and service this for our customers.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

This article first appeared on GuruFocus.

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