Neuronetics, Inc. (NASDAQ:STIM) Q4 2022 Earnings Call Transcript

Adam Maeder: Hi, Keith. Hi, Steve. Thanks for taking the questions here. Wanted to follow-up a little bit on the guidance line of question. And I guess I’ll ask about kind of cadence. You obviously gave Q1 guidance maybe a hair lighter-than-expected, but just kind of help us think through, kind of, how you see your business, kind of, progressing over the year? Maybe we’ll start there and then I have a follow-up or two. Thanks.

Steve Furlong: Thanks, Adam. Yes, if you look at our historical performance and I go back to 2018, so the year prior to IPO, our revenue cadence by quarter is Q1 is 21% to 225 of annual revenue. Q2 is about 24% to 25%, Q3 25% to 26% and then Q4 is always our strongest quarter at 28% to 29%. And so Q1, we always have the reset of deductibles, patients have to go through and get their benefits investigations redone. And so, the internal teams here have been processing about 400 or so BIs a week and that’s continued into early March. So that’s really the biggest pressure on Q1. But again, it’s very typical for the past five years.

Adam Maeder: Okay. I appreciate that color, Steve. And I guess just one more on the guidance then I had a follow-up. But just kind of obviously a lot of focus on the Greenbrook announcement yesterday and, kind of, how that impacts you guys. But if we just kind of look back more broadly, it sounds like you are very confident in the business ex-Greenbrook. So, I guess one question I have just on the macro is how are you thinking about this year 2023 in a potential recessionary environment. Has anything factored into the guidance there? Are you allowing for some additional conservatism? Just kind of maybe walk through the philosophy on the outlook?

Steve Furlong: Yes. I mean, there is — there are no recessionary impacts in our guidance, I’m sure you remember, Adam, at your conference in New York that I communicated we were comfortable with where the consensus was for the year and that was in that $73 million range. We were also anticipating mid to high-teen growth year-over-year. Again, the Greenbrook press release yesterday was a little bit surprising, and so I think we need just some time to work through the impact. Otherwise, you saw performance in Q3 and Q4. Even with, I would say, no to slow growth from them, we were still at that 20% level. And I think we’re confident that we’ll be able to maintain that in the other segments.

Adam Maeder: Okay.

Keith Sullivan: Yes, Adam, this is Keith. From a marketing standpoint, we have been working closely over the past couple of months with the Greenbrook team. Putting together a plan on how they would attend NSU, how they would market within their practices, how we would help them get PHQ-10s in, so there was some hints of the closing of the stores. But I believe that we have put together a solid plan with Bill and his team to see if we can take the remaining stores and get them back up to their prior service levels.

Adam Maeder: Okay. Appreciate the color guys. And one last one if I may, just on some of the payer changes, expanded Medicare coverage and the United News from this week streamlining therapy, maybe just, kind of, how do you think about the impact from those developments? Is this something that can impact the business near-term? Or do you think we need several quarters to, kind of, see any tailwind ultimately materialize? Thanks again for taking the questions.