Neuronetics (STIM) Q4 2025 earnings review
Milestone Achieved, But 2026 Guidance Raises Questions
Neuronetics ended 2025 on a strong note, delivering record Q4 revenue of $41.8M (+23% adjusted pro forma YoY) and finally achieving its long-promised goal of generating positive operating cash flow (+$0.9M). The Greenbrook clinic acquisition continues to be the primary growth engine, surging 37% pro forma YoY to $23.5M. However, the celebratory mood is dampened by a sobering 2026 outlook. Coinciding with the appointment of Dan Reuvers as the new CEO, management guided for 2026 operating cash flow to fall back into deep negative territory (-$13M to -$17M) and for Q1 revenue to decelerate sequentially. While the top-line integration is working, structural profitability remains elusive.
🐂 Bull Case
Clinic revenue reached $23.5M in Q4, growing 37% on an adjusted pro forma basis. The pivot from a pure equipment manufacturer to a vertically integrated healthcare provider has dramatically expanded the company's TAM and revenue base.
The 93-clinic Greenbrook network is becoming a platform for novel therapies. The new collaboration with Compass Pathways to roll out COMP360 psilocybin positions Neuronetics at the forefront of the psychedelic-assisted therapy market.
🐻 Bear Case
After aggressively cutting costs to achieve +$0.9M in Q4 operating cash flow, FY26 guidance projects a return to heavy burn (-$13M to -$17M). The Q4 milestone appears to have been driven by aggressive working capital management rather than structural profitability.
Pre-acquisition, Neuronetics enjoyed ~75% gross margins. FY25 finished at 48.5%, and FY26 guidance targets 47-49%. The transition to a clinic-operator model has permanently compressed the margin ceiling.
⚖️ Verdict: ⚪
Neutral. The operational execution of the Greenbrook integration is highly commendable, and Q4 top-line metrics look great. However, the whiplash from celebrating positive cash flow in Q4 to guiding for a $15M midpoint cash burn in 2026 creates significant unease for investors.
Key Themes
Greenbrook Clinic Flywheel Accelerating
The clinic segment is outperforming expectations. Q4 clinic revenue hit $23.5M, driving the vast majority of the company's growth. By implementing SPRAVATO (esketamine) treatments and optimizing physician referrals across its 93 locations, Neuronetics is successfully extracting more revenue per patient than the legacy equipment-only model.
The Cash Flow Disconnect
Management's narrative heavily praised the achievement of positive operating cash flow ($0.9M) in Q4. However, the FY26 guidance for an operating cash outflow of $(13)M to $(17)M completely contradicts the narrative of sustainable cash generation. Even with projected revenue growth of ~9% and flat OpEx, the company expects cash generation to severely deteriorate, suggesting Q4 was aided by non-recurring working capital timing.
Expanding into Psychedelic Therapies
Neuronetics is leveraging its clinic infrastructure to become a premier delivery channel for next-generation depression treatments. The new collaboration with Compass Pathways to administer COMP360 psilocybin for Treatment Resistant Depression is a brilliant strategic move. With phase 3 studies completed, this positions the company to capture massive value from the estimated 4 million TRD patients in the US.
Adolescent Market Unlock
Access continues to broaden for the adolescent indication (ages 15-21). TRICARE West recently expanded coverage for this demographic across 26 states. With 4.3 million adolescents suffering from depression and growing parental hesitance toward SSRIs, this demographic represents a significant, largely untapped TAM for NeuroStar.
Leadership Transition During Pivotal Year
Dan Reuvers takes over as CEO from Keith Sullivan in March 2026. Reuvers brings a strong track record of scaling revenue and cash flow at Tactile Medical. While this is a high-quality hire, executive transitions often bring strategy tweaks and kitchen-sinking of guidance, which may explain the conservative FY26 cash flow and margin outlook.
Other KPIs
Accelerating sequentially from 45.9% in Q3, but down significantly from 66.2% in Q4 2024. The YoY decline is a permanent feature of the business model transition due to the inclusion of the lower-margin Greenbrook clinic services. The Q4 sequential uptick shows early signs of clinic optimization.
Reversing the steep declines seen earlier in the year. While reported revenue was down 4% YoY, adjusted pro forma revenue grew 6%. This indicates that the core consumable business is finally stabilizing following the disruption of internalizing the Greenbrook accounts.
The balance sheet remains adequately capitalized, consisting of $28.1M in cash and $6.0M in restricted cash. However, a $5.0M one-time debt principal payment to Perceptive in March 2026, combined with the forecasted FY26 cash burn, will quickly draw down these reserves.
Guidance
Decelerating. The midpoint of $163M implies 9.2% YoY growth. This is a noticeable slowdown from the 15% adjusted pro forma growth achieved in FY25, indicating that the immediate low-hanging fruit of the Greenbrook integration may have been harvested.
Decelerating. Represents a 6.2% YoY increase at the midpoint compared to Q1 2025, but a steep 18% sequential drop from Q4 2025's $41.8M. While some Q1 seasonality is normal, the magnitude points to a soft start to the year.
Stable to slightly down. The guidance is roughly in line with the FY25 average of 48.5%, but notably lower than the 52.0% achieved in Q4 2025. This suggests Q4 benefited from favorable mix or one-time items that won't repeat.
Stable. Flat compared to the $103.7 million spent in FY25. Management anticipates a reduction in the second half of 2026, dropping below a $100M annualized run rate by Q4 as efficiency initiatives take hold.
Key Questions
The Cash Flow Discrepancy
You achieved $0.9M in positive operating cash flow in Q4, yet your 2026 guidance implies a return to a $15M cash burn. If operating expenses are guided flat year-over-year and revenue is growing, what specific working capital dynamics or structural costs are driving this massive cash flow reversal?
Compass Pathways Timeline
The collaboration with Compass on COMP360 psilocybin is an exciting new modality. Given the potential FDA decision by year-end, how should we model the timeline for commercial rollout across the Greenbrook network, and what are the initial capital requirements to outfit clinics for this treatment?
Q4 Gross Margin Sustainability
Gross margin popped to 52.0% in Q4, but your full-year 2026 guidance calls for 47-49%. What drove the Q4 outperformance, and why are you not assuming those margin gains carry forward into 2026?