Neuronetics, Inc. (STIM): BCG Matrix [Dec-2025 Updated]

You're hunting for a clear-eyed view of Neuronetics, Inc.'s business lines after the Greenbrook deal, and frankly, that acquisition has completely reshaped their BCG profile as of late 2025. We're seeing massive potential in new Stars driven by $21.8 million in Q3 clinic revenue, but that growth is pressuring margins down to 47% to 49%, pushing cash flow positivity back to Q4 2025. Let's map out exactly where the predictable Cash Cows sit versus the high-risk Question Marks and the Dogs that need pruning; you need to see this breakdown now.

Background of Neuronetics, Inc. (STIM)

You're looking at Neuronetics, Inc. (STIM) as of late 2025, a company that has fundamentally changed its structure following the acquisition of Greenbrook TMS back in December 2024. Neuronetics, Inc. is a vertically integrated, commercial-stage medical technology and healthcare company. Its core mission revolves around transforming the lives of patients needing neurohealth therapies, primarily through its leading product, the NeuroStar Advanced Therapy System, which uses transcranial magnetic stimulation (TMS) for treating mood disorders. The company now combines its device technology with direct service delivery.

Looking at the most recent numbers from the third quarter of 2025, total worldwide revenue hit $37.3 million, which represents an 11% increase on an adjusted pro forma basis compared to the same quarter in 2024. This growth is heavily influenced by the clinic side of the business. Specifically, the U.S. Greenbrook clinic revenue was $21.8 million in Q3 2025, marking a strong 25% adjusted pro forma growth year-over-year. Still, the system sales component showed some softness; U.S. NeuroStar Advanced Therapy System revenue was only $3.5 million, with 40 systems shipped that quarter.

The integration of the clinic business has definitely impacted margins. For Q3 2025, the gross margin stood at 45.9%, which is quite a drop from the 75.6% reported in Q3 2024, primarily because the service-based clinic revenue is now included. On the bottom line, Neuronetics, Inc. posted a net loss of $9.4 million, or $0.13 per share, in the third quarter. Honestly, the company is still managing its cash position carefully, ending Q3 2025 with $34.5 million in total cash, an improvement from the end of 2024.

Strategically, the company is focused on maximizing the combined entity. They recently saw a positive development with New York State Medicaid expanding coverage for TMS therapy, including NeuroStar, effective October 1, 2025, which opens up access for over 5 million members. On the leadership front, you should note that CEO Keith Sullivan has announced his plan to retire effective June 30, 2026, and the search for his successor has started. The full-year 2025 revenue guidance was recently adjusted down slightly to a range between $147 million and $150 million.

Neuronetics, Inc. (STIM) - BCG Matrix: Stars

You're looking at the Stars quadrant, which for Neuronetics, Inc. is clearly anchored by the Greenbrook clinic network, representing high market share in a segment that is still growing, even if the overall device revenue has seen some near-term pressure. These are the units demanding investment to maintain that leadership position.

The vertically integrated service model, primarily driven by the Greenbrook acquisition, is showing strong top-line momentum in its core segment. For the third quarter of 2025, U.S. clinic revenue from Greenbrook totaled $21.8 million. This specific segment drove an 25% increase on an adjusted pro forma basis compared to Q3 2024, which is the high growth rate we look for in a Star. Still, this high-growth clinic business is also consuming cash and impacting margins, as seen by the consolidated gross margin dropping to 45.9% in Q3 2025 from 75.6% in the prior year period.

NeuroStar Advanced Therapy technology itself is the leader in the Transcranial Magnetic Stimulation (TMS) space, which is a rapidly expanding mental health market. The overall TMS market size is estimated at $1.44 billion in 2025, with projections to reach $2.26 billion by 2030 at a 9.56% CAGR. Depression remains the dominant application, accounting for 45.63% of the 2024 TMS market revenue. The expansion of the addressable market, including the recent FDA clearance for adolescents, which increased the total addressable market by 35% to 29.3 million patients, shows the growth potential you need to fund.

Here's a quick look at how the key components of this Star business unit performed in Q3 2025:

The high-growth nature of this segment requires significant support, which is evident in the overall financials. While the company delivered $37.3 million in total revenue for Q3 2025, it still resulted in a net loss of $9.4 million. However, the cash burn improved, with cash used in operations at only $0.8 million for the quarter, signaling that the investment is starting to yield operational efficiencies, which is key for a Star to eventually become a Cash Cow.

The market access side is also showing concrete signs of future growth, which justifies continued investment in promotion and placement:

• New York State Medicaid coverage for TMS became effective October 1, 2025, for fee-for-service members.
• This coverage expansion opens access to over 5 million members statewide.
• Specifically, this includes nearly 1 million fee-for-service members and over 4.4 million in Medicaid Managed Care Plans.
• The coverage applies to adults diagnosed with treatment-resistant Major Depressive Disorder (MDD).

To sustain this Star status, Neuronetics, Inc. must keep investing in the Greenbrook integration and market access initiatives, like the New York State Medicaid expansion, to ensure that the high market share in this growing segment translates into positive cash flow as the market matures.

Neuronetics, Inc. (STIM) - BCG Matrix: Cash Cows

You're looking at the core engine of Neuronetics, Inc. (STIM) here, the segment that should be funding the riskier bets. Cash Cows thrive on high market share in mature areas, and for Neuronetics, that's the established NeuroStar platform.

The recurring revenue stream from existing installations is what defines this quadrant. You saw the $\text{U.S. treatment session revenue$ hit $\text{$10.8 million$ in the second quarter of 2025. While that figure was down $\text{8% compared to the prior year's $\text{$11.7 million$ in Q2 2024, on a pro forma basis, it still represented a $\text{13% increase, showing underlying service demand growth. This is the predictable, high-margin disposable revenue you want from a Cash Cow.

The installed base of NeuroStar systems is what keeps that revenue predictable. The company has reached a significant milestone, with over $\text{7.6 million$ global patient treatment sessions delivered as of Q2 2025. Furthermore, the Greenbrook clinic segment, which feeds directly into this recurring revenue model, posted record $\text{U.S. clinic revenue$ of $\text{$23.0 million$ for the same quarter.

Here's a quick look at the system sales supporting the installed base in Q2 2025:

The $\text{ASP$ over $\text{$85,000$ is the highest the company has seen in five years, which definitely signals pricing power in this mature hardware segment. You'd expect low investment here, but supporting infrastructure investments, like optimizing collections, is key; cash used in operations improved to $\text{$3.5 million$, beating the under $\text{$5 million$ target.

The foundation of this Cash Cow status rests on clinical validation, which reduces the need for heavy promotional spending to prove efficacy. The core NeuroStar technology is backed by substantial real-world data:

• The NeuroStar Patient Outcomes Registry launched in 2016.
• It is the world's largest registry focused on Major Depressive Disorder (MDD) treatment outcomes.
• One report noted the registry surpassed $\text{3,223$ evaluable patients.
• Another milestone noted the registry exceeded $\text{10,000$ enrolled patients across $\text{116$ U.S. clinical practice sites.

Neuronetics, Inc. (STIM) - BCG Matrix: Dogs

You're looking at the parts of Neuronetics, Inc. (STIM) business that require careful management because they operate in slower growth areas or have lost significant market standing. These are the units where expensive turn-around plans often don't pay off, so the strategy leans toward minimizing exposure or divestiture. The U.S. NeuroStar Advanced Therapy System capital sales component clearly shows this dynamic.

Consider the capital equipment sales figures from the third quarter of 2025. This segment is a classic example of a low-share, low-growth area when viewed against the company's overall growth story driven by clinic revenue. You saw U.S. NeuroStar Advanced Therapy System revenue land at $3.5 million for the three months ended September 30, 2025. That figure represents a 15% decrease when you compare it to the $4.1 million generated in the third quarter of 2024. For that same Q3 2025 period, the company shipped 40 systems, which was in line with a focus on strategic higher volume accounts following a capital team realignment.

Here's a quick look at how these system sales and the overall margin profile fit the Dog profile:

The overall profitability picture for Neuronetics, Inc. (STIM) is also being pulled down by this mix shift. The company's full-year 2025 gross margin guidance was revised down to the 47% to 49% range. This dilution is directly linked to the increasing proportion of lower-margin service revenue relative to higher-margin system sales, as seen by the Q3 2025 actual gross margin of 45.9%.

You should also note these other areas that fit the low-share, low-growth profile:

• International revenue, which remains a marginal contributor to the overall business mix, though it did see a 73% increase in Q3 2025 over Q3 2024.
• Older, non-strategic NeuroStar systems that may require higher maintenance costs without significant upgrade potential.
• The pressure on U.S. treatment session revenue, which fell to $10.5 million in Q3 2025, a 21% decrease year-over-year.

Finance: draft a sensitivity analysis on the impact of system sales falling below $3.5 million for two consecutive quarters by next Tuesday.

Neuronetics, Inc. (STIM) - BCG Matrix: Question Marks

You're looking at the segment of Neuronetics, Inc. (STIM) that fits the classic Question Mark profile: high market growth potential but currently holding a low market share, meaning they burn cash while waiting for adoption. These are the areas where the company must decide whether to pour in capital to turn them into Stars or divest.

SPRAVATO Buy-and-Bill Services and Margin Dynamics

The SPRAVATO (esketamine) buy-and-bill services, integrated through the Greenbrook clinics, represent a key Question Mark. While Greenbrook clinic revenue showed adjusted pro forma growth of 25% year-over-year in Q3 2025, reaching $21.8 million, the overall gross margin for Neuronetics, Inc. compressed significantly to 45.9% in Q3 2025, down from 75.6% in the prior year quarter. This compression is explicitly tied to the inclusion of the lower-margin clinic business mix. Furthermore, the strategy around SPRAVATO is actively being managed to reduce cash burn; management noted a shift to a higher percentage of administer-and-observe versus buy-and-bill, which, while optimizing profitability on a per-case basis, actually reduced near-term revenue. The CFO estimated Q3 2025 revenue would have been approximately $38.0 million if the administer-and-observe mix had remained flat, showing the immediate financial drag of this strategic optimization.

Expanding the Addressable Market with Adolescent MDD Clearance

The FDA clearance for adolescent Major Depressive Disorder (MDD) treatment is the primary driver of the high-growth market characteristic for this quadrant. This clearance, supported by real-world data, expanded the total addressable market for MDD by 35%, bringing the patient pool to 29.3 million people. This is a massive growth runway, but capturing share requires heavy investment in awareness, payer coverage, and physician training. The global MDD market itself is projected to grow, with a market size reaching US$ 6.84 billion in 2024 and expected to reach US$ 14.57 billion by 2033. You need to see rapid adoption here to justify the cash burn.

Investment Needs for Adjunct Indications

Beyond the core MDD indication, pursuing adjunct indications like Obsessive-Compulsive Disorder (OCD) falls squarely into the Question Mark category. These new indications require significant, upfront investment in clinical validation, regulatory submissions, and commercial education to drive adoption among prescribers who are already familiar with the existing, proven indications. This investment consumes cash without immediate, guaranteed returns, fitting the profile of a product needing heavy support to gain market traction.

The Cash Consumption and Path to Breakeven

These growth-oriented, low-share areas are cash intensive. The company's full-year 2025 operating expense projection remains high, set between $100 million and $105 million. The pressure to fund these growth initiatives while managing the lower margins from the clinic integration has pushed the breakeven timeline. Management has adjusted its target for achieving positive cash flow from operations to Q4 2025, projecting a range of between $2 million of positive and $2 million of negative operating cash flow for that quarter. The year-end 2025 total cash position is projected to land between $32 million and $36 million, illustrating the tight liquidity management required while these Question Marks mature.

Here's a quick look at the key 2025 financial parameters shaping the Question Mark strategy:

The company's ability to manage the cash burn while simultaneously driving adoption in the expanded 29.3 million patient adolescent market and optimizing SPRAVATO revenue will determine if these assets become Stars or Dogs by 2026. Finance: draft 13-week cash view by Friday.