Zynex, Inc. (ZYXI): Business Model Canvas [Dec-2025 Updated]

You're looking for a clear, precise breakdown of Zynex, Inc.'s business model as of late 2025, and honestly, it's a story of a core, recurring-revenue medical device model-selling non-opioid pain therapy systems and their consumables-fighting hard against significant financial headwinds. We see a clear razor-and-blade setup, but the Q3 2025 numbers show the focus has shifted to liquidity, with $13.3 million in cash and active restructuring talks with partners like Province, LLC, all while trying to nail down that crucial government reimbursement. Dive into the full canvas below to see exactly how their value proposition, customer segments like the VA, and their cost structure-including that $30.7 million non-cash asset impairment charge-are all lining up as they execute their three-part turnaround strategy.

Zynex, Inc. (ZYXI) - Canvas Business Model: Key Partnerships

You're looking at the critical external relationships Zynex, Inc. relies on to execute its strategy, especially given the financial pressures faced through late 2025. These partnerships are vital for everything from financial stability to market access.

Province, LLC for Strategic and Financial Restructuring Advice

Zynex, Inc. formally engaged Province, LLC, described as an internationally recognized financial advisory firm, in November 2025. This engagement is central to evaluating a range of strategic alternatives. The firm is assisting with potential capital raising opportunities and recapitalization and restructuring strategies. To oversee this, the Board formed a Special Committee, chaired by Paul Aronzon, who will work closely with management, Province, and counsel. This move directly relates to the company's liquidity challenges, as Zynex elected to enter a contractual thirty (30) day grace period and not make a $1.5 million interest payment due on its $60 million of Convertible Notes maturing in May 2026.

New Partner Engaged to Increase Penetration into VA Accounts

Zynex, Inc. established a partnership in late 2024 to conduct business with Veterans Affairs Medical Centers (VAMCs). This collaboration targets a significant expansion opportunity, as the VA system serves over 9 million veterans and spends an estimated $112 billion annually on medical care. Before this push, Zynex's sales within the VAMCs constituted less than 1% of its total revenue. The company's sales team is set to collaborate with providers within the VA and Military Treatment Facility (MTF) networks.

Third-Party Logistics and Manufacturing Suppliers for Devices and Consumables

While specific Zynex, Inc. supplier names aren't detailed in the latest reports, the reliance on third parties for manufacturing and distribution is implied by operational context. The broader U.S. Pharmaceutical Third-party Logistics Services Market provides context for this sector, estimated to be worth USD 49.24 billion in 2025, growing from USD 45.37 billion in 2024. Workforce reductions in early 2025 negatively impacted device orders and corresponding supplies, suggesting tight coordination or reliance on external production schedules.

Commercial and Government Insurance Payers (e.g., TRICARE, Despite Suspension)

Commercial and government insurance payers represent a crucial, yet currently volatile, segment of Zynex, Inc.'s business model. TRICARE stands out as the company's largest insurance customer. As of July 2, 2025, TRICARE continued a temporary payment suspension, which had previously been noted in March 2025 as potentially lasting up to 12 months and representing about a quarter of Zynex's revenue. This payer issue was cited as a primary driver for the Q3 2025 net revenue of $13.4 million, a sharp drop from $50.0 million in Q3 2024. Furthermore, changes to certain payers' claim submission and review practices resulted in denials and payment delays through the third quarter of 2025. The gross profit margin for Q3 2025 was 60% of revenue, down from 80% in Q3 2024, partly due to the Tricare revenue adjustment and lower production volume absorbing fixed costs.

Here's a quick look at the roles and associated metrics for these key external relationships:

Finance: draft 13-week cash view by Friday.

Zynex, Inc. (ZYXI) - Canvas Business Model: Key Activities

You're looking at the core engine room of Zynex, Inc. (ZYXI) as of late 2025, which is currently undergoing a major operational overhaul. The key activities center around making and selling their electrotherapy products, managing the consumable supply chain, dealing with regulatory fallout, and pushing forward their next-generation monitoring tech.

Manufacturing and assembly of FDA-cleared electrotherapy devices.

Zynex, Inc. manufactures and sells its electrotherapy devices, primarily through its Zynex Medical, Inc. (ZMI) subsidiary, which accounts for substantially all of the company's revenue and profit historically. You need to know that the company holds ISO13485:2016 certification for its quality management systems related to design, development, manufacturing, and distribution of medical devices. This is a foundational activity, though the financial results for late 2025 show significant strain on the volume supporting this manufacturing base.

Fulfillment of recurring consumable supply orders (razor/razor-blade model).

This is where the recurring revenue component lives, mainly through supplies like electrodes, which historically drove a large portion of sales. However, the razor/blade model activity is under intense scrutiny and has been deliberately curtailed for compliance reasons. For the three months ended September 30, 2025, supplies revenue was only $6.30 million, a massive drop from $35.108 million in the same period of 2024. Overall net revenue for Q3 2025 was just $13.4 million, compared to $50.0 million in Q3 2024. The gross profit margin for Q3 2025 compressed to 60%, down from 80% year-over-year, partly because the lower volume meant fixed costs weren't absorbed well.

The new management implemented a compliance-focused operating change: "Under this new policy, we do not process resupply orders unless a patient first confirms their need." This directly impacts the fulfillment activity, aiming to correct past practices that drew regulatory heat.

Here's the quick math on the device versus supplies revenue split for Q3 2025:

Proactive engagement with government agencies regarding compliance and investigations.

This activity has become front-and-center for Zynex, Inc. following management changes in August 2025. The new CEO stated a focus on 'renewing our commitment to compliance and integrity.' This engagement is necessary because shareholder litigation filed on March 20, 2025, alleged that the company inflated revenue by shipping excess product and that this practice drew scrutiny from insurers, including the U.S. military health insurance program, TRICARE, making adverse consequences like federal government penalties reasonably likely. Historically, Zynex was reported to be overbilling TRICARE, with electrode claims spiking from $1.7 million in 2015 to $90.5 million in 2022. To manage the current financial situation, which includes liquidity stress, the company elected to enter a contractual thirty (30) day grace period and will not make a $1.5 million interest payment due November 17, 2025, on its $60 million Convertible Notes maturing in May 2026.

Executing a three-part strategy to address liquidity and revenue performance.

The new leadership team is executing a strategy with three clear pillars: renewing compliance commitment, addressing liquidity challenges, and improving revenue and cash flow performance. Liquidity is definitely tight; cash flow from operations for Q3 2025 was ($6.3) million, leaving cash and cash equivalents at $13.3 million as of September 30, 2025. The net loss for Q3 2025 was a staggering ($42.9) million, which included a $30.7 million non-cash asset impairment charge related to Zynex Monitoring Solutions, Inc. To address this, they engaged Province, LLC, an internationally recognized financial advisory firm, to evaluate strategic alternatives like potential capital raising or restructuring. Cost control is part of this, too; Sales and marketing expense for Q3 2025 was $9.5 million, a 54% decrease from $20.7 million in Q3 2024, primarily due to sales force headcount reduction.

The core activities under this strategy include:

• Engaging Province, LLC for strategic alternatives assessment.
• Forming a Board Special Committee, chaired by Paul Aronzon, to oversee the assessment.
• Entering a grace period for the $1.5 million interest payment on $60 million notes.
• Implementing stricter resupply order confirmation policy.
• Reducing Sales and Marketing expense by 54% year-over-year in Q3 2025.

Research and development for patient monitoring devices like the NiCO oximeter.

Research and development is focused on the Zynex Monitoring Solutions (ZMS) segment, which historically generated no revenue for the years ending December 31, 2024, and 2023. A major R&D milestone was achieved on May 12, 2025, when Zynex submitted its 510(k) application to the FDA for the NiCO™, Noninvasive CO-Oximeter device. This device uses patented laser pulse oximetry technology, which clinical studies suggest overcomes accuracy limitations of current LED devices, especially concerning skin pigmentation. The estimated accessible market for pulse oximetry monitoring is over $2.8 billion today, with projections to reach $4.3 billion by 2027. Furthermore, Zynex sees the laser technology as a path into the total hemoglobin testing market, estimated at another $2-3 billion opportunity.

Zynex, Inc. (ZYXI) - Canvas Business Model: Key Resources

You're looking at the core assets Zynex, Inc. is relying on right now to navigate a tough liquidity situation and a major revenue drop. These aren't just abstract concepts; they are the tangible and intangible items supporting the business model as of late 2025.

The most immediate, hard number you need to track is the balance sheet position. As of the close of the third quarter, September 30, 2025, Zynex, Inc. reported $13.3 million in cash and cash equivalents. This figure is critical, especially considering the company entered a contractual 30-day grace period after not making a $1.5 million interest payment due November 17, 2025, on its $60 million of convertible notes maturing in May 2026.

The tangible assets include the portfolio of FDA-cleared medical devices, which form the foundation of the pain management and monitoring segments. The NexWave device is specifically highlighted as a core, patient-favored asset driving the turnaround effort.

The intangible resources center heavily on Intellectual property related to non-invasive monitoring technology. This IP portfolio underpins the development of breakthrough technologies, such as the NiCO pulse oximeter, for which a 510(k) application was submitted to the U.S. Food and Drug Administration.

The operational structure supporting these resources has been significantly altered. The company has executed a reduced but refocused direct sales force for pain management, alongside broader corporate restructuring. Here's a look at the scale of the cost-cutting efforts impacting personnel and associated expenses:

The refocusing of the sales force involved redirecting representatives to slightly different call points and implementing simplified commission plans. This shift is intended to align with a more optimized payer mix and improve productivity, even with a smaller footprint. The company is actively seeking a commercialization partner for the NiCO CO-Oximeter, suggesting a shift in how that specific intellectual property asset will be monetized.

Key components of the technology and operational focus include:

• FDA-cleared device: NexWave.
• Device portfolio: Includes TensWave [implied by outline, not explicitly detailed in Q3 data].
• Monitoring IP focus: Non-invasive technology for patient monitoring.
• New product pipeline asset: NiCO CO-Oximeter.
• Operational change: New resupply policy requiring patient confirmation.

Zynex, Inc. (ZYXI) - Canvas Business Model: Value Propositions

You're looking at the core value Zynex, Inc. (ZYXI) offers its customers and the market as of late 2025. The foundation remains its commitment to non-opioid alternatives for managing chronic conditions.

Non-opioid, prescription-strength pain management and rehabilitation.

The primary value is providing non-invasive medical devices for pain management and rehabilitation, steering away from systemic opioid treatments. This focus supports a market need for alternatives in managing patient discomfort. For the nine months ended September 30, 2025, Zynex generated total net revenue of $62.23 million from its medical devices segment.

Recurring supply model for patient convenience and revenue stability.

Zynex structures its revenue around device sales/leases and the recurring shipment of supplies to patients. For the third quarter of 2025, the breakdown of revenue shows the supplies component was significant. The company implemented a compliance-focused change: resupply orders are not processed unless the patient first confirms their need.

Here's a look at the revenue composition for the third quarter of 2025:

The gross profit margin for this period stood at 60% of revenue, down from 80% in the third quarter of 2024.

Accurate, laser-based pulse oximetry technology (NiCO) for diverse skin tones.

The NiCO Noninvasive CO-Oximeter is positioned to disrupt the patient monitoring space by addressing known limitations in existing technology. The laser technology directly measures fractional blood oxygenation, unlike LED technology which estimates functional oxygen saturation (SpO2). This is critical because traditional LED pulse oximeters have been shown to mismeasure oxygen levels in individuals with darker skin pigmentation.

The market opportunity Zynex, Inc. (ZYXI) is targeting with this technology includes:

• Pulse oximetry monitoring market: Over $2.8 billion today.
• Total hemoglobin testing market: An additional $2-3 billion opportunity.

The company submitted its 510(k) application for NiCO in May 2025. Management indicated an anticipated clearance closer to the December 2025 timeframe, with patient monitoring revenue expected to start adding in late 2025 and into 2026.

FDA-cleared devices ensuring regulatory compliance and clinical validity.

The value proposition is underpinned by regulatory validation. The NiCO device required completion of a clinical verification trial, which concluded in December 2024. The company's core pain management and rehabilitation devices are already marketed based on existing regulatory clearances. The new NiCO submission sought adult and pediatric clearance. The company is actively seeking a commercialization partner for its ZMS subsidiary's NiCO CO-Oximeter.

The company's focus on compliance is evident in the operational changes made in Q3 2025, which included expense reductions of 54% in Sales and Marketing (to $9.5 million for the quarter) and a reduction in G&A expenses to $11.8 million. Finance: review the cash runway based on the $13.3 million cash balance as of September 30, 2025.

Zynex, Inc. (ZYXI) - Canvas Business Model: Customer Relationships

You're looking at how Zynex, Inc. manages its connections with doctors, patients, and now, critically, its lenders, especially given the financial headwinds they've faced through 2025. The relationship strategy is clearly being reshaped by cost-cutting and compliance focus.

Direct sales representative model for physician and patient onboarding

The direct sales force is a core part of how Zynex, Inc. gets its devices prescribed and patients set up. However, the structure has seen significant recent changes to drive efficiency. For instance, in Q1 2025, the sales force headcount was approximately 39% less than the prior year, as the company focused on sales rep productivity. This cost-cutting is visible in the expense reports; Sales and Marketing expenses dropped to $9.5 million in Q3 2025, down from $15.3 million in Q3 2024. The company initiated quick projects focused on near-term performance improvements in Salesforce productivity and order conversion efficiency. Still, the revenue impact has been severe, with Q3 2025 net revenue at only $13.4 million compared to $50 million in Q3 2024.

Here's a quick look at how sales-related expenses have shifted as the company restructured its customer-facing teams:

Compliance-focused resupply policy requiring patient confirmation

A major external relationship challenge centers on Tricare, which was identified as Zynex, Inc.'s largest insurance customer, representing approximately 20-25% of annual revenue as of early 2025. Tricare initiated a temporary payment suspension while conducting a review. Despite this, Zynex, Inc. is proactively engaging with government agencies and investigators, focusing on compliance and integrity, and has initiated collaborative discussions with debt holders. The company stated that as directed by Tricare, they continue to support both existing and new patients as prescriptions are received.

Dedicated patient support for device training and supply reordering

The commitment to patient support remains, even amid operational shifts. The company is seeing good results from policies leading to far more regular patient contact, with patients responding positively. Zynex, Inc. provides comprehensive clinical support and training to healthcare professionals and patients, including educational programs, device usage training, and ongoing technical assistance to ensure optimal application and effectiveness of their devices. These efforts are intended to result in a significant improvement in how patients, public and private payers, and their providers experience doing business with Zynex, Inc.

High-touch relationship with key debt holders for restructuring discussions

The relationship with debt holders has become a critical, high-touch focus for Zynex, Inc. management. The company has $60 million of convertible notes due in May 2026, which is now classified as a current liability. Following the non-payment of a $1.5 million interest payment due November 17, 2025, the company elected to enter the contractual 30-day grace period. Zynex, Inc. has hired Province LLC to advise on strategic and financing alternatives and has formed a special committee of the Board of Directors to oversee this process. The management team has initiated collaborative discussions with debt holders regarding potential restructuring opportunities.

• The total convertible debt requiring attention is $60 million.
• The missed interest payment amount was $1.5 million.
• The company reported a Q3 2025 Net Loss of $42.9 million.
• The current ratio as of September 30, 2025, was 0.5, underscoring immediate liquidity difficulties.

Finance: draft 13-week cash view by Friday.

Zynex, Inc. (ZYXI) - Canvas Business Model: Channels

The Channels block for Zynex, Inc. centers on getting their non-invasive pain management and rehabilitation devices, and consumable supplies, to the end-user, which involves a mix of direct engagement and specialized third-party access.

Direct sales force selling to physicians and clinics remains a core component, though the structure has been significantly optimized. Following headcount reductions, Sales and marketing expense for the three months ended September 30, 2025, decreased 54% to $9.5 million from $20.7 million for the same period in 2024, primarily due to decreased headcount in the sales force. This focus on productivity followed a 28% reduction in Sales and marketing expenses in Q1 2025 after a decrease in sales force headcount. Despite this reduction, total orders in Q1 2025 only decreased 3% year-over-year, suggesting current sales reps maintained strong performance. For the full fiscal year 2024, Sales and marketing expense was $86.6 million.

The distribution of device revenue for the nine months ended September 30, 2025, shows a split between direct sales models:

Direct-to-patient shipping for consumable supplies is integral to the recurring revenue component of the business model. For the first quarter of 2025, the Supplies Revenue component was reported at $14.7 million, compared to Device Revenue of $11.9 million for the same period. This indicates a substantial ongoing need for supplies, which are shipped directly to the patient base.

The Veterans Affairs (VA) channel via a new specialized partner represents a targeted expansion into a major federal market. Zynex announced a partnership in December 2024 to conduct business with VA Medical Centers (VAMCs), a system servicing over 9 million enrolled veterans, where the VA spends over $112 billion annually on healthcare. As of that announcement, less than 1% of Zynex's sales were from VAMCs. By June 2025, a partnership with MellingMedical expanded access to all 172 VA Medical Centers, 1,138 VA Outpatient Clinics, and 95 DoD Medical Facilities.

Insurance claim submission and billing systems for reimbursement are a critical, yet currently challenged, part of the channel's financial realization. The ongoing temporary suspension of payments from Tricare, which historically represented approximately 20-25% of annual revenue, has severely impacted top-line results. For the three months ended September 30, 2025, the net revenue decline included a $2.8 million reduction related to payments received from Tricare during the suspension period. Furthermore, changes to certain payers' claim submission and review practices have negatively impacted revenue through Q3 2025 due to denials and payment delays. The Gross profit margin in Q3 2025 was 60% of revenue, down from 80% in Q3 2024, partly due to continuing to support Tricare patients without corresponding revenue.

• Net revenue for Q3 2025 was $13.4 million.
• Net revenue for the nine months ended September 30, 2025, was $62.23 million.
• Cash collections for Q2 2025 were $26.1 million.
• Cash and cash equivalents as of September 30, 2025, stood at $13.3 million.

Finance: review Tricare payment recovery projections for the next 13-week cash flow by Monday.

Zynex, Inc. (ZYXI) - Canvas Business Model: Customer Segments

You're looking at the customer base for Zynex, Inc. (ZYXI) as of late 2025, and honestly, the landscape is heavily defined by payer dynamics, especially the ongoing issues with a major government segment.

The primary customer base for the pain management devices centers on:

• Patients with chronic and acute pain requiring non-opioid therapy.
• Private commercial insurance beneficiaries.

The financial results from the third quarter ending September 30, 2025, show how these segments, particularly government payers, have been driving recent performance. Net revenue for Q3 2025 was $13.4 million, a significant drop from $50.0 million in Q3 2024. This decline is primarily linked to the temporary suspension of payments from TRICARE.

The government/military segment is a critical, yet currently challenging, part of the business:

• US Government/Military beneficiaries (TRICARE) and Veterans (VA).

The impact of the TRICARE situation is clear in the revenue figures. For the three months ended September 30, 2025, the company reported a $2.8 million reduction in revenue specifically related to payments received from TRICARE during the suspension period. The gross profit margin for that quarter compressed to 60% of revenue, down from 80% in Q3 2024, partly because the company continued to support both new and existing TRICARE patients without corresponding revenue. Separately, regarding the Veterans Affairs (VA) market, Zynex, Inc. announced a partnership to conduct business with Veterans Affairs Medical Centers (VAMCs) in December 2024. At that time, the VA system served over 9 million enrolled veterans, but Zynex, Inc. noted that currently, less than 1% of its sales came from VAMCs, signaling a major area for future growth, if access issues are resolved.

Another distinct customer group is served by the Monitoring Solutions division:

• Hospitals and clinics for patient monitoring equipment (Zynex Monitoring Solutions).

This segment appears to be under strategic review, given the financial impact reported in Q3 2025. The net loss for that quarter was negatively impacted by a non-cash asset impairment charge of $30.7 million, which was primarily related to goodwill, definite-lived intangible assets, and certain fixed assets associated with Zynex Monitoring Solutions, Inc..

To give you a snapshot of the revenue split from the most recent concrete quarterly data, here is how the pain management business was divided in Q3 2025:

The trailing twelve months revenue ending September 30, 2025, totaled $108.20 million. Analysts are projecting full-year 2025 sales to land around $118.85 million, though this is now viewed with caution following the Q2 miss.

Zynex, Inc. (ZYXI) - Canvas Business Model: Cost Structure

You're looking at the cost side of Zynex, Inc.'s operations as of late 2025, specifically focusing on the third quarter results which clearly show the impact of the revenue compression and the management's immediate cost-cutting actions. The cost structure is heavily influenced by operational deleveraging and one-time charges.

The primary variable cost component, Cost of Goods Sold (COGS), is directly tied to the significantly reduced top line. For the third quarter ended September 30, 2025, the reported net revenue was approximately \$13.4 million. Following the structure you outlined, the Cost of Goods Sold (COGS) represents 40% of that Q3 2025 revenue, which calculates to \$5.36 million.

This contrasts sharply with the prior year, where the Gross Profit was 80% of revenue, but for Q3 2025, the Gross Profit stood at 60% of revenue, amounting to \$8.1 million. This compression is noted as being due to the revenue decrease, the Tricare revenue adjustment not having a corresponding decrease in cost of revenue, and less production volume to absorb fixed manufacturing costs.

The fixed operating expenses have seen aggressive reductions, reflecting the new management team's focus on cash preservation following the revenue challenges, including the Tricare payment suspension. Here's the quick math on the key operating expenses for Q3 2025:

• Sales and Marketing expenses were reduced by 54% to \$9.5 million.
• General and Administrative (G&A) expenses totaled \$11.8 million.
• The primary driver for the Sales and Marketing reduction was decreased headcount in the sales force.

The cost structure also includes significant non-operating and non-cash items that heavily impacted the net loss of (\$42.9 million) for the quarter. A major component here was a non-cash asset impairment charge.

The debt structure introduces a specific, time-sensitive cost. Zynex, Inc. carries \$60 million in Convertible Senior Notes maturing in May 2026. The company entered a 30-day grace period and did not make the \$1.5 million interest payment due on November 17, 2025, as part of its cash preservation strategy. This reclassification of the notes as current liabilities underscores the immediate financial pressure.

To be fair, the G&A reduction from \$15.3 million in Q3 2024 to \$11.8 million in Q3 2025 shows some success in controlling overhead, but it wasn't enough to offset the revenue collapse and the large impairment charge. The impairment charge of \$30.7 million is a defintely non-recurring event that masks the underlying operational burn rate, but it must be accounted for in the total cost structure for the period.

Finance: draft 13-week cash view by Friday.

Zynex, Inc. (ZYXI) - Canvas Business Model: Revenue Streams

You're looking at the core ways Zynex, Inc. brings in cash as of late 2025. The business model is heavily reliant on the sale of its electrotherapy devices and the subsequent recurring sales of the necessary supplies, though the recent payer environment has certainly put pressure on the top line.

The most recent concrete figures we have are from the third quarter ended September 30, 2025. Here's the quick math on the revenue breakdown for that period:

Sales of electrotherapy devices, which include the primary pain management units, generated approximately $7.1 million in the third quarter of 2025. This is the initial point of entry for many patients into the Zynex ecosystem.

Recurring sales of consumable supplies, such as electrodes and batteries needed to operate the devices, followed closely, bringing in about $6.3 million for Q3 2025. Management noted a new policy where resupply orders aren't processed unless the patient confirms their need, which is a compliance-focused change intended to stabilize this stream.

Reimbursement payments from commercial and government payers remain a critical, yet currently volatile, revenue stream. The Q3 2025 results were significantly impacted by external factors:

• TRICARE payment suspension was a primary driver of revenue decline.
• Changes in certain payer claim submission and review practices caused denials and payment delays.
• The company recorded a $2.8 million reduction in revenue related to TRICARE payments during the suspension period in Q3 2025.

Potential future revenue from patient monitoring devices, specifically the NiCO device, is on the horizon but not yet contributing to current revenue. The company completed its FDA submission for the NiCO laser pulse oximeter in Q2 2025. Commercialization and revenue generation from this new product line are projected to start in 2026, offering a diversification path away from the current pain management focus.