Neuronetics (NASDAQ:STIM) reported third-quarter 2026 revenue growth, wider gross margin and a return to positive adjusted EBITDA, citing record NeuroStar system sales and continued revenue-cycle improvements across its Greenbrook clinic network.
Total revenue rose 12.5% year over year to $42 million from $37.3 million. Revenue from Greenbrook clinics increased 20.1% to $26.2 million, while NeuroStar revenue grew 1.8% to $15.8 million.
“We continued to execute against the profitability and operating cash goals we outlined earlier in the year, and we made meaningful progress on both fronts,” President and CEO Dan Reuvers said.
Profitability Improves as Expenses Decline
Gross margin expanded to 52.2% from 45.9% a year earlier. Chief Financial Officer Nir Naor said the improvement reflected the company’s revised NeuroStar go-to-market strategy and better revenue-cycle management at Greenbrook.
Operating expenses declined 12.6% to $21.3 million, primarily due to lower sales and marketing expense, partly offset by higher general and administrative costs. The company generated income from operations of $500,000, compared with an operating loss of $7.3 million in the prior-year quarter.
Net loss attributable to Neuronetics stockholders narrowed to $1.7 million, or $0.02 per share, from $9 million, or $0.13 per share, a year earlier. Adjusted EBITDA was positive $1.9 million, compared with a $4.7 million loss in the third quarter of 2025.
Cash provided by operating and investing activities was $800,000 during the quarter, versus negative $900,000 in the prior-year period. Total cash at Sept. 30 was $27.9 million, including $22.9 million in cash and cash equivalents and $5.8 million in restricted cash, down from $34.1 million at the end of 2025.
NeuroStar Mix Shifts Toward Capital Sales
NeuroStar’s revenue growth was led by a record quarter for system sales, with strong double-digit year-over-year growth in the capital equipment business, Reuvers said. More than half of systems sold during the quarter were capital or lease units, which management said supported average selling prices and gross margin.
The company said sales of systems were partly offset by lower treatment-session revenue, a trend it expected as it broadens its sales strategy to pursue larger, multi-site and national customers. Reuvers said session revenue is expected to trend modestly lower as the business mix shifts more toward capital sales.
Neuronetics said it recently received a sole-source agreement with a large national customer and believes the revised commercial approach is allowing it to compete for business that was previously outside its reach. Management expects the strategy to produce higher overall growth in 2027 and beyond.
In August, the company submitted a 510(k) application to the Food and Drug Administration for an accelerated transcranial magnetic stimulation, or TMS, protocol. The filing remains under review. Reuvers said condensed protocols could improve patient access to TMS treatment.
The company also cited a publication in the TMS Journal analyzing more than 6,400 patients treated with NeuroStar under real-world conditions. The analysis found no statistically significant difference in outcomes between patients who had treatment gaps and those who did not, and concluded that gaps of up to 13 days did not reduce effectiveness.
Greenbrook Revenue-Cycle Efforts Continue
Greenbrook’s growth reflected a combination of revenue-cycle management progress and growth in SPRAVATO treatment, Reuvers said. He described the SPRAVATO business as durable because patients may continue into a maintenance phase after entering the network.
During the quarter, Greenbrook began deploying SkyPoint, an artificial intelligence-enabled coding optimization tool intended to improve claim submission speed and accuracy. Reuvers said the workflow change produced a low-double-digit improvement in first-month collections, though he noted that collections are also received in subsequent months.
Management said there remains capacity available at Greenbrook clinics. Reuvers said clinic occupancy ranges from about 25% at the low end to roughly 75% among the highest-performing locations.
To improve patient acquisition and fill capacity, the company plans to redirect a portion of direct-to-consumer advertising spending to expand its field sales team. Neuronetics expects to add eight representatives to its existing team of 20, reaching 28 representatives by sometime in the first quarter, without increasing overall sales and marketing expense. The company expects the new representatives to be fully ramped and contributing meaningfully by mid-2027.
Technology Partnerships and 2026 Outlook
Neuronetics signed a distribution agreement with Wave Neuroscience to integrate Wave’s MeRT system with NeuroStar. Wave’s MeRT system uses EEG data to personalize TMS protocols and received FDA clearance in June for treating adults with post-traumatic stress disorder. Before launch, Neuronetics plans to seek FDA clearance to add NeuroStar as a TMS system compatible with Wave’s PTSD indication.
The company also announced an integration between its TrakStar practice-management platform and AdvancedMD, an electronic health record and revenue-cycle platform. The integration is scheduled to become available in the fourth quarter for NeuroStar providers already using AdvancedMD.
For full-year 2026, Neuronetics maintained its revenue outlook of $160 million to $164 million. It raised the low end of its gross-margin outlook to 49%, from prior guidance of 48% to 50%, and lowered its operating-expense outlook to $92.5 million to $95.5 million, including estimated stock-based compensation.
The company expects cash flow from operating and investing activities of negative $10 million to negative $12 million for the year, compared with prior guidance of negative $10.5 million to negative $14.5 million. Management continues to target limited to no net cash utilization from operating and investing activities in the second half of 2026.
About Neuronetics (NASDAQ:STIM)
Neuronetics, Inc is a medical technology company that develops and commercializes noninvasive treatments for psychiatric and neurological disorders. Its primary product is NeuroStar TMS Therapy, which uses transcranial magnetic stimulation to deliver targeted magnetic pulses to areas of the brain associated with mood regulation.
NeuroStar TMS Therapy is cleared by the U.S. Food and Drug Administration for treating major depressive disorder in adults and adolescents, obsessive-compulsive disorder, and depression with anxious distress.
