• Net Revenue: $50 million in Q3 2024, compared to $49.9 million in Q3 2023.
• Device Revenue: $14.9 million in Q3 2024, down from $16.9 million in Q3 2023.
• Supplies Revenue: $35.1 million in Q3 2024, up from $33.1 million in Q3 2023.
• Gross Profit: $39.8 million or 80% of revenue in Q3 2024, compared to $40.4 million or 81% in Q3 2023.
• Sales and Marketing Expenses: $20.7 million in Q3 2024, down from $22.1 million in Q3 2023.
• G&A Expenses: $15.3 million in Q3 2024, up from $12.7 million in Q3 2023.
• Net Income: $2.4 million or $0.07 per diluted share in Q3 2024, compared to $3.6 million or $0.10 per diluted share in Q3 2023.
• Adjusted EBITDA: $5.1 million in Q3 2024, compared to $7.3 million in Q3 2023.
• Cash Flow from Operations: $7.1 million in Q3 2024, $10.3 million year-to-date in 2024.
• Cash Balance: $37.6 million at the end of Q3 2024, up 22% from Q2's balance of $30.9 million.
• Working Capital: $58.5 million as of September 30, 2024.
• Order Growth: 13% year-over-year increase in Q3 2024.
• Revenue per Sales Rep: $530,000 on an annualized basis in Q3 2024, a 25% increase from Q3 2023.
• 2024 Revenue Expectation: At least $200 million, representing a 9% growth over 2023.
• 2024 Diluted EPS Expectation: At least $0.20 per share.

• Warning! GuruFocus has detected 3 Warning Signs with ZYXI.

Release Date: October 24, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Zynex Inc (NASDAQ:ZYXI) reported a 13% year-over-year increase in orders for the third quarter of 2024.
• The company achieved FDA clearance for its new TensWave device, enhancing its product portfolio in non-opioid pain management.
• Zynex Inc (NASDAQ:ZYXI) has a strong cash position with a balance of $37.6 million, up 22% from the previous quarter.
• The company is making significant progress in its Patient Monitoring division, with the NiCO pulse oximeter nearing FDA submission.
• Zynex Inc (NASDAQ:ZYXI) continues to diversify its revenue streams, with non-NexWave private label rehab products making up over 31% of total orders.

Negative Points

• Net revenue for the third quarter was essentially flat at $50 million compared to $49.9 million in the same quarter of 2023.
• Device revenue decreased to $14.9 million from $16.9 million in the third quarter of the previous year.
• Net income declined to $2.4 million or $0.07 per diluted share, down from $3.6 million or $0.10 per diluted share in 2023.
• Adjusted EBITDA decreased to $5.1 million from $7.3 million in the third quarter of 2023.
• The company experienced a deceleration in order growth due to sales rep pruning, impacting the overall growth rate.

Q & A Highlights

Q: Can you explain the deceleration in order growth during the third quarter and how orders are trending in the fourth quarter? A: Thomas Sandgaard, CEO: In the third quarter, we saw a 17% year-over-year increase in October orders. Moving forward, we expect to maintain double-digit order growth, although not consistently at the 20% level we've seen previously. We anticipate this trend to continue into next year.

Q: Could you provide an update on the strategic review process and any changes in timing? A: Thomas Sandgaard, CEO: The strategic review process is ongoing. We have received a couple of letters of intent and are moving forward with one interested entity. However, we do not expect a closure in the immediate timeframe.

Q: Can you discuss the TensWave device and its indications, and whether patients would use it alongside NexWave? A: Thomas Sandgaard, CEO: The TensWave device is not typically used alongside NexWave. NexWave offers three modalities, including differential current and neuromuscular electrical stimulation. TensWave is a high-quality device for situations where a TENS-only device is approved, often dictated by insurance coverage.

Q: Was there any share repurchase during the third quarter? A: Daniel Moorhead, CFO: We did not repurchase any shares during the third quarter. The plan remains open, but no purchases were made at this time.

Q: Do you plan to add additional sales reps before the end of 2024, and what is the expected total by year-end? A: Thomas Sandgaard, CEO: We plan to add a net of 10 sales reps monthly over the next 18 months. This includes additional training and optimizing candidate selection to ensure higher success rates for new reps.

Q: How many sales reps will be needed to effectively market the NiCO pulse oximeter once cleared by the FDA? A: Donald Gregg, President of Zynex Monitoring Solutions: We are considering both direct and indirect sales forces and will decide in Q1 2025. Initially, we will start with a few area managers and directors, focusing on specific market segments for a controlled product launch.

Q: Will the Monitoring division be independently profitable compared to the Pain Management division? A: Thomas Sandgaard, CEO: The Monitoring division operates independently, with no synergies on the sales side. We believe it will be profitable long-term, although there will be a ramp-up period to reach that point.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.