BWAY

Good day, and welcome to BrainsWay's 1st quarter 2026 earnings conference call. I now hand the conference over to Garth Russell. Please go ahead.

Thank you, welcome to BrainsWay's first quarter 2026 earnings conference call. With us today are BrainsWay's Chief Executive Officer, Hadar Levy, and Chief Financial Officer, Ido Marom. The format for today's call will be a discussion of recent trends and business updates from Hadar, followed by a detailed discussion of the financials. We will open up the call for your questions. Earlier today, BrainsWay released its financial results for the 3-month period ended March 31, 2026. A copy of the press release is available on the company's investor relations website.

Before I turn the call over to Hadar, I would like to remind you that this conference call, including both management's prepared remarks and the question answer session, may contain projections or other forward-looking statements regarding, among other topics, BrainsWay's anticipated future operating and financial performance, business plans and prospects, and expectations for its products and pipeline, which are all subject to risks and uncertainties, including shifting market conditions resulting from geopolitical, supply chain and other factors, as well as the use of non-GAAP financial information. Additional information regarding these and other risks are available in the company's earnings release and in its other filings with the SEC, including the Risk Factors section contained in BrainsWay's Form 20-F. Finally, please note that the company's 6-K will be filed tomorrow at approximately 6:00 A.M. Eastern Time, in accordance with the SEC's operating schedule.

With that, I would now like to turn the call over to Hadar.

Thank you. Welcome, everyone, and thank you for joining us today. I will keep today's comments brief as we just provided a comprehensive business overview during our year-end call in mid-March. We are off to an excellent start in 2026, reporting a 35% increase in revenue to $15.5 million for the first quarter, compared with $11.5 million in the prior year period. This performance was driven by the strong execution of our core business and expanded market penetration. During the quarter, we achieved our 11th consecutive quarter of profitability, supported by expanding margins and the implementation of our recurring model. Let me take a minute to walk you through a few other key metrics that we monitor each quarter to measure our continued pattern of growth.

In the first quarter of 2026, we shipped 117 Deep TMS systems, a 44% increase over the same period last year, bringing our total install base to approximately 1,820 systems. Remaining performance obligation have increased to $75 million as of March 31st, 2026. Notably, the vast majority of the new contracts signed during the quarter were multi-year long-term agreements, reflecting continued traction with our revenue model. We view the steady increase in RPO over the past 3 years as a clear indicator of strong market demand, a success of our strategy focused on servicing enterprise customers while also providing greater visibility into future revenue streams. We are proud to have achieved this level of growth while maintaining operational discipline, resulting in increased profitability.

In the first quarter, net income increased by over 100% to $2.3 million, compared to $1.1 million for the prior year period. Adjusted EBITDA increased 119% to $2.8 million, compared to $1.3 million for the same period last year. Let me take the next few minutes to offer some colors on our multiple long growth strategy and provide updates on our execution across each aspect. First, I would like to remind everyone that our Deep TMS platform is backed by an extensive peer-reviewed, published clinical evidence demonstrating efficacy and durability across a broad range of conditions, including major depressive disorder, or MDD, anxious depression, late-life depression, OCD, and smoking addiction.

This robust set of clinical evidence has resulted in FDA clearances and broad attention across many of these indications and resulting in accelerated adoption of Deep TMS and, in many cases, exceeding our expectations. In addition to educating patients and physicians on the benefits of this treatment, we have actively worked with payers across the U.S. to expand reimbursement coverage. For example, since the FDA label expansion for adolescents aged 15-21, we have worked toward getting over 10 payers to add coverage for adolescent depression. In addition, Evernorth Behavioral Health has eliminated prior authorization requirement for TMS across Evernorth and Cigna plans. We are also seeing expanded reimbursement for clinicians that can deliver TMS. For example, a growing number of commercial insurers, Medicare contractors, and government payers now allow trained nurse practitioners to administer Deep TMS when practicing in accordance with applicable regulations and state scope of practice rules.

Recently, Optum updated its policy to permit nurse practitioners to order, supervise, and administer TMS across plans covering nearly 35 million lives, with several other major payers, the VA, and TRICARE adopting similar approaches. We view this as an important step towards reducing provider constraints and improving access, particularly in areas with psychiatrist shortage, helping more patients benefit from non-pharmacologic treatment options. We're seeing a meaningful shift in the market as Deep TMS continue to gain share from alternative treatment modalities, including SPRAVATO. We believe this momentum is being driven by the strength of our clinical data, expanding reimbursement support, and growing demand for non-invasive, non-pharmacologic therapies. In particular, our 6-days acute phase SWIFT protocol is gaining strong interest from providers and patients because it offers a much shorter treatment schedule while still delivering strong clinical results.

In the first quarter, we published landmark data in the peer-review journal, Brain Stimulation, validating that Swift protocol reduces acute phase clinic visit by approximately 70% without compromising efficacy. We believe this represents a win for patients, providers, and payer alike, expect Swift reimbursement to continue expanding. We recently announced two large payers as being among the first have issued final or draft coverage policies applicable to Swift. Moving to an update on clinical activities for Deep TMS. We are pleased to report that patient recruitment is now actively underway for our multi-center study on Deep TMS for alcohol use disorder. This is a major unmet need, affecting approximately 29 million Americans, with up to 60% of patients relapsing within 3-6 months despite available treatments.

We have also planned to submit an application to the FDA for clearance to treat PTSD symptoms in MDD patients in the next several weeks. Based on promising data we have collected from U.S. patients primarily treated with the VA system and our enterprise accounts. If cleared by the FDA, Deep TMS can offer several meaningful advantage compared with the other treatment options in light of the fact that it is an outpatient procedure that does not require hospitalization or anesthesia and is generally well-tolerated. Let me move on, provide an update around our strategic initiative focused on securing minority equity investment in high-performing mental health providers. To date, we have completed minority investment in five mental health networks. I'm happy to report that this portfolio of providers is performing well, with our capital serving as a real growth catalyst to those networks.

This growth also translates into successful BrainsWay. Beyond having an equity stake in these growing businesses, this strategy also provide us with a clear channel for both commercial and clinical collaboration, with the ability to have more direct impact on the field, which is an obvious benefit to our business. We believe the value of these agreements is a two-way street as our clinics gain access to BrainsWay important know-how and enterprise, which are second to none. I'm also very excited to report to you for the first time today that the company just signed another strategic equity agreement with an Illinois group known as Hopemark.

The transaction, which was made with the MSO servicing Hopemark multiple location in Chicago area, include an initial $1.5 million investment and up to an additional $1.5 million in potential future milestone-based investment, all in exchange for a preferred minority stake in Hopemark. Additionally, we're on the cusp of signing another new minority stake transaction with an East Coast provider with location in New York, New Jersey, Pennsylvania, and Connecticut. We expect to announce more on this deal soon. Looking ahead, we have already identified more than 200 other qualified clinics as a potential candidates for participation in this program. These transactions further demonstrate our continuing confidence in this strategic initiative. We are firmly believe will further raise awareness and continue to expand patients' access to care. We look forward to providing updates on additional investment throughout 2026.

Importantly, we are still in the early stage of building awareness and adoption of Deep TMS. We estimate that we have penetrated only fraction of our addressable market, highlighting the significant runway for growth ahead. Deep TMS remains our core strength, our long-term vision is to become the only company in mental health offering database integration of multiple treatments modalities across multiple care settings. As part of this strategy, we executed a strategic investment in Neurolief, a developer of ProlivRx, the world's first wearable, non-invasive, multi-channel brain neuromodulation platform that is designed for use at home. This relationship has advanced on multiple fronts. Following the FDA's pre-market approval of the ProlivRx system for the treatment of resistant MDD, we made an additional $6 million milestone-based convertible loan to Neurolief, which was completed in late March.

This brings our total convertible loan investment in Neurolief to $11 million. As a reminder, our agreement provides for potential third tranche of up to $5 million upon Neurolief achieving specified commercial targets. Neurolief has made additional meaningful commercial progress. The VA Federal Supply Schedule contract has been secured, and ProlivRx has received approved pricing of $11,800 per unit as an important step toward broader adoption with the VA system and beyond. We are excited to be working with the Neurolief team on meaningful synergetic approaches that include the commercial and research infrastructure for both companies. We view ProlivRx as a complimentary offering to Deep TMS. Where Deep TMS serves patients in the clinical setting, ProlivRx is designed for home use, thereby expanding access to clinically validated neuromodulation for patients who cannot easily get to the clinic.

Together, we believe these two platforms expand our total addressable market and reinforce our broader mission of increasing patients' access to effective non-pharmacological mental health treatments. This can also potentially fit within our broader vision for BrainsWay 360, a new fully integrated mental health ecosystem we are building around Deep TMS, next generation rotational field, Deep TMS 360, advanced digital tools, diagnostic, and an intelligent cloud-based platform. Deep TMS 360 is our future platform. With rotational field technology, we can stimulate more neurons more effectively and in much shorter time. Clinical research in either already underway or in planning stage in alcohol use disorder, dementia, and chronic pain. On another front, internationally, we are likewise seeing very strong momentum. Demands continue to grow with distributors across Asia Pacific, Canada, and Europe, accelerating adoption of Deep TMS at an important pace.

With that, I will now turn the call over to Ido for his review for our first quarter 2026 financial results. Ido?

Thank you, Hadar. During the first quarter of 2026, we continued to execute on our growth strategy, which drove a 35% increase in revenue to $15.5 million, compared with $11.5 million for the same period last year. During the quarter, we placed 117 Deep TMS systems, bringing our total install base to approximately 1,820 systems as of March 31st, 2026. Gross profit for the quarter was $11.6 million, up 35% from $8.6 million in the prior year period, while also keeping a healthy gross margin. This performance reflects our continued growth and increased market penetration, both in the U.S. and the international markets. Turning to operating expenses.

Sales and marketing expenses for the first quarter of 2026 totaled $4.9 million compared to $4.2 million in the first quarter of 2025. The increase was primarily driven by targeted investment in commercial expansions and marketing programs. Research and development expenses were $2.8 million, compared with $2.3 million last year. The increase was primarily driven by investments in clinical development and research, including our multi-center trial for alcohol use disorder. General and administrative expenses were $1.8 million, compared with $1.5 million in the prior year period, reflecting the organic growth of our business in addition to the investments we continue to make in strategic initiatives. Operating income was approximately $2 million, compared with $0.6 million reported for Q1 2025.

This performance reflects the scaling of operations, strength of our recurring revenue model, and disciplined cost management. For the first quarter ended March 31, 2026, we reported net income of $2.3 million, compared with $1.1 million in the same period of 2025. Adjusted EBITDA was $2.8 million, representing the 11th consecutive quarter of positive adjusted EBITDA, compared with $1.3 million in Q1 2025. Remaining performance obligations grew to $75 million as of March 31, 2026, a 25% year-over-year increase. We believe the steady increase in our RPOs reflects the strength of our business and execution on our long-term strategy. Cash flow from operation was positive in Q1 2026, further reinforcing the confidence we have in our recurring model and high collection efficiency.

The capital structure for the company remained debt-free, giving us significant flexibility to pursue strategic growth initiatives, including the various investment that are outlined earlier. This is especially notable given additional investment of approximately $9 million made during Q1, 2026 in line with our strategic direction. We reported cash and cash equivalents of $58.9 million on March 31st, 2026. We believe our strong capital position will support the continuous growth of our core scientific and technology operation, as well as our strategic investment program, which aims to increase patient access to innovative treatments while also building long-term value for our shareholders. Looking ahead, we continue to expect revenue in the range of $66 million-$68 million for the full year of 2026. This guidance represent a year-over-year growth rate of 27%-30%.

In addition, we expect operating income in the range of 13% to 14% of revenue and adjusted EBITDA of $12 million-$14 million, representing anticipated growth of 86% to 100% over 2025. This concludes my prepared remarks, and I will now turn the call back to the operator to please open up the call for questions. Operator?

Thank you. We will now begin the question and answer session. Question comes from Jeffrey Cohen with Ladenburg Thalmann. Please go ahead.

Good morning, Hadar and Ido, and congratulations on the strong quarter in progress. Couple of questions from our end. Firstly, could you talk about the upcoming PTSD filing, and can you talk to us a little more about the protocol you anticipate and if the trial is with or without medication in the case of patients?

Yeah. Hey, Jeff. Thank you and good morning. We're very excited about the submission of the PTSD data. Just to remind everyone, this is a comorbidity PTSD treatment for people also suffering from depression. It's with medication, we're not washing out patients from medications. What we have seen, based on the data, that we are able to see some really, really good results on reducing the symptoms of PTSD for people suffering from depression as well. The protocol is very similar to the depression protocol. It's the exact same coil. It's the H1 Coil, targeting same areas of anxiety and depression, but we do see some significant reduction in those symptoms for PTSD patients.

Perfect. As a follow-up, could you talk about the SWIFT protocol a little bit and talk about what you're finding in the field as far as it being utilized and for what indications, and perhaps give us a sense of % as far as patients using SWIFT versus the regular protocol? Maybe also talk about the payer environment. Are the payers agnostic, are the payers taking this on and accepting it as a similar protocol?

Yeah. Look, I believe the SWIFT protocol is a game changer in this field. We're talking about a 6 days acute phase protocol as compared to the standard protocol that is talking about 20-30 days. Being able to shorten the number of days that patients need to commit to come daily to the clinic to only 6 days obviously make it really accessible for patients. When you compare it also to the alternative treatments today in the market, like esketamine or some other psychedelic treatment, it's even more compelling because being able to complete the whole course of treatment within 6 days and see a very strong result. Just to remind everyone, we announced those results, we have seen 88% response rate for the SWIFT protocol within only 6 days of treatment and 78% remission rate with only 6 days.

Both the provider and the patients are really now pushing or demanding this treatment modality. You mentioned also the payers. You know, at the end of the day, the payers is asking themselves on actuality basis, "Am I saving cost for those patients suffering from depression?" If they see good results within 6 days or within 30 days, but they still see some very good response and remission rates, the answer will be that they will start to adopt it. We have seen, we were very happy to see some very early adoption with some of the payers, but we're starting to see more and more payers now also adopting this SWIFT protocol. I believe we're gonna see some more serious momentum toward the end of the year. I believe the industry is looking for shorter treatment and effective treatment that are saving and improving patients' life.

Perfect. Thanks for taking our questions.

Thank you, Jeff.

Thank you. Our next question come from Ram Selvaraju from H.C. Wainwright. Please go ahead.

Thanks so much for taking our questions. Congratulations on excellent operational performance this quarter. Firstly, I wanted to ask about when you submit the application for use of Deep TMS in connection with treating PTSD associated with MDD, maybe give us some additional granularity on what you anticipate the review timeline to be once the application has been submitted. If you can give us some sense of what you anticipate to be any new emergent promotional strategy that you might utilize, assuming that approval for this indication is granted. Secondly, I wanted to ask if you could provide some additional color on what you were just saying, Hadar, about the additional adoption of the SWIFT system from a reimbursement perspective. Potentially, you know, how many more covered lives might have access to the system?

How many more reimbursement providers might ultimately ink agreements with you? Thirdly, I wanted to ask about the Proliv Rx system and what the sales and marketing strategy is underlying this. If you have any sense of when it might be possible to share with us what the total addressable market looks like, you know, and what peak sales might be for this product. Thank you.

Yeah, great. Thank you for all these question. Let's start with with the PTSD. You know, usually, once we submit the data to the FDA, the clock start ticking. Usually take up to 90 days for us to get the first response. If everything goes well, you know, we can expect to get the FDA approval. Usually, there is some a back and forth about that. If I need to put it in the right timeframe, we do expect to receive the FDA clearance before the end of the year. That's about the PTSD. You also ask about our marketing. How are we going to market this?

Obviously, this is the exact same market that we're playing today, right? For all those outpatients clinic, and specifically the one that are working with the police department or with active military folks, they got the volume of patient that most of them suffering from depression, anxiety, and also PTSD. What will be very, very unique for us is that we have treated hundreds of patients suffering from PTSD in Israel and similar numbers or even greater number also in the U.S. We are planning to do some meaningful marketing push toward the last quarter of the year to make sure that we're optimizing the revenue from this very, very, very important indication.

As for the second question on the adoptions of payer of SWIFT protocol. You know, we are looking on this very closely. We're speaking today with more than 20 payers, providing all the necessary data. I think the feedback is very positive. I do expect to get reimbursement by payers for, I would say, $40 million-$50 million covered life before the end of the year. Overall, very good momentum, even faster than we thought. We truly do believe that, you know, at the end of the day, what really matter is how is the efficacy of the treatment.

If you can deliver great efficacy and great durability in such a short time, I see no reason why the payers will not adopt it if they already fully adopt the standard protocol as well. With regards to your last question about the Proliv Rx. Just to remind again, we're still not owning Neurolief. However, we are watching very carefully on some of their strategic and commercial approach. The main focus right now is penetration in the VA. The main reason is because they got listed in the VA contract, and they got reimbursement over there. I mentioned on my call that they got a pricing of $11,800 per system.

That's a really, really significant reimbursement for this treatment. The main focus right now is to focus in all VA accounts and start generating some significant revenue. In parallel, the company also doing some limited market release in some leading enterprise, BrainsWay enterprise accounts, and they're looking also to define some contracts with some IDNs, big IDNs, in the U.S. I also mentioned it, there is additional $5 million investment in Neurolief based on some significant commercial milestone, which I'll be more than happy to write the check if they're going to achieve it. I think that Neurolief within Proliv Rx have everything they need in order to execute and to deliver in this very, very important market.

Remember, The main reason that we invested in this company is to increase the target market for BrainsWay. It's specifically aimed for the people that find difficulties to come to the clinic. They are far away. That cost also could be a bridge to neuromodulation. It could be a complementary treatment after they are doing the Deep TMS sessions within the clinic. All in all, I do expecting a very, very growth trajectory for Neurolief specifically with the Proliv Rx device.

Two other very quick ones. You mentioned in the press release the versus year-ago period growth and remaining performance obligations. Can you just provide us with the quarter-over-quarter change in remaining performance obligations? Maybe if you could just comment on if you are seeing any disruption at all to operations, international sales, stemming from the ongoing evolving situation in the Middle East. Thank you.

Yeah, I'm gonna let Ido just to chime in on the remaining performance obligation. I will take the second question.

We mentioned also on the call that our remaining performance obligation grew 25% year-over-year. We have a backlog right now, which, this is our remaining performance obligation of $75 million comparing to approximately $60 that we had in the previous period. This represents the growth of our remaining performance obligation backlog. Also, I believe Hadar will mention, will add more about the international, we also see a growth in the revenue, mainly in Q1 for the international market as well. We actually even saw a growth in our revenue and orders this quarter comparing to the previous one.

Great. Thank you, Ido. For your question, you know, our main business today is the U.S. and international. We didn't see any disruption from the current situation. We have enough inventory just to support the demand. I think the TMS market is growing and experiencing a significant amount of consolidation. With us focusing on those enterprise accounts, and specifically with what we're seeing with shifting among providers toward Deep TMS away from some other pharmacologic and alternative like SPRAVATO, I think all of these can really deliver on the record number of units that we were able to deliver in the first quarter.

Remember, usually there is seasonality in our space. Usually, Q1 is a light quarter. You know, people are still, you know, sitting on the fence about their budget decisions for the year. Overall, I'm very proud and very glad to see the good momentum, not only in the U.S., but also in the international. I think that on the international, we continue to strengthen our distribution channels across the world. We see some very growing demand, not only in mental health. We have some additional approved indication in those markets in recovery area and addiction. I do anticipate that this momentum will continue to grow.

Thank you so much.

Thank you, Ram.

Thank you. Thank you.

Okay.

This concludes our question and answer session. I would like to turn the conference back over to Hadar Levy for any closing remarks. Over to you, sir.

Yeah. I would like to thank all of the investors, analysts, and other participants for their interest in BrainsWay. With that, please enjoy the rest of your day. Thank you.

Thank you. The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.

Good day, and welcome to the BrainsWay Q4 and full year 2025 earnings conference call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your telephone keypad, and to withdraw your question, please press star then two. Please note today's event is being recorded. I'd now like to turn the conference over to Brian Ritchie with LifeSci Advisors. Please go ahead.

Thank you, and thank you for joining today's BrainsWay Q4 and full year 2025 earnings conference call. With us today are BrainsWay's Chief Executive Officer, Hadar Levy, and Chief Financial Officer, Ido Marom. The format for today's call will be a discussion of recent trends and business updates from Hadar, followed by a detailed discussion of the financials. Then we will open up the call for your questions. Earlier today, BrainsWay released financial results for the three months and full year ended December 31st 2025. A copy of the press release is available on the company's investor relations website.

Before I turn the call over to Hadar, I would like to remind you that this conference call, including both management's prepared remarks and the question and answer session, may contain projections or other forward-looking statements regarding, among other topics, BrainsWay's anticipated future operating and financial performance, business plans and prospects, and expectations for its products and pipeline, which are all subject to risks and uncertainties, including shifting market conditions resulting from geopolitical supply chain and other factors, as well as the use of non-GAAP financial information. Additional information regarding these and other risks are available in the company's earnings release and in its other filings with the SEC, including the Risk Factors section contained in BrainsWay's Form 20-F. I would now like to turn the call over to Hadar. Please go ahead, Hadar.

Thank you, Brian. Welcome, everyone, and thank you for joining us today. We closed 2025 with strong momentum, reporting a 27% increase in revenue to $14.5 million for the Q4. Revenue for the full year also grew 27% to $52.2 million compared to 2024. I am pleased to report that this puts us slightly above the high end of our guidance for 2025, with a steady wind at our back as we head into 2026. In addition, we delivered 10 consecutive quarters of profitability, supported by expanding margins and the implementation of our recurring model. Taking a deeper dive into our performance, 95 Deep TMS systems were shipped during the Q4, and our installed base reached approximately 1,700 Deep TMS systems worldwide.

As a result, we exited the Q4 with a book-to-bill ratio of 1.4x, up from 1.2x last quarter. In addition, our remaining performance obligation reached $70 million, representing approximately 43% growth from $49 million a year ago. Overall, our expanding backlog reflects not only strong demand, but also our ability to efficiently monetize long-term commitments through recurring leasing contracts. As we have discussed previously, a major driver of our ongoing success is the decision we made a little more than two years ago to focus our efforts to grow by targeting large enterprise customers who value our technology and the high level of service we provide to support their Deep TMS systems. During this transition, we also observed that these customers increasingly were interested in our leasing program, which better support the rapid expansion and ongoing maintenance needs.

This shift has enabled us to build highly attractive recurring revenue model. Today, the majority of our enterprise customers are signed on a long-term leasing agreement with a high rate of customer renewals. Overall, this model provides meaningful stability and visibility into our revenue and growth potential that extends for years into the future. It is worth mentioning that this recurring revenue model has also allowed us to scale revenue significantly faster than operating expenses, demonstrating the operational discipline that continue to expand our margins and increase profitability. Importantly, we are still in the early stage of building awareness adoption of Deep TMS. I estimate we have penetrated less than 10% of the market, and we continue to see strong demand from both new facilities and patients seeking access to our systems.

As part of our long-term growth strategy to take additional market share, we have targeted expanded reimbursement coverage with payers across the U.S. I am pleased by the progress our team has made on multiple fronts, driven by broader adoption of Deep TMS, our clinical research, which has produced positive results across multiple new indications and patient segments, and our development of the accelerated SWIFT Deep TMS protocol. These initiatives are delivering positive market reaction, and I cannot praise the BrainsWay team enough for the work they are doing behind each of these programs. A central reason we stand apart in the market is our innovative platform, supported by extensive peer-reviewed published clinical evidence demonstrating efficacy across a broad range of condition, including major depressive disorder, anxious depression, late-life depression, OCD, and smoking addiction.

We continue to advance the clinical and regulatory pathway for Deep TMS by expanding our potential indication pipeline, including ongoing work in alcohol use disorder, which I will touch on shortly. In parallel, we are supporting the evaluation of accelerated treatment protocol for certain indication with the goal of further improving patient access and treatment efficiency. In the Q4, the FDA granted the label expansion for the Deep TMS system, allowing the treatment to be used as an adjunct therapy for adolescents aged 15 to 21 suffering from major depressive disorder. This clearance expands the addressable patient population and positions Deep TMS therapy with the broadest age range for the treatment of depression, spanning patients from 15 to 86 years old. It is worth noting that an estimated 5,000,000 adolescents in the U.S. have experienced a major depressive episode in the past year.

As such, we believe this represents a large potential patient population that can now benefit from access to this treatment option. We recently received market clearance for an accelerated Deep TMS protocol for the treatment of MDD. In addition, several payers have begun providing coverage for this new protocol, an important step that supports broader clinical adoption and improved patient access. This includes Premera Blue Cross, which was the first to issue coverage for accelerated Deep TMS for adolescents and adult MDD patients. Highmark Blue Cross Blue Shield, which released a draft coverage policy for accelerated Deep TMS across its covered population. We believe these milestones will support broader adoption of Deep TMS and reinforce the clinical leadership of our platform. Access to treatment goes beyond payers and approved indications.

For many patients considering Deep TMS, one of the major hurdles has been time, specifically the number of required office visits. This is why we are so excited to have announced just last week landmark data featured in two peer-reviewed manuscripts published by Brain Stimulation, the premier journal of neuromodulation. This data further validates that our SWIFT Deep TMS protocol for the treatment of MDD provides a significantly faster, non-invasive way to treat patients without compromising the efficacy of our existing protocol. We believe widespread adoption of SWIFT approach, which reduces the number of clinic visits in the acute phase of Deep TMS treatment by 70% could alter how interventional psychiatry is delivered, improving patient retention and expanding clinical options at a time when demand for non-drug depression therapies is rising.

We believe the SWIFT protocol will result in as a win for the patient, the provider, and the payers. We are also seeing payers making meaningful changes that improve patient success access by reducing administrative barriers. This include Evernorth Behavioral Health recent decision to eliminate prior authorization requirements for TMS for contracted providers treating patients covered under Evernorth and Cigna Healthcare plans. We view this as an important step forward in expanding access to this effective and well-accepted therapy as it empowers providers to deliver timely care to patients who meet Evernorth TMS policy selection criteria. We hope this progress help pave the way for similar actions by other payers. Moving to an update on clinical activities for Deep TMS. In the Q4, we announced that an NIH grant for $2.5 million was awarded for Stanford study on Deep TMS for alcohol use disorder or AUD.

This represents a major economic and health burden affecting about 29,000,000 Americans, and despite available treatment, up to 60% of patients relapse within three to six months. The study, which is posted on ClinicalTrials.gov for any of you that would like to review the details, will utilize our novel Deep TMS 360 system, which has been designed to provide more comprehensive and uniform stimulation of the neurons in the targeted brain regions. We look forward to supporting this study. We are also preparing a submission to the FDA for clearance based on the data from U.S. depression patients with comorbid PTSD symptoms, primarily treated within the VA system. As a reminder, Deep TMS offers several meaningful advantages compared to other treatment options. It is an outpatient procedure that does not require hospitalization or anesthesia. It's generally well-tolerated, and it's associated with minimal side effects.

In Israel, the concern surrounding PTSD has risen dramatically following the October 7 attack. In response to the growing clinical need, the Israeli Ministry of Defense Rehabilitation Department has approved reimbursement for Deep TMS therapy for qualifying PTSD patients treated in Israeli public hospitals. This decision represents an important step in expanding access to care for those affected. Changing gears slightly, let me provide an update on our strategic initiative focused on securing minority equity investment in high-performing mental health providers operating five to 50 centralized sites. As a reminder, this investment provides capital to providers, which in turn enable them to support growth initiatives and launch new locations. Our investments are designed to facilitate their ability to scale more rapidly, allowing for faster access by their patients to interventional psychiatry modalities. We believe their success truly validates our capital-efficient enterprise partnership strategy.

In addition, positioning these providers to grow and invest in the services will further support the broader ecosystem and help expand innovation, which is also a part of our strategy that I will touch on more in a moment. To date, we have announced minority investment in five mental health networks, including BrainStim Health, which we completed just last month. I am excited to report that the providers that we invested in are already performing strongly, with growth reported in the patient demand for interventional psychiatry therapies, including Deep TMS, in just two to three quarters. This macro growth also translates into micro growth for our core business, in addition to the increased value of our equity stake. Looking ahead, we have already identified more than 200 other qualified clinics as potential candidates for participation in this program.

We look forward to providing updates on additional investment throughout 2026. We see meaningful opportunities to broaden our impact in mental health treatment. While Deep TMS remains our core strength, we believe we can leverage this market position to develop a portfolio of data-driven technology-enabled neuromodulation solution that can serve more patients in more settings and with more treatment options. Our long-term vision is to become the only company mental health offering database integration of multiple treatment modalities across multiple care settings. It was under this strategy that we executed an initial strategic investment in Neurolief, a developer of Proliv Rx, the world's first wearable, non-invasive, multi-channel brain neuromodulation platform that is designed for use at home. In January, FDA granted Class III PMA labeling for Proliv Rx as an adjunct treatment for adult patients suffering from major depressive disorder.

This approval represents a significant regulatory milestone, making Proliv Rx the first and only at-home neuromodulation treatment with FDA labeling applicable to treatment-refractory MDD patients. We are excited to be working with the Neurolief team on meaningful synergetic approaches that include the commercial and research infrastructure of both companies. As a reminder, our agreement with Neurolief includes milestone-based funding for up to an additional $11 million of convertible loan over two tranches, along with an option to fully acquire the company. With that, I will now turn the call over to Ido for his review of our Q4 2025 financial results. Ido.

Thank you, Hadar. As Hadar mentioned, we had another very strong quarter with revenue of $14.5 million, representing a 27% increase compared with $11.4 million reported for the same period last year. During the quarter, we placed 95 Deep TMS systems, bringing our total install base to approximately 1,700 systems as of December 31st 2025, a 26% increase compared to the same point in the prior year. As a result of our strong performance in the Q4, we beat the top end of our guidance with $52.2 million of revenue recorded for the full year 2025. This represents a 27% increase compared to the $41 million reported for 2024.

Gross profit for the quarter was $11.1 million, up $2.6 million from $8.5 million in the prior year period, while increasing gross margin to 76% compared with 75% for the same period last year. Gross profit for the full year 2025 was $39.4 million or a 75% gross margin. This is compared to $30.6 million during 2024, which reflected the same gross margin. Turning to operating expenses. Sales and marketing totaled $5.1 million compared to $4.5 million in Q4 2024. An increase of approximately $0.6 million, driven by targeted investment in commercial expansions and marketing programs.

For the full year 2025, sales and marketing expenses were $18.9 million, compared to $16.2 million for 2024. Research and development expenses were $2.5 million compared to $2 million last year. An increase of $0.5 million primarily from our ongoing clinical trials and development activities, which represent investment in our future. R&D expenses for the full year 2025 were $9.6 million compared to $7.2 million in 2024. General and administrative expenses were $1.6 million, flat with the prior year period. General and administrative expenses for 2025 were $6.5 million, compared to $5.8 million for 2024.

Operating income was approximately $1.9 million, which is a $1.5 million increase compared with the $0.4 million reported for the same period last year. Operating income for the full year 2025 was approximately $4.3 million compared to $1.4 million in 2024. This performance reflects the scaling of our operation, strength of our recurring revenue model, and disciplined cost management. Adjusted EBITDA increased to $2.3 million from $1.5 million in the prior year period. For the full year 2025, we reported adjusted EBITDA of $7 million, representing 13% of revenue, which is at the top end of our guidance. This is compared to adjusted EBITDA of $4.5 million for 2024 or 11% of revenue for the previous year.

Net income for the quarter was $2.9 million for 2025, compared to $1.5 million in the same period of 2024. For the full year, we recorded net income of approximately $7.6 million, compared to $2.9 million in 2024. Turning to the balance sheet. We have maintained a strong cash position with $68 million in cash and cash equivalents as of December 31st 2025. We believe this capital will support the continued growth of our core scientific and technology operation, as well as our strategic investment program, which aims to increase patient access to innovative treatments while also building long-term value for our shareholders. Remaining performance obligation grew to $70 million, a 43% year-over-year increase.

We believe this further proves the strength of our long-term growth strategy and provides strong visibility into future revenues. Cash flow from operations in 2025 was positive, further reinforcing the strength of our recurring model and high collection efficiency. Our capital structure remained debt-free, giving us significant flexibility to pursue strategic growth initiatives, including the investment program Hadar outlined earlier. Looking ahead, we are excited by the momentum in our business and the opportunities ahead. Based on our strong backlog, sales pipeline and new growth opportunities following recent FDA clearances, we expect revenue in the range of $66 million-$68 million for the full year 2026. This guidance represents a year-over-year growth rate of 27%-30%.

Also, we expect operating income in the range of 13%-14% of revenue, and adjusted EBITDA of $12 million-$14 million, representing anticipated growth of 86%-100% over 2025. This concludes my prepared remarks, and I will now turn the call back to the operator to please open up the call for questions. Operator?

Thank you. Yes, sir. Thank you. We will now begin the question and answer session. To ask a question, you may press star then one on your telephone keypad. If your question has already been addressed and you'd like to remove yourself from queue, please press star then two. Today's first question comes from Jeffrey Cohen at Ladenburg Thalmann. Please go ahead.

Good morning, and thank you for taking our questions. I guess firstly, can you give us a little better sense of the Q4 placements as far as units sold, units leased, and also any color regarding OCD placements?

Yes. As we mentioned, we shipped 95 systems during Q4, and more than 50% out of this number were also included the H7 coils.

Okay, got it. That's helpful. Can you talk about the Deep TMS 360 trial that's going on, the study that's going on? How many centers have the unit, and how many patients would you anticipate in the study over what time period?

The TMS 360 is designed for two new markets for us. The first one is the addiction one that we're already actively recruiting patients for the alcohol use disorder trial in 10 centers across the U.S.

The goal is to recruit 200, a little bit more than 200 patients overall. We just launched this recruitment. My hope is to recruit at least 50% of the patients before the end of the year. The demand and the participation in this trial looking very, very good, as far as we see it, today. We'll try to accelerate this recruitment for this very, very important clinical trial. The other segment for the TMS 360 is neurology, specifically for Alzheimer's and dementia.

We are now actively working on three leading neurology centers to launch a small study in all these three centers for Alzheimer's disease to track if we can slow down the disease with this rotational field 360 machine. Overall, 10 centers for alcohol use disorder, plus three feasibility study for this new neurology feasibility study.

Perfect. One more quick one, if I may. As far as pricing, was there any pricing that you took in 2025 or would you anticipate any pricing for 2026 as far as sales or leases?

Look, we are different. You know, we are the only company in this segment in TMS that has a different product. Not only that we're reducing the pricing, I think that customers are willing even to pay premium price for product, for value, for all the support that we are providing. I do not anticipate any kind of a decrease for ASP. On the contrary, I would like even just to try and optimize the pricing of our value.

Perfect. Thanks for taking our questions. Nice readout.

Thank you very much, Jeffrey.

Thank you. Our next question today comes from Carl Byrnes at Northland Capital Markets. Please go ahead.

Thanks for the question, and congratulations on the quarter and the 10th consecutive profitable quarter as well. Of the $70 million obligations that you mentioned in the release and on the call, what percent, if you can quant this, relates to commitments from your existing strategic partners? Thanks.

Yeah. You know, we launched this minority investment program. I think the first one was in the second half of 2025. As I mentioned on my script earlier, we are very happy with what we're seeing. We're seeing a very nice increase in utilization using the devices and also the demand for our systems as well. The expectation from each one of those centers is to deliver new backlog or booking of between $3-$5 million on a yearly basis.

I can share with you that based on the increase in utilization, we are very, very happy and we are even exceeding some of the pace of what we expected to see when we just launched the program. I think that across the board, all these minority investments are delivering an increasing utilization of our Deep TMS systems. As a result, we see a very strong demand for backlog and new orders.

Great. Thank you. Again, congratulations.

Thank you, Carl.

As a reminder, if you'd like to ask a question, please press star then one. Our next question comes from Ram Selvaraju with H.C. Wainwright & Co. Please go ahead.

Hi. Good morning. This is Katie on for Ram. Do you anticipate significant utilization of the SWIFT protocol for Deep TMS in conjunction with deployment of like ketamine or psychedelics-based pharmacotherapy in MDD, please?

Yeah, for sure. You know, I, first of all, we do see a very strong demand for TMS, and I think the main reason for that is the SWIFT protocol. We do see more and more use of the SWIFT protocol in conjunction with some other modalities. It could be psychedelic, it could be med management or some other forms of therapy. But this is definitely a very one of the top acceleration of the demand. We do see some additional acceleration of the demand also coming from OCD in the last FDA clearance for adolescents. I think all of them, together with our last investment also together with Neurolief, really giving us whatever way we desire to see in our vision. A combination of treatments and modalities that will help us to optimize the revenue per location.

Great. Thank you so much.

Thank you.

Thank you. That concludes our question and answer session. I'd like to turn the conference back over to the company for any closing remarks.

Yeah, great. I would like to thank all of the investors, analysts, and other participants for their interest in BrainsWay. With that, please enjoy the rest of your day. Goodbye.

Thank you, sir. That concludes today's conference call. We thank you all for attending today's presentation. You may now disconnect your lines and have a wonderful day.