NeurAxis Earnings Call: Reimbursement Wins Drive Next Phase

NeurAxis, Inc. ((NRXS)) has held its Q4 earnings call. Read on for the main highlights of the call.

NeurAxis, Inc. struck an optimistic tone on its latest earnings call, framing recent regulatory wins and payer coverage as inflection points on the path to commercialization. Management acknowledged near-term margin pressure, uneven hospital adoption, and rising losses, but argued that growing reimbursement, clinical data, and solid liquidity tilt the risk‑reward in shareholders’ favor.

Category I CPT Code Sets Stage for 2026 Commercial Push

The company’s headline update was securing a Category I CPT code effective January 1, 2026, which management called a major catalyst for scaled reimbursement. With this code and associated RVUs in place, NeurAxis plans to pivot from access creation to commercial execution across a coverage footprint that now exceeds 100 million lives.

Major Payer Policy Unlocks Immediate Reimbursement

In December, NeurAxis won written medical policy coverage from a major national insurer covering roughly 45 million members, providing full reimbursement without prior authorization when proper diagnosis codes are used. This policy became an immediate revenue driver, improving the payer mix in the fourth quarter and supporting higher submission volumes.

VA FSS Contract Opens Federal Growth Channel

The company also secured a Federal Supply Schedule contract with the U.S. Department of Veterans Affairs, giving access to a system treating about 7 million active patients annually. Management reported that multiple VA facilities have already placed initial orders and early reorders, positioning the VA as a meaningful new federal growth channel.

Revenue and Units Deliver Seventh Straight Quarter of Double-Digit Growth

Fourth-quarter 2025 revenue rose 27% year over year to $968,000, while unit deliveries climbed 35%, marking the seventh consecutive quarter of double-digit unit growth. For fiscal 2025, revenue increased 33% to $3.6 million and units grew 44% versus 2024, reflecting rising clinical adoption despite operational hurdles.

Building Commercial and Reimbursement Infrastructure for Scale

Management detailed a build-out of commercial capabilities including targeted outreach to about 75 children’s hospitals, CME talks, and payer-focused marketing to drive utilization. Hiring plans span medical science liaisons, market development and digital marketing specialists, and an expanded prior-authorization team to support the broader 2026 commercialization effort.

Clinical and Regulatory Wins Broaden Indications and Age Range

On the clinical front, NeurAxis highlighted an FDA label expansion to include functional abdominal pain and functional dyspepsia in both children and adults, with eligibility broadened to ages 8 and older and up to four devices per treatment. Multiple randomized controlled trials are underway, including an adult trial at Cleveland Clinic, a cyclic vomiting syndrome study, and a 300-patient post-operative study at UPMC.

Improved Liquidity Eases Near-Term Funding Concerns

The company ended 2025 with $5 million in cash and reported fourth-quarter free cash flow of $2.5 million, exceeding its estimated $1.5 million core quarterly burn. Subsequent ATM usage and warrant exercises added about $2.6 million, pushing current cash above $6 million and leaving additional ATM capacity that management views as adequate near-term liquidity.

CPT Code Not a Silver Bullet Without Medical Policies

Management cautioned that payers typically will not reimburse based solely on the new CPT code, underscoring the need for explicit written medical policies. Submission growth is currently concentrated, with about 10% of children’s hospitals driving most activity, and broader adoption will depend on securing more payer policies and deeper hospital engagement.

Gross Margin Compression Tied to Mix and Inventory Reserves

Despite high overall margins, profitability slipped as gross margin fell to 85.4% in Q4 from 86.4% a year earlier and to 84.2% for 2025 versus 86.5% in 2024. Management cited excess and obsolete inventory reserves, higher discounting and financial assistance, and growth of the lower-margin RED device as primary drivers of the margin contraction.

Operating Expenses Rise as Company Invests in Growth

Total operating expenses climbed 20% year over year in the fourth quarter to $2.5 million, pushing operating and net losses to $1.7 million, while full-year operating loss reached $7.8 million. The company attributed higher spending to increased commissions, marketing and headcount, plus certain one-off items, arguing these are necessary investments ahead of the 2026 ramp.

Hospital Adoption Uneven Amid Operational Roadblocks

While coverage has expanded, NeurAxis noted that many children’s hospitals remain underpenetrated due to administrative challenges such as lack of dedicated clinic time, absence of physician champions, and complex multi-committee approvals. Only a small number of sites are treating near capacity, suggesting a sizeable utilization gap even where reimbursement is in place.

Adult Market Uptake Hinges on Large RCT

Management tempered expectations for near-term adult market contribution, saying broad adult medical policy coverage is unlikely until robust trial data are available. The Cleveland Clinic randomized controlled trial in adults has started but is expected to take about 18 months, delaying widespread adult reimbursement and limiting adult commercialization in the interim.

RED Device Growth Weighs on Margins and Inventory

The company’s RED device contributed to unit growth in the fourth quarter but at the cost of profitability, as it carries substantially lower gross margins than the flagship IV Stem system. Its expansion also drove excess and obsolete inventory charges, exacerbating the overall gross margin decline reported for the period.

Guidance Focuses on Execution Across 100 Million Plus Covered Lives

Looking ahead, NeurAxis’ guidance centers on executing now that the Category I CPT code and RVUs are locked in and more than 100 million lives are covered. Management aims to scale utilization through prior-authorization submissions, which are already roughly 10 times 2025 levels, leverage VA access, and progress ongoing RCTs to support broader, especially adult, payer coverage while managing margins and cash burn.

NeurAxis’ earnings call painted a picture of a small medtech company moving from validation to commercialization, with payor wins and regulatory milestones opening meaningful growth lanes. Investors will need to watch whether the company can convert coverage into consistent hospital utilization while controlling margin pressure and rising costs as it heads toward its pivotal 2026 ramp.