Zynex Inc ((ZYXI)) has held its Q4 earnings call. Read on for the main highlights of the call.
Zynex Inc’s recent earnings call presented a mixed sentiment, balancing between notable achievements and significant challenges. While the company celebrated growth in revenue per sales rep and promising trial outcomes for their NiCO pulse oximeter, it faced hurdles such as the Tricare payment suspension and a reported net loss for Q4. The absence of clear guidance for 2025 further contributed to the cautious tone of the call.
Revenue Growth and Diversification
Zynex Inc reported a 4% increase in revenue for 2024, with a notable 16% growth in orders. The company also achieved a 22% increase in revenue per sales representative, averaging $490,000. This growth underscores Zynex’s efforts to diversify and strengthen its revenue streams, despite facing challenges in other areas.
NiCO Pulse Oximeter Development
The development of the NiCO pulse oximeter is progressing well, with positive results from human trials conducted at Duke University and UCSF. Zynex is preparing for an FDA 510(k) submission, which could open doors to a multi-billion dollar market, marking a significant milestone in the company’s product innovation efforts.
Cost Savings
Zynex has implemented cost restructuring initiatives expected to save approximately $35 million annually. This includes a 15% reduction in corporate staff, reflecting the company’s strategic focus on optimizing operational efficiency and maintaining financial health.
Strong Cash Position
The company ended the year with a cash balance of $39.6 million, a 5% increase from Q3, and reported positive cash flows from operations for the year. This strong cash position provides Zynex with a solid foundation to navigate future challenges and invest in growth opportunities.
Tricare Payment Suspension
A significant challenge for Zynex is the temporary suspension of payments by Tricare, affecting 20-25% of its revenue. The resolution timeline remains uncertain, potentially taking up to 12 months, which poses a risk to the company’s financial stability.
Net Loss for Q4 2024
Zynex reported a net loss of $615,000 or $0.02 per share for Q4 2024, a stark contrast to the net income of $1.2 million in Q4 2023. The adjusted EBITDA also saw a significant decrease, highlighting the financial pressures faced by the company.
Decrease in Device Revenue
Device revenue decreased to $14.8 million from $16.3 million in Q4 2023, attributed to a shift in product mix towards lower-priced items. This decline emphasizes the need for Zynex to adapt its product strategy to sustain revenue growth.
Lack of 2025 Guidance
Due to the uncertainties surrounding the Tricare payment suspension, Zynex is unable to provide comprehensive guidance for 2025. This lack of clarity adds to the cautious outlook for the upcoming year.
Forward-Looking Guidance
Zynex’s guidance for the future is marked by both optimism and caution. The company projects $30 million in revenue for Q1 2025, with an anticipated net loss between $9 million and $10 million. Despite these challenges, Zynex remains focused on diversifying its products and revenue streams, with the upcoming FDA submission for the NiCO pulse oximeter being a key strategic priority.
In conclusion, Zynex Inc’s earnings call reflected a blend of optimism and caution. While the company has achieved significant milestones in revenue growth and product development, it faces substantial challenges, particularly with the Tricare payment suspension and financial losses. The lack of clear guidance for 2025 adds to the uncertainty, but Zynex’s strategic focus on diversification and cost savings provides a pathway for potential recovery and growth.