Brainsway Ltd Sponsored ADR Stock

Good morning, everyone. My name is Sachi, and I will be your conference operator today. At this time, I would like to welcome everyone to BrainsWay's Second Quarter 2026 Financial Results Conference Call.

[Operator Instructions] 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 its financial results for the three and six months ended June 30, 2026. A copy of the press release is available on the company's Investor Relations website, www.brainsway.com.

Before I turn the call over to management, 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.

Finally, please note that the company's S-K will be filed tomorrow at approximately 6:00 a.m. Eastern Time in accordance with the SEC's operating schedule. I would now like to turn the call over to Hadar.

Thank you. Welcome, everyone, and thank you for joining us today. We entered the second half of 2026 from a position of strength with accelerating growth, expanding profitability and increasing visibility into future revenue. But more importantly, we believe BrainsWay is entering the next phase of its evolution from a leading Deep TMS company into a broader platform for interventional psychiatry.

Our second quarter results provide further evidence that the foundation of this platform is getting stronger. Revenue grew 35% to $17.1 million for the second quarter compared with $12.6 million in the prior year period. We achieved this level of growth while maintaining operational discipline, resulting in expanded margins and increased profitability.

In the second quarter, operating income increased over 300% to $2.4 million compared with $0.6 million for the prior year. Adjusted EBITDA increased 141% to $3.5 million compared with $1.5 million for the same period last year, with adjusted EBITDA margin expanding to 20% from 11%.

This also marked our 12th consecutive quarter of profitability, underscoring the scalable nature of the business model. These results matter not only because of the growth they represent today, but because every system we install, every reimbursement expansion we achieve and every new clinical indication we develop, strengthen the platform and expand our long-term opportunity.

Let me take a minute to walk you through a few key metrics that we monitor each quarter to measure our continued growth.

During the second quarter of 2026, we shipped 125 Deep TMS systems, a 42% increase over the same period last year, bringing our installed base to approximately 1,950 systems. Every system represents more than an initial placement. It creates potential for multiyear recurring revenue, additional utilization, new indications and protocols, deeper provider relationship and greater clinical data. And importantly, as we expand the capabilities of the platform, we increase the potential value of systems that are already in the field.

Remaining performance obligations have increased to $80.4 million as of June 30, 2026, a 30% increase compared with the same period last year. We believe the continued growth in remaining performance obligation over the past several quarters demonstrates the strong market demand for Deep TMS as well as the success of our leasing strategy focused on servicing enterprise customers.

This is an important evolution in our business model. As the installed base grows, we believe revenue visibility, recurring revenue and operating leverage can increasingly compound. Our strategy is built around what we believe is a powerful growth flywheel with a series of reinforcing growth drivers that build on one another over time.

We believe the expanding clinical evidence for Deep TMS drives broader reimbursement, which in turn support greater physicians' confidence and adoption. As adoption grows, our installed base expands, creating a large recurring revenue stream and increasing operating leverage. The resulting operating leverage cash flow enable us to reinvest in additional clinical studies, reimbursement initiatives and strategic partnership.

At the foundation of our strategy is the strength of the Deep TMS platform itself. Our systems are supported by one of the industry's most extensive bodies of peer-reviewed clinical evidence, demonstrating efficacy across a broad range of neuropsychiatric disorders, including major depressive disorder, anxious depression, late-life depression, obsessive compulsive disorder and smoking addiction.

This growing body of evidence has resulted in multiple FDA clearances, increasing physicians confidence, broader reimbursement support and ultimately accelerated adoption of Deep TMS. One of the clearest example of our momentum is the continued expansion of reimbursement for Deep TMS.

Commercial payers increasingly recognize the clinical value of this therapy, while prior authorization requirements continue to become less burdensome. Perhaps just as important for us, we have also seen reimbursement continue to expand to include accelerated treatment protocol, which we call SWIFT. We currently estimate there are approximately 57 million covered lives in the U.S. with access to our SWIFT accelerated Deep TMS protocol.

Every reimbursement expansion lowers barrier to treatment, increased provider confidence in investing in Deep TMS systems, expand patient access and support higher utilization across our growing installed base. We believe SWIFT represents an important long-term growth opportunity for BrainsWay. By reducing treatment from several weeks to just a few days, SWIFT has the potential to improve convenience for patients, increase treatment capacity for providers and further strengthen the value proposition for payers.

During the quarter, we presented the first prospective 12-month durability data for the SWIFT accelerated Deep TMS protocol. The study demonstrated that patients maintain meaningful clinical improvement through one year following treatment, including sustained remission rates and continued improvements in functional outcome.

Importantly, these findings help address one of the key questions surrounding accelerated treatment protocol, not simply whether patients improve quickly, but whether those improvements are durable over time. We believe these findings further strengthen the clinical evidence supporting SWIFT and the case for broader reimbursement adoption an important driver behind broader adoption of Deep TMS.

Beyond expanding adoption within our existing indication, we continue seeking to broaden the clinical utility of Deep TMS platform. During the quarter, we presented results from the largest real-world study to date evaluating Deep TMS in patients with comorbid PTSD and major depressive disorder, which is one of the most challenging psychiatric population to treat.

Across 462 patients treated at 11 clinical sites, more than 83% experienced a meaningful response in PTSD symptoms, while substantial improvements were also observed in depression symptoms. We believe these findings further strengthen the growing body of evidence supporting Deep TMS across complex psychiatric disorder and reinforce our recent FDA submission seeking clearance for comorbid PTSD and MDD.

If cleared, this would represent another important opportunity to expand the clinical utility of Deep TMS platform, increasing the value proposition for every system already installed in the field without requiring providers to purchase additional capital equipment.

Taking together the clinical regulatory advances are occurring against the backdrop of an interventional psychiatry market that we believe is entering to an important period of long-term growth.

Payers are steadily expanding reimbursement for neuromodulation therapies. Demand for non-pharmacologic treatment options continue to grow among both providers and patients and awareness condition such as treatment-resistant depression, OCD and PTSD continue to expand.

We believe BrainsWay is well positioned to benefit from these tailwinds given our clinical evidence base, pipeline strategy, reimbursement infrastructure and installed base of Deep TMS systems. Capturing these opportunities require more than innovative technology. It also requires expanding patient access in investing in providers as they scale their practices.

That is one of the key objectives of our strategic priority investment program. This initiative is designed to do much more than efficacy deployed capital in promising investment targets. It allows us to partner with leading behavioral health providers and to align ourselves with organizations that have a plan to grow and succeed by accelerating patient access to care and building awareness of cutting-edge interventional psychiatry treatment approaches.

During the quarter, we continued to execute against this strategy with a strategic investment in HopeMark Health, a growth-oriented behavioral health platform, serving multiple clinics in the Greater Chicago area.

Following the close of the quarter, we continued with this strategy through investment in Radial Health, an innovative mental health service platform, combining clinical infrastructure, reimbursement capabilities and AI-guided decision support as well as in Sound Minds Behavioral, a leading growth-oriented outpatient behavioral health platform with locations across the Mid-Atlantic and Northeast.

This minority stake investment reflects our strategy of partnering with leading providers organization and expanding our presence within the broader behavioral health ecosystem while allowing BrainsWay to remain focused on advancing our technology, clinical evidence and commercial execution.

Looking ahead, we continue to assess a pipeline of investment opportunities and remain disciplined in identifying partners that can generate both financial growth and meaningful strategic value.

Another important part of our long-term platform strategy is extending neuromodulation beyond the clinic. Today, Deep TMS anchors treatment in the clinical setting. Over time, we see an opportunity to extend the patient's journey into the home and ultimately connect treatment with the data and digital monitoring.

That is the strategic context behind our investment in Neurorelief. Following the FDA approval for its ProlivRx system in March, the commercial launch has begun and progressing. While it remains early in the launch, we are encouraged by the progress being made by Neurorelief and the execution discipline that they roll out.

International expansion represent another important layer of our long-term opportunity. Across our current partner market, we estimate there are more than 170 million untreated patients. Importantly, we are not starting from zero. We are building on established commercial partnership and existing IP infrastructure, providing what we believe is an attractive and capital-efficient path to scale.

As interventional psychiatry expand globally, we believe our international footprint can become an increasingly important contributor to BrainsWay's growth.

In closing, we are pleased with our performance this quarter, but we believe we are still in the early stage of much larger opportunity. For many years, BrainsWay has been known as a Deep TMS company. Today, we are building something broader, a global platform for interventional psychiatry. Every system we install, every reimbursement expansion, every new indication and every strategic partnership strengthens that platform.

We are building it from a position of increasing financial strength with a strong growth, expanding profitability and greater revenue visibility. One platform, millions of patients, decades of growth.

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

Thank you, Hadar. During the second quarter of 2026, we continued to execute on our growth strategy, which drove a 35% increase in revenue to $17.1 million compared with $12.6 million for the same period last year.

During the quarter, we placed 125 Deep TMS systems, bringing our total installed base to approximately 1,950 systems as of June 30, 2026.

Gross profit for the quarter was $12.8 million, up 34% from $9.5 million in the prior year period, while gross margin remained stable at 75%.

Turning to operating expenses. Sales and Marketing expenses for the second quarter of 2026 totaled $4.9 million, steady with the second quarter of 2025. This reflects continued operating leverage and improved efficiency across our sales organization, enabling us to support our commercial activities while maintaining a disciplined cost structure.

Research and Development expenses were $3.2 million compared with $2.3 million last year. The increase was primarily driven by investments in clinical development and research, including our ongoing PTSD and alcohol use disorder research initiatives.

General and Administrative expenses were $2.3 million compared with $1.6 million in the prior year period, an increase of approximately $0.7 million, driven by higher professional fees and administrative costs.

Operating income was approximately $2.4 million compared with $0.6 million reported for the second quarter of 2025, with operating margin expanding to 14% of revenue from 5%. This performance reflects the scaling of our operations, the strength of our recurring revenue model and disciplined cost management.

For the second quarter ended June 30, 2026, we reported net income of $2.7 million, up 34% compared with $2 million in the same period of 2025.

Adjusted EBITDA was $3.5 million, an increase of 141% compared with $1.5 million in the second quarter of 2025. Adjusted EBITDA margin expanded to 20% from 11%.

As Hadar mentioned earlier, this is the 12th consecutive quarter of positive adjusted EBITDA, and we are very excited by our progress in scaling our growth and profitability.

Remaining performance obligations grew to $80.4 million as of June 30, 2026, a 30% year-over-year increase. We believe the steady increase in our RPOs reflect the strength of our business and execution against our long-term strategy.

Cash flow from operations was $6.3 million in the second quarter of 2026 compared with $1.2 million in the first quarter, reflecting the strong payment term structure related to certain strategic deals. The capital structure of the company remained debt-free, giving us significant flexibility to pursue strategic growth initiatives, including our minority investment program.

We reported cash and cash equivalents of $62.4 million as of June 30, 2026. We believe our strong capital position will support the continued growth of our core scientific and technology operations 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, based on our strong first half performance and continued momentum, we are raising our full year 2026 guidance from a range of $66 million to $68 million to a range of $68 million to $70 million for the full year 2026.

This new guidance range, if achieved, will represent a year-over-year expected growth rate of 30% to 34%. In addition, we are narrowing our ranges for operating margin to 13.5% to 40% of revenue and adjusted EBITDA to $13 million to $40 million, representing anticipated growth of approximately 90% to 100% over full year 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?

[Operator Instructions] The first question is from Sam Eiber from U.S. Bancorp BTIG.

Maybe I want to start on the guidance raise. Obviously, implying sustained 30% growth in the back half of the year. So maybe you can talk about some of the trends you're seeing into Q3 so far and generally, the confidence to sustain this premium growth rate.

Yes, thank you for the question. We have a very high confidence based on what we are seeing based on the growing remaining performance obligation that gives us very good visibility toward the second half of the year and also into 2027.

So there is definitely a very strong demand across the board for Deep TMS product for the MDD, OCD and specifically the SWIFT protocol that is today one of the main drivers for the demand. So we continue to see some very strong demand for new systems and new orders towards the end of the year, and that's what's really increasing our confidence by raising the guidance.

Okay. Very helpful. And then maybe if I could use my follow-up here on the SWIFT protocol. I guess, generally, what are you hearing from providers that have adopted it so far? Are they generally aware that it exists? How much education do you need to do on the marketplace? And just generally, those that have adopted it, are they starting to see better throughput, better patient demand because of the reduced treatment burden? Generally, what are you hearing from those who have started to use it?

Yes, absolutely. The feedback is very, very strong and very good. Look, at the end of the day, it's not just a matter of better convenience for the patients, but also for the clinics. So a busy clinic can really increase their utilization by using this SWIFT protocol, and they can see much more patients on a daily basis and even complete the all 30 sessions protocol with a few days.

So there is definitely lots of interest, both from providers and patients. But the main feedback is really about the convenience of those patients that are seeking to get a better treatment in such a shorter time. The economics look very, very good for the clinic. And that's what I think what really drive also some of the payers to continue and expand reimbursement because of the demand is growing for the SWIFT protocol.

The next question is from Jeffrey Cohen from Ladenburg Thalmann.

A couple of questions from our end. So firstly, I wanted to jump back into the SWIFT protocol. Could you give us a sense of the payer environment and give us a sense of percent of new cases that are falling under the protocol? And then maybe give us a little bit of a sense of types of patients that are falling under that protocol, whether they be MDD or PTSD, OCD, et cetera.

Yes. So currently, we're only speaking about MDD patients. Obviously, once we are looking to get FDA approval for comorbidity patients with PTSD and MDD. But currently, we're only focusing on MDD patients, which are all kind of a drug resistant. So they are the ones that are seeking for a better treatment. They're not responding well for medications or maybe to some other treatment modalities. The percentage, as I said, we have today 57 million people that are eligible for this treatment.

So I think reimbursement is a key initiative for the adoption of this treatment. But if you are not specifically for psychiatrists that just not submitting their cases to payers. We definitely, a very high growth of this SWIFT protocol. The one that are still looking for reimbursement. So there is good adoption, but it depends on the local payer in each one of those territories.

But overall, I would say once you have reimbursement in your territory, I would say that you can see a significant increase in the adoption of the SWIFT protocol, getting close to 50% of the total population in the local area.

Okay. Got it. And then as a follow-up, you spoke about the $80.4 million performance obligations. I'm assuming that's lease systems, and I'm assuming that's a two- to three-year period. But could you tie that in also to some of the minority investments that you've made so far and how that pipeline may look or what we should anticipate for the back half of the year?

Yes. Look, I mean, the backlog is growing, and we are very proud with this 30% increase in the backlog. Remember, these are all orders that we still didn't recognize the revenue. I mean it's a backlog of orders, but the revenue will be recognized going forward. One of the main driver for supporting this growth is definitely the minority investment that we are making in those growing platforms.

Each one of them are expanding. They are building, they are not only buying some new locations, but they're also growing organically and expanding the utilization of TMS inside the business. So most of them like we're most likely going to have more than one system in each location.

Based on that and based on the demand and the growing demand of patients, they will continue to order a bulk of systems from us as utilization grows since the interventional psychiatry market continue to grow. So I do anticipate this number will continue to grow toward the end of the year. And that's what really gives us good visibility when we're entering into 2027.

[Operator Instructions] The next question is from Ahmed Mahmud from H.C. Wainwright.

This is Ahmed on for Ram. Could you give us some color on how ProlivRx sales are ramping? And when do you expect to decide whether to acquire Neurolief and what factors will determine that decision?

Yes. Thank you for taking this question. I think as I said in my script, Neurolief is a very important factor for our future platform to extend our outreach also for Home Use Care. Currently, Neurolief are running launch mainly with the VA channel. I think I said in the last call, they already got reimbursement from the VA channel and they're now deploying some of the first commercial stage within the VA channel, but also in some private clinics. The progress are going very well.

But what we would like to monitor is kind of in the next 90 days, what we call as a soft launch is just to see that what are the main KPIs that will help us to accelerate the growth when you're going to do a full launch of this. So today, we still have only minority investment in Neurolief.

It's a convertible loan. We will decide whether we would like to continue and invest or acquire Neurolief based on some commercial milestone, which relates to growth and profitability. So there is still time for that.

Right now, we are very encouraged with the commercial progress and the soft launch that they are making in the U.S. More to come, and I believe that I will report and give much more details on some of those important metrics towards the end of the year.

And if I could just follow up on the minority investments. Could you give us some color on the cadence and the number of minority investments you plan on making for the second half of this year? And when do you expect them to begin accelerating BrainsWay's revenue growth? And on a separate follow-up, might the optimized BTMS protocol be elevated earlier in the treatment continuum for major depression?

Yes. Look, on the minority investment, we have done today six minority investment. I believe we are expecting, and we still have a pipeline of minority investment that we are reviewing very carefully in some very thorough due diligence process. There is definitely a good interest. Look, my expectation is to invest in growing business with the right management team and a profitable business, okay? I would like to make sure that I am investing in the right portfolio that has the ability to grow their business in interventional psychiatry.

When they are growing, which means that there is a growing demand by patients. And when there is a growing demand by patients, you can assume that there will be also a growing demand for the Deep TMS platform. And again, my expectation is to have at least more than one system in each one of those locations, specifically due to the adoption of the SWIFT protocol.

So as long as each one of them will continue to grow and based on their projections, each one of them can expand to 10 to 15 locations every year. So if they will execute very well and they are executing very well, I am expecting to continue and see a very nice demand and use of the Deep TMS platform. What was the other question?

The other question, so I was asking how might the optimized Deep TMS protocol be elevated early in the treatment continuum.

Yes. I think on the continuum of care, once you failed in one or two medications, you have several good options. We believe that a very good option is the noninvasive treatment of the Deep TMS, specifically with the SWIFT protocol. There are some other options like psychedelic that are very popular today. But where I'm seeing the continuum of care and in terms of growing the business, we are growing with one of the most growing market, which is interventional psychiatry.

So I do believe that the future of this business will be offering options to patients, which will be a combination of a few treatment modalities. It could be psychedelic, it could be Deep TMS and it could be also med management. So on the continuum of care, Deep TMS is definitely reaching to an inflection point where exactly it should be. And we're seeing some better results and better demand due to that.

There are no further questions at this time. I'd like to turn the floor back over to Hadar Levy for closing comments.

Thank you. So with that, we conclude our remarks for today. I want to thank for, again, for all the investors and the analysts for following the company. Thank you, and that's it for today. Have a good one.

This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.

Good day, and welcome to BrainsWay First Quarter 2026 Earnings Conference Call. [Operator Instructions] Please note that this event is being recorded. I now hand the conference over to Garth. Please go ahead.

Thank you, and 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. Then 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-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. 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 installed base to approximately 1,820 systems. Remaining performance obligations have increased to $75 million as of March 31, 2026. Notably, the vast majority of the new contracts signed during the quarter were multiyear 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 and 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, and 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 multipronged 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 payer across the U.S. to expand reimbursement coverage. For example, since the FDA label expansion for adolescents aged 15 to 21, we have worked towards 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 insurer, 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 are seeing a meaningful shift in the market as Deep TMS continues 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 noninvasive 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-reviewed 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 payers alike and expect SWIFT reimbursement to continue expanding. We recently announced 2 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 multicenter 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 to 6 months despite available treatments. We are also planning 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 to 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 5 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 success for BrainsWay. Beyond having an equity stake in these growing businesses, this strategy also provides 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 and we believe the value of these agreements is a 2-way street as our clinics gain access to BrainsWay's 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 locations 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 are 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 firmly believe we 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 a fraction of our addressable market, highlighting the significant runway for growth ahead. While Deep TMS remains our core strength, our long-term vision is to become the only company in mental health offering data-based integration of multiple treatment 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 noninvasive multichannel brain neuromodulation platform that is designed for use at home.

Since then, this relationship has advanced on multiple fronts. Following the FDA's premarket approval of the ProlivRx system for the treatment-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 towards 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 complementary 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 2 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 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 other -- 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. Demand continued to grow with distributors across Asia Pacific, Canada and Europe, accelerating adoption of Deep TMS as an important pace. With that, I will now turn the call over to Ido for his review of 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 installed base to approximately 1,820 systems as of March 31, 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 multicenter 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 our 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 operations 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 investments Hadar 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 31, 2026. We believe our strong capital position 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.

Looking ahead, we continue to expect revenue in the range of $66 million to $68 million for the full year of 2026. This guidance represents a year-over-year growth rate of 27% to 30%. In addition, we expect operating income in the range of 13% to 14% of revenue and adjusted EBITDA of $12 million to $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?

[Operator Instructions] Question comes from Jeffrey Cohen with Ladenburg Thalmann.

Congratulations on the strong quarter and progress. So a couple of questions from our end. Firstly, could you talk about the upcoming PTSD filing? And could 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?

Yes. Jeff, thank you. 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 medications so we're not washing out patients from medications. But 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. Okay. And then 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 percentage as far as patients using SWIFT versus the regular protocol? And then maybe also talk about the payer environment? Are the payers agnostic or the payers taking this on and accepting it as a similar protocol?

Yes. 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 to 30 days. So 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. Now 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 results, just to remind everyone, when 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, which means that both the provider and the patients are really now pushing or demanding this treatment modality. You mentioned also the payers. So at the end of the day, the payer is asking themselves on actuarial basis, "Am I saving cost for those patients suffering from depression." And if they see good results within 6 days or within 30 days, but they still see some very good response and remission rates. So the answer will be that they will start to adopt it. So 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 going to see some more serious momentum toward the end of the year. And I believe the industry is looking for shorter treatment and effective treatment that are saving and improving patients' life.

Our next question comes from Ram Selvaraju from H.C. Wainwright.

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? And 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 how many more covered lives might have access to the system? How many more reimbursement providers might ultimately ink agreements with you?

Thirdly, I was asking about -- I wanted to ask about the ProlivRx system and what the sales and marketing strategy is underlying this and if you have any sense of when it might be possible to share with us what the total addressable market looks like and what peak sales might be for this product?

Yes. Great. Thank you for all the questions. Let's start with the PTSD. 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. And then if everything goes well, we can expect to get the FDA approval. Usually, there is some back and forth about that. So if I need to put it in the right timeframe, we do expect to receive the FDA clearance before the end of the year. So that's about the PTSD and you also asked about marketing, how are we going to market this. So obviously, this is the exact same market that we're playing today, right, for all those outpatient clinics and specifically the one that are working with the police department or with active military folks, they got the volume of patients that most of them suffering from depression, anxiety and also PTSD.

So 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. So 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 the SWIFT protocol. So we are looking on this very, very closely. We're speaking today with more than 20 payers providing all the necessary data. I think that the feedback is very, very positive. I do expect to get reimbursement by payers for, I would say, 40 million to 50 million covered lives before the end of the year.

So overall, very good momentum, even faster than we thought. But we truly do believe that at the end of the day, what really matter is how is the efficacy of the treatment. And 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 ProlivRx, so 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. So 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. But I think that Neurolief within ProlivRx have everything they need in order to execute and to deliver in this very, very important market.

Remember, we are -- 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 and that growth also could be a bridge to neuromodulation. It could be a complementary treatment after they are doing the deep TMS sessions within the clinic. So all in all, I do expecting a very, very growth trajectory for Neurolief, specifically with the ProlivRx device.

And then 2 other very quick ones. You mentioned in the press release the [Technical Difficulty] versus year ago period growth in remaining performance obligations. Can you just provide us with the quarter-over-quarter change in remaining performance obligations. And then 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.

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

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

Yes. Great. Thank you, Ido. And for your question, our main business today is the U.S. and international. So 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 and 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 alternatives like Spravato, I think all of this can really deliver on the record number of units that we were able to deliver in the first quarter.

And remember, usually, there is seasonality in our space. Usually, Q1 is a light quarter. People are still sitting on the fence about their budget decisions for the year. So overall, I'm very, 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, very growing demand, not only in mental health, we have some additional approved indication in those markets in recovery area and addiction. And I do anticipate that this momentum will continue to grow.

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.

Yes. 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 Fourth Quarter and Full Year 2025 Earnings Conference Call. [Operator Instructions] 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 fourth quarter 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 to your questions. Earlier today, BrainsWay released financial results for the 3 months, and full year ended December 31, 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 fourth quarter. 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 reoccurring model. Taking a deeper dive into our performance, 95 Deep TMS systems were shipped during the fourth quarter, and our installed base reached approximately 1,700 Deep TMS systems worldwide. As a result, we exited the fourth quarter 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 2 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 supports the rapid expansion and ongoing maintenance needs. This shift has enabled us to build a 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 conditions, 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 alcohol for a certain indication with the goal of further improving patient access and treatment efficiency.

In the fourth quarter, the FDA granted a 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. These clearance expand the addressable patient population and position 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 million adolescents in the U.S. have experienced a major depressive episode with 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 and Highmark Blue Cross Blue Shield's, 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 indication. 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 2 peer-reviewed manuscript 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, noninvasive way to treat patients without compromising the efficacy of our existing protocol.

We believe widespread adoption of SWIFT approach, which reduced 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 option at a time when demand for nondrug 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 includes Evernorth Behavioral Health recent decision to eliminate prior authorization requirements for TMS for contracted providers treating patients covered under Evernorth and Cigna health care 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 omit Evernorth's TMS policy selection criteria. We hope this progress help pave the way for similar actions by adopters.

Moving to an update on clinical activities for Deep TMS. In the fourth quarter, 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 million Americans. And despite available treatment, up to 60% of patients relapse within 3 to 6 months.

This study, which is posted on clinicaltrial.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 simulation 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 advantage 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 5 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 5 mental health networks, including Brainstim Health, which we completed just last month. I am excited to report that the provider that we invested in are already performing strongly with growth reported in the patient demand for interventional psychiatry therapies, including Deep TMS in just 2 to 3 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 a potential candidate 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 noninvasive multichannel 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 atom 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 2 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 fourth quarter 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 installed base to approximately 1,700 systems as of December 31, 2025, a 26% increase compared to the same point in the prior year.

As a result of our strong performance in the fourth quarter, 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 expansion 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 operations, 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 31, 2025. We believe this capital will support the continued growth of our core scientific and technology operations 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 obligations 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 to $68 million for the full year 2026. This guidance represents a year-over-year growth rate of 27% to 30%. Also, we expect operating income in the range of 13% to 14% of revenue and adjusted EBITDA of $12 million to $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?

[Operator Instructions] Today's first question comes from Jeffrey Cohen at Ladenburg Thalmann.

So I guess, firstly, can you give us a little better sense of the fourth quarter placements as far as units sold, units leased and also any color regarding OCD placements?

Yes. So as we mentioned, we shipped 95 systems during Q4 and more than 50% of this number were also included the H7 Coil.

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?

Yes. So the TMS 360 is designed for 2 new markets for us. The first one is the addiction one that we're already actively recruiting patients for the alcohol user trial in 10 centers across the U.S. The goal is to recruit 200 -- a little bit more than 200 patients overall. So 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, and 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. So we are now actively working on 3 leading neurology centers to launch a study, a small study in all these 3 centers for Alzheimer's disease to track if we can slow down the disease with this rotational field 360 machine. So overall, 10 centers for alcohol use disorder, plus 3 feasibility study for this new neurology feasibility study.

Perfect. And 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 '26 as far as sales or leases?

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

Perfect. Nice readout.

And our next question today comes from Carl Byrnes of Northland Capital Markets.

Congratulations on the quarter and the 10th consecutive profitable quarter as well. So 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?

Yes. We launched this minority investment program. I think the first one was on the second half of 2025. And as I mentioned on my script earlier, we are very happy with what we're seeing. We're seeing a very, 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 million to $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. So I think that across the board, all these minority investments are delivering and increasingly in utilizing of our Deep TMS systems. And as a result, we see a very strong demand of backlog and new orders.

Again, congratulations.

[Operator Instructions] Our next question comes from Ram Selvaraju with H.C. Wainright.

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

Yes, for sure. 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 and the last FDA clearance for adolescents.

I think all of them together with our last investment also in the -- 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.

And that concludes our question-and-answer session. I'd like to turn the conference back over to the company for any closing remarks.

Yes. Great. I would like to thank all of the investors, analysts and other participants for their interest in BrainsWay. And 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.

Good morning, and welcome to the BrainsWay Virtual KOL event. [Operator Instructions] As a reminder, this call is being recorded, and a replay will be made available on the BrainsWay website following the conclusion of the event.

I'd now like to turn the call over to Hadar Levy, Chief Executive Officer at BrainsWay. Please go ahead, Hadar.

Thank you, Tara. Hello, everyone, and thank you for joining us. So my name is Hadar Levy, CEO of BrainsWay. I have spent over 25 years in med tech and my focus has always been the same, take real innovation and turn it into a scalable business that's changed patients' life.

Before I jump into the slide, I want to thank 2 partners who bring the clinical and operational day-to-day reality of our work into life. So we're joined Dr. Owen Muir, Co-Founder and Chief Medical Officer of Radial. Dr. Muir is leading clinician, who sees the unmet need in mental health every day. He's also been a key driver of the accelerated protocol in the U.S. and helped shape how we think about delivering faster relief to patients.

We're also joined by Michael Gershenzon, CEO of Stella, one of the fastest-growing mental health networks. Michael or Gersh will share what it looks like the scale care delivery with BrainsWay, especially since our strategic minority investment in Stella. So for both of you, thank you for being here and for helping shape the future of mental health.

All right. So just to remind everyone, what do we do? So BrainsWay is a global leader in noninvasive Brain Stimulation. Our FDA cleared, Deep TMS technology delivers target neurostimulation to treat major mental health conditions. Today, we are the global leader in TMS. We have more than 1,600 systems installed and over 7 million treatments delivered. That scale and impact are unmatched in our field.

Let me start with the headline of this slide about the third quarter. So Q3 was a quarter of strong growth and real profitability, proof that our strategy is working in the field. So revenue was $13.5 million, up 29% year-over-year. Gross margin stayed strong at 75%, and that translates into earnings. Adjusted EBITDA of $2 million, up 81% and net profit of $1.6 million, up 137%. So we are growing, and we're doing it profitably.

Now let's talk about momentum in our business. Remaining performance obligation reached $65 million up 37% year-over-year. That future revenue already signed and visible. We shipped systems up 43%. And remember, every system out there is clinic treating patients, generating recurring revenue and strengthening our clinical footprint. About 70% of new deals are multiyear leases. That's a big shift towards stability and predictability.

On the clinical side, we hit the milestone that changed the playing field, FDA clearance for the accelerated protocol for MDD. This isn't incremental. It's a new way of delivering treatment faster with the potential to reshape access across clinics. Dr. Muir will expand on that as part of his presentation.

We also announced that the VA Palo Alto secured $2.5 million NIH grant, supporting Deep TMS for alcohol use disorder. That's not just funding. It's a validation from one of the highest scientific bars in the world, another step forward in our expansion into the addiction space.

Finally, we continue to build an ecosystem, not just a product company. We now have 4 strategic minority investment. And just to summarize, the story for Q3 is simple: more systems, more contracts, more clinical momentum, more recurring revenue on top of profitability and cash strength.

So looking ahead, it comes down to execution and the numbers show we are delivering with discipline. Revenue growth has been steady across 11 straight quarters, and our 2025 guidance of $52 million remain fully supported by pipeline and recurring base. On the visibility front, so as I said before, $65 million in remaining performance obligation, 70% of new engagement are multiyear leases, customer retention rate is 93% and book-to-bill ratio is 1.3x carry momentum into 2026. Profitability continued to scale, 75% gross margins, $7 million annualized EBITDA run rate, 10 consecutive quarters of positive free cash flow, and we're doing it from a position of strength, $71 million in cash, no debt.

I want to capture a second with you on one of the most important shift on our evolution. We moved from one time sale model into a true ARR business model. Recurring revenue grew 34% year-over-year, faster than nonrecurring at 23%. In simple word, BrainsWay now behaves like a platform company, which provides more visibility, more scalability and more predictability, and that's a key driver for long-term value.

With the new shift in our business model, you can see the mix shifting toward recurring revenue, growing from $10 million in 2023 to 18.5 -- $18.4 million in 2025. Nonrecurring growth as well, but slower so the mix keeps improving. And that upgrade creates operating leverage. Revenue has been growing about 25%, while we keep OpEx growth under 15%. From 2023 to 2025 guidance, revenue increases by about $25 million, while OpEx increases by less than $8 million. Simple takeaway, we are growing faster than cost, so profitability extend naturally.

So let's talk about scale. How can we triple the new signed backlog? We are already at $65 million remaining performance obligation. We are profitable, and we are growing. The real question is execution. How do we deploy the $71 million with precision, turning capital into capacity, capacity into momentum and momentum into accelerated growth? So today, I'm going to share with you the road map that already in motion.

So let's review the growth driver for the next chapter of BrainsWay. So organic growth remains the base. Demand is growing due to the accelerated protocol due to the OCD due to the vast majority of approved indication. Utilization is climbing, recurring revenue compounding. The next step is to make strategic equity investment in mental health clinic.

By partnering with leading clinics that already have scale, strong patient flow and experienced management, we're able to extend access, increased utilization and create long-term recurring revenue stream with minimal incremental OpEx. From there, we're going to move into new care settings and new territories, like home use setting with the last investment that we made at Neurolief, addiction, rehabilitation and international markets. And the next major driver is new clinical indication in which we have built the strongest clinical platform in the category. And we are pushing into PTSD, addiction, cognitive decline and more. That's our strong performance turn into long-term momentum.

So let's touch base on the organic growth. So just to remind, again, to everyone, we changed the model from one time sell into high-margin ARR, powered by leasing and pay per use. With our new mix lease -- or fixed lease or pay-per-use offering, clinics can start without major CapEx, adoption is much faster and volume rises, recurring revenue increases. Now we are widening the final with the accelerated protocol clearance, with the adolescent MDD clearance and our strength in OCD, all will push demand higher, which means more patients, more referrals and more sessions per systems.

Let's jump into the strategic equity investment in mental health provides. Just to give you some kind of sense how is it going to look. But before that, I want just to -- just touch base on the -- one of our main shareholder that's called Valor Equity Partners. Valor Equity Partners is roughly $20 billion technology-focused investment fund, known for helping and build scale from iconic companies of the last decade.

So when they lean in, it's not passive capital. It's a signal. And it matters for 3 reasons: one, they know how to scale, they help build global platform before; two, they're active partners, not passive capital, supporting talent, operations and expansion; and three, they validate the platform opportunity. The investment sales, Deep TMS technology is not just a product. It's a global platform.

So we internally and together with Valor, we try to think how to accelerate the growth, right? So yes, we are growing organically. We are profitable, how can we really accelerate the growth into the future. And we came to a conclusion that the best way is to invest minority stake in leading mental health networks, clinics that already deliver care of scale, and we identified more than 200 qualified clinics that can potentially be a good fit for this initiative. Each network adds 10 to 15 sites a year that's going to translate into machines.

So if we're going to do a simple math, 10 clinics create a potential of $100 million to $150 million in your booking over the 3 years without additional OpEx. Only 10 signed contracts with leading mental healths clinic, can yield between $100 million to $150 million in new bookings in the next couple of years.

So how do we partner? This is a scalable partnership engine. So there is a minority investment with preferred share into this leading mental health clinics, only in clinics with aligned DNA which means clinical excellence, growth, profitability and the right management team. Every dollar drive utilization, ARR and brand strength. We have already done 4 investments this year, and we're just getting started.

Let's think about the new care setting and territories. So in general, Deep TMS starts in the clinic, but care cannot end there. Patient needs continuity at home, and that's why Neurolief matters. We partnered and invested in Neurolief to develop a home use neuromodulation system for MDD. The vision is simple. Treatment begins in the clinic and continue at home and vice versa under medical oversight. This is the first toward BrainsWay 360, a connected mental health ecosystem built around Deep TMS, next-generation rotational Deep TMS 360, digital tools, diagnostics and smart cloud platforms. We are building continuity of care and real-time data that improve outcome and scale impact.

Very quickly, just to touch on the international growth opportunity. So we have presence in -- outside of the United States, and the momentum is real. The demand is growing. The distributors are pulling Deep TMS faster. This isn't a future option. It's already contributing, and it's a meaningful global runway in the next couple of years in Asia Pacific, in Europe, in the Middle East and in Latin America.

So last but least, I want just to touch base on some of the new care settings. So Deep TMS 360 is the future platform of BrainsWay. With the rotational field, we can stimulate more neurons in a much more effective way. We believe that we can meet shorter treatment with a better outcome and new indication. Clinical work is already underway in alcohol use disorder, post-stroke rehabilitation, and broader neurology indications. This is the bridge to the next chapter of the company.

So just to give you some kind of taste of some upcoming milestones with the road map. So now we pretty check the box on kind of the near-term view for the next 12 months, accelerated in adolescence demand now is increasing. New alcohol use disorder trial has been launched already. We are planning to sign 5 enterprise deployments before the end of 2025. And the data collection for the FDA co-morbidity PTSD application together with MDD is underway. We are targeting it for 2026. For the midterm, Neurolief home-use device launch will be something that we're really, really looking for just to conduct a pilot and see how it's going to move because we do think it's going to reshape the market.

We're going to continue to have a broader enterprise roll out, up to 10 new investments and wider core adoption with more payers win and for the long run, bigger platform, neurology portfolio, global, BrainsWay 360 launch and some selective global expansion. So if I need to just to summarize this slide, in the near term, demand and acceleration in the midterm, scaling up the growth and for the long term, we are focusing on some very interesting indication outside of mental health as well.

So let me close with a simple takeaway. We lead the category with our 4 FDA-cleared indication. Our market is expanding through a new indication, home use and international growth. The business is recurring by design, 70% multiyear leases. We have a very strong visibility into 2026 and even beyond with a $65 million remaining performance obligation. We are costs consistently profitable, 10 straight quarters of positive free cash flow, and we are back to grow $71 million in cash and Valor as a scaling partner. Put it all together, and we are in a real inflection point. 2025 was a record year for BrainsWay, 2026 will be the breakout year for the company.

So now I'll turn the call to Gersh just to share his experience and view working with BrainsWay.

Absolutely. Thank you, Hadar. As Hadar mentioned, my name is Michael Gershenzon. I'm the CEO and Co-Founder of Stella Mental Health. I'll tell you a little bit more about what we do here shortly.

But before that, I think these are probably statistics or directionally things that don't need much discussion but worth a reminder. So 70% of U.S. adults have experienced one or multiple dramatic events in their life and that in a lot of people, we said debilitating afflictions with every year, over 8 million people are suffering from PTSD, upwards of 50 people suffering from depression with 18 million within that suffering from MDD or major depressive disorders, 20 million with moderate or severe anxiety.

So all to say that this is a massive and global problem that the folks on this call are trying to make our small little impact on. And as we can appreciate, all of that kind of comes with massive societal costs. So most importantly, maybe the human costs, so people suffering from PTSD are 10x more likely to attempt suicide. Obviously, self harm has very expensive downstream ramifications for ED visits and kind of just the medical care ecosystem at large with those suffering from mental health disorders upwards of 4x more likely to end up in ED.

So again, a lot of words to say that -- let's say, there's a lot of people [ to help ]. The TAM is massive and innovation like that BrainsWay and the rest of the market are pushing forward, provide some, let's say, silver lining to this kind of global epidemic.

So at Stella, who do we treat? We view ourselves as -- through the lens of the indications and diagnoses we treat, not so much the treatments we offer necessarily. So we are focused on depression, anxiety and PTSD. And within that, we've kind of positioned ourselves with our referral basis and within our markets as treating the treatment-resistant conditions within each of those.

So as you can see, our -- the severity of the symptoms that our patients face kind of skew towards the severe symptoms. So over 50% suffer from severe depression, over 53% suffer from severe anxiety and PTSD, more than half have PTSD and a lot with kind of chronic and debilitating severe PTSD symptoms. And again, I touched on traumas. We're very focused on data outcomes collection. So we spend a lot of time focused on what it is that led people to us. So within kind of the experienced traumas, it's an average of 3 -- over 3 per person, childhood traumas being, unfortunately, more than half experienced by our patients, health and frankly, there's a list of -- and a long tail of others.

So all to say that we see, let's call it, short of the inpatient cases, those on the severe side of these symptoms. And from a demographic perspective, that ranges from 18 to 84, I think, is the oldest patient currently in our care ecosystem, 54% female, 45% male, 1% nonbinary. So point being, these are afflictions that are universally felt and we treat it each and every day.

So what do we offer? Everything starts with a comprehensive psycho -- biopsychosocial with a mental health provider, so either a psychiatric mental health nurse practitioner or a psychiatrist to again assess what was on the previous slide, what is it the patient suffering from and what do they need. And we have a range of tools, including medication management and therapy or what's called the frontline treatments or general psychiatric treatments as well as interventional treatments, which are kind of the fastest growing in the market and provide the best and breakthrough outcomes, which I'll share here shortly.

So we offer insurance reimbursed modalities such as esketamine and dTMS, which obviously we'll talk a little bit more about as well as cash pay once, ketamine therapy and a specialized procedure for PTSD. So our goal is really to offer all or as many as we can operationalize evidence-based outpatient psychiatric and psychological treatments under one roof, that minimizes the coordination effort between referral sources.

And we know there's a lot of patient drop-off when you give someone a name to a therapist. There's a great likelihood that they're not going to act on that referral. So our goal is to build kind of a cohesive ecosystem internally. And unfortunately, these are largely chronic conditions and patients need more than just one modality. So again, building kind of that internal engine and all outpatient evidence-based modalities under one roof provides most importantly, the best outcomes.

So let's talk about those outcomes. So what you're seeing here -- I'll caveat with our internally collected patient reported outcomes on clinical scales for depression PHQ-9, for anxiety GAD-7. And these are from about 10,000 patients and I think 2,000 -- or 200,000 scale and survey completions.

So on the depression side, I'll stratify this into let's say, general psychiatry, so therapy medication management and the combination of the two, absolutely has an important place in psychiatry and I'll caveat, I'm a nonclinician. Dr. Muir will shed a lot more light on these things in a more scientific realm. But that is how oftentimes patients come to us seeking help. They've heard about therapy. They've heard about medication management and frontline treatments are really important.

However, we know that less than half the people find remission and in our kind of internally collected outcomes here 1/3 or just barely over 40% are finding clinically significant improvement 1 to 3 months out from treatment, which is where the breakthrough or what's called interventional psychiatric treatments come in. So IV/IM ketamine, Spravato, a combination of many interventions and very importantly, dTMS have almost twice as good of outcomes.

What's not presented here is durability, how long people stay better, which is also much more improved. And just the rapid-acting nature of these interventions provide you, again, breakthrough outcomes in a smaller window of time compared to maybe years of therapy or kind of a lifetime of medications.

Now all of that said, together, this integrated care model does yield the best outcomes and really mixing and matching these modalities that's right for the patient provides both the most effective in the moment outcome as well as keeping people better.

So a little bit more about how our care model has and continues to evolve. So in 2024, we provided about 12,000 patient appointments. Now that we're towards the end of the year, I can more or less confidently say, we'll end the year around 85,000 to 90,000 patient appointments. And next year, our budget is to deliver over 120,000 appointments.

And within that, over 1/3 of them are interventional in nature. And now importantly, over 60% of the interventional bucket is our revenue generation. So these -- both from a business model and outcomes perspective or care model perspective are kind of the superior modalities and where we're focusing kind of our effort and energy to be market leaders in the markets where we are providing those interventional psychiatry modalities.

Within the interventional bucket, for us, dTMS is by far the fastest-growing modality. So as a percentage of the interventional appointments, it was only 8% in '24. 21% so a tremendous amount of growth in '25, and we're expecting that to continue into '26.

So prior to our partnership with BrainsWay in Q2 to where we'll end up Q4, we'll have about 100% growth in appointments delivered -- in dTMS appointments delivered. So both by the nature of just continuing to expand dTMS becoming just general awareness, more people know about modality, the accelerated protocols and just the incredible work BrainsWay and Hadar are doing to get this into the marketplace, we're benefiting from those tailwinds and so our patients.

Now the last thing I'll end on is our kind of 3-year growth plan. So as we talked about, we've had a tremendous amount of growth through 2025. So we'll have 12 and actually we have 3 sites under LOI. We might end the year with 15 sites, and our goal is to get to 40 within a 3-year span. So we are in the L.A. area, Salt Lake City, Chicago and Boston. Frankly, within those markets, there's room to build 50, 60, 100 locations. So our kind of first step is to densify our market positioning in each of those large MSAs, which will do throughout 2026 and then '27, '28, we'll continue to explore maybe 1 to 2 additional markets, again, with the goal of entering those with a bit of density and continuing to build on that market positioning through de novos and organic growth.

And frankly, the biggest lever for our business, both from a revenue, profitability and kind of patient-centric outcomes approach is continuing to further our interventional adoption as maybe we could all appreciate the great majority of people have heard of therapy. They've heard of medication management or SSRIs.

Most people still haven't heard of Spravato or dTMS or interventional modality. So as those continue to progress in just general awareness, we're already seeing people coming to us for dTMS, already educated on what that modality can offer that -- those are all tailwinds that benefit people's people with outcomes, but also kind of our business model.

So growing our, let's call it, cross referral -- internal cross referral of our gen psych patient from under 15% today to 25%, we're yielding incredible revenue growth for us. And also just within dTMS, which is still kind of our largest growth, however, within interventional as general awareness grows and maybe most excitingly, the accelerated protocol has become more known and reimbursable that's when we expect to see a tremendous amount of continued growth in exponential growth in dTMS.

So with that, I will pass it to Dr. Muir to tell us more about these exciting innovations.

Thank you so much. I think I get to do the slide advance. Hey, everybody. Welcome investors, analysts, friends, colleagues and readers of my newsletter or viewers of my TikTok channel.

To give you a sense of the amount of product market fit, I have 8 million views on TikTok in the last year on videos I've made largely around conversations around insurance coverage of accelerated Transcranial Magnetic Stimulation, which I'm going to focus on.

I am the Chief Medical Officer of 2 companies. One is Radial, which I'm a co-founder. That team includes our team members who were previously at Amazon Pharmacy, a little company you may have heard of, and the former Chief Medical Officer of Osmind, Carlene MacMillan, who's another investigator on this accelerated trial I'll be presenting data from. And I'm also the CMO for Neurolief, the other strategic investment BrainsWay made earlier this year in an at-home treatment for treatment-resistant depression.

The mental health crisis has a solution, and that solution is to use better and more scalable treatments. And I'm going to tell the story of how big this market is and how much suffering there is. For every person who dies by suicide and this number is tragically going up every single year in the past several years. We also have 4 people who have hospitalizations for suicide attempts. Of that number, we have another 8 who have emergency department visits related to suicide attempts or suicidality, 27 self-reported suicide attempts that never received medical care in a hospital setting and 275 people are walking around seriously considering suicide. This is a crisis by any definition.

And the pills that we have to address it, I'm going to be really frank, don't work, right? There was a historical thinking in the field of medicine. If you do nothing, 1/3 of people get better, 1/3 of people stay the same and 1/3 of people die. That was from the era of the ancient Greeks. And if you saw the numbers Gersh presented from their general psychiatry data, patients, about 1/3 are reporting they do better when we give them pills. And that's not good enough. And so we need something that can work dramatically better to keep up with the scale of need. And that was just in suicidality, which, of course, isn't just depression or trauma or anxiety, but all of those contribute to that most severe outcome, which is really only the tip of the iceberg of the suffering and disability from these disorders.

The data on those medicines we know from a reanalysis of the largest NIH-funded trial called STAR*D in 2023 is overstated, and that's about 30%. Again, 1/3 we'll get to remission with that first medication we try. And after that, it's really a dog's dinner. We had a large-scale trial just in the past year called ASCERTAIN-TRD published by our colleagues in [ Martin Aarons et al ]. And they found that switch of oral medication or augmentation with [indiscernible] in TRD just didn't change the needle. It wasn't statistically significant, but TMS was. And this is the kind of old school version of once-daily TMS done over 36 days, which is an effective treatment, but it's not an accessible or necessarily scalable treatment.

So is there a more scalable version of this technology? And I would argue, Deep Transcranial Magnetic Stimulation may be that tool that gets us to scale fastest. So we looked at data from over 1,700 patients treated in the real world, and you're going to notice that 20 sessions patients did better. And at 30 sessions, patients were in remission more than half the time.

And this is a huge deal. It looks even better on clinician-rated scales like the Hamilton Rating Scale for Depression, HDRS, and the self-reported PHQ-9 initially introduced by Pfizer to sell antidepressants, it looks a little bit lower, and that really is just an outcome of the scale.

But all of these numbers are better than 30%. And quickly -- so how quickly can this go? And so we looked at a pooling of data from real-world accelerated treatment, and we saw that response getting 50% or more better was happening in 80% of people and remission was happening in 50% of patients in 111 patients in the real world. And Dr. Tendler, looked at this data, [indiscernible] looked at this data. And we said, well, let's pick. What are we going to do the FDA pivotal trial list?

And so we chose the 5 times a day because it's a half day of treatment, more scalable for clinics, more easy to deploy, and honestly, just a little bit easier for patients to do because 10 treatments in a day like we see with [ saint ] neuromodulation is a really long day for a patient and a family.

And I'll point out that I came to this honestly, I am a psychiatrists but have also been treated with Deep Transcranial Magnetic Stimulation. That's how I know it works, and that's how I knew it should be available to more people faster because when I was a fourth year medical resident, I couldn't take a bunch of days off work. I had a limited number of days available to me, and that was 7. So less than that is what was necessary to kind of get me back to my life. And luckily, it worked. And that's just a little view of me getting the treatment. It's safe. It's noninvasive. It is relatively comfortable, especially with repeated treatments.

And so we saw that real-world data. We ran an FDA approval trial, and this is perhaps the best data ever submitted to FDA in the treatment of severe depression. So we took people who had failed multiple prior medications. We enrolled them across multiple sites. And by the way, the more sites you add to a trial, but less likely you're going to see a difference. And the study design is crucial here, we compare patients getting once-daily H1 Coil TMS to patients getting 6 days of half a day TMS. That accelerated line, and they were basically the same. They were noninferior. And this is important because it means our trial didn't get stopped early. The same trial was shut down at 15 active patients treated because it would have been unethical to continue to give human subjects sham treatment.

So to get to the larger numbers necessary, to convince any payer to pay for anything, we had to make sure this study wouldn't get shut down early, and thus, we used a non-inferiority design as opposed to a double-blind sham-controlled study design, and that was in collaboration with our colleagues at FDA. And it was cleared. We have a 78% remission rate, which frankly stunned us all. This is even better than we were seeing in the real world, and that's the opposite of the pattern you generally expect in that 6-day accelerated treatment with a number of taper sessions thereafter, mostly to preserve the blind from my perspective, but perhaps helping with durability as well.

This also similar data sets led to an adolescent label in depression. And I want to highlight the market opportunity here, there is only one other biological treatment that has any evidence and frankly, it's [ scamped ] for adolescent depression and it's Prozac. Every other drug you've ever heard of doesn't work for kids. I'm a child psychiatrist, this matters, but we have one safe and effective treatment that doesn't have an increased risk of suicidal thinking and its TMS.

And the Deep TMS product from BrainsWay is not identical to other TMS treatments. It is meaningfully different, and I would argue more scalable, harder to screw up at an individual like variability level. But it works. It works reliably. It works safely. And I got to say kids complain less about this treatment than adults do. So hats off to the young people who got these treatments.

We're seeing multiple FDA labels in a single year, and there's more to come. And I want to highlight, it's possible we may be able to get not just this remarkable in-clinic treatment but actually into the home in the very near future, submitted to the FDA for premarket authorization on a breakthrough status.

So this will be an FDA approved, not cleared product, is the Relivion -- sorry, that's the migraine product we already have in the market, the Proliv RX device for depression, and this is an external combined trigeminal and occipital afferent nerve stimulator and it worked. It's the best data ever presented to FDA for an adjuvant treatment for depression.

So the original TMS trials were done using TMS as a monotherapy, not with the drug. This was done while patients didn't screw around with their drugs. They just kept taking whatever they are taking, and it's harder to show a statistical difference. This treatment had a sham response that was better than the active group in the original nueronetics trial. And we still showed a difference of -- I think it was at 2.63 additional points in the Hamilton, which is a big number, in an at-home treatment.

So my hope is we're going to be able to either start people on treatment in this BrainsWay ecosystem. And if they don't remit, well, then we can get them to this more effective accelerated Deep TMS treatment or maybe they're so acute, they need Deep TMS treatment first, but they can't travel back and forth because maybe they live in North Dakota, and we can keep them well at home with the Proliv treatment.

But the most important thing about this, maybe that patient app you see in the upper right corner and the cloud database and analytics, it allows because that is clinical insights that is clinical visibility, and it could be used to measure things that aren't just the Proliv device in the future. These are all possibilities. So building that integrated scalable data collecting infrastructure where we can map that, frankly, 7 trillion parameter space of TMS alone, that's a huge deal. And so I think the strategic investment BrainsWay made into Neurolief that's likely to pay off not just for the Neurolief product itself, but for the entire BrainsWay ecosystem and for our patients who need to be well not just a little bit better. And that's the Proliv RX device, which we expect to hear back from the FDA by the end of the year or early next year.

To give you a sense of how potent that is in the home setting, we're looking at response rates in the first 8 weeks of the trial, essentially gets better in the second 8 weeks, which we're not presenting here, 31% remission, again, compared to sham of 21% in the first 8 weeks, getting into the 30-plus percent, almost to 40% in the next 8 weeks and clinical improvement in most of the patients.

So this is wildly outperforming medications traditionally in a cohort who've already failed oral medication treatment in a small at-home battery-powered device that's using sensory nerve stimulation. It's a massive unlock in scale. And when we put those things together, we have hope for our patients and all of this is in this integrated ecosystem that Hadar and Gersh were describing where we're getting many patients from treatments that don't work to treatments that do.

Thank you so much for your time.

[Operator Instructions] So our first question comes from Jeff Cohen at Ladenburg.

And thank you all for your time and presentation. I guess a couple of questions from our end. I guess, firstly, Michael, if you could comment on Spravato and ketamine as far as a Venn diagram, if it's being used before, after or in conjunction with dTMS or percent of population gives us a better sense of that use?

Yes, it's a great question. Given some of the challenges with prior authorizations, today, it's typically used not in conjunction with and those are insurance prior auths, if I wasn't clear. It is used either before or for those that are nonresponders on dTMS or TMS after.

So let me know if that answers your question. I think there's a lot of exciting opportunity to use those in conjunction with one another. Right now, not done very often just for the practical nature of the hoops we jumped through with insurance carriers.

At the moment, the payers are somewhat reluctant to paying for 2 or 3 and their pushback is leading toward which is your pushback saying TMS should be enough? Or is your pushback saying some of the other treatments may be first line versus dTMS?

Yes. Sorry, if I wasn't clear. Their pushback is not so far the right word. They want a trial of dTMS or a trial with Spravato at the end of which if the patient has not yet kind of seen the clinical results they're hoping for you submit for a prior authorization for the other one.

So getting them in conjunction with one another is more difficult and kind of less scalable. So we'll prescribe one or the other, run the patient through the protocol, see how they're feeling, if they are a nonresponder, submit and most often go with the inverse treatment.

Okay. Got it. And as a follow-up for Dr. Muir. I want add some commentary on Proliv, please. And congrats, hopefully, fingers crossed on the [ PMA ] breakthrough coming through in the coming months. But talk about the payers, again, I hate to harp on the payers, but talk about the payers and how they are currently thinking about or how they may be thinking about Proliv and/or dTMS and/or total reimbursement number?

So I'm actually shocked at the positive response I've gotten from my payer colleagues. I was speaking to senior leadership just the other week at both Cigna, Aetna. I had outreach from my colleague at TRICARE West. The outcomes, especially with accelerated TMS and the ability to get better patient adherence to a treatment course because that's already in the market. has the payers, honestly salivating, like I'm shocked to be saying that, but they are to get this in their formularies.

And the real blocker right now is the code set. The American Medical Association is, of course, the owner of the product that is current procedural terminology. And so a new code set I would expect to be submitted in 2026. This has been a long-term effort. You may be familiar with the fact that the medically unlikely edit AKA, how many TMS treatments can you do in a day was updated in 2025, thanks to Carlene MacMillan, the insurance committee chair, also full disclosure of my wife and Co-Founder at Radial.

And the American Medical Association wants to see an update that pushes to CMS and to thus all other payers around how to reimburse technically in the back end for these services. A lot of the progress you've seen demonstrated that real-world data had to do with my close relationship over many years with Cigna, which has allowed us to gather the data supporting the need to do that accelerated FDA trial, like we had the real-world data first, which is actually very odd. You can't do that in drugs. You can do that in devices. It's a safe way to proceed. And so that's what happened here. We had a really good signal first.

And when it comes to the Neurolief device Proliv RX, the price point for that is relatively aggressive in terms of coverage, and we've got no pushback from any of the payers we've talked to on that price point. So obviously, we need an FDA approval before we can bring it to market. But the -- in the margins are great on that product even at that aggressive price point. And so I'd expect it to come in around what we're seeing for oral medication augmentation with drugs like brexpiprazole or caplyta which you saw previously. It's going to be competitively priced with other adjuvant treatments and the pushback around that price point has been 0 in those initial conversations.

Maybe that means we're going -- we're being a little too aggressive, we'll find out. The benefit again is these are platform technologies. And so with -- you have Wegovy and Ozempic. They're the same drug, but they can have different product price points for those different indications. And we can do similar things with the BrainsWay ecosystem of technologies because when you get a new indication, you can have a different branding, a different price point, et cetera. Is that helpful, Jeffrey?

Yes, that's helpful. So would you expect the payers, let's say, that probably is 10% or 20% of TMS treatment. Would you expect that the payers would go for TMS plus Proliv afterwards or do you expect payers to go for Proliv prior to TMS or we expect for payers to push back Proliv instead of dTMS?

I would expect none of those. Keep in mind, Spravato is a $2 billion a year product on a tiny fraction of the total population of TRD patients. The thing they have to deal with is their -- currently, their network insufficiency and their lack of effective treatments. I don't expect them to have any opinion about any of the things you brought up in the beginning. They just want to know, are we including this in the formulary or not. And we're already -- because we have a migraine device in the market at Neurolief already, we're already in the product catalog as a vendor for the VA system.

So we expect to essentially go hard at a cohort of individuals who desperately need treatment for their depression but 8 drugs, which is frankly, most people aren't enthusiastic about drugs they just heard of them. and then working on the integrated delivery network, and those are groups like Kaiser Permanente or [indiscernible], which own both a health plan and the care delivery services, the Gunderson Health System in Wisconsin, for example.

So that's going to be our initial beachhead, but the enthusiasm from the large commercial payers has been frankly surprising, and we look forward to pulling that thread and bringing that product to market for everybody who needs it. I don't see them even remotely trying to dictate or have an opinion on the sequencing of treatments. That's up to clinicians, and they like working with narrow networks more and more. And so the kind of groups like Stella and like Radial are, we hope, in the position to be those narrow high-performing networks that are going to have preferred relationships with strategic payers.

Our next question comes from Ram Selvaraju at H.C. Wainwright.

Firstly, a question for Michael. I think it would be helpful to understand in your experience at Stella, how product like Deep TMS 360 ultimately could be deployed? And I think this kind of echoes a question that was discussed earlier, if it's going to be preferentially deployed in conjunction with specific genres of pharmacotherapeutic interventions or not? And if it is likely to be deployed in conjunction with specific pharmacotherapies, what are those pharmacotherapies most likely to be? Are they going to be in the psychedelic category, for example, more traditional antidepressant or other neuropsychiatric medications or something else? So that would be very helpful.

Also for Dr. Muir, I just wanted to understand what you expect the time line to be to obtain FDA licensure for the Neurolief device?

And then lastly, for Hadar, I wanted to see if you could opine on 2 things. One is the circumstances under which BrainsWay might acquire Neurolief, if you can disclose if that would be in the cash or stock transaction or a combination of both, if that is at BrainsWay's discretion or if that's been predefined, what the circumstances of a potential transaction like that would look like?

And also, if you can comment on, in terms of the international expansion and the evolution of the installed base, how quickly you expect Deep TMS 360 to sort of percolate across the current customer base and in particular, in the United States versus internationally, what you expect the uptake curve to look like, specifically for the 360 system?

Gersh, maybe you can just jump first and then Dr. Muir and I will jump on my questions later.

Yes, absolutely. So I will answer it from the nonclinician ones, Dr. Muir is uniquely positioned to do that. And I am uniquely positioned not to answer from that same point. I will say we will aggressively pursue. And our job is to be the delivery mechanism and infrastructure to the things that work best and the insurance companies reimburse and patients are excited to pursue. So that's a nonanswer to say anything that reduces the convenience barrier for a patient, which today is typically 36 sessions of D or TMS spaced out over 8 weeks that's inconvenient for patients, generally speaking, that sucks or reduces the catchment area of our sites and reduces our addressable market in our markets.

So with kind of the rollout and evolution of these protocols that reduces the barrier on patients to get treatment we have seen compared to some less frequent treatments that we offer meaning more convenient in the way of getting to -- getting in the center and increases your catchment area.

So that's to say, I think some of these developments that Hadar will speak to and the 360 and the accelerated kind of protocols and infrastructure are going to reduce the barrier on the patients and help more people actually want to and be able to get into treatment as far as how they interplay with other modalities. I think that's where we're #1, that's a clinician-led conversation in a lot of ways.

But that's where the payers, at least from our standpoint, set the rules. And I'd say we play by them. So how that evolves is to a certain extent, outside of our control. But if I had to guess just based on our internally collected data of kind of multimodal treatment, relaxing those standards and mixing and matching, let's say, both general psych and that being therapy medication management and these interventions, allows kind of the clinicians to do what's best by the patients.

That said, the payers kind of operate at, let's say, with their own set of data and maybe agendas and more order takers from that standpoint to a certain extent.

Ram, thanks for the layup. I appreciate you. So the -- as a long time kind of author both in science and in popular press about this future, what we're seeing with these range of treatments is, we're going to be putting general psychiatry to bed over the next couple of years, and we're not really going to need it because we have remarkably effective treatments in a short time frame.

And when you look at payer math, right? If you're on a Medicaid plan, the shortest time on plan in American health care, we're looking at 10.1 months on a health plan. So if you do anything, it's got to have a financial impact that's positive within 10.1 months, and Prozac isn't going to do that. Single-dose psilocybin might. But single dose psilocybin isn't in the market yet. MM-120 isn't in the market yet.

The only condensed dosing treatments that exist are accelerated treatments like BrainsWay's accelerated protocol in 6 days, that could possibly have an outcome that changes the cost curve for a payer. And practically, depression is the only condition that's been demonstrated to have treatment meaningfully change the cost curve. That's from data in the Oregon Experiment in Medicaid populations, which are -- I'm using it to as an example because it's the most challenging population in which to make a difference and treating depression works in that Oregon data set from their kind of natural experiment where they essentially inadvertently randomize people getting Medicaid coverage a number of years back and depression was the only condition where it mattered.

The Neurolief product, we are on the FDA's time line. There's some uncertainty with the government currently around those time lines, but we have under 90 days on the clock. They may come back with additional questions, but our work with them has been close and collaborative thanks to the breakthrough pathway. So I'd expect end of this year, early next year to be when we have that definitive decision. But again, I don't control what the FDA is doing. I do respect their hard work at all times, and they have been gracious and communicative throughout.

The -- briefly on the dTMS 360 product, the rotational field device that I want to highlight is 800% more efficient at 40% lower motor threshold. So it's more comfortable and wildly effective, and I have been waiting with bated breath for literally a decade for that product to come as far as it already has. But we're looking at a game changer in a disorder, alcohol use disorder, which hasn't had any meaningfully effective treatments of any kind.

Like you sit together in group therapy and you dry out and detox and we call that good enough and it's not for people who are suffering. And are there other indications like stroke, et cetera, where that may prove a meaningful treatment. And by the way, that's on better rate cards in hospital settings, please god, give me a neurosurgical rate card on which these treatments with its multiplier.

We're looking at an entire new area of total addressable market when we're getting into neurology settings. We're getting into hospital settings. At Radial, we're already working with hospital systems to bring these interventional treatments into inpatient, outpatient, residential, et cetera, levels of care. And we look to not just set new standards in what could or should be covered, but to make it a fiduciary duty to cover only the most cost-effective and best outcomes in treatment with the lowest risk.

Great. Dr. Muir you basically stole my thunder on the TMS 360.

I am sorry. This is how long Hadar and I have been working together.

But I'm going to touch on the international market. But it's definitely going to generate demand. Since it's a new modality, it's a new modality and new space, right? Not only in mental health, it's going into a new space like addiction neurology that we're starting to see some good results. And as Dr. Muir said, like 800% more efficient. I do foresee a significant demand.

We are speaking -- we're actively speaking with our distributors just to run some pilots in some rehabilitation centers. That we're definitely going to increase the appetite and the market demand outside of the United States. So big, big, big waiting for this technology. And again, it's not just a product. It's the oral ecosystem around this rotational which is, again, all the connectivity with the home care with the data collection with some personalized treatments so the market is really, really looking for this new modality.

With regards to Neurolief, so as we published, we have an option to acquire Neurolief based on meeting some certain milestones, the interest is definitely there. So we just need to make sure, first of all, let's make sure that the company is receiving the FDA approval and then some -- they need to hit some milestones around growth and penetration into the market.

And if there is a good DNA that is aligned between the companies, there is definitely a big interest. I will not get into the details whether it's going to be cash or stock deal. I mean, I think all the options are on the table, but there is definitely an interest. I do believe in this product. I do believe that it eventually will increase the total addressable market that some of it are not really existing to us today.

And most important is as a technology company is data collection. We now being able to collect data online from patients into our clinics, into our labs, I think that will be worth a lot for shaping up the future of mental health and in the future some other conditions.

So Carl Byrnes at Northland Capital Markets submitted his questions. Have you seen changes in workflow attributable to the one accelerate protocol into high remission rate from the study?

Dr. Muir, maybe you can jump on this?

Yes. We're building an entire company around it. So at Radial, we really focus on these accelerated deployments of treatments. And so that's true with the BrainsWay treatment, and we've been doing accelerated treatment since prior to this FDA label. We were a clinical trial site on it, but we built our business around deploying that and we'll be announcing more on the Series A funding of that probably later this week.

Yes. Maybe I can share just from our standpoint, from an infrastructure standpoint, it more and less requires us to have a minimum of 2 chairs in kind of 2 different rooms, given one room is more or less being utilized for a big part of the day. Another is turning patients over much more frequently. So from our standpoint, and maybe I can speak on behalf of the rest of the market, it will require more of Hadar and BrainsWay's great technology.

Great. And his final question, how do you see the accelerated protocol and data supporting great use and access?

So the easiest number to answer that question is the average distance travel to come see our clinicians. It's 600 miles. People are coming from all around the world, just to get access to this treatment. And that says there's product market fit when you add a plane ticket and prior to broad insurance coverage.

Imagine what that looks like when you have more local access, you have the ability based on that kind of telehealth infrastructure we built out on the legal side over the course of the pandemic. And now you're deploying it to be able to do those initial evaluations where the patient is, get them to the nearest clinic.

And if there isn't enough clinics near you, well then maybe there need to be more. And I would imagine there are more BrainsWay devices that are going to be needed, there's more monitoring technology that's going to be needed to make sure those patients get and stay well over time to retreat them promptly. And in your local hospital does actually can get people well in the time frame of an inpatient admission or even could get started in the emergency setting.

Keep in mind, there are ERs for psychiatric patients, they're having patients just sit there in a bed wasting time, money and suffering for 23 days before they're transferred to an inpatient psychiatric setting. In the time they're sitting there, they could be well with this protocol. And so it is a step function improvement in what's possible with depression and other psychiatric disorders just by virtue of being so much faster than we ever imagined possible.

Can I add anything there. Just a catchment area. Today, our average TMS patient trial was 14 minutes driving time. I think this increases that to at least an hour and just makes much more of the market available to every single clinic.

Great. Thank you. So this concludes our Q&A session. I'll hand it back to Hadar for some quick closing remarks.

Yes. Great. First of all, I'm feeling blessed having partners like you guys. So thank you for sharing your view today.

My take away from the session today, I think everybody can read the financials of BrainsWay, that's great. But I think all of us are shaping the future of mental health that is evolving in front of our eyes. My take away from some of the comments that you mentioned today, market is growing, is definitely growing, and we want to be there with the best modalities and with the best product. We're speaking about the huge total addressable market, whether it's alternative to pharma treatments or some other modalities. There is much more market awareness due to this minority investment that we're making through our channels. I'm very happy about that. 100% increase in utilization since we launched the program with BrainsWay.

Just to mention, by the way, Stella before they switch to BrainsWay, they use to work with the first generation figure-of-8 technology, and I'm really happy and feel proud to share that they continue to. They like the technology, they use the Deep TMS technology, and they see the benefits out of it and accelerate protocol is here and is going to win.

We are feeling the increased demand with all the great latest clearance that we received and we're really, really looking for a very, very strong 2026 that is going to be a breakout year for BrainsWay in specific, but I think for the space also in general.

So with that, I want to thank for the investors for listening us today. Enjoy the rest of your day. Thank you.

Good day, and welcome to the BrainsWay Third Quarter 2025 Earnings Conference Call. [Operator Instructions] Please note this event is being recorded.

I would now like to turn the conference over to Brian Ritchie with LifeSci Advisors. Please go ahead.

Thank you all, and welcome to BrainsWay's Third Quarter 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 and Ido, 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 3 months ended September 30, 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 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.

I would now like to turn the call over to Hadar.

Thank you, Brian. Welcome, everyone, and thank you for joining us today. We are excited to announce record quarterly revenue of $13.5 million reported in the third quarter of 2025. This represents a 29% increase compared with the same period last year. In addition, we shipped a total of 90 Deep TMS systems during the quarter, representing a 43% increase compared to the same period last year. This brings our total installed base to more than 1,600 systems across the globe.

With our quarterly results continuing to trend towards the higher end of expectations and improved visibility into the remainder of the year, we are raising the midpoint of our guidance for the full year 2025, including increasing our revenue guidance to a range of $51 million to $52 million, which is up from our previous guidance of $50 million to $52 million. We now expect to report operating profit in the range of 6% to 7% of revenue, up from the previous guidance of 4% to 5% and adjusted EBITDA in the range of 13% to 14% for the year, up from the previous guidance of 12% to 13%.

Let me now take a deeper dive into our performance and why we believe our long-term growth is being built into the current execution of our strategy. As I have mentioned previously, we made the decision approximately 2 years ago to focus our attention on selling to large enterprise customers who value our technology and high level of customer service to support their Deep TMS systems. To this end, we have structured multiyear lease agreement, which in turn provide us a steady foundation from which to grow our business and maintain gross margin every year. As a result of our team's dedication to this sales model, we have transitioned the majority of our sales over with approximately 70% of our recent customer engagement being lease agreements.

And I want to highlight that the customers are aligned with this type of engagement as we have had a high rate of customer retention with many customers deciding to extend and even expand their agreement out several years. And this outcome really highlights the scalability of our business. And while perhaps the initial focus each quarter is on the revenue numbers, internally, we also find value in looking at our book-to-bill ratio for the quarter, which was 1.3x indicating that bookings were solidly above our billing. And our remaining performance obligation under existing customer agreement was $65 million at the end of the quarter. These are just a couple of metrics, which we believe reflects a strong market demand momentum and give us confidence in our forward visibility and revenue trajectory. I am proud of how effectively our team has executed our business model to date.

Let me take a minute to walk you through our strategy, which includes 3 main key pillars, which we believe are our key to driving long-term growth: one, further elevating market awareness of Deep TMS and its clinical impact; two, advancing our R&D road map to unlock new and expanded treatment indication; and three, broadening patient access through global expansion and health system integration. At the core of these initiatives is our regulatory approvals and clinical data, which continued to set Deep TMS apart and allow us to lead the market.

Most recently, we announced that the U.S. FDA has granted an expansion of the treatment protocol for the Deep TMS system to include an accelerated protocol for major depressive disorder or MDD treatment. As a reminder, the traditional Deep TMS protocol involves a 4-week acute treatment phase with 1 session on each day of treatment. This is compared to an accelerated protocol, which involves a significantly shorter acute phase, taking place over several treatment days. This is a very exciting development for us in the treatment centers using our systems, as we believe the accelerated protocol has the potential to improve convenience and thereby make Deep TMS substantially more appealing to prospective patients. As a reminder, Deep TMS is the only TMS modality cleared by the FDA and with peer-reviewed published clinical evidence for a broad range of indications, including depression, anxious depression, late life depression, OCD and smoking addiction.

We are also supporting the evaluation of accelerated protocol for these other indications. For example, the U.S. NIH recently awarded approximately $2.5 million in 5-year grant for the clinical study evaluating the mechanism of action and potential efficacy of the accelerated Deep TMS protocol to treat alcohol use disorder or AUD. This study will be conducted by research team led by Dr. Claudia Padula and Dr. Michelle Madore of Stanford University and the Palo Alto Veterans Institute of Research. This study, which is posted on clinicaltrial.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. The accelerated protocol being evaluated in this study is similar to the accelerated protocol for MDD, including an acute phase taking place over several treatment days as compared to the traditional protocol, which is several weeks.

Moving on to our investment initiatives. As previously announced in late 2024, we identified a new opportunity to generate shareholder value by making minority interest investment in mental health providers as well as other enterprises that we believe are complementary to our business. This strategy allows us to tap into the market we know well, building additional market awareness, R&D road map, data analysis capabilities and expanding access to Deep TMS while avoiding stepping into an operational role outside of our core focus of Deep TMS. To support us in this initiative, Valor Equity Partner made a $20 million strategic equity investment in our company. This investment provided us with the capital needed to quickly move ahead with this strategy on a broader, more meaningful scale.

We are pleased with the rollout of this initiative to date, which most recently included our third and fourth investment in 2025. This recent strategic investment have come quickly on the heels of our first 2 agreements with Stella Mental Health and Axis. This collaboration is already making meaningful contribution as utilization of Deep TMS system at those clinics is up over 50% from the start of our relationship. During the third quarter, we also announced an initial strategic investment in Neurolief LTD, a developer of the world's first wearable noninvasive multichannel brain neuromodulation platform that is designed for use at home. This agreement includes a milestone-based funding for up to an additional $11 million of convertible loan over 2 tranches, along with an option to fully acquire the company.

These strategic investments are an exciting new part of our story, and we look forward to helping each business grow initially through the additional fund the investment provide, but also through strategic counsel as they look to navigate faster and larger growth. We look forward to identifying additional investment, and we'll keep you updated on these initiatives.

This is a truly exciting time in our history as we continue to identify ways to drive long-term shareholder growth. As we just heard, there is significant momentum in all aspects of our business, so much so that it is too much to cover on this call. Therefore, we will be hosting a virtual Investor and Analyst Day on December 1 to further discuss our operations, clinical, regulatory and financial progress. Additional details will be announced shortly.

With that, I will now turn the call over to Ido for his review of our third quarter 2025 financial results. Ido?

Thank you, Hadar. As Hadar noted, Q3 2025 was another record quarter for BrainsWay with revenue of $13.5 million, representing a 29% increase compared with the $10.5 million reported for the same period last year.

During the quarter, we placed 90 Deep TMS systems, bringing our total installed base to more than 1,600 systems as of September 30, 2025. Gross profit for the quarter was $10.2 million, up $2.4 million from $7.7 million in the prior year period, while maintaining a strong gross margin of 75% compared with 74% for the same period last year. This stability continues to reflect the strength of our recurring revenue model and disciplined cost management.

Turning to operating expenses. Sales and marketing totaled $4.7 million compared to $4.1 million in Q3 2024, an increase of approximately $0.6 million, driven by targeted investment in commercial expansion and marketing programs. Research and development expenses were $2.4 million compared to $1.8 million last year, an increase of $0.6 million, primarily from our ongoing clinical trials and development activities. General and administrative expenses were $1.8 million compared to $1.5 million in the prior year period, an increase of $0.3 million due in part to additional legal fees and due diligence costs related to new investments. Operating profit was approximately $1.3 million, which is a $1 million increase compared with the $0.3 million reported for the same period last year.

Adjusted EBITDA increased to $2 million from $1.1 million in the prior year period. Net profit for the quarter was $1.6 million compared to $0.7 million in the same period of 2024, demonstrating the operating leverage in our model as we scale. From a balance sheet perspective, we ended the quarter with $70.7 million in cash and cash equivalents, up $1.1 million from $69.6 million at year-end 2024. This increase was driven primarily by very strong collection during the quarter despite deploying $7.3 million for our minority equity investment as part of our strategic initiative. Remaining performance obligations grew to $65 million, a 37% year-over-year increase, providing strong visibility into future revenues.

Cash flow from operations in the quarter was positive, further reinforcing the strength of our recurring model and high collection efficiency. Our capital structure remains debt-free, giving us significant flexibility to pursue strategic growth initiatives, including the investment program Hadar outlined earlier. As Hadar mentioned, after a strong third quarter and increased visibility for the remainder of the year, we have raised the midpoint of our guidance for the full year 2025, which includes revenue guidance of $51 million to $52 million, up from our previous guidance of $50 million to $52 million. This guidance represents a year-over-year growth rate of 24% to 27%. We also expect operating profit in the range of 6% to 7% of revenue, up from our previous guidance of 4% to 5% and adjusted EBITDA in the range of 13% to 14% for the year, up from our previous guidance of 12% to 13%. The increased operating and adjusted EBITDA margins reflect the increased scale of our operations.

This concludes my remarks, and I will now turn the call back to the operator to please open up the call for questions. Operator?

[Operator Instructions] The first question comes from Jeffrey Cohen with Ladenburg Thalmann.

Congrats on the quarter. So I guess, firstly, could you talk about the accelerated protocol and give us some sense of current treatments that are taking on the accelerated protocol and what you may expect over the coming quarters?

Yes. I think the accelerated protocol is a really big news for patients around the world that is basically shortening the acute phase protocol from 4 weeks to only 6 days in which we are increasing the dosage, the amount of treatments per day to 5 treatments per day. The demand so far looks pretty good. And I think that, that's what's really driving the demand for the growth of the company.

Okay. Got it. And then secondly, could you talk about minority equity investments? Congrats on the handful already this year. But what might we expect as far as the pipeline and other investments over the coming quarters?

Yes. So we have a full hand of pipeline of this minority investment that we are speaking and exploring the option to collaborate with them. We still need to check the box on part of our due diligence process to make sure that this growing enterprise are growing, they are profitable. They have the right management team and that we believe that they can execute upon their business plan. So the goal before the end of the year is to sign at least one more. And there is a handful of additional opportunities for 2026 that looks very promising.

Got it. And then lastly for us, could you give us an update on Neurolief as far as any activity currently going on in Japan and EU and then talk about U.S. timing or anticipated activities here.

Yes. I think we're all anticipating to -- for Neurolief to receive the FDA clearance toward the end of the year. We're hoping there won't be some additional delay with that, but things might look a little bit slow due to the current situation with the FDA administration. But we're hoping to get this FDA clearance for the end of the year. Once we get clearance for that, they're ready to market their -- to distribute their device through different channels. It could be VA, it could be IDNs. And obviously, TMS clinics through BrainsWay customers. But the most promising one that we're waiting for is FDA clearance towards the end of the year.

The next question comes from Carl Byrnes with Northland Capital Markets.

Congratulations on the quarter. I'm just curious what you're seeing in terms of system placements from the minority partners thus far. And then again, looking at adding 5 or so partnerships per year, what we should expect potentially in terms of incremental system placements? And then I'll jump back into the queue.

Yes. Each one of these minority investment is providing us with a business plan. And based on their expectation, they are planning to expand and to grow in between to an opening up additional 10 to 15 new clinics every year. Obviously, the first year is always the most challenging one to make sure that they've got all the necessary setup. But once they got the funding and they got everything they need, they should deliver on that, either by merger and acquisitions or opening some de novo clinics. So that's pretty aligned with our expectations.

We're not sharing the data of current installed base that we received from our minority investment, but I can only share with you that aligned with our expectations. I did share a very important fact that with the most early investment that we've made with both Stella Mental Health and Axis, both of them grew their utilization rate more than 50% since inception, since the collaboration with us. And that's the most important sign. It means that they like the technology, they're utilizing this technology, and they're expanding, which is pretty aligned with our expectations.

[Operator Instructions] The next question comes from Ram Selvaraju with H.C. Wainwright.

Congratulations on the quarter. I wanted to ask about, first of all, how you think you will alter metrics reporting going forward in general, if we can expect greater granularity on, for example, what you expect to be growth in total installed base, what you anticipate to be performance with respect to some of the individual minority investments and so on?

And also, I wanted to ask a couple of specific questions about where we are currently. Firstly, if you could elaborate on where you are with respect to the upgrade cycle across the installed base. And how you expect that to play out over the course of the coming quarters, that would be very helpful. And then if you can offer us any granularity regarding the state of the international business and geographically speaking, where you expect the bulk of growth to come from as we look ahead to 2026?

Yes. Great. Thank you for the questions, and I'm hoping I won't forget anything.

So in terms of the metrics or KPIs that we are measuring, I think it's going to be a mix of some very relative KPIs. It will be a number of systems that we are shipping on a quarterly basis, and we can -- we see some very consistent growth on that. It will be also the additional indications that we're also selling on top of the traditional one, it could be the OCD, the H7 or the H4 for addiction. That will be another important KPI, the book-to-bill ratio and most important, again, like is the new initiative with this minority investment that we most probably going to share much more information and trajectory on the Analyst Day meeting on December 1. So I promise to give you a bit more details about some of those metrics and how you can all try and measure the progress of the company in 2026 and beyond.

For your questions about the international growth. So we continue to strength our distribution channels, mainly, mainly, mainly in Asia Pacific and in Europe. So I do expect a very strong trajectory from Japan, China, South Korea, Taiwan, Thailand, all this region and India, of course, all these regions continue to grow their demand and increase awareness in this market, but also in the main countries in Europe, like Germany and France and Spain and Italy, we're seeing some constant demands in those markets. And last but not least, also the Israeli market is also growing in a very nice way.

So overall, I think that the international growth is pretty aligned with our expectations. I believe there is a chance for us to even expand faster with the additional indication that we currently cleared in those area, which is beyond the mental health, mainly some of them relates to addiction, some of them relates to neurology indications that we're seeing some good results in these areas. But that's a very, very promising target, market targets for the company for 2026 and beyond.

And just one other quick one, if I may. Maybe this is more for Ido. Do you have any plans to alter the way in which you report revenue, particularly given the minority stakes that you are acquiring, if you're going to break out revenue coming from those sources or any other changes that you anticipate with respect to top line item reporting?

Yes. So those minority investments won't impact our top line revenue. We are still -- need to examine that with our auditors for the financial statements at the end of the year. But right now, those investments will be written either in their fair value or as an equity under the operating profit. So it's not part of our top line.

This concludes our question-and-answer session. I would like to turn the conference over to Hadar Levy for any closing remarks.

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

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