Zynex (ZYXI) Q1 2025 earnings summary

Executive summary

• Q1 2025 net revenue declined 43% year-over-year to $26.6 million, primarily due to a temporary payment suspension from TRICARE, which historically represented 20-25% of annual revenue, and a 3% decrease in total orders amid a 39% reduction in sales force headcount.

• Net loss was $10.4 million ($0.33 per share) versus net income of $10,000 in Q1 2024; adjusted EBITDA loss was $11.8 million compared to positive $1.7 million a year ago.

• The company is restructuring to operate without TRICARE revenue if necessary, including a 15% staff reduction and cost containment measures expected to save $35 million annually.

• The company is preparing to launch the Nico Pulse Oximeter, with FDA submission expected soon and revenue anticipated in 2026, targeting a large market with technology designed to address health equity and accuracy issues.

• Cash used in operating activities was $10.5 million, with working capital at $40.1 million and cash and equivalents at $23.9 million as of March 31, 2025.

Financial highlights

• Q1 2025 net revenue was $26.6 million, down from $46.5 million in Q1 2024.

• Gross profit was $18.2 million (69% margin), compared to $37.2 million (80% margin) year-over-year.

• Device revenue was $11.9 million; supplies revenue was $14.7 million in Q1 2025, both down from prior year.

• Sales and marketing expenses fell 28% to $16.9 million due to headcount reduction; G&A expenses increased to $14.4 million from $13.3 million.

• Cash and cash equivalents were $23.9 million at quarter-end.

Outlook and guidance

• Q2 2025 revenue is estimated at $27 million, with an expected EPS loss of $0.20 per share or better.

• Management anticipates quarterly revenue growth through the year, with typical seasonality.

• No full-year 2025 guidance provided yet; management awaits clarity on TRICARE before issuing further outlook.

• If TRICARE resumes payments, all appropriately processed claims during the suspension will be reimbursed, potentially boosting future revenue.

• Nico Pulse Oximeter expected to generate revenue starting in 2026 following anticipated FDA clearance in late 2025.