NeurAxis Stock Gains Post Q4 Earnings and Revenue Growth

Shares of NeurAxis, Inc. NRXS have gained 0.9% since the company reported earnings for the quarter ended Dec. 31, 2024. This compares favorably to the S&P 500 Index, which declined 0.1% over the same time frame. Over the past month, NeurAxis stock has climbed 3.2%, while the S&P 500 saw a 5% decline.

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Revenue Growth and Margin Stability

NeurAxis reported fourth-quarter 2024 revenues of $761 thousand, a 43% increase from $531 thousand a year earlier. This robust growth was primarily driven by a 45% increase in unit sales, reflecting stronger adoption of the company's IB-Stim therapy through both insurance-covered treatments and the company’s financial assistance program. For the full year, revenues rose 9.2% to $2.7 million from $2.5 million in 2023.

Gross margin remained stable at 86.4% in the fourth quarter, unchanged from a year ago. Operating loss in the fourth quarter of 2024 was $1.5 million compared with $1.6 million in the fourth quarter of 2023. Net loss for the quarter was $1.5 million compared with $5.3 million in the prior-year period, aided by the absence of a $3.7 million debt extinguishment charge incurred during the company’s 2023 IPO. Cash at year-end was $3.7 million, with no long-term debt and only $154 thousand in short-term obligations.

Key Business Metrics

Unit sales surged in the fourth quarter due to growing insurance reimbursement and expanded use of NRXS’ financial assistance program. While the latter contributes to lower average selling prices — discounted by up to 65% from the list price of $1,195 — the company maintained healthy gross margins. Executives emphasized that broader insurance coverage and the implementation of a permanent Current Procedural Terminology (CPT) Category I billing code in January 2026 are expected to drive higher margin sales.

The company has treated more than 1,000 pediatric patients in the past year, a small fraction of the estimated 600,000 children in the United States affected by debilitating IBS symptoms. Management noted that this highlights the scale of the addressable market and underscores the opportunity for accelerated revenue growth as policy coverage improves.

Management Commentary

CEO Brian Carrico characterized the fourth quarter as the culmination of a transformational year, noting NRXS’ progress in expanding insurance coverage from 4 million to 51 million covered lives. He highlighted three key milestones, including the CPT Category I code approval (effective Jan. 1, 2026), expansion of the IB-Stim label to cover ages 8–21 (up from 11–18) and FDA clearance for the company’s new Rectal Expulsion Device (RED).

CFO Tim Henrichs added that revenue growth in first-quarter 2025 has continued the momentum seen in the third and fourth quarters of 2024. He reiterated that NRXS is targeting cash flow breakeven at annual revenues in the $10 million to $12 million range, a target deemed achievable based on the company's existing cost structure and gross margins.

Factors Influencing Results

The 43% year-over-year revenue growth in the fourth quarter was driven by expanding insurance policy coverage and stronger market penetration. While NRXS continued to provide discounts through its financial assistance program, the increased share of full-reimbursement unit sales helped preserve gross margin levels. Operating expenses increased modestly, with selling, general and administrative expenses rising 2% year over year in the fourth quarter to $2.1 million from $2 million, largely due to headcount additions and a new short-term incentive plan.

The sharp year-over-year reduction in net loss was primarily attributed to the absence of IPO-related debt extinguishment charges, which significantly inflated losses in the comparable 2023 period. Excluding those one-time items, operational improvements and disciplined cost control contributed to better bottom-line performance.

Guidance and Outlook

NeurAxis did not issue formal financial guidance but expressed confidence in achieving accelerated revenue growth through 2025 and beyond. The company expects meaningful revenue contributions from RED beginning in the second quarter of 2025, following its initial soft launch and first order in early 2025. Management also anticipates expanded FDA indications, including a pending submission for functional dyspepsia in children, which would potentially double the company’s pediatric addressable market.

The anticipated publication of new treatment guidelines by the North American Society for Pediatric Gastroenterology, Hepatology and Nutrition (NASPGHAN) is expected to be a key catalyst for securing broader insurance policy coverage.

Other Developments

During the fourth quarter, NeurAxis received FDA 510(k) clearance for RED, a point-of-care test designed to diagnose evacuation disorders in patients with chronic constipation. RED, developed at the University of Michigan, is now being commercially introduced and is supported by existing reimbursement codes, which management believes will accelerate adoption.

In addition, the company secured FDA clearance to expand the IB-Stim label to a broader patient population aged 8–21 and allow up to four devices per patient. These regulatory milestones significantly increase the product’s market potential and operational flexibility. NeurAxis also continues to invest in clinical studies, with 16 peer-reviewed publications supporting the use of its PENFS technology in pediatric populations.

The development of a second-generation IB-Stim device is underway, with enhancements including user feedback indicators and potential integration of diagnostic capabilities. The company targets a 2026 release.

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