Nexstim H2'24 preview: Profitable H2 in expectations

Translation: Original published in Finnish on 2/25/2025 at 7:45 am EET.

Nexstim will publish its H2 report on Thursday, February 27 at 9 am EET. The second half of an eventful year full of surprises was marked in particular by the cooperation agreement with Brainlab and the import license for the Indian market. Supported by good system sales, we expect growth over the comparison period and a profitable second half of the year. The beginning of the year also looks bright for Nexstim with the anticipated launches of the Sinaptica partnership and the NBS 6 therapy. 

Growth expectations driven by increase in system sales and recurring revenue

Our H2 revenue forecast is 5.5 MEUR, an increase of 0.8 MEUR year-on-year.  Our growth forecast is based on the number of reported system sales and the recurring revenue generated by the growing system portfolio.  Sales of higher average-priced NBS 6 systems also support growth.  Based on reported system sales, Nexstim was on an upward trajectory in H2, but the exact number of systems sold will not be known until the report.  The end of the year is the busiest time for system sales as hospitals make purchases towards the end of their budget period.  It is difficult to accurately forecast the revenue of system sales because systems can generate revenue immediately or in the longer term if they are leased. Our full-year revenue estimate for is 8.6 MEUR.

Earnings improve supported by higher revenue

Our H1 EBIT forecast is 0.7 MEUR (H2’23: 0.2 MEUR) based on growing revenue and careful cost management. We expect cash flow to be a little weaker than earnings as we expect capitalized costs to be higher than depreciation. The balance sheet is in good shape, as the company's cash position has been strengthened during the year, supported by an R&D loan, a convertible bond as well as a 1 MEUR upfront payment and a 1.05 MEUR equity investment from Brainlab. For the full year, our EBIT estimate is -0.2 MEUR. The result level will depend on the correlation between direct system sales and system leasing contracts.

Multiple growth drivers for 2025

Nexstim's guidance for 2024 is for year-on-year revenue and earnings growth. Achievement of this guidance is assured based on information already reported. Growth and profitability in the current year will be significantly impacted by the company's ability to enter into an agreement in Alzheimer's disease following the previously announced letter of intent. The companies have already announced the delivery of the first test system, so we believe the deal is very likely. Other growth drivers for the year include the Brainlab contract with its guaranteed coverage and the launch of the NBS 6 with diagnostics. Our revenue forecast for the full year is 15.8 MEUR, which includes the high probability of the Sinaptica contract materializing. We have not yet included the potential licensing income from Magnus Medical for 2025. Our EBIT expectation is 3.5 MEUR, which will be significantly impacted by the potential agreements with Sinaptica and Magnus Medical.