Greenbrook TMS Inc.

Q3 2023 revenue fell 13% year over year to $18 million, down $2.8 million from Q3 2022. Year-to-date 2023 revenue rose 17% to $56.3 million, up $8.3 million from the prior-year period, largely due to the Success TMS acquisition. Average revenue per treatment was $227 in the quarter, up 4%, and year-to-date it was $222, consistent with the prior period. Entity-wide regional operating income was $0.5 million in Q3 versus an operating loss of $0.8 million a year ago; loss for the period and comprehensive loss improved 24% to $12.7 million. Cash at quarter end was $1.8 million, including restricted cash, and the company received $4.7 million in financing after quarter end. Looking ahead, management said Q4 should land toward the high end of the $22 million-$25 million cost-savings range, possibly exceeding it, and reiterated prior guidance that EBITDA breakeven is $21.5 million while cash flow breakeven is around $100 million in annual revenue.

Bill Leonard framed the quarter as evidence that the restructuring is working, emphasizing that the company has removed $23 million in annualized costs and is in the final phases of the plan. He highlighted a more streamlined model, renewed room to invest in marketing, and growth levers including SPRAVATO buy-and-bill, Medication Management, and the Neuronetics partnership. His tone was optimistic and focused on building toward self-sufficiency, while acknowledging that liquidity constraints still remain.

Peter Willett focused on the financial effects of the restructuring: direct center and regional costs fell 19% to $17.5 million in Q3, regional operating income improved to $0.5 million, and corporate G&A excluding one-time items fell 10% versus Q3 2022 and 20% versus Q4 2022. He said the $23 million in annualized cost reductions should be fully realized by the end of fiscal 2023, with Q4 likely at the high end of the target savings range. He also noted cash of $1.8 million at quarter end, the $4.7 million post-quarter financing, and reiterated breakeven targets of $21.5 million EBITDA and roughly $100 million in annual revenue for cash flow breakeven.

Analysts pressed on the Neuronetics pilot, Medication Management, cost savings, and breakeven timing. Management said the Neuronetics pilot is only about 5 weeks old but is already showing higher leads and booked consults than historical averages, with some consults converting into patients. On Medication Management, management argued it should expand access, shorten the path to TMS and SPRAVATO, and improve conversion rather than disrupt referrals; on buy-and-bill, they said reimbursement is currently around $300 but could move closer to $1,000 with a larger cost base and higher contribution. They also said the $5.9 million device contract termination payment will be completed by the end of Q2 2024.