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Zynex Reports First Quarter 2025 Financial Results

Zynex, Inc. (NASDAQ: ZYXI), a leader in non-invasive medical devices, unveiled its financial and operational outcomes for the first quarter that concluded on March 31, 2025. Amidst challenges, the company showcased its commitment to innovation and patient management.

In the first quarter, Zynex experienced steady demand for its pain management devices and private-labeled rehabilitation products. However, total orders saw a slight decline of 3% year-over-year. This reduction occurred despite a significant decrease in the sales force, which was down by around 39%, indicating that existing representatives performed strong under the circumstances. The CEO, Thomas Sandgaard, pointed out a temporary cessation of payments from Tricare, their largest insurance entity, as a substantial hurdle. The company is optimistic as they await a decision on the payment appeal, which could arrive in June. In the interim, Zynex maintains support for both existing and new patients under Tricare’s guidance.

Additionally, Zynex made the difficult choice to downsize its workforce by about 15% during this quarter, a move that’s expected to generate approximately $35 million in annual savings. These cuts are part of a broader strategy to keep expenses in check while adjusting operational capacities.

Financial Performance Overview

Zynex reported net revenues of $26.6 million for Q1 2025, down from $46.5 million during the same time last year. The significant change in revenue reflects various operational and market factors, including the Tricare payment situation. Gross profits for the quarter came in at $18.2 million, which accounted for 69% of total revenue, compared to 80% from the first quarter of 2024. This decline is attributed mainly to the ongoing support provided to patients under the suspended payment agreement.

Sales and marketing expenditures saw a notable reduction of 28%, totaling $16.9 million, down from $23.4 million in the previous year. This reduction is primarily a result of the decreased sales team. Conversely, general and administrative costs rose slightly to $14.4 million from $13.3 million year-over-year.

For this quarter, Zynex also recorded a net loss of $10.4 million, translating to a per-share loss of $0.33, starkly contrasting with a net income of $10,000 in the same quarter of the previous year. The adjusted EBITDA loss stood at $11.8 million, a drop from an adjusted EBITDA of $1.7 million in Q1 2024.

Future Projections

Looking forward, Zynex anticipates a net revenue of at least $27 million for Q2 2025. The forecast includes expectations of improved stock value on a per-share basis, potentially better than the anticipated $0.20 loss per share. The company projects a gradual increase in revenue throughout the year, aligning with typical seasonal trends observed in their business model.

Mr. Sandgaard expressed confidence in the company's ongoing FDA submission for their innovative laser pulse oximeter, slated for completion in the next few weeks. This device is believed to open new revenue streams and broaden Zynex’s product range, further solidifying its presence in the market.

As Zynex navigates through its challenges with a clear vision and strategic planning, the company remains committed to enhancing its pain management and patient monitoring offerings. This adaptability and focus on performance optimization position Zynex for potential growth in the coming quarters, reflecting both resilience and foresight in a changing marketplace.