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Zynex's Financial Highlights for Q4 and Full Year 2024

Zynex, Inc. (NASDAQ: ZYXI), a pioneering company in medical technology known for developing non-invasive medical devices, recently disclosed its financial and operational outcomes for the fourth quarter and entire year ending December 31, 2024. Despite experiencing challenges, they showcased a solid performance with significant growth in orders and revenue.

Key Financial Highlights

• - Orders for FY 2024: The company reported a remarkable 16% year-over-year increase in orders.
• - Net Revenue Increase: For FY 2024, net revenue rose by 4%, totaling $192.4 million compared to $184.3 million in 2023.
• - Net Income: The net income for the year stood at $3.0 million, which translates to a diluted earnings per share (EPS) of $0.09. In contrast, the previous year recorded a net income of $9.7 million with an EPS of $0.27.
• - Adjusted EBITDA: The adjusted EBITDA for the year reached $10.9 million, reflecting a decrease from $22.3 million in 2023.
• - Cash Flow from Operations: The operating cash flow for the year was recorded at $12.7 million, a decline from $17.8 million in the preceding year.

Challenges Ahead

Despite the growth in orders and revenue, Zynex faced some setbacks. The fourth quarter's revenue fell short of expectations primarily due to delayed payments from certain payers. Notably, Tricare has temporarily halted payments pending a review of prior claims, which could have a significant impact as it constitutes about 20-25% of the company’s annual revenue.

In response to these challenges, Zynex is restructuring its workforce, reducing staff by approximately 15% predominantly in corporate departments. This strategic move aims to save about $35 million annually, ensuring financial prudence amid external pressures.

Looking Ahead

Management remains optimistic about long-term growth in the pain management business sector, stating that they are accelerating their efforts to expand payer relationships. They believe that these efforts will help to address short-term revenue challenges.

Moreover, Zynex has achieved FDA clearance for the innovative TensWave device and completed a clinical trial at Duke University for the NiCO laser pulse oximeter, yielding positive results. This new technology promises enhanced accuracy in measuring blood oxygen levels, specifically benefiting diverse populations often misrepresented by traditional LED-based devices.

Q1 2025 Guidance

As they move into the first quarter of 2025, Zynex predicts a net revenue of at least $30 million, with an expectation of sequential revenue growth throughout the year influenced by seasonal demand. They aim to show greater financial strength in the second quarter due to the expense reductions being implemented.

The company has demonstrated resilience in adapting to these external changes while consistently striving to lead in innovative, non-invasive pain management solutions.

Zynex continues to maintain a robust balance sheet, having repurchased over $80 million in shares over recent years, thereby maximizing shareholder value.

Overall, while the current environment poses certain challenges, Zynex’s commitment to enhancing patient outcomes through cutting-edge technology signals a positive outlook for the future.