electroCore (ECOR) Q4 2025 Earnings Transcript

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DATE
Thursday, March 19, 2026 at 4:30 p.m. ET
CALL PARTICIPANTS
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Chief Executive Officer — Daniel Goldberger
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Chairman — Dr. Thomas Errico
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Chief Financial Officer and Interim President — Joshua Lev
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Full Conference Call Transcript
Daniel Goldberger: [indiscernible] participating in today's electroCore earnings call. Joining me today are Dr. Thomas Errico, one of our founders and investor and Chairman of the electroCore Board of Directors; and Joshua Lev, our Chief Financial Officer. Before we begin, I want to express the privilege it is to address so many colleagues, partners, investors and their friends who have supported electroCore since I took the CEO position in late 2019. For the years, we've taken meaningful steps in building a great company. I'm Deeply proud of what we accomplished and truly thankful for your support as well as the support and hard work of all the employees worked tirelessly in making our noninvasive pain therapeutics available to patients who need them.
With that in mind, I'd like to share an important personal decision about the next chapter for myself and for this organization. After a thoughtful discussion with the Board about the company's next phase of growth I have made a decision to retire as CEO of electroCore effective April 1, 2026. When I joined in late 2019, [indiscernible] was strengthening the company's financial position and establishing a focused commercial strategy. For the past several years, we've made substantial progress on those objectives, including building momentum in the VA channel, expanding our product portfolio and putting the company on a stronger financial footing.
With that foundation now in place, the Board and I believe this is the right time to begin a leadership transition as electroCore moves into its next stage of growth. To ensure a seamless transition, the Board of Directors has appointed Joshua Lev as Interim President, electroCore is also hiring a new Chief Operating Officer. These steps will provide stability and operational momentum while the Board conducts a thorough search for my permanent successor. I look forward to continuing to support the company during the transition and to exploring new opportunities where my experience may be helpful. I step away knowing that electroCore is in excellent hands and well positioned for continued success.
I'm confident the leadership team will continue building on the progress we've made and drive the company forward in the next phase of growth. It's been an honor to lead this organization and serve you, our shareholders. Thank you for your unwavering support. I look forward to watching electroCore thrive [indiscernible] Now the Chairman, Dr. Errico like to share a few thoughts on strategy and [indiscernible]
Thomas Errico: Thank you, Dan. On behalf of the Board of Directors, I want to take a moment to recognize Dan Goldberger, for his outstanding leadership. We're grateful for the strong foundation he has built and for the momentum the company carries forward today. As we look ahead, I'm pleased to share an update on our leadership transition, which is designed to ensure continuity and focus as we enter our next phase of growth. Effective April 1, Joshua Lev, our Chief Financial Officer, will assume the role of Interim President, overseeing day-to-day operations while continuing to serve as CFO.
Josh has more than 15 years of experience in finance and operations and has played a central role in guiding the company through several key milestones. He is well positioned to lead during this transition as we conduct a search for a permanent successor. In April, we will welcome Michael Fox as our new Chief Operating Officer. Michael joins us from Pro Medtech, where he served as Chief Revenue Officer. He brings more than 3 decades of experience across pharmaceuticals, biotechnology and medical devices with deep expertise in complex federal markets, including the VA system. His operational leadership will be instrumental as we continue to scale across the organization.
With this transition in place, the Board and management team remains fully focused on executing our strategy of increasing sales within covered entities such as the VA system and driving long-term value through market expansion into general wellness with our Truvaga product offering. Being now to the business. We remain encouraged by the continued momentum of our noninvasive vagal nerve stimulation or MVNS platform. Before Josh Lev reviews the financials, I'd like to briefly highlight the clinical foundation supporting our portfolio. Our flagship gammaCore device is supported by a substantial body of scientific evidence, including more than 20 peer-reviewed publications and multiple randomized controlled trials, such as AT1, AT2, Presto and premium.
These studies have demonstrated statistically significant reductions in migraine and cluster headache frequency, intensity and duration, gammaCore is FDA cleared for both acute and preventive treatments in adult and adolescents and real-world adoption continues to build. For example, U.K. audit data shows that a meaningful portion of cluster headache patients achieved clinically significant response rates alongside measurable cost savings compared to standard care. Beyond gammaCore, exploratory studies plus additional indications, including Schorn syndrome, gastroparesis, traumatic brain injury, and inflammatory conditions related to COVID-19 highlighted the potential for broader anti-inflammatory potential of nVNS. These studies have shown encouraging signals across fatigue, quality of life measures and anti-inflammatory biomarkers.
At the same time, ongoing trials in areas such as PTSD, long COVID, substance abuse disorder, muscularskeletal pain and concussions, supported by partnerships, including the NFL and NFLPA funded research support our long-term strategy for indication expansion. In addition, our Quell device is supported by a growing body of peer-reviewed research. -- including randomized controlled trials published in well-regarded journals. These studies demonstrate efficacy across multiple pain-related conditions, including difficult-to-treat fibromyalgia, further strengthening the clinical foundation of our portfolio. On the consumer side, Truvaga continues to gain traction as a wellness product, focused on stress reduction, sleep quality and emotional well-being through parasypthetic nervous system activation.
Truvaga has recently received recognition from major lifestyle publications and engagement across social and digital channels continues to grow. For example, national media outlets like women's health and men's health have been driving website traffic. Miranda Kerr mentioned Truvaga on the skinny confidential podcast, [indiscernible] like true met, Ben Greenfield and Luke story have been promoting Truvaga, and Truvaga is now available through online retail outlets like Best Buy and Rehab. Independent in-home studies indicate high levels of user reported commonness and sleep improvement after consistent use. Importantly, this momentum supports diversification of our revenue mix and highlights the scalability of our nVNS technology in direct-to-consumer channels.
First, the expanding clinical validation across our product lines continues to support prescription growth, payer engagement and international expansion. We believe this positions the company well for sustained revenue acceleration and long-term value creation as we bolster our commercial team with VA governmental specialists to further execute against our pipeline and strategic priorities while maintaining our attention on operating efficiency to progress towards profitability over time. And now I will turn the call over to our Interim President and CFO, Joshua Lev to walk through the financial results.
Joshua Lev: Dr. Errico. Before reviewing the financial results, I want to briefly acknowledge the leadership transition announced earlier. [indiscernible] played an important role in shaping the company over the past several years and the strategy we have in place today reflects that work. On a personal note, I've learned a great deal from working with Dan, and he has been a strong leader for the organization. Our focus remains on executing the [indiscernible] strategy expanding adoption across the VA system and continuing to scale our wellness platform.
[indiscernible] details of our fourth quarter and full year 2025 operating performance. electroCore delivered another year of strong top line revenue growth, extending our growth trend and exceeding both revenue and EPS analyst consensus [indiscernible] The VA hospital system remains our largest customer, continues to grow. We expect adoption of our noninvasive same therapeutics. Truvaga sales also showed great strong driven primarily by our e-commerce store at www.truvaga.com and an expanding network of affiliates to actively promote Truvaga to their [indiscernible] Revenue in the fourth quarter of 2025 was our highest ever, reaching a record of $9.2 million, up 31% year-over-year and bringing our full year 2025 revenue to $32 million or 27% over full year 2024.
[indiscernible] revenue increased 23% year-over-year to $26 million by continued growth gammaCore and Quell within the VA hospital system. Acquiring the Quell assets in May 2025, [indiscernible] generated $1.5 million in revenue. As of December 31, 2025, [indiscernible] facilities [indiscernible] products, up from 170 a year ago. Approximately 13,400 VA patients [indiscernible] gammaCore device and [indiscernible] we estimate this represents roughly 2% penetration of the addressable VA headache market. Given the scale of the VA system and the number of patients experiencing headaches, related to PTSD and mild traumatic brain injury, we believe there may be a significant opportunity for continued growth.
For this opportunity we expanded our VA sales presence during 2025 by adding both internal team members and contracted representatives. In 2026, we will also welcome Michael Fox as Chief Operating Officer. We [indiscernible] experience commercializing products within federal health care systems to help accelerate [indiscernible] and expand our commercial reach. Turning to our general wellness channel Fourth quarter revenue reached $1.4 million, representing 31% year-over-year growth. Full year general wellness revenue totaled $5.5 million, an increase of 97% compared to 2024. [indiscernible] primarily driven by $5.4 million in Truvaga sales, up 93% from 2024. While Truvaga revenue was flat sequentially [indiscernible] quarter included a onetime $500,000 order associated with a third-party clinical trial.
Excluding that order, Truvaga revenue grew approximately 40% sequentially. Return on advertising spend or ROAS for the [indiscernible] period was approximately $2.10, meaning for every dollar spent on media, we generated nearly $2.10 [indiscernible] $1.80 in Q3 2025 was primarily driven by a seasonal increase in sales during the holiday season. [indiscernible] across our e-commerce platforms have increased slightly but remain at approximately 12% to 15% with prior periods. We believe that ROAS as a result of the shift away from Amazon and the teams increased [indiscernible] driving sales through other direct-to-consumer platforms.
As we look forward to 2025, we expect to expand the potential applications for our NDNS platform while introducing additional wellness offerings, including Quell relief for lower extremity pain. We are also developing our next-generation mobile application signed to complement an [indiscernible] differing more personalized and data-driven user experience, which could support recurring revenue opportunities. Based on the opportunities ahead, we are investing in people, marketing and product development to accelerate growth in 2026 to 2027 while maintaining discipline around operating [indiscernible]. Turning briefly to the full year 2025 financial results.
Net sales in 2025 increased 27% to $32 million, driven by growth of prescription gammaCore and Quell fiber biologic products in the VA system as well as increased sales of our nonprescription group data general wellness products. We expect the majority of 2026 revenues continue coming from the U.S. Department of [indiscernible] Net profit increased to $27.8 million for the year ended December 31, 2025. Margin was 87% compared to 5% full year 2024. Research and development expense of $2.7 million decreased by approximately $375,000 compared to the prior year, [indiscernible] primarily related to the development work on our gammaCore Emerald and our next-generation [indiscernible].
Selling, general and administrative expense, $38.2 million year ended December 31, 2025, increased by $7 million compared to $31.2 million in the [indiscernible] marketing increased by $4.3 million from the prior period. The increase in sales and marketing was primarily driven by a $3.8 million increase in burial expenses, which contributed [indiscernible] increase in sales. General and administrative expense increased by $2.7 million from the prior year.
This increase was primarily driven by a $800,000 increase in legal fees and early associated development activity, $500,000 [indiscernible] with 1 customer, $300,000 investment [indiscernible] systems and $200,000 of increased transaction fees [indiscernible] Total operating expenses for the full year 2025 were approximately $40.9 million as compared to $33.6 million in the full year of 2024. Other expense of $800,000 for the year ended December 31, 2025, increased by $1 million versus the prior year period.
The increase is primarily attributed to nonrecurring expenses, including $0.5 million change in the estimated liability payable pre-closing shareholders of [indiscernible] pursuing to with CDR equipment and interest expense associated with our term debt financing with [indiscernible] other income for the year ended December 31, 2024, which is primarily of interest. Net loss for 2025 was $14 million or $1.65 per share compared to a net loss of $11.9 million or $1.59 per share in 2024. Net loss is primarily attributed to an increase in operating expense and other expense [indiscernible]. Adjusted EBITDA net loss this full year 2025 was $8.7 million compared to $9 million in the prior year.
[indiscernible] and adjusted EBITDA primarily reflects a GAAP net loss, offset by adjusting for Neurometrix acquisition-related items [indiscernible] for reserve bad debt expense and IP litigate [indiscernible]. A reconciliation of GAAP net loss to non-GAAP adjusted EBITDA net loss has been provided in the financial statement table concluded [indiscernible] and marketable securities at December [indiscernible] 2025, or approximately $11.6 million approximately $12.2 million as of September 30, 2024. Looking ahead, we remain