Brainsway Ltd. American Depositary Shares 2026 Q2 Earnings Call

Thank you. Welcome, everyone, and thank you for joining us today. We entered the second half of 2026 from a position of strength with accelerating growth, expanding profitability, and increasing visibility into future revenue. More importantly, we believe BrainsWay is entering the next phase of its evolution from a leading Deep TMS company into a broader platform for interventional psychiatry. Our second quarter results provide further evidence that the foundation of this platform is getting stronger. Revenue grew 35% to $17.1 million for the second quarter, compared with $12.6 million in the prior year period. We achieved this level of growth while maintaining operational discipline, resulting in expanded margin and increased profitability. In the second quarter, operating income increased over 300% to $2.4 million, compared with $0.6 million for the prior year.

Adjusted EBITDA increased 141% to $3.5 million, compared with $1.5 million for the same period last year, with adjusted EBITDA margin expanding to 20% from 11%. This also marked our 12th consecutive quarter of profitability, underscoring the scalable nature of the business model. These results matter not only because of the growth they represent today, but because every system we install, every reimbursement expansion we achieve, and every new clinical indication we develop strengthens the platform and expands our long-term opportunity. Let me take a minute to walk you through a few key metrics that we monitor each quarter to measure our continued growth. During the second quarter of 2026, we shipped 125 Deep TMS systems, a 42% increase over the same period last year, bringing our install base to approximately 1,950 systems. Every system represents more than an initial placement.

It creates potential for multi-year recurring revenue, additional utilization, new indications and protocols, deeper provider relationship, and greater clinical data. Importantly, as we expand the capabilities of the platform, we increase the potential value of systems that are already in the field. Remaining performance obligations have increased to $80.4 million as of June 30, 2026, a 30% increase compared with the same period last year. We believe the continued growth in remaining performance obligations over the past several quarters demonstrates the strong market demand for Deep TMS, as well as the success of our leasing strategy focus on servicing enterprise customers. This is an important evolution in our business model. As the install base grows, we believe revenue visibility, recurring revenue, and operating leverage can increasingly compound.

Our strategy is built around what we believe is a powerful growth flywheel with a series of reinforcing growth drivers that build on one another over time. We believe the expanding clinical evidence for Deep TMS drives broader reimbursement, which in turn supports greater physician confidence and adoption. As adoption grows, our install base expands, creating a large recurring revenue stream and increasing operating leverage. The resulting operating leverage cash flow enable us to reinvest in additional clinical studies, reimbursement initiatives, and strategic partnership. At the foundation of our strategy is the strength of the Deep TMS platform itself. Our systems are supported by one of the industry's most extensive bodies of peer-reviewed clinical evidence, demonstrating efficacy across a broad range of neuropsychiatric disorders, including major depressive disorder, anxious depression, late-life depression, obsessive-compulsive disorder, and smoking addiction.

This growing body of evidence has resulted in multiple FDA clearances, increasing physicians' confidence, broader reimbursement support, and ultimately accelerated adoption of Deep TMS. One of the clearest examples of our momentum is the continuing expansion of reimbursement for TMS. Commercial payers increasingly recognize the clinical value of this therapy. While prior authorization requirements continue to become less burdensome. Perhaps just as important for us, we have also seen reimbursement continue to expand to include accelerated treatment protocol, which we called SWIFT. We currently estimate there are approximately 57 million covered lives in the U.S. with access to our SWIFT for accelerated Deep TMS protocol. Every reimbursement expansion lowers barrier to treatment, increases provider confidence in investing in Deep TMS systems, expands patient access, and supports higher utilization across our growing install base. We believe SWIFT represents an important long-term growth opportunity for BrainsWay.

By reducing treatment from several weeks to just a few days, SWIFT has the potential to improve convenience for patients, increase treatment capacity for providers, and further strengthen the value proposition for payers. During the quarter, we presented the first prospective 12-month durability data for the SWIFT accelerated Deep TMS protocol. The study demonstrated that patients maintain meaningful clinical improvement through one year following treatment, including sustained remission rates and continued improvements in functional outcome. Importantly, these findings help address one of the key questions surrounding accelerated treatment protocol, not simply whether patients improve quickly, but whether those improvements are durable over time. We believe these findings further strengthen the clinical evidence supporting SWIFT and the case for broader reimbursement adoption, an important driver behind broader adoption of Deep TMS. Beyond expanding adoption within our existing indication, we continue seeking to broaden the clinical utility of Deep TMS platform.

During the quarter, we presented results from the largest real-world study to date evaluating Deep TMS in patients with comorbid PTSD and major depressive disorder, which is one of the most challenging psychiatric population to treat. Across 462 patients treated at 11 clinical sites, more than 83% experienced a meaningful response in PTSD symptoms, while substantial improvement were also observed in depression symptoms. We believe these findings further strengthen the growing body of evidence supporting Deep TMS across complex psychiatric disorder and reinforce our recent FDA submission seeking clearance for comorbid PTSD and MDD. If cleared, this would represent another important opportunity to expand the clinical utility of Deep TMS platform, increasing the value proposition for every system already installed in the field without requiring providers to purchase additional capital equipment.

Taking together, these clinical regulatory advances are occurring against the backdrop of an interventional psychiatry market that we believe is entering into an important period of long-term growth. Payers are steadily expanding reimbursement for neuromodulation therapies. Demand for non-pharmacologic treatment options continue to grow among both providers and patients, and awareness condition such as treatment-resistant depression, OCD, and PTSD continue to expand. We believe BrainsWay is well-positioned to benefit from these tailwinds, given our clinical evidence base, pipeline strategy, reimbursement infrastructure, and install base of Deep TMS systems. Capturing these opportunities require more than innovative technology. It also required expanding patients' access in investing in providers as they scale their practices. That is one of the key objectives of our strategic minority investment program. This initiative is designed to do much more than efficacy deploy capital in promising investment targets.

It allows us to partner with leading behavioral health providers and to align ourselves with organizations that have a plan to grow and succeed by accelerating patient access to care and building awareness of cutting-edge interventional psychiatric treatment approaches. During the quarter, we continued to execute against this strategy with a strategic investment in Hopemark Health, a growth-oriented behavioral health platform serving multiple clinic in the greater Chicago area. Following the close of the quarter, we continued with this strategy through investment in Radial Health, an innovative mental health service platform combining clinical infrastructure, reimbursement capabilities, and AI-guided decision support, as well as in Sound Minds Behavioral, a leading growth-oriented outpatient behavioral health platform with locations across the Mid-Atlantic and Northeast.

This minority stake investment reflects our strategy of partnering with leading providers organization and expanding our presence within the broader behavioral health ecosystem while allowing BrainsWay to remain focused on advancing our technology, clinical evidence, and commercial execution. Looking ahead, we continue to assess a pipeline of investment opportunities and remain disciplined in identifying partners that can generate both financial growth and meaningful strategic value. Another important part of our long-term platform strategy is extending neuromodulation beyond the clinic. Today, Deep TMS anchors treatment in the clinical setting. Over time, we see an opportunity to extend the patient's journey into the home and ultimately connect treatment with the data and digital monitoring. That is the strategic context behind our investment in Neurolief. Following the FDA approval for its Proliv™Rx system in March, the commercial launch has begun and progressing.

While it remains early in the launch, we are encouraged by the progress being made by Neurolief and the execution discipline that they roll out. International expansion represent another important layer of our long-term opportunity. Across our current partner market, we estimate there are more than 170 million untreated patients. Importantly, we are not starting from zero. We are building on established commercial partnership and existing infrastructure, providing what we believe is an attractive and capital-efficient path to scale. As interventional psychiatry expands globally, we believe our international footprint can become an increasingly important contributor to BrainsWay's growth. In closing, we are pleased with our performance this quarter, but we believe we are still in the early stage of much larger opportunity. For many years, BrainsWay has been known as a Deep TMS company. Today, we are building something broader, a global platform for interventional psychiatry.