Nexstim H1'25 preview: Profitable H1 in expectations

Translation: Original published in Finnish on 8/13/2025 at 7:51 am EEST.

Nexstim publishes its H1’25 report on Friday, August 25 at 9 am EEST. We expect EBIT to turn profitable based on sales announcements, supported by a successful summer. The forecast risk is typically high because the final amount of sales will be disclosed in the report, and there is no certain information about the timing of items under collaboration agreements. The most interesting aspects of the report will be the progress of Brainlab's sales and the status of Nexstim's own diagnostics sales pipeline. 

Source: Inderes

Growth expected through system sales and collaboration agreements

Our H1 revenue forecast is 5.9 MEUR, a notable increase of 86% year-on-year (H1’24: 3.2 MEUR). Our growth forecast is based on the number of reported system sales and the recurring revenue generated by the growing system portfolio. Sales of higher average-priced NBS 6 systems also support growth. Nexstim's H1 was on a growth curve based on reported system sales (12). The final number of systems sold will be revealed in the report and is usually higher than the number of announced sales. In the comparison period, a total of 10 systems were sold. It is difficult to accurately forecast the revenue of system sales because systems can generate revenue immediately or in the longer term if they are leased. A large proportion of the reported transactions were made through distributors (7), which may indicate sales through Brainlab and/or activity in the rest of the distribution network. Depending on the sales mix, additional revenue support may come from Brainlab's guaranteed margin contributions. At the end of the period, Nexstim announced a 1.5 MEUR fee related to the exclusivity agreement with Sinaptica. Some of this fee may be allocated to H1, but we assume most of it will be allocated to H2.

Earnings improve supported by higher revenue

Our H1 EBIT forecast is 0.4 MEUR (H2’24: -0.9 MEUR), primarily because we expect revenue to grow faster than costs. There is considerable uncertainty associated with the earnings forecast due to the level of revenue. Additionally, we do not know the timing of Brainlab's guaranteed margin over the year or its exact contribution to H1. Sales through distributors generate lower margins, contributing to pressure on the gross margin. We expect operating costs to have increased moderately.

We expect cash flow to be a little weaker than earnings as we expect capitalized R&D costs to be higher than depreciation. The balance sheet is in good shape, as the company's cash position has been strengthened during the past year, supported by improving operational performance, an R&D loan, a convertible bond as well as a 1 MEUR upfront payment and a 1.05 MEUR equity investment from Brainlab.

A year of strong growth underway

Nexstim's guidance for 2025 is for year-on-year revenue and earnings growth. Achievement of this guidance is assured based on information already reported. This includes record-breaking system sales in H1, several announced deals in H2, and progress in the Sinaptica agreement. The latter involves a cash payment of 1.5 MEUR and the delivery of several systems, primarily in H2. Uncertainty for the remainder of the year stems from the situation regarding Nexstim's diagnostics sales pipeline. The company has announced that it will finish its own diagnostic sales pipeline in North America and German-speaking Europe, as Brainlab will take over sales responsibility for the segment. In a positive scenario, these two channels will complement each other in the second half of the year, resulting in a period of strong sales. In a weaker scenario, the company's own sales pipeline will already be depleted, and Brainlab's sales will remain low relative to their potential, which would lead to progress that is more subdued than expected. Visibility into Brainlab's sales ramp-up and Nexstim's own sales pipeline is limited at this stage.

Our revenue forecast for the full year is 15.8 MEUR, which includes approximately 3 MEUR in payments and system deliveries related to the Sinaptica agreement. We have not included the potential licensing income from Magnus Medical in 2025. To achieve the estimates, system sales must exceed those of the comparison period and H1 for the rest of the year. The initial signs from July and August are positive in this regard. We expect an EBIT of 3.6 MEUR, based on the Sinaptica agreement and continued growth in system sales. The relative proportion of higher-margin own sales versus lower-margin distributor sales plays its own role in determining the level of earnings.