Tue, Apr 29, 9:02 PM (19 days ago)
**Zynex, Inc. (ZYXI) Q1 2025 Financial Summary** **Financial Health and Performance:** - **Revenue:** $26.6 million, down 43% from $46.5 million in Q1 2024. - **Net Loss:** $10.4 million, compared to a net income of $10,000 in Q1 2024. - **Cash Flow:** $10.5 million used in operations, compared to $2.1 million provided in Q1 2024. - **Working Capital:** $40.1 million, down from $58.3 million at the end of 2024. - **Cash and Cash Equivalents:** $23.9 million, down from $39.6 million at the end of 2024. **Key Metrics:** - **Gross Margin:** Decreased due to lower revenue and higher cost of revenue as a percentage of revenue. - **Operating Expenses:** Sales and marketing expenses decreased by 28%, while general and administrative expenses increased by 8%. - **Income Taxes:** Effective tax rate was 25% for Q1 2025, with a tax benefit of $3.4 million. **Trends and Uncertainties:** - **Tricare Payment Suspension:** A significant payer temporarily suspended payments, impacting revenue and cash flow. - **Staff Reductions:** The company reduced its staff by approximately 15% to align with current revenue, expecting $35 million in annual savings. - **Legal Proceedings:** A putative class action complaint was filed, alleging securities fraud and revenue inflation. **Future Operations Impact:** - **Liquidity:** The company believes its cash position and anticipated cash flow will meet working capital and capital expenditure requirements for at least the next 12 months. - **Market Risks:** Trade policies, tariffs, and currency fluctuations may impact the cost of goods and gross margin. - **Regulatory and Compliance:** The company faces potential penalties and removal from insurance networks due to scrutiny from insurers. **Management Discussion:** - **Revenue Decline:** Primarily due to the Tricare payment suspension and a 3% decrease in device orders. - **Cost Management:** Efforts to reduce expenses include staff reductions and focusing on sales rep productivity. - **Internal Controls:** A material weakness in IT general controls was identified, but no material misstatements in financial statements were reported. **Conclusion:** Zynex, Inc. faced significant challenges in Q1 2025, including a substantial revenue decline and increased net loss. The company is taking steps to manage costs and improve liquidity, but uncertainties related to regulatory and market risks remain. Management is committed to remediating internal control weaknesses and navigating the current financial environment.