Good day, and welcome to the BrainsWay Second Quarter 2025 Earnings Conference Call. [Operator Instructions] Please note, this event is being recorded. I would now like to turn the conference over to Garth Russell with Investor Relations from LifeSci Advisors. Please go ahead.

Thank you all, and welcome to BrainsWay's Second Quarter 2025 Earnings Conference Call. With us today are BrainsWay's Chief Executive Officer, Hadar Levy; and Chief Financial Officer, Ido Marom. The format for today's call will be a discussion of recent trends and business updates from Hadar, followed by a detailed discussion of the financials. Then we will open up the call for your questions. Earlier today, BrainsWay released financial results for the 3 months ended June 30, 2025. A copy of this press release is available on the company's Investor Relations website. Before I turn the call over to Hadar, I would like to remind you that this conference call, including both management's prepared remarks and the question-and-answer session may contain projections or other forward-looking statements regarding, among other topics, BrainsWay's anticipated future operating and financial performance, business plans and prospects and expectations for its products and pipeline, which are all subject to risks and uncertainties, including shifts in the market conditions resulting from geopolitical, supply chain and other factors as well as the use of non-GAAP financial measures. Additional information regarding these and other risk factors are available in the company's earnings release and in its other filings with the SEC, including the Risk Factors section contained in BrainsWay's Form 20-F. I would like to turn the call over to Hadar.

Thank you, Garth. Welcome, everyone, and thank you for joining us today. We are excited to announce record quarterly revenue of $12.6 million reported for the second quarter of 2025. This represents a 26% increase compared to the same period last year. In addition, we shipped a total of 88 Deep TMS systems during the quarter, representing a 35% increase compared to the same period last year. This brings our total installed base to 1,522 systems. A key part of our success, which has allowed us to report steady growth and strong gross margin is our focus on generating recurring revenue streams through multiyear lease agreements. These agreements now make up approximately 70% of our recent customer engagement. In addition to signing new agreements, we have had a high rate of customer retention with many customers deciding to extend and even expand their agreement out several years. Currently, we have a backlog of signed agreement with remaining performance obligation totaling approximately $62 million. This backlog provides us with a clear visibility into the future and a foundation from which to grow. We believe the stability and visibility in our business driven by the growing share of customer engagement tied to multiyear leasing agreement over the past several quarters clearly demonstrate our evolution from a pioneer of breakthrough technology into a scalable growth platform. With the wind at our backs, we have been able to further establish our leadership position in the noninvasive neuromodulation space. I am proud of how efficient our team is at executing our business model, which is designed to innovate, repeat, expand and compound. Thus far, under this model, we are focused on 3 key pillars to drive long-term growth, including further elevating market awareness of Deep TMS and its clinical impact, advancing our R&D road map…

Thank you, Hadar. As Hadar noted, Q2 2025 was another record quarter for BrainsWay with revenue of $12.6 million, representing a 26% increase compared to $10 million in the same period last year. During the quarter, we placed 88 Deep TMS systems, bringing our total installed base to 1,522 systems as of June 30, 2025, compared to 1,215 systems a year ago. Gross profit for the quarter was $9.5 million, up $2 million from $7.5 million in the prior year period, while maintaining a strong gross margin of 75% in both periods. This stability continues to reflect the strength of our recurring revenue model and disciplined cost management. Turning to operating expenses. Sales and marketing totaled $4.9 million compared to $3.8 million in Q2 2024, an increase of $1.1 million, driven by targeted investment in commercial expansions and marketing programs. Research and development expenses were $2.3 million compared to $1.7 million last year, an increase of $0.6 million, primarily from our ongoing clinical trials and development activities. General and administrative expenses were $1.6 million compared to $1.4 million in the prior year period, an increase of $0.2 million, mainly due to additional legal fees and due diligence costs related to the Stella investment and other initiatives as reflected in our adjusted EBITDA reconciliation table, including in our press release issued earlier today. Operating profit was approximately $600,000, in line with the same period last year. Adjusted EBITDA increased to $1.5 million from $1.3 million in the prior year period. Net profit for the quarter was $2 million compared to $0.6 million in the same period of 2024. From a balance sheet perspective, we ended the quarter with $78.3 million in cash, cash equivalents, restricted cash and short-term deposits, up $8.7 million from the end of 2024 and up $30.2 million…

[Operator Instructions] Our first question comes from Jeffrey Cohen with Ladenburg Thalmann.

I guess, firstly, Hadar, could you talk about the accelerated protocol in the sense of if or when that comes to market as far as treatment days and potential pricing and payer flow, at least domestically, please?

Yes. So as I said, as part of my earlier call, we already submitted the data to the FDA, and we also published the initial results from the study that looks very, very positive. In terms of timing, we're expecting to receive an answer from the FDA on the fourth quarter of this year with the hope to potentially even get clearance before the end of the year. In terms of the commercialization part of this, we believe that's going to be a game changer. We believe that make -- shorten the daily visit at the clinic for only a few days. We're talking about 6 days instead of 4 weeks acute phase plus additional 2 weeks of maintenance treatment, overall 6 weeks. So you compare 6 weeks to 6 days, that we're really going to make much easier and much more comfortable for patients to come and do this meaningful and important treatment at the clinic. In terms of reimbursement, so the current reimbursement is currently allowing up to 2 treatments per day. So we are actively working with -- on that to try and improve it to match our new protocol for the accelerated in order to continue and expand this new indication in 2026.

Okay. Got it. That's helpful. And then as a follow-up, secondly, could you talk about the FTEs and the size of the commercial organization and talk about the size over the past year and how they may look into the future?

The FTE, are you calling to...

The full-time inflation in the sales organization?

Yes. Okay. So the current sales team is around 16 direct sales folks spreaded out in the U.S. However, we do have an additional 10 FTE practice development folks that are responsible for the utilization and supporting all our current customers and new customers with training and installation. So overall, we're speaking about 26 people that are supporting the sales activity.

Got it. And then lastly, I didn't hear any commentary regarding TMS 360 and the pilot study. Any updates there?

Yes. So the 360, our plan is to launch the 360 with the alcohol use disorder trial, which we plan to launch it in the third quarter, let's say, by the end of September. So that will be the first use of the 360 machine. However, we also do some feasibility studies with this machine around cognitive behavior and Parkinson's, so in some qualitative centers in the United States and maybe also in Europe before the end of the year. So I believe this next-gen, the 360 machine will be used one for feasibility studies on some neurology indication, but also it's going to be the main system for the alcohol use disorder that we are planning to launch during this year.

Our next question comes from the line of Carl Byrnes with Northland Capital Markets.

Congratulations on your results. With respect to the backlog, I would imagine that the super majority of that is from enterprise customers. But if you could elaborate, that would be great. And then also, what was the OCD placements during the quarter, if you can reference that number as well?

Yes. So as you mentioned, we continue to focus on a multiyear lease agreements, but most of them are coming from enterprise accounts. We'll continue to focus on enterprise accounts that are generating a substantial lease agreements for us, and that's helped us to continue and increase our backlog, the remaining performance obligation and most important, the visibility for the next -- at least for the next year or so. And I'm expecting this momentum to continue and stay very positive. In terms of the OCD, so we shipped 30 OCD systems in the second quarter.

Our next question comes from Raghuram Selvaraju from H.C. Wainwright.

This is Dan on for Raghu. Congratulations on the earnings. So we were curious how many -- about how many more of these strategic financing arrangements are you planning this year if you have a planned number? What's likely to be the capital outlay for investment? Do you have a max cap for investment? Or is it going to be a flat rate moving forward?

Yes. So thank you for this question. And we are -- that's going to be a very strategic initiative for the company. We believe that there is a very high interest for this collaboration with growing and profitable mental health networks. The goal -- my personal goal and the company goal is to sign at least 5 contracts before the end of the year, similar to what we announced with Stella MSO and for 2026 is to have 10 contracts. So overall, we're speaking about potential 15 contracts by the end of 2026. The size of this minority investment could range between $2 million up to $5 million, depends on the size of the mental health network and the profitability and our plan to expand. So overall, we are -- as I said, we are actively speaking with a few players today in the market and my hope is to hit the target that we set to ourselves to sign 5 new agreements before the end of the year.

Awesome. That's really exciting. Could you also just qualitatively talk about how the Stella financing arrangement has been working out so far?

That's -- from our perspective, that's a great example of collaboration. So when we launched this collaboration with Stella, we do what we are used to do. So besides bringing the best technology into their centers is putting lots of emphasis on educating the centers, training the centers of what is working and what is broking in the process and how can they yield more patients into this treatment modality. And we're seeing some dramatic increase in the utilization. I think we are seeing over 50% increase in the utilization for TMS patients at Stella MSO Clinic. And that's fantastic. And I really believe on the experience and the playbook that my team already administered with Stella, and that's our plan to do the same thing with all the future collaboration with other mental health networks.

[Operator Instructions] we have no further questions at this time. I would like to turn the conference back over to Hadar Levy for any closing remarks.

Yes, I would like to thank all the investors, analysts and other participants for their interest in BrainsWay. With that, please enjoy the rest of your day. Thank you.

Thank you. The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.