Zynex Reports 43% Revenue Decline and $10.4 Million Net Loss in Q1 2025

Zynex, Inc. reported a significant decline in financial performance for the first quarter of 2025, with net revenue falling to $26.6 million, a decrease of 43% from $46.5 million in the same period of 2024. The company attributed this drop primarily to a temporary payment suspension from Tricare, which historically accounted for approximately 20-25% of its annual revenue, and a 3% decline in device orders. The net loss for the quarter was $10.4 million, compared to a net income of $10,000 in the prior year, reflecting the impact of reduced sales and increased operational costs.

In terms of operational metrics, Zynex's device revenue decreased by 15% to $11.9 million, while supplies revenue plummeted by 55% to $14.7 million. The company noted that the decline in supplies revenue was also influenced by the Tricare payment suspension and a strategic reduction in its sales force by 34% to enhance productivity. As of March 31, 2025, Zynex's cash and cash equivalents stood at $23.9 million, down from $39.6 million at the end of 2024, while accounts receivable decreased to $14.1 million.

Zynex has undertaken strategic measures to align its operations with current revenue levels, including a workforce reduction of approximately 15%, primarily affecting corporate departments. This restructuring is expected to yield annual savings of around $35 million. The company also reported a significant increase in general and administrative expenses, which rose to $14.4 million, up 8% from the previous year, largely due to increased professional fees. Sales and marketing expenses decreased by 28% to $16.9 million, reflecting the reduced headcount in the sales force.

Looking ahead, Zynex remains focused on addressing the challenges posed by the Tricare payment suspension and is actively working to reinstate payments. The company anticipates a response from Tricare in June 2025. Despite the current difficulties, Zynex believes that its cash reserves and projected cash flows will be sufficient to meet working capital and capital expenditure requirements for at least the next twelve months. The company continues to monitor its operational efficiency and market conditions to navigate the ongoing challenges in the healthcare landscape.