NeuroOne Medical Technologies(NMTC -9.32%) reported fiscal third quarter 2025 earnings on August 14, 2025, with product revenue up 105% year-over-year to $1.7 million and product gross margins rising to 53.9% from 34.1% in the third quarter of fiscal year 2024. Notable progress included new clinical milestones for its OneRF ablation system, first commercial activity in drug delivery, a strengthened balance sheet following an $8.2 million capital raise in April 2025, and a reiteration of raised full-year guidance for product revenue of $8 million to $10 million, and gross margin of 50% to 53% for fiscal year 2025. For reference, the fiscal year ends September 30, 2025.
Gross margin expands as NeuroOne slashes losses
Operating expenses decreased 9% year-over-year to $2.8 million, while net loss per share (GAAP) improved to $0.03 from $0.10 year-over-year due to higher sales and disciplined spending. Licensing revenue, derived exclusively from Zimmer Biomet, reached $3 million for the first nine months of fiscal year 2025, up from zero in the same period of fiscal year 2024.
"Product revenue increased 105% to $1.7 million in Q3 FY2025, and product gross margins increased to 53.9% compared to 34.1% in the third quarter of fiscal year 2024. These represent sizable improvements year-over-year, highlighting the strength of our current business as well as efforts to reduce costs. The company has done a great job of making meaningful progress with a limited burn rate. We also remain debt free and reiterate our expectations of being funded through at least fiscal year 2026 based on contractual minimum orders expected under our contract with Zimmer Biomet with the potential to get to cash flow breakeven if we achieve some of the key milestones currently in progress."
-- David A. Rosa, Chief Executive Officer
The company’s improved margins, reduced losses, and debt-free status reflect effective cost controls and provide a longer financial runway, supported by contractual minimum orders from Zimmer Biomet.
OneRF delivers first 1-year seizure freedom milestone
The company plans to initiate a post-market registry to collect outcomes data for patients treated with the OneRF thin-film ablation system, following the first patient reaching 12 months seizure-free and additional positive patient results. NeuroOne is also expanding indications in pain management via FDA 510(k) submissions for trigeminal neuralgia and has begun preclinical studies in spinal cord stimulation.
"We celebrated our first patient to reach the 1-year of seizure freedom milestone after being treated with our OneRF ablation system. I am pleased to report that the patient has been able to return to many of the activities she participated in prior to being diagnosed with epilepsy. It has had a major impact on her well-being and improved her quality of life. Additional patients are showing significant improvements with reduced or eliminated seizures and as a result, an improved quality of life. In an effort to highlight these positive outcomes we are planning to initiate a post-market registry to collect outcomes data for patients treated with our OneRF ablation system."
-- David A. Rosa, Chief Executive Officer
Demonstrated clinical efficacy and the move to systematically collect outcomes data may support broader adoption and reimbursement for the OneRF system in epilepsy and related indications.
New markets and IP bolster NeuroOne's future runway
The company received its first order for a drug delivery device from a biotechnology company, while simultaneously gaining its first international patent and progressing toward ISO 13485 certification, which is required for international medical device commercialization. Spinal cord stimulation and lower back pain represent over $3 billion in annual U.S. markets, and management is engaging with strategic advisers and partners to extend its thin-film platform technologies toward these indications.
"We're excited to announce that we received our first order from a leading biotech company to test our drug delivery system. As designed, the biotech company is interested in using our technology to both deliberate therapy and to record brain activity before and after the therapy has been administered. We believe this is a very exciting example of the unique combination of therapeutic and diagnostic capabilities provided by our technology platform. Additionally, we continue to make progress with regulatory matters, intellectual property and strengthening our management team. We previously reported that we were initiating a process to secure ISO 13485 certification which is required to commercialize and obtain regulatory clearances internationally. To date, we have not sold or commercialized any of our products in international markets. So if successful, international markets could represent significant revenue in the years to come. Regarding NeuroOne's intellectual property portfolio, we recently received a notice of allowance from the U.S. Patent and Trademark Office regarding the novel method of manufacturing that the company has developed. We also recently received notification that we have been granted our first international patent, which is for our spinal cord stimulation electrode. This is part of 17 patent applications that are either pending or approved."
-- David A. Rosa, Chief Executive Officer
Expanding intellectual property, regulatory progress, and initial commercial traction in new applications and geographies position the company to access larger addressable markets and diversify revenue streams.
Looking Ahead
Management reiterates fiscal year 2025 guidance for product revenue of $8 million to $10 million and raises product gross margin expectations to 50% to 53% for fiscal year 2025, both representing material improvements over fiscal year 2024. The company expects incremental revenue opportunities from new pain management ablation products pending FDA clearance and anticipates planning human studies for spinal cord stimulation implants in early 2026. No specific fiscal year 2026 revenue or margin outlook was provided on this call.
