electroCore — Third Quarter 2026 Earnings Summary

Financial Performance:

• Reported net sales of $9.7 million for the three months ended September 30, 2026, an increase of approximately 12% year-over-year compared to $8.7 million in the prior year period.
• GAAP net loss improved by $2.0 million to $1.3 million (or $0.13 per share), a 61% decrease from the $3.4 million loss in the third quarter of 2025.
• Adjusted EBITDA net loss improved by nearly $1.4 million to $0.7 million, a 67% improvement from the $2.0 million loss in the prior year period.
• Gross profit increased by $1.1 million to $8.6 million, with gross margin expanding to 88.5% from 86.0% year-over-year, driven by favorable product mix.
• Total operating expenses decreased to $10.1 million from $10.4 million in the prior year period.
• Research and development expenses decreased to $0.4 million from $0.7 million year-over-year.
• Selling, general and administrative expenses remained flat at $9.7 million, with sales and marketing increasing $0.3 million to support revenue growth.
• Cash, cash equivalents, and marketable securities totaled approximately $7.5 million at September 30, 2026, down from approximately $11.6 million at December 31, 2025.

Guidance and Future Outlook:

• Revised full-year 2026 revenue guidance to a range of $39 million to $42 million, replacing the previous guidance of greater than 30% revenue growth.
• Introduced preliminary 2027 revenue guidance targeting 30% to 40% revenue growth over full-year 2026 revenue.
• Expects to achieve its first quarter with positive Adjusted EBITDA by the end of 2027.
• Future growth expectations are based on the expansion of representatives selling gammaCore and Quell into VA accounts, improved accountability from smaller territories, replicating operating leverage, and potential FDA clearance for Quell in the CIPN indication.

Business Segments and Product Lines:

• U.S. Prescription (Rx) revenue grew approximately 25% in the third quarter and 34% in the first nine months of 2026 compared to the prior year.
• Quell product line sales reached $1.2 million in the third quarter of 2026, representing a 102% increase year-over-year and a 369% increase in the first nine months.
• Revenue from Quell Fibromyalgia sold into the VA was approximately $1.1 million for the three months ended September 30, 2026, a 111% increase over the prior year.
• Approximately 17,700 VA patients have received a gammaCore device, representing 3.0% penetration of the estimated addressable VA headache market.
• The General Wellness channel saw revenue decline to $1.0 million in the third quarter from $1.7 million in the prior year as the company de-emphasized low-return revenue.
• The company submitted a 510(k) premarket notification to the FDA in October 2026 seeking clearance for Quell for the treatment of chronic chemotherapy-induced peripheral neuropathy (CIPN).
• Transitioned all prescription product sales to the VA and Department of Defense through a distribution agreement with Lovell Government Services, with 91% of orders flowing through Lovell by the end of September 2026.

Market and Competitive Landscape:

• The VA channel remains the company's largest growth driver, with new sales representatives averaging $210,000 in monthly VA revenue in Q3 2026, a 30% increase over previous territory performance.
• New patient starts per account increased to 3.4 per account by month three for newly onboarded 1099 representatives, compared to 0.3 for previously onboarded 1099s.
• Revenue concentration in the top 15 VA accounts decreased from 54% in June 2026 to 51% in the third quarter of 2026, indicating improved revenue diversification.
• Return on advertising spend improved 8% in the third quarter of 2026 compared to the prior year, reflecting a strategic shift toward higher-converting audiences.
• The company continues engagement within Kaiser Permanente Georgia regarding Quell Fibromyalgia.

Risks and Challenges:

• The preliminary 2027 outlook is subject to FDA clearance of the pending 510(k) submission for Quell CIPN.
• Risks include the potential inability to raise additional funding, maintain Nasdaq listing, or meet operating covenants under the Loan and Security Agreement with Avenue.
• There is a risk that expected cost savings from the revised sales incentive structure and the Lovell arrangement may not materialize.
• Regulatory risks include the possibility of FDA Form 483 observations resulting in a warning letter or other regulatory action.
• The company faces risks associated with ongoing leadership changes and the ability to attract and retain key personnel.
• Inflation, currency fluctuations, and competition in the industry are cited as potential factors affecting results.

Management Commentary and Tone:

• Joshua Lev, Co-Chief Executive Officer, President, and CFO, stated the quarter reflects the "early stages of a more efficient commercial organization" and delivered the "lowest operating loss in our history."
• Management emphasized a deliberate prioritization of profitable, sustainable long-term growth over short-term results.
• Leadership expressed confidence in accelerating revenue growth and reaching an inflection point for positive Adjusted EBITDA in 2027.
• The company noted that structural changes to the commercial organization, including filling sales management roles, are expected to be the last material changes.

Other Key Points:

• Quell was acquired in May 2025 as part of the acquisition of NeuroMetrix, Inc.
• The company expects the transition to the Lovell distribution agreement to reduce approximately 3% of general and administrative expense in transaction fees.
• A gain of approximately $0.4 million related to the settlement of claims for indemnification was included in Interest and other income.
• A $0.1 million benefit from income taxes was recorded, consisting of a favorable adjustment to the UK tax provision following a change in transfer pricing policy.
• The company will host a conference call and webcast on November 4, 2026, at 4:30 pm EST.