What does a 'good account' look like in terms of revenue and volume per account in states with substantial policy coverage versus modest coverage?

The company is currently analyzing this by penetration rate per children's hospital, rather than just per-account revenue, due to varying numbers of providers. These penetration rate metrics will likely be added to future KPIs. “So what we're doing is looking at this by penetration rate and what that means to the children's hospital, what's the penetration rate of that children's hospital. And those are numbers that will probably add to the KPIs to some level going forward.”

Should we expect to hit 200 million covered lives in 2027? What percentage of covered lives does a hospital need to commit to an aggressive program, and will additional payer coverages help reach that?

The CEO would be 'highly disappointed' if they weren't over 200 million covered lives by the end of 2027. Hospitals typically need 70% payer coverage to fully commit. Each additional payer will bring cumulative effects, expanding coverage and accelerating the 'filling of the bucket'. “I would be personally based on what I know at this point, highly disappointed if we weren't over 200 million lives by the end of 2027, yes.”

For the 10 VA reps being deployed, what are the expected sales per quarter?

The company has clear-cut expectations but is not disclosing them today. They plan to discuss the revenue breakout or expectations per territory in the next quarterly call (Q4 report). “We have clear-cut expectations that I'm not going to disclose those today. I think next quarterly call, we'll likely move forward either talking about how -- what the revenue looks like and breaking that out and we might wait for Q1 to do that in Q1 report in Q4, how that broke out.”

NRXS

NeurAxis (NRXS) Q2 FY26 earnings call: guidance and Q&A

Earnings call· Jun 2026 (Q2 FY26)· Health Care· Aug 11, 2026

Source: earnings call transcript

Executive summary

NeurAxis Q2 FY26 — Strong Revenue Growth Driven by CPT Code and Payer Progress

NeurAxis reported strong Q2 FY26 revenue growth, driven by the new Category 1 CPT code and a favorable shift to full reimbursement payers, which also boosted gross margins. The company made significant progress with two large commercial payers and is aggressively expanding into VA Medical Centers. While operating expenses and cash burn are expected to increase in the near term to capitalize on market opportunities, the focus remains on expanding payer coverage and executing intensely in covered markets to drive future revenue and profitability.

Highlights

Revenue increased 116% year-over-year to $1.928 million in Q2 FY26.
IB-Stim average selling price rose 30% year-to-date to $1,003.
Gross margin expanded 230 basis points to 85.9% in Q2 FY26.
Significant progress made with two large commercial payers for additional coverage.
VA Medical Centers identified as a meaningful growth platform, with 10 1099 reps to be in the field by September 15.

Concerns

Operating loss increased 24% year-over-year to $2.1 million in Q2 FY26 due to higher operating expenses.
Cash burn is expected to increase in the second half of FY26 due to aggressive commercial hiring and R&D investments.
Many states have not yet included CPT code 64567 on their 2026 Medicaid fee schedules, hindering access.
Hospitals require 70% payer coverage to fully commit to aggressive IB-Stim programs, a threshold not yet broadly met.

Guidance & targets

Category	Target	Timeline	Confidence
Additional payer coverage	Additional coverage high materiality	H2 FY26 or early FY27	Medium
Cash burn	Increase medium materiality	H2 FY26	High
Covered lives	Over 200 million high materiality	End of FY27	High

Deals & partnerships

U.S. Department of Veterans Affairs Federal Supply Schedule contract for PENFS

The VA health care system serves nearly 7 million active patients annually, with functional dyspepsia estimated to affect approximately 3% of that population. This contract provides a pathway not dependent on commercial payer coverage.

Risks & headwinds

Lack of comprehensive insurance coverage Ongoing

Only treating a 'fraction of patients' despite strong demand; utilization is not optimized where one element (coverage, physician champion, operational capacity) is missing.

Mitigation:Aggressive market access strategy, hiring a VP of Healthcare Economics and Policy, direct engagement with payers, and preparing commercial infrastructure to scale as additional coverage comes online.

Medicaid fee schedule inclusion delays Ongoing

CPT code 64567 not yet fully loaded in many states' 2026 fee schedules, hindering medically necessary coverage and delaying program launches.

Mitigation:Payer outreach now includes state Medicaid fee schedules, focusing on implementation issues rather than clinical adoption.

Hospital capacity issues Current

Patients in some of the best accounts are waiting for multiple months for care due to capacity issues.

Mitigation:Hiring a Director or VP of Provider Economics to communicate economic and operational value to administrators and hospital stakeholders to gain more IB-Stim clinic time.

Increased operating expenses and cash burn H2 FY26

Total operating expenses increased 53% in Q2 FY26; cash burn expected to increase in H2 FY26.

Mitigation:Strategic hiring of sales, marketing, and clinical personnel, and increased R&D expenditures are growth-related investments expected to drive future revenue growth and eventually offset the burn.

Going concern Until cash flow breakeven/profitability is reached.

Still a factor.

Mitigation:Continued focus on revenue growth and operating leverage to reduce cash burn, with significant reliance on securing additional insurance coverage to change the outlook.

What to watch in Q3 FY26

Additional payer coverage

H2 FY26 or early FY27

Current Significant progress with two large payers

Target Additional coverage

Why it matters

Securing additional payer coverage is the single most important driver of scalable growth, unlocking significant revenue and enabling hospitals to fully commit to IB-Stim programs.

We are cautiously optimistic that these efforts will result in additional coverage in the second half of 2026 or early 2027.

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Q&A highlights

Can you provide more color on the progress with the two large payers and what drives your confidence? Also, how do you see sequential growth in the back half of the year – driven by new coverage or current market saturation?

Confidence stems from direct conversations with payers who believe PENFS should be a covered service. Growth will come from aggressively saturating states with existing decent-to-good policy coverage and from additional payers writing new policy coverage, which will unlock significant revenue.

“My confidence comes from the fact that we've had direct conversations. I wouldn't be confident if we didn't have direct conversations with a payer who made comments or alluded to the fact that they believe this should -- they also believe this should be a covered service.”

asked by Chase Knickerbocker · answered by Brian Carrico

2 min read 6 chapters

Detailed narrative

CPT Code Impact & Strategy

The Category 1 CPT code for PENFS, effective January 1, 2026, confirmed key drivers for adoption, leading to disciplined strategic decisions in Q2. The company's strategy is centered on securing remaining insurance coverage and maximizing execution in covered markets, positioning the organization to scale rapidly as new coverage comes online.

This approach has moved the company from theory to evidence, providing a clear roadmap for addressing historical adoption barriers.

Payer Progress & Market Access

NeurAxis reported significant progress with two large commercial payers, expressing cautious optimism for additional coverage in H2 2026 or early 2027. The market access strategy has been elevated to include direct engagement with commercial payers, inclusion in state Medicaid fee schedules, physician and KOL advocacy, and guidance from former payer executives.

A new VP of Healthcare Economics and Policy is being hired to focus on upstream initiatives, while the VP of Market Access and Reimbursement will concentrate on downstream implementation and reimbursement pull-through.

Commercialization & Resource Deployment

Commercial execution is now the primary driver of growth, with the organization aligning resources to markets and accounts demonstrating the strongest coverage, demand, and utilization potential. The company is prioritizing hospitals based on reimbursement, patient opportunity, and their ability to dedicate clinic capacity to IB-Stim.

A disciplined approach avoids broad expansion into markets lacking sufficient payer coverage, instead focusing on in-depth penetration of select favorable markets to generate higher returns and predictable growth.

Team Expansion & Initiatives

In Q2, NeurAxis strengthened its commercial team with new hires, including a full-time VP of Sales, VP of Marketing, a digital marketing expert, a medical science liaison, and a Director of Clinical Adoption. New initiatives include a targeted regional sales rep coverage model in key states, increased sales training rigor, and a focus on integrated health programs within pediatric GI.

A 'strategic market initiative' will coordinate payer access, field execution, clinical education, and marketing efforts in targeted markets to create local intensity.

VA Opportunity

The federal supply schedule contract with the U.S. Department of Veterans Affairs is showing early activity, with multiple VA facilities placing orders and reorders. The VA represents a second meaningful growth platform due to its large patient population (7 million active patients, 3% with functional dyspepsia), centralized purchasing, and independence from commercial payer coverage.

The company plans to deploy 10 1099 territory reps by September 15 to expand this channel, with expectations for a strong revenue read by year-end.

Adult Functional Dyspepsia Program

A large multisite randomized controlled trial evaluating IB-Stim in adult patients with functional dyspepsia is in its early stages. This study is designed to generate the necessary evidence to support future adult medical policy coverage. While this trial progresses, NeurAxis' near-term commercial focus remains strictly on children's hospitals and the VA, with minimal resources allocated to the adult study.

Summary of the company's earnings call; see how call summaries are prepared. Not investment advice.