NeuroOne Medical Technologies Corporation (Nasdaq: NMTC) reported financial results for the third quarter of fiscal year 2026, showing a 16% year-over-year increase in product revenue to $2.0 million. The company also achieved record product gross margins of 59.9%, up from 53.9% in the same period last year, driven by a 29% increase in product gross profit to $1.2 million. These results underscore the growing commercial traction of NeuroOne's portfolio of minimally invasive neurological technologies.
Despite revenue growth, the company's net loss widened to $2.0 million, or $0.23 per basic share, compared to a net loss of $1.5 million in the prior-year quarter, reflecting increased operating expenses tied to expanded sales and marketing efforts, R&D, and headcount. Total operating expenses rose to $3.6 million from $2.8 million.
A key highlight of the quarter was the strong demand for NeuroOne's products, with new product orders of $2.7 million, representing 43% growth year-over-year. Orders outpaced shipments, growing backlog to $1.7 million as of June 30, 2026. For the full fiscal year 2026, the company has received product orders totaling $11.2 million, with recognized revenue expected to range from $9.2 million to $10.5 million, depending on manufacturing completion and shipment timing. The company is working closely with manufacturing partners to maximize shipments.
CEO Dave Rosa commented, "This quarter marked another period of revenue growth compared to 2025, with product revenue increasing 16% year-over-year to $2.0 million. Importantly, this growth is improving margins – product gross margins reached a record 59.9%, driven by a 29% increase in product gross profit to $1.2 million compared to the prior year period. Even more encouraging is that new product orders of $2.7 million during the quarter meaningfully outpaced revenue recognized during the quarter, growing our backlog to $1.7 million."
In addition to financial performance, NeuroOne achieved several operational milestones. The company received ISO 13485:2016 certification, enabling commercialization across different countries, which paves the way for international expansion. The Journal of Neurosurgery published a study by the Mayo Clinic in Jacksonville, Florida, evaluating NeuroOne's OneRF® Brain Ablation System in patients with implanted neuromodulation devices, concluding that the procedures can be performed without interfering with existing hardware and providing meaningful seizure reduction.
NeuroOne also made significant progress in its StereoCED™ drug delivery platform, which is expected to be available for animal research and FDA IDE approved studies by the end of fiscal year 2026. The company released a white paper highlighting the platform's potential to reduce procedure time and address barriers to scalable commercial delivery of brain therapeutics. This comes as the first potential blockbuster intraparenchymal brain-delivered therapy could receive FDA approval as early as 2027.
The company expanded its drug delivery collaborations with the Mayo Clinic and the University of Minnesota to study novel treatments for pediatric diffuse midline glioma and drug-resistant epilepsy, respectively. Additionally, NeuroOne is in advanced discussions with a tier-one potential strategic partner for its basivertebral nerve ablation system to treat lower back pain.
Financially, the company had $2.0 million in cash and cash equivalents as of June 30, 2026, down from $6.6 million at the start of the fiscal year, reflecting ongoing investments. Working capital stood at $3.7 million, and the company had no debt. Subsequent to quarter end, the company raised $1.0 million through its at-the-market offering program, and its lead investor increased ownership to 12.5%.
These results highlight NeuroOne's strong momentum in the medical technology sector, particularly in the growing field of minimally invasive neurological procedures. The company's ability to secure orders ahead of shipments suggests robust demand, while the expansion into international markets and drug delivery could open new revenue streams. However, the widened net loss and increased operating expenses point to the challenges of scaling operations and investing in future growth. As the company approaches the launch of its StereoCED platform and continues to build its sales infrastructure, stakeholders will be watching for sustained revenue growth and a path to profitability.
