Nexalin Technology posts Q2 earnings miss, revenue below forecasts

Nexalin Technology Inc. on Wednesday reported second-quarter earnings and revenue that missed Wall Street estimates, extending a streak of underperformance in its fiscal performance.

The company, which develops non-invasive medical devices for neurological and pain management applications, posted a net loss of $1.2 million, or 10 cents per share, for the three months ended June 30. Analysts polled by Refinitiv had expected a loss of 5 cents per share on average.

Revenue for the quarter declined 12% year-over-year to $2.8 million, falling short of the $3.1 million consensus forecast. The drop in revenue was attributed to slower-than-expected adoption of its devices in key markets and ongoing supply chain constraints that have constrained production and distribution.

Gross margin contracted to 45% from 52% in the same period last year, reflecting higher material costs and reduced operational efficiency. Operating expenses rose 8% to $2.1 million, driven by increased research and development spending aimed at accelerating product development and regulatory approvals.

Nexalin’s cash and cash equivalents totaled $5.7 million at quarter-end, down from $7.2 million at the start of the year. The company did not provide updated guidance for the full fiscal year, citing ongoing macroeconomic uncertainty and variable market conditions.

Shares of Nexalin fell 5% in after-hours trading following the release, extending declines from the prior session. The stock has underperformed the broader healthcare sector by 18% over the past three months, according to data from FactSet.

Management highlighted progress in clinical trials for its next-generation devices but acknowledged that commercialization timelines remain subject to regulatory review and market demand recovery.