Zynex (ZYXI) Hit by TriCare Suspension on Multiple Fronts: Weak Earnings and Investor Lawsuit – Hagens Berman

SAN FRANCISCO, May 07, 2025 (GLOBE NEWSWIRE) -- Medical technology company Zynex, Inc. (NASDAQ: ZYXI) is facing a double whammy linked to its dealings with TriCare, the healthcare program for the U.S. military community. The company's first-quarter 2025 results revealed a sharp downturn, largely attributed to a temporary payment suspension by one of its major payers, TriCare. Adding to the company’s troubles, this very TriCare payment issue has now become central to a recently announced class action lawsuit filed on behalf of Zynex investors. The lawsuit, Tuncel v. Zynex, Inc., No. 25-cv-00913 (D. Colo.), alleges that Zynex and certain top executives violated federal securities laws between March 13, 2023, and March 11, 2025. Hagens Berman is investigating the alleged claims and urges Zynex investors to submit your losses now. Class Period: Mar. 13, 2023 – Mar. 11, 2025Lead Plaintiff Deadline: May 19, 2025Visit: www.hbsslaw.com/investor-fraud/zyxi Contact the Firm Now: ZYXI@hbsslaw.com 844-916-0895 Disappointing Q1 2025 Results Due to TriCare Suspension On April 29, 2025, Zynex reported that its net revenue for the first quarter of 2025 plummeted to $26.6 million, a significant drop from the $46.5 million reported in the same period of 2024. The company also experienced a contraction in gross profit margin, falling to 69% in Q1 2025, compared to 80% in the prior year. The bottom line reflected these challenges, with an adjusted EBITDA loss of $11.8 million, a stark contrast to the $1.7 million in adjusted EBITDA recorded in the first quarter of 2024. On the earnings call, Zynex CEO Thomas Sandgaard directly cited the TriCare payment suspension as a primary driver of the disappointing first-quarter results. He stated that the disruption significantly impacted revenue calculations and prompted the company to initiate a restructuring to prepare for a scenario where TriCare payments remain halted. Looking ahead, Zynex has offered a muted revenue guidance of $27 million for the second quarter of 2025, with an anticipated EPS loss of $0.20. The company has withheld full-year guidance pending clarity on the TriCare situation, a decision that reflects the significant uncertainty surrounding this key payer relationship. Analysts on the earnings call voiced concerns that the TriCare situation could create a domino effect, prompting other insurers to re-evaluate their reimbursement policies for Zynex's device. Zynex Securities Class Action Alleges "Oversupplying" Scheme The payment woes with Tricare appear to be intertwined with more serious allegations leveled against Zynex in a newly filed securities class action. The core of the lawsuit’s allegations mirrors the explanation provided by Zynex for its poor financial performance. Investors claim that the company misled them by failing to disclose practices that ultimately led to the TriCare payment suspension. Specifically, the lawsuit contends that Zynex shipped excessive amounts of products, including electrodes, inflating revenue and drawing scrutiny from insurers like TriCare. The plaintiffs argue that the company should have warned investors about the likely adverse consequences of these practices, including the potential for payment suspensions and removal from insurer networks. The complaint highlights a more than 5% drop in Zynex's share price following a June 4, 2024 report by STAT detailing an alleged "oversupplying scheme." This report, according to the lawsuit, raised concerns about the company's billing practices and likely contributed to the increased scrutiny from payers like TriCare. The lawsuit further points to a dramatic over 51% plunge in Zynex's share price on March 11, 2025, the day the company reported its disappointing fourth-quarter 2024 results and disclosed the significant TriCare payment suspension. Hagens Berman’s Investigation Shareholder rights firm Hagens Berman is investigating the alleged claims. “The significant revenue decline and the revised guidance following the TriCare payment suspension raise serious questions about the accuracy and timeliness of Zynex's prior statements to investors. We are investigating whether the company adequately disclosed the risks associated with its billing practices and its reliance on TriCare revenues,” said Reed Kathrein, the Hagens Berman Partner leading the firm’s probe. If you invested in Zynex and have substantial losses, or have knowledge that may assist the firm’s investigation, submit your losses now » If you’d like more information and answers to frequently asked questions about the Zynex case and our investigation, read more » Whistleblowers: Persons with non-public information regarding Zynex should consider their options to help in the investigation or take advantage of the SEC Whistleblower program. Under the new program, whistleblowers who provide original information may receive rewards totaling up to 30 percent of any successful recovery made by the SEC. For more information, call Reed Kathrein at 844-916-0895 or email ZYXI@hbsslaw.com. About Hagens BermanHagens Berman is a global plaintiffs’ rights complex litigation firm focusing on corporate accountability. The firm is home to a robust practice and represents investors as well as whistleblowers, workers, consumers and others in cases achieving real results for those harmed by corporate negligence and other wrongdoings. Hagens Berman’s team has secured more than $2.9 billion in this area of law. More about the firm and its successes can be found at hbsslaw.com. Follow the firm for updates and news at @ClassActionLaw. Contact: Reed Kathrein, 844-916-0895

Zynex (ZYXI) Hit by TriCare Suspension on Multiple Fronts: Weak Earnings and Investor Lawsuit – Hagens Berman

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