Tactile Systems Technology, Inc. Reports First Quarter 2025 Financial Results

MINNEAPOLIS, May 05, 2025 (GLOBE NEWSWIRE) -- Tactile Systems Technology, Inc. (“Tactile Medical”; the “Company”) (Nasdaq: TCMD), a medical technology company providing therapies for people with chronic disorders, today reported financial results for the first quarter ended March 31, 2025. First Quarter 2025 Summary & Recent Business Highlights: Total revenue increased 0.3% year-over-year to $61.3 millionGross margin of 74% versus 71% in Q1 2024Net loss of $3.0 million versus $2.2 million in Q1 2024Adjusted EBITDA loss of $0.3 million versus positive Adjusted EBITDA of $1.0 million in Q1 2024Repurchased $10.0 million of stock under the Company’s share repurchase programExpanded launch of Nimbl to include patients with lower extremity conditions, the largest segment of the lymphedema marketCompleted launch of a new customer relationship management (CRM) tool and previously announced optimization of sales organization “Through the first quarter our team executed on several highly strategic, growth-oriented priorities. We launched Nimbl for lower extremity lymphedema, completed efforts to optimize our sales organization for scale and efficiency, and implemented a new CRM tool that equips our team with best-in-class resources to more efficiently reach lymphedema patients,” said Sheri Dodd, Chief Executive Officer of Tactile Medical. “While these efforts have had a temporary impact on sales force productivity, we are thrilled with the progress made and firmly believe these transformational actions are essential to positioning Tactile for consistent, long-term growth. Our underlying business fundamentals remain firmly in place and we are meaningfully advancing each of our three 2025 strategic priorities to remain the competitive market share leader in medical device lymphatic therapy.” First Quarter 2025 Financial Results Total revenue in the first quarter of 2025 increased $180 thousand, or 0.3%, to $61.3 million, compared to $61.1 million in the first quarter of 2024. The increase in total revenue was attributable to an increase of $1.9 million, or 22%, in sales of the airway clearance product line, offset by a decrease of $1.8 million, or 3%, in sales and rentals of the lymphedema product line in the quarter ended March 31, 2025, compared to the first quarter of 2024. The increase in airway clearance product line revenue was primarily attributable to increased placements of AffloVest among our durable medical equipment (DME) partners, while the decrease in lymphedema product line revenue was primarily attributable to a decrease in headcount of our field sales team. Gross profit in the first quarter of 2025 increased $1.9 million, or 4%, to $45.3 million, compared to $43.4 million in the first quarter of 2024. Gross margin was 74% of revenue, compared to 71% of revenue in the first quarter of 2024. The increase in gross profit was primarily attributable to lower manufacturing and warranty costs. Operating expenses in the first quarter of 2025 increased $3.5 million, or 8%, to $49.9 million, compared to $46.4 million in the first quarter of 2024. The increase in operating expenses was primarily attributable to planned strategic investments. Operating loss was $4.5 million in the first quarter of 2025, compared to $3.0 million in the first quarter of 2024. Other income was $0.5 million in the first quarter of 2025, compared to $0.2 million in the first quarter of 2024, and consisted primarily of interest income, net. Income tax benefit was $1.1 million in the first quarter of 2025, compared to $0.6 million in the first quarter of 2024. Net loss in the first quarter of 2025 was $3.0 million, or $(0.13) per diluted share, compared to $2.2 million, or $(0.09) per diluted share, in the first quarter of 2024. Weighted average shares used to compute diluted net loss per share were 23.7 million in each of the first quarters of 2025 and 2024. Adjusted EBITDA loss was $0.3 million in the first quarter of 2025, compared to positive Adjusted EBITDA of $1.0 million in the first quarter of 2024. Balance Sheet Summary As of March 31, 2025, the Company had $83.6 million in cash and $25.5 million of outstanding borrowings under its credit agreement, compared to $94.4 million in cash and $26.3 million of outstanding borrowings under its credit agreement as of December 31, 2024. The Company repurchased $10.0 million of its stock during the first quarter under its repurchase program. As of March 31, 2025, $16.5 million remained available under the Company’s $30.0 million share repurchase program, which expires October 31, 2026. 2025 Financial Outlook The Company is updating its 2025 financial outlook and now expects full year 2025 total revenue in the range of $309 million to $315 million, representing growth of approximately 5% to 8% year-over-year, compared to total revenue of $293.0 million in 2024. The Company’s prior 2025 guidance expectation was total revenue in the range of $316 million to $322 million, representing growth of approximately 8% to 10% year-over-year. The Company now also expects full year 2025 adjusted EBITDA in the range of $32 million to $34 million, compared to adjusted EBITDA of $37.1 million in 2024. The Company’s prior 2025 guidance expectation was adjusted EBITDA in the range of $35 million to $37 million. Conference Call Management will host a conference call with a question-and-answer session at 5:00 p.m. Eastern Time on May 5, 2025, to discuss the results of the quarter. Those who would like to participate may dial 877-407-3088 (201-389-0927 for international callers) and provide access code 13752588. A live webcast of the call will also be provided on the investor relations section of the Company's website at investors.tactilemedical.com. For those unable to participate, a replay of the call will be available for two weeks at 877-660-6853 (201-612-7415 for international callers); access code 13752588. The webcast will be archived at investors.tactilemedical.com. About Tactile Systems Technology, Inc. (DBA Tactile Medical) Tactile Medical is a leader in developing and marketing at-home therapies for people suffering from underserved, chronic conditions including lymphedema, lipedema, chronic venous insufficiency and chronic pulmonary disease by helping them live better and care for themselves at home. Tactile Medical collaborates with clinicians to expand clinical evidence, raise awareness, increase access to care, reduce overall healthcare costs and improve the quality of life for tens of thousands of patients each year. Legal Notice Regarding Forward-Looking Statements This release contains forward-looking statements, including guidance for the full year 2025. Forward-looking statements are generally identifiable by the use of words like “may,” “will,” “should,” “could,” “expect,” “anticipate,” “estimate,” “believe,” “intend,” “continue,” “confident,” “outlook,” “guidance,” “project,” “goals,” “look forward,” “poised,” “designed,” “plan,” “return,” “focused,” “prospects” or “remain” or the negative of these words or other variations on these words or comparable terminology. The reader is cautioned not to put undue reliance on these forward-looking statements, as these statements are subject to numerous factors and uncertainties outside of the Company’s control that can make such statements untrue, including, but not limited to, the Company’s ability to obtain reimbursement from third-party payers for its products; adverse economic conditions, including inflation, rising interest rates or a recession; the adequacy of the Company’s liquidity to pursue its business objectives; price increases for supplies and components; wage and component price inflation; loss of a key supplier or other supply chain disruptions; entry of new competitors and/or competitive products; compliance with and changes in federal, state and local government regulation; technological obsolescence of, or quality issues with, the Company’s products; the Company’s ability to expand its business through strategic acquisitions; the Company’s ability to integrate acquisitions and related businesses; the effects of current and future U.S. and foreign trade policy and tariff actions; or the inability to carry out research, development and commercialization plans. In addition, other factors that could cause actual results to differ materially are discussed in the Company’s filings with the SEC. Investors and security holders are urged to read these documents free of charge on the SEC’s website at http://www.sec.gov. The Company undertakes no obligation to publicly update or revise its forward-looking statements as a result of new information, future events or otherwise. Use of Non-GAAP Financial Measures This press release includes the non-GAAP financial measure of Adjusted EBITDA, which differs from financial measures calculated in accordance with U.S. generally accepted accounting principles (“GAAP”). Adjusted EBITDA in this release represents net income (loss), plus interest expense, net, or less interest income, net, less income tax benefit or plus income tax expense, plus depreciation and amortization, plus stock-based compensation expense and plus executive transition costs. Reconciliation of this non-GAAP financial measure to its most directly comparable GAAP measure is included in this press release. This non-GAAP financial measure is presented because the Company believes it is a useful indicator of its operating performance. Management uses this measure principally as a measure of the Company’s operating performance and for planning purposes, including the preparation of the Company’s annual operating plan and financial projections. The Company believes this measure is useful to investors as supplemental information and because it is frequently used by analysts, investors and other interested parties to evaluate companies in its industry. The Company also believes this non-GAAP financial measure is useful to its management and investors as a measure of comparative operating performance from period to period. In addition, Adjusted EBITDA is used as a performance metric in the Company’s compensation program. The non-GAAP financial measure presented in this release should not be considered as an alternative to, or superior to, its respective GAAP financial measure, as a measure of financial performance or cash flows from operations as a measure of liquidity, or any other performance measure derived in accordance with GAAP, and it should not be construed to imply that the Company’s future results will be unaffected by unusual or non-recurring items. In addition, Adjusted EBITDA is not intended to be a measure of free cash flow for management’s discretionary use, as it does not reflect certain cash requirements such as tax payments, debt service requirements, capital expenditures and certain other cash costs that may recur in the future. Adjusted EBITDA contains certain other limitations, including the failure to reflect our cash expenditures, cash requirements for working capital needs and cash costs to replace assets being depreciated and amortized. In evaluating non-GAAP financial measures, you should be aware that in the future the Company may incur expenses that are the same as or similar to some of the adjustments in this presentation. The Company’s presentation of non-GAAP financial measures should not be construed to imply that its future results will be unaffected by any such adjustments. Management compensates for these limitations by primarily relying on the Company’s GAAP results in addition to using non-GAAP financial measures on a supplemental basis. The Company’s definition of these non-GAAP financial measures is not necessarily comparable to other similarly titled captions of other companies due to different methods of calculation. Tactile Systems Technology, Inc.Condensed Consolidated Balance Sheets(Unaudited) March 31, December 31,(In thousands, except share and per share data) 2025 2024Assets Current assets Cash $83,619 $94,367Accounts receivable, net 35,693 44,937Net investment in leases 14,850 14,540Inventories 18,867 18,666Income taxes receivable 1,193 —Prepaid expenses and other current assets 5,900 5,053Total current assets 160,122 177,563Non-current assets Property and equipment, net 5,391 5,603Right of use operating lease assets 16,174 16,633Intangible assets, net 41,866 42,789Goodwill 31,063 31,063Deferred income taxes 18,059 18,311Other non-current assets 7,567 5,962Total non-current assets 120,120 120,361Total assets $280,242 $297,924Liabilities and Stockholders' Equity Current liabilities Accounts payable $7,224 $5,648Note payable 2,956 2,956Accrued payroll and related taxes 10,929 17,923Accrued expenses 7,177 7,780Income taxes payable — 270Operating lease liabilities 3,036 2,980Other current liabilities 4,079 3,147Total current liabilities 35,401 40,704Non-current liabilities Note payable, non-current 22,481 23,220Accrued warranty reserve, non-current 1,201 1,209Income taxes payable, non-current 355 239Operating lease liabilities, non-current 15,173 15,955Total non-current liabilities 39,210 40,623Total liabilities 74,611 81,327 Stockholders’ equity: Preferred stock, $0.001 par value, 50,000,000 shares authorized; none issued and outstanding as of March 31, 2025 and December 31, 2024 — —Common stock, $0.001 par value, 300,000,000 shares authorized; 23,584,471 shares issued and outstanding as of March 31, 2025; 23,883,475 shares issued and outstanding as of December 31, 2024 24 24Additional paid-in capital 172,727 180,719Retained earnings 32,880 35,854Total stockholders’ equity 205,631 216,597Total liabilities and stockholders’ equity $280,242 $297,924 Tactile Systems Technology, Inc.Condensed Consolidated Statements of Operations(Unaudited) Three Months Ended March 31,(In thousands, except share and per share data) 2025 2024Revenue Sales revenue $52,469 $53,307 Rental revenue 8,799 7,781 Total revenue 61,268 61,088 Cost of revenue Cost of sales revenue 13,891 14,944 Cost of rental revenue 2,031 2,715 Total cost of revenue 15,922 17,659 Gross profit Gross profit - sales revenue 38,578 38,363 Gross profit - rental revenue 6,768 5,066 Gross profit 45,346 43,429 Operating expenses Sales and marketing 27,516 27,357 Research and development 1,741 2,143 Reimbursement, general and administrative 19,998 16,261 Intangible asset amortization and earn-out 633 632 Total operating expenses 49,888 46,393 Loss from operations (4,542) (2,964)Interest income 895 713 Interest expense (424) (567)Other income — 9 Loss before income taxes (4,071) (2,809)Income tax benefit (1,097) (600)Net loss $(2,974) $(2,209)Net loss per common share Basic $(0.13) $(0.09)Diluted $(0.13) $(0.09)Weighted-average common shares used to compute net loss per common share Basic 23,710,643 23,665,829 Diluted 23,710,643 23,665,829 Tactile Systems Technology, Inc.Condensed Consolidated Statements of Cash Flows(Unaudited) Three Months Ended March 31,(In thousands) 2025 2024Cash flows from operating activities Net loss $(2,974) $(2,209)Adjustments to reconcile net loss to net cash provided by operating activities: Depreciation and amortization 1,726 1,634 Deferred income taxes 252 84 Stock-based compensation expense 2,066 2,039 Loss on disposal of property and equipment and intangibles 5 — Changes in assets and liabilities, net of acquisition: Accounts receivable, net 9,244 2,682 Net investment in leases (310) (129)Inventories (201) 1,683 Income taxes (1,347) (693)Prepaid expenses and other assets (2,452) (787)Right of use operating lease assets (267) 2 Accounts receivable, non-current — 3,983 Accounts payable 1,387 (1,396)Accrued payroll and related taxes (6,994) (5,766)Accrued expenses and other liabilities 282 (203)Net cash provided by operating activities 417 924 Cash flows from investing activities Purchases of property and equipment (379) (482)Intangible assets expenditures (28) (20)Net cash used in investing activities (407) (502)Cash flows from financing activities Payments on note payable (750) (750)Proceeds from exercise of common stock options 10 1 Payments for repurchases of common stock (10,018) — Net cash used in financing activities (10,758) (749)Net decrease in cash (10,748) (327)Cash – beginning of period 94,367 61,033 Cash – end of period $83,619 $60,706 Supplemental cash flow disclosure Cash paid for interest $444 $583 Cash paid for taxes $15 $54 Accrued excise tax on stock repurchases $50 $— Capital expenditures incurred but not yet paid $189 $225 The following table summarizes revenue by product line for the three months ended March 31, 2025 and 2024: Three Months Ended March 31,(In thousands) 2025 2024 Revenue Lymphedema products $50,554 $52,313 Airway clearance products 10,714 8,775 Total $61,268 $61,088 Percentage of total revenue Lymphedema products 83% 86%Airway clearance products 17% 14%Total 100% 100% The following table contains a reconciliation of net loss to Adjusted EBITDA for the three months ended March 31, 2025 and 2024, as well as the dollar and percentage change between the comparable periods: Tactile Systems Technology, Inc.Reconciliation of Net Loss to Non-GAAP Adjusted EBITDA(Unaudited) Three Months Ended Increase March 31, (Decrease)(Dollars in thousands) 2025 2024 $ %Net loss $(2,974) $(2,209) $(765) 35%Interest (income) expense, net (471) (146) (325) N.M.%Income tax benefit (1,097) (600) (497) 83%Depreciation and amortization 1,726 1,634 92 6%Stock-based compensation 2,066 2,039 27 1%Executive transition costs 491 315 176 56%Adjusted EBITDA $(259) $1,033 $(1,292) (125)% The following table contains a reconciliation of net income to Adjusted EBITDA for the year ended December 31, 2024: Tactile Systems Technology, Inc.Reconciliation of Net income to Non-GAAP Adjusted EBITDA(Unaudited) Year Ended(Dollars in thousands) December 31, 2024Net income $16,960 Interest (income) expense, net (1,299)Income tax expense 6,529 Depreciation and amortization 6,793 Stock-based compensation 7,819 Executive transition costs 248 Adjusted EBITDA $37,050 The following table contains a reconciliation of GAAP net income guidance range to the Adjusted EBITDA guidance range for the twelve months ended December 31, 2025: Tactile Systems Technology, Inc.Reconciliation of FY 2025 GAAP Net Income to Adjusted EBITDA Guidance(Unaudited) Twelve Months Ended December 31, 2025(Dollars in thousands) Low HighNet income $13,400 $14,800 Interest income, net (2,400) (2,400)Income tax expense 5,200 5,800 Depreciation and amortization 6,700 6,700 Stock-based compensation 8,600 8,600 Executive transition costs 500 500 Adjusted EBITDA $32,000 $34,000 Investor Inquiries:Sam BentzingerGilmartin Groupinvestorrelations@tactilemedical.com

Tactile Systems Technology, Inc. Reports First Quarter 2025 Financial Results

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