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

MINNEAPOLIS, Aug. 04, 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 second quarter ended June 30, 2025. Second Quarter 2025 Summary & Recent Business Highlights: Total revenue increased 7.8% year-over-year to $78.9 millionGross margin of 75% versus 74% in Q2 2024Net income of $3.2 million versus $4.3 million in Q2 2024Adjusted EBITDA of $7.7 million versus $9.1 million in Q2 2024Announced the presentation of new data demonstrating significant benefits associated with use of Flexitouch Plus in treating patients with head and neck cancer-related lymphedemaRepurchased $16.5 million of stock to complete the Company’s share repurchase program “We delivered strong financial performance in the second quarter, marked by total revenue growth of nearly 8% year-over-year and ahead of our previously stated expectations,” said Sheri Dodd, Chief Executive Officer of Tactile Medical. “Supported by a favorable near-term payer policy environment and healthy channel call points, we are confident this momentum will continue through the second half of the year as we deploy our go-to-market strategies and commercial action plan.” “We also remain highly focused on our three strategic priorities for 2025 to improve access to care, expand treatment options for lymphedema patients, and enhance the lifetime patient value. Our key technology and people-related investments are continuing to progress, including strategically expanding our sales force, presenting new clinical data from our head and neck lymphedema trial, growing adoption of Nimbl, and launching pilot programs aimed at simplifying the workflow process of patient identification, referral, and order processing. These priorities are designed to unlock our market opportunity and enable scalable, profitable growth, and we expect to begin benefiting more meaningfully from them in 2026.” Second Quarter 2025 Financial Results Total revenue in the second quarter of 2025 increased $5.7 million, or 7.8%, to $78.9 million, compared to $73.2 million in the second quarter of 2024. The increase in total revenue was attributable to an increase of $4.4 million, or 52%, in sales of the airway clearance product line and an increase of $1.3 million, or 2%, in sales and rentals of the lymphedema product line in the quarter ended June 30, 2025, compared to the second quarter of 2024. The increase in airway clearance product line revenue was primarily attributable to increased placements of AffloVest among the Company’s durable medical equipment (DME) partners, and the increase in lymphedema product line revenue was primarily attributable to increased headcount and improved productivity within the Company’s field sales team. Gross profit in the second quarter of 2025 increased $4.7 million, or 9%, to $58.8 million, compared to $54.1 million in the second quarter of 2024. Gross margin was 75% of revenue, compared to 74% of revenue in the second quarter of 2024. The increase in gross profit was primarily attributable to lower manufacturing and warranty costs. Operating expenses in the second quarter of 2025 increased $6.5 million, or 13%, to $54.7 million, compared to $48.3 million in the second quarter of 2024. The increase in operating expenses was primarily attributable to planned strategic investments. Operating income was $4.1 million in the second quarter of 2025, compared to $5.8 million in the second quarter of 2024. Other income was $0.4 million in the second quarter of 2025, compared to $0.2 million in the second quarter of 2024, and consisted primarily of interest income, net. Income tax expense was $1.3 million in the second quarter of 2025, compared to $1.8 million in the second quarter of 2024. Net income in the second quarter of 2025 was $3.2 million, or $0.14 per diluted share, compared to $4.3 million, or $0.18 per diluted share, in the second quarter of 2024. Weighted average shares used to compute diluted net income per share were 23.2 million and 24.1 million for the second quarters of 2025 and 2024, respectively. Adjusted EBITDA was $7.7 million in the second quarter of 2025, compared to $9.1 million in the second quarter of 2024. First Six Months 2025 Financial Results Total revenue for the six months ended June 30, 2025, increased $5.9 million, or 4%, to $140.2 million, compared to $134.3 million for the six months ended June 30, 2024. The increase in total revenue was attributable to an increase of $6.3 million, or 37%, in sales of the airway clearance product line, partially offset by a decrease of $0.5 million, in sales and rentals of the lymphedema product line for the six months ended June 30, 2025, compared to the six months ended June 30, 2024. Net income for the six months ended June 30, 2025, was $0.2 million, or $0.01 per diluted share, compared to $2.1 million, or $0.09 per diluted share, for the six months ended June 30, 2024. Weighted average shares used to compute diluted net income per share were 23.7 million and 24.1 million for the six months ended June 30, 2025 and 2024, respectively. Adjusted EBITDA was $7.4 million in the six months ended June 30, 2025, compared to $10.1 million in the six months ended June 30, 2024. Balance Sheet Summary As of June 30, 2025, the Company had $81.5 million in cash and cash equivalents and $24.8 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 $26.6 million of its stock during the six months ended June 30, 2025, to complete its $30.0 million share repurchase program. On July 31, 2025, the Company paid the full outstanding principal balance of $24.0 million under, and retired, its term loan, and refinanced its revolving credit facility, increasing the capacity from $25.0 million to $40.0 million. 2025 Financial Outlook The Company is updating its 2025 financial outlook and now expects full year 2025 total revenue in the range of $310 million to $315 million, representing growth of approximately 6% 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 $309 million to $315 million, representing growth of approximately 5% to 8% year-over-year. The Company now also expects full year 2025 adjusted EBITDA in the range of $33 million to $35 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 $32 million to $34 million. Conference Call Management will host a conference call with a question-and-answer session at 5:00 p.m. Eastern Time on August 4, 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 13754589. 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 13754589. 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 laws and regulations; 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) June 30, December 31,(In thousands, except share and per share data) 2025 2024Assets Current assets Cash $81,528 $94,367Accounts receivable, net 33,086 44,937Net investment in leases 14,457 14,540Inventories 17,111 18,666Income taxes receivable 457 —Prepaid expenses and other current assets 6,348 5,053Total current assets 152,987 177,563Non-current assets Property and equipment, net 4,897 5,603Right of use operating lease assets 15,462 16,633Intangible assets, net 40,904 42,789Goodwill 31,063 31,063Deferred income taxes 18,333 18,311Other non-current assets 9,402 5,962Total non-current assets 120,061 120,361Total assets $273,048 $297,924Liabilities and Stockholders' Equity Current liabilities Accounts payable $8,025 $5,648Note payable 2,956 2,956Accrued payroll and related taxes 12,678 17,923Accrued expenses 8,180 7,780Income taxes payable — 270Operating lease liabilities 3,095 2,980Other current liabilities 5,469 3,147Total current liabilities 40,403 40,704Non-current liabilities Note payable, non-current 21,743 23,220Accrued warranty reserve, non-current 1,241 1,209Income taxes payable, non-current 355 239Operating lease liabilities, non-current 14,380 15,955Total non-current liabilities 37,719 40,623Total liabilities 78,122 81,327 Stockholders’ equity: Preferred stock, $0.001 par value, 50,000,000 shares authorized; none issued and outstanding as of June 30, 2025 and December 31, 2024 — —Common stock, $0.001 par value, 300,000,000 shares authorized; 22,292,145 shares issued and outstanding as of June 30, 2025; 23,883,475 shares issued and outstanding as of December 31, 2024 22 24Additional paid-in capital 158,807 180,719Retained earnings 36,097 35,854Total stockholders’ equity 194,926 216,597Total liabilities and stockholders’ equity $273,048 $297,924 Tactile Systems Technology, Inc.Condensed Consolidated Statements of Operations(Unaudited) Three Months Ended Six Months Ended June 30, June 30,(In thousands, except share and per share data) 2025 2024 2025 2024Revenue Sales revenue $70,531 $64,267 $123,000 $117,574 Rental revenue 8,374 8,951 17,173 16,732 Total revenue 78,905 73,218 140,173 134,306 Cost of revenue Cost of sales revenue 17,483 16,263 31,374 31,207 Cost of rental revenue 2,629 2,852 4,660 5,567 Total cost of revenue 20,112 19,115 36,034 36,774 Gross profit Gross profit - sales revenue 53,048 48,004 91,626 86,367 Gross profit - rental revenue 5,745 6,099 12,513 11,165 Gross profit 58,793 54,103 104,139 97,532 Operating expenses Sales and marketing 30,039 28,608 57,555 55,965 Research and development 2,018 2,234 3,759 4,377 Reimbursement, general and administrative 22,034 16,779 42,032 33,040 Intangible asset amortization 619 633 1,252 1,265 Total operating expenses 54,710 48,254 104,598 94,647 Income (loss) from operations 4,083 5,849 (459) 2,885 Interest income 850 754 1,745 1,467 Interest expense (410) (529) (834) (1,096)Other income 1 — 1 9 Income before income taxes 4,524 6,074 453 3,265 Income tax expense 1,307 1,776 210 1,176 Net income $3,217 $4,298 $243 $2,089 Net income per common share Basic $0.14 $0.18 $0.01 $0.09 Diluted $0.14 $0.18 $0.01 $0.09 Weighted-average common shares used to compute net income per common share Basic 23,092,469 23,873,379 23,399,848 23,769,604 Diluted 23,237,671 24,099,047 23,679,220 24,073,986 Tactile Systems Technology, Inc.Condensed Consolidated Statements of Cash Flows(Unaudited) Six Months Ended June 30,(In thousands) 2025 2024Cash flows from operating activities Net income $243 $2,089 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 3,385 3,345 Deferred income taxes (22) (30)Stock-based compensation expense 4,005 3,899 Loss on disposal of property and equipment and intangibles 68 54 Changes in assets and liabilities, net of acquisition: Accounts receivable, net 11,851 1,238 Net investment in leases 83 644 Inventories 1,555 3,681 Income taxes (611) (922)Prepaid expenses and other assets (4,735) (364)Right of use operating lease assets (289) (2)Accounts receivable, non-current — 6,425 Accounts payable 2,319 (1,592)Accrued payroll and related taxes (5,245) (4,699)Accrued expenses and other liabilities 2,567 300 Net cash provided by operating activities 15,174 14,066 Cash flows from investing activities Purchases of property and equipment (748) (982)Proceeds from sale of property and equipment — 12 Intangible assets expenditures (56) (57)Net cash used in investing activities (804) (1,027)Cash flows from financing activities Payments on note payable (1,500) (1,500)Proceeds from exercise of common stock options 10 2 Proceeds from the issuance of common stock from the employee stock purchase plan 843 1,044 Payments for repurchases of common stock (26,562) — Net cash used in financing activities (27,209) (454)Net (decrease) increase in cash (12,839) 12,585 Cash – beginning of period 94,367 61,033 Cash – end of period $81,528 $73,618 Supplemental cash flow disclosure Cash paid for interest $828 $1,099 Cash paid for taxes $892 $2,177 Accrued excise tax on stock repurchases $210 $— Capital expenditures incurred but not yet paid $58 $27 The following table summarizes revenue by product line for the three and six months ended June 30, 2025 and 2024: Three Months Ended Six Months Ended June 30, June 30,(In thousands) 2025 2024 2025 2024Revenue Lymphedema products $65,969 $64,683 $116,524 $116,996 Airway clearance products 12,936 8,535 23,649 17,310 Total $78,905 $73,218 $140,173 $134,306 Percentage of total revenue Lymphedema products 84% 88% 83% 87%Airway clearance products 16% 12% 17% 13%Total 100% 100% 100% 100% The following table contains a reconciliation of net income to Adjusted EBITDA for the three and six months ended June 30, 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 Six Months Ended Increase June 30, (Decrease) June 30, (Decrease)(Dollars in thousands) 2025 2024 $ % 2025 2024 $ %Net Income $3,217 $4,298 $(1,081) (25)% $243 $2,089 $(1,846) 88 %Interest (income) expense, net (440) (225) (215) 96 % (911) (371) (540) 146 %Income tax expense 1,307 1,776 (469) (26)% 210 1,176 (966) (82) Depreciation and amortization 1,659 1,711 (52) (3)% 3,385 3,345 40 1 %Stock-based compensation 1,939 1,860 79 4 % 4,005 3,899 106 3 %Executive transition costs — (340) 340 (100)% 491 (25) 516 N.M. %Adjusted EBITDA $7,682 $9,080 $(1,398) (15)% $7,423 $10,113 $(2,690) (27)% 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 $14,200 $15,600 Interest income, net (1,800) (1,800)Income tax expense 5,400 6,000 Depreciation and amortization 6,600 6,600 Stock-based compensation 8,100 8,100 Executive transition costs 500 500 Adjusted EBITDA $33,000 $35,000 Investor Inquiries:Sam BentzingerGilmartin Groupinvestorrelations@tactilemedical.com

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

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