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

MINNEAPOLIS, Nov. 03, 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 third quarter ended September 30, 2025 and announced the adoption of a second share repurchase program. Third Quarter 2025 Summary & Recent Business Highlights: Total revenue increased 17% year-over-year to $85.8 millionGross margin of 76% versus 75% in Q3 2024Net income of $8.2 million versus $5.2 million in Q3 2024Adjusted EBITDA of $14.4 million versus $10.7 million in Q3 2024Announced six-month data demonstrating sustained benefits of Flexitouch® Plus as a first-line therapy in treating lymphedema in head and neck cancer patientsRepaid the full outstanding principal balance of $24.0 million under the Company’s term loanAuthorized a second program to repurchase up to $25.0 million of the Company’s common stock “Tactile Medical delivered strong third quarter results, reflecting continued progress across our business transformation and product innovation initiatives”, said Sheri Dodd, Chief Executive Officer of Tactile Medical. “Our go-to-market strategies and differentiated products are driving market leadership and top-line growth, and we are beginning to see leverage in our internal business operations and processes. We are aligned on our strategy, focused on execution, and well positioned to capitalize on the strength of our organization and improving market conditions.” “Building on this momentum, we are increasingly confident in the trajectory of our business and our ability to execute our financial and operational initiatives, as reflected in our revenue and adjusted EBITDA guidance updates and the establishment of a new stock repurchase program. We look forward to closing out 2025 in a strong position and continuing to build momentum for 2026 and beyond.” Third Quarter 2025 Financial Results Total revenue in the third quarter of 2025 increased $12.7 million, or 17%, to $85.8 million, compared to $73.1 million in the third quarter of 2024. The increase in total revenue was attributable to an increase of $7.1 million, or 11%, in sales and rentals of the lymphedema product line and an increase of $5.6 million, or 71%, in sales of the airway clearance product line in the quarter ended September 30, 2025, compared to the third quarter of 2024. Gross profit in the third quarter of 2025 increased $10.2 million, or 19%, to $65.0 million, compared to $54.8 million in the third quarter of 2024. Gross margin was 76% of revenue, compared to 75% of revenue in the third quarter of 2024. Operating expenses in the third quarter of 2025 increased $6.0 million, or 13%, to $54.0 million, compared to $48.0 million in the third quarter of 2024. Operating income was $11.0 million in the third quarter of 2025, compared to $6.8 million in the third quarter of 2024. Income tax expense was $3.2 million in the third quarter of 2025, compared to $2.1 million in the third quarter of 2024. Net income in the third quarter of 2025 was $8.2 million, or $0.36 per diluted share, compared to $5.2 million, or $0.21 per diluted share, in the third quarter of 2024. Weighted average shares used to compute diluted net income per share were 22.5 million and 24.3 million for the third quarters of 2025 and 2024, respectively. Adjusted EBITDA was $14.4 million in the third quarter of 2025, compared to $10.7 million in the third quarter of 2024. First Nine Months 2025 Financial Results Total revenue for the nine months ended September 30, 2025, increased $18.5 million, or 9%, to $225.9 million, compared to $207.4 million for the nine months ended September 30, 2024. The increase in total revenue was attributable to an increase of $11.9 million, or 47%, in sales of the airway clearance product line and an increase of $6.6 million, or 4%, in sales and rentals of the lymphedema product line for the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024. Net income for the nine months ended September 30, 2025, was $8.5 million, or $0.36 per diluted share, compared to $7.2 million, or $0.30 per diluted share, for the nine months ended September 30, 2024. Weighted average shares used to compute diluted net income per share were 23.3 million and 24.1 million for the nine months ended September 30, 2025 and 2024, respectively. Adjusted EBITDA was $21.8 million in the nine months ended September 30, 2025, compared to $20.8 million in the nine months ended September 30, 2024. Balance Sheet Summary As of September 30, 2025, the Company had $66.0 million in cash and no 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. 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. Share Repurchase Program The Company also announced today that the Board of Directors of the Company authorized a program to repurchase up to $25.0 million of common stock. Under the program, purchases may be made from time to time in the open market, in privately negotiated purchases, or both. The timing and number of shares to be purchased will be based on the price of the Company's common stock, general business and market conditions, and other investment considerations and factors. The share repurchase program expires on November 3, 2027. The program does not obligate the Company to repurchase any specific number of shares and may be suspended or discontinued at any time without prior notice. The Company intends to finance the share repurchase program with cash on hand. 2025 Financial Outlook The Company is updating its 2025 financial outlook and now expects full year 2025 total revenue in the range of $317 million to $321 million, representing growth of approximately 8% to 10% 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 $310 million to $315 million, representing growth of approximately 6% to 8% year-over-year. The Company now also expects full year 2025 adjusted EBITDA in the range of $38 million to $39.5 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 $33 million to $35 million. Conference Call Management will host a conference call with a question-and-answer session at 5:00 p.m. Eastern Time on November 3, 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 13755883. 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 13755883. 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, 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) September 30, December 31,(In thousands, except share and per share data) 2025 2024Assets Current assets Cash $65,965 $94,367 Accounts receivable, net 37,257 44,937 Net investment in leases 14,843 14,540 Inventories 16,084 18,666 Prepaid expenses and other current assets 7,250 5,053 Total current assets 141,399 177,563 Non-current assets Property and equipment, net 5,460 5,603 Right of use operating lease assets 14,751 16,633 Intangible assets, net 40,023 42,789 Goodwill 31,063 31,063 Deferred income taxes 16,745 18,311 Other non-current assets 9,736 5,962 Total non-current assets 117,778 120,361 Total assets $259,177 $297,924 Liabilities and Stockholders' Equity Current liabilities Accounts payable $7,989 $5,648 Note payable — 2,956 Accrued payroll and related taxes 14,727 17,923 Accrued expenses 7,862 7,780 Income taxes payable 1,200 270 Operating lease liabilities 3,144 2,980 Other current liabilities 4,264 3,147 Total current liabilities 39,186 40,704 Non-current liabilities Note payable, non-current — 23,220 Accrued warranty reserve, non-current 1,121 1,209 Income taxes payable, non-current 334 239 Operating lease liabilities, non-current 13,587 15,955 Total non-current liabilities 15,042 40,623 Total liabilities 54,228 81,327 Stockholders’ equity: Preferred stock, $0.001 par value, 50,000,000 shares authorized; none issued and outstanding as of September 30, 2025 and December 31, 2024 — — Common stock, $0.001 par value, 300,000,000 shares authorized; 22,335,582 shares issued and outstanding as of September 30, 2025; 23,883,475 shares issued and outstanding as of December 31, 2024 22 24 Additional paid-in capital 160,621 180,719 Retained earnings 44,306 35,854 Total stockholders’ equity 204,949 216,597 Total liabilities and stockholders’ equity $259,177 $297,924 Tactile Systems Technology, Inc.Condensed Consolidated Statements of Operations(Unaudited) Three Months Ended Nine Months Ended September 30, September 30,(In thousands, except share and per share data) 2025 2024 2025 2024Revenue Sales revenue $76,890 $63,168 $199,890 $180,742 Rental revenue 8,865 9,925 26,038 26,657 Total revenue 85,755 73,093 225,928 207,399 Cost of revenue Cost of sales revenue 17,896 15,603 49,270 46,810 Cost of rental revenue 2,858 2,703 7,518 8,270 Total cost of revenue 20,754 18,306 56,788 55,080 Gross profit Gross profit - sales revenue 58,994 47,565 150,620 133,932 Gross profit - rental revenue 6,007 7,222 18,520 18,387 Gross profit 65,001 54,787 169,140 152,319 Operating expenses Sales and marketing 29,809 26,838 87,364 82,803 Research and development 2,191 2,417 5,950 6,794 Reimbursement, general and administrative 21,442 18,118 63,474 51,158 Intangible asset amortization 596 633 1,848 1,898 Total operating expenses 54,038 48,006 158,636 142,653 Income from operations 10,963 6,781 10,504 9,666 Interest income 667 969 2,412 2,437 Interest expense (193) (517) (1,027) (1,614)Other income — — 1 9 Income before income taxes 11,437 7,233 11,890 10,498 Income tax expense 3,228 2,078 3,438 3,254 Net income $8,209 $5,155 $8,452 $7,244 Net income per common share Basic $0.37 $0.21 $0.37 $0.30 Diluted $0.36 $0.21 $0.36 $0.30 Weighted-average common shares used to compute net income per common share Basic 22,318,570 23,985,364 23,035,461 23,842,049 Diluted 22,513,140 24,254,176 23,304,900 24,070,084 Tactile Systems Technology, Inc.Condensed Consolidated Statements of Cash Flows(Unaudited) Nine Months Ended September 30,(In thousands) 2025 2024Cash flows from operating activities Net income $8,452 $7,244 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 5,023 5,079 Deferred income taxes 1,566 (341)Stock-based compensation expense 5,819 5,969 Loss on disposal of property and equipment and intangibles 68 308 Changes in assets and liabilities, net of acquisition: Accounts receivable, net 7,680 3,203 Net investment in leases (303) 242 Inventories 2,582 1,351 Income taxes payable 1,025 (807)Prepaid expenses and other assets (5,971) (1,844)Right of use operating lease assets (322) (18)Accounts receivable, non-current — 7,308 Accounts payable 2,117 582 Accrued payroll and related taxes (3,196) (3,703)Accrued expenses and other liabilities 975 (251)Net cash provided by operating activities 25,515 24,322 Cash flows from investing activities Purchases of property and equipment (1,870) (1,932)Proceeds from sale of property and equipment — 12 Intangible assets expenditures (88) (85)Net cash used in investing activities (1,958) (2,005)Cash flows from financing activities Payments on note payable (26,250) (2,250)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 (51,959) (1,204)Net (decrease) increase in cash (28,402) 21,113 Cash – beginning of period 94,367 61,033 Cash – end of period $65,965 $82,146 Supplemental cash flow disclosure Cash paid for interest $836 $1,612 Cash paid for taxes $899 $4,428 Accrued excise tax on stock repurchases $210 $— Capital expenditures incurred but not yet paid $224 $49 The following table summarizes revenue by product line for the three and nine months ended September 30, 2025 and 2024: Three Months Ended Nine Months Ended September 30, September 30,(In thousands) 2025 2024 2025 2024Revenue Lymphedema products $72,381 $65,282 $188,905 $182,278 Airway clearance products 13,374 7,811 37,023 25,121 Total $85,755 $73,093 $225,928 $207,399 Percentage of total revenue Lymphedema products 84% 89% 84% 88%Airway clearance products 16% 11% 16% 12%Total 100% 100% 100% 100% The following table contains a reconciliation of net income to Adjusted EBITDA for the three and nine months ended September 30, 2025 and 2024, as well as the dollar and percentage change between the comparable periods: Tactile Systems Technology, Inc.Reconciliation of Net Income to Non-GAAP Adjusted EBITDA(Unaudited) Three Months Ended Increase Nine Months Ended Increase September 30, (Decrease) September 30, (Decrease)(Dollars in thousands) 2025 2024 $ % 2025 2024 $ %Net Income $8,209 $5,155 $3,054 59% $8,452 $7,244 $1,208 17%Interest (income) expense, net (474) (452) (22) 5% (1,385) (823) (562) 68%Income tax expense 3,228 2,078 1,150 55% 3,438 3,254 184 6%Depreciation and amortization 1,638 1,734 (96) (6)% 5,023 5,079 (56) (1)%Stock-based compensation 1,814 2,070 (256) (12)% 5,819 5,969 (150) (3)%Executive transition costs — 136 (136) (100)% 491 111 380 N.M.%Adjusted EBITDA $14,415 $10,721 $3,694 34% $21,838 $20,834 $1,004 5% 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 $17,900 $19,000 Interest income, net (1,800) (1,800)Income tax expense 7,000 7,400 Depreciation and amortization 6,600 6,600 Stock-based compensation 7,800 7,800 Executive transition costs 500 500 Adjusted EBITDA $38,000 $39,500 Investor Inquiries:Sam BentzingerGilmartin Groupinvestorrelations@tactilemedical.com

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

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