Tactile Systems Technology Q2 Earnings Call Highlights

Second-quarter results strengthened: Revenue rose 9% year over year to $85.7 million, led by 12% growth in lymphedema sales. Net income increased 142% to $7.8 million, while adjusted EBITDA climbed 49% to $11.4 million. Airway-clearance sales faced a temporary inventory issue: Revenue declined 7% as several large DME partners reduced AffloVest inventories during the next-generation product rollout. Management expects purchasing patterns to normalize in the fourth quarter and said underlying demand remains strong. 2026 outlook was revised: Tactile Medical now expects revenue of $360 million to $366 million, reflecting airway-clearance revenue closer to flat for the year, while maintaining its adjusted EBITDA forecast of approximately $49 million to $51 million. Tactile Systems Technology NASDAQ: TCMD , doing business as Tactile Medical, reported second-quarter revenue growth and higher profitability, led by its lymphedema business, while updating its full-year outlook to reflect temporary inventory effects in its airway-clearance segment. Total revenue rose 9% year over year to $85.7 million in the second quarter. Lymphedema revenue increased 12% to $73.6 million, while airway-clearance revenue declined 7% to $12.1 million. CEO Sheri Dodd said the airway-clearance decline reflected inventory management by several large durable medical equipment, or DME, partners during the rollout of the company’s next-generation AffloVest system. The company attributed lymphedema growth to commercial execution, healthy referral trends, improved territory productivity and increased Flexitouch adoption following alignment with Medicare’s national coverage determination policy. Medicare prior authorization requirements that took effect April 13 added administrative steps to the ordering process and contributed to near-term moderation in Medicare order volumes, management said. However, Dodd said authorization approval rates and adjudication timing have met the company’s expectations, while the operational effects of the change are beginning to normalize. During the question-and-answer session, Chief Financial Officer Elaine Birkemeyer said Medicare revenue declined during the quarter, reflecting the transition. She said the company expects a comparatively larger sequential increase in third-quarter revenue, similar to the pattern seen in the prior year, as orders affected by timing move through the process. Commercial revenue continued to show growth, according to management, while the Department of Veterans Affairs channel remained more stable due to its reimbursement environment and streamlined operating model. Dodd said a limited number of larger DME partners had elevated AffloVest inventories as the company introduced its next-generation system. Those partners are expected to reduce existing inventory through the third quarter before returning to more normal purchasing patterns in the fourth quarter. The next-generation AffloVest is lighter than the prior version, offers size adjustability and connectivity, and remains untethered, according to Dodd.