MINNEAPOLIS, Oct. 20, 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 announced that third quarter of fiscal year 2025 financial results will be released after the market closes on Monday, November 3, 2025. 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 qua ...

Core Insights - Tactile Systems Technology, Inc. (TCMD) specializes in developing medical devices for chronic diseases, particularly lymphedema, within the resilient healthcare sector [1] - TCMD has experienced a strong monthly gain of approximately 7.23%, indicating positive investor sentiment and confidence in the company's future prospects [2][6] - Despite a recent 10-day decline of about 3.36%, TCMD's overall trajectory remains positive, presenting potential buying opportunities for investors [3] - The projected growth potential for TCMD is 27.64%, suggesting a target price of $18.75, supported by continuous demand and innovation in the healthcare sector [4] - TCMD's strong Piotroski Score of 8 reflects its robust financial health, indicating profitability, leverage, liquidity, and operational efficiency [5][6]

Core Insights - The article emphasizes the importance of value investing, which focuses on identifying undervalued companies through fundamental analysis and traditional valuation metrics [2][3] - Tactile Systems Technology (TCMD) is highlighted as a strong investment opportunity, currently holding a Zacks Rank 2 (Buy) and a Value grade of A [4][8] Company Metrics - TCMD has a P/E ratio of 18.47, significantly lower than its industry's average P/E of 27.16, indicating potential undervaluation [4] - The company's P/B ratio stands at 1.68, compared to the industry average of 3.63, suggesting a solid valuation relative to its book value [5] - TCMD's P/S ratio is 1.06, which is much lower than the industry's average P/S of 2.74, reinforcing the notion of undervaluation [6] - The P/CF ratio for TCMD is 14.89, again lower than the industry's average of 20.39, indicating a favorable cash flow outlook [7] - Overall, these metrics suggest that TCMD is likely undervalued and presents an impressive value stock opportunity [8]

Technical Analysis - Tactile Systems Technology (TCMD) has reached a significant support level, indicating a potential investment opportunity from a technical perspective [1] - TCMD recently broke through the 20-day moving average, suggesting a short-term bullish trend [1][2] Earnings Estimates - Positive earnings estimate revisions for TCMD strengthen the bullish case, with no lowered estimates in the past two months and two raised estimates for the current fiscal year [3] - The consensus earnings estimate for TCMD has also increased, indicating positive sentiment among analysts [3] Stock Performance - TCMD shares have increased by 25.7% over the past four weeks, reflecting strong upward momentum [4] - The company currently holds a Zacks Rank 2 (Buy), suggesting potential for continued stock price appreciation [4]

Core Viewpoint - Tactile Systems Technology (TCMD) is showing potential for a bullish trend following a breakout above the 50-day moving average and a significant rally in its stock price [1][2]. Technical Analysis - TCMD has recently broken out above the 50-day moving average, indicating a short-term bullish trend [1]. - The stock has rallied 25.7% over the past four weeks, suggesting strong momentum [2]. - The 50-day simple moving average is considered a critical indicator for establishing support and resistance levels [2]. Earnings Estimates - There have been two upward revisions in TCMD's earnings estimates for the current fiscal year, with no downward revisions [3]. - The consensus estimate for earnings has also increased, reinforcing the bullish outlook for the company [3]. - The combination of positive technical indicators and earnings estimate revisions suggests TCMD could be poised for further gains [3].

Company Performance - Tactile Systems Technology (TCMD) reported quarterly earnings of $0.14 per share, exceeding the Zacks Consensus Estimate of $0.09 per share, but down from $0.20 per share a year ago, representing an earnings surprise of +55.56% [1] - The company posted revenues of $78.91 million for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 6.93%, compared to year-ago revenues of $73.22 million [2] - Over the last four quarters, the company has surpassed consensus EPS estimates three times and topped consensus revenue estimates two times [2] Stock Performance and Outlook - Tactile Systems Technology shares have declined approximately 43.7% since the beginning of the year, while the S&P 500 has gained 6.1% [3] - The current consensus EPS estimate for the coming quarter is $0.18 on revenues of $80.53 million, and for the current fiscal year, it is $0.56 on revenues of $309.96 million [7] - The estimate revisions trend for Tactile Systems Technology was mixed ahead of the earnings release, resulting in a Zacks Rank 3 (Hold) for the stock, indicating expected performance in line with the market [6] Industry Context - The Medical - Instruments industry, to which Tactile Systems Technology belongs, is currently in the bottom 37% of over 250 Zacks industries, suggesting that the outlook for the industry can significantly impact stock performance [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5]

Financial Data and Key Metrics Changes - Total revenue grew by 7.8% year over year to $78.9 million, exceeding previous Q2 expectations [4][26] - Adjusted EBITDA decreased by 15% year over year to $7.7 million due to planned investments in technology and sales headcount [5][28] - Gross margins increased by 60 basis points year over year to 74.5% [4][26] Business Line Data and Key Metrics Changes - Lymphedema revenue increased by 2% year over year to $66 million and over 30% sequentially [6][26] - Airway clearance revenue surged by 51.6% year over year to $12.9 million [4][26] Market Data and Key Metrics Changes - The U.S. lymphedema patient population is estimated to be approximately 145,000, growing at 10% annually [9] - There are about 2 million U.S. patients diagnosed with lymphedema who are not currently receiving treatment, representing a significant market opportunity [10] Company Strategy and Development Direction - The company aims to improve access to care, expand treatment options for lymphedema patients, and enhance lifetime patient value [6][14] - Strategic investments are focused on increasing PCD therapy adoption and simplifying workflow processes for patient identification and order processing [15][16] - The company is committed to new product innovation, including the development of a next-generation advanced lymphedema pump [21] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to drive consistently improving results despite short-term disruptions from CRM implementation [5][31] - The company anticipates continued growth in both lymphedema and airway clearance markets, with a focus on operational and financial performance [31] Other Important Information - The company completed an additional $16.5 million stock buyback, concluding the current repurchase program [28] - The full-year 2025 revenue guidance is now expected to be in the range of $310 million to $350 million, reflecting growth of approximately 6% to 8% year over year [29][30] Q&A Session Summary Question: Guidance clarification regarding Q2 performance - Management noted that while Q2 performance exceeded expectations, the full-year guidance was raised conservatively to account for potential short-term variability due to CRM rollout and AI tool implementation [34][37] Question: Head and neck data commercialization timeline - Management indicated that while the manuscript submission for head and neck data is expected in early Q4, full commercialization will depend on payer policy reviews, which may take time [38][42] Question: Market share and growth expectations - Management believes Tactile can return to double-digit growth, driven by deeper market penetration and product mix optimization [48][49] Question: Composition of updated guidance - Management explained that the growth in airway clearance is offsetting slower growth in lymphedema, with a focus on securing partnerships and increasing demand for airway clearance products [60][63] Question: Reimbursement updates and policy changes - Management highlighted positive developments in reimbursement policies that allow patients to access advanced pumps more easily, which aligns with the company's strategy [66][70]

Financial Data and Key Metrics Changes - Total revenue grew by 7.8% year over year to $78.9 million, exceeding previous Q2 expectations [5][30] - Adjusted EBITDA decreased by 15% year over year to $7.7 million, attributed to planned investments in technology and sales headcount [6][31] - Gross margins increased by 60 basis points year over year to 74.5% [5][30] Business Line Data and Key Metrics Changes - Lymphedema revenue increased by 2% year over year to $66 million and over 30% sequentially [5][7] - Airway clearance revenue surged by 51.6% year over year to $12.9 million [5][30] - Sales headcount increased by 11% to 293 total representatives [8][10] Market Data and Key Metrics Changes - The U.S. lymphedema patient population is estimated to grow at 10% annually, with approximately 145,000 patients currently treated [11][12] - There are about 2 million U.S. patients diagnosed with lymphedema who are not currently receiving treatment, representing a significant market opportunity [12][13] Company Strategy and Development Direction - The company aims to improve access to care, expand treatment options for lymphedema patients, and enhance lifetime patient value [7][16] - Strategic investments are focused on increasing PCD therapy adoption and streamlining workflow processes [17][20] - The company is committed to new product innovation, including the development of a next-generation advanced lymphedema pump [24] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to drive consistently improving results despite short-term disruptions from CRM implementation [6][35] - The company anticipates total revenue for 2025 to be in the range of $310 million to $350 million, reflecting growth of approximately 6% to 8% year over year [32][34] - Management highlighted the positive momentum in sales rep productivity and market share growth in both lymphedema and airway clearance segments [40][66] Other Important Information - The company completed an additional $16.5 million stock buyback, concluding the current repurchase program [31] - The implementation of AI tools is expected to enhance operational efficiency and patient engagement [20][28] Q&A Session Summary Question: Guidance clarification regarding Q2 performance - Management noted that while Q2 performance exceeded expectations, the full-year guidance was raised conservatively to account for potential short-term variability in sales rep productivity [38][40] Question: Head and neck data commercialization timeline - Management indicated that the manuscript submission for head and neck lymphedema data is expected in early Q4, with ongoing discussions with payers to improve coverage [42][46] Question: Market share and growth rate expectations - Management expressed confidence in returning to double-digit growth, emphasizing the importance of deeper market penetration and product mix optimization [50][52] Question: Composition of updated guidance - Management explained that the growth in airway clearance is offsetting slower growth in lymphedema, with a focus on executing commercial strategies to capture market share [63][66]

Core Insights - Tactile Systems Technology reported stronger-than-expected revenue for Q2 2025, driven by growth in the airway clearance business, with GAAP revenue reaching $78.9 million, surpassing the consensus estimate of $73.9 million [1][2] - The company experienced a year-over-year revenue increase of 7.8%, but both GAAP net income and Adjusted EBITDA declined due to rising operating expenses related to strategic investments [1][2] Financial Performance - GAAP revenue for Q2 2025 was $78.9 million, compared to $73.2 million in Q2 2024, reflecting a 7.8% increase [2] - Diluted earnings per share (GAAP) were $0.14, exceeding the expectation of $0.1075, but down 22.2% from $0.18 in Q2 2024 [2] - GAAP net income fell to $3.2 million, a decrease of 25.1% from $4.3 million in Q2 2024 [2] - Adjusted EBITDA was $7.7 million, down 15.4% from $9.1 million in Q2 2024 [2] - Gross margin improved to 75%, up from 74% in Q2 2024, attributed to lower manufacturing and warranty-related costs [2][7] Business Overview - Tactile Systems Technology specializes in medical devices for lymphedema and airway clearance, with key products including Flexitouch, Entre Plus, and AffloVest [3] - The company aims to enhance daily living and clinical outcomes for patients with chronic conditions [3] Strategic Focus - Recent efforts have been directed towards expanding the product lineup, investing in technology, and strengthening the sales force to support long-term growth [4] - Key success factors include timely product launches, adoption by healthcare providers, and securing reimbursement from payers [4] Quarterly Highlights - The AffloVest sales surged by 52% year-over-year in Q2 2025, while lymphedema products accounted for 84% of total revenue [5] - The return to growth in lymphedema products was supported by an optimized sales organization and increased field sales headcount [6] Financial Outlook - The company raised its full-year 2025 revenue guidance to $310–315 million, with slower growth expected from lymphedema products but higher growth projected for airway clearance products at 20–23% [9] - Adjusted EBITDA outlook for FY2025 was raised to $33–35 million, although still below the previous year's results [9] - Management anticipates improved productivity in the latter half of 2025 due to hiring and technology investments [10]

[PART I—FINANCIAL INFORMATION](index=3&type=section&id=PART%20I%E2%80%94FINANCIAL%20INFORMATION) This section presents unaudited condensed consolidated financial statements, management's discussion, market risk, and internal controls [Item 1. Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited condensed consolidated financial statements, including balance sheets, operations, equity, cash flows, and detailed notes [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) This section presents the company's financial position, detailing assets, liabilities, and stockholders' equity at period-end | (In thousands) | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Assets** | | | | Total current assets | $152,987 | $177,563 | | Total non-current assets | $120,061 | $120,361 | | **Total assets** | **$273,048** | **$297,924** | | **Liabilities and Stockholders' Equity** | | | | Total current liabilities | $40,403 | $40,704 | | Total non-current liabilities | $37,719 | $40,623 | | **Total liabilities** | **$78,122** | **$81,327** | | Total stockholders' equity | $194,926 | $216,597 | | **Total liabilities and stockholders' equity** | **$273,048** | **$297,924** | - Total assets decreased by **$24.876 million** from December 31, 2024, to June 30, 2025, primarily driven by a decrease in cash and accounts receivable[15](index=15&type=chunk) - Total stockholders' equity decreased by **$21.671 million**, from $216.597 million at December 31, 2024, to $194.926 million at June 30, 2025[15](index=15&type=chunk) [Condensed Consolidated Statements of Operations](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) This section details the company's financial performance over specific periods, including revenue, expenses, and net income | (In thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Total revenue | $78,905 | $73,218 | $140,173 | $134,306 | | Total cost of revenue | $20,112 | $19,115 | $36,034 | $36,774 | | Gross profit | $58,793 | $54,103 | $104,139 | $97,532 | | Total operating expenses | $54,710 | $48,254 | $104,598 | $94,647 | | Income (loss) from operations | $4,083 | $5,849 | $(459) | $2,885 | | 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 | | Basic EPS | $0.14 | $0.18 | $0.01 | $0.09 | | Diluted EPS | $0.14 | $0.18 | $0.01 | $0.09 | - Net income for the three months ended June 30, 2025, decreased by **25%** to **$3.217 million** from $4.298 million in the prior year period[17](index=17&type=chunk) - Net income for the six months ended June 30, 2025, significantly decreased by **88%** to **$0.243 million** from $2.089 million in the prior year period[17](index=17&type=chunk) [Condensed Consolidated Statements of Stockholders' Equity](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders%27%20Equity) This section outlines changes in the company's equity accounts, including common stock, paid-in capital, and retained earnings | (In thousands, except share data) | Balances, December 31, 2024 | Balances, June 30, 2025 | | :--- | :--- | :--- | | Common Stock (Shares) | 23,883,475 | 22,292,145 | | Common Stock (Par Value) | $24 | $22 | | Additional Paid-In Capital | $180,719 | $158,807 | | Retained Earnings | $35,854 | $36,097 | | Total Stockholders' Equity | $216,597 | $194,926 | - The company repurchased **1,507,496 shares** for **$16.704 million** during the three months ended June 30, 2025, and **2,143,099 shares** for **$26.772 million** during the six months ended June 30, 2025[19](index=19&type=chunk) - Stock-based compensation contributed **$1.939 million** for the three months and **$4.005 million** for the six months ended June 30, 2025[19](index=19&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) This section presents the cash inflows and outflows from operating, investing, and financing activities over specific periods | (In thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $15,174 | $14,066 | | Net cash used in investing activities | $(804) | $(1,027) | | Net cash used in financing activities | $(27,209) | $(454) | | Net (decrease) increase in cash | $(12,839) | $12,585 | | Cash – end of period | $81,528 | $73,618 | - Net cash provided by operating activities increased to **$15.174 million** for the six months ended June 30, 2025, from $14.066 million in the prior year[22](index=22&type=chunk) - Net cash used in financing activities significantly increased to **$27.209 million** for the six months ended June 30, 2025, primarily due to common stock repurchases[22](index=22&type=chunk) [Note 1. Nature of Business and Operations](index=9&type=section&id=Note%201.%20Nature%20of%20Business%20and%20Operations) This note describes the company's core business, product lines, and operational characteristics, including seasonality - Tactile Systems Technology, Inc. (Tactile Medical) manufactures and distributes medical devices for chronic diseases, focusing on lymphedema products (Flexitouch® Plus, Entre™ Plus, Nimbl) and airway clearance products (AffloVest)[24](index=24&type=chunk)[25](index=25&type=chunk)[26](index=26&type=chunk) - The company experiences seasonality, with reduced demand in Q1 due to new insurance year deductibles and higher revenue in Q3 and Q4 as deductibles are met and flexible spending accounts are exhausted[29](index=29&type=chunk) [Note 2. Basis of Presentation](index=9&type=section&id=Note%202.%20Basis%20of%20Presentation) This note explains the accounting principles and consolidation methods used in preparing the financial statements - The unaudited condensed consolidated financial statements are prepared in accordance with GAAP for interim financial reporting and SEC rules, and include the accounts of Tactile Systems Technology, Inc. and its wholly owned subsidiary, Swelling Solutions, Inc[30](index=30&type=chunk)[34](index=34&type=chunk) [Note 3. Summary of Significant Accounting Policies](index=11&type=section&id=Note%203.%20Summary%20of%20Significant%20Accounting%20Policies) This note outlines the key accounting policies applied, including segment reporting and the evaluation of new accounting pronouncements - There were no material changes in significant accounting policies during the six months ended June 30, 2025[36](index=36&type=chunk) - The company operates as one operating segment, with the CEO reviewing consolidated financial information[37](index=37&type=chunk) - The company is evaluating the impact of new FASB ASUs on expense disaggregation disclosures (ASU 2024-03, effective 2026/2027) and income tax disclosures (ASU 2023-09, effective 2024)[38](index=38&type=chunk)[39](index=39&type=chunk) [Note 4. Inventories](index=12&type=section&id=Note%204.%20Inventories) This note provides a breakdown of the company's inventory components and their carrying values at period-end | (In thousands) | At June 30, 2025 | At December 31, 2024 | | :--- | :--- | :--- | | Finished goods | $6,930 | $6,149 | | Component parts and work-in-process | $10,181 | $12,517 | | Total inventories | $17,111 | $18,666 | - Total inventories decreased by **$1.555 million** from December 31, 2024, to June 30, 2025[40](index=40&type=chunk) [Note 5. Goodwill and Intangible Assets](index=12&type=section&id=Note%205.%20Goodwill%20and%20Intangible%20Assets) This note details the company's goodwill and intangible assets, including their composition and amortization expense - Goodwill of **$31.1 million** was recognized from the AffloVest Acquisition in Q3 2021[41](index=41&type=chunk) | (In thousands) | At June 30, 2025 | At December 31, 2024 | | :--- | :--- | :--- | | Total intangible assets (Net Amount) | $40,904 | $42,789 | | Patents | $750 | $815 | | Customer relationships | $21,912 | $23,104 | | Developed technology | $8,496 | $9,087 | | Tradenames | $9,500 | $9,500 | | Patents pending | $246 | $223 | - Amortization expense was **$0.9 million** for Q2 2025 and **$1.9 million** for the six months ended June 30, 2025[43](index=43&type=chunk) [Note 6. Accrued Expenses](index=13&type=section&id=Note%206.%20Accrued%20Expenses) This note provides a breakdown of the company's accrued expenses, highlighting changes in key categories | (In thousands) | At June 30, 2025 | At December 31, 2024 | | :--- | :--- | :--- | | In-transit inventory | $2,256 | $1,013 | | Sales and use tax | $1,765 | $802 | | Warranty | $1,395 | $1,784 | | Travel | $1,106 | $1,120 | | Legal and consulting | $872 | $1,318 | | Clinical studies | $34 | $304 | | Other | $752 | $1,439 | | Total | $8,180 | $7,780 | - Total accrued expenses increased by **$0.4 million** to **$8.180 million** at June 30, 2025, from $7.780 million at December 31, 2024, primarily due to increases in in-transit inventory and sales and use tax[44](index=44&type=chunk) [Note 7. Warranty Reserves](index=13&type=section&id=Note%207.%20Warranty%20Reserves) This note details the company's warranty reserve movements, including provisions and processed claims over reporting periods | (In thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Beginning balance | $2,774 | $3,836 | $2,993 | $4,038 | | Warranty provision | $441 | $902 | $921 | $1,742 | | Processed warranty claims | $(579) | $(1,046) | $(1,278) | $(2,088) | | Ending balance | $2,636 | $3,692 | $2,636 | $3,692 | - The warranty provision decreased significantly from **$902 thousand** in Q2 2024 to **$441 thousand** in Q2 2025, and from **$1.742 million** in H1 2024 to **$0.921 million** in H1 2025[45](index=45&type=chunk) [Note 8. Credit Agreement](index=15&type=section&id=Note%208.%20Credit%20Agreement) This note describes the company's credit facilities, including recent amendments, revolving credit, and term loan status - On July 31, 2025, the company entered into a 2025 Restated Credit Agreement, expanding the revolving credit facility from **$25.0 million** to **$40.0 million** and extending its maturity to July 31, 2028[57](index=57&type=chunk) - The 2025 Restated Credit Agreement eliminated the minimum consolidated EBITDA financial covenant and revised applicable margins and unused line fees[57](index=57&type=chunk) - The company paid off the full **$24.4 million** outstanding term loan on July 31, 2025, using cash on hand, and the new agreement removes committed term loan provisions[58](index=58&type=chunk) [Note 9. Commitments and Contingencies](index=17&type=section&id=Note%209.%20Commitments%20and%20Contingencies) This note outlines the company's contractual obligations, operating lease liabilities, purchase commitments, and legal contingencies | (In thousands) | At June 30, 2025 | At December 31, 2024 | | :--- | :--- | :--- | | Right of use operating lease assets | $15,462 | $16,633 | | Operating lease liabilities (Current) | $3,095 | $2,980 | | Operating lease liabilities (Non-current) | $14,380 | $15,955 | | Total Operating lease liabilities | $17,475 | $18,935 | - The company has purchase commitments totaling **$30.4 million** for goods expected within the next year[68](index=68&type=chunk) - The company is involved in two qui tam complaints alleging false claims related to Medicare and other government payers, with actions stayed until November 25, 2025, for government review[71](index=71&type=chunk) [Note 10. Stockholders' Equity](index=22&type=section&id=Note%2010.%20Stockholders%27%20Equity) This note details changes in stockholders' equity, including share repurchases, stock-based compensation, and equity incentive plans - The company completed its **$30.0 million** share repurchase program as of June 24, 2025, repurchasing **2,338,617 shares** in aggregate[75](index=75&type=chunk) | (In thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Total stock-based compensation expense | $1,939 | $1,860 | $4,005 | $3,899 | - The 2025 Equity Incentive Plan was approved on May 7, 2025, authorizing **1,850,000 shares** for awards, with **1,595,027 shares** available for future grant as of June 30, 2025[76](index=76&type=chunk) [Note 11. Revenue](index=27&type=section&id=Note%2011.%20Revenue) This note provides a detailed breakdown of revenue by product line and payer type for the reporting periods | (In thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Lymphedema products | $65,969 | $64,683 | $116,524 | $116,996 | | Airway clearance products | $12,936 | $8,535 | $23,649 | $17,310 | | Total Revenue | $78,905 | $73,218 | $140,173 | $134,306 | - Total revenue increased by **8%** to **$78.9 million** in Q2 2025 and by **4%** to **$140.2 million** in H1 2025, driven by a significant increase in airway clearance product sales[91](index=91&type=chunk) | (In thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Private insurers and other payers | $39,041 | $44,066 | $67,986 | $75,343 | | Veterans Administration | $7,506 | $8,071 | $14,043 | $14,897 | | Medicare | $19,422 | $12,546 | $34,495 | $26,756 | | Durable medical equipment distributors | $12,936 | $8,535 | $23,649 | $17,310 | | Total | $78,905 | $73,218 | $140,173 | $134,306 | [Note 12. Income Taxes](index=29&type=section&id=Note%2012.%20Income%20Taxes) This note explains the company's effective tax rates, the factors influencing them, and the impact of new tax legislation - The effective tax rate for Q2 2025 was **28.9%** (vs. 29.2% in Q2 2024) and for H1 2025 was **46.4%** (vs. 36.0% in H1 2024)[97](index=97&type=chunk)[98](index=98&type=chunk) - The change in effective tax rate was primarily due to the relative impact of stock-based compensation discrete tax items, which had a larger proportional effect on lower pre-tax income in H1 2025[98](index=98&type=chunk) - The recently enacted One Big Beautiful Bill Act (OBBBA) is expected to have a minimal impact on the effective tax rate but a favorable impact on cash taxes, with an estimated full-year 2025 cash tax benefit of approximately **$4.6 million**[102](index=102&type=chunk) [Note 13. Net Income Per Share](index=31&type=section&id=Note%2013.%20Net%20Income%20Per%20Share) This note presents the basic and diluted net income per share calculations and the underlying share counts | (In thousands, except share and per share data) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Net income | $3,217 | $4,298 | $243 | $2,089 | | Basic EPS | $0.14 | $0.18 | $0.01 | $0.09 | | Diluted EPS | $0.14 | $0.18 | $0.01 | $0.09 | | Weighted-average common shares (Basic) | 23,092,469 | 23,873,379 | 23,399,848 | 23,769,604 | | Weighted-average common shares (Diluted) | 23,237,671 | 24,099,047 | 23,679,220 | 24,073,986 | - Basic and diluted EPS decreased from **$0.18** in Q2 2024 to **$0.14** in Q2 2025, and from **$0.09** in H1 2024 to **$0.01** in H1 2025[103](index=103&type=chunk) [Note 14. Fair Value Measurements](index=31&type=section&id=Note%2014.%20Fair%20Value%20Measurements) This note discusses the fair value hierarchy and measurement approaches for the company's financial and non-financial assets - The carrying amounts of short-term financial instruments (accounts receivable, payables, accrued expenses) approximate their fair values[105](index=105&type=chunk) - Non-financial assets like equipment and intangible assets are subject to non-recurring fair value measurements if impaired[105](index=105&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=31&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's analysis of the company's financial condition and operational results, covering revenue, expenses, and liquidity [Overview](index=33&type=section&id=Overview) This section provides a general description of Tactile Medical's business, product focus, and sales model - Tactile Medical develops and commercializes medical devices for underserved chronic conditions, focusing on home-based solutions for lymphedema (Flexitouch Plus, Entre Plus, Nimbl) and chronic respiratory conditions (AffloVest)[108](index=108&type=chunk)[109](index=109&type=chunk)[110](index=110&type=chunk) - Lymphedema products accounted for **83%** of revenue in H1 2025, while airway clearance products (AffloVest) grew to **17%** of revenue in H1 2025[109](index=109&type=chunk)[110](index=110&type=chunk) - The company employs a direct-to-patient and -clinician model for lymphedema products and sells AffloVest through durable medical equipment (DME) providers[108](index=108&type=chunk)[111](index=111&type=chunk) [Results of Operations](index=36&type=section&id=Results%20of%20Operations) This section analyzes the company's revenue, gross profit, operating expenses, and income from operations for the reported periods Revenue Performance (YoY Change) | Metric | Q2 2025 Revenue (in thousands) | Q2 2024 Revenue (in thousands) | Q2 Change ($) | Q2 Change (%) | | :--- | :--- | :--- | :--- | :--- | | Total Revenue | $78,905 | $73,218 | $5,687 | 8% | | Lymphedema products | $65,969 | $64,683 | $1,286 | 2% | | Airway clearance products | $12,936 | $8,535 | $4,401 | 52% | | Metric | H1 2025 Revenue (in thousands) | H1 2024 Revenue (in thousands) | H1 Change ($) | H1 Change (%) | | :--- | :--- | :--- | :--- | :--- | | Total Revenue | $140,173 | $134,306 | $5,867 | 4% | | Lymphedema products | $116,524 | $116,996 | $(472) | 0% | | Airway clearance products | $23,649 | $17,310 | $6,339 | 37% | - Airway clearance product line revenue increased significantly by **52%** in Q2 2025 and **37%** in H1 2025, primarily due to increased placements of AffloVest among DME partners[122](index=122&type=chunk)[123](index=123&type=chunk)[124](index=124&type=chunk) - Lymphedema product revenue saw a modest **2%** increase in Q2 2025 due to increased headcount and productivity, but a slight **0.4%** decrease in H1 2025 attributed to CRM system implementation disruption and delayed hiring[124](index=124&type=chunk)[125](index=125&type=chunk) Gross Profit and Operating Expenses (YoY Change) | Metric (in thousands) | Q2 2025 | Q2 2024 | Q2 Change ($) | Q2 Change (%) | | :--- | :--- | :--- | :--- | :--- | | Gross profit | $58,793 | $54,103 | $4,690 | 9% | | Gross margin | 75% | 74% | 1 pp | | | Sales and marketing | $30,039 | $28,608 | $1,431 | 5% | | Research and development | $2,018 | $2,234 | $(216) | (10)% | | Reimbursement, general and administrative | $22,034 | $16,779 | $5,255 | 31% | | Total operating expenses | $54,710 | $48,254 | $6,456 | 13% | | Income from operations | $4,083 | $5,849 | $(1,766) | (30)% | | Metric (in thousands) | H1 2025 | H1 2024 | H1 Change ($) | H1 Change (%) | | :--- | :--- | :--- | :--- | :--- | | Gross profit | $104,139 | $97,532 | $6,607 | 7% | | Gross margin | 75% | 73% | 2 pp | | | Sales and marketing | $57,555 | $55,965 | $1,590 | 3% | | Research and development | $3,759 | $4,377 | $(618) | (14)% | | Reimbursement, general and administrative | $42,032 | $33,040 | $8,992 | 27% | | Total operating expenses | $104,598 | $94,647 | $9,951 | 11% | | Income (loss) from operations | $(459) | $2,885 | $(3,344) | (116)% | - Gross margin improved to **75%** in both Q2 and H1 2025. Operating expenses increased significantly, particularly reimbursement, general and administrative expenses (**31%** in Q2, **27%** in H1), driven by personnel, IT, and occupancy costs[128](index=128&type=chunk)[134](index=134&type=chunk)[135](index=135&type=chunk) - Income from operations decreased by **30%** in Q2 2025 and resulted in a loss of **$0.459 million** in H1 2025, a **116%** decrease, primarily due to the substantial increase in operating expenses[120](index=120&type=chunk)[121](index=121&type=chunk) [Liquidity and Capital Resources](index=43&type=section&id=Liquidity%20and%20Capital%20Resources) This section discusses the company's cash position, cash flow activities, credit facilities, and future liquidity outlook Cash Flows Summary (Six Months Ended June 30) | (In thousands) | 2025 | 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $15,174 | $14,066 | | Net cash used in investing activities | $(804) | $(1,027) | | Net cash used in financing activities | $(27,209) | $(454) | | Net (decrease) increase in cash | $(12,839) | $12,585 | | Cash – end of period | $81,528 | $73,618 | - Cash balance at June 30, 2025, was **$81.5 million**, down from $94.4 million at December 31, 2024, primarily due to significant cash usage in financing activities for share repurchases[15](index=15&type=chunk)[143](index=143&type=chunk)[147](index=147&type=chunk) - The company completed its **$30.0 million** share repurchase program by June 24, 2025, repurchasing **2,143,099 shares** for **$26.6 million** during the six months ended June 30, 2025[147](index=147&type=chunk)[162](index=162&type=chunk) - The 2025 Restated Credit Agreement, effective July 31, 2025, expanded the revolving credit facility to **$40.0 million** and extended its maturity, while the term loan was fully paid off[158](index=158&type=chunk)[159](index=159&type=chunk) - Management believes current cash and cash flows from operations will be sufficient to meet requirements for at least the next twelve months, despite potential tariff impacts of up to **$1.5 million** for FY2025[166](index=166&type=chunk)[167](index=167&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=50&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section references the Annual Report on Form 10-K for market risk disclosures, noting no material changes since December 31, 2024 - No material changes in market risks have occurred since December 31, 2024, as referenced in the Annual Report on Form 10-K[170](index=170&type=chunk) [Item 4. Controls and Procedures](index=50&type=section&id=Item%204.%20Controls%20and%20Procedures) This section confirms the effectiveness of disclosure controls and procedures and reports no material changes to internal control over financial reporting - Management, including the CEO and CFO, concluded that disclosure controls and procedures were effective at a reasonable assurance level as of June 30, 2025[171](index=171&type=chunk) - There were no material changes in internal control over financial reporting during the quarter ended June 30, 2025[172](index=172&type=chunk) [PART II—OTHER INFORMATION](index=3&type=section&id=PART%20II%E2%80%94OTHER%20INFORMATION) This section covers legal proceedings, risk factors, equity sales, defaults, safety disclosures, other information, and exhibits [Item 1. Legal Proceedings](index=52&type=section&id=Item%201.%20Legal%20Proceedings) This section incorporates by reference details on legal proceedings, including two qui tam complaints, from Note 9 of the financial statements - Information on legal proceedings, including two qui tam complaints, is incorporated by reference from Note 9 of the condensed consolidated financial statements[173](index=173&type=chunk) [Item 1A. Risk Factors](index=52&type=section&id=Item%201A.%20Risk%20Factors) This section references the Annual Report on Form 10-K for risk factors, noting no material changes since December 31, 2024 - No material changes in risk factors have occurred since December 31, 2024, as disclosed in the Annual Report on Form 10-K[174](index=174&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=52&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section details the company's share repurchase program, including shares repurchased and total cost during the quarter ended June 30, 2025 Issuer Purchases of Equity Securities (Q2 2025) | Period | Total Number of Shares Purchased | Average Price Paid Per Share | | :--- | :--- | :--- | | April 1, 2025 - April 30, 2025 | 320,118 | $13.66 | | May 1, 2025 - May 31, 2025 | 399,082 | $10.42 | | June 1, 2025 - June 30, 2025 | 788,296 | $10.16 | | Total | 1,507,496 | | - The company completed its **$30.0 million** share repurchase program as of June 24, 2025, having utilized substantially all of the authorization[176](index=176&type=chunk) [Item 3. Defaults Upon Senior Securities](index=52&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) This item confirms no applicable defaults upon senior securities - This item is not applicable, indicating no defaults upon senior securities[177](index=177&type=chunk) [Item 4. Mine Safety Disclosures](index=53&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item confirms no applicable mine safety disclosures - This item is not applicable, indicating no mine safety disclosures[178](index=178&type=chunk) [Item 5. Other Information](index=53&type=section&id=Item%205.%20Other%20Information) This section discloses significant post-reporting events, including a credit agreement amendment, executive compensation, and trading arrangements - On July 31, 2025, the company entered into a 2025 Restated Credit Agreement, expanding the revolving credit facility to **$40.0 million** and extending its maturity to July 31, 2028, while paying off the **$24.4 million** term loan[179](index=179&type=chunk)[180](index=180&type=chunk) - The Compensation and Organization Committee approved a monthly housing stipend of **$3,400** for the CEO, Ms. Dodd, starting August 2025, with no tax gross-ups[182](index=182&type=chunk) - No directors or officers adopted or terminated any Rule 10b5-1 trading arrangements or non-Rule 10b5-1 trading arrangements during the quarter ended June 30, 2025[183](index=183&type=chunk) [Item 6. Exhibits](index=55&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the Quarterly Report on Form 10-Q, including corporate documents, plans, agreements, and certifications - The exhibit index includes the Amended and Restated Certificate of Incorporation, By-laws, 2025 Equity Incentive Plan, various stock unit agreements, the Amended and Restated Credit Agreement dated July 31, 2025, and certifications from the Principal Executive and Financial Officers[185](index=185&type=chunk)