Myomo(MYO) - 2025 Q2 - Quarterly Results

Executive Summary & Highlights Myomo's Q2 2025 revenue exceeded expectations, driven by increased units and ASP, despite concerns over lead quality and pipeline conversion impacting gross margin and cost per pipeline add Second Quarter 2025 Financial and Operating Highlights Myomo reported strong revenue growth in Q2 2025, exceeding expectations, driven by increased revenue units and a higher average selling price, though forward-looking operating metrics like lead quality and pipeline conversion were not as anticipated, leading to a decrease in gross margin and an increase in cost per direct billing pipeline add Q2 2025 Financial and Operating Highlights (YoY Comparison) | Metric | Q2 2025 Value | Change vs. Q2 2024 | Source Chunk | | :-------------------------------- | :---------------- | :------------------- | :----------- | | Revenue ($) | $9.7 million | +28% | 5 | | Revenue units (units) | 178 | +13% | 5 | | Orders and insurance authorizations (units) | 207 units | -3% | 5 | | Backlog (units, as of June 30, 2025) | 230 units | -18% | 5 | | New candidates added to pipeline (count) | 816 | +49% | 5 | | Total MyoPro candidates in pipeline (count, as of June 30, 2025) | 1,611 | +37% | 5 | | Gross margin (%) | 62.7% | -810 basis points | 5 | | Cost per direct billing pipeline add ($) | $2,926 | +89% | 5 | Management Commentary & Strategic Actions CEO Paul R. Gudonis highlighted that Q2 revenues surpassed expectations due to improved conversion of current quarter authorizations, but noted concerns regarding lead quality and pipeline conversion, prompting a shift in advertising focus to television, engagement of clinical teams, and enhancement of the provider ecosystem - Second quarter revenues exceeded expectations with 28% growth, strengthening the ability to convert current quarter authorizations and orders into revenue[2] - Forward-looking operating metrics were not as strong as anticipated due to factors affecting lead quality and pipeline conversion[2] - Strategic actions include shifting advertising focus from digital to television for higher quality leads and using clinical teams to engage therapists and physicians to expand MyoPro understanding and secure referrals[3] Financial Performance Analysis This section analyzes Myomo's Q2 2025 financial results, detailing revenue growth, gross profit changes, increased operating expenses, and the resulting net loss and Adjusted EBITDA Revenue and Gross Profit Myomo's revenue for Q2 2025 increased by 28% to $9.7 million, driven by a 13% increase in revenue units and a 14% rise in average selling price (ASP), with year-to-date revenue seeing a substantial 73% increase, though gross margin decreased to 62.7% primarily due to higher material and overhead spending Revenue and Gross Profit (Q2 and YTD 2025 vs. 2024) | Metric | Q2 2025 | Q2 2024 | Change ($) | Change (%) | YTD 2025 | YTD 2024 | Change ($) | Change (%) | | :---------------- | :---------- | :---------- | :--------- | :--------- | :----------- | :----------- | :--------- | :--------- | | Revenue | $9,652,234 | $7,520,767 | $2,131,467 | 28% | $19,484,048 | $11,275,156 | $8,208,892 | 73% | | Cost of revenue | $3,600,061 | $2,195,255 | $1,404,806 | 64% | $6,822,246 | $3,650,601 | $3,171,645 | 87% | | Gross profit | $6,052,173 | $5,325,512 | $726,661 | 14% | $12,661,802 | $7,624,555 | $5,037,247 | 66% | | Gross margin % | 62.7% | 70.8% | -8.1% | -8.1% | 65.0% | 67.6% | -2.7% | -2.7% | - Revenue units for Q2 2025 were 178, up 13% YoY[6] - Average Selling Price (ASP) was approximately $54,200, up 14% versus the prior year[6] - Medicare Part B patients represented 56% of second quarter 2025 revenue[6] Operating Expenses Operating expenses for Q2 2025 surged by 65% to $10.6 million, primarily due to increased payroll, R&D spending, and advertising, leading to an 89% rise in cost per direct billing pipeline add despite workforce reductions Operating Expenses (Q2 and YTD 2025 vs. 2024) | Metric | Q2 2025 | Q2 2024 | Change (%) | YTD 2025 | YTD 2024 | Change (%) | | :-------------------- | :---------- | :---------- | :--------- | :----------- | :----------- | :--------- | | Operating expenses | $10.6 million | $6.4 million | 65% | $20.8 million | $12.6 million | 64% | | Advertising costs | $2.2 million | - | 162% | - | - | - | | Cost per direct billing pipeline add | $2,926 | - | 89% | - | - | - | - The increase in operating expenses was primarily due to higher payroll expense (reflecting higher headcount for direct billing channel support), increased engineering activity and headcount (resulting in higher R&D spending), and higher advertising expenditures[8] - Workforce reduced by approximately 8% in July, and certain spending on outside services eliminated, expected to reduce cash expenditures by at least $2 million over the next 12 months[8] Net Loss and Adjusted EBITDA Myomo reported a significant increase in operating loss and net loss for Q2 2025 and year-to-date, reflecting the higher operating expenses, with net loss per share also increasing and Adjusted EBITDA showing a larger negative value compared to the prior year Operating Loss, Net Loss, and Adjusted EBITDA (Q2 and YTD 2025 vs. 2024) | Metric | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :-------------------- | :---------- | :---------- | :----------- | :----------- | | Operating loss | $(4.6) million | $(1.1) million | $(8.1) million | $(5.0) million | | Net loss | $(4.6) million | $(1.1) million | $(8.1) million | $(5.0) million | | Net loss per share | $(0.11) | $(0.03) | $(0.20) | $(0.13) | | Adjusted EBITDA | $(4.0) million | $(1.2) million | $(6.8) million | $(4.7) million | - Operating loss for Q2 2025 was $4.6 million, compared with $1.1 million for Q2 2024[9] - Net loss for Q2 2025 was $4.6 million, or $0.11 per share, compared with $1.1 million, or $0.03 per share, for Q2 2024[9] Operational Performance This section examines Myomo's MyoPro pipeline growth, order trends, and the key factors influencing operating metrics, including lead quality, conversion rates, and advertising cycle time MyoPro Pipeline and Orders The MyoPro patient pipeline grew significantly by 37% to 1,611 patients as of June 30, 2025, with 816 new medically-qualified patients added in Q2 2025, a 49% increase, though authorizations and orders decreased by 3% to 207 units, and the ending backlog fell by 18% to 230 patients due to slower authorizations and higher revenue velocity MyoPro Pipeline and Order Metrics (Q2 2025 vs. 2024) | Metric | Q2 2025 Value | Change vs. Q2 2024 | Source Chunk | | :-------------------------------- | :---------------- | :------------------- | :----------- | | MyoPro pipeline (as of June 30, 2025) | 1,611 patients | +37% | 11 | | Medically-qualified patients added to pipeline (Q2 2025) | 816 | +49% | 11 | | MyoPro authorizations and orders (Q2 2025) | 207 | -3% | 11 | | Backlog (as of June 30, 2025) | 230 patients | -18% | 12 | Factors Impacting Operating Metrics Management identified three key factors impacting operating metrics: the quality of leads generated post-digital advertising changes, lower conversion rates due to patient response and stricter clinical eligibility, and a cycle time effect where a significant portion of current advertising spending will yield pipeline additions in future years - Lead quality issues after changes to digital advertising in response to an algorithm change[13] - Lower conversion rates to both pipeline adds and authorizations and orders, driven by patient response and enhanced outcome focus of the clinical team disqualifying more patients[13] - A cycle time effect where 40-50% of pipeline adds in a given quarter come from leads generated a year or more ago, implying current advertising spending will impact future pipeline adds[13] Financial Position This section details Myomo's cash and liquidity position, highlighting the $15.5 million cash balance, increased cash used in operating activities, and the company's assessment of sufficient funding for the next 12 months Cash Position and Liquidity As of June 30, 2025, Myomo's cash, cash equivalents, and short-term investments stood at $15.5 million, bolstered by $4.0 million in borrowings, with cash used in operating activities significantly increasing to $8.9 million in Q2 2025, attributed to higher operating loss, capital expenditures, working capital needs, and specific payment issues, though the company expects a normalized cash burn of $4.9 million in Q2 and believes its current cash position is sufficient for the next 12 months Cash Position and Usage (Q2 2025) | Metric | Value | Source Chunk | | :------------------------------------------ | :---------- | :----------- | | Cash, cash equivalents and short-term investments (June 30, 2025) | $15.5 million | 14 | | Borrowings against line of credit and term loan (Q2) | $4.0 million | 14 | | Cash used in operating activities (Q2 2025) | $8.9 million | 14 | | Normalized cash burn (Q2 2025) | $4.9 million | 16 | - Elevated cash use was due to higher operating loss, capital expenditures for software development, manufacturing facility improvements, demo units, and increased working capital requirements, including 2024 incentive compensation payment, a payment hold by a DME MAC, increased days sales outstanding, and an insurance payer repayment[15] - The company believes its cash, cash equivalents, and short-term investments are sufficient to fund operations for the next 12 months[16] Business Outlook This section outlines Myomo's revised 2025 full-year revenue guidance, which has been reduced to $40 million to $42 million, while still projecting a significant increase over 2024 2025 Revenue Guidance Update Myomo has updated its 2025 full-year revenue guidance to a range of $40 million to $42 million, a reduction from the previous guidance of $50 million to $53 million, though this revised guidance still represents a 23% to 29% increase over 2024, with Q3 2025 revenue expected to be between $9.5 million and $10.0 million 2025 Revenue Guidance Update | Metric | Previous Guidance | Updated Guidance | Change | | :-------------------------- | :------------------ | :----------------- | :----- | | Full-year 2025 Revenue ($) | $50 million - $53 million | $40 million - $42 million | Downward revision | | Q3 2025 Revenue Expectation ($) | - | $9.5 million - $10.0 million | - | - The updated 2025 revenue guidance represents an increase of 23% to 29% versus 2024[17] Company Information This section provides an overview of Myomo, Inc., its MyoPro product line, non-GAAP financial measures, and important forward-looking statements and risk factors About Myomo Myomo, Inc. is a wearable medical robotics company specializing in the MyoPro product line, which offers improved arm and hand function for individuals with neurological disorders and upper-limb paralysis, utilizing EMG signals to restore daily living activities and enable patients to regain independence - Myomo, Inc. is a wearable medical robotics company that offers improved arm and hand function for those suffering from neurological disorders and upper-limb paralysis[22] - The MyoPro product line is a powered upper-limb orthosis designed to support the arm and restore function to weakened or paralyzed arms of patients with conditions like CVA stroke, brachial plexus injury, traumatic brain or spinal cord injury, or other neuromuscular diseases[22] - MyoPro is currently the only marketed device in the U.S. that senses a patient's own EMG signals through non-invasive sensors to restore the ability to perform activities of daily living[22] Non-GAAP Financial Measures Myomo provides financial information, including Adjusted EBITDA, that is not prepared in accordance with GAAP, using this non-GAAP measure to offer supplementary information for investors to evaluate operating performance and compare Myomo's financial measures with other companies in its industry, defined as EBITDA adjusted for stock-based compensation expense - Myomo provides financial information, including Adjusted EBITDA, that has not been prepared in accordance with GAAP[21] - Adjusted EBITDA is a non-GAAP financial measure used to provide supplementary information for investors to evaluate operating performance and compare Myomo's financial measures with other companies[21] - Adjusted EBITDA is defined as EBITDA adjusted for stock-based compensation expense[21] Forward-Looking Statements & Risk Factors This press release contains forward-looking statements regarding Myomo's future business expectations, including revenue guidance, which are subject to various factors that could cause actual results to differ materially, such as challenges related to reimbursement, financing, scaling operations, revenue concentration, supply chain disruptions, marketing effectiveness, strategic collaborations, internal controls, product development, market acceptance, clinical research, intellectual property, regulatory approvals, competition, and general market conditions - The press release contains forward-looking statements regarding future business expectations, including revenue for Q3 and full year 2025, subject to safe harbor provisions[23] - Factors that could cause actual results to differ materially include: ability to obtain sufficient reimbursement, dependence on external financing, ability to achieve positive cash flow, revenue concentration with Medicare and specific payers, supply chain disruption, marketing efforts, strategic collaborations, remediation of material weakness in internal control, product development, market acceptance, clinical research, intellectual property protection, regulatory approvals, competition, and general market factors[24][25][26] Condensed Consolidated Financial Statements This section presents Myomo's detailed condensed consolidated financial statements, including statements of operations, balance sheets, and cash flows, for the specified periods Condensed Consolidated Statements of Operations This section presents the detailed income statement for Myomo, Inc. for the three and six months ended June 30, 2025, and 2024, outlining revenue, cost of revenue, gross profit, operating expenses (research and development, selling, clinical and marketing, general and administrative), loss from operations, other income/expense, income tax expense, and net loss, along with weighted average shares and net loss per share Condensed Consolidated Statements of Operations | | For the Three Months ended | | For the Six Months Ended | | :------------------------------------------ | :---------- | :---------- | :----------- | :----------- | | | June 30, 2025 | June 30, 2024 | June 30, 2025 | June 30, 2024 | | Revenue | $9,652,234 | $7,520,767 | $19,484,048 | $11,275,156 | | Cost of revenue | 3,600,061 | 2,195,255 | 6,822,246 | 3,650,601 | | Gross profit | 6,052,173 | 5,325,512 | 12,661,802 | 7,624,555 | | Operating expenses: | | | | | | Research and development | 2,001,331 | 1,007,224 | 3,791,355 | 1,963,438 | | Selling, clinical and marketing | 5,233,885 | 2,777,135 | 9,629,689 | 5,138,980 | | General and administrative | 3,407,277 | 2,656,217 | 7,351,332 | 5,525,968 | | Total Operating Expenses | 10,642,493 | 6,440,576 | 20,772,376 | 12,628,386 | | Loss from operations | (4,590,320) | (1,115,064) | (8,110,574) | (5,003,831) | | Interest (income), net | (106,549) | (107,242) | (298,540) | (242,535) | | Loss before income taxes | (4,483,771) | (1,007,822) | (7,812,034) | (4,761,296) | | Income tax expense | 148,201 | 113,785 | 284,996 | 195,943 | | Net loss | $(4,631,972) | $(1,121,607) | $(8,097,030) | $(4,957,239) | | Weighted average common shares outstanding (Basic and diluted) | 41,582,737 | 37,368,488 | 41,518,959 | 37,060,543 | | Net loss per share (Basic and diluted) | $(0.11) | $(0.03) | $(0.20) | $(0.13) | Condensed Consolidated Balance Sheets This section provides Myomo, Inc.'s condensed consolidated balance sheets as of June 30, 2025 (unaudited) and December 31, 2024, detailing current and non-current assets, liabilities, and stockholders' equity, with key changes including a decrease in total current assets and total stockholders' equity, alongside an increase in total liabilities Condensed Consolidated Balance Sheets | | June 30, 2025 | December 31, 2024 | | :------------------------------------------ | :---------- | :---------------- | | ASSETS | | | | Cash and cash equivalents | $14,240,432 | $24,372,373 | | Short-term investments | 1,241,515 | 492,990 | | Accounts receivable, net | 7,054,545 | 3,825,291 | | Inventories | 4,125,597 | 3,165,965 | | Prepaid expenses and other current assets | 1,381,721 | 933,377 | | Total Current Assets | 28,043,810 | 32,789,996 | | Restricted Cash | 375,000 | 375,000 | | Operating lease assets with right of use | 7,058,063 | 7,584,663 | | Equipment, net | 2,908,804 | 1,330,008 | | Other assets | 286,670 | 164,412 | | Total Assets | $38,672,347 | $42,244,079 | | LIABILITIES AND STOCKHOLDERS' EQUITY | | | | Accounts payable and accrued expenses | $8,313,862 | $9,021,817 | | Current operating lease liability | 460,351 | 748,021 | | Income taxes payable | 204,110 | 318,885 | | Deferred revenue | 108,780 | 83,115 | | Current portion long-term debt | 166,667 | — | | Revolving credit line | 2,500,000 | — | | Total Current Liabilities | 11,753,770 | 10,171,838 | | Non-current operating lease liability | 7,970,116 | 7,358,184 | | Long-term debt | 1,333,333 | — | | Total Liabilities | 21,057,219 | 17,530,022 | | Stockholders' Equity: | | | | Common stock | 3,778 | 3,439 | | Additional paid-in capital | 128,781,048 | 127,846,026 | | Accumulated other comprehensive income (loss) | 48,334 | (14,406) | | Accumulated deficit | (111,211,568) | (103,114,538) | | Treasury stock, at cost | (6,464) | (6,464) | | Total Stockholders' Equity | 17,615,128 | 24,714,057 | | Total Liabilities and Stockholders' Equity | $38,672,347 | $42,244,079 | Condensed Consolidated Statements of Cash Flows This section details Myomo, Inc.'s condensed consolidated statements of cash flows for the six months ended June 30, 2025, and 2024, showing a significant increase in net cash used in operating activities, higher cash used in investing activities, and a decrease in cash provided by financing activities compared to the prior year, resulting in a substantial net decrease in cash and cash equivalents Condensed Consolidated Statements of Cash Flows | For the Six Months Ended June 30, | 2025 | 2024 | | :------------------------------------------ | :----------- | :----------- | | CASH FLOWS FROM OPERATING ACTIVITIES | | | | Net loss | $(8,097,030) | $(4,957,239) | | Adjustments to reconcile net loss to net cash used in operations: | | | | Depreciation | 349,240 | 65,663 | | Stock-based compensation | 935,093 | 228,395 | | Accretion of discount on short-term investments | (108,999) | — | | Credit losses | 51,643 | 5,257 | | Amortization of deferred offering costs | 60,045 | — | | Amortization of right-of-use assets | 526,600 | 124,057 | | Other non-cash charges | (91,984) | 44,631 | | Changes in operating assets and liabilities: | | | | Accounts receivable | (2,975,272) | (102,234) | | Inventories | (1,204,740) | (816,055) | | Prepaid expenses and other current assets | (615,940) | (363,375) | | Other assets | (130,801) | (214,937) | | Accounts payable and accrued expenses | (531,182) | 990,973 | | Income taxes payable | (144,392) | 176,235 | | Operating lease liabilities | 140,536 | (237,365) | | Deferred revenue | 25,666 | 3,505 | | Tenant improvement allowance | 183,726 | — | | Net cash used in operating activities | $(11,542,175) | $(5,161,488) | | CASH USED IN INVESTING ACTIVITIES | $(2,653,446) | $(1,211,930) | | CASH PROVIDED BY FINANCING ACTIVITIES | $3,963,494 | $5,361,909 | | Effect of foreign exchange rate changes on cash | 100,186 | (13,697) | | Net (decrease) increase in cash and cash equivalents | $(10,131,941) | $(1,025,206) | | Cash and cash equivalents, beginning of period | 24,747,373 | 6,871,306 | | Cash and cash equivalents, end of period | $14,615,432 | $5,846,100 | Reconciliation of GAAP Net Loss to Adjusted EBITDA This section provides a reconciliation of Myomo, Inc.'s GAAP net loss to Adjusted EBITDA for the three and six months ended June 30, 2025, and 2024, adjusting net loss for interest income, depreciation expense, stock-based compensation, and income tax expense to arrive at the non-GAAP Adjusted EBITDA Reconciliation of GAAP Net Loss to Adjusted EBITDA | | For the Three Months Ended June 30, | | For the Six Months Ended June 30, | | :------------------------------------------ | :---------- | :---------- | :----------- | :----------- | | | 2025 | 2024 | 2025 | 2024 | | GAAP net loss | $(4,631,972) | $(1,121,607) | $(8,097,030) | $(4,957,239) | | Adjustments to reconcile to Adjusted EBITDA: | | | | | | Interest income | (106,549) | (107,242) | (298,540) | (242,535) | | Depreciation expense | 190,798 | 35,979 | 349,240 | 65,663 | | Stock-based compensation | 394,889 | (91,893) | 935,093 | 228,395 | | Income tax expense | 148,201 | 113,785 | 284,996 | 195,943 | | Adjusted EBITDA | $(4,004,633) | $(1,170,978) | $(6,826,241) | $(4,709,773) | Conference Call & Contacts This section provides details for Myomo's Q2 2025 conference call and webcast, along with contact information for investor relations inquiries Conference Call and Webcast Details Myomo hosted a conference call and webcast on August 11, 2025, at 4:30 p.m. Eastern time to discuss the Q2 2025 results, with pre-registration and dial-in options available, and a webcast and dial-in replay provided for those unable to attend live - Conference call held on August 11, 2025, at 4:30 p.m. Eastern time[18] - Participants could pre-register for a passcode and PIN or dial 844-707-6932 (U.S.) or 412-317-9250 (International)[18] - A webcast of the call and a replay were available on Myomo's Investor Relations page at http://ir.myomo.com/[18](index=18&type=chunk)[20] Contacts This section provides contact information for Myomo's Investor Relations and Alliance Advisors IR for further inquiries - Myomo Investor Relations contact: ir@myomo.com[26] - Alliance Advisors IR contact: Tirth T. Patel, tpatel@allianceadvisors.com, 212-201-6614[26]