ReWalk(LFWD) - 2025 Q2 - Quarterly Results

Executive Summary & Recent Highlights Lifeward Ltd. reported Q2 2025 results, highlighting record ReWalk systems for Medicare, pipeline growth, new executive leadership, ReWalk 7 launch, and improved cash burn Introduction Lifeward Ltd. announced its Q2 2025 financial results, highlighting a record number of ReWalk systems placed for Medicare beneficiaries, consistent U.S. ReWalk pipeline growth, and the appointment of a new CEO and CFO to drive strategic changes and accelerate growth - Lifeward achieved a record number of ReWalk systems placed for Medicare beneficiaries since the fee schedule was established[1] - The company reported its third consecutive quarter of U.S. ReWalk pipeline growth, with over 130 qualified leads in process[1] - New executive leadership was appointed, with Mark Grant as President and CEO and Almog Adar as CFO, to spearhead strategic change and accelerate growth[1] Operational Highlights Lifeward advanced on multiple fronts in Q2 2025, including FDA clearance and launch of ReWalk 7, expansion of the ReWalk pipeline and U.S. payer base, significant improvement in cash burn, successful transition to in-house manufacturing for ReWalk Personal Exoskeleton, and strengthening of executive leadership - Achieved FDA clearance and launched ReWalk 7 in April 2025, with over 20 units installed and positive customer feedback[4] - Expanded and advanced the ReWalk pipeline, achieving the highest quarterly total of ReWalk units placed for Medicare beneficiaries since the fee schedule was established in April 2024[4] - Improved quarterly cash burn to $3.9 million, down from $5.6 million in Q2 2024 and $5.5 million in Q1 2025, due to operational efficiencies and cost reduction initiatives[4] - Successfully transitioned to in-house manufacturing of the ReWalk Personal Exoskeleton, leading to cost savings, improved quality control, and greater production flexibility[4] - Strengthened executive leadership with the appointment of Mark Grant as President and CEO and Almog Adar as CFO[4] Second Quarter 2025 Financial Results Lifeward's Q2 2025 results show decreased revenue, improved GAAP gross margin, increased GAAP operating expenses due to impairment, and improved liquidity Revenue Analysis Lifeward's revenue for Q2 2025 was $5.7 million, a 15% decrease year-over-year but a 14% increase quarter-over-quarter. The YoY decrease was primarily due to the absence of a one-time Medicare-related revenue benefit recognized in Q2 2024 and timing of international deliveries for AlterG products Revenue Overview | Metric | Q2 2025 (in millions) | Q2 2024 (in millions) | Change (YoY) | Change (%) | | :----- | :-------------------- | :-------------------- | :----------- | :--------- | | Revenue | $5.7 | $6.7 | -$1.0 | -15% | | Revenue (Q1 2025) | $5.0 | N/A | +$0.7 | +14% | Revenue by Product Category | Product Category | Q2 2025 (in millions) | Q2 2024 (in millions) | Change (YoY) | Change (%) | | :--------------- | :-------------------- | :-------------------- | :----------- | :--------- | | Traditional Products & Services | $2.5 | $3.1 | -$0.6 | -19% | | AlterG Products & Services | $3.2 | $3.6 | -$0.4 | -11% | - Excluding a one-time Medicare-related revenue of approximately $0.7 million recognized in Q2 2024, revenue from traditional products and services grew year-over-year[5] Gross Margin GAAP gross margin improved to 43.9% in Q2 2025 from 41.1% in Q2 2024. However, non-GAAP adjusted gross margin decreased to 44.0% from 46.9% year-over-year, primarily due to the absence of the one-time Medicare-related revenue benefit from the prior year Gross Margin Performance | Metric | Q2 2025 | Q2 2024 | Change (YoY) | | :----- | :------ | :------ | :----------- | | GAAP Gross Margin | 43.9% | 41.1% | +2.8 pp | | Non-GAAP Adjusted Gross Margin | 44.0% | 46.9% | -2.9 pp | - The year-over-year decrease in non-GAAP margin reflects the absence of a one-time Medicare-related revenue benefit recognized in Q2 2024[6] Operating Expenses and Loss Total GAAP operating expenses increased to $9.1 million in Q2 2025 from $7.2 million in Q2 2024, mainly due to a $2.8 million goodwill impairment charge. Non-GAAP adjusted operating expenses decreased by $0.9 million to $6.0 million, driven by efficiencies in reimbursement, marketing/sales, and lower R&D spending. GAAP operating loss widened to $6.6 million, while non-GAAP adjusted operating loss slightly improved to $3.5 million Operating Expenses and Loss Summary | Metric | Q2 2025 (in millions) | Q2 2024 (in millions) | Change (YoY) | | :----- | :-------------------- | :-------------------- | :----------- | | Total GAAP Operating Expenses | $9.1 | $7.2 | +$1.9 | | Goodwill Impairment Charge | $2.8 | $0.0 | +$2.8 | | Non-GAAP Adjusted Operating Expenses | $6.0 | $6.9 | -$0.9 | | GAAP Operating Loss | ($6.6) | ($4.4) | -$2.2 | | Non-GAAP Adjusted Operating Loss | ($3.5) | ($3.7) | +$0.2 | - The increase in GAAP operating expenses was largely driven by a $2.8 million non-cash goodwill impairment charge[7] - The decrease in non-GAAP operating expenses reflects greater efficiency in reimbursement activities, improved productivity in marketing and sales, and lower R&D spending[7] Net Loss and EPS Lifeward reported a GAAP net loss of $6.6 million, or $0.58 per share, for Q2 2025, compared to a net loss of $4.3 million, or $0.50 per share, in Q2 2024. On a non-GAAP basis, the adjusted net loss was $3.5 million, or $0.31 per share, an improvement from $3.6 million, or $0.42 per share, in the prior-year quarter Net Loss and EPS Summary | Metric | Q2 2025 (in millions) | Q2 2024 (in millions) | Change (YoY) | | :----- | :-------------------- | :-------------------- | :----------- | | GAAP Net Loss | ($6.6) | ($4.3) | -$2.3 | | GAAP Net Loss Per Share | ($0.58) | ($0.50) | -$0.08 | | Non-GAAP Adjusted Net Loss | ($3.5) | ($3.6) | +$0.1 | | Non-GAAP Adjusted Net Loss Per Share | ($0.31) | ($0.42) | +$0.11 | Liquidity As of June 30, 2025, Lifeward had $5.1 million in unrestricted cash and cash equivalents with no debt. Cash used in operations significantly improved to $3.9 million in Q2 2025, down from $5.6 million in Q2 2024, reflecting operational efficiencies and facility closures Liquidity Position | Metric | As of June 30, 2025 (in millions) | As of June 30, 2024 (in millions) | Change (YoY) | | :----- | :-------------------------------- | :-------------------------------- | :----------- | | Unrestricted Cash & Cash Equivalents | $5.1 | N/A | N/A | | Cash Used in Operations (Q2) | $3.9 | $5.6 | -$1.7 | - The company had no debt on its balance sheet as of June 30, 2025[10] Financial Guidance Lifeward's new management team reset full-year 2025 guidance, projecting revenue of $24-26 million and a non-GAAP net loss of $12-14 million 2025 Full-Year Guidance Lifeward has reset its full-year 2025 financial guidance under the new management team, projecting revenue between $24 million and $26 million and a non-GAAP net loss between $12 million and $14 million 2025 Full-Year Projections | Metric | 2025 Full-Year Guidance (in millions) | | :----- | :------------------------------------ | | Revenue | $24–$26 | | Non-GAAP Net Loss | $12–$14 | Corporate Information This section covers Q2 2025 conference call details, Lifeward's mission and products, forward-looking statement disclaimers, and non-GAAP financial measure explanations Conference Call Details Lifeward management will host a conference call on August 14, 2025, at 8:30 AM EST to discuss the financial results. Details for telephone access and webcast are provided Conference Call Information | Detail | Information | | :----- | :---------- | | Date | August 14, 2025 | | Time | 8:30 AM EST | | U.S. Telephone | 1-833-316-0561 | | International Telephone | 1-412-317-0690 | | Webcast | https://edge.media-server.com/mmc/p/kegov6it | About Lifeward Lifeward Ltd. is a global leader in innovative medical technology, designing, developing, and commercializing solutions for physical rehabilitation and recovery. The company's mission is to drive innovation to empower individuals with physical limitations, offering products like the ReWalk Exoskeleton, AlterG Anti-Gravity system, ReStore Exo-Suit, and MyoCycle FES System. Founded in 2001, Lifeward operates in the U.S., Israel, and Germany - Lifeward designs, develops, and commercializes life-changing solutions for physical rehabilitation and recovery[13] - Key products include the ReWalk Exoskeleton, AlterG Anti-Gravity system, ReStore Exo-Suit, and MyoCycle FES System[13] - Founded in 2001, Lifeward has operations in the United States, Israel, and Germany[14] Forward-Looking Statements This section contains standard forward-looking statements regarding future performance, subject to uncertainties, risks, and changes in circumstances. It highlights important factors that could cause actual results to differ materially, including product acceptance, regulatory approvals, funding, market acceptance, reimbursement, and intellectual property protection - Forward-looking statements are based on management's current expectations and are subject to uncertainty, risks, and changes in circumstances[16] - Key risk factors include acceptance of new products (e.g., ReWalk 7), uncertainties in clinical trials and regulatory processes, ability to meet capital requirements, market acceptance, and third-party payer reimbursement (including CMS)[16] - The company undertakes no obligation to publicly update any forward-looking statements, except as required by law[16] Non-GAAP Financial Measures Explanation Lifeward uses non-GAAP financial measures, such as non-GAAP net loss, to supplement GAAP statements, believing they provide more meaningful comparisons by excluding non-cash share-based compensation and acquisition costs. The company emphasizes that these measures are not GAAP alternatives and may not be comparable to other companies, urging investors to review reconciliations - Non-GAAP measures are used to provide more meaningful comparisons between operating results by excluding non-cash share-based compensation expense and acquisition costs[18] - Non-GAAP financial measures are not prepared in accordance with GAAP and should not be considered alternatives to GAAP measures[18] - Lifeward does not provide GAAP reconciliation for its non-GAAP financial guidance due to the inability to predict certain items with reasonable certainty[20] Media & Investor Contacts Contact information for Lifeward's Media Relations and Investor Contact is provided, including the Vice President of Marketing & New Business Development and the Chief Financial Officer - Media inquiries can be directed to Kathleen O'Donnell, Vice President, Marketing & New Business Development[21] - Investor inquiries can be directed to Almog Adar, Chief Financial Officer[21] Condensed Consolidated Financial Statements (GAAP) This section presents Lifeward's GAAP financial statements, including statements of operations, balance sheets, and cash flows, detailing financial position and performance Statements of Operations The condensed consolidated statements of operations show a net loss of $6.6 million for Q2 2025, compared to $4.3 million in Q2 2024. Revenue decreased year-over-year, while operating expenses increased significantly due to an impairment charge Condensed Consolidated Statements of Operations (in thousands) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Revenue | $5,724 | $6,707 | $10,758 | $11,990 | | Gross profit | $2,511 | $2,757 | $4,633 | $4,152 | | Total operating expenses | $9,074 | $7,200 | $16,049 | $15,097 | | Operating loss | ($6,563) | ($4,443) | ($11,416) | ($10,945) | | Net loss | ($6,562) | ($4,304) | ($11,396) | ($10,580) | | Basic net loss per ordinary share | ($0.58) | ($0.50) | ($1.05) | ($1.23) | Balance Sheets The condensed consolidated balance sheets show total assets decreased to $26.8 million as of June 30, 2025, from $30.5 million at December 31, 2024. Cash and cash equivalents also decreased, while goodwill saw a significant reduction due to impairment Condensed Consolidated Balance Sheets (in thousands) | Metric | June 30, 2025 | December 31, 2024 | | :-------------------- | :------------ | :---------------- | | Cash and cash equivalents | $5,139 | $6,746 | | Total current assets | $20,710 | $21,294 | | Goodwill | $4,755 | $7,538 | | Total assets | $26,777 | $30,487 | | Total current liabilities | $10,360 | $10,225 | | Shareholders' equity | $15,110 | $18,849 | Statements of Cash Flows The condensed consolidated statements of cash flows indicate a net cash outflow from operating activities of $9.4 million for the six months ended June 30, 2025, an improvement from $13.3 million in the prior year. Net cash provided by financing activities was $7.8 million, compared to none in the prior year Condensed Consolidated Statements of Cash Flows (in thousands) | Metric | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------- | :----------------------------- | :----------------------------- | | Net cash used in operating activities | ($9,429) | ($13,290) | | Net cash used in investing activities | ($5) | $0 | | Net cash provided by financing activities | $7,779 | $0 | | Decrease in cash, cash equivalents, and restricted cash | ($1,585) | ($13,305) | | Cash, cash equivalents, and restricted cash at end of period | $5,523 | $15,487 | Non-GAAP Reconciliations and Supplemental Data This section provides supplemental revenue data by customer location and detailed GAAP to non-GAAP reconciliations for net loss, operating loss, gross profit, and operating expenses Revenues by Customer Location Lifeward's revenue breakdown by customer location shows that the United States remains the largest market, though it experienced a decline in Q2 2025 compared to the prior year. Europe also saw a slight decrease, while the Rest of the World segment grew Revenues by Customer Location (in thousands) | Region | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :----- | :-------------------------------------------- | :-------------------------------------------- | :------------------------------------------ | :------------------------------------------ | | United States | $3,062 | $3,849 | $6,271 | $7,596 | | Europe | $2,103 | $2,308 | $3,439 | $3,477 | | Asia - Pacific | $124 | $214 | $166 | $394 | | Rest of the world | $435 | $336 | $882 | $523 | | Total Revenues | $5,724 | $6,707 | $10,758 | $11,990 | Non-GAAP Net Loss Reconciliation The non-GAAP net loss reconciliation adjusts GAAP net loss for items such as amortization of intangible assets, restructuring costs, remeasurement of earnout liability, impairment charges, and stock-based compensation expenses. For Q2 2025, the non-GAAP net loss was $3.5 million, an improvement from $3.6 million in Q2 2024 Non-GAAP Net Loss Reconciliation (in thousands) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | GAAP net loss | ($6,562) | ($4,304) | ($11,396) | ($10,580) | | Adjustments: | | | | | | Amortization of intangible assets | $0 | $832 | $0 | $1,663 | | Restructuring | $700 | $0 | $700 | $0 | | Remeasurement of earnout liability | ($608) | ($488) | ($608) | ($492) | | Impairment charges | $2,783 | $0 | $2,783 | $0 | | Stock-based compensation expenses | $182 | $376 | $402 | $757 | | Non-GAAP net loss | ($3,505) | ($3,584) | ($8,119) | ($8,883) | | Non-GAAP net loss per share | ($0.31) | ($0.42) | ($0.75) | ($1.03) | Non-GAAP Operating Loss Reconciliation The non-GAAP operating loss reconciliation adjusts GAAP operating loss by adding back non-cash and non-recurring items. For Q2 2025, the non-GAAP operating loss was $3.5 million, an improvement from $3.7 million in Q2 2024 Non-GAAP Operating Loss Reconciliation (in thousands) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | GAAP operating loss | ($6,563) | ($4,443) | ($11,416) | ($10,945) | | Adjustments: | | | | | | Amortization of intangible assets | $0 | $832 | $0 | $1,663 | | Restructuring | $700 | $0 | $700 | $0 | | Remeasurement of earnout liability | ($608) | ($488) | ($608) | ($492) | | Impairment charges | $2,783 | $0 | $2,783 | $0 | | Stock-based compensation expenses | $182 | $376 | $402 | $757 | | Non-GAAP operating loss | ($3,506) | ($3,723) | ($8,139) | ($9,248) | Non-GAAP Gross Profit Reconciliation Non-GAAP gross profit for Q2 2025 was $2.5 million (44.0% of revenue), compared to $3.1 million (46.9% of revenue) in Q2 2024, after adjusting for amortization of intangible assets and stock-based compensation expenses Non-GAAP Gross Profit Reconciliation (in thousands) | Metric | Three Months Ended June 30, 2025 | % of revenue | Three Months Ended June 30, 2024 | % of revenue | | :-------------------- | :------------------------------- | :----------- | :------------------------------- | :----------- | | GAAP gross profit | $2,511 | 43.9% | $2,757 | 41.1% | | Adjustments: | | | | | | Amortization of intangible assets | $0 | 0% | $383 | 5.7% | | Stock-based compensation expenses | $4 | 0.1% | $5 | 0.1% | | Non-GAAP gross profit | $2,515 | 44.0% | $3,145 | 46.9% | Non-GAAP Research & Development Reconciliation Non-GAAP research and development expenses for Q2 2025 were $0.73 million (12.8% of revenue), a decrease from $1.16 million (17.3% of revenue) in Q2 2024, after adjusting for stock-based compensation Non-GAAP Research & Development Reconciliation (in thousands) | Metric | Three Months Ended June 30, 2025 | % of revenue | Three Months Ended June 30, 2024 | % of revenue | | :-------------------- | :------------------------------- | :----------- | :------------------------------- | :----------- | | GAAP research & development | $767 | 13.4% | $1,205 | 18.0% | | Adjustments: | | | | | | Stock-based compensation expenses | ($37) | (0.6)% | ($46) | (0.7)% | | Non-GAAP research & development | $730 | 12.8% | $1,159 | 17.3% | Non-GAAP Sales & Marketing Reconciliation Non-GAAP sales and marketing expenses for Q2 2025 were $3.45 million (60.3% of revenue), a decrease from $3.91 million (58.3% of revenue) in Q2 2024, after adjustments for amortization, restructuring, and stock-based compensation Non-GAAP Sales & Marketing Reconciliation (in thousands) | Metric | Three Months Ended June 30, 2025 | % of revenue | Three Months Ended June 30, 2024 | % of revenue | | :-------------------- | :------------------------------- | :----------- | :------------------------------- | :----------- | | GAAP sales & marketing | $3,785 | 66.1% | $4,403 | 65.6% | | Adjustments: | | | | | | Amortization of intangible assets | $0 | 0% | ($383) | (5.7)% | | Restructuring | ($277) | (4.8)% | $0 | 0% | | Stock-based compensation expenses | ($56) | (1.0)% | ($107) | (1.6)% | | Non-GAAP sales & marketing | $3,452 | 60.3% | $3,913 | 58.3% | Non-GAAP General & Administrative Reconciliation Non-GAAP general and administrative expenses for Q2 2025 were $1.84 million (32.1% of revenue), compared to $1.80 million (26.7% of revenue) in Q2 2024, after adjustments for M&A, amortization, restructuring, earnout liability remeasurement, and stock-based compensation Non-GAAP General & Administrative Reconciliation (in thousands) | Metric | Three Months Ended June 30, 2025 | % of revenue | Three Months Ended June 30, 2024 | % of revenue | | :-------------------- | :------------------------------- | :----------- | :------------------------------- | :----------- | | GAAP general & administrative | $1,739 | 30.4% | $1,592 | 23.7% | | Adjustments: | | | | | | Remeasurement of earnout liability | $608 | 10.6% | $488 | 7.3% | | Restructuring | ($423) | (7.4)% | $0 | 0% | | Stock-based compensation expenses | ($85) | (1.5)% | ($218) | (3.3)% | | Non-GAAP general & administrative | $1,839 | 32.1% | $1,796 | 26.7% |