Tactile Systems Technology(US:TCMD)2025-11-03 21:07Revenue Growth - Revenue increased by $12.7 million, or 17%, to $85.8 million for the three months ended September 30, 2025, compared to $73.1 million for the same period in 2024[124] - For the nine months ended September 30, 2025, revenue increased by $18.5 million, or 9%, to $225.9 million, compared to $207.4 million for the same period in 2024[129] - Sales and rentals of the lymphedema product line contributed $7.1 million, or 11%, to the revenue increase in Q3 2025, while sales of the airway clearance product line increased by $5.6 million, or 71%[128] - The airway clearance product line revenue increased by $11.9 million, or 47%, for the nine months ended September 30, 2025, compared to the same period in 2024[129] - Revenue for the three months ended September 30, 2025, was $85.8 million, a 17% increase from $73.1 million in the same period of 2024[131] - Lymphedema products accounted for 84% of total revenue in Q3 2025, while airway clearance products increased to 16% from 11% in Q3 2024[131] Profitability - Gross profit for the three months ended September 30, 2025, was $65.0 million, a 19% increase from $54.8 million in the same period in 2024[126] - Gross margin improved to 76% in Q3 2025, up from 75% in Q3 2024, and remained stable at 75% for the nine months ended September 30, 2025, compared to 73% in the same period of 2024[133] - Net income for the three months ended September 30, 2025, was $8.2 million, compared to $5.2 million for the same period in 2024, reflecting a 59% increase[124] Operating Expenses - Operating expenses for the three months ended September 30, 2025, totaled $54.0 million, an increase of 13% from $48.0 million in the same period in 2024[126] - Sales and marketing expenses rose by 11% to $29.8 million in Q3 2025, driven by a $2.3 million increase in personnel-related compensation[134] - Research and development expenses decreased by 9% to $2.2 million in Q3 2025, primarily due to lower clinical study-related expenses[137] - Reimbursement, general and administrative expenses increased by 18% to $21.4 million in Q3 2025, mainly due to a $2.8 million rise in personnel-related compensation[139] Cash Flow and Financing - Net cash provided by operating activities was $25.5 million for the nine months ended September 30, 2025, compared to $24.3 million in the same period of 2024[150] - Cash and net accounts receivable as of September 30, 2025, were $66.0 million and $37.3 million, respectively, down from $82.1 million and $43.2 million in 2024[148] - Net cash used in financing activities was $52.0 million for the nine months ended September 30, 2025, primarily due to stock repurchases and term loan payments[154] - The company expects a full-year 2025 cash tax benefit of approximately $4.5 million due to the enactment of the One Big Beautiful Bill Act[147] - The company borrowed $30.0 million through a term loan and $25.0 million from a revolving credit facility to fund the acquisition of the AffloVest business[158] Share Repurchase - The company repurchased a total of 2,338,617 shares of common stock at a total cost of $30.0 million under the share repurchase program[169] - During the nine months ended September 30, 2025, the company repurchased 2,143,099 shares for approximately $26.6 million[170] Financial Agreements - The Second Amendment to the Credit Agreement modified key financial covenants, including a mandatory principal prepayment of $3.0 million on February 22, 2022[159] - The Third Amendment replaced the interest rate benchmark from LIBOR to the term Secured Overnight Financing Rate (SOFR)[160] - The Fourth Amendment provided an additional term loan of $8.25 million and extended the maturity date of loans from September 8, 2024, to August 1, 2026[161] - The 2025 Restated Credit Agreement expanded the revolving credit facility from $25.0 million to $40.0 million and eliminated the minimum consolidated EBITDA financial covenant[163] - As of September 30, 2025, the company had no outstanding borrowings under the 2025 Restated Credit Agreement[166] Other Considerations - The company estimated that tariff impacts on cost of goods sold could be up to $1.0 million for the year ended December 31, 2025[175] - The company believes its cash and cash flows from operations will be sufficient to meet its working capital and other cash requirements for at least the next twelve months[174] - As of September 30, 2025, the company employed 167 account managers and 162 specialists for lymphedema products, compared to 167 account managers and 103 specialists in the previous year[119] - The company launched the Entre Plus system in March 2023 and the Nimbl platform for lymphedema in October 2024, enhancing its product offerings[116]