Financial Data and Key Metrics Changes - LifeWorks reported revenues of $5.7 million in Q2 2025, a decrease of $1 million or about 15% year-over-year compared to $6.7 million in Q2 2024, but an increase of approximately 14% quarter-over-quarter from $5 million in Q1 2025 [19][24] - GAAP gross profit was $2.5 million or 43.9% of revenue in Q2 2025, compared to $2.8 million or 41.1% in Q2 2024 [22] - GAAP operating loss for Q2 2025 was $6.6 million compared to $4.4 million in Q2 2024, while non-GAAP operating loss was $3.5 million compared to $3.7 million in the same period last year [24] Business Line Data and Key Metrics Changes - Revenue from traditional products and services totaled $2.5 million in Q2 2025, down from $3.1 million in Q2 2024, a decrease of about 19% [19] - Revenue from AlterG products and services was $3.2 million in Q2 2025, down from $3.6 million in Q2 2024, primarily due to the timing of deliveries to international distributors [20] - The ReWalk product line saw its highest quarterly total of units placed to Medicare beneficiaries since the schedule was established in April 2024 [19] Market Data and Key Metrics Changes - The pipeline of qualified leads for the ReWalk product line increased by 86% since Q3 2024, ending the quarter with more than one-third of leads in process in the U.S. [21] - In Germany, there were 46 leads in process at the quarter end, including 34 active rentals, which historically convert to sales within three to six months [21] Company Strategy and Development Direction - The company’s growth strategy is anchored in three core pillars: accelerating commercial adoption, portfolio diversification, and operational excellence [12][13] - The focus is on building strong momentum from recent Medicare and commercial insurer wins by reducing approval times and expanding coverage [12] - The company aims to leverage software innovation and AI integration to deepen customer engagement and ensure solutions are effective and commercially viable [13] Management's Comments on Operating Environment and Future Outlook - Management acknowledged that revenue cycles in their markets are inherently extended, particularly those dependent on payer approvals and coverage decisions [28] - The company expects gradual growth in the next few quarters, with meaningful acceleration weighted toward the back half of their strategic plan [28] - Management remains committed to developing solutions that enhance independence and quality of life for patients [30] Other Important Information - The company ended Q2 2025 with $5.1 million in cash and cash equivalents and no debt, indicating a strong liquidity position [24] - LifeWorks is considering both debt and equity opportunities to support operations and growth plans while implementing cost management strategies [26] Q&A Session Summary Question: Can you provide details on Medicare revenue for the quarter? - Management clarified that in Q2 2024, there was a one-time revenue recognition of approximately $700,000, and excluding this, Medicare-related sales grew year-over-year [33] Question: What is the current status of leads in the U.S. and Germany? - Management confirmed that Medicare leads are greater than 130, with a strong pipeline building quarter over quarter [34][36] Question: How does the current tariff situation impact the company? - Management stated that the ReWalk exoskeleton is exempt from tariffs, but there are some tariff situations with the UltraG product that are being addressed [39] Question: What are the plans for AlterG commercialization? - Management emphasized the importance of focusing on channel partners and specific markets to ensure sustainable growth for the AlterG product line [51] Question: What is the reasoning behind lowering the guidance? - Management explained that the trajectory of growth has changed, and while pipelines are growing, the timing of revenue recognition is still being understood [60]

Core Insights - Lifeward Ltd. reported a record number of ReWalk systems placed for Medicare beneficiaries, marking the third consecutive quarter of growth in the U.S. pipeline with over 130 qualified leads [1][3] - The company appointed a new CEO and CFO to drive strategic changes and accelerate growth [1][7] - Lifeward's financial results for Q2 2025 showed a revenue of $5.7 million, a decrease of approximately 15% year-over-year, but an increase of about 14% compared to Q1 2025 [4][10] Financial Performance - Revenue from traditional products, including ReWalk Personal exoskeletons, decreased by 19% year-over-year to $2.5 million, while revenue from AlterG products fell by approximately 11% to $3.2 million [4][5] - Gross margin improved to 43.9% in Q2 2025 from 41.1% in Q2 2024, although the adjusted gross margin decreased to 44.0% from 46.9% due to the absence of one-time Medicare-related revenue [5][30] - Total operating expenses rose to $9.1 million in Q2 2025, primarily due to a $2.8 million goodwill impairment charge, while adjusted operating expenses decreased to $6.0 million [6][9] Losses and Cash Flow - The operating loss for Q2 2025 was $6.6 million, compared to $4.4 million in Q2 2024, with an adjusted operating loss of $3.5 million [9][10] - The net loss was $6.6 million, or $0.58 per share, compared to a net loss of $4.3 million, or $0.50 per share, in the prior year [10][23] - As of June 30, 2025, Lifeward had $5.1 million in unrestricted cash and cash equivalents, with cash used in operations improving to $3.9 million from $5.6 million in Q2 2024 [11][26] Strategic Developments - Lifeward achieved FDA clearance for the ReWalk 7 in April 2025, with over 20 units installed and positive customer feedback [7] - The company expanded its U.S. payer base for the ReWalk Personal Exoskeleton, with a ruling affirming its medical necessity for Medicare beneficiaries [7] - Lifeward transitioned to in-house manufacturing of the ReWalk Personal Exoskeleton, enhancing cost savings and production flexibility [7][8] Future Guidance - Lifeward has reset its full-year 2025 guidance, targeting revenue between $24 million and $26 million and a non-GAAP net loss of $12 million to $14 million [12]