EKSO BIONICS HOLDINGS, INC. Q3 FY2023 earnings call

• Achieved a 38% year-over-year quarterly revenue growth driven by strong sales of EksoNR and Indego devices. • Established groundwork for EksoWorks segment with a record quarterly number of EVO unit sales. • Narrowed operating loss by $700,000 compared to Q3 2022 by focusing on operating efficiencies and cost improvements. • Built a strong multi-unit order pipeline with top network operators, e.g., a 10 EksoNR device order from a large integrated delivery network in the quarter. • Maintained critical relationship with the US Department of Veteran Affairs for Ekso Indego product line, with increasing adoption of advanced technology. • Secured multi-unit orders internationally: 6 EksoNR devices in Europe and a 3-unit Ekso Indego personal order in APAC. • CMS proposed rule to include personal exoskeletons in Medicare benefit category could significantly grow the addressable population for Ekso Indego personal. • Launched an e-commerce platform for EksoWorks' EVO units, allowing direct purchase and access to branded apparel and accessories.

In the third quarter of 2023, Ekso Bionics generated revenue of $4.6 million, a 38% year-over-year increase. This was composed of a $1.2 million increase in EksoHealth revenue and a $0.1 million increase in EksoWorks revenue. Gross profit for the third quarter was $2.5 million, representing a gross margin of approximately 53%, compared to a gross profit of $1.7 million and a gross margin of 51% in the third quarter of 2022. For the nine months ended September 30, 2023, revenue increased 43% to $13.4 million, driven primarily by a $4.7 million increase in EksoHealth device sales. Gross profit for the first nine months was $6.7 million with a gross margin of 50%, compared to $4.5 million and a 48% gross margin in the same period of 2022.

• CMS is expected to provide notification by late November; if approved, potential positive impact on business could start in Q1 2024. • Anticipate margins to continue improving as volumes increase and supply chain normalizes. • Expect continued growth in international markets, particularly Europe and APAC, as relationships with larger customers are built and awareness of expanded capabilities increases.

• Forward-looking statements involve material risks and uncertainties that could cause actual results to differ materially from anticipated ones. Specific risks and uncertainties associated with the business are detailed in filings with the Securities and Exchange Commission.

Q: On the CMS front with the meeting coming out next month, assuming everything goes well, when would the new rules come into effect and on your basis, how much of an impact would you say they'll have on your sales in the U.S?

A: The end of November is the timeframe for notification. Assuming approval, positive impact on business could start in Q1 2024. There are approximately 164,000 individuals who have suffered a spinal cord injury and have Medicare and/or Medicaid coverage that could be impacted.

Q: Speaking on a medium to longer term, say next two to four years, where do you see these margins could improve to?

A: Anticipate margins to continue improving as volumes increase and supply chain improves. On the Works side, with the contract manufacturing relationship, as volumes increase, we can maintain good margins and see continued margin improvement over the next several years.

Q: Where do you expect this market -- the international market to grow to in terms of your overall revenues?

A: Europe has a strong team and distribution partners, and we anticipate continued growth there. In APAC, it's just starting to grow, and we see continued growth in these regions relative to North American growth