Lifeward Ltd. Q2 FY2024 earnings call

Management Statement and Operational Highlights:

• Revenue: Q2 2024 revenue was $6.7 million, a 402% increase from Q2 2023. Achieved 20 ReWalk placements, with over $600,000 of Medicare receivables received. First half of 2024 saw more ReWalk systems sold than any prior full year.
• Product Launches: New NEO anti-gravity model launched in June, designed for smaller clinics. Submitted FDA 510(k) for ReWalk 7 in June.
• Market Development: Focus on Medicare approvals and expanding ReWalk placements. AlterG sales impacted by high interest rates and clinic consolidation, but new product expected to drive growth.
• Cost Efficiency: Operating losses stayed level year-over-year despite larger commercial footprint, with cost efficiency measures to reduce cash burn in coming quarters.

Segment Performance:

• ReWalk systems: Generated $3.1 million in revenue in Q2 2024, representing 46.3% of total revenue ($6.7 million). This was driven by the successful placement of ReWalk systems and Medicare coverage expansion.
• AlterG products: Generated $3.6 million in revenue in Q2 2024, representing 53.7% of total revenue. Revenue increased sequentially from Q1 2024, with the sales team integrating and showing improved effectiveness.

Guidance:

• Full-year 2024 revenue expected to be between $28 million to $32 million.
• Q3 and Q4 revenue expected to show sequential growth from Q2.
• Adjusted gross margin expected to reach approximately 50% by Q4.
• Operating expenses expected to decline slightly over the next two quarters, leading to reduced non-GAAP operating loss by fourth quarter.

Risks:

• Managing revenue growth slope and expense reductions levels.
• Potential supply chain disruptions, as seen with building additional ReWalk systems in the U.S. due to Israel conflict.
• Medicare payment timing and lead times for initial claims, although catch-up payments expected by year-end.

Q: Regarding receivables, how long to normalize Medicare payments?

A: Mike Lawless expects majority of Medicare receivables to be collected by end of 2024, with future claims paid in 30-45 days from approval.

Q: AlterG growth sustainability?

A: Larry Jasinski states growth is organic, driven by field team's efforts, with backlog increasing from mid-60s to over 100.

Q: Germany business progress?

A: Larry Jasinski notes Germany is having a good year, progressing well with insurers like Barmer, with growth in both Germany and U.S. markets