Lifeward Ltd. Q1 FY2025 earnings call

Profitable revenue growth

• Q1 revenues were $5 million, down year-on-year but the business was actually up. Made progress in the US with FDA clearance of the ReWalk 7, first commercial health insurance claim approval for ReWalk 7, partnership with CorLife for workers' compensation, and expanded MyoCycle distribution. Internationally, the ReWalk contract with BARMER in Germany and expanded AlterG distributors (including four new business partners) were highlighted.

Tight expense control and cash management

• Took multiple actions to reduce expenses, resulting in a 25% reduction in operating loss in Q1. Expect further reductions as savings phase in and revenue grows. Worked with Medicare Administrative Contractors (MACs) for improved claims predictability and faster payments, with MACs agreeing on a uniform set of claims data and approval criteria.

Smooth leadership transition

• Larry mentioned ongoing leadership transition but no additional details were discussed during the call.

Q1 revenues were $5 million. Revenue from sales of former ReWalk Robotics products and services (including ReWalk Exoskeletons, MyoCycles, and ReStore Exo-Suits) was $1.6 million, accounting for 32% of total revenue. Revenue from AlterG products and services was $3.4 million, making up 68% of total revenue. In the US, there are over 120 qualified ReWalk leads in the pipeline, a 70% increase from two quarters ago, and 36 ReWalk rentals underway, primarily in Germany. AlterG has grown by 19% and 17% in the last two quarters with the new NEO line.

Guidance

• Larry reaffirmed the guidance of sales between $28 million to $30 million for 2025.
• Anticipated that the combined effect of growing revenue and declining operating expenses will result in a Q4 adjusted operating loss of approximately $1 million.

Risks

• Monitored tariff situations carefully as the business is globally spread. ReWalk is primarily produced in Israel, and AlterG has an international business. Impact on revenue not yet seen, but internal planning for supply alternatives within market.

Question and Answer

• Q: Given that you have an international business and revenue come all over the world, what's your initial assessment in terms of the recent tariff situations?

A: We're well spread out for supply and revenue globally, monitoring carefully, planning supply alternatives within market, with ReWalk production in Israel relatively stable.

• Q: You reiterate the guidance for the year, so top line guidance for the year and the first quarter revenue seems to be slightly lower than some of the expected. So what will be the confidence then to support the hypothesis that the full year revenue would be within the range as you sort of stated earlier?

A: Confidence is based on momentum in AlterG product line growing, ReWalk pipeline with strong leads, partnerships, and first commercial pay, having a better pipeline than ever before.

• Q: You just mentioned that in fourth quarter of this year, anticipated adjusted loss could be around $1 million which is certainly a good news compared to the models we have at this point. Again, could you give us a little bit more color for that expectation?

A: Need to get to a certain breakeven revenue run rate, cost actions taken like closing facilities have brought down breakeven revenue, approaching roughly $10 million a quarter or $40 million in a year should enable breakeven, with revenue growth in Q4 and continued reduction in operating expenses contributing.