SANUWAVE Health, Inc. Q2 FY2025 earnings call

Management Statement and Operational Highlights:

• Q2 was a strong performance with top line up 42% year-on-year and 51% for the first half of 2025.
• Significant changes in sales leadership, sales force, commercial ops, and strategy; all 12 national sales territories are now staffed, and a new national and key accounts manager has been added.
• Q3 focus on internal systems, lead and sales management, dashboarding, reimbursement support, and preparation for an outbound marketing campaign launching in October.
• Crossed adoption threshold with increased inbound inquiries, planning to expand awareness through social proof and credibility.

Segment Performance:

• UltraMIST systems: Sold 116 in Q2, a 61% year-on-year increase, with a total of 1,261 systems, 473 (38%) sold in the last 12 months.
• Applicator revenue: $6.4 million in Q2, accounting for 63% of overall revenues, grew 37% year-on-year and 10% sequentially from Q1.
• Gross margin: 78.3% in Q2, up 510 basis points from the previous year but down slightly from Q1 due to engineering costs for the new applicator production.

Guidance:

• Guiding Q3 revenue to $12 million to $12.7 million, noting Q3 2024 had a large sale, so conservative guidance. Annual guidance remains unchanged.
• New applicator design on track for Q4 2025, expected to increase applicator capacity and reduce costs, potentially adding 350-400 basis points of margin on applicators.

Risks:

• Patent and IP: While SANUWAVE has 140 patents, details on specific patent utilization and monetization are limited.
• Debt Refinancing: In process of refinancing senior secured debt, but details on terms and counterparty not fully disclosed.

Q: About margins and new applicator production impact on gross margin and EBITDA A: Morgan C. Frank stated the new applicator design is expected to add 350-400 basis points margin on applicators, but it will take time as existing inventory is being bled off. Peter Sorensen added it will take some time to see the full impact.

Q: On sales team size and expansion A: Morgan C. Frank said there are currently 13 reps, they are focusing on training and best practices sharing, and may consider adding a few more people in the future.

Q: On senior secured debt refinancing A: Morgan C. Frank said they are in the process of refinancing, received attractive term sheets, but details on counterparty and specific terms are not disclosed.

Q: On IP and patents A: Morgan C. Frank mentioned SANUWAVE has 140 patents, some monetized (e.g., $2.5M from a license agreement), and they are using the portfolio to explore new opportunities.