Tactile Systems Technology, Inc. Q3 FY2025 earnings call

Business Line Performance - Lymphedema: Grew 11% Y/Y and 10% sequentially in Q3, driven by go-to-market strategy, rebalanced field sales organization, new CRM launch, and having 329 total reps. - Airway Clearance: Sales of AffloVest increased 71% Y/Y and 3% sequentially, with strong partnerships with top respiratory DMEs and growing awareness of bronchiectasis. ### Strategic Priorities - Improved Access to Care: Clinical evidence generation, pilot of AI-enabled tech in order operations. - Expanding Treatment Options: Nimbl showing strong growth in lymphedema, next-gen AffloVest submitted to FDA. - Enhancing Lifetime Patient Value: Patient services organization and care navigation pilots, investment in omnichannel platform. ### Other Highlights: Raised full-year 2025 total revenue guidance to $317M-$321M, initiated second share repurchase program of up to $25M.

In the third quarter, Tactile Medical delivered total revenue of $85.8 million. Lymphedema revenue increased 11% year-over-year to $72.4 million, contributing a significant portion to total revenue. Airway clearance revenue increased 71% year-over-year to $13.4 million. Q3 gross margins were 76%, up 80 basis points year-over-year, and adjusted EBITDA increased 34% year-over-year to $14.4 million.

Full-Year 2025 Guidance - Raised total revenue guidance to $317 million to $321 million, representing 8%-10% Y/Y growth. - Adjusted EBITDA guidance raised to $38 million to $39.5 million. - Anticipate ongoing annual tariff impact beyond 2025 of roughly half the 2025 amount. - Initiated second share repurchase program of up to $25 million of outstanding stock.

Risks - Forward-looking statements involve inherent risks and uncertainties, could cause actual results to differ from expectations. Risks identified in annual report on Form 10-K and most recent 10-Q filing with SEC may update over time.

Q: Double-click on AffloVest performance.

A: AffloVest had 71% Y/Y growth, driven by deep DME partnerships, increased awareness of bronchiectasis, and excellent product.

Q: Guidance for lymphedema and AffloVest.

A: Lymphedema guidance adjusted, AffloVest contributing to overall growth.

Q: Tailwinds for lymphedema.

A: NCD transition, sales rep hiring, CRM implementation.

Q: Market share and growth for AffloVest.

A: Close to market-leading position, market growing with increased awareness of bronchiectasis.

Q: Drivers of lymphedema growth.

A: Rebalanced sales organization, new CRM, NCD tailwind.

Q: Flexitouch study and payer discussions.

A: Engaging with payers on head and neck lymphedema coverage, expecting policy reevaluation.

Q: Impact of investments on revenue and expenses.

A: Investments in CRM, sales force, care navigation will have ongoing returns, transforming business for future growth.