Tactile Systems Technology, Inc. Q1 FY2026 earnings call

Sherry Dodd and Elaine Berkemeyer highlighted strong Q1 performance driven by focused execution of strategic priorities. Focus on improving access to care via AI-enabled order process transformation, expanding treatment options with new next-gen AfloVest and Lymphatech integration, and enhancing lifetime patient value through targeted care navigation pilots. Also noted preparation for Medicare prior authorization changes and successful acceleration of the prior authorization module in the AI portfolio.

In Q1 2026, total revenue was $75.3 million, representing a 23% year-over-year growth. Lymphedema revenue grew 23% year-over-year to $62.2 million, accounting for approximately 82.6% of total revenue. Airway clearance revenue increased 22% year-over-year to $13 million, making up around 17.4% of total revenue. Gross margins rose to 76.5%, a 250 basis point increase, and adjusted EBITDA grew $4 million year-over-year to $3.7 million.

Full-year 2026 revenue guidance updated to $360 - $368 million, including Lymphatech contribution and increased confidence in commercial execution. Expected adjusted EBITDA for 2026 is approximately $49 - $51 million, reflecting annualization of investments and strategic spending.

Uncertainties regarding Medicare prior authorization outcomes as new requirements mature, including variability in Medicare Administrative Contractors' (MAC) interpretations and potential administrative delays during the early phases of the new prior authorization process.

Q: About Q2 dynamics and pull-forward, A: Orders were accelerated for patient benefit, not a pull-forward of revenue from Q2. There is early variability in MACs, but the company is confident in managing administrative aspects.

Q: Lymphatech contribution, A: Grants from federal programs help with revenue now, and Lymphatech's R&D capabilities will contribute to future therapy delivery.

Q: EBITDA guidance, A: Part of the EBITDA changes are due to the nature of Lymphatech's revenue and one-time costs.

Q: Next-gen AfloVest, A: FDA cleared for launch this year for the 2026 - 2027 winter respiratory season, with no additional reimbursement but improved patient experience.

Q: Lower limb guidelines, A: Guidelines call out pneumatic compression devices as part of guideline-based care, aiding education.

Q: Bronchiectasis pharmaceuticals, A: Helps raise awareness of bronchiectasis but airway clearance therapy remains relevant alongside such pharmaceuticals