Q3 2025 Myomo Inc Earnings Call
Speaker #1: Good day and welcome to the MYOMO third quarter 2025 financial results conference call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero.
Speaker #1: After
Speaker #1: Please note this event is being recorded. I would now like to turn the conference over to Tirth Patel, with Alliance Advisors IR. Please go ahead.
Speaker #2: Thank you, Operator, and good afternoon, everyone. This is Tirth Patel with Alliance Advisors IR. Welcome to the MYOMO third quarter 2025 financial results conference call.
Speaker #2: With me on today's call are MYOMO's Chief Executive Officer, Paul Gudonis, and Chief Financial Officer, David Henry. Before we begin, I'd like to caution listeners that statements made during this call by management, other than historical facts, are forward-looking statements.
Speaker #2: The words "anticipate," "believe," "estimate," "expect," "intend," "guidance," "outlook," "confidence," "target," "project," and other similar expressions are typically used to identify such forward-looking statements. These forward-looking statements are not guarantees of future performance and may involve and are subject to risks, uncertainties, and other factors that may affect MYOMO's business, financial condition, and operating results.
Speaker #2: These risks, uncertainties, and other factors are discussed in MYOMO's filings with the Securities and Exchange Commission. Actual outcomes and results may differ materially from what's expressed in or implied by these forward-looking statements.
Speaker #2: Furthermore, except as required by law, MYOMO undertakes no obligation to revise or update any forward-looking statements to reflect events or circumstances after the date of this call, today, November 10, 2025.
Speaker #2: It's now my pleasure to turn the call over to MYOMO's CEO, Paul Gudonis. Paul, please go ahead.
Speaker #3: Thanks, Tirth. Good afternoon, and thank you all for joining us today. I'm pleased to announce that MYOMO had another strong quarter, with revenue of $10.1 million coming in at the high end of our expectations.
Speaker #3: This was driven by record revenues in our international markets and a growing number of OMP providers. In addition, we saw our pipeline increase, and for the first time this year, our quarterly authorizations and orders increased sequentially.
If the supporting increased reimbursement, we continue to add to the published research on the Myomo during Q3.
A highly respected topics and stroke Rehabilitation Journal published a systematic review of patient outcomes from the use of the myoelectric orthosis.
Providing this information to payers rehab Physicians and therapists as well as OMP professionals can lead to Greater insurance coverage and clinical adoption.
And lastly during the quarter, we implemented manufacturing changes to improve our growth margin. Uh also manage headcount and other cost reductions to lower operating expenses.
The positioning ourselves from improved operating leverage as we grow future. Revenues based on the larger patient pipeline augmented by The increased number of authorizations and orders, we expect for the mile connect program and the expanded on Channel.
Based on the backlog, going into the fourth quarter and the number of patient cases progressing through reimbursement, we're able to reiterate our full 2025 annual guidance of $40 to $42 million, which represents an increase of more than 23% over last year.
With that overview of our performance and actions. I'll turn the call over to our CFO. Dave Henry provide more of the financials and details on our newly executed Term Loan facility which is designed to provide us with growth capitals. Continue scaling the business. This is sustainable profitability and positive cash flow as our myopro volumes and revenue increase.
Thank you, Paul, and good afternoon, everyone. Let me start with a review of our third quarter financial results. Revenue for the third quarter of 2025 was $10.1 million. This represents a 10% increase versus the prior year and was driven by a higher number of revenue units, offset by a lower average selling price (ASP).
We delivered 186 Mi Pro Revenue units during the quarter up 16% with 57% of those units from authorizations and orders received in the third quarter.
Our ASP decreased 5% versus the prior year to approximately 54,300 hours and was roughly flat sequentially.
ASP and the prior year period was unusually high due to the change in revenue recognition for Medicare patients to be upon delivery instead of payment.
In that period, we began reporting Medicare and some supplemental revenues at delivery, in addition to some at payment on deliveries prior to the accounting change.
This had about a 4300 favorable impact on ASP. In the third quarter of 2024
Normalized for the accounting change, ASP increased 3% year-over-year.
Basis represented 54% of Revenue in the third quarter.
Medicare Advantage revenue was 18% of third quarter revenue and, in dollar terms, was down 18% compared with the prior year.
Medicare Advantage Revenue, remained constrained by the high. Number of pre-authorization denials forcing us into an appeals process in order to serve these patients.
Companies forced patients into this process. Hoping they will not appeal.
and while successful appeal, rates vary, we typically see about 45 to 50% overturned on appeal for those that stay engaged with us in the process of trying to receive a myopro
73% of Revenue in the third quarter, came from the direct billing Channel compared with 81% in the prior year quarter.
International Revenue was a record 1.8 million in the quarter up to 63% and representing 18% of total revenue primarily from Germany.
Revenue in the OMP channel. Was also a quarterly record at 900,000 up 154% year-over-year and representing 9% of total revenue.
As Paul mentioned, the UNP channel is emerging as a high-quality, lower-cost source of qualified patients and we intend to continue to develop this channel.
As of September 30th 2025 the pipeline stood at 1,669 Patients, an increase of 32% year-over-year.
In the third quarter, we added 826 patients to the pipeline, which is up 28% from the prior year quarter and up 1% sequentially.
There were 266 Medicare patients in the pipeline and the increase of 21% year-over-year and 4% sequentially.
We ended the quarter with a backlog of 208 patients, down 34% versus the prior year.
In other words, we were able to convert more of our backlog into Revenue faster.
You received 229 authorizations and orders during the third quarter and the increase of 11% sequentially and 2% year-over-year.
A higher authorizations and orders helped us to generate record revenue from intra quarter fill units.
Gross margin for the third quarter of 2025 was 63.8%.
Down from 75.4% for the prior year quarter.
Prior gross margin was favorably, impacted by a change in accounting for revenues, from Medicare patients that I mentioned earlier.
Which favorably impacted third quarter, 2024 gross margin by approximately 200 basis points.
in addition, with our growth, we opened a new facility and hired additional staff, leading to higher payroll and Lease expense
Finally, an unfavorable change in the overhead absorbed in inventory, in the third quarter of 2025 negatively impacted gross margin as well as higher material costs.
The higher labor, and overhead spending, and changing absorption impacted gross margin by approximately 800 basis points, and represents an opportunity to improve gross margin as activity increases.
Total operating expenses for the third quarter of 2025 or 10 million up 26%, over a third quarter of 2024, but down 6% sequentially.
This increase was driven primarily by higher payroll and advertising spending, as well as increased R&D due to development efforts on a mobile app for our Mike and Fig software, MyoPro 3.
And funding for a pilot of a randomized control trial at the University of Utah.
As Paul touched on, we are focused on more efficient customer acquisition, leading to us sequential reduction in cost per pipeline, add
We are investing in our mild connect platform and expect to gain further, leverage with our growth in patients.
operating loss for the third quarter of 2025 was 3.5 million compared with an operating loss of 1 million in the prior year quarter,
That loss for the third quarter of 2025 was $3.7 million, or 9 cents per share. This compares with the net loss of $1 million, or 3 cents per share, for the third quarter of 2024.
During the third quarter of 2025 approximately 600,000 pre-funded warrants were exercised.
As of September 30th 2025 approximately 3.8 million pre-funded, warrants remain outstanding from our offerings in 2023.
are considered common stock equivalents under gaap accounting and are included in our weighted average shares outstanding
adjusted debit to offer the third quarter of 2025 was a -2.7 million compared with the negative 0.6 million with a third quarter of 2024.
Turning now, to our balance sheet and cash flow as of September 30th, 2025 Cash, Cash, equivalents and short-term Investments for 12.6 million.
Cash burn was 2.9 Million in the third quarter, including 1.8 million from operating activities and 1 million. From Capital expenditures related to the Fed Up of the additional manufacturing space. We took over in the third quarter along with capitalized, software costs for 1 of our product development projects and demo unit builds.
On November 4th 2025, we entered into a loan and security agreement with Avenue Capital, which provides for a committed Term Loan facility of 17.5 million of which 12.5 million was funded at closing.
The remaining 5 million is available to borrow at our discretion from November 2026 through May 2027. Assuming certain conditions are met
Will make interest-only payments for the next 18 months after which will repay principal in 24, equal monthly installments.
For formal for the funding provided at closing. Net of repayment to Silicon Valley Bank and fees and expenses our cash balance as of September 30th 2025 is 20.1 million.
For more details regarding the term loan facility. Please refer to our current report on Form 8K filed today.
Let me close with our financial guidance. Given our backlog entering the fourth quarter and anticipated failure units, we continue to expect full year 2025 revenue to be in the range of $40 million to $42 million.
But we're not providing specific 2026 guidance. At this time, we want to convey that we are focused on diversifying. Our revenue streams in 2026, relying Less on Advertising driven revenues and generating growth through our mild connect platform and further pre pain penetration of the of our onp Channel and international markets.
You plan to improve operating leverage and lower the cash burn in 2026.
With that Financial overview, I'll turn the call back to Paul.
Thanks, Dave. Uh, operator, we're now ready to take our attendees' questions.
Thank you. We will now begin the question and answer session.
To ask a question, you may press star, then 1 on your touchtone phone.
If you're using a speakerphone, please pick up your handset before pressing the keys.
if at any time your question has been addressed and you would like to withdraw your question, please press star then 2
At this time, we will pause momentarily to assemble a roster.
While we're waiting for the first question, I'd like to mention that we will be attending the Craig Hallam Alpha select conference in person in New York City. On November 18th, we hope to see some of you there.
Okay, operator. Whenever you're ready. Let's take the first question.
Yes.
The first question comes from Chase Knickerbocker with Craig Holland. Please go ahead.
Good afternoon. Uh, thanks for taking the questions, maybe just to start. Um, could you help us quantify the scale of your us business at this point. So just from a domestic OMP perspective, how many units um did you ship into that channel on the third quarter just to help us kind of think about how that business is scaling?
No worries. That's helpful. Um, and then maybe, uh, just as, as far as your new head of marketing goes, can you just, uh, cue Us in on? You know, what kind of levers were identified? As far as improve as potential avenues for improvement in terms of reducing customer, acquisition costs respect that you're you know um becoming more focused on my connect here, but just kind of within that direct, uh, billing Channel, um, you know, any any levers that were initially identified, as far as we need to be doing this, we need to be doing this better Etc.
We're looking at that and doing a comprehensive review, right now of okay, how, uh, effective is our television advertising. Are we using social media the right way? What else should we be doing to uh, again generate more leads at a lower cost per lead for qualified patients? So uh, that's the review that's underway right now and she started about 2 weeks ago.
Got it. Um,
Maybe just kind of turn into the pipeline, etc. Um,
There was a there was an a noticeable uptick as far as uh backlog drops. Um our concerns and you just kind of walk walk us through you know what might be the driver their kind of what you saw on the quarter as far as how the backlog progressed
Yeah, I think, um, a lot of the blacklog drops. Um, I would say about 40% of them, uh, came from, uh, came from Germany as a result of
What I think was, uh, you know, I think—I don't think the backlog in terms of some of those trials that did not convert was updated. And I think there was some cleanup that went on in the third quarter.
And so, I think part of that uh that higher number of backlog drops is due to that.
And so, like I said about 40% of those drops related to that with the rest just normal activity.
Got it, maybe just lasts 1 for me. Dave. Um, is, is this the right way to think about Opex, for the foreseeable future? I mean, how, how should we be thinking about Opex, kind of building off of Q3 levels and then along those same lines? Um, if you could just talk about how you guys are thinking, um, about, you know, the time to return to positive, adjusted Ava and, and, and kind of how you manage the business with that in mind.
Yeah, so I think the, in terms of the operating expenses, our plan is to, I mean, there there is going to be some growth in the operating expenses, you know, for example, I mean, we will, uh, we do intend to spend more on Advertising, you know, though, not as much of an increase as in 2025. Um, we are going to spend more on R&D, uh, particularly for that randomized, control trial that, that we're funding that I that I mentioned earlier.
Um but other than that uh Our intention is to uh not grow the operating expenses as as much as possible. And you know, we want to, you know, we don't we want to be generating and and and showing uh that we can generate operating leverage and grow revenues faster than operating expenses.
And in terms of, you know, when we get uh um when we get to back to positive uh adjusted e. But again we all, you know, we'll provide more of an update as when we give our uh our 2026 guidance.
Understood, thanks for the questions.
Mhm.
Thank you. The next question comes from Scott Henry with AGP. Please go ahead.
Thank you, and good afternoon. I have a couple of questions on the metrics.
Uh, I guess first.
Reimbursement or not reimbursed of a pipeline ads. Uh, they were up slightly in Q3 to Q2. Uh, do you think you could still see big gains there or is it going to be harder?
You know, at some point there's a saturation level or or is it maybe it's just flattening before jumping higher again. Uh, how how do you think about that pipeline, add or that top of the funnel?
Well, Scott given the size of the market opportunity, you know, the prevalence and a quarter million new cases just in the US every year. Uh I don't think we're near saturation. I think we got to find uh better innovative ways to reach th those uh patients. But also I think through the own fee channel and through the
Uh, in the Pro, in the, um, uh, incidence population, which I think will, uh, uh, grow the pipeline, but also improve the quality of the pipeline.
Okay. Uh, all right, that's helpful. Thank you.
And then, you know, when we think about Q4, you're going to have a smaller backlog entering Q4 than you did entering Q3. Typically, the quarter before use backlog is an indicator for what we should expect in the next quarter. So, I know your guidance.
Targets growth. Uh, but if you could just kind of walk through sequential growth from Q3 to Q4 4, if you just talked about, you know, how you're going to do that with a smaller backlog. Uh it may just be other levers that are pulling but I just want to get a better understanding from from your perspective. Thank you. Yeah, well it's, it's obviously it's going to come from, you know, from few units and from, you know, authorizations and orders that we get inside of the quarter. Um you're correct. But the you know, the backlog is lower but we've also been demonstrating that as we are as we get offer authorizations and orders, you know, our operations are actually able to turn them into Revenue faster.
Okay, so we should expect that to continue and even accelerate that, uh,
You know, day Trippers, if you will people that come and go on the same quarter, uh, I think it's, you know, the authorizations and orders go up. I think that, you know, we will probably uh, you know, the number of fill units that we have just in in whole numbers, will probably also go up as we as we go through time.
Okay, great. And then I guess final question and and it's somewhat strategic uh,
You know, it's always a little higher risk profile to take on debt uh when you're losing money. Uh the question is is is this a sign that you think? I mean, obviously you have 18 months Runway before you have to start paying it back. But you know, do you feel you know, based on your ability to take this debt that 18 months from now? Uh, you could be close to break, even just trying to get a sense of, you know, the decision to take debt over Equity even though I know the you're not probably happy with the share price but certainly debt has a degree of risk that comes with it.
Sure. Um,
Done this transaction. If we didn't feel like that we could pay it back.
That that's that, that was really the first criteria.
And so, um, I think that I think that also sort of says that uh you know before in the in the 18th that we that before we start having to pay this back, we would expect that we're you know we're not burning cash.
By the time we get to that point uh that's you know. So we're we're managing the business that way through continuing to grow revenues and my you know holding down the growth and operating expenses and generating more uh incremental operating uh income you know from those from those additional revenues. So we feel like that we could um you know we could you know pay it back. Obviously that was the that was the first criteria and then you know, it was the you know, the best combination of um you know of of capital that was provided to us with the minimum amount of evolution.
And so we've been very consistent that if we were to
Uh, you know, look for additional capital. We wanted to do it in a way that was the least dilutive way possible, and we feel that we accomplished that.
Okay, thank you for that. That insight into the decision-making. I appreciate that. Uh, that should do it for me. Thank you for taking the questions.
All right. Thanks Scott.
The next question comes from Anton, with Maximum Group. Please go ahead.
Oh, hi. It's Anthony. Um,
so,
Paul and David. Um,
in terms of the O, OMP
Clinics. How many of you have been trained so far? Um, do you have a goal in terms of the number you'd like to have by the end of '25?
Uh, or by the end of 26.
And then, um, I was wondering if you could discuss a little more of the details of of my connect.
What's behind that initiative, and what do you hope to accomplish there? Thanks.
Yeah. Hi Anthony. So, we've been training, uh, a lot of, uh, own Peak clinicians, uh, but in various, uh, stages of their certification process, you know, for example, a couple of hundred if taken the online training program and how to evaluate a patient, uh, and then those that have moved forward to get that patient, uh, into an evaluation. Uh, we show up uh, in person with our clinical team to do the evaluation with them, so there's that additional training. Uh, then they have to sit up 3 units, uh, in order to become fully certified. So you know that number is growing. Uh, good news is, we've got, you know, a lot of interest among, you know, hanger clinicians around the country. Uh, we've got the other, um, major firms like Autobot as a number of fox clinicians. Uh, oser has its formotion clinics, uh, equal as like 90 clinics. So, uh, we continue do seminars, uh, on reimbursement on clinical training on how to do the
Marketing, uh, as well. So you know, our goal is to, you know, we'll have a couple of dozen. I would say that are actively placing orders, uh, this year and our goal is to continue to expand that. I think what you'll see is I've mentioned this in previous calls, you know, someone will do uh, 1 order, see how it works out for their patients. They put outcomes, uh, make sure they get the reimbursement check and they'll do another 1 and that, then it starts to take off from there.
Uh as far as my connect, you know, 1 of the assets we have is we've got uh, a dozen field clinicians primarily occupational therapists, you know, who are well-versed in the myopro, uh, they're in these rehab hospitals, all the time, training therapists on how to work with users, who get a new myopro, you know, we train some 80 to 100 New therapists every month. Uh, and in the process of doing. So, uh, we conduct in service presentations and we're seeing a growing number of clinical referrals now. Uh, and we think that will be a, a real Source because the Strategic shift that I'm looking next to you. Here is
From 1 time for advertising driven, uh, orders from a patient, uh, to recurring sources of patience. So that's, um, OMP providers in the US and Germany, uh, and rehab hospitals, who will, hopefully provide us with a steady flow of new patient candidates. So, that's kind of the outline of the myio connect program. Okay? And then, just lastly, um,
Maybe more for David, but just in terms of uh getting to break. Even um any update on on what that quarterly Revenue, run rate needs to be or a timeline for getting there.
Well, when we did the um um, the headcount reduction early in, um, you know, earlier this year, um, you know, prior to that, we kind of gave. We gave some guidance of about 17 to 18 million dollars of a quarterly Revenue was required to break. Even, I think after that,
Um headcount reduction in um you know in July um that you probably saved about a million dollars, a quarter off of that. So I would say around 16 to 17 million
Okay, great.
All right, thanks, I'll hop back to you, appreciate it.
The next question comes from Sean Lee with Etsy, vein right? Please go ahead.
Hey uh, good afternoon guys, and thanks for taking my questions. Um I just have 2 quick ones. Uh first uh I think you mentioned to its 1.8 million in revenue from Germany this quarter since increasing quite well. So I was wondering if you can provide some color on that.
And what's behind the, uh, increase there?
Well, uh we've got a a network of over a hundred our own pairs there that have been developed over the last several years. Sean, uh, and in Germany, uh, we've had very good success, uh, with the statutory Health insurer so that uh, virtually anyone uh, in Germany who medically qualifies for the myopro can get access to it, you know, we don't have to go through the same type of
Pre-authorization, uh, you know, hassles that we sometimes face here uh by some payers where we have to appeal these and so on. So uh, patients that are medically qualified can get a myopro uh and that's helped the drive the growth there in Germany.
I see thanks for that and my last question is on the advertising spend? So do you think you've reached a new Plateau? Now, with the advertising, spend following your switch to more focus on TV or do you expect that to go up, more in Q4? And, uh, how does that impact your pipeline? How do you expect that to impact your? Um, the cost for pipeline add
We are intending to spend more on advertising in 2026, but not at a rate of growth, like we, like we did in 2025. So the the growth rate in advertising spending will be lower in 2026 versus 2025.
But I think the, you know, the bigger impact might be from, you know, myio connect and you know, some of the efforts with the MP channel in terms of, you know, growing the pipeline ads. Um, and obviously I think, you know, you know, there's, you know, for for dollars that we invest in advertising more pipeline ads, come from that. But we're looking to increase the quality of the pipeline ads because as Paul mentioned,
People that are in the incidence population that the myconnect program is, um, is is, is is really targeting those people are closer to um, their pre-strike life in terms of, you know what they, you know. They they remember what it was like before the stroke and so I we think that they're going to be more motivated, the quality of the pipeline should improve. And so a pipeline add, uh, overall as as the mix of patients that come from referrals. And from the MP Channel increases the conversion of those pipeline adds to revenue should increase over time. That's the intent of doing this. Um, and we're doing, you know, my connect with with, you know, the the people that we have today. So we're not, you know, right now we're not spending more for it.
and so, you know, those are the reasons why we're doing it and why we think that, uh, the pipeline has to grow, but not only that, but the quality of the ad should grow in 2026,
Okay. Yeah that does make it a lot clearer. Thanks for that that's all I have.
Yeah. Thanks for taking my question. It looks like International Germany, uh, continues to very well. How's the rest of your international business and any updates on your partnership in China?
Oh, and you've always been a proponent of, you know, an early uh spotter that the Germany is going to be a really good market for us. So I think we've validated your thesis on that.
Germany, uh is growing with the growing pipeline. We expect continued record record revenues next year. Uh, you know, other International markets, uh we've just decided we're not going to spend a lot of money at this point to try to get reimbursement, which is a couple of your process there. Uh, from our last call with the China JV. Now they're still conducting a clinical trial to get nmpa approval. So, uh not much progress up over there, but it doesn't really cost us anything. Uh, at this point, we're just uh, uh regularly engaging with that management of the JV
Great. Well, thanks for the update. And, you know, congratulations on Germany. I wish you guys good luck. Thank you.
Thank you, Ed.
Thank you, operator, any more questions?
Uh, know, there are no further questions, I would like to turn the conference back over to Paul gudonis for closing remarks.
Well, thanks. Just to summarize our business plan going forward, we expect continued revenue growth through our direct-to-patient marketing, as well as expanding our own two channels. We discussed here the Mile Connect referral program.
we're increasing Market access for patients by signing additional payer contracts and engaging with the Medicare Advantage and Commercial plans for coverage.
We're managing our cost structure as Dave described and enhancing our manufacturing processes to demonstrate operating leverage as we scale. And we continue to innovate and product development to maintain our Market leadership position. Well, thank you all for your questions and for your interest in myomo, we look forward to speaking to you again, when we report, our Q4 and full year 2025 Financial results in about 4 months, have a nice evening, everyone.
Thank you. The conference has now concluded. Thank you for attending today's presentation. You may now disconnect