Q4 2025 Myomo Inc Earnings Call

March 9, 2026

Speaker #1: Good day and welcome to the MYOMO Fourth Quarter and Full Year 2025 Financial Results. All participants will be in a listen-only mode. Should you need assistance, please signal conference specialist by pressing the star key followed by zero.

Operator: Good day, and welcome to the Myomo Q4 and Full Year 2025 Financial Results. All participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by 0. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then 1 on your touchtone phone. To withdraw your question, please press star then 2. Please note this event is being recorded. I would now like to turn the conference over to Mr. Tirth Patel with Alliance Advisors IR. Please go ahead, sir.

Speaker #1: After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star than one or touch tone phone.

Speaker #1: And to withdraw your question, please press star, then two. Please note this event is being recorded. I would now like to turn the conference over to Mr. Tirth Patel with Alliance Advisors IR.

Speaker #1: Please go ahead, sir.

Speaker #2: Thank you, operator, and good afternoon, everyone. This is Tirth Patel with Alliance Advisors IR. Welcome to the MYOMO fourth quarter and full year 2025 financial results conference call.

Tirth Patel: Thank you, operator. Good afternoon, everyone. This is Tirth Patel with Alliance Advisors IR. Welcome to the Myomo Q4 and full year 2025 Financial Results Conference Call. With me on today's call are Myomo's Chief Executive Officer, Paul Gudonis, and Chief Financial Officer, Dave 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. 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. These risks, uncertainties, and other factors are discussed in Myomo's filings with the Securities and Exchange Commission.

Speaker #2: With me on today's call are MYOMO's Chief Executive Officer, Paul Gudonis, and Chief Financial Officer, Dave 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 and certainties and other factors that may affect MYOMO's business financial condition and operating results.

Speaker #2: These risks, certainties, and other factors are discussed in Myomo's filings with the Securities and Exchange Commission. Actual outcomes and results may differ materially from what is expressed in or implied by these forward-looking statements.

Tirth Patel: Actual outcomes and results may differ materially from what's expressed in or implied by these forward-looking statements. 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, 9 March 2026. It's now my pleasure to turn the call over to Myomo's CEO, Paul Gudonis. Paul, please go ahead.

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, March 9, 2026.

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. During our last quarterly call, I outlined four major objectives for the company.

Paul Gudonis: Thanks, Tersh. Good afternoon, and thank you all for joining us today. During our last quarterly call, I outlined four major objectives for the company. One, continue to grow revenue through our direct-to-patient marketing, as well expand the number of orders from recurring sources, namely the orthotics and prosthetics channel and the MyoConnect referral program. Number two, increase market access for patients by signing additional payer contracts and engaging with Medicare Advantage and commercial plans for coverage. Number three, manage our cost structure and enhance our manufacturing processes to demonstrate operating leverage as we scale. Number four, continue to innovate in product development to maintain our market leadership position. I'm pleased to report that we made progress on all four of these objectives. Q4 of 2025 was our strongest revenue quarter of the year, with $11.4 million in revenue.

Speaker #3: One, continue to grow revenue through our direct-to-patient marketing, as well as expand the number of orders from recurring sources—namely, the orthotics and prosthetics channel—and the MyoConnect referral program.

Speaker #3: Number two, increase market access for patients by signing additional payer contracts and engaging with Medicare Advantage and commercial plans for coverage. Number three, manage our cost structure and enhance our manufacturing processes to demonstrate operating leverage, as we scale; and number four, continue to innovate in product development to maintain our market leadership position.

Speaker #3: I'm pleased to report that we've made progress on all four of these objectives. The fourth quarter of 2025 was our strongest revenue quarter of the year, with $11.4 million in revenue.

Speaker #3: This brought our full-year revenue to $40.9 million, representing 26% growth over 2024. We also recorded the highest number of orders in the company's history, with 241 MyoPros ordered during the quarter, up 5% sequentially from the third quarter.

Paul Gudonis: This brought our full year revenue to $40.9 million, representing 26% growth over 2024. We also recorded the highest number of orders in the company's history, with 241 MyoPros ordered during the quarter, up 5% sequentially from Q3. This growth was driven by expanded penetration of the O&P channel, the early success of our MyoConnect clinical referral program, and stronger international revenues. Over the past year, we launched the MyoPro Center of Excellence program to educate domestic O&P practices on the new MyoPro 2X product and the improved reimbursement environment. O&P providers from national and regional chains to local independent practices ordered approximately 100 MyoPros last year.

Speaker #3: This growth was driven by expanded penetration of the OMP channel, the early success of our MyoConnect clinical referral program, and stronger international revenues. Over the past year, we launched the MyoPro Center of Excellence program to educate domestic OMP practices on the new MyoPro 2X product and the improved reimbursement environment.

Speaker #3: OMP providers, from national and regional chains to local independent practices, ordered approximately 100 MyoPros last year. In addition, quarterly revenue from the US OMP channel exceeded $1 million for the first time. Our revenue from the OMP channel was up 81% for the quarter, and it doubled for the year.

Paul Gudonis: In addition, quarterly revenue from the US O&P channel exceeded $1 million for the first time. Our revenue from the O&P channel was up 81% for the quarter and doubled for the year. To capitalize on the clinical relationships we've developed with therapists at rehab hospitals across the country, we established the MyoConnect program to engage therapists and physicians in referring medically qualified patients to Myomo and our O&P partners. In just the first six months of this program, we've had over 100 qualified candidates enter our patient pipeline. Referrals were nearly 10% of total pipeline adds in Q4. We'll continue to lean into the MyoConnect program in 2026 as we focus on growing revenues from recurring patient sources.

Speaker #3: To capitalize on the clinical relationships we've developed with therapists at rehab hospitals across the country, we established the MyoConnect program to engage therapists and physicians in referring medically qualified patients to Myomo and our OMP partners.

Speaker #3: In just the first six months of this program, we've had over 100 qualified candidates enter our patient pipeline, and referrals were nearly 10% of total pipeline adds in the fourth quarter.

Speaker #3: We'll continue to lean into the MyoConnect program in 2026 as we focus on growing revenues from recurring patient sources. MyoConnect makes sense for clinicians since they want better outcomes for their patients, and these rehab hospitals will continue to provide therapy and training support based on the MyoPro protocol.

Paul Gudonis: MyoConnect makes sense for clinicians since they want better outcomes for their patients. These rehab hospitals will continue to provide therapy and training support based on the MyoPro protocol. This strategic pivot to recurring patient sources is already evident in our results. Back in Q4 2024, 26% of our revenue came from recurring sources. By Q4 2025, that figure had increased to 42%, representing 52% year-over-year growth. Supporting the above revenue initiatives is a revised marketing plan that's raising awareness of our products to healthcare professionals and further optimizing our digital marketing to patients. We believe these initiatives, along with better insurance coverage, will reduce our acquisition costs for customer. Our international operations delivered quarterly revenues in excess of $2 million for the first time, growing 46% for the quarter and 48% for the year.

Speaker #3: This strategic pivot through recurring patient sources is already evident in our results. Back in the fourth quarter of 2024, 26% of our revenue came from recurring sources.

Speaker #3: By the fourth quarter of 2025, that figure had increased to 42%, representing 52% year-over-year growth. Supporting the above revenue initiatives is a revised marketing plan that's raising awareness of our products to healthcare professionals, and further optimizing our digital marketing to patients.

Speaker #3: We believe these initiatives, along with better insurance coverage, will reduce our acquisition costs for customers. Our international operations delivered quarterly revenues in excess of $2 million for the first time, growing 46% for the quarter and 48% for the year.

Speaker #3: The increase was due to growth in the patient pipeline, more OMP clinics and medical professionals sourcing patients for MyoPro, favorable reimbursement policies from statutory health insurers, and some foreign exchange tailwinds.

Paul Gudonis: The increase was due to growth in the patient pipeline, more O&P clinics and medical professionals sourcing patients for MyoPro, favorable reimbursement policies from statutory health insurers, and some foreign exchange tailwinds. We're adding more business development and clinical staff to our team in Germany. We expect continued growth in that market in 2026. However, over in China, we became aware toward the end of the year that the majority shareholder in the joint venture, Ryzur Medical, ran into financial problems in its core rehab hospital business and declared bankruptcy. As a result, operations of the JV company are on hold at this time.

Speaker #3: We're adding more business development and clinical staff to our team in Germany, and we expect continued growth in that market in 2026. However, over in China, we became aware toward the end of the year that the majority shareholder in the joint venture, Riser Medical, ran into financial problems in its core rehab hospital business and declared bankruptcy.

Speaker #3: As a result, operations of the JV company are on hold at this time. As you may recall, we received $2.7 million in upfront license payments a few years ago, and we're now working with China Leave Ventures, a major investor in the JV, to see if the venture can be recapitalized and restructured so that it can address that very large market opportunity in that country.

Paul Gudonis: As you may recall, we received $2.7 million in upfront license payments a few years ago. We're now working with China Lead Ventures, a major investor in the JV, to see if the venture can be recapitalized and restructured so they can address that very large market opportunity in that country. Our market access strategy here in the US continues to gain traction. We've signed in-network contracts with additional Medicare Advantage and commercial payers in the past several months. Most notably, we recently reached a multi-state agreement with Elevance Health, which allows us to begin executing state-by-state in-network contracts across their network, which covers 45 million lives. This represents our first such extensive payer arrangement, which provides for case-by-case authorization. This is significant since we're seeing an increasing number of authorizations from plans where we have a contract.

Speaker #3: Our market access strategy here in the US continues to gain traction, and we've signed in-network contracts with additional Medicare Advantage and commercial payers in the past several months.

Speaker #3: Most notably, we recently reached a multi-state agreement with Elevance Health, which allows us to begin executing state-by-state in-network contracts across their network, which covers 45 million lives.

Speaker #3: This represents our first such extensive payer arrangement, which provides for

Speaker #1: For case-by-case authorization. This is significant since we are seeing an increasing number of authorizations from plans where we have a contract.

Speaker #1: Since we have these agreements on pricing, we don't have to go through a lengthy single case agreement process, and that speeds up the patient's access to a pro and our revenue cycle. Our third major initiative is to manage our cost structure.

Paul Gudonis: Since we have these agreements on pricing, we don't have to go through a lengthy single case agreement process, and that speeds up the patient's access to MyoPro and our revenue cycle. Our third major initiative is to manage our cost structure, and we've taken steps to increase our organizational efficiency, reduce the cost of outside services, and continue to drive down material costs for manufacturing the MyoPro units. We're becoming more efficient while investing in critical R&D projects to build on our market leadership. In Q2 of this year, we plan to activate the Myomo mobile app for patients and clinicians, which is now available as a free download in the Apple and Google App Stores.

Speaker #1: We've taken steps to increase our organizational efficiency, reduce the cost of outside services, and continue to drive down the material costs for manufacturing Pro units.

Speaker #1: We're becoming more efficient while investing in critical R&D projects to build on our market leadership. In Q2 of this year, we plan to activate the Myomo mobile app for patients and clinicians, which is now available as a free download in the Apple and Google app stores.

Speaker #1: The app provides enhanced capabilities and data collection for users , allowing us to reduce the cost of goods sold by eliminating the need to ship a laptop , including our proprietary software , to each Myo user Meanwhile , we expect to roll out other enhancements this year while developing the next generation Pro three .

Paul Gudonis: The app provides enhanced capabilities and data collection for users while allowing us to reduce the cost of goods sold by eliminating the need to ship a laptop, including our proprietary software, to each MyoPro user. Meanwhile, we expect to roll out other enhancements this year while developing the next generation MyoPro 3.0. Another R&D investment we're making is in a randomized controlled trial that's being conducted by the University of Utah Rehabilitation Hospital. This is expected to add to the growing body of research publications, including the two that were released last year. In summary, we're making significant progress in our strategic pivot to recurring patient sources, an increased number of insurance authorizations and O&P channel orders, and a lower cost structure as we intend to cut the cash burn in half in 2026.

Speaker #1: Another R&D investment we're making is in a randomized controlled trial that's being conducted by the University of Utah Rehabilitation Hospital. And this is expected to add to the growing body of research publications, including the two that were released last year.

Speaker #1: So in summary , we're making significant progress in our strategic pivot to recurring patient sources and increased number of insurance authorizations and Ope channel orders and a lower cost structure as we intend to cut the cash burn in half in 2026 .

Speaker #1: With that overview of our results and actions , I'll turn the call over to our CFO , Dave Henry , to provide more of the financials and details Thank you , Paul , and good afternoon , everyone .

Paul Gudonis: With that overview of our results and actions, I'll turn the call over to our CFO, Dave Henry, to provide more of the financials and details.

David Henry: Thank you, Paul. Good afternoon, everyone. As Paul mentioned, we saw full year revenue growth of 26%, driven by growth across all of our sales channels led by the US O&P channel and international, which both had record orders. Revenue for Q4 2025 was $11.4 million, which was our highest revenue quarter this year, up 13% from Q3 2025, but down slightly versus the prior year period. The year-over-year decrease was driven by a lower number of revenue units and a slightly lower average selling price or ASP. In addition, in Q4 2024, we experienced stronger Medicare Advantage revenue and filled demand from Medicare patients after beginning to cover the MyoPro earlier that year.

Dave Henry: Thank you, Paul. Good afternoon, everyone. As Paul mentioned, we saw full year revenue growth of 26%, driven by growth across all of our sales channels led by the US O&P channel and international, which both had record orders. Revenue for Q4 2025 was $11.4 million, which was our highest revenue quarter this year, up 13% from Q3 2025, but down slightly versus the prior year period. The year-over-year decrease was driven by a lower number of revenue units and a slightly lower average selling price or ASP. In addition, in Q4 2024, we experienced stronger Medicare Advantage revenue and filled demand from Medicare patients after beginning to cover the MyoPro earlier that year.

Speaker #1: As Paul mentioned , we saw full year revenue growth of 26% , driven by growth across all of our sales channels , led by the US omni channel and international , which both ad record quarters revenue for the fourth quarter of 2025 was 11.4 million , which was our highest revenue quarter this year , up 13% from the third quarter of 2025 , but down slightly versus the prior year period year over year decrease was driven by a lower number of revenue units and a slightly lower average selling price or ASP .

Speaker #1: In addition , in the fourth quarter of 2024 , we experienced stronger Medicare Advantage revenue and filled demand from Medicare patients . After beginning to cover the myopia earlier that year We delivered 208 revenue units during the quarter , down 5% year over year , but up 12% sequentially .

David Henry: We delivered 208 MyoPro revenue units during the quarter, down 5% year-over-year, but up 12% sequentially. 62% of Q4 revenue units were generated from authorizations received during the quarter. In addition, our ASP decreased less than 1% versus the prior year to approximately $54,600, due primarily to channel mix. Medicare Part B patients represented 49% of revenue in Q4. Medicare Advantage patients represented 20% of Q4 revenue, and in dollar terms was down 11% compared to the prior year quarter. As I'm sure you have seen with other companies, it's been a challenging year dealing with Medicare Advantage payers who have constrained this by issuing a high number of pre-authorization denials, necessitating an appeals process in order to serve these patients.

Dave Henry: We delivered 208 MyoPro revenue units during the quarter, down 5% year-over-year, but up 12% sequentially. 62% of Q4 revenue units were generated from authorizations received during the quarter. In addition, our ASP decreased less than 1% versus the prior year to approximately $54,600, due primarily to channel mix. Medicare Part B patients represented 49% of revenue in Q4. Medicare Advantage patients represented 20% of Q4 revenue, and in dollar terms was down 11% compared to the prior year quarter. As I'm sure you have seen with other companies, it's been a challenging year dealing with Medicare Advantage payers who have constrained this by issuing a high number of pre-authorization denials, necessitating an appeals process in order to serve these patients.

Speaker #1: 62% of fourth quarter revenue units were generated from authorizations received during the quarter. In addition, our ASP decreased less than 1% versus the prior year to approximately $54,600, due primarily to channel mix.

Speaker #1: Medicare Part B patients represented 49% of revenue in the fourth quarter. Medicare Advantage patients represented 20% of fourth quarter revenue, and in dollar terms was down 11% compared to the prior year quarter.

Speaker #1: As I'm sure you have seen with other companies , it's been a challenging year dealing with Medicare Advantage payers who have constrained us by issuing a high number of pre-authorization denials , necessitating an appeals process in order to serve these patients .

Speaker #1: We have and will continue to fight these denials to make our product available to patients who are in need. As we enter into more payer contracts, we are seeing more authorizations under those agreements, but not enough so far to replace the volume from payers that previously authorized more routinely.

David Henry: We have and will continue to fight these denials to make our product available to patients who are in need. As we enter into more payer contracts, we are seeing more authorizations under those agreements, but not enough so far to replace the volume from payers that previously authorized more routinely. We continue to work to secure more payer contracts and are encouraged by our first multi-state payer arrangement with Elevance. 69% of revenue in Q4 came from the direct billing channel, compared with 81% in the prior year Q4. Direct billing revenue was down 20% year-over-year due to lower Medicare and Medicare Advantage authorizations and challenges with social media lead generation we faced in the first half of 2025. Partially offsetting lower direct billing revenue were solid results in our other sales channels.

Dave Henry: We have and will continue to fight these denials to make our product available to patients who are in need. As we enter into more payer contracts, we are seeing more authorizations under those agreements, but not enough so far to replace the volume from payers that previously authorized more routinely. We continue to work to secure more payer contracts and are encouraged by our first multi-state payer arrangement with Elevance. 69% of revenue in Q4 came from the direct billing channel, compared with 81% in the prior year Q4. Direct billing revenue was down 20% year-over-year due to lower Medicare and Medicare Advantage authorizations and challenges with social media lead generation we faced in the first half of 2025. Partially offsetting lower direct billing revenue were solid results in our other sales channels.

Speaker #1: We continue to work to secure more payer contracts and are encouraged by our first multi-state payer arrangement with Elements. Sixty-nine percent of revenue in the fourth quarter came from the direct billing channel, compared with eighty-one percent in the prior year quarter.

Speaker #1: Direct billing revenue was down 20% year over year due to lower Medicare and Medicare Advantage authorizations and challenges with social media lead generation we faced in the first half of 2025. Partially offsetting lower direct billing revenue were solid results in our other sales channels.

Speaker #1: International revenue was a record 2.2 million , up 46% year over year , and representing 19% of total revenue , primarily from Germany , the US comp channel also achieved a milestone , reaching a record 1 million in quarterly revenue , up 81% year over year , and representing 9% of total revenue .

David Henry: International rec-revenue was a record $2.2 million, up 46% year-over-year and representing 19% of total revenue, primarily from Germany. The US O&P channel also achieved a milestone, reaching a record $1 million in quarterly revenue, up 81% year-over-year and representing 9% of total revenue. Recurring patient sources, including referrals under our MyoConnect program, international, US O&P, and the VA, represented 42% of Q4 revenue. As of 31 December 2025, the pipeline stood at 1,528 patients, an increase of 10% year-over-year. During the Q4, we added 676 patients to the pipeline, which is up 3% from the prior year quarter. We exited the quarter with a backlog of 199 patients.

Dave Henry: International rec-revenue was a record $2.2 million, up 46% year-over-year and representing 19% of total revenue, primarily from Germany. The US O&P channel also achieved a milestone, reaching a record $1 million in quarterly revenue, up 81% year-over-year and representing 9% of total revenue. Recurring patient sources, including referrals under our MyoConnect program, international, US O&P, and the VA, represented 42% of Q4 revenue. As of 31 December 2025, the pipeline stood at 1,528 patients, an increase of 10% year-over-year. During the Q4, we added 676 patients to the pipeline, which is up 3% from the prior year quarter. We exited the quarter with a backlog of 199 patients.

Speaker #1: Recurring patient sources , including referrals under our Mile Connect programme , international US , Onp and the VA represented 42% of fourth quarter revenue as of December 31st , 2025 .

Speaker #1: The pipeline stood at 1528 patients , an increase of 10% year over year . During the fourth quarter , we added 676 patients to the pipeline , which is up 3% from the prior year quarter .

Speaker #1: We exited the quarter with a backlog of 199 patients , a record 241 orders in the quarter , combined with a smooth , smooth running operations resulted in a record 62% of fourth quarter revenue units coming from order fill units up 35 , up from 35% of revenue units a year ago Gross margin for the fourth quarter of 2025 was 68.6% , down from 71.4% a year ago and up from 63.8% in the third quarter .

David Henry: A record 241 orders in the quarter, combined with the smooth-running operations, resulted in a record 62% of Q4 revenue units coming from intra-quarter fill units, up from 35% of revenue units a year ago. Gross margin for Q4 of 2025 was 68.6%, down from 71.4% a year ago, and up from 63.8% in Q3. The year-over-year decrease was due to a lower amount of overhead capitalized inventory compared to the prior year period and higher warranty expenses. Operating expenses for Q4 of 2025 were $10.6 million, up 19% over the prior year quarter.

Dave Henry: A record 241 orders in the quarter, combined with the smooth-running operations, resulted in a record 62% of Q4 revenue units coming from intra-quarter fill units, up from 35% of revenue units a year ago. Gross margin for Q4 of 2025 was 68.6%, down from 71.4% a year ago, and up from 63.8% in Q3. The year-over-year decrease was due to a lower amount of overhead capitalized inventory compared to the prior year period and higher warranty expenses. Operating expenses for Q4 of 2025 were $10.6 million, up 19% over the prior year quarter.

Speaker #1: The year over year decrease was due to a lower amount of overhead , capitalized inventory compared to the prior year period , and higher and higher warranty expenses .

Speaker #1: Operating expenses for the fourth quarter of 2025 were 10.6 million , up 19% over the prior year quarter . This increase was driven primarily by higher sales , clinical and marketing expenses , particularly advertising expense , which was up approximately 1.2 million year over .

David Henry: This increase was driven primarily by higher sales, clinical and marketing expenses, particularly advertising expense, which was up approximately $1.2 million year-over-year. Advertising spending in Q4 was down 4% sequentially. Operating loss for Q4 of 2025 was $2.8 million, compared with an operating loss of about $200,000 in the prior year quarter. Q4 non-operating expenses include a one-time write-off of debt issuance costs, cash interest expense under the Avenue term loan, non-cash interest expense for the amortization of discounts on the debt, and a loss on the change in fair value of derivative liabilities bifurcated from the debt on the issuance date and recorded as separate liabilities which must be marked to market to fair value each quarter.

Dave Henry: This increase was driven primarily by higher sales, clinical and marketing expenses, particularly advertising expense, which was up approximately $1.2 million year-over-year. Advertising spending in Q4 was down 4% sequentially. Operating loss for Q4 of 2025 was $2.8 million, compared with an operating loss of about $200,000 in the prior year quarter. Q4 non-operating expenses include a one-time write-off of debt issuance costs, cash interest expense under the Avenue term loan, non-cash interest expense for the amortization of discounts on the debt, and a loss on the change in fair value of derivative liabilities bifurcated from the debt on the issuance date and recorded as separate liabilities which must be marked to market to fair value each quarter.

Speaker #1: Advertising spending in the fourth quarter was down 4% sequentially. Operating loss for the fourth quarter of 2025 was $2.8 million, compared with an operating loss of about $200,000 in the prior year quarter.

Speaker #1: Fourth quarter non-operating expenses include a one time write off of debt issuance costs , cash interest expense under the Avenue Term Loan , noncash interest expense for the amortization of discounts on the debt , and a loss on the change in fair value of derivative like derivative liabilities bifurcating from the debt on the issuance date and recorded as separate liabilities , which must be marked to market the fair value each quarter .

Speaker #1: That loss for the fourth quarter of 2025 was $3.8 million, or $0.09 per share. This compares with a net loss of about $300,000, or $0.01 per share, for the fourth quarter of 2025.

David Henry: Net loss for Q4 2025 was $3.8 million, or $0.09 per share. This compares with a net loss of about $300,000 or $0.01 per share for Q4 2025. Adjusted EBITDA for Q4 2025 was -$1.9 million, compared with $200,000 for Q4 2024. Before I move to the balance sheet, let me give you a quick summary of some selected full year results. As I mentioned, revenue was $40.9 million, up 26%. Gross margin for the year was 65.7%, compared with 71.2% for 2024. The decrease was due to higher overhead costs, primarily due to our facility move earlier this year.

Dave Henry: Net loss for Q4 2025 was $3.8 million, or $0.09 per share. This compares with a net loss of about $300,000 or $0.01 per share for Q4 2025. Adjusted EBITDA for Q4 2025 was -$1.9 million, compared with $200,000 for Q4 2024. Before I move to the balance sheet, let me give you a quick summary of some selected full year results. As I mentioned, revenue was $40.9 million, up 26%. Gross margin for the year was 65.7%, compared with 71.2% for 2024. The decrease was due to higher overhead costs, primarily due to our facility move earlier this year.

Speaker #1: Adjusted EBITDA for the fourth quarter of 2025 was -$1.9 million, compared with a positive $200,000 for the fourth quarter of 2020.

Speaker #1: For Before I move to the balance sheet , let me give you a quick summary of some selected full year results As I mentioned , revenue was 40.9 million , up 26% .

Speaker #1: Gross margin for the year was 65.7%, compared with 71.2% for 2020. The decrease was due to higher overhead costs, primarily due to our facility move earlier this year.

Speaker #1: Investments in R&D , which resulted in the launch of the Pro two X , our Mark two unit , and progress on the Myo Pro 3 in 2025 , as well as higher sales and marketing expense , drove the increase in operating expenses to 41.3 million in 2025 , compared with 29.4 million in 2024 .

David Henry: Investments in R&D, which resulted in the launch of the MyoPro 2x, our Mark II unit, and progress on the MyoPro 3 in 2025, as well as higher sales and marketing expense, drove the increase in operating expenses to $41.3 million in 2025, compared with $29.4 million in 2024. Turning now to our balance sheet and cash flow. As of 31 December 2025, cash equivalents, and short-term investments were $18.4 million. Cash burn, which we define as free cash flow, was $1.5 million in the Q4, excluding the net proceeds from the Avenue term loan, repayment of the debt to Silicon Valley Bank, and issuance fees and expenses. Operating cash flow was a negative $1.1 million in the quarter compared to a positive $3.4 million in the Q4 a year ago.

Dave Henry: Investments in R&D, which resulted in the launch of the MyoPro 2x, our Mark II unit, and progress on the MyoPro 3 in 2025, as well as higher sales and marketing expense, drove the increase in operating expenses to $41.3 million in 2025, compared with $29.4 million in 2024. Turning now to our balance sheet and cash flow. As of 31 December 2025, cash equivalents, and short-term investments were $18.4 million. Cash burn, which we define as free cash flow, was $1.5 million in the Q4, excluding the net proceeds from the Avenue term loan, repayment of the debt to Silicon Valley Bank, and issuance fees and expenses. Operating cash flow was a negative $1.1 million in the quarter compared to a positive $3.4 million in the Q4 a year ago.

Speaker #1: Turning now to our balance cash flow . As of December 31st , 2020 , cash cash equivalents and short term investments were 18.4 million .

Speaker #1: Cash burn would be defined as free cash flow was 1.5 million in the fourth quarter , excluding the net proceeds from the term , loan , repayment of the debt to Silicon Valley Bank and issuance fees and expenses .

Speaker #1: Operating cash flow was a negative $1.1 million in the quarter, compared to a positive $3.4 million in the fourth quarter a year ago.

Speaker #1: Let me conclude my remarks with financial guidance . As Paul mentioned , we are approaching 2026 , a year where we orient our business more towards stroke patients in the incidence , population and recurring patient sources through our referral program , increasing engagement with the US channel , as well as continued international growth , our near-term objective to generate a majority of revenue from occurring sources is expected to make the business easier to scale the fund .

David Henry: Let me conclude my remarks with financial guidance. As Paul mentioned, we are approaching 2026 as a year where we orient our business more towards stroke patients in the incidence population and recurring patient sources through our MyoConnect referral program, increasing engagement with the US O&P channel, as well as continued international growth. Our near-term objective to generate a majority of revenue from recurring sources is expected to make the business easier to scale. To fund this transition, we will continue to advertise direct to patients, but limit the growth in advertising spending while building out our MyoConnect program and adding direct sales resources to support the O&P and international channels. As a reminder, Q1 revenue tends to be seasonally lower and expenses higher with payroll taxes and employee benefits resetting.

Dave Henry: Let me conclude my remarks with financial guidance. As Paul mentioned, we are approaching 2026 as a year where we orient our business more towards stroke patients in the incidence population and recurring patient sources through our MyoConnect referral program, increasing engagement with the US O&P channel, as well as continued international growth. Our near-term objective to generate a majority of revenue from recurring sources is expected to make the business easier to scale. To fund this transition, we will continue to advertise direct to patients, but limit the growth in advertising spending while building out our MyoConnect program and adding direct sales resources to support the O&P and international channels. As a reminder, Q1 revenue tends to be seasonally lower and expenses higher with payroll taxes and employee benefits resetting.

Speaker #1: This transition, we will continue to advertise direct to patient, but limit the growth in advertising spending while building out our Connect program and adding direct sales resources to support the OMP and international channels.

Speaker #1: As a reminder, first quarter revenue tends to be seasonally lower and expenses higher, with payroll taxes and employee benefits resetting in line with this historical seasonality.

David Henry: In line with this historical seasonality, Q1 revenue is expected to be in the range of $9 to 9.5 million. With sequentially lower revenue and operating expenses expected to be slightly higher sequentially, we expect Q1 operating loss to be higher than Q4 2025. For 2026, we expect revenue to be in the range of $43 million to 46 million. We expect gross margin to benefit from higher volume and lower cost of goods sold per unit, as well as a 2% Medicare price increase effective 1 January 2026. In addition, we expect to generate operating leverage and limit the growth of other operating expenses. We expect to limit the growth of OpEx to half the growth of revenue in 2026.

Dave Henry: In line with this historical seasonality, Q1 revenue is expected to be in the range of $9 to 9.5 million. With sequentially lower revenue and operating expenses expected to be slightly higher sequentially, we expect Q1 operating loss to be higher than Q4 2025. For 2026, we expect revenue to be in the range of $43 million to 46 million. We expect gross margin to benefit from higher volume and lower cost of goods sold per unit, as well as a 2% Medicare price increase effective 1 January 2026. In addition, we expect to generate operating leverage and limit the growth of other operating expenses. We expect to limit the growth of OpEx to half the growth of revenue in 2026.

Speaker #1: First quarter revenue is expected to be in the range of $9 to $9.5 million, with sequentially lower revenue, and operating expenses expected to be slightly higher sequentially.

Speaker #1: We expect first quarter operating loss to be higher than fourth quarter 2025. For 2026, we expect revenue to be in the range of $43 million to $46 million.

Speaker #1: We expect gross margin to benefit from higher volume and lower cost of goods sold per unit, as well as a 2% Medicare price increase effective January 1, 2026.

Speaker #1: In addition, we expect to generate operating leverage and limit the growth of other operating expenses. We expect to limit the growth of OpEx to half the growth of revenue in 2026, with gross margin expected to increase in 2026 and operating cost management.

David Henry: With gross margin expected to increase in 2026 and operating cost management, we expect a lower operating loss in 2026, and that cash burn or free cash flow will be reduced by roughly half in 2026 compared with 2025, driven by the higher revenue and gross margin, partially offset by investment in R&D and sales and marketing, as well as interest expense on our debt. We are committed to growing the top line while prudently investing in the business. With that overview, I'll turn the call back to Paul.

Dave Henry: With gross margin expected to increase in 2026 and operating cost management, we expect a lower operating loss in 2026, and that cash burn or free cash flow will be reduced by roughly half in 2026 compared with 2025, driven by the higher revenue and gross margin, partially offset by investment in R&D and sales and marketing, as well as interest expense on our debt. We are committed to growing the top line while prudently investing in the business. With that overview, I'll turn the call back to Paul.

Speaker #1: We expect a lower operating loss in 2026 , 2026 , and that cash burn or free cash flow will be reduced by roughly half in 2026 compared with 2025 , driven by the higher revenue and gross margin , partially offset by investment in R&D and sales and marketing , as well as interest expense on our debt .

Speaker #1: We are committed to growing the top line while prudently investing in the business. With that, I'll turn the call back to Paul.

Speaker #1: Thanks , Dave . Well , to summarize , in 2025 , we saw 26% revenue growth . We launched the Myo Pro two X .

Paul Gudonis: Thanks, Dave. Well, to summarize, in 2025, we saw a 26% revenue growth. We launched the MyoPro 2x. We invested in developing the next gen MyoPro 3. We generated several million dollars in orders from the new O&P channel. We re-grew the recurring revenue portion of our business by over 50%. We also expanded our addressable market by engaging patients right after their stroke while they're still in the rehab centers, in addition to the large prevalence population with chronic arm paralysis. For example, we just provided a MyoPro to a 36-year-old male who had a stroke last year and was referred to us by his therapist. With our contract with his Blue Cross Blue Shield plan, he was quickly approved for the device and received it within a year of the incidence of his stroke.

Speaker #1: We invested in developing the next gen Myo Pro three , regenerated several million dollars in orders from the new Owen Channel , and we grew the recurring revenue portion of our business by over 50% .

Speaker #1: We also expanded our addressable market by engaging patients right after their stroke . While they're still in the rehab centers . In addition to the large prevalence population with chronic arm paralysis , for example , we just provided a Myo probe to 36 year old had a stroke last year and was referred to us by his therapist with our contract with his Blue Cross Blue Shield plan .

Speaker #1: He was quickly approved for the device and received it within a year of the incidence of his stroke As we look ahead to this year , we plan to continue this go to market transition , reduce our customer acquisition costs and demonstrate that operating leverage with a lower cost structure .

Paul Gudonis: As we look ahead to this year, we plan to continue this go-to-market transition, reduce our customer acquisition costs, and demonstrate that operating leverage with a lower cost structure. While the untapped market for our product remains vast, with hundreds of thousands of potential patient candidates representing a large long-term opportunity, given our sales and marketing transition and the uncertainty around the behavior of the Medicare Advantage payers, we believe it's prudent to be conservative and guide to approximately 10% revenue growth with improvement in adjusted EBITDA. We're looking forward to updating you on our progress as the year unfolds. We're now ready to take your questions. Now, operator?

Speaker #1: While the untapped market for our product remains vast, with hundreds of thousands of potential patient candidates representing a large, long-term opportunity.

Speaker #1: Given our sales and marketing transition, and the uncertainty around the behavior of the Medicare Advantage payers, we believe it's prudent to be conservative and guide to approximately 10% revenue growth, with improvement in adjusted EBITDA.

Speaker #1: We're looking forward to updating you on our progress as the year unfolds. We're now ready to take your questions, Operator.

Speaker #2: Thank you . We will now begin the question and answer session . To ask a question , you may press star , then one on your touch tone phone .

Operator: Thank you. We will now begin the question-and-answer session. To ask a question, you may press star then 1 on your touch-tone phone. If you are 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'll pause momentarily to assemble our roster.

Speaker #2: If you are 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 two.

Speaker #2: And at this time, we'll pause momentarily to assemble our roster.

Speaker #1: While we're waiting for the first question.

Paul Gudonis: While we're waiting for the first question...

Operator: The first question. Go ahead, sir. I'm sorry.

Speaker #2: Go ahead. Sir, I'm sorry.

Operator: The first question. Go ahead, sir. I'm sorry.

Paul Gudonis: Well, yeah. Chuck, I was gonna say, while we're waiting for the first question, I do want to mention that we're planning to host another investor analyst day for an update on the business, and we'll provide details on this event at a later date. We hope to speak with many of you there. Okay, operator, let's go with the first question.

Speaker #1: , I was gonna say , while we're waiting for the first question , I do want to mention that we're planning to host another investor analyst Day for an update on the business , and we'll provide details on this event at a later date .

Speaker #1: We hope to speak with many of you there. Okay, operator, let's go with the first question.

Speaker #2: The first question will come from Chase Knickerbocker with Craig-Hallum. Please go ahead.

Operator: The first question will come from Chase Knickerbocker with Craig-Hallum. Please go ahead.

Speaker #3: Good afternoon . Thanks for taking the questions . Maybe just first , you noted progress on mile Connect , though . Cost per pipeline ad increased in the quarter .

David Henry: Good afternoon. Thanks for taking the questions. Maybe just first, you noted progress on MyoConnect, though cost per pipeline add, you know, increased in the quarter. Can you just detail what maybe drove that up in the quarter? Can you talk about kind of the plan on the direct side of the business to kind of get that acquisition cost down? Thanks. Thanks, Chase. The MyoConnect program is gaining traction. We're getting these referrals, and there's no advertising cost around that. Q4, as we've mentioned in the past, tends to have a higher advertising cost because you were competing with holiday advertising. There may be election cycles in some cases. Our pipeline ads, when you divide it by the, you know, into the advertising costs were higher than we like.

Chase Knickerbocker: Good afternoon. Thanks for taking the questions. Maybe just first, you noted progress on MyoConnect, though cost per pipeline add, you know, increased in the quarter. Can you just detail what maybe drove that up in the quarter? Can you talk about kind of the plan on the direct side of the business to kind of get that acquisition cost down? Thanks.

Speaker #3: Can you just detail what maybe drove that up in the quarter? Up, and then can you talk about kind of the plan on the direct side of the business to kind of get that acquisition cost down?

Speaker #3: Thanks

Paul Gudonis: Thanks, Chase. The MyoConnect program is gaining traction. We're getting these referrals, and there's no advertising cost around that. Q4, as we've mentioned in the past, tends to have a higher advertising cost because you were competing with holiday advertising. There may be election cycles in some cases. Our pipeline ads, when you divide it by the, you know, into the advertising costs were higher than we like.

Speaker #1: Thanks, Chase. So, the Mile Connect program is gaining traction. We're getting these referrals, and there's no advertising cost around that fourth quarter.

Speaker #1: As we mentioned in the past, it tends to have a higher advertising cost because they were competing with holiday advertising. There may be election cycles in some cases.

Speaker #1: So our pipeline ads , when you divide by the into the advertising costs , were higher than we like . And so what we've done is we brought on a new head of marketing .

David Henry: What we've done is, we've brought on a new head of marketing. She started at the end of last year. We brought on a new digital marketing agency in January. They've gotten started revamping our digital marketing approach and social media. We've introduced new TV creative for that advertising, and we've seen the cost per call go down. You know, we expect that all these different actions should take down that cost per pipeline ad over time, especially with more referrals where there's a zero advertising cost associated with it.

Paul Gudonis: What we've done is, we've brought on a new head of marketing. She started at the end of last year. We brought on a new digital marketing agency in January. They've gotten started revamping our digital marketing approach and social media. We've introduced new TV creative for that advertising, and we've seen the cost per call go down. You know, we expect that all these different actions should take down that cost per pipeline ad over time, especially with more referrals where there's a zero advertising cost associated with it.

Speaker #1: She started at the end of last year. We brought on a new digital marketing agency in January. They've gotten started revamping our digital marketing approach and social media.

Speaker #1: We've introduced new TV creative for that advertising. We've seen the cost per call go down, so we expect that all these different actions should take down that cost per pipeline ad over time, especially with more referrals where there's zero advertising cost associated with it.

Speaker #3: Have you seen any of that improvement so far as we've kind of come into Q1?

Chase Knickerbocker: Have you seen any of that improvement so far as we've kind of came into Q1?

David Henry: Well, we're not really discussing Q1 at this time. I will say, though, it is kind of a little bit early. I mean, the ad agency just really started, I would say, within the last six to eight weeks, you know, really starting to, you know, do their work. It's a little bit too early to talk about results at this time. I think we'll give you a better update when we report in May the Q1 results.

Speaker #1: Well , we're not . Really discussing Q1 at this time . I will say , though , it is kind of a little bit early .

Paul Gudonis: Well, we're not really discussing Q1 at this time. I will say, though, it is kind of a little bit early. I mean, the ad agency just really started, I would say, within the last six to eight weeks, you know, really starting to, you know, do their work. It's a little bit too early to talk about results at this time. I think we'll give you a better update when we report in May the Q1 results.

Speaker #1: I mean , the the ad agency just really started , I would say within the last 6 to 8 weeks , you know , really , really starting to do their work .

Speaker #1: So it’s a little bit too early to talk about results at this time. I think we’ll give you a better update when we report in May on first quarter results.

Speaker #3: Got it . Maybe just a couple more details on the OMP channel if you would . Can you give any sort of any sort of kind of KPIs around kind of ordering number like number of clinics that ordered in the quarter , you know , some sort of active , active account number .

Chase Knickerbocker: Got it. Maybe just a couple more details on the O&P channel, if you would. Can you give any sort of kind of KPIs around kind of number of clinics that ordered in the quarter, you know, some sort of active account number? Can you just give us the number of units through the O&P channel in Q4? Was ASP kind of solid there, Q3 to Q4? Thanks.

Speaker #3: And then can you just give us the number of units through the OMP channel in Q4? Was ASP kind of solid there?

Speaker #3: Q3 to Q4 , thanks

Speaker #1: Well , we've got a couple dozen only providers that have been trained , certified and are ordering the pros . And we had over $1 million of revenue in the quarter .

David Henry: Well, we've got a couple of dozen O&P providers that have been trained, certified, and they're ordering the MyoPros, and we had over $1 million of revenue in Q4. On an average price there, some 30-some units, Dave? It was about 36 O&P units in Q4.

Paul Gudonis: Well, we've got a couple of dozen O&P providers that have been trained, certified, and they're ordering the MyoPros, and we had over $1 million of revenue in Q4. On an average price there, some 30-some units, Dave?

Speaker #1: And so, on an average price there, some 30, some units stay. That was about 36 units in the fourth quarter.

Dave Henry: It was about 36 O&P units in Q4.

Speaker #3: Got it. And then maybe just last one from me, just on 2026 guidance. Can you just kind of detail what your assumptions are there for that U.S. OMP business, as far as what it'll contribute to that 2026 guidance?

Chase Knickerbocker: Got it. Maybe just, the last one for me, just on 2026 guidance, can you just, kind of detail what your assumptions are there for that US O&P business as far as what it'll contribute to that 2026 guidance?

Speaker #1: Well , we're expecting growth in the in the OMP channel and in international . That's what's going to drive the growth this year .

David Henry: Well, we're expecting growth in the O&P channel and in international. That's what's going to drive the growth this year. I think direct billing is gonna be relatively flat if you, if you look at it. That's because it's just we're too soon into these marketing changes to really, you know, have some conviction that and to say that direct billing is going to grow. You know, we're trying to limit the amount of spending on advertising because we're trying to. We've seen the results, you know, in the last half of 2025, and the cost per pipeline ads is unacceptably high.

Dave Henry: Well, we're expecting growth in the O&P channel and in international. That's what's going to drive the growth this year. I think direct billing is gonna be relatively flat if you, if you look at it. That's because it's just we're too soon into these marketing changes to really, you know, have some conviction that and to say that direct billing is going to grow. You know, we're trying to limit the amount of spending on advertising because we're trying to. We've seen the results, you know, in the last half of 2025, and the cost per pipeline ads is unacceptably high.

Speaker #1: I think direct billing is is going to be relatively flat . If you if you look at it and that's because it's just we're too soon into these marketing changes to really , you know , have some conviction that , you know , and to say that direct billing is going to grow and we're trying to limit the amount of spending on advertising because we are trying to we've seen the results , you know , in the last half of , of 2025 and the cost per pipeline as it is , is unacceptably high .

Speaker #1: And so, we have to—we need to see that being addressed before we'll decide to spend more money on advertising, beyond what we're already spending.

David Henry: We have to, you know, we need to see that being addressed before we'll decide to spend, you know, more money on advertising beyond what we're already spending. The MyoConnect program is kind of really ramping up. You know, there's some, you know, just uncertainties, some uncertainty as we wait to see how these marketing changes will flow through and to get some, you know, better visibility on what that channel might look like for 2026. We're working really hard to grow those recurring patient sources because as Paul mentioned, you know, the cost per pipeline ad there is minimal, and we're all about trying to increase operating leverage, reduce cash burn while at the same time growing revenue in 2026.

Dave Henry: We have to, you know, we need to see that being addressed before we'll decide to spend, you know, more money on advertising beyond what we're already spending. The MyoConnect program is kind of really ramping up. You know, there's some, you know, just uncertainties, some uncertainty as we wait to see how these marketing changes will flow through and to get some, you know, better visibility on what that channel might look like for 2026. We're working really hard to grow those recurring patient sources because as Paul mentioned, you know, the cost per pipeline ad there is minimal, and we're all about trying to increase operating leverage, reduce cash burn while at the same time growing revenue in 2026.

Speaker #1: So and then the connect program is kind of really ramping up . And so , you know , there's some , you know , just uncertainties , some uncertainty as we see as we wait to see how these marketing changes will flow through and to get some , you know , better visibility on what that , that channel might look like for 2026 .

Speaker #1: But we're working really hard to grow those recurring patient sources because, as Paul mentioned, the cost per pipeline ad there is minimal.

Speaker #1: And we're all about trying to increase operating leverage, reduce burn, while at the same time growing revenue in 2026.

Speaker #3: Understood . Thank you

Chase Knickerbocker: Understood. Thank you.

Speaker #2: The next question will come from Scott Henry with AGP. Please go ahead.

Operator: Your next question will come from Scott Henry with AGP. Please go ahead.

Speaker #4: Thank you, and good afternoon. Starting from the top of the funnel, pipeline ads—676—is a little lower than it's been in the past couple of quarters.

Scott Henry: Thank you. Good afternoon. Starting from the top of the funnel pipeline ads, 676 is a little lower than it's been in the past couple quarters. Do you see that as an aberration? Are you getting higher quality ads? You know, alternatively, should we see that bounce back towards some of the higher levels we saw in the middle of the year? Thank you.

Speaker #4: Do you see that as an aberration? Are you getting higher quality ads or, alternatively, should we see that bounce back towards some of the higher levels we saw in the middle of the year?

Speaker #4: Thank you .

Speaker #1: Yeah , I think the key will be the the success of Mile Connect to to generate some pipeline ads . We're not going to spend more on advertising .

David Henry: Yeah. I think a key will be the, you know, the success of MyoConnect to generate some pipeline ads. You know, we're not gonna spend more on advertising. We're gonna try to keep that spending relatively flat year-over-year. That's where the sources are going to come from. We did have, you're right, 676. It was a little bit lower. I will say, though, that we did shut down for about in the last 9 days or so of 2025. That did have a little bit of effect on pipeline ad generation. We had about 2 less weeks in the Q4 compared to the Q3.

Dave Henry: Yeah. I think a key will be the, you know, the success of MyoConnect to generate some pipeline ads. You know, we're not gonna spend more on advertising. We're gonna try to keep that spending relatively flat year-over-year. That's where the sources are going to come from. We did have, you're right, 676. It was a little bit lower. I will say, though, that we did shut down for about in the last 9 days or so of 2025. That did have a little bit of effect on pipeline ad generation. We had about 2 less weeks in the Q4 compared to the Q3.

Speaker #1: We're going to try to keep that spending relatively flat year over year. So that's where the sources are going to come from.

Speaker #1: We did have you're right , 676 . It was a little bit lower . I will say though , that we did shut down for about in the last nine days or so of 2025 .

Speaker #1: So that did have a little bit of effect on , on pipeline ad generation . We had about two less weeks in in the fourth quarter compared to the third .

Speaker #1: So, like I said, I think it's, you know, we're really looking to see the MyoConnect program gain some traction and try to bring more pipeline ads at a much reduced cost per pipeline ad here in 2026.

David Henry: Like I said, I think it's, you know, we're really looking to see the MyoConnect program gain some traction and try to bring more pipeline ads at a much reduced cost per pipeline ad here in 2026.

Dave Henry: Like I said, I think it's, you know, we're really looking to see the MyoConnect program gain some traction and try to bring more pipeline ads at a much reduced cost per pipeline ad here in 2026.

Speaker #4: Okay , we'll continue to track that . Also , the dropout rate , I think by my calculations , was around 40% . I guess that could change a little bit depending how you calculated it .

Scott Henry: Okay. We'll continue to track that. Also, the dropout rate, I think by my calculations, was around 40%. I guess that could change a little bit depending how you calculated it. A little bit higher, not dramatically higher than past quarters, but any comments on that rate?

Speaker #4: A little bit higher. Not dramatically higher than last quarter's, but any comments on that rate?

David Henry: This is the backlog drop rate, correct?

Speaker #1: This is the backlog drop rate. Correct?

Dave Henry: This is the backlog drop rate, correct?

Speaker #4: Yes .

Scott Henry: Yes.

Speaker #1: Yeah . It was about by my calculations , there's a little over a little over 20% .

David Henry: Yeah. It was about, by my calculations, it was a little over 20%.

Dave Henry: Yeah. It was about, by my calculations, it was a little over 20%.

Speaker #4: Okay . The trend should be the same depending I just backing it out of the reimbursement pipeline . If if you add all the ads and you subtract the units placed , you come up with a number .

Scott Henry: Okay. The trend should be the same. I'm just backing it out of the reimbursement pipeline. If you add all the adds and you subtract the units placed, you come up with a number.

Speaker #1: So you're talking about a pipeline drop rate, then?

David Henry: Okay. You're talking about a pipeline drop rate then?

Dave Henry: Okay. You're talking about a pipeline drop rate then?

Speaker #4: Yes .

Scott Henry: Yes.

Speaker #1: Okay . Yeah . I was I was referring to backlog . Sorry . No . And and and I haven't calculated the pipeline drop rate .

David Henry: Okay. Yeah, I was referring to backlog. Sorry.

Dave Henry: Okay. Yeah, I was referring to backlog. Sorry.

Scott Henry: Oh.

David Henry: I haven't calculated the pipeline drop rate, but so I'll take your word for it's around that. I mean, there's.

Dave Henry: I haven't calculated the pipeline drop rate, but so I'll take your word for it's around that. I mean, there's.

Speaker #1: So I'll take your word for it. Around that. I mean, there's a—

Scott Henry: It's a little bit higher than-

Speaker #4: Little bit .

Speaker #1: Higher than . Yeah . The overall pipeline is , you know , the pipeline did decrease and a lot of that was of drops .

David Henry: Yeah. Yeah, the overall pipeline, you know, the pipeline did decrease, and a lot of that was probably because of drops. There's been a lot of Medicare Advantage patients that have been accumulating in the pipeline that we're having, you know, they're making it hard on us to get authorized. As a result, a lot of them, you know, we're seeing a lot of dropouts as a result of that.

Dave Henry: Yeah. Yeah, the overall pipeline, you know, the pipeline did decrease, and a lot of that was probably because of drops. There's been a lot of Medicare Advantage patients that have been accumulating in the pipeline that we're having, you know, they're making it hard on us to get authorized. As a result, a lot of them, you know, we're seeing a lot of dropouts as a result of that.

Speaker #1: There's been a lot of Medicare Advantage patients that have been accumulating in the pipeline that we're having. You know, they're making it hard on us to get authorized.

Speaker #1: And as a result , a lot of them , we're seeing a lot of drop outs as a result of that . On the other hand , the other hand , Scott , where we are seeing is especially from the referring therapists , because we've encouraged them to check insurance and so on .

Scott Henry: Okay.

Paul Gudonis: On the other hand, Scott, what we are seeing is, especially from the referring therapist, because we've encouraged them to, you know, check insurance and so on, we're seeing more Medicare-qualified patients coming to us from that referral channel, which means, there's a, you know, a higher probability that they will get approved for their MyoPro.

Speaker #1: We're seeing more Medicare qualified patients coming to us from that referral channel , which means there's a a higher probability that they will get approved for their Myo Pro .

Speaker #4: Okay . Thank you for the color and the final question . Gross margins were very strong in the quarter . And you mentioned they could get even stronger , at least in the press release from that kind of 68 , 69% level .

Scott Henry: Okay. Thank you for the color. The final question, gross margins were very strong in the quarter, and you mentioned, they could get even stronger, at least in the press release. From that kind of 68%, 69% level, do you think that could be a new baseline? Kinda how high can that go? Because it's obviously a pretty good number for the quarter.

Speaker #4: Do you think that could be a new baseline? And how high can that go? Because that's obviously a pretty good number for the quarter.

Speaker #1: Yeah , it will fluctuate with volume . So I would expect first quarter gross margin will be lower than than fourth quarter just because of the less units absorbing absorbing overhead .

David Henry: It will fluctuate with volume, so I would expect Q1 gross margin will be lower than Q4 just because of the, you know, less units absorbing overhead. As we go through the year, you know, the guidance implies increasing revenues as we go through the quarters of 2026. That will help the growth margin in addition to, you know, we're working on, about a, as we mentioned actually last Analyst Day, around 200 basis points of gross margin improvement from various activities. Paul mentioned the Mobile app that will be. We expect that to be released here in the coming weeks.

Dave Henry: It will fluctuate with volume, so I would expect Q1 gross margin will be lower than Q4 just because of the, you know, less units absorbing overhead. As we go through the year, you know, the guidance implies increasing revenues as we go through the quarters of 2026. That will help the growth margin in addition to, you know, we're working on, about a, as we mentioned actually last Analyst Day, around 200 basis points of gross margin improvement from various activities. Paul mentioned the Mobile app that will be. We expect that to be released here in the coming weeks.

Speaker #1: But as we go through the year, the guidance implies increasing revenues as we go through the quarters of 2026. That will help with margin.

Speaker #1: In addition to , you know , we're we're working on about a as we mentioned , last year , last Analyst day around 200 basis points of of gross margin improvement from various activities .

Speaker #1: Paul mentioned the mobile app that will be expect that to be released here in the in the coming weeks . That will help , you know , take out about 4 to $500 of of cost out of the mile pro because we're not providing a laptop anymore .

David Henry: That will help, you know, take out about $400 to $500 of cost out of the MyoPro because we're not providing a laptop anymore. There's other cost reduction projects that we're working on as well. You know, so I think that we're trying to get that gross margin back up into the 70% range here by the time we exit 2026.

Dave Henry: That will help, you know, take out about $400 to $500 of cost out of the MyoPro because we're not providing a laptop anymore. There's other cost reduction projects that we're working on as well. You know, so I think that we're trying to get that gross margin back up into the 70% range here by the time we exit 2026.

Speaker #1: And there's other there's other cost reduction projects that we're working on as well . So so I think that we're trying to get that gross margin back up into the , into the 70% range here .

Speaker #1: By the time we exit 2026.

Speaker #4: Okay, great. Thank you for taking the questions.

Scott Henry: Okay, great. Thank you for taking the questions.

David Henry: Mm-hmm.

Dave Henry: Mm-hmm.

Speaker #2: The next question will come from Jeremy Perlman with Maxim Group. Please go ahead.

Operator: The next question will come from Jeremy Pearlman with Maxim Group. Please go ahead.

Speaker #5: Thank you for taking my question . First one is related to the AMP clinics . I think if I recall correctly , you mentioned in last year's Investor Day that you had you were planning on having roughly 200 clinics trained , certified , and to be able to deliver the Myo Pro's .

Jeremy Pearlman: Thank you for taking my question. First one is related to the O&P clinics. I think if I recall correctly, you mentioned in last year's Investor Day that you were planning on having roughly 200 clinics trained, certified, and to be able to deliver the MyoPros in 2028. Is that still, you know, a goal that's on track? You know, how fast is this O&P network expanding?

Jeremy Perlman: Thank you for taking my question. First one is related to the O&P clinics. I think if I recall correctly, you mentioned in last year's Investor Day that you were planning on having roughly 200 clinics trained, certified, and to be able to deliver the MyoPros in 2028. Is that still, you know, a goal that's on track? You know, how fast is this O&P network expanding?

Speaker #5: But in 2028 , is that still , you know , a goal that's on track ? How fast is this OMP network expanding ?

Speaker #1: You know , that is still a goal of ours . We have a number of clinics that are earlier stage . You know , where they're just getting trained .

Paul Gudonis: You know, that is still a goal of ours. You know, we have a number of clinics that, you know, they're earlier stage, you know, where they're just getting trained, they're building their patient pipelines, they're getting the reimbursement, and so then they will turn into orders. We also have a very robust national account programs 'cause there's been consolidation in the industry, where there's been a number of players that own 40 to 50, 80 or so clinics, and we've been doing national account planning with these entities, where they're starting out with a couple of their regions, piloting it, getting some good results, and then we'll see greater rollout. I think, look, this is the most profitable new product opportunity to address a big unmet need.

Speaker #1: They're building their patient pipelines . They're getting the reimbursement . And so then they will turn into orders . We also have a very robust national account programs , because there's been consolidation in the industry where there's been a number of players that own 40 to 50 , 80 or so clinics .

Speaker #1: And we've been doing national account planning with these entities where they're starting out with a couple of their regions piloting it , getting some good results , and then we'll see greater rollouts .

Speaker #1: So I think , look , this is the most profitable new product opportunity to be address a big unmet need . So I'm bullish about the own channel adopting the Myo Pro into their clinical treatment plans

Paul Gudonis: I'm very bullish about the O&P channel adopting the MyoPro into their clinical treatment plans.

Speaker #5: Okay . Great . And then switching maybe to reimbursement cycle times I think again in the past you've mentioned numerous times it's roughly six months I think from , you know , when a patient reaches out until they actually you actually get payment .

Jeremy Pearlman: Okay, great. You know, switching maybe to reimbursement cycle times, I think again, in the past you've mentioned numerous times it's roughly 6 months, I think, from, you know, when a patient reaches out until you actually get payment. Now that you're signing up more of these payers, does that reimbursement, you know, cycle time, are you seeing improvements or it's still roughly that 6-month timeframe?

Jeremy Perlman: Okay, great. You know, switching maybe to reimbursement cycle times, I think again, in the past you've mentioned numerous times it's roughly 6 months, I think, from, you know, when a patient reaches out until you actually get payment. Now that you're signing up more of these payers, does that reimbursement, you know, cycle time, are you seeing improvements or it's still roughly that 6-month timeframe?

Speaker #5: Now that you're signing up , more of these payers does that reimbursement . Cycle time . Are you seeing improvements or are still roughly that six months time frame ?

Speaker #1: Well , I think the , the , the bigger improvement is coming from the fact that we're Medicare is now , you know , roughly half of our revenues and Medicare reimburses pretty quickly .

David Henry: Well, I think the bigger improvement is coming from the fact that you know, Medicare is now, you know, roughly half of our revenues, and Medicare reimburses pretty quickly. You know, we can generally get, we can get paid in, you know, 3 weeks, and we're recording revenue on delivery. You know, the most, I would say the majority of our revenues are occurring at delivery, though I will say that one of the things that we see with the backlog here is that as we have more contracts and the payer base broadens, not only are we seeing, you know, contracted payers, you know, authorized, but also non-contracted payers.

Dave Henry: Well, I think the bigger improvement is coming from the fact that you know, Medicare is now, you know, roughly half of our revenues, and Medicare reimburses pretty quickly. You know, we can generally get, we can get paid in, you know, 3 weeks, and we're recording revenue on delivery. You know, the most, I would say the majority of our revenues are occurring at delivery, though I will say that one of the things that we see with the backlog here is that as we have more contracts and the payer base broadens, not only are we seeing, you know, contracted payers, you know, authorized, but also non-contracted payers.

Speaker #1: We can generally get we can get paid in three weeks . And we're recording revenue on delivery . The most , I would say the majority of our revenues are occurring at delivery , though I will say that one of the things that we see with with the backlog here is that as the as we have more contracts and the payer base broadens , not only are we seeing contracted payers , you know , authorized , but also non-contracted payers .

Speaker #1: And we're actually seeing a bit of an increase in the non-contracted payers authorizing the Myo Pro , which means we're waiting until payment to get revenue .

David Henry: We're actually seeing a bit of an increase in the non-contracted payers, authorizing the MyoPro, which means we're waiting till payment to get revenue. We're starting to see a little bit of that. It's sort of a. It's good news that there are, you know, a broader base of payers now reimbursing for the device.

Dave Henry: We're actually seeing a bit of an increase in the non-contracted payers, authorizing the MyoPro, which means we're waiting till payment to get revenue. We're starting to see a little bit of that. It's sort of a. It's good news that there are, you know, a broader base of payers now reimbursing for the device.

Speaker #1: So we're starting to see a little bit of that . So it's sort of a it's good news that there are , you know , a broader base of payers .

Speaker #1: Now reimbursing for the device.

Speaker #5: Okay , great . And just last question from from us , I might have missed this earlier in the call , but what percentage of the pipeline Ed was from this new recurring referral sources as opposed to , you know , maybe some of the direct , direct in the past ?

Jeremy Pearlman: Okay, great. Just last question from us. You know, what percentage of the pipeline add was from this new recurring referral sources as opposed to, you know, maybe some of the direct in the past? Also, do you have a target goal percentage of, you know, how you wanna see that breakdown in the future?

Jeremy Perlman: Okay, great. Just last question from us. You know, what percentage of the pipeline add was from this new recurring referral sources as opposed to, you know, maybe some of the direct in the past? Also, do you have a target goal percentage of, you know, how you wanna see that breakdown in the future?

Speaker #5: And also, do you have a target goal percentage of how you want to see that breakdown in the future?

David Henry: The pipeline adds were about 10% of the pipeline adds and about 10% of the orders were from referrals in the Q4. In terms of the way we're thinking about what success might look like here in the near term is we're looking to get the revenues from recurring sources to approach half of our revenues here by the end of 2026. I think that's the near term objective that we're focused on.

Speaker #1: The pipeline has about 10% of the pipeline adds, and about 10% of the orders were from referrals in the first quarter or in the fourth quarter.

Dave Henry: The pipeline adds were about 10% of the pipeline adds and about 10% of the orders were from referrals in the Q4. In terms of the way we're thinking about what success might look like here in the near term is we're looking to get the revenues from recurring sources to approach half of our revenues here by the end of 2026. I think that's the near term objective that we're focused on.

Speaker #1: In terms of the way , the way we're thinking about what that what success might look like here in the near term is we're we're looking to get the revenues from recurring sources to get to approach half of our revenues here by the end of 2026 .

Speaker #1: I think that's the near-term objective that we're focused on.

Speaker #5: Okay . Thank you very much for taking my questions . I'll hop back into Q

Jeremy Pearlman: Okay, thank you very much for taking my questions. I'll hop back into you.

Jeremy Perlman: Okay, thank you very much for taking my questions. I'll hop back into you.

Speaker #2: The next question will come from Sean Lee with H.C. Wainwright . Please go ahead .

Operator: Your next question will come from Sean Lee with H.C. Wainwright. Please go ahead.

Speaker #4: Hey , good afternoon , guys , and thanks for taking our questions . First on the German market . It's great to see that the group end of last year , I was just wondering if you could provide some color on what were the main drivers behind this growth and how do you expect that market to go in 2026 .

Sean Lee: Hey, good afternoon, guys. Thanks for taking our questions. First on the German market, it's great to see that it grew really well towards the end of last year. I was just wondering if you could provide some color on what were the main drivers behind this growth and how do you expect that market to grow in 2026?

Speaker #1: I'm sorry, you've cut out a little bit. Which market were you referring to? International?

David Henry: Which. I'm sorry, you cut out a little bit. Which market were you referring to? International?

Dave Henry: Which. I'm sorry, you cut out a little bit. Which market were you referring to? International?

Sean Lee: Germany market, yes.

Speaker #4: Markets

David Henry: Well, Germany is a large market, you know, with over 80 million population, 1% prevalence. You're talking about 800,000 prevalence population plus, again, all these incidences. Our team has done a good job recruiting a number of O&P practices around the country there. We've gotten very good social court rulings. Many statutory health insurance companies will pay for the MyoPro. We don't face the same reimbursement issues there in Germany as we do in the US. That's why it's a very good market, grew over 40% and we're continuing to invest in scaling that operation.

Dave Henry: Well, Germany is a large market, you know, with over 80 million population, 1% prevalence. You're talking about 800,000 prevalence population plus, again, all these incidences. Our team has done a good job recruiting a number of O&P practices around the country there. We've gotten very good social court rulings. Many statutory health insurance companies will pay for the MyoPro. We don't face the same reimbursement issues there in Germany as we do in the US. That's why it's a very good market, grew over 40% and we're continuing to invest in scaling that operation.

Speaker #1: Germany is a large market with over 80 million population , 1% prevalence . You're talking about 800,000 prevalence population plus . Again , all these incidences , our team has done a good job recruiting a number of owned practices around the country there .

Speaker #1: And we've gotten very good social court rulings. So, many statutory health insurance companies will pay for the MyoPro. So we don't face the same reimbursement issues.

Speaker #1: There in Germany, as we do in the US. So that's why it's a very good market, grew over 40%, and we're continuing to invest in scaling that operation.

Sean Lee: Great. Thanks for that. My second question is on the randomized control study that's going on in University of Utah. If this study is successful, how will you use this data in your commercial efforts, and where do you think it will help the most?

Speaker #4: Great . Thanks for that . My second question is on the randomized control study that's going on at University of Utah . So if this study is successful , how will you use this data in your commercial efforts ?

Speaker #4: And where do you think it will help the most?

Speaker #1: Okay. Well, the good news is that the IRB was just approved for this trial. It's an RCT. Patients with Aminopro versus those that don't get Myopro as the control group.

David Henry: Well, the good news is that the IRB was just approved for this trial. It's an RCT, patients with MyoPro versus those that don't get a MyoPro as a control group. We should start seeing the first readouts by the end of this year. Our plan is to use that, like we've used the other research, to basically convince more payers that they should be covering the cost of the MyoPro because it's not experimental, it's not investigational, and it is medically reasonable and necessary. That's our plan is, that will just reinforce the research that's already been published, that's been accepted by CMS and many other payers, just like this new Elevance agreement we entered into and announced today.

Dave Henry: Well, the good news is that the IRB was just approved for this trial. It's an RCT, patients with MyoPro versus those that don't get a MyoPro as a control group. We should start seeing the first readouts by the end of this year. Our plan is to use that, like we've used the other research, to basically convince more payers that they should be covering the cost of the MyoPro because it's not experimental, it's not investigational, and it is medically reasonable and necessary. That's our plan is, that will just reinforce the research that's already been published, that's been accepted by CMS and many other payers, just like this new Elevance agreement we entered into and announced today.

Speaker #1: We should start seeing the first readouts by the end of this year . And our plan is to use that like we've used the other research to basically convince more payers that they should be covering the cost of Myo Pro , because it's not experimental , it's not investigational , and it is medically reasonable and necessary .

Speaker #1: So that's our plan. It's that we'll just reinforce the research that's already been published, that's been accepted by CMS and many other payers, just like this new agreement we entered into and announced today.

Speaker #4: Oh , fantastic . That's very helpful . Our last question is on the R&D efforts for mild three . So could you provide some timeline for the 3.0 model ?

Sean Lee: Oh, fantastic. That's very helpful. Our last question is on the R&D efforts for MyoPro 3. Could you provide some timeline for the 3.0 model, and what are the primary clinical or manufacturing advantages of the 3.0 versus the 2x?

Speaker #4: And what are the primary clinical or manufacturing advantages of the 3.0 versus the Two X?

Speaker #1: Well , this will be a next generation platform . We are revamping everything about the Myo Pro from the the chip that's in the device .

David Henry: Well, this will be a next generation platform. We are revamping everything about the MyoPro from the chip that's in the device, the software that's there, the sensing systems, the orthotic materials, the hand grasp capability, elbow motor, harness. It's a total redo of the MyoPro to provide more functional benefits for the patients. It'll be customizable like the current one is, but just provide more function, comfort. Hope we get even greater market adoption because of it.

Dave Henry: Well, this will be a next generation platform. We are revamping everything about the MyoPro from the chip that's in the device, the software that's there, the sensing systems, the orthotic materials, the hand grasp capability, elbow motor, harness. It's a total redo of the MyoPro to provide more functional benefits for the patients. It'll be customizable like the current one is, but just provide more function, comfort. Hope we get even greater market adoption because of it.

Speaker #1: The software that's there , the sensing systems , the orthotic materials , the hand grasp capability , elbow motor harness . So it's a total redo of the Myo Pro to provide more functional benefit for the patients .

Speaker #1: It will be customizable like the current one is, but just provide more function, comfort, and hopefully get even greater market adoption because of it.

Speaker #4: Excellent. Thank you again for taking our questions. That's all we have.

Sean Lee: Excellent. Thank you for, again, for taking our questions. That's all I have.

Speaker #2: The next question will come from Edward Wu with Obsidian Capital. Please go ahead.

Operator: The next question will come from Edward Wu with Ascendiant Capital. Please go ahead.

Speaker #6: Yeah . Thanks for taking my questions . I was questioning in terms of the as you guys continue to grow international , what's the gross margin percentage in international compared to domestic , and what is your operating leverage opportunity ?

Edward Wu: Yeah, thanks for taking my question and congratulations. I was questioning in terms of as you guys continue to grow international, what's the gross margin percentage in international compared to domestic, and what is your operating leverage opportunity? Thank you.

Speaker #6: Thank you. Yeah, so the

David Henry: I've often said that, in terms of the ASPs, the international business has the second highest ASP compared to the, you know, compared to the, like, Medicare allowable here in the US. The gross margin will be a little bit lower on international. If we're at about a 68% gross margin in Q4, international will be a little bit lower than that.

Speaker #1: I've often said that in terms of the the ASPs , the international business is has the second highest ASP compared to the , you know , compared to like the Medicare allowable here in the US .

Dave Henry: I've often said that, in terms of the ASPs, the international business has the second highest ASP compared to the, you know, compared to the, like, Medicare allowable here in the US. The gross margin will be a little bit lower on international. If we're at about a 68% gross margin in Q4, international will be a little bit lower than that.

Speaker #1: And so the gross margin will be a little bit lower on international. So, if we're at about a 68% gross margin in the fourth quarter, international will be a little bit lower than that.

Speaker #6: And how much leverage do you have in the model to increase it as your sales grow?

Edward Wu: How much leverage do you have in the model to increase it as your sales grow?

Speaker #1: I think you know , all the manufacturing is here in the US . And so as the as we put more volume into the into the facility here , you know , the , gross margin in Germany will benefit just as the , you know , the , the overall company gross margin benefits

David Henry: I think, you know, all the manufacturing is here in the US, and so as we put more volume into the facility here, you know, the gross margin in Germany will benefit just as the overall company gross margin benefits.

Dave Henry: I think, you know, all the manufacturing is here in the US, and so as we put more volume into the facility here, you know, the gross margin in Germany will benefit just as the overall company gross margin benefits.

Speaker #6: Great. Well, thanks for answering my questions, and I wish you guys good luck. Thank you.

Edward Wu: Great. Well, thanks for answering my questions, and I wish you guys good luck. Thank you.

Speaker #1: Thank you . Editor

David Henry: Thank you, Ed.

Dave Henry: Thank you, Ed.

Speaker #2: Again if you have a question please press star . Then one . And this will conclude our question and answer session . I would like to turn the conference back over to Mr. Paul Gudonis for any closing remarks .

Operator: Again, if you have a question, please press star then one. This will conclude our question and answer session. I would like to turn the conference back over to Mr. Paul Gudonis for any closing remarks. Please go ahead.

Speaker #2: Please go ahead .

Speaker #1: Well , thanks . Operator . Well , the actions we've taken over the last 6 to 9 months have already demonstrated progress for achieving our goals of creating a growing , profitable company .

Paul Gudonis: Well, thanks, operator. Well, the actions we've taken over the last 6 to 9 months have already demonstrated progress for achieving our goals of creating a growing profitable company, addressing this large unmet need of chronic arm paralysis. We're planning for a record number of MyoPro orders this year with a growing contribution from these recurring patient sources. We expect to lower our customer acquisition costs with a new approach to digital and TV advertising and the shift to the new O&P and rehab hospital channels. Our lowered cost structure and these projects to reduce our manufacturing costs should result in improvements in our gross margin. We continue to innovate in product development to maintain our market leadership position. Thank you all for your questions and your interest in Myomo. Have a nice evening.

Speaker #1: Addressing this large unmet need of chronic arm paralysis, we're planning for a record number of orders this year, with a growing contribution from these recurring patient sources.

Speaker #1: We expect to lower our customer acquisition costs with a new approach to digital and TV advertising, and the shift to the new OP and rehab hospital channels.

Speaker #1: Our lowered cost structure in these projects to reduce our manufacturing costs should result in improvements in our gross margin, and we continue to innovate in product development to maintain our market leadership position.

Speaker #1: Well, thank you all for your questions and your interest in Myomo. Have a nice evening.

Operator: The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.

Q4 2025 Myomo Inc Earnings Call

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