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01/11 16:21
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
Despite some positive developments, such as operational efficiencies and Medicare revenue growth, the earnings report reflects mixed signals. Revenue decline, increased GAAP operating expenses due to goodwill impairment, and lack of clear guidance on margin improvements counterbalance the positives. The Q&A further highlights concerns about tariff impacts, unclear margin improvements, and lowered guidance despite expected revenue growth. These mixed signals suggest a neutral market reaction.
Revenue $5.7 million in Q2 2025, a decrease of $1 million or about 15% year-over-year from $6.7 million in Q2 2024. The decline was attributed to lower sales in traditional products and services and timing of deliveries to international distributors.
Revenue from Traditional Products and Services $2.5 million in Q2 2025, a decrease of $600,000 or 19% year-over-year from $3.1 million in Q2 2024. The prior year included $700,000 of Medicare-related revenue recognized for submissions made in 2023 and Q1 2024. Excluding this, Medicare-related sales grew year-over-year.
Revenue from AlterG Products and Services $3.2 million in Q2 2025, down from $3.6 million in Q2 2024. The decline was primarily due to the timing of deliveries to international distributors.
Gross Profit (GAAP) $2.5 million or 43.9% of revenue in Q2 2025, compared to $2.8 million or 41.1% in Q2 2024. The change reflects the absence of a one-time benefit from Medicare-related revenue recognized in Q2 2024.
Gross Profit (Non-GAAP) $2.5 million or 44% of revenue in Q2 2025, compared to $3.1 million or 46.9% in Q2 2024. The year-over-year change reflects the absence of a one-time benefit from Medicare-related revenue recognized in Q2 2024.
Operating Expenses (GAAP) $9.1 million in Q2 2025, compared to $7.2 million in Q2 2024. The increase was largely driven by a $2.8 million goodwill impairment charge due to a significant decline in share price.
Operating Expenses (Non-GAAP) $6 million in Q2 2025, compared to $6.9 million in Q2 2024. The decrease was due to greater efficiency in reimbursement activities, marketing and sales operations, and lower R&D spending.
Operating Loss (GAAP) $6.6 million in Q2 2025, compared to $4.4 million in Q2 2024. The increase was driven by the goodwill impairment charge.
Operating Loss (Non-GAAP) $3.5 million in Q2 2025, compared to $3.7 million in Q2 2024. The improvement reflects operational efficiencies and cost management.
Cash Burn $3.9 million in Q2 2025, down from $5.6 million in Q2 2024 and $5.5 million in Q1 2025. The improvement was driven by operational efficiencies and facility consolidations.
ReWalk 7 Personal Exoskeleton: Achieved FDA clearance in March 2025. Features include improved battery life, push-button control, seamless stair curb activation, and cloud connectivity. Over 20 units installed in the U.S. with positive feedback. CE clearance for Europe is in final stages.
Medicare and commercial insurer wins: Expanded payer base for ReWalk Personal Exoskeleton. Partnership with CorLife accelerated lead pipeline and processing timelines for workers' compensation claims. Recent ruling affirmed ReWalk as reasonable and necessary for medical beneficiaries.
Germany operations: Operating profitably with strong patient community. Expanded AlterG sales through targeted strategies and local market innovation. Germany serves as a proving ground for global market strategies.
In-house manufacturing transition: Transitioned to in-house manufacturing for ReWalk Personal Exoskeleton, resulting in cost savings, improved quality control, and greater production flexibility.
Facility consolidation: Closed AlterG manufacturing facility in Fremont, California, as part of cost-saving measures.
Three core growth pillars: Focused on accelerating commercial adoption, portfolio diversification, and operational excellence. Leveraging payer expansion, channel distribution, and AI integration to improve efficiency and expand market reach.
Revenue Decline: Year-over-year revenue decreased by $1 million (15%) in Q2 2025 compared to Q2 2024, primarily due to lower sales of traditional products and services and timing of deliveries to international distributors.
Medicare Collection Delays: Payments from Medicare administrative contractors are not occurring on a regular cycle, leading to slower-than-expected collections and impacting cash flow.
Inventory Increase: Inventory levels increased due to the transition to in-house manufacturing and simultaneous production of ReWalk 6 and ReWalk 7, tying up resources and increasing costs.
Goodwill Impairment: A $2.8 million goodwill impairment charge was triggered by a significant decline in share price, creating a gap between market value and book value.
Cash Position: The company has sufficient cash to fund operations only into Q4 2025, necessitating consideration of debt and equity opportunities to support operations and growth plans.
Operational Cash Usage: Cash usage remains higher than expected due to Medicare collection delays and increased inventory, despite operational efficiencies.
Regulatory Approvals: Awaiting CE clearance for ReWalk 7 in Europe, which delays broader market access and revenue generation.
Extended Revenue Cycles: Revenue cycles are inherently extended due to dependency on payer approvals and coverage decisions, slowing revenue realization.
Revenue Guidance for 2025: Lifeward expects full-year revenue in the range of $24 million to $26 million.
Non-GAAP Net Loss Guidance for 2025: The company projects a non-GAAP net loss in the range of $12 million to $14 million.
Revenue Growth Expectations: Revenue growth is expected to be gradual over the next few quarters, with meaningful acceleration weighted toward the back half of the strategic plan and beyond.
Operational Cash Usage: The company expects inventory levels to decline over time, improving gross margin and product quality. Operational efficiencies and cost management plans are being implemented to preserve resources.
Medicare Collections: Progress in Medicare payment processing times is expected in the second half of 2025.
Product Launch in Europe: The company is awaiting CE approval for the ReWalk 7 Personal Exoskeleton in Europe, with plans for a subsequent launch.
Pipeline Growth: The commercial pipeline for ReWalk products has grown for three consecutive quarters, with 130 qualified leads in the U.S. and 46 leads in Germany, including 34 active rentals expected to convert to sales within 3 to 6 months.
Cash Position: Lifeward has sufficient cash to fund operations into the fourth quarter of 2025 and is considering both debt and equity opportunities to support operations and growth plans.
The selected topic was not discussed during the call.
The earnings call highlights operational efficiencies and a strong pipeline, but concerns arise due to increased operating expenses and cash constraints. The Q&A reveals optimism in partnerships and revenue growth, yet lacks clarity on strategic execution. Despite the positive outlook, uncertainties in Medicare reliance and AlterG sales decline temper enthusiasm. The neutral rating reflects mixed signals, with potential growth balanced by financial and operational challenges.
Despite some positive developments, such as operational efficiencies and Medicare revenue growth, the earnings report reflects mixed signals. Revenue decline, increased GAAP operating expenses due to goodwill impairment, and lack of clear guidance on margin improvements counterbalance the positives. The Q&A further highlights concerns about tariff impacts, unclear margin improvements, and lowered guidance despite expected revenue growth. These mixed signals suggest a neutral market reaction.
The earnings call presents a mixed picture. Financial performance shows improvement in operating loss and gross margin, but revenue declined YoY. The Q&A reveals confidence in future growth, but uncertainties remain, especially with cash management and leadership transition risks. The lack of a shareholder return plan and ongoing financial challenges temper optimism. Positive aspects include improved margins and strategic partnerships, but these are offset by revenue decline and leadership risks, resulting in a neutral sentiment.
The earnings call reveals concerns over operational losses, declining margins, and a going concern qualification, which overshadow revenue growth. While product growth is anticipated, the significant operating losses and headcount reduction raise financial sustainability concerns. The Q&A highlights cautious guidance and uncertainty about new partnerships. Overall, negative sentiment due to financial health issues and lack of clear growth catalysts.
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