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Image source: The Motley Fool. Monday, Aug. 10, 2026 at 5:00 p.m. ET Investor Relations - Sam Bentzinger Chief Executive Officer - Sheri Dodd Chief Financial Officer - Elaine Birkemeyer Operator: Welcome, ladies and gentlemen, to the second quarter 2026 Earnings Conference Call for Tactile Medical. [Operator Instructions] Please note that this conference call is being recorded and will be available on the company's website for replay shortly. I would now like to turn the call over to Sam Bentzinger, Investor Relations at Gilmartin Group, for a few introductory comments. Please go ahead. Sam Bentzinger: Good afternoon and thank you for joining today's call. With me from Tactile's management team are Sheri Dodd, Chief Executive Officer, and Elaine Birkemeyer, Chief Financial Officer. Before we begin, I'd like to remind everyone that our remarks and responses to your questions today may contain forward-looking statements that are based on the current expectations of management and are not intended to be used to address the problems of the current inherent risks, and uncertainties. These could cause actual results to differ materially from those indicated, including those identified in the risk factor section of our annual report on Form 10-K, as well as our most recent 10-Q filing to be filed with the Securities and Exchange Commission. Such factors may be updated from time to time in our filings with the SEC, which are available on our website. We undertake no obligation to publicly update or revise our forward-looking statements as a result of new information, future events, or otherwise. This call will also include references to certain financial measures that are not calculated in accordance with generally accepted accounting principles or GAAP. We generally refer to these as non-GAAP financial measures. Reconciliations of those non-GAAP financial measures to the most comparable measures calculated and presented in accordance with GAAP are available in the earnings press release on the Investors Relations portion of our website. With that, I'll now turn the call over to Sheri. Sheri Dodd: Thanks, Sam. Good afternoon, everyone, and welcome to our Second Quarter 2026 Earnings Call. Here with me is Elaine Birkemeyer, our Chief Financial Officer. We delivered another strong quarter of execution in Q2, highlighted by continued strength in our lymphedema business and meaningful profitability expansion. Total revenue was $85.7 million, up 9% year-over-year, with lymphedema contributing $73.6 million, up 12% year-over-year. AffloVest contributed $12.1 million, a 7% decline year-over-year due to temporary inventory management dynamics among several of our large DME partners associated with the launch of our next-generation AffloVest system during the quarter. Importantly, on a trailing 12-month basis, AffloVest revenue remains up 32% year-over-year, underscoring the durability of the underlining growth trend, even as we work through this near-term dynamic, which I will touch on shortly. Our strong revenue performance was complemented by another quarter of meaningful profitability expansion. Gross margin improved 180 basis points year-over-year and adjusted -- 49% to $11.4 million, reflecting both operating leverage and disciplined execution across the business. We continue to be strategic and measured in our capital allocation, ending the second quarter with approximately $70 million in cash. Our cash balance sheet is strong, providing flexibility to invest in growth and return capital to shareholders over the short, medium, and long-term horizons. Based on our first half performance, we are updating our full year 2026 revenue guidance to a range of $360 million to $366 million. Within that outlook, we are projecting continued strength in revenue expectations for the lymphedema business while anticipating a more conservative view of the ordering patterns in our airway clearance business as some of our DME partners work through inventory as they convert to the next-generation AffloVest system. I will now review our second quarter performance by business line and provide updates on our ongoing strategic priorities. Elaine will then discuss our financial results in greater detail and provide additional perspectives on our outlook for the balance of 2026. Both the lymphedema market and our lymphedema business are healthy, and we are pleased to see the continued growth momentum, reflected in a 12% year-over-year revenue growth in Q2. As we have shared in the past, our sales organization calls on a variety of payor types, including vascular and oncology practices, lymphatic therapists, and the VA, each of which tends to serve different patient needs. As a result, our revenue mix across payor types, Medicare, commercial, and VA naturally reflects these points and is further influenced by the unique coverage policy dynamics. Since aligning our documentation criteria with the now stable Medicare NCD policy, we continue to see increasing volume of Flexitouch orders, driven in part by our large number of Medicare patients accessing advanced pump therapy more directly than was allowed under the previous LCD policy. That growth was partially offset by the April 13th Medicare prior authorization requirement, which introduced additional administrative steps into the order process and contributed to some near-term moderation in Medicare order volumes during the quarter, even as Flexitouch adoption itself continues to grow. While the time from order completion to shipment is now slightly longer for these patients, prior authorization approval rates and adjudication timelines have tracked in line with our expectations. We moved quickly to prepare for these requirements ahead of the April 13th effective date and entered the quarter well-positioned to execute the new prior authorization process. With a full quarter of experience now behind us, we expect the initial impacts of the implementation to moderate and operational efficiency to continue improving as our teams and the MACs gain familiarity with the new requirements. Our commercial revenue mix continues to demonstrate durable growth, fueled by patient demand, product therapy options, and sales execution across the provider and clinician channels. While the coverage policies are not uniform across commercial payors, we continue to see broad access to our therapies. Our efforts remain focused on reducing administrative burden and expanding patient access in areas where payor requirements or coverage limitations have not yet evolved to reflect the growing body of clinical evidence, society-based guidelines, and current standards of care. Regarding the VA, revenue performance here has less quarter-to-quarter variability due to the stable reimbursement environment and a more streamlined operating model. We continue to view the VA as a strategic long-term opportunity, given the breadth of providers and patient needs. To that end, we're really excited about our recently announced distribution agreement with ElastiMed to bring a novel compression therapy device specifically to veterans, active duty service members, and other beneficiaries served through the Department of Defense. We believe this opportunity will be an incremental growth contributor within the VA channel over time by expanding the range of treatment options available to patients and clinicians. I'll come back to this partnership in more detail shortly when we discuss our strategic initiatives. Turning now to airway clearance. As I mentioned, sales of AffloVest were down 7% year-over-year in the second quarter, reflecting temporary inventory management dynamics among several of our large DME partners associated with the launch of our next-generation AffloVest system during the quarter. As we work closely with the DMEs around the launch of our next-generation AffloVest system, we've learned of a few larger partners that had been carrying elevated AffloVest inventory levels. We expect this to moderate purchasing activity among these particular organizations as they work through existing inventory. As many of you know, this type of inventory management dynamic is common among DMEs. Based on our visibility today, we expect these inventory management dynamics to continue influencing ordering patterns throughout the third quarter, with purchasing activity beginning to normalize in the fourth quarter as their inventory levels rebalance. The underlining fundamentals of this business remain strong. The patient demand, coverage environment, and AffloVest competitive positions are favorable. AffloVest is a differentiated product in a market leadership position supported by strong DME partnerships and a large addressable market. On a trailing 12-month basis, AffloVest revenue has grown at a compound annual rate of approximately 28% over the past 2 years and remains up 32% year-over-year in Q2, again on a TTM basis. This underscores the durability of the underlining growth trend despite the near-term inventory management dynamics associated with the launch of our next-generation AffloVest system during the quarter. Importantly, airway clearance remains a profitable contributor to our business. We are confident that the recently launched next-generation AffloVest system will continue to solidify our category leadership position in high-frequency chest wall oscillation and remain the product of choice for DME partners, clinicians, and the patients they serve. Turning now to an update on LymphaTech. We believe this acquisition addresses 2 of the most important unmet needs in the lymphedema patient journey: earlier, more objective diagnosis and monitoring disease progression, and the ability to personalize therapy to a patient's specific clinical needs over time. Starting with diagnosis, lymphedema is a chronic progressive disease that's largely diagnosed and monitored today through clinician evaluation, including girth measurement and patient-reported symptoms. Inputs that are hard to standardize and unreliable for early detection. There are 20 million patients in the U.S. who have lymphedema but remain undiagnosed, and unlocking that population is a significant growth opportunity for us and more importantly, for patient care. LymphaTech's FDA-cleared platform addresses the undiagnosed patient issue directly, providing objective, quantitative assessment of limb volume and circumference and generating a clinical grade 3D model of the affected anatomy. This provides clinicians with a clear view of disease progression and gives patients a visual understanding of their own condition, which we believe strengthens engagement and supports more timely access to therapy. Today, LymphaTech is deployed as a Software-as-a-Service solution, primarily in oncology centers, where clinicians use it to establish patient baselines and monitor change over time. We see a larger opportunity ahead in expanding LymphaTech's role specifically as a diagnostic aid, helping close the gap for the millions of undiagnosed patients I just mentioned. As the market leader in this space, we would like to be the first to begin supporting these diagnostic needs of physicians and the complex patients they treat. To that end, we have submitted for an expanded indication as a diagnostic aid for lymphedema with an FDA expected approval in 2027. In parallel, we are advancing efforts to secure a Category III CPT code, which would establish a reimbursement pathway and support broader adoption over time. Looking ahead, LymphaTech also expands our R&D capabilities towards the second unmet need, integrating sensing and measurement directly into personalized therapy delivery, so treatment can be tailored to the patient's specific lymphatic care needs over time. We continue to advance integration activities with early clinician feedback reinforcing these key strategic opportunities we see ahead. And we'll provide additional updates as we make progress on commercialization, reimbursement, and product development initiatives. Our Q2 performance was anchored by continued execution of our 3 ongoing strategic priorities: improving access to care, expanding treatment options, and enhancing the lifetime patient value. Beginning with improving access to care, our stated focus has been on internal and external initiatives aimed at breaking down the barriers and friction points along the patient care journey. From an external perspective, improving market access conditions is supported by clinical evidence generation, guideline dissemination, and engagement with government and commercial payors. With respect to clinical evidence generation, today I'm pleased to share that the 6-month manuscript for our head and neck clinical evidence program has been published in the International Journal of Radiation Oncology, Biology, and Physics. This study, a 236-patient trial across 10 sites, represents the largest randomized control trial to date evaluating advanced pneumatic compression therapy for head and neck cancer-related lymphedema. The results showed that Flexitouch delivered patient-reported outcomes comparable to therapist-guided care in a treatment-naive population with a strong safety profile and durable benefit over the 6-month study period. We believe these findings are clinically meaningful because many head and neck lymphedema patients face barriers to accessing lymphatic massage therapy, including travel burden, cost, and delays in care. An at-home advanced pneumatic compression option can help address that access gap and support more timely treatment for this underserved patient population. With this publication, we will continue to focus on translating the evidence into broader provider awareness and payor engagement. Notably, the NCD policy language already allows advanced pump coverage for patients with head and neck lymphedema. Our efforts post-publication will now be centered on working with commercial payors to remove restrictive experimental and investigational designations so coverage policies can reflect the growing body of clinical evidence. We view this as a deliberate, evidence-driven effort to expand awareness, improve access to care, and support broader adoption over time. Next, on expanding treatment options, where we have an exciting update to highlight. In July, we announced an exclusive U.S. distribution agreement with ElastiMed to bring MyoSleeve to veterans, active duty service members, and other beneficiaries served through the Department of Defense. MyoSleeve is a discreet, wearable, non-pneumatic compression device for the lower leg, providing an additional treatment option for patients in the earlier stages of chronic swelling, where consistent therapy adherence is important for slowing disease progression. Compression therapy is not one-size fits all. Clinicians benefit from having a range of treatment options that can be matched to the patient's clinical needs, anatomy, lifestyle, and disease stage. The device is designed to integrate seamlessly into daily life. It can be worn beneath clothing, allowing patients to receive therapy while going about their normal activities, which provides a more discreet and flexible compression solution. Leveraging electroactive polymer technology, MyoSleeve delivers dynamic compression through the flexible bands that contract in sequence, all within a fully battery-powered design that requires no tubing, cords, or external controller. Importantly, the device can function in both active and passive compression modes, providing flexibility to support patient preferences while helping promote long-term therapy adherence and engagement. MyoSleeve expands our market-leading portfolio of lymphatic care solutions and is specifically a natural fit within the VA channel, where we have historically not offered a basic compression product. It is designed specifically for lower leg patients earlier in their care continuum who may not require foot or knee coverage or the advanced capabilities of a pneumatic compression device. As a result, we view MyoSleeve as complementary to, rather than a replacement for, our pneumatic compression therapies including Flexitouch. We plan to leverage our established VA relationships, reimbursement expertise, and patient support infrastructure to launch MyoSleeve. While adoption is expected to build over time, we believe the product increases our addressable patient population within the VA channel and further advances our strategy of delivering comprehensive solutions to patients across the lymphatic care continuum. We look forward to providing additional updates as we progress through commercialization. Finally, our third strategic priority of enhancing lifetime patient values. Consistent with previous updates, we are continuing our targeted care navigation work, designed to give patients clearer guidance earlier in the process and reduce administrative friction. We believe embedding this work in our referral-to-ship process will reduce patient leakage, enhance the patient experience, and over time reduce sales rep involvement in the order process, supporting both referral growth and operating leverage. With that, I'll now have Elaine review our Q2 financial results in more detail and provide an update on our outlook for 2026. Elaine Birkemeyer: Thanks, Sheri. Unless noted otherwise, all references to second quarter financial results are on a GAAP and year-over-year basis. Revenue and profitability exceeded our expectations during the quarter, driven by continued strength in our lymphedema business and disciplined execution across the organization. Total revenue in the second quarter increased by $6.8 million or 9% to $85.7 million, driven by continued strength in our lymphedema business. By product line, sales and rentals of lymphedema products, which includes our Flexitouch, Nimbl, and LymphaTech systems increased $7.7 million, or 12% to $73.6 million. And sales of our airway clearance products, which includes our AffloVest system, decreased $0.9 million, or 7%, to $12.1 million, reflecting temporary inventory management dynamics associated with the launch of our next-generation AffloVest system among a few DME partners during the quarter. Turning to profitability. Gross margin was 76.3% of revenue compared to 74.5% in the second quarter of 2025. The increase in gross margin was attributable primarily to lower manufacturing costs, stronger collections reflected in revenue, and favorable mix benefits. Second quarter operating expenses increased $3.8 million or 7% to $58.5 million, reflecting continued strategic investments to support long-term growth, including investments in our commercial organization, technology initiatives, and operational capabilities. The change in GAAP operating expenses reflected a $2.0 million increase in sales and marketing expenses, $0.5 million increase in research and development expenses, and a $1.3 million increase in reimbursement general and administrative expenses, including and primarily driven by strategic investments. Operating income increased $2.7 million or 67% to $6.8 million. Interest income decreased $0.3 million or 34% to $0.6 million due to our decreased cash position. Interest expense decreased $0.4 million or 95% to $19,000. Income tax benefit was $0.4 million compared to income tax expense of $1.3 million. Net income increased $4.6 million or 142% to $7.8 million or $0.34 per diluted share compared to $3.2 million or $0.14 per diluted share. Adjusted EBITDA increased 49% to $11.4 million compared to $7.7 million in the prior year period driven by revenue growth, gross margin expansion, and disciplined expense management. With respect to our balance sheet, we had $69.9 million in cash and cash equivalents and no outstanding borrowings at quarter end. This compares to $83.4 million in cash and no outstanding borrowings as of December 31, 2025. The decline in cash during the quarter primarily reflects the upfront payments made to allow ElastiMed to secure the exclusive distribution rights for MyoSleeve in the VA and Department of Defense. Share repurchases completed during the quarter under our repurchase program. Excluding new strategic uses of cash, we generated positive operating cash flow during the quarter, and our balance sheet continues to provide meaningful flexibility to invest in growth and return capital to shareholders. Moving to review of our 2026 outlook. For the full year 2026, we are updating your guidance and now expect total revenue in the range of $360 million to $366 million, representing growth of approximately 9% to 11% year-over-year. At the product line level, we continue to expect lymphedema revenue growth in the low double-digit range for the full year, while airway clearance revenue is now expected to be closer to flat year-over-year. This range reflects continued strength across our lymphedema business and a temporary impact of the inventory management dynamics within the airway clearance channel during the second and third quarters that Sheri discussed earlier. For modeling purposes for the full year 2026, we expect our GAAP gross margins to be 76% to 76.5%. Our GAAP operating expenses to increase 10% to 12% year-over-year as the annualized or sales organization investments and advance our tech-related investments throughout the year, net interest income of approximately $2.4 million, a tax rate of 28%, and a fully diluted weighted average share count of approximately 23 million shares. We continue to expect to generate adjusted EBITDA of approximately $49 million to $51 million in 2026. While we are pleased with our strong first-half profitability, maintaining your outlook reflects a balanced view of temporary airway clearance inventory dynamics, the Medicare prior authorization transition, and continued investment in strategic growth initiatives. Our adjusted EBITDA expectation assumes certain non-cash items, including stock compensation expense of approximately $8.6 million, intangible amortization of approximately $4.2 million, depreciation expense of approximately $3.3 million, litigation-related costs of approximately $1 million, and one-time acquisition related and integration cost of $1.3 million. With that, I'll turn the call back to Sheri for some closing remarks. Sheri? Sheri Dodd: Thank you, Elaine. We believe our second quarter top and bottom line results reinforce the strength and resilience of our business model. We are growing. Our profitability profile continues to improve, and we have the financial flexibility to continue to invest in opportunities that can further strengthen our long-term growth profile while maintaining a disciplined approach to execution. Our focus remains clear, improving access to care, broadening treatment options, and creating lifetime value through an enhanced patient experience. At scale, these strategies will drive growth through market leadership, market development, and operational excellence. Notably, LymphaTech expands our platform across the lymphedema care continuum, including upstream diagnosis and monitoring. The next-generation AffloVest system reinforces our commitment to innovation and airway clearance. And our MyoSleeve distribution agreement broadens our portfolio with an additional treatment option for veterans and active duty service members and their beneficiaries through the Department of Defense. Our clinical evidence and payor strategies will support broader access to care for underserved patient populations, and our order operations transformation will continue to unlock leverage and referral expansion. Tactile is well-positioned to generate sustainable, profitable growth, and deliver meaningful long-term value for our shareholders. I want to thank the Tactile Medical employees for all they do for patients, our clinical customer, and for each other. With that, operator, we'll now open the call for questions. Operator: [Operator Instructions] And our first question will come from Adam Maeder with Piper Sandler. Kyle Edward Winborne: This is Kyle Winborne on for Adam. I guess, maybe I'll start on lymphedema. The performance was good there in the quarter. And maybe on the prior authorization updates that you gave. Given the performance and the momentum, it seems like maybe it was -- some of the ability to navigate some of the turbulence there was offset maybe by some strength just in the underlying business momentum. But just curious because last quarter we had a lot of discussion about sales acceleration in Q1 and maybe some shift in revenue into Q3 from Q2 due to the prior authorization requirements. So just kind of curious if you could maybe quantify any shift in orders and revenue between the quarters just so we can kind of maybe get a sense of where normal order patterns are. Because being that it was so -- such a good quarter there, was it kind of just maybe these weren't as prevalent as feared or did your team's experience with this process kind of carry you through successfully? Sheri Dodd: So, a couple of things. Definitely, lymphedema was a primary driver of the upside, and we continue to see really strong execution across our commercial organization, which is both healthy referral trends. We have improved territory productivity, and then the continued NCD-driven Flexitouch adoption. Remember that we started to align our policy with that NCD change in November of last year. We added the additional reps, so we've got more referrals coming in, that productivity is happening, so all of these things were really contributing to that overall growth. For sure the Medicare prior auth, as we reported in Q1, did have a timing impact on when we thought those orders would flow through given there was more upfront administrative work. But that is starting to normalize more and more now. We're starting to see exactly what we expected to see, where the MACs are converging a bit more in terms of their adjudication policies. We were really proud of how our team stood up our capabilities, and we're seeing the MACs also starting to resource what they need on their side. So it really was a product of healthy referral trends, territory productivity, NCD-driven Flexitouch adoption, and what we expected to see on that prior auth on Medicare. Really, really pleased with the results on lymphedema. Kyle Edward Winborne: Okay, great. That's helpful. And then maybe just continuing in the lymphedema business with this new distribution agreement with ElastiMed. I wanted to just kind of get a better understanding of how this will fit into the business model and what we should expect for impact to our models. I understand it looks like there was a commitment to minimum purchase agreements, marketing and sales promotion. So should we expect maybe some added OpEx here from the agreement? Or given kind of your already established infrastructure, should this really just be more plug and play? And what could we expect from a revenue impact perspective? Sorry if I missed if there was kind of any timing here when we could expect contribution. Elaine Birkemeyer: So, I'll answer your last question first. So, we do see MyoSleeve as an incremental growth contributor within the VA channel over time, but we -- our current guidance does not assume any material contribution from MyoSleeve. So that answers the revenue side of your question. As it relates to OpEx, what we really like about this agreement is we are leveraging our existing infrastructure. So we already have the VA as a call point. We already have very talented reps. Of course, they call on all call points, but they already have relationships within the VA. They're already used to selling in multi-provider specialties within the VA with Flexitouch. The MyoSleeve now offers them another opportunity of going in with a more expansive portfolio, kind of using the same talent that we already have within our current sales force. So we're really excited to be leveraging the resources that we already have, which made the VA a really great starting point for that product introduction. Operator: And our next question will come from Ryan Zimmerman with BTIG. Ryan Zimmerman: Just on the airway clearance dynamics, I wonder if we could dig in a little farther there. I guess, why do the ordering patterns normalize in 4Q? What are you seeing right now in terms of inventory levels that need to kind of burn through, burn down? And when do we see the impact of the new AffloVest product start to kick in? Elaine Birkemeyer: From a dynamic standpoint, the not complicated -- in launching our next-gen kind of product, it really forces people our partners to take a look at overall inventory. And in planning for the launch of a new product, they identified, so then we also identified when they did, that we had more inventory sitting in some of those partners, so it was very limited, where they do need to burn down that inventory before they pick up on their normal patterns. We're aware of what that inventory looks like, and that has been built into our back half guidance. So that's why we're saying we believe that Q3, they'll start to burn through that inventory, and then starting in Q4, they'll start to pick back up on their overall ordering pattern. So we feel confident that we have good visibility now to what the current inventory is. We know what normal buying patterns are. This business can be a little bit lumpy on things we can't control, which would be like cold and flu seasonality, a little bit on patient affordability dynamics. But right now, everything is really stable with the reimbursement. It really is this temporary kind of one-time dynamic that's happening with the introduction of a new product. As it relates to Gen 6, or our next-generation product, our DMEs are really excited to be bringing this product to patients. Remember, there's no incremental reimbursement for this. This is just a better product on top of what was already the best product on the market. So it has size adjustability, which is great. It has -- it's even lighter than our current product. It remains still the only untethered vest that's out there, and now it offers connectivity. So our DME partners are excited to bring this to patients. They just need to burn through some inventory in a few number of our partners at a few of their branches, and then we'll be back off exactly where we want to be starting in Q4 with regular ordering patterns. Ryan Zimmerman: Okay. And just maybe to dig in a little bit farther on the guidance, Sheri and Elaine. I mean if you break down the contributions. I appreciate you gave the color for double-digit lymphedema growth, but I just want to, you know, dig in there. I mean, does that include any contribution from LymphaTech? And then, arguably, how much are you taking the airway clearance guidance down? If it's overall $1 million at the mid-point, is there any incremental contributions, say, from LymphaTech that are, maybe offsetting that incremental airway clearance revenue? Elaine Birkemeyer: Yes, so LymphaTech is already built into the overall guide. That's reflected when we talk about the health of the lymphedema business. But we'll say that, LymphaTech continues to be a really small portion of what is the broader lymphedema business growth for us. Again, that growth really on the back of having great referral trends. We'd love the momentum there. We'd love seeing the territory productivity. And then this NCD-driven change in alignment is really helping with our overall Flexitouch adoption. So all of that is really in the strengths of the lymphedema business, which is why we are confident that we're going to be delivering in that low double-digit on the AffloVest. That is just us knowing what we know right now, has been the philosophy of what's called the shot based on what we know right now, what we believe to be the ordering patterns back -- normalizing back in the back half of the year and that's why we just changed the top end but we held the bottom end of the overall guide. Ryan Zimmerman: Okay, fair enough. And I just sneak 1 tiny little question in. You said there's a near-term moderation in -- from Q2 in the lymphedema business just because of the prior auth requirement. Were you -- are you able to size that, Elaine, just as to what you may or may not make up as a result of that potentially in Q3? Elaine Birkemeyer: So I think the best way to look at it, if you take a look at, and you can see in our filing, the Medicare business was down in the quarter. That's reflective of kind of what we're talking about. That, typically we wouldn't have expected to kind of to see that. So I think what we're saying is that over time, we think that will start to normalize. And from a sequential perspective, I think we mentioned this before and it's holding that Q3 sequential growth is going to be kind of on that bigger side compared to years past, more similar to last year. When you think about we had that bigger step up there and that really is kind of that timing push that we're talking about from the Q2 to Q3 related to Medicare. Operator: [Operator Instructions] We'll go next to Brandon Vazquez with William Blair. Brandon Vazquez: I wanted to stick with AffloVest first. Is there any way you can talk a little bit about kind of the sell-through versus the sell-in to the channel? Just trying to get a better sense of end market demand? Is it still growing kind of in line with market? And can you just quantify it or even just talk about it a little bit? Elaine Birkemeyer: Sure. I mean, the good news about the AffloVest story here, and I know it may not seem like great news, but let's put this in context. This is a temporary dynamic that was driven from us introducing a new product. This is not uncommon in DMEs. Whenever they have a next-gen product coming in or a manufacturer is upgrading or kind of changing out of platform, they typically go back and they check to make sure what do they currently have so that they can determine what their buying patterns are. It's a forced function of launching a new product. And we're really excited for both patients as well as clinicians to be bringing good product. This is just an unfortunate outcome that comes with that, but again it's temporary and it's very contained to a small number of our largest DMEs. Overall from a market standpoint, nothing is changing. So we continue to see the market growing, there's more awareness of the disease state, and we already have the market-leading product and we're adding an even better product by the connectivity, the sizing adjustment, as well as being even lighter. So we feel very confident in this business. It's a great business for us. The patients are there. The clinicians are super excited about this next-gen product. It is a profitable product for us. It's a healthy part of our overall business, and we will get past this one-time temporary dynamic, again, triggered by the launch of a new product introduction. Brandon Vazquez: Got it. Okay. And then I'll ask maybe 2 like reimbursement questions or market access questions that I'll lump together here. The first one, you have the new 6-month head and neck data published. Congrats. What are kind of the next steps here? What are the timelines for us to be keeping a lookout for to improve market access on the private side? And then the other kind of market access question, if you could just talk a little bit more. I know you were using AI internally to kind of improve for kind of market access on the Medicare front, I think it was. Just talk a little bit there on how those AI efforts are going and kind of how those trends are going into the rest of the year. Elaine Birkemeyer: I like talking about both of these. So we're very excited to have that head and neck publication 6 months data finally in a great peer-reviewed journal, and eager to both have that in the hands of payors as well as clinicians so that they can see the benefit. Again, a Flexitouch versus usual care, and again, and this was in treatment-naive patients. These are patients who had never received even conservative care and showing the great Flexitouch benefit in outcomes and sustaining those outcomes at 2, 4, and 6 months is going to show a lot of benefit both from a payor's side as well as a clinician and a patient side. So we had already been engaging with payors to share with them the 2-month data that we had, letting them know that we were going to be having that 6-month manuscript. Now we have it. We're back in front of payors right now, and we're asking for 2 things. We're asking for immediate reconsideration of their current E&I policy. And then, if they don't agree to an immediate reconsideration, at least get it in the docket for when they do an update on their coverage policies. So that is going on right now, and we're having good discussions, and we really feel that the weight of this evidence is going to be very helpful. The thing I cannot control is their timing. We can help make a case for it. We can talk about it from a patient advocacy standpoint. We've got the data. It is supportive, but ultimately it is the payor's decisions on when they change that policy. And I'm saying when they change, because I'm expecting that they will change, but that timing is challenging. But we're moving on that fast. Just not expect payor coverage to change immediately. It does take time. But also wanted to do a reminder that the Medicare NCD already allows for head and neck patients to receive a product. So this is just in the commercial -- straight up commercial as well as Medicare MA plans that need to change their policy, but the commercial Medicare fee-for-service already allows for this path, and hopefully then the publication will just help drive that clinician awareness and identifying more patients. Your second question was on AI and operations. It's interesting. In this earnings call, we didn't discuss a lot on operations, and that's actually, hopefully, a positive. Our operations and the way we're adding AI and technology and our tech transformation is going really well. We continue to partner with AI companies looking for ways to streamline the work, take the friction points out of moving documents from the physician into the order management process, and those continue to go really well and we'll provide an update as something material is there, but it's going really well. We're pleased with the way we're leveraging the existing technology and upcoming technology that's going to help make this aspect of the journey a little easier for providers, easier for us, and hopefully get that access to the therapy sooner for patients. Operator: And we'll go next to Ben Haynor with Lake Street Capital Markets. Benjamin Haynor: Just 1 more, maybe on the AffloVest. It sounds like it's a handful of distributors or DMEs. Can you maybe share how much of the sales of AffloVest are coming from the top half of DMEs versus the bottom half of DMEs that you deal with? Just trying to get a sense of whether that's 68% or 90%? What's kind of the mix of sales volumes at these places. Elaine Birkemeyer: Sure. And so, Ben, there are 1,000 plus -- there's a lot of DMEs that are out there. So, we have been focused and have shared publicly that we are really focused on the top 10 DMEs by volume. And again, these are respiratory DMEs. So they focus in respiratory solutions for patients with respiratory illnesses. So we call on non-top 10 or we help support them, but our focus with our 20 account managers is on that top 10 DMEs. And so specifically as it relates to different DMEs have different inventory management policies. Some of them are super hyper diligent and some of them kind of get triggered and kind of do, if you will, reassess and clean up when there's a triggering event. So I would say the best I can say here is that this is limited to a very few partners, but they are larger partners because that's where our focus is. But they're -- but the good news is here, we have a lot of visibility now where we didn't before in an indirect model. There's a lot more in what inventory they're carrying. And they are as eager as we are to help make sure that, that inventory continues to move and then they can have the next set of patients coming up on this next cold and flu season, you know, on our next-gen product. So that's -- I hope that's helpful to you. Benjamin Haynor: No, that makes sense. I mean, it's not like the spread. It doesn't sound like from your 10th DME is -- to the first DME is like the first to the thousands of the DMEs that are out there. It's relatively high selling folks to begin with. Yes. Elaine Birkemeyer: Correct. Yes. And look, this is not inventory that we were pushing into the channel. It truly is DME partners. They all manage their inventory differently, and that's why this is not widespread. This is not prolific across all DMEs. This is very focused and centered on a few of our larger partners. We're working with them. We all have awareness of the inventory they have. And then we, as per our guidance and as we shared in the script, we're eager to move through in Q3 with burning their current inventory, getting that placed on patients, and then starting to normalize ordering patterns and starting in Q4. Benjamin Haynor: That's definitely helpful. I think I got it. And then on LymphaTech, you got the FDA submission in, you're working on a Category III code. Once you get kind of those things in place, what's the plan to take this thing out there more broadly? Elaine Birkemeyer: Yes, so we're currently working on more full integration. The product right now is sold as Software-as-a-Service, largely into oncology centers, but we continue to look at that broader opportunity from a size where you've got 20 million patients that currently are undiagnosed and those patients are sitting not just in oncology, but they're also in vascular and they're in the VA, they are with therapists. So getting the FDA clearance as a diagnostic aid is going to be a really important first step to us being able to market a objective tool for clinicians that help identify those patients. And then with the Category III CPT code, there's various steps, but it definitely does start that broader path to reimbursement coverage starting to track the code, it helps to kind of support the broader reimbursement payment etc. So the idea of getting the clearance on the diagnostic aid is our first step but we continue to look at the broader integration and determine what is going to be the best step for commercialization. Benjamin Haynor: Okay. Got it. And then lastly, just real quickly on account managers, field sales force territories, it looks like there are a few fewer account managers this quarter versus last quarter. Just kind of the plans for -- as we go into the end of the year, then anything you might be able to suggest for what that looks like in 2027? Elaine Birkemeyer: Yes. You know what? We're only down 2 than what we reported in Q1, so I think we're... Benjamin Haynor: My [ bad ]. Elaine Birkemeyer: Yes. No, that's okay. So I'd call that flat. You know, any dynamics on any given day, you're going to have a little bit of flow, but we are very committed and have seen a lot of stabilization in that 1-to-1 territory manager to a product specialist model. So we're in good shape. We love seeing, again, as I mentioned, the strength of the business in Q2 really reflected increased in overall referrals and the productivity that we're seeing with that go-to-market investment in 2025, the maturation of that team, them using the CRM tools. So we're good there and we're going to hold at this ratio and we'll continue to evaluate target additions where there might be an opportunity based on territory growth but we're really focused right now on just making sure that we're optimizing the both the people and the tools that we have. Operator: And that concludes our question and answer session. Ladies and gentlemen, thank you for your participation. This also concludes today's teleconference. You may disconnect your lines and have a wonderful day. 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Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Lymphedema revenue grew 12% year-over-year, driven by strong referral trends, improved territory productivity, and continued adoption of Flexitouch following Medicare NCD alignment. Airway clearance revenue declined 7% due to temporary inventory management dynamics as large DME partners transitioned to the next-generation AffloVest system. Management noted that several large DME partners were carrying elevated inventory levels, necessitating a pause in ordering to burn through existing stock before normalizing. Profitability expansion was significant, with gross margin improving 180 basis points to 76.3% due to lower manufacturing costs and favorable product mix. The company is leveraging its established VA infrastructure to launch MyoSleeve, a non-pneumatic compression device, targeting patients in earlier stages of chronic swelling. Strategic focus remains on reducing administrative friction through AI and tech-driven order management to improve patient access and operational leverage. Full-year 2026 revenue guidance was updated to $360 million to $366 million, reflecting lymphedema strength offset by conservative airway clearance ordering patterns. Airway clearance ordering is expected to remain impacted through Q3, with a return to normalized purchasing activity projected for Q4 as DME inventory rebalances. Management expects a larger-than-typical sequential revenue step-up in Q3 as Medicare prior authorization timelines and adjudication processes begin to stabilize. FDA submission for LymphaTech as a diagnostic aid is underway, with expected approval in 2027 to address the estimated 20 million undiagnosed lymphedema patients. The company is pursuing a Category III CPT code for LymphaTech to establish a formal reimbursement pathway and support broader clinical adoption. Medicare prior authorization requirements implemented in April introduced administrative steps that caused a near-term moderation in order volumes during Q2. The 6-month manuscript for the head and neck clinical evidence program was published, providing a foundation for challenging restrictive commercial payor policies. Cash position decreased to $69.9 million primarily due to upfront payments for exclusive MyoSleeve distribution rights and share repurchases. Management flagged that while the next-gen AffloVest offers superior features like connectivity, it does not command incremental reimbursement, serving instead as a competitive differentiator. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. Management confirmed that while prior authorization created an upfront administrative burden, the process is normalizing as MACs align their adjudication policies. The timing impact resulted in some Q2 orders shifting into Q3, contributing to the expectation of strong sequential growth in the coming quarter. The device is viewed as an incremental growth contributor for the VA channel that does not require additional OpEx, as it leverages existing sales infrastructure. Current 2026 guidance does not assume material revenue contribution from MyoSleeve, as adoption is expected to build gradually over time. Management stated they now have high visibility into partner inventory levels, which was previously limited in their indirect sales model. The inventory issue is contained to a small number of the company's largest DME partners rather than being a widespread market trend. Tactile is actively seeking immediate reconsideration of 'experimental' designations from commercial payors based on the newly published 6-month randomized controlled trial data. While management is confident the evidence will drive policy changes, they cautioned that payor decision timelines are outside of the company's control.

Interested in Tactile Systems Technology, Inc.? Here are five stocks we like better. Second-quarter results strengthened: Revenue rose 9% year over year to $85.7 million, led by 12% growth in lymphedema sales. Net income increased 142% to $7.8 million, while adjusted EBITDA climbed 49% to $11.4 million. Airway-clearance sales faced a temporary inventory issue: Revenue declined 7% as several large DME partners reduced AffloVest inventories during the next-generation product rollout. Management expects purchasing patterns to normalize in the fourth quarter and said underlying demand remains strong. 2026 outlook was revised: Tactile Medical now expects revenue of $360 million to $366 million, reflecting airway-clearance revenue closer to flat for the year, while maintaining its adjusted EBITDA forecast of approximately $49 million to $51 million. 3 Small Caps Drawing Insider and Institutional Support Tactile Systems Technology (NASDAQ:TCMD), doing business as Tactile Medical, reported second-quarter revenue growth and higher profitability, led by its lymphedema business, while updating its full-year outlook to reflect temporary inventory effects in its airway-clearance segment. Total revenue rose 9% year over year to $85.7 million in the second quarter. Lymphedema revenue increased 12% to $73.6 million, while airway-clearance revenue declined 7% to $12.1 million. CEO Sheri Dodd said the airway-clearance decline reflected inventory management by several large durable medical equipment, or DME, partners during the rollout of the company’s next-generation AffloVest system. → MarketBeat Week in Review – 08/03 - 08/07 The Future of Medical Devices: Two Strong Buys You Can't Miss “The underlying fundamentals of this business remain strong,” Dodd said of AffloVest, adding that patient demand, reimbursement conditions and the product’s competitive position remain favorable. On a trailing 12-month basis, AffloVest revenue was up 32% year over year, according to the company. The company attributed lymphedema growth to commercial execution, healthy referral trends, improved territory productivity and increased Flexitouch adoption following alignment with Medicare’s national coverage determination policy. → Quantum Earnings Week: Winners and Losers Are Finally Emerging Medicare prior authorization requirements that took effect April 13 added administrative steps to the ordering process and contributed to near-term moderation in Medicare order volumes, management said. However, Dodd said authorization approval rates and adjudication timing have met the company’s expectations, while the operational effects of the change are beginning to normalize. During the question-and-answer session, Chief Financial Officer Elaine Birkemeyer said Medicare revenue declined during the quarter, reflecting the transition. She said the company expects a comparatively larger sequential increase in third-quarter revenue, similar to the pattern seen in the prior year, as orders affected by timing move through the process. → Take-Two’s Q1 Results Leave GTA 6 Bulls Stuck in the Fog of War Commercial revenue continued to show growth, according to management, while the Department of Veterans Affairs channel remained more stable due to its reimbursement environment and streamlined operating model. Dodd said a limited number of larger DME partners had elevated AffloVest inventories as the company introduced its next-generation system. Those partners are expected to reduce existing inventory through the third quarter before returning to more normal purchasing patterns in the fourth quarter. The next-generation AffloVest is lighter than the prior version, offers size adjustability and connectivity, and remains untethered, according to Dodd. The company said the updated device does not carry incremental reimbursement but is intended to provide additional features for patients and DME partners. Management said the inventory issue was not broad-based across its DME network and was concentrated among a few larger partners. The company said it has improved visibility into inventory held by those organizations and incorporated the expected effect into its outlook. Gross margin expanded to 76.3% from 74.5% a year earlier, primarily due to lower manufacturing costs, stronger collections reflected in revenue and favorable product mix. Operating income increased 67% to $6.9 million. Net income increased 142% to $7.8 million, or $0.34 per diluted share, from $3.2 million, or $0.14 per diluted share. Adjusted EBITDA rose 49% to $11.4 million from $7.7 million. Operating expenses increased 7% to $58.5 million, reflecting investments in the commercial organization, technology and operational capabilities. The company ended the quarter with $69.9 million in cash and cash equivalents and no outstanding borrowings. Birkemeyer said the cash balance declined from $83.4 million at the end of 2025 primarily because of upfront payments to ElastiMed for exclusive MyoSleeve distribution rights in the VA and Department of Defense channels, as well as share repurchases. She said the company generated positive operating cash flow excluding new strategic uses of cash. Tactile Medical updated its 2026 revenue guidance to $360 million to $366 million, representing projected growth of approximately 9% to 11%. The company continues to expect low-double-digit lymphedema revenue growth, while it now expects airway-clearance revenue to be closer to flat for the year. The company maintained its adjusted EBITDA outlook of approximately $49 million to $51 million. It expects GAAP gross margin of 76% to 76.5%, operating-expense growth of 10% to 12%, net interest income of about $2.4 million and a 28% tax rate. Management also discussed strategic initiatives involving LymphaTech and MyoSleeve. The company has submitted for an expanded FDA indication for LymphaTech as a diagnostic aid for lymphedema, with anticipated approval in 2027, and is pursuing a Category III CPT code to support a potential reimbursement pathway. In July, Tactile Medical announced an exclusive U.S. distribution agreement with ElastiMed for MyoSleeve, a wearable non-pneumatic compression device for lower-leg patients. The agreement initially covers veterans, active-duty service members and other beneficiaries served through the Department of Defense. Dodd said MyoSleeve is expected to be an incremental VA-channel growth contributor over time, though the company’s current guidance does not assume a material contribution. The company also said a six-month study involving 236 patients across 10 sites was published in the International Journal of Radiation Oncology • Biology • Physics. Management said the study found Flexitouch produced patient-reported outcomes comparable with therapist-guided care in treatment-naive patients with head and neck cancer-related lymphedema. The company plans to use the publication in discussions with commercial payers regarding coverage policies. Tactile Systems Technology, Inc, headquartered in Plymouth, Minnesota, is a medical device company specializing in the design, manufacture and marketing of home-use pneumatic compression therapy systems for the treatment of lymphedema and other chronic edema-related conditions. Using proprietary software and patented pump technologies, the company's platforms are designed to improve patient outcomes through sequential pressure treatment that promotes fluid mobilization and enhanced lymphatic function. At the core of Tactile Systems' product portfolio is the Flexitouch® system, a programmable pneumatic pump and garment system approved for home use, and the Aria® device, which features an intuitive touchscreen interface and advanced garment design. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "Tactile Systems Technology Q2 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for August 2026.

MINNEAPOLIS, Aug. 10, 2026 (GLOBE NEWSWIRE) -- Tactile Systems Technology, Inc. (“Tactile Medical”; the “Company”) (Nasdaq: TCMD), a medical technology company providing therapies for people with chronic disorders, today reported financial results for the second quarter ended June 30, 2026. Second Quarter 2026 Summary and Recent Business Highlights: Total revenue increased 9% year-over-year to $85.7 million Gross margin expanded to 76% from 75% in Q2 2025 Net income increased to $7.8 million from $3.2 million in Q2 2025 Adjusted EBITDA increased to $11.4 million from $7.7 million in Q2 2025 Entered into an exclusive U.S. distribution agreement with ElastiMed, Inc. to distribute the MyoSleeve™ Wearable Compression Device to Veterans and active-duty service members and their dependents Commercially launched the next-generation AffloVest Airway Clearance Therapy system Repurchased $5.3 million of stock under the Company’s share repurchase program Publication of six-month clinical results from the Company's randomized controlled trial evaluating Flexitouch® Plus for the treatment of head and neck cancer-related lymphedema “We are encouraged by our strong momentum in the second quarter. We delivered solid revenue growth, expanded gross margin, and generated meaningful adjusted EBITDA, underscoring the strength of our business model and our team’s disciplined execution,” said Sheri Dodd, Chief Executive Officer of Tactile Medical. “Our core lymphedema business remains healthy and our view of the long-term opportunity for AffloVest to be a leading high frequency chest wall oscillation technology therapy is unchanged despite the impact of a temporary inventory management dynamic related to the launch of our next-generation AffloVest system during the quarter.” Ms. Dodd continued, “Operationally, we made tangible progress furthering our broader strategy. We advanced integration activities for LymphaTech, which expands our portfolio across the lymphedema care continuum, launched our next-generation AffloVest system, and secured exclusive Department of Veterans Affairs and Department of Defense distribution rights for MyoSleeve. These product and capability investments strengthen and broaden our patient reach and market expansion, enabling diagnostic and therapy options for patients and providers. With a clear growth and leverage strategy and a differentiated portfolio, we believe Tactile Medical is well-positioned for sustainable, profitable growth in the years ahead.” Second Quarter 2026 Financial Results Total revenue in the second quarter of 2026 increased $6.8 million, or 9%, to $85.7 million, compared to $78.9 million in the second quarter of 2025. The increase in total revenue was attributable to an increase of $7.7 million, or 12%, in sales and rentals of the lymphedema product line, partially offset by a decrease of $0.9 million, or 7%, in sales of the airway clearance product line, due to temporary inventory management dynamics associated with the launch of the Company’s next-generation AffloVest system among a few large DME providers during the quarter. Gross profit in the second quarter of 2026 increased $6.6 million, or 11%, to $65.3 million, compared to $58.8 million in the second quarter of 2025. Gross margin was 76% of revenue, compared to 75% of revenue in the second quarter of 2025. Gross margin improvement reflected continued operating execution and product cost discipline. Operating expenses in the second quarter of 2026 increased $3.8 million, or 7%, to $58.5 million, compared to $54.7 million in the second quarter of 2025. The increase primarily reflected continued investments to support long-term growth initiatives. Operating income was $6.8 million in the second quarter of 2026, compared to $4.1 million in the second quarter of 2025. Income tax benefit was $0.4 million in the second quarter of 2026, compared to an income tax expense of $1.3 million in the second quarter of 2025. Net income in the second quarter of 2026 was $7.8 million, or $0.34 per diluted share, compared to $3.2 million, or $0.14 per diluted share, in the second quarter of 2025. Weighted average shares used to compute diluted net income per share were 23.1 million and 23.2 million for the second quarters of 2026 and 2025, respectively. Adjusted EBITDA was $11.4 million in the second quarter of 2026, compared to $7.7 million in the second quarter of 2025, reflecting revenue growth, gross margin expansion and disciplined expense management. First Six Months 2026 Financial Results Total revenue for the six months ended June 30, 2026, increased $20.8 million, or 15%, to $161.0 million, compared to $140.2 million for the six months ended June 30, 2025. The increase in total revenue was attributable to an increase of $19.3 million, or 17%, in sales and rentals of the lymphedema product line and an increase of $1.5 million, or 6%, in sales of the airway clearance product line for the six months ended June 30, 2026, compared to the six months ended June 30, 2025. Net income for the six months ended June 30, 2026, was $6.0 million, or $0.26 per diluted share, compared to $0.2 million, or $0.01 per diluted share, for the six months ended June 30, 2025. Weighted average shares used to compute diluted net income per share were 23.1 million and 23.7 million for the six months ended June 30, 2026 and 2025, respectively. Adjusted EBITDA was $15.1 million in the six months ended June 30, 2026, compared to $7.4 million in the six months ended June 30, 2025. Balance Sheet Summary As of June 30, 2026, the Company had $69.9 million in cash and no outstanding borrowings under its credit agreement, compared to $83.4 million in cash and no outstanding borrowings under its credit agreement as of December 31, 2025. The Company repurchased $5.3 million of its stock during the second quarter under its repurchase program. As of June 30, 2026, $18.7 million remained available under the Company’s $25.0 million share repurchase program, which expires November 3, 2027. 2026 Financial Outlook The Company is updating its 2026 financial outlook and now expects full year 2026 total revenue in the range of $360 million to $366 million, representing growth of approximately 9% to 11% year-over-year, compared to total revenue of $329.5 million in 2025. The Company’s prior 2026 guidance expectation was total revenue in the range of $360 million to $368 million, representing growth of approximately 9% to 12% year-over-year. The Company continues to expect full year 2026 adjusted EBITDA in the range of $49 million to $51 million, compared to adjusted EBITDA of $44.8 million in 2025. The revised revenue outlook reflects continued confidence in the Company's lymphedema product line, partially offset by a more conservative view of airway clearance product line ordering patterns as certain DME providers work through near-term elevated inventory levels related to the launch of the Company’s next-generation AffloVest system. Conference Call Management will host a conference call with a question-and-answer session at 5:00 p.m. Eastern Time on August 10, 2026, to discuss the results of the quarter. Those who would like to participate may dial 877-407-3088 (201-389-0927 for international callers) and provide access code 13761142. A live webcast of the call will also be provided on the investor relations section of the Company's website at investors.tactilemedical.com. For those unable to participate, a replay of the call will be available for two weeks at 877-660-6853 (201-612-7415 for international callers); access code 13761142. The webcast will be archived at investors.tactilemedical.com. About Tactile Systems Technology, Inc. (DBA Tactile Medical) Tactile Medical is a leader in developing and marketing at-home therapies for people suffering from underserved, chronic conditions including lymphedema, lipedema, chronic venous insufficiency and chronic respiratory conditions by helping them live better and care for themselves at home. Tactile Medical collaborates with clinicians to expand clinical evidence, raise awareness, increase access to care, reduce overall healthcare costs and improve the quality of life for tens of thousands of patients each year. Legal Notice Regarding Forward-Looking Statements This release contains forward-looking statements, including guidance for the full year 2026. Forward-looking statements are generally identifiable by the use of words like “may,” “will,” “should,” “could,” “expect,” “anticipate,” “estimate,” “believe,” “intend,” “continue,” “confident,” “outlook,” “guidance,” “project,” “goals,” “look forward,” “poised,” “designed,” “plan,” “return,” “focused,” “prospects” or “remain” or the negative of these words or other variations on these words or comparable terminology. The reader is cautioned not to put undue reliance on these forward-looking statements, as these statements are subject to numerous factors and uncertainties outside of the Company’s control that can make such statements untrue, including, but not limited to, the Company’s ability to obtain reimbursement from third-party payers for its products; adverse economic conditions, including inflation, rising interest rates or a recession; the adequacy of the Company’s liquidity to pursue its business objectives; price increases for supplies and components; wage and component price inflation; loss of a key supplier or other supply chain disruptions; entry of new competitors and/or competitive products; compliance with and changes in federal, state and local government laws and regulations; technological obsolescence of, or quality issues with, the Company’s products; the Company’s ability to expand its business through strategic acquisitions; the Company’s ability to integrate acquisitions and related businesses; the effects of current and future U.S. and foreign trade policy and tariff actions; or the inability to carry out research, development and commercialization plans. In addition, other factors that could cause actual results to differ materially are discussed in the Company’s filings with the SEC. Investors and security holders are urged to read these documents free of charge on the SEC’s website at http://www.sec.gov. The Company undertakes no obligation to publicly update or revise its forward-looking statements as a result of new information, future events or otherwise. Use of Non-GAAP Financial Measures This press release includes the non-GAAP financial measure of Adjusted EBITDA, which differs from financial measures calculated in accordance with U.S. generally accepted accounting principles (“GAAP”). Adjusted EBITDA in this release represents net income, plus interest expense, net, or less interest income, net, less income tax benefit or plus income tax expense, plus depreciation and amortization, plus stock-based compensation expense, plus litigation-related costs, plus executive transition costs, and plus acquisition and integration costs. Reconciliation of this non-GAAP financial measure to its most directly comparable GAAP measure is included in this press release. This non-GAAP financial measure is presented because the Company believes it is a useful indicator of its operating performance. Management uses this measure principally as a measure of the Company’s operating performance and for planning purposes, including the preparation of the Company’s annual operating plan and financial projections. The Company believes this measure is useful to investors as supplemental information and because it is frequently used by analysts, investors and other interested parties to evaluate companies in its industry. The Company also believes this non-GAAP financial measure is useful to its management and investors as a measure of comparative operating performance from period to period. In addition, Adjusted EBITDA is used as a performance metric in the Company’s compensation program. The non-GAAP financial measure presented in this release should not be considered as an alternative to, or superior to, its respective GAAP financial measure, as a measure of financial performance or cash flows from operations as a measure of liquidity, or any other performance measure derived in accordance with GAAP, and it should not be construed to imply that the Company’s future results will be unaffected by unusual or non-recurring items. In addition, Adjusted EBITDA is not intended to be a measure of free cash flow for management’s discretionary use, as it does not reflect certain cash requirements such as tax payments, debt service requirements, capital expenditures and certain other cash costs that may recur in the future. Adjusted EBITDA contains certain other limitations, including the failure to reflect our cash expenditures, cash requirements for working capital needs and cash costs to replace assets being depreciated and amortized. In evaluating non-GAAP financial measures, you should be aware that in the future the Company may incur expenses that are the same as or similar to some of the adjustments in this presentation. The Company’s presentation of non-GAAP financial measures should not be construed to imply that its future results will be unaffected by any such adjustments. Management compensates for these limitations by primarily relying on the Company’s GAAP results in addition to using non-GAAP financial measures on a supplemental basis. The Company’s definition of these non-GAAP financial measures is not necessarily comparable to other similarly titled captions of other companies due to different methods of calculation. Investor Inquiries: Sam BentzingerGilmartin [email protected] The following table summarizes revenue by product line for the three and six months ended June 30, 2026 and 2025: The following table contains a reconciliation of net income to Adjusted EBITDA for the three and six months ended June 30, 2026 and 2025, as well as the dollar and percentage change between the comparable periods: “N.M.” Not Meaningful The following table contains a reconciliation of net income to Adjusted EBITDA for the year ended December 31, 2025: The following table contains a reconciliation of GAAP net income guidance range to the Adjusted EBITDA guidance range for the twelve months ending December 31, 2026: Investor Inquiries:Sam BentzingerGilmartin [email protected]

Tactile Systems Technology (TCMD) came out with quarterly earnings of $0.34 per share, beating the Zacks Consensus Estimate of $0.14 per share. This compares to earnings of $0.14 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of +142.86%. A quarter ago, it was expected that this medical device maker would post a loss of $0.07 per share when it actually produced a loss of $0.08, delivering a surprise of -14.29%. Over the last four quarters, the company has surpassed consensus EPS estimates three times. Tactile Systems Technology, which belongs to the Zacks Medical - Instruments industry, posted revenues of $85.7 million for the quarter ended June 2026, surpassing the Zacks Consensus Estimate by 0.19%. This compares to year-ago revenues of $78.9 million. The company has topped consensus revenue estimates four times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. Tactile Systems Technology shares have added about 1.7% since the beginning of the year versus the S&P 500's gain of 13.3%. While Tactile Systems Technology has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for Tactile Systems Technology was mixed. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the shares are expected to perform in line with the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $0.38 on $93.57 million in revenues for the coming quarter and $1.11 on $364.28 million in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Medical - Instruments is currently in the bottom 40% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. One other stock from the same industry, 908 Devices Inc. (MASS), is yet to report results for the quarter ended June 2026. The results are expected to be released on August 11. This company is expected to post quarterly loss of $0.14 per share in its upcoming report, which represents a year-over-year change of +22.2%. The consensus EPS estimate for the quarter has been revised 12.5% lower over the last 30 days to the current level. 908 Devices Inc.'s revenues are expected to be $15.18 million, up 16.5% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Tactile Systems Technology, Inc. (TCMD) : Free Stock Analysis Report 908 Devices Inc. (MASS) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Tactile Systems Technology, Inc.'s (NASDAQ:TCMD) strong earnings report was rewarded with a positive stock price move. We have done some analysis, and we found several positive factors beyond the profit numbers. This technology could replace computers: discover the 20 stocks are working to make quantum computing a reality. In high finance, the key ratio used to measure how well a company converts reported profits into free cash flow (FCF) is the accrual ratio (from cashflow). The accrual ratio subtracts the FCF from the profit for a given period, and divides the result by the average operating assets of the company over that time. This ratio tells us how much of a company's profit is not backed by free cashflow. That means a negative accrual ratio is a good thing, because it shows that the company is bringing in more free cash flow than its profit would suggest. While having an accrual ratio above zero is of little concern, we do think it's worth noting when a company has a relatively high accrual ratio. To quote a 2014 paper by Lewellen and Resutek, "firms with higher accruals tend to be less profitable in the future". Over the twelve months to March 2026, Tactile Systems Technology recorded an accrual ratio of -0.13. Therefore, its statutory earnings were quite a lot less than its free cashflow. Indeed, in the last twelve months it reported free cash flow of US$39m, well over the US$20.3m it reported in profit. Tactile Systems Technology shareholders are no doubt pleased that free cash flow improved over the last twelve months. That might leave you wondering what analysts are forecasting in terms of future profitability. Luckily, you can click here to see an interactive graph depicting future profitability, based on their estimates. As we discussed above, Tactile Systems Technology has perfectly satisfactory free cash flow relative to profit. Based on this observation, we consider it likely that Tactile Systems Technology's statutory profit actually understates its earnings potential! And on top of that, its earnings per share increased by 33% in the last year. The goal of this article has been to assess how well we can rely on the statutory earnings to reflect the company's potential, but there is plenty more to consider. If you'd like to know more about Tactile Systems Technology as a business, it's important to be aware of any risks it's facing. For example - Tactile Systems Technology has 1 warning sign we think you should be aware of. This note has only looked at a single factor that sheds light on the nature of Tactile Systems Technology's profit. But there is always more to discover if you are capable of focussing your mind on minutiae. Some people consider a high return on equity to be a good sign of a quality business. While it might take a little research on your behalf, you may find this free collection of companies boasting high return on equity, or this list of stocks with significant insider holdings to be useful. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Tactile Systems Technology, Inc. (NASDAQ:TCMD) defied analyst predictions to release its first-quarter results, which were ahead of market expectations. Revenues beat expectations coming in atUS$75m, ahead of estimates by 6.7%. Statutory losses were somewhat smaller thanthe analysts expected, coming in at US$0.08 per share. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results. Trump has pledged to "unleash" American oil and gas and these 15 US stocks have developments that are poised to benefit. After the latest results, the five analysts covering Tactile Systems Technology are now predicting revenues of US$363.5m in 2026. If met, this would reflect an okay 5.8% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to jump 24% to US$1.12. Before this earnings report, the analysts had been forecasting revenues of US$360.5m and earnings per share (EPS) of US$1.13 in 2026. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates. View our latest analysis for Tactile Systems Technology There were no changes to revenue or earnings estimates or the price target of US$38.50, suggesting that the company has met expectations in its recent result. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. The most optimistic Tactile Systems Technology analyst has a price target of US$42.00 per share, while the most pessimistic values it at US$32.00. Still, with such a tight range of estimates, it suggeststhe analysts have a pretty good idea of what they think the company is worth. Of course, another way to look at these forecasts is to place them into context against the industry itself. It's pretty clear that there is an expectation that Tactile Systems Technology's revenue growth will slow down substantially, with revenues to the end of 2026 expected to display 7.8% growth on an annualised basis. This is compared to a historical growth rate of 11% over the past five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 8.0% annually. Factoring in the forecast slowdown in growth, it looks like Tactile Systems Technology is forecast to grow at about the same rate as the wider industry. The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. They also reconfirmed their revenue estimates, with the company predicted to grow at about the same rate as the wider industry. The consensus price target held steady at US$38.50, with the latest estimates not enough to have an impact on their price targets. With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Tactile Systems Technology analysts - going out to 2028, and you can see them free on our platform here. Don't forget that there may still be risks. For instance, we've identified 1 warning sign for Tactile Systems Technology that you should be aware of. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

MINNEAPOLIS, May 04, 2026 (GLOBE NEWSWIRE) -- Tactile Systems Technology, Inc. (“Tactile Medical”; the “Company”) (Nasdaq: TCMD), a medical technology company providing therapies for people with chronic disorders, today reported financial results for the first quarter ended March 31, 2026. First Quarter 2026 Summary and Recent Business Highlights: Total revenue increased 23% year-over-year to $75.3 million Gross margin of 76.5% versus 74% in Q1 2025 Net loss of $1.8 million versus $3.0 million in Q1 2025 Adjusted EBITDA of $3.7 million versus an Adjusted EBITDA loss of $0.3 million in Q1 2025 Expanded AI-enabled order management platform with the implementation of new operational capabilities to execute the Medicare prior authorization requirement for PCDs Repurchased $1.1 million of stock under the Company’s share repurchase program Received FDA 510(k) clearance for next-generation AffloVest airway clearance device “We delivered a strong start to 2026, with first quarter revenue growth of 23% year-over-year driven by disciplined execution of our strategic priorities,” said Sheri Dodd, Chief Executive Officer of Tactile Medical. “Performance in the quarter was broad-based and reflected the strength and durability of our go-to-market strategy, including increased productivity from a fully resourced sales organization, growing access to advanced therapy under the NCD, and continued momentum across both lymphedema and airway clearance. Importantly, this top line strength translated into meaningful expansion in gross margin and adjusted EBITDA, underscoring the operating leverage in our model.” Ms. Dodd continued, "We also advanced our business transformation technology while demonstrating the operational agility required to respond effectively to an evolving regulatory environment. Further, we have expanded our product portfolio and R&D capabilities through our acquisition of LymphaTech, positioning us to support lymphedema patients across the full continuum of care, beginning with accurate, timely, and objective diagnosis. As we move through 2026 and beyond, we remain confident in the trajectory of our business and the multiple catalysts ahead, and we will continue to invest with intent and execute with discipline.” First Quarter 2026 Financial Results Total revenue in the first quarter of 2026 increased $14.0 million, or 23%, to $75.3 million, compared to $61.3 million in the first quarter of 2025. The increase in total revenue was attributable to an increase of $11.7 million, or 23%, in sales and rentals of the lymphedema product line and an increase of $2.3 million, or 22%, in sales of the airway clearance product line. Gross profit in the first quarter of 2026 increased $12.3 million, or 27%, to $57.6 million, compared to $45.3 million in the first quarter of 2025. Gross margin was 76.5% of revenue, compared to 74% of revenue in the first quarter of 2025. Operating expenses in the first quarter of 2026 increased $9.3 million, or 19%, to $59.1 million, compared to $49.9 million in the first quarter of 2025. Operating loss was $1.5 million in the first quarter of 2026, compared to $4.5 million in the first quarter of 2025. Income tax expense was $0.9 million in the first quarter of 2026, compared to an income tax benefit of $1.1 million in the first quarter of 2025. Net loss in the first quarter of 2026 was $1.8 million, or $0.08 per diluted share, compared to $3.0 million, or $0.13 per diluted share, in the first quarter of 2025. Weighted average shares used to compute diluted net income per share were 22.6 million and 23.7 million for the first quarters of 2026 and 2025, respectively. Adjusted EBITDA was $3.7 million in the first quarter of 2026, compared to an Adjusted EBITDA loss of $0.3 million in the first quarter of 2025. Balance Sheet Summary As of March 31, 2026, the Company had $75.0 million in cash and no outstanding borrowings under its credit agreement, compared to $83.4 million in cash and no outstanding borrowings under its credit agreement as of December 31, 2025. The Company repurchased $1.1 million of its stock during the first quarter under its repurchase program. As of March 31, 2026, $23.9 million remained available under the Company’s $25.0 million share repurchase program, which expires November 3, 2027. 2026 Financial Outlook The Company is updating its 2026 financial outlook and now expects full year 2026 total revenue in the range of $360 million to $368 million, representing growth of approximately 9% to 12% year-over-year, compared to total revenue of $329.5 million in 2025. The Company’s prior 2026 guidance expectation was total revenue in the range of $357 million to $365 million, representing growth of approximately 8% to 11% year-over-year. The Company continues to expect full year 2026 adjusted EBITDA in the range of $49 million to $51 million, compared to adjusted EBITDA of $44.8 million in 2025. Conference Call Management will host a conference call with a question-and-answer session at 5:00 p.m. Eastern Time on May 4, 2026, to discuss the results of the quarter. Those who would like to participate may dial 877-407-3088 (201-389-0927 for international callers) and provide access code 13759535. A live webcast of the call will also be provided on the investor relations section of the Company's website at investors.tactilemedical.com. For those unable to participate, a replay of the call will be available for two weeks at 877-660-6853 (201-612-7415 for international callers); access code 13759535. The webcast will be archived at investors.tactilemedical.com. About Tactile Systems Technology, Inc. (DBA Tactile Medical) Tactile Medical is a leader in developing and marketing at-home therapies for people suffering from underserved, chronic conditions including lymphedema, lipedema, chronic venous insufficiency and chronic inflammatory lung disease by helping them live better and care for themselves at home. Tactile Medical collaborates with clinicians to expand clinical evidence, raise awareness, increase access to care, reduce overall healthcare costs and improve the quality of life for tens of thousands of patients each year. Legal Notice Regarding Forward-Looking Statements This release contains forward-looking statements, including guidance for the full year 2026. Forward-looking statements are generally identifiable by the use of words like “may,” “will,” “should,” “could,” “expect,” “anticipate,” “estimate,” “believe,” “intend,” “continue,” “confident,” “outlook,” “guidance,” “project,” “goals,” “look forward,” “poised,” “designed,” “plan,” “return,” “focused,” “prospects” or “remain” or the negative of these words or other variations on these words or comparable terminology. The reader is cautioned not to put undue reliance on these forward-looking statements, as these statements are subject to numerous factors and uncertainties outside of the Company’s control that can make such statements untrue, including, but not limited to, the Company’s ability to obtain reimbursement from third-party payers for its products; adverse economic conditions, including inflation, rising interest rates or a recession; the adequacy of the Company’s liquidity to pursue its business objectives; price increases for supplies and components; wage and component price inflation; loss of a key supplier or other supply chain disruptions; entry of new competitors and/or competitive products; compliance with and changes in federal, state and local government laws and regulations; technological obsolescence of, or quality issues with, the Company’s products; the Company’s ability to expand its business through strategic acquisitions; the Company’s ability to integrate acquisitions and related businesses; the effects of current and future U.S. and foreign trade policy and tariff actions; or the inability to carry out research, development and commercialization plans. In addition, other factors that could cause actual results to differ materially are discussed in the Company’s filings with the SEC. Investors and security holders are urged to read these documents free of charge on the SEC’s website at http://www.sec.gov. The Company undertakes no obligation to publicly update or revise its forward-looking statements as a result of new information, future events or otherwise. Use of Non-GAAP Financial Measures This press release includes the non-GAAP financial measure of Adjusted EBITDA, which differs from financial measures calculated in accordance with U.S. generally accepted accounting principles (“GAAP”). Adjusted EBITDA in this release represents net income (loss), plus interest expense, net, or less interest income, net, less income tax benefit or plus income tax expense, plus depreciation and amortization, plus stock-based compensation expense, plus litigation-related costs, plus executive transition costs, and plus acquisition and integration costs. Reconciliation of this non-GAAP financial measure to its most directly comparable GAAP measure is included in this press release. This non-GAAP financial measure is presented because the Company believes it is a useful indicator of its operating performance. Management uses this measure principally as a measure of the Company’s operating performance and for planning purposes, including the preparation of the Company’s annual operating plan and financial projections. The Company believes this measure is useful to investors as supplemental information and because it is frequently used by analysts, investors and other interested parties to evaluate companies in its industry. The Company also believes this non-GAAP financial measure is useful to its management and investors as a measure of comparative operating performance from period to period. In addition, Adjusted EBITDA is used as a performance metric in the Company’s compensation program. The non-GAAP financial measure presented in this release should not be considered as an alternative to, or superior to, its respective GAAP financial measure, as a measure of financial performance or cash flows from operations as a measure of liquidity, or any other performance measure derived in accordance with GAAP, and it should not be construed to imply that the Company’s future results will be unaffected by unusual or non-recurring items. In addition, Adjusted EBITDA is not intended to be a measure of free cash flow for management’s discretionary use, as it does not reflect certain cash requirements such as tax payments, debt service requirements, capital expenditures and certain other cash costs that may recur in the future. Adjusted EBITDA contains certain other limitations, including the failure to reflect our cash expenditures, cash requirements for working capital needs and cash costs to replace assets being depreciated and amortized. In evaluating non-GAAP financial measures, you should be aware that in the future the Company may incur expenses that are the same as or similar to some of the adjustments in this presentation. The Company’s presentation of non-GAAP financial measures should not be construed to imply that its future results will be unaffected by any such adjustments. Management compensates for these limitations by primarily relying on the Company’s GAAP results in addition to using non-GAAP financial measures on a supplemental basis. The Company’s definition of these non-GAAP financial measures is not necessarily comparable to other similarly titled captions of other companies due to different methods of calculation. Investor Inquiries: Sam Bentzinger Gilmartin Group [email protected] The following table summarizes revenue by product line for the three months ended March 31, 2026 and 2025: The following table contains a reconciliation of net loss to Adjusted EBITDA for the three months ended March 31, 2026 and 2025, as well as the dollar and percentage change between the comparable periods: “N.M.” Not Meaningful The following table contains a reconciliation of net income to Adjusted EBITDA for the year ended December 31, 2025: The following table contains a reconciliation of GAAP net income guidance range to the Adjusted EBITDA guidance range for the twelve months ending December 31, 2026: Investor Inquiries: Sam Bentzinger Gilmartin Group [email protected]