Release Date: May 05, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Total revenue grew 0.3% year over year to $61.3 million, with a significant 22% increase in airway clearance revenue.
- Gross margins improved by 290 basis points year over year, indicating better cost management and product design improvements.
- The company ended the quarter with a strong cash position of $83.6 million, despite a $10.7 million decrease due to stock buybacks.
- The launch of the Salesforce CRM module is expected to enhance sales efficiency and data-driven decision-making.
- Strong growth and adoption of the Nimbl product, which is outpacing the broader lymphedema market growth.
Negative Points
- Lymphedema business line revenue declined by 3% year over year, impacted by sales headcount vacancies and lower sales productivity.
- Adjusted EBITDA decreased by 125% year over year due to planned investments in technology and order processes.
- The transition to the new Salesforce CRM module temporarily impacted sales productivity more than anticipated.
- Operating expenses increased by 8% to $49.9 million, driven by strategic technology investments.
- Net loss increased by 35% to $3 million, or $0.13 per diluted share, compared to the previous year.
Q & A Highlights
Q: What assumptions are considered for the revenue guidance for the year, especially as you approach Q4?
A: Elaine Birkemeyer, Chief Financial Officer, explained that the guidance considers the speed of hiring planned sales roles and sales rep proficiency with the new CRM tool. The success of the Parachute rollout and its extension to Flexitouch, along with back-office efficiency improvements, are also factors. The guidance implies a sequential growth pattern, with Q3 expected to show low double-digit growth and Q4 resembling typical growth patterns.
Q: How does the hiring of new sales reps impact growth expectations for 2026?
A: Elaine Birkemeyer noted that while they are not ready to comment on 2026 specifics, they expect to exit 2025 with more momentum. The guidance range considers the speed of hiring and sales rep productivity, with faster hiring benefiting the company, especially in Q4, which is their largest quarter.
Q: Can you provide an update on the growth rates for the lymphedema and AffloVest businesses?
A: Elaine Birkemeyer stated that the lymphedema product line growth rate has been revised to 4% to 5%, and the airway clearance (AffloVest) growth rate is now 20% to 23%.
Q: How is the commercial launch of Nimbl progressing, and are there any manufacturing or inventory concerns?
A: Sheri Dodd, Independent Director, expressed satisfaction with Nimbl's launch, noting that about a quarter of orders are coming through Parachute. The product is easy to use, and there are no manufacturing challenges, with all product demand being met.
Q: What factors contributed to the strong performance in the airway clearance business, and is this growth sustainable?
A: Sheri Dodd attributed the success to strategic partnerships with DMEs, preferred product placement, and alignment on capital allocation. The AffloVest product is competitive, and they expect continued growth due to patient and physician preference.
Q: How does the new CRM tool impact sales rep productivity and hiring plans?
A: Sheri Dodd explained that the CRM tool enhances efficiency by directing reps on where to focus their efforts, complementing the strategic placement of reps in the right roles and locations. This combination is expected to improve productivity and leverage.
Q: How many clinicians were reached through the education platform in Q1, and how does this align with your annual goal?
A: Sheri Dodd mentioned that while they did not report specific numbers for lymphedema outreach, they are on target with their goals. They reached 800 clinicians in the bronchiectasis business, contributing to their overall target.
Q: What percentage of patients are using Kylee, and how does therapy compliance differ for these patients?
A: Sheri Dodd noted that while they don't have data on non-Kylee users, they track check-ins and therapy sessions for Kylee users. The data provides insights into patient compliance and symptom management, although individual patient needs vary.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
