Tactile Systems Technology, Inc. 2026 Q2 Earnings Call
Review the key takeaways and the transcript of this earnings call.
- Tactile Medical reported total revenue of $85.7 million for Q2 2026, a 9% increase year over year.
- Lymphedema revenue grew 12% year over year to $73.6 million, while airway clearance revenue declined 7% to $12.1 million due to temporary inventory management dynamics among large DME partners.
- Gross margin improved 180 basis points to 76.3%, and adjusted EBITDA increased 49% to $11.4 million.
- Net income rose 142% to $7.8 million, or $0.34 per diluted share.
- The company ended Q2 with approximately $70 million in cash and no outstanding borrowings.
- The lymphedema business showed continued strength driven by Medicare NCD policy alignment, commercial growth, and stable VA revenue.
- Airway clearance sales were impacted by inventory management related to the launch of the next generation Alphabet system, expected to normalize by Q4 2026.
- Tactile Medical announced a U.S. distribution agreement with Alaska Med for the Myo sleeve, a wearable non-pneumatic compression device for veterans and Department of Defense beneficiaries.
- The company published six-month clinical evidence for head and neck lymphedema treatment showing durable benefits of Flexitouch therapy.
- Q2 operating expenses increased 7% to $58.5 million due to investments in commercial, technology, and operational capabilities.
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Transcript
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Ladies and gentlemen, to the second quarter 2026 earnings conference call for Tactile Medical. At this time, all participants have been placed in a listen-only mode. At the end of the company's prepared remarks, we will conduct a question and answer. 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. 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 involve inherent risks and uncertainties. These could cause actual results to differ materially from those indicated, including those identified in the Risk Factors 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.
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 underlying 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.
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