Myomo Inc. 2026 Q2 Earnings Call

Please go ahead. Thank you, operator, good afternoon, everyone.

This is Vivian Cervantes with Alliance Advisors IR. Welcome to the Myomo second quarter 2026 financial results conference call. With me today are Myomo's Chief Executive Officer, Paul R. Gudonis, and Chief Financial Officer, Dave Henry. Before we begin, I'd like to caution listeners that statements made during this call by management, other than historical facts, are forward-looking statements. The words anticipate, believe, estimate, expect, intend, guidance, outlook, confidence, target, project, and other similar expressions are typically used to identify such forward-looking statements. These forward-looking statements are not guarantees of future performance and may involve and are subject to risks and uncertainties and other factors that may affect Myomo's business, financial condition and operating results. These risks, uncertainties, and other factors are discussed in Myomo's filings with the SEC.

Actual outcomes and results may differ materially from what's expressed or is implied by these forward-looking statements. Furthermore, except as required by law, Myomo undertakes no obligation to revise or update any forward-looking statements to reflect events or circumstances after the date of this call, today, August 5th, 2026. It's now my pleasure to turn the call over to Myomo CEO, Paul R. Gudonis.

Paul, please go ahead. Thanks, Vivian, good afternoon, everyone.

Thank you all for joining us today. Our mission here at Myomo remains straightforward: to restore function and independence to people living with chronic arm and hand paralysis. Every day, we hear from patients whose lives have been changed by the MyoPro, individuals who can once again feed themselves, carry groceries, return to work, or simply use both hands for everyday activities. This mission and our goal to serve a much larger number of patients continue to guide every decision we make. From a business perspective, the second quarter demonstrated continued progress in executing the strategy we introduced earlier this year.

Rather than relying primarily on direct-to-consumer marketing, we're building a more durable and scalable business by evolving our go-to-market strategy by emphasizing recurring patient referrals, expanding reimbursement coverage, tightly managing our operational execution, and continuing our market leadership through innovation on our wearable robotics platform. Importantly, we're seeing measurable progress across all four of our success pillars, which I set out earlier this year. Our first success pillar is the shift to recurring patient sources. Overall revenue for the second quarter increased 21% year-over-year to $11.7 million, and recurring patient sources represented 53% of total revenue during the quarter. That's double the 26% of revenue from these sources a year ago. Our shift to recurring patient sources is resulting in an improvement in patient quality as well.

The conversion rate of referral leads into pipeline adds is significantly higher than the conversion rate of advertising sourced leads to pipeline adds. We added more than 150 referral sites, bringing us to over 300 active locations, with a growing number already referring a second patient or more. O&P revenue doubled versus the prior year, and the out-of-pocket care national rollout is progressing well alongside discussions with other national O&P organizations. Our second success pillar is to increase market access. We've signed additional Elevance state contracts under our national agreement, further expanding our in-network footprint. Among other payer relationships established in the quarter, we are now in network with Optum's workers' compensation product, which is a part of UnitedHealthcare. The benefit of being in network is higher authorization rates from contracted payers.

A still small but growing number of cases, we're seeing higher authorization rates compared with non-contracted payers, which demonstrates the value of these agreements in improving patient access and reimbursement efficiency. Meanwhile, we continue to serve a growing number of Medicare Part B patients with a 100% reimbursement rate for patients with the complete medical documentation supporting the delivery of a MyoPro to them. Our third success pillar is to demonstrate operating leverage. As I mentioned, revenue increased 21% while operating expenses grew only 1%. We improved our adjusted EBITDA by over $3 million compared to the second quarter of last year. Revenue per employee continues to improve as we implement new systems and efficient processes.

In our manufacturing organization, we now have a trained Six Sigma team that has been executing cost reduction initiatives, which include the mobile app rollouts to replace the cost of a laptop for each device. We're using our new facility here in Burlington, Massachusetts, to expand in-house assembly from outsourced contractors, and we made a very new investment in 3D printing capabilities. We still remain confident that these and other initiatives will result in expanding margins and lower cash burn. We're demonstrating the ability to grow revenues at a faster rate than operating expenses, which puts us on the path to profitability and sustainable positive cash flows. Our fourth success pillar is continued progress on product development and clinical research. Development of the next generation MyoPro 3 continues on schedule.

At the OTWorld Conference in Germany in May, which is the largest O&P industry event in Europe, we introduced a hand-only prototype for the German market, thus expanding future market opportunities by serving the patient population that needs only a device for hand function. This is the latest example of building upon our wearable robotics platform, which now includes a cloud-based data collection system and mobile app for communicating with patients and clinicians. Meanwhile, we're making good progress at the University of Utah randomized control trial, which has enrolled 25 of 50 patients and an updated six-month outcomes publication is planned for the second half of this year. As you can see, the key operating metrics continue to move forward in the right direction.

We're expanding recurring referral sources, increasing payer access, demonstrating operating leverage, investing in innovation based on our platform, and most importantly, helping more patients regain the use of their arms and hands. Some additional highlights in the quarter as I wrap up my remarks. The evolution in our go-to-market strategy to recurring patient sources is yielding terrific results, including record quarterly orders totaling 255 MyoPro units in the second quarter. One example of how the strategy is working is the case of Barbara, who was referred to Myomo by her therapist at a major rehab hospital in New Jersey, where she'd be attending therapy after her stroke. Barbara is 14 months post-stroke and had plateaued with her upper extremity progress. With limited ability to use her right arm, the therapist contacted us as a potential MyoPro candidate. After a positive evaluation, her physician provided the necessary medical documentation.

Her MyoPro was authorized by her health insurance plan, Blue Cross Blue Shield, within 30 days of the assessment, and she was fit with her custom MyoPro within 90 days of the referral. She's doing well. She's making great progress with her therapy and training on how to use her new MyoPro. She's also able to take advantage of our recently released four-finger saddle, which will help improve her functional grasp for the activities of daily living, which she can now do at home. Barbara's case exemplifies the effectiveness of our patient referral program, which engages recurring rehabilitation sources at the point of care to advance the patient's return to mobility and independence and can lead to a faster revenue cycle.

I'd also like to highlight that we enhanced our board with the appointment of Joe Manko of Horton Capital, one of our largest shareholders, and Will Febbo, a seasoned healthcare and med tech executive. Our expanded board strengthens our governance framework and strategic capabilities by adding directors with significant industry experience, financial expertise, and proven leadership in building shareholder value. With that overview, I'll now turn the call over to Dave Henry to review our financial results in greater detail.