SANUWAVE Health Inc Reports Q1 2026 Results: Full Earnings Call Transcript

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Summary

SANUWAVE Health Inc reported grounds Q1 revenues of $9.6 million, a 3% summation from the erstwhile year, driven by a 22% year-over-year summation successful consumables utilization.

The institution saw a emergence successful progressive systems to 1382, up from 1292 astatine year-end, contempt archetypal marketplace challenges owed to caller CMS pricing for tegument substitutes.

Guidance for Q2 is acceptable astatine 10-15% year-over-year growth, with a full-year people of $51 to $55 million, supported by accrued engagement with ample systems and imaginable enlargement into caller marketplace areas.

Operational nonaccomplishment for Q1 was $1.1 million, with accrued expenses successful R&D, sales, and marketing, but a important simplification successful nett nonaccomplishment from $6.1 cardinal to $1.4 cardinal year-over-year.

The institution is focusing connected maintaining operational discipline, expanding the adoption of Ultramist, and addressing challenges successful agrarian healthcare delivery.

Full Transcript

OPERATOR

Hello and invited everyone joining today's SANUWAVE Health Inc net call. At this clip each participants are successful a perceive lone mode. Later you volition person the accidental to inquire questions during the question and reply session. To registry to inquire a question astatine immoderate time, delight property prima 1 connected your telephone keypad. Please enactment this telephone is being recorded. We are lasting by if you should request immoderate assistance. It is present my pleasance to crook the gathering implicit to Morgan Frank, Chairman and CEO of SANUWAVE Health Inc. Please spell ahead.

Morgan Frank (Chairman and CEO)

Thank you Nikki invited to SANUWAVE Health Inc's archetypal 4th 2026 net call. Our Form 10Q was filed with the SEC past nighttime on with our net merchandise and our updated presumption was made disposable connected our website successful the Investor section. Please notation to that during the presentation. Joining maine connected the telephone is Peter Sorensen, our CFO and aft the presumption we volition unfastened up for Q&A. So let's statesman with the guardant looking statements and disclosures. This telephone whitethorn incorporate guardant looking statements specified arsenic statements relating to aboriginal fiscal results, accumulation expectations, plans for aboriginal concern improvement activities, and expectations regarding the interaction of changes successful reimbursement levels and tariff rates. Investors are cautioned that immoderate specified guardant looking statements are not guarantees of aboriginal show and impact definite risks and uncertainties, galore of which are beyond the Company's quality to control. Description of these risks and uncertainties and different factors that could impact our fiscal results is included successful our SEC filings. Actual results whitethorn disagree materially from those projected successful the guardant looking statements. The Company undertakes nary work to update immoderate guardant looking statement. Certain percentages discussed successful this telephone are calculated successful the underlying full dollar amounts and truthful whitethorn not recalculate from the rounded numbers utilized for disclosure purposes. As a reminder, our treatment contiguous volition see non Generally Accepted Accounting Principles (GAAP) numbers. Reconciliations betwixt our Generally Accepted Accounting Principles (GAAP) and non Generally Accepted Accounting Principles (GAAP) results tin beryllium recovered successful our precocious filed 10Q for the play of March 31, 2026. Okay, truthful arsenic we mentioned successful our property release, Q1 fundamentally started retired with benignant of a daze intermission successful January successful which the full precocious coiled attraction marketplace seemed to benignant of fastener up for a infinitesimal and fundamentally frost solid. It was beauteous melodramatic and successful essence it seemed similar a large galore marketplace participants were not expecting the caller Centers for Medicare & Medicaid Services (CMS) pricing for tegument subs to really beryllium applied and we're assured successful immoderate benignant of benignant of 11th hr rescission oregon modification. Obviously this did not come, truthful it took the marketplace a small clip to travel to presumption with this, but astatine slightest from wherever we sit, it seems to person started doing truthful successful February and we saw betterment each 4th with each period beyond being amended than the 1 before. So contempt a precise dilatory archetypal 30 days and immoderate ongoing elevated churn rates owed to fiscal accent astatine practitioners, the institution sold 97 systems successful Q1 and our progressive systems fig roseate to 1382 up from 1292 astatine twelvemonth end. Quick reminder connected our methodology here. Active Systems is simply a measurement of systems owned by customers who person ordered applicators successful the trailing six months oregon according to a circumstantial schedule. In a fewer country cases this fig includes churn lawsuit loss, lawsuit reactivation, which is to accidental churn customers who began ordering again, caller lawsuit acquisition of machine, caller lawsuit acquisitions of machines and past merchantability passim of resellers portion netting retired income into reseller inventory. So due to the fact that transmission inventory evidently are not systems that are successful use, truthful the extremity present is to springiness you arsenic bully a consciousness arsenic we tin of however galore systems are really being utilized successful the field. So fundamentally this alteration successful progressive systems fig is simply a travel fig and it's conscionable showing you the fig of systems successful the marketplace whose owners are actively ordering. Net alteration successful progressive systems during Q1 was 90. This summation and a spot of betterment successful usage rates from immoderate existing customers drove Q1 to an each clip grounds successful applicator portion sales. This did not construe into an each clip grounds for applicator revenues, owing predominantly to a greater quantity of income going done resellers who bargain astatine wholesale price. This inclination was accentuated by the modulation of a mates of our agelong lasting distributors becoming resellers. Therefore the customers they service moving to wholesale pricing from what was antecedently retail with committee paid connected the backmost end. This worked retired beauteous likewise for america connected the operating line, but evidently that does impact revenues and asp, truthful determination was a spot of a measurement relation there, but 1 that's besides down us. We instrumentality this grounds portion measurement arsenic a bully motion for the marketplace and aft immoderate suppression implicit the past six oregon 7 months a motion that diligent counts are starting to inclination amended again. Many person asked astir a fig of markets for america and benignant of wherever our existent absorption lies. So we stay committed to serving each of precocious coiled attraction and are expanding our beingness successful hospitals, coiled centers, physicians offices, and successful peculiar we're seeing a batch of renewed involvement successful agelong word attraction and nursing facilities seeking to execute their ain coiled care. The hospitals are showing a peculiar spot arsenic well, but we're besides seeing immoderate meaningful and encouraging advancement successful mobile wound, a abstraction that a fig of folks look to person had a batch of questions and concerns astir truthful determination seems to beryllium a misconception that mobile coiled is going distant oregon would request to beryllium de emphasized. But from wherever we sit, we simply don't judge this to beryllium the case. As with the marketplace arsenic a whole, the patients successful the wounds determination are not going distant and astir of them are neither funny in, nor successful galore cases susceptible of jumping up and heading to a coiled center. The attraction to the borderline doctrine of Centers for Medicare & Medicaid Services (CMS) remains precise overmuch live and mobile coiled attraction volition stay an important portion of that. But similar a batch of this industry, mobile coiled attraction is changing due to the fact that the needs of the marketplace person changed. We're seeing benignant of a reevaluation and a consolidation. Centers for Medicare & Medicaid Services (CMS) and Mac standards for documentation person tightened. This is selecting for much blase providers. This contented is compounded by the disbursal of the important backmost bureau unit that's required to tally a mobile coiled attraction strategy properly. That takes standard and revenues dropping from mobile coiled arsenic a effect of little allograph reimbursement models that erstwhile worked, these models tin nary longer enactment themselves. So the caller world is that you request capable gross to screen the backmost bureau seed and you request a precocious capable basal density truthful that you tin screen the disbursal of practitioners and that's driving consolidation. Like you just, you request much gross and much patients per practitioner. So I mean, look, I'm making these numbers up, but if you person 30 patients being covered by 10 mobile coiled attraction companies, you know, present possibly you're going to need, you know, present possibly you're going to person those 30 covered by 5 oregon possibly adjacent 3 companies. Like the diligent number stays the same, but the marketplace adapts. So successful galore ways this is favorable to Sanuwave, some due to the fact that Ultramist remains specified an effectual attraction modality that generates beardown objective outcomes and for Saintewaver arsenic a company, due to the fact that moving with a smaller fig of larger, much blase companies is really easier for us. And this allows america to supply much engagement and much idiosyncratic attention. The 1 spot we person immoderate interest is agrarian wherever the patients are acold isolated and the wage rates are often paradoxically lower. Pay complaint successful agrarian areas gets indexed to the debased section wages. And truthful the reward for 90 minutes of windshield clip to scope a diligent successful an underserved assemblage with nary different healthcare options, often little payout and something's going to request to springiness astir that. We fishy that a re indexing oregon outgo for question clip whitethorn beryllium required and that the payer strategy has a large woody of inducement to fig this out. Because I mean honestly, the outgo of not treating these wounds would rapidly swell to galore multiples of immoderate outgo to supply care. So wide the marketplace frost seems to beryllium opening to thaw retired and we expect this crystal to benignant of interruption up further arsenic we get temporally further from the assertive Centers for Medicare & Medicaid Services (CMS) tegument substitute audits and clawbacks of claims made successful Q4 which person been freezing superior budgets arsenic providers benignant of play it cautious until they're definite they're not going to look ample recoupments. We've been seeing immoderate much question there. We've been seeing a batch much question astir requests and inquiries, but income cycles bash inactive stay a spot extended. We expect this to amended arsenic lawsuit clarity into their ain finances improves. So you know, arsenic we mentioned successful the past, we had a precise palmy SAWC successful April and we truly started to consciousness that the question successful the manufacture is shifting from, you know, is the entity falling? To you know, truthful what now? And an increasing, you know, determination to thoughts of benignant of much holistic and unified diligent care, the improvement of much rigorous coiled attraction protocols and a wide absorption connected grounds based medicine. All of which we spot arsenic incrementally precise affirmative improvement that volition beryllium beneficial to Saniwave successful the agelong run. With that, I'll present crook you implicit to Peter Sorensen, our CFO who tin locomotion you done the quarter's financials.