Myomo, Inc. (MYO) Q4 2025 Earnings Call Transcript
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
Overview
The earnings call reveals a negative sentiment due to increased costs, negative EBITDA, and cash burn. Despite optimistic future guidance and strategic plans, current financial metrics are weak, with no immediate improvements in acquisition costs and high pipeline dropout rates. The stock price is likely to face downward pressure in the short term.
Key Financial Performance
Fourth Quarter Revenue $11.4 million, the highest revenue quarter of the year, up 13% from Q3 2025 but slightly down year-over-year due to a lower number of revenue units and a slightly lower average selling price (ASP).
Full Year Revenue $40.9 million, representing 26% growth over 2024, driven by growth across all sales channels, particularly the U.S. O&P channel and international markets.
Orders 241 MyoPros ordered in Q4 2025, up 5% sequentially from Q3 2025, driven by expanded penetration of the O&P channel and the MyoConnect clinical referral program.
Recurring Revenue 42% of Q4 2025 revenue came from recurring sources, up from 26% in Q4 2024, representing 52% year-over-year growth, due to the MyoConnect program and other recurring patient sources.
International Revenue $2.2 million in Q4 2025, up 46% year-over-year, driven by growth in Germany, favorable reimbursement policies, and foreign exchange tailwinds.
U.S. O&P Channel Revenue $1 million in Q4 2025, up 81% year-over-year, driven by increased orders from O&P providers.
Gross Margin 68.6% in Q4 2025, down from 71.4% in Q4 2024, due to lower overhead capitalization and higher warranty expenses.
Operating Expenses $10.6 million in Q4 2025, up 19% year-over-year, driven by higher sales, clinical, and marketing expenses, particularly advertising.
Net Loss $3.8 million in Q4 2025, compared to $300,000 in Q4 2024, due to higher operating expenses and non-operating expenses like debt issuance costs and interest expenses.
Adjusted EBITDA Negative $1.9 million in Q4 2025, compared to a positive $200,000 in Q4 2024, due to higher operating expenses.
Cash Burn $1.5 million in Q4 2025, compared to a positive cash flow of $3.4 million in Q4 2024, driven by higher operating expenses and investments.
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Operating Highlights
MyoPro 2X: Launched in 2025, aimed at educating domestic O&P practices and improving reimbursement environment.
MyoPro 3: Currently under development as the next-generation product.
Myomo mobile app: Planned activation in Q2 2026 to enhance capabilities and reduce costs by eliminating the need for laptops for MyoPro users.
U.S. O&P channel: Quarterly revenue exceeded $1 million for the first time, up 81% for the quarter and doubled for the year.
International operations: Quarterly revenues exceeded $2 million for the first time, growing 46% for the quarter and 48% for the year, driven by Germany and favorable reimbursement policies.
China joint venture: Operations on hold due to financial issues with majority shareholder Ryzur Medical, which declared bankruptcy.
Revenue growth: Achieved 26% growth in 2025, with $40.9 million in revenue.
Recurring revenue: Increased from 26% in Q4 2024 to 42% in Q4 2025, representing 52% year-over-year growth.
Cost management: Efforts to reduce material costs, increase efficiency, and cut cash burn by half in 2026.
MyoConnect referral program: Engaged therapists and physicians to refer patients, contributing to 10% of pipeline adds in Q4 2025.
Market access strategy: Signed in-network contracts with Medicare Advantage and commercial payers, including a multistate agreement with Elevance Health covering 45 million lives.
Focus on recurring patient sources: Strategic pivot to increase revenue from recurring sources, making the business easier to scale.
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Risk or Challenges
Financial Challenges: The company experienced a net loss of $3.8 million in Q4 2025, compared to a net loss of $300,000 in the prior year quarter. Adjusted EBITDA for Q4 2025 was negative $1.9 million, compared to a positive $200,000 in Q4 2024. Operating expenses increased by 19% year-over-year, driven by higher sales, clinical, and marketing expenses.
Medicare Advantage Payer Issues: The company faced challenges with Medicare Advantage payers, including a high number of pre-authorization denials, which required an appeals process to serve patients. This constrained revenue growth and impacted the volume of authorizations.
China Joint Venture Disruption: The majority shareholder in the joint venture in China, Ryzur Medical, declared bankruptcy, leading to operations being on hold. This has disrupted the company's ability to address the large market opportunity in China.
Revenue Unit Decline: The number of revenue units delivered in Q4 2025 decreased by 5% year-over-year, and the average selling price (ASP) decreased slightly due to channel mix.
Gross Margin Decline: Gross margin for Q4 2025 was 68.6%, down from 71.4% in the prior year, due to lower overhead capitalization and higher warranty expenses.
Social Media Lead Generation Issues: Challenges with social media lead generation in the first half of 2025 negatively impacted direct billing revenue.
Seasonal Revenue Fluctuations: First-quarter revenue is expected to be seasonally lower, with higher operating expenses due to payroll taxes and employee benefits resetting.
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Guidance & Outlook
Revenue Growth: The company expects revenue for 2026 to be in the range of $43 million to $46 million, representing approximately 10% growth over 2025.
Gross Margin: Gross margin is expected to benefit from higher volume, lower cost of goods sold per unit, and a 2% Medicare price increase effective January 1, 2026.
Operating Expenses: Operating expenses growth will be limited to half the growth of revenue in 2026, demonstrating operating leverage.
Cash Burn: Cash burn or free cash flow is expected to be reduced by roughly half in 2026 compared with 2025.
Recurring Revenue: The company aims to generate a majority of revenue from recurring sources, making the business easier to scale.
Product Development: Plans to roll out enhancements to the Myomo mobile app in Q2 2026 and continue development of the next-generation MyoPro 3.
Market Expansion: Continued international growth is expected, particularly in Germany, supported by additional business development and clinical staff.
Medicare Advantage Payers: The company will continue to secure more payer contracts to address challenges with Medicare Advantage pre-authorization denials.
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Shareholder Return Plan
The selected topic was not discussed during the call.
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Key Q&A
Q:What drove the increase in cost per pipeline add for MyoConnect in the quarter, and what is the plan to reduce acquisition costs?
A:The increase in cost per pipeline add was due to higher advertising costs in Q4, influenced by holiday advertising and election cycles. To reduce acquisition costs, the company hired a new head of marketing, engaged a new digital marketing agency, revamped digital marketing and social media, introduced new TV creative, and focused on referrals with zero advertising costs.
Q:Have there been any improvements in acquisition costs as of Q1?
A:No significant improvements have been observed yet as the new ad agency started work only 6-8 weeks ago. Updates will be provided in May during the Q1 results report.
Q:Can you provide KPIs for the O&P channel, such as the number of clinics ordering and units sold in Q4?
A:There are a couple of dozen O&P providers trained and certified, with over $1 million in revenue in Q4. Approximately 36 O&P units were sold in the quarter.
Q:What are the assumptions for the U.S. O&P business contributing to 2026 guidance?
A:Growth is expected in the O&P channel and international markets, while direct billing is expected to remain flat. Marketing changes are still in early stages, and the company is focusing on reducing advertising costs and increasing recurring patient sources to grow revenue in 2026.
Q:Why were pipeline adds lower at 676 in Q4, and is this expected to bounce back?
A:Pipeline adds were lower due to a shutdown in the last 9 days of 2025 and fewer weeks in Q4 compared to Q3. The company expects MyoConnect to generate more pipeline adds at reduced costs in 2026.
Q:What is the dropout rate for the pipeline, and what are the reasons behind it?
A:The pipeline dropout rate is around 40%, influenced by challenges in getting Medicare Advantage patients authorized. However, more Medicare-qualified patients are being referred, increasing the likelihood of approval.
Q:What are the expectations for gross margins in 2026?
A:Gross margins are expected to fluctuate with volume but improve to around 70% by the end of 2026. Improvements will come from cost reduction projects, such as eliminating laptops with a new mobile app, and increasing revenues.
Q:Is the goal of having 200 O&P clinics trained and certified by 2028 still on track?
A:Yes, the goal is still on track. The company is working with clinics at various stages and has robust national account programs to expand the O&P network.
Q:Are reimbursement cycle times improving with more payers signing on?
A:Reimbursement cycle times remain around six months, but Medicare, which accounts for half of revenues, reimburses in about three weeks. Broader payer bases are also authorizing MyoPro, though payment delays occur with non-contracted payers.
Q:What percentage of pipeline adds and orders came from recurring referral sources in Q4, and what is the target for the future?
A:About 10% of pipeline adds and orders came from referrals in Q4. The company aims for revenues from recurring sources to approach 50% by the end of 2026.
Q:What drove growth in the German market, and what are the expectations for 2026?
A:Growth in Germany was driven by a large population, good reimbursement policies, and successful recruitment of O&P practices. The market grew over 40%, and the company plans to continue scaling operations.
Q:How will the randomized controlled study at the University of Utah be used commercially?
A:The study will provide data to convince more payers to cover MyoPro by demonstrating its medical necessity and effectiveness. Initial results are expected by the end of the year.
Q:What is the timeline and expected benefits of the MyoPro 3.0 model?
A:The MyoPro 3.0 will be a next-generation platform with improvements in functionality, comfort, and market adoption. It will feature updated components like chips, software, and orthotic materials.
Q:What are the gross margin percentages and operating leverage opportunities for international sales?
A:International gross margins are slightly lower than the 68% domestic margin. As sales grow, manufacturing in the U.S. will provide operating leverage, benefiting both domestic and international margins.
Q:Review of Unclear Management Responses
A:Management avoided giving a direct answer regarding Q1 improvements in acquisition costs, stating it was too early to discuss results. Additionally, there was some lack of clarity around the exact pipeline dropout rate, with conflicting calculations and no definitive figure provided.
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Earnings Word Cloud
The most frequently occurring keywords in this quarter's earning call
Avenue term
Elevance
JV
MyoConnect program
MyoConnect referral
Number
RD
acquisition
agreement
app
burn cash
channel record
contract Medicare
cost structure
customer
debt issuance
hospital
interest expense
leverage
liability
majority
market access
multistate
network contract
number order
objective
patient source
payer arrangement
payer contract
pivot patient
program revenue
referral MyoConnect
referral program
sale channel
sale marketing
source MyoConnect
transition
value
venture
MYO Transcript
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Myomo, Inc. (MYO) Q1 2026 Earnings Call Transcript
Positive5-8
The earnings call shows a strong financial performance with a 20% revenue growth and improved gross margin. Net loss reduction and increased cash balance are positive indicators. Despite a slight increase in operating expenses, the overall financial health appears robust. The lack of discussion on operational updates, strategic initiatives, and risks suggests no immediate concerns. Without additional negative insights from the Q&A, the sentiment remains positive, likely leading to a 2%-8% stock price increase over the next two weeks.
Myomo, Inc. (MYO) Q4 2025 Earnings Call Transcript
Unknown3-9
The earnings call reveals a negative sentiment due to increased costs, negative EBITDA, and cash burn. Despite optimistic future guidance and strategic plans, current financial metrics are weak, with no immediate improvements in acquisition costs and high pipeline dropout rates. The stock price is likely to face downward pressure in the short term.
Myomo, Inc. (MYO) Q3 2025 Earnings Call Transcript
Unknown11-10
The earnings call reveals several concerning factors: declining gross margins, increased operating expenses, and widening losses. While there are strategic plans for revenue growth and cost management, the lack of clear guidance on returning to positive adjusted EBITDA and the impact of debt raise concerns. The Q&A session highlights uncertainties, particularly in the international market and the China partnership. These negatives outweigh the positives, leading to a negative sentiment prediction for the stock price over the next two weeks.
MYO Report
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