Myomo Inc. Earnings Call: Growth Amid Challenges

Myomo Inc ((MYO)) has held its Q3 earnings call. Read on for the main highlights of the call.

The recent earnings call for Myomo Inc. painted a mixed picture, highlighting both growth and challenges. The company reported notable revenue growth and strategic expansions, particularly in international markets and the O&P channel. However, concerns were raised over decreased gross margins, increased operating losses, and high cash burn. While the reaffirmation of financial guidance and steps to optimize costs and advertising were positive, issues with Medicare Advantage revenue and increased losses remain significant hurdles.

Revenue Growth and International Success

Myomo reported a revenue of $10.1 million for Q3 2025, marking a 10% increase compared to the prior year. This growth was driven by record revenues in international markets, with Germany being a standout performer. The international revenue from Germany alone reached a record $1.8 million, up 63% from the previous year.

Increased Authorizations and Orders

For the first time this year, Myomo experienced a sequential increase in quarterly authorizations and orders. This growth was supported by an increase in Medicare Advantage payer authorizations, signaling a positive trend in this area.

Expanding O&P Channel

The company’s O&P channel saw a significant revenue increase of 154% year over year, reaching $900,000. This expansion is part of Myomo’s strategic efforts to enhance its market presence and drive growth.

Cost Reduction and Operating Leverage

Myomo has taken steps to reduce operating costs and improve gross margins. The company is also optimizing advertising spend and expanding the MyoConnect program, aiming to enhance operating leverage and achieve cost efficiencies.

Financial Guidance Reaffirmed

Myomo reiterated its full-year 2025 revenue guidance of $40 million to $42 million, representing an increase of more than 23% over the previous year. This optimistic outlook is supported by strong third-quarter performance and strategic initiatives aimed at sustainable growth.

Decline in Medicare Advantage Revenue

Despite positive trends in authorizations, Medicare Advantage revenue was down 18% compared to the prior year. This decline was attributed to high pre-authorization denial rates, leading to a time-consuming appeals process.

Decreased Gross Margin

The gross margin for Q3 2025 was 63.8%, down from 75.4% in the prior year. This decrease was impacted by higher payroll and lease expenses, material costs, and unfavorable overhead absorption.

Increased Operating Loss

The operating loss for Q3 2025 increased to $3.5 million, compared to $1 million in the prior year. The net loss also rose to $3.7 million from $1 million, highlighting the financial challenges the company faces.

High Cash Burn

Cash burn was $2.9 million in Q3 2025, driven by operating activities and capital expenditures related to manufacturing space expansion and product development. This remains a critical area of concern for the company.

Forward-Looking Guidance

During the earnings call, CEO Paul Gudonis provided guidance that Myomo anticipates achieving full-year 2025 revenue within the range of $40 million to $42 million, reflecting an over 23% increase compared to the previous year. The company is focusing on expanding its MyoConnect program and O&P channel to lower customer acquisition costs and improve operating leverage. Strategic initiatives include expanding insurance coverage and enhancing patient identification processes, with a commitment to scaling towards sustainable profitability and positive cash flow.

In summary, Myomo’s earnings call highlighted both promising growth and significant challenges. The company’s strategic expansions and revenue growth in international markets are encouraging, yet issues such as decreased gross margins and increased operating losses pose challenges. The reaffirmation of financial guidance and strategic initiatives aimed at cost optimization and market expansion provide a hopeful outlook for the future.