Hinge Health (HNGE) Plunge 17.38% as GAAP Net Loss Widens to $1.8M Despite 53% Revenue Surge, AI-Driven Margins

The share price fell to its lowest level since August 2025 today, with an intraday decline of 17.38%.

Hinge Health (HNGE) reported mixed third-quarter 2025 results, with strong non-GAAP financials contrasting a GAAP net loss. Revenue surged 53% year-over-year to $154.2 million, driven by a 25% client base expansion, while non-GAAP gross margins reached 83%—a four-point improvement. However, GAAP net losses widened to $1.8 million, dragging down the stock after hours. The company attributed the GAAP shortfall to elevated expenses, despite record free cash flow of $81.3 million. Analysts highlighted AI-driven operational efficiencies, including motion-tracking technology, as key enablers of margin growth and scalability.

The stock’s sharp decline came despite upgraded analyst ratings and a 6.5% intraday rebound following the earnings release. Citigroup and Evercore ISI raised price targets to $65 and $62, respectively, citing Hinge Health’s competitive positioning in the $661 billion musculoskeletal care market. The firm also raised full-year 2025 revenue guidance to $572–$574 million, reflecting sustained demand from large employers and federal insurers. However, persistent GAAP losses and market skepticism over short-term profitability remain risks. With a focus on AI automation and cost optimization, Hinge Health aims to solidify its role in a high-growth sector, though execution challenges and competitive pressures could test its long-term momentum.