Myomo's Q3 2025: Contradictions Emerge on Pipeline Growth, Authorizations, Customer Acquisition Costs, Orthotist Expansion, and Breakeven Timelines

Date of Call: November 10, 2025

Financials Results

• Revenue: $10.1M, up 10% YOY
• EPS: $0.09 loss per share, compared with $0.03 loss per share in Q3 2024
• Gross Margin: 63.8%, down from 75.4% in Q3 2024 (prior-year accounting change benefited 2024 by ~200 bps; 2025 impacted by ~800 bps from higher labor/overhead and change in absorption)
• Operating Margin: Operating loss of $3.5M (≈ -34.7% margin on $10.1M revenue), compared with an operating loss of $1.0M in Q3 2024

Guidance:

• Reiterated full-year 2025 revenue guidance of $40M to $42M ( >23% growth vs prior year)
• Not providing 2026 numeric guidance at this time
• 2026 focus: diversify revenue away from advertising toward MyoConnect referrals and O&P channel expansion (including international)
• Plan to improve operating leverage and reduce cash burn in 2026
• Term loan ($17.5M facility; $12.5M funded) to provide growth capital and extend runway

Business Commentary:

* Revenue and Market Performance: - Myomo, Inc. reported record revenue of $10.1 million for Q3 2025, coming in at the high end of expectations. - The growth was driven by record revenues in international markets and a growing number of O&P providers.

• Pipeline and Customer Acquisition:
• The pipeline increased, with the number of patient candidates who qualify for MyoPro growing. In Q3, there was a sequential increase in authorizations and orders.

• This was attributed to improved identification and qualification of prospective patients, enhanced advertising media mix, and the expansion of the MyoConnect program.

• Operational Efficiency and Cost Management:

• Gross margin for the third quarter was 63.8%, although down from previous periods due to higher labor and overhead costs.
• Myomo implemented manufacturing changes to improve gross margin, managed headcount reductions, and focused on reducing operating expenses to lower the cash burn rate.

• International Market Growth:
• International revenue reached a record $1.8 million in the quarter, up 63%, with Germany leading in orders.
• This growth was driven by the establishment of a robust O&P channel and favorable reimbursement access in Germany.

Sentiment Analysis:

Overall Tone: Positive

• "We had another strong quarter with revenue of $10.1 million, coming in at the high end of our expectations."; "we're able to reiterate our full 2025 annual guidance of $40 million to $42 million."; record international revenue +63% and pipeline up 32% YOY support constructive execution despite margin and loss headwinds.

Q&A:

• Question from Chase Knickerbocker (Craig-Hallum Capital Group LLC, Research Division): Maybe just to start, could you help us quantify the scale of your U.S. O&P business at this point? So just from a domestic O&P perspective, how many units did you ship into that channel in the third quarter, just to help us kind of think about how that business is scaling?
  Response: Q3 U.S. O&P revenue was about $900k, roughly 30 units (CFO to supply exact unit count).

• Question from Chase Knickerbocker (Craig-Hallum Capital Group LLC, Research Division): As far as your new head of marketing goes, can you just cue us on what kind of levers were identified as far as potential avenues for improvement in terms of reducing customer acquisition costs within the direct billing channel?
  Response: New head of marketing is reviewing channel mix (TV, social, YouTube, etc.) to lower cost per qualified lead and optimize media allocation.

• Question from Chase Knickerbocker (Craig-Hallum Capital Group LLC, Research Division): There was a noticeable uptick as far as backlog drops are concerned. Can you walk us through what might be the driver there, what you saw in the quarter as far as how the backlog progressed?
  Response: About 40% of backlog drops were cleanup related to Germany trial conversions; remaining reductions were normal activity as intra-quarter fills increased.

• Question from Chase Knickerbocker (Craig-Hallum Capital Group LLC, Research Division): How should we think about OpEx going forward off Q3 levels and timing to return to positive adjusted EBITDA?
  Response: OpEx will grow modestly (more advertising and R&D) but management intends to limit expense growth and drive operating leverage; timing for positive adjusted EBITDA will be provided with 2026 guidance.

• Question from Scott Henry (Alliance Global Partners, Research Division): Pipeline adds were up slightly in Q3; can you still see big gains there or is there a saturation level?
  Response: Management believes market is far from saturated and expects pipeline growth to accelerate via MyoConnect referrals and O&P channel, capturing more incidence (recent) patients who convert better.

• Question from Scott Henry (Alliance Global Partners, Research Division): With a smaller backlog entering Q4, how will you deliver sequential growth from Q3 to Q4?
  Response: Q4 growth is expected to come from increased intra-quarter fill units and authorizations/orders received and converted inside the quarter, offsetting a smaller opening backlog.

• Question from Scott Henry (Alliance Global Partners, Research Division): Is taking debt a sign you expect to be close to breakeven in 18 months given the repayment schedule and risk profile?
  Response: Company would not have taken the loan if it didn't expect to repay it; expects to stop burning cash before repayment begins by growing revenues and containing OpEx; loan chosen to minimize dilution.

• Question from Anthony Vendetti (Maxim Group LLC, Research Division): How many O&P clinics have been trained so far and what are your goals by end of '25/'26? Also, what is behind MyoConnect and what do you hope to accomplish?
  Response: A couple hundred clinicians completed online training; a couple dozen clinics are actively placing orders this year; MyoConnect leverages field clinicians and rehab in‑services to generate recurring, lower-cost referrals from therapists, hospitals and O&P partners.

• Question from Anthony Vendetti (Maxim Group LLC, Research Division): Any update on the quarterly revenue run rate required to reach breakeven or timeline?
  Response: Post‑headcount reductions, breakeven quarterly revenue estimate is roughly $16M–$17M (down from prior $17M–$18M).

• Question from Xun Lee (H.C. Wainwright & Co, LLC, Research Division): You mentioned $1.8M of revenue from Germany this quarter; what's behind the increase there?
  Response: Germany growth driven by >100 O&P channel partners and statutory health insurer coverage that provides easier access (less pre-authorization friction) for medically qualified patients.

• Question from Xun Lee (H.C. Wainwright & Co, LLC, Research Division): Have you reached a new plateau in advertising spend after switching to more TV, or will spend rise in Q4 and how will that impact pipeline and cost per add?
  Response: Advertising spend will increase in 2026 but at a slower growth rate than 2025; MyoConnect and O&P efforts aim to improve pipeline quality and conversion, and current MyoConnect activity is being executed without additional spend.

• Question from Edward Woo (Ascendiant Capital Markets LLC, Research Division): How is the rest of international business performing and any updates on the China partnership?
  Response: Germany is the standout and expected to continue strong growth; other international markets not being actively pursued for reimbursement now; China JV is still conducting a clinical trial for NMPA approval with no major progress to report.

Contradiction Point 1

Pipeline Growth and Advertising Strategy

It involves the company's strategy for growing the patient pipeline and the role of advertising in that growth, which impacts expectations for future revenue and market penetration.

Will pipeline adds continue to grow significantly, or will they stabilize? - Scott Robert Henry(Alliance Global Partners)

2025Q3: We expect our patient pipeline to continue to grow and expect the growth to come from both of our strategic channels. We also expect to see some improvement over the historical conversion rate. - Paul R. Gudonis(CEO)

Can you provide the number of CPOs trained and currently certified? What are your expectations for pipeline additions and authorization rates? - Scott Robert Henry(Alliance Global Partners)

2025Q2: We're working through a record number of leads from June. Authorization rates are not expected to return to 17% until Medicare Advantage plans start authorizing more. - David A. Henry(CFO)

Contradiction Point 2

Authorizations and Medicare Advantage Plans

It involves the company's expectations for authorizations from Medicare Advantage plans, which directly impacts revenue and patient acquisition.

Can you provide more details about MyoConnect? - Anthony Vendetti(Maxim Group)

2025Q3: We believe that there's a medical need for our device. We're working right now with 50 joint venture clinics. And we're just starting to execute on the strategy we've developed for the private market. - David Henry(CFO)

Can you provide the number of CPOs trained to date and how many are currently active and certified? What are your expectations for pipeline additions and authorization rates? - Scott Robert Henry(Alliance Global Partners)

2025Q2: We're not cutting pipeline adds, but rather focusing on quality. - David A. Henry(CFO)

Contradiction Point 3

Customer Acquisition Costs

It involves the company's strategy for reducing customer acquisition costs, which directly impacts operational efficiency and revenue growth.

Okay, let me see. The user wants me to simplify a question from a conference call. The original question is: "Within the direct billing channel, were there any levers identified for potential avenues for improvement in customer acquisition costs?" First, I need to make sure I understand the question. The person is asking if, in the direct billing channel, the company found any levers (which means factors or strategies) that could improve customer acquisition costs.Now, the task is to make this question more concise without changing the meaning. The original has "potential avenues for improvement," which can be simplified. Maybe "opportunities for improvement" is shorter. Also, "levers identified" can be just "levers identified," but maybe "strategies identified" is better? Wait, "levers" is a business term here, so it's okay to keep it.So, "Within the direct billing channel, were there any levers identified for potential avenues for improvement in customer acquisition costs?" Let me break it down. "Within the direct billing channel" is the context. Then the main question: "were there any levers identified for potential avenues for improvement in customer acquisition costs?" Simplify "potential avenues for improvement" to "opportunities for improvement." Also, "levers identified for" can be "levers identified to improve." Putting it together: "In the direct billing channel, were any levers identified to improve customer acquisition costs?" Wait, does that capture the original meaning? The original is asking if there were any levers (strategies) found that could be avenues (opportunities) for improvement. The simplified version says "were any levers identified to improve..." which is slightly different. The original is more about identifying levers that could be avenues for improvement, not necessarily that they were used to improve. So maybe "were any levers identified as potential avenues for improvement..." But the user wants it concise. "Potential avenues for improvement" can be "opportunities for improvement." So maybe "In the direct billing channel, were any levers identified as opportunities to improve customer acquisition costs?" But the original uses "potential avenues," which is a bit wordy. Alternatively, "In the direct billing channel, were any levers identified to improve customer acquisition costs?" That's even shorter. But does that miss the "potential avenues" part? The original is about potential avenues (possible ways) for improvement. The simplified version removes "potential avenues for," which might change the nuance. The original is asking if there are any levers that could be used as avenues (i.e., strategies) for improvement. The simplified version is asking if any levers were identified to improve, which is a bit more direct. Hmm. Maybe the key is to keep "potential avenues for improvement" but make it shorter. "Opportunities for improvement" is a common phrase. So "In the direct billing channel, were any levers identified as opportunities for improving customer acquisition costs?" But the user wants it concise. Let me check the original again. The original is: "Within the direct billing channel, were there any levers identified for potential avenues for improvement in customer acquisition costs?" "Potential avenues for improvement" is redundant. "Avenues for improvement" already implies potential. So maybe "In the direct billing channel, were any levers identified as avenues for improving customer acquisition costs?" But "avenues for improving" might still be wordy. The user wants it as concise as possible. So "In the direct billing channel, were any levers identified to improve customer acquisition costs?" That's the most concise version. However, does that accurately reflect the original? The original is about identifying levers that are potential avenues (i.e., possible strategies) for improvement. The simplified version is asking if any levers were identified to improve, which is slightly different. But maybe in business contexts, "levers" are the strategies themselves. So the question is whether they found any levers (strategies) that could be used to improve customer acquisition costs. So the simplified version is acceptable. Therefore, the answer would be: "In the direct billing channel, were any levers identified to improve customer acquisition costs?" But wait, the original uses "potential avenues for improvement," which is a bit more cautious. The simplified version is more direct. However, the user wants to keep the original meaning without changing it. So maybe "In the direct billing channel, were any levers identified as potential avenues for improving customer acquisition costs?" But that's still longer. Alternatively, "In the direct billing channel, were any levers identified for improving customer acquisition costs?" That removes "potential avenues for," which might be necessary. Hmm. The user said to keep the original meaning. The original is about identifying levers that are potential avenues for improvement. So the key is "potential avenues for improvement." But how to make that concise? Maybe "potential strategies - Chase Richard Knickerbocker(Craig-Hallum)

2025Q3: The company is reviewing various media channels, including social media and television, to optimize customer acquisition costs and generate more leads at lower costs. A comprehensive review is underway. - Paul R. Gudonis(CEO)

How many CPOs have been trained and are currently certified? What are your expectations for pipeline adds and authorization rates? - Scott Robert Henry(Alliance Global Partners)

2025Q2: We're not cutting pipeline adds, but rather focusing on quality. - David A. Henry(CFO)

Contradiction Point 4

Growth in Orthotists and Pipeline Adds

It highlights differing perspectives on the role of orthotists in driving pipeline growth, which is crucial for the company's expansion strategy.

What is the current scale of your U.S. O&P business? How many units were shipped through this channel in Q3? - Chase Knickerbocker(Craig-Hallum)

2025Q3: Growth will come from O&P channel and MyoConnect, focusing on recent stroke patients who are more motivated and medically qualified. - Paul Gudonis(CMO)

How does orthotist growth drive the pipeline and backlog, and how does the MyoPro certification class contribute to these metrics? - Anthony Vendetti(Maxim Group)

2025Q1: We've trained 300 CPOs for patient evaluations. MyoPro 2x certification classes are hands-on, enabling clinics to evaluate patients and handle reimbursement. - Paul Gudonis(CMO)

Contradiction Point 5

Breakeven Timeline and Financial Goals

It involves changes in financial forecasts and expectations, particularly with regard to the breakeven timeline and the financial goals of the company, which are critical for investors.

Any update on breakeven timeline or required revenue run rate? - Anthony Vendetti (Maxim Group)

2025Q3: The breakeven quarterly revenue needed is around $16 million to $17 million, adjusted after a headcount reduction. - David Henry(CFO)

Can you discuss your outlook for the remainder of FY25 in terms of sales and profitability? - Chase Knickerbocker (Craig-Hallum)

2024Q4: We are anticipating sales and profitability for the remainder of this fiscal year. We are enthusiastic about the growth and execution of our strategy and the market's response to our recent product launches. We expect to see growth in revenue and profitability in FY25. - Paul Gudonis(CEO)