SANUWAVE's 2025 Q1: Unpacking Contradictions in Sales Strategy and Customer Acquisition

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Revenue Growth and Sales Expansion:
- SanuWAVE Health, Inc. reported Q1 2025 revenue of $9.3 million, representing a 61% increase year-over-year.
- The growth was driven by a 128% increase in UltraMIST system placements and strategic expansion into new customer segments.

Gross Margin Improvement:
- The company achieved a gross margin of 79% in Q1 2025, up from 72.6% in Q1 2024, an increase of over 640 basis points.
- This improvement was attributed to reduced costs in UltraMIST system production and strategic pricing adjustments for systems and applicators.

Inventory Build-up and Tariff Resilience:
- SanuWAVE built up inventory on both UltraMIST systems and applicators during Q1, aiming to stockpile longer lead-time components.
- This strategy was adopted to ensure comfortable inventory levels amidst uncertain economic and trade conditions, with no anticipated material cost availability or margin issues from current tariffs.

Financial Performance and Stock-Based Compensation:
- The company reported an adjusted EBITDA of $2.3 million in Q1 2025, a $2.4 million improvement year-over-year.
- Higher non-cash and infrequent expenses, including $1 million in stock-based compensation expense, contributed to the increase in net loss, despite lower interest expense.