Lifeward's Q3 2025: Contradictions Emerge on Medicare Sales, AlterG Strategies, and ReWalk 7 Pricing

Date of Call: September 30, 2025

Financials Results

• Revenue: $6.2M in Q3 2025, up ~1.1% YOY from $6.1M in Q3 2024 and up ~8% sequentially from $5.7M in Q2 2025
• Gross Margin: GAAP gross margin 43.7% of revenue (Q3 2025) vs 36.2% in Q3 2024; non-GAAP gross margin 43.7% vs 42.5% in Q3 2024
• Operating Margin: GAAP operating loss $3.1M in Q3 2025 vs $3.2M in Q3 2024; non-GAAP operating loss $3.0M vs $4.1M in Q3 2024 (management expects further reduction in Q4 2025)

Guidance:

• Reaffirming full-year 2025 revenue guidance of $24–$26 million.
• Reaffirming projected non-GAAP net loss for FY2025 of $12–$14 million.
• Management expects operating loss to further reduce in Q4 2025 as sales volumes grow and efficiency measures continue to take hold.

Business Commentary:

* ReWalk Placements and Medicare Sales Growth: - Lifeward reported a significant increase in ReWalk placements, reaching record numbers for Medicare beneficiaries, marking the second consecutive record since CMS established its fee schedule in April 2024. - The growth was driven by improved operational efficiencies and a strong focus on expanding patient access to Medicare Advantage commercial revenue.

• Operational Efficiency and Cost Reduction:
• The company achieved a 16% reduction in quarterly cash burn and a 27% reduction in non-GAAP operating loss compared to the previous year.
• This was primarily due to operational efficiencies and lower production costs following the December 2024 closure of the Fremont, California manufacturing facility.

• European Market Expansion and AlterG Performance:
• Lifeward's access to the European market expanded, representing roughly 40% of its global addressable exoskeleton opportunity, following the CE mark approval for ReWalk 7.
• Revenue from AlterG products and services was $3.1 million in Q3 2025, down from $3.6 million in Q3 2024, primarily driven by timing factors and quarterly revenue mix, as the company refocuses its sales strategy.

• Strategic Partnerships and Payer Access:
• Lifeward has been building strategic partnerships, such as the collaboration with CoreLife, to enhance patient reach and gain broader access to payers across the U.S.
• This strategic focus aims to leverage channel management and payer policy development to improve access for patients, which is expected to contribute to future growth.

Sentiment Analysis:

Overall Tone: Positive

• Management highlighted 'another record quarter for ReWalk placements,' a 16% reduction in quarterly cash burn, a 27% reduction in non-GAAP operating loss year-over-year, CE mark expansion into Europe (~40% addressable opportunity), completion of a $3M loan to bolster liquidity, and reaffirmed FY2025 guidance—indicating cautious optimism about operational progress.

Q&A:

• Question from Yale Jen (Laidlaw & Company): I just a little bit sort of detail things here. First of all, I just want to confirm that you mentioned that there’s 23 systems in rental. Is that correct? If so, what’s the breakdown between the United States and Germany?
  Response: There are 33 active rentals and all of them are in Germany.

• Question from Yale Jen (Laidlaw & Company): In the previous quarter, you had a collaboration with CoreLife. What kind of impact did that have in Q3 or going forward?
  Response: The CoreLife partnership is progressing, the pipeline has grown each quarter, training and marketing processes are being refined, and expansion is expected over time.

• Question from Yale Jen (Laidlaw & Company): You mentioned the highest percentage of ReWalk is from Medicare — do you have a percentage from a dollar sense for Medicare versus others?
  Response: Medicare accounts for approximately 50% of ReWalk revenue (statement refers to ReWalk products only).

• Question from Yale Jen (Laidlaw & Company): What’s the actual rough revenue of ReWalk within the $3.1M of the traditional product sales?
  Response: $2.9M of the $3.1M traditional product revenue is related to ReWalk; the remainder is mainly MyoCycle.

• Question from Swayampakula Ramakanth (HC Wainwright): After your review of the company, what operational aspects require change to reach inflection and growth?
  Response: Priority is rebuilding fundamentals—establish clear KPIs and data-driven allocation, strengthen channel/payer partnerships for broader access, and ensure scalable operations and COGS discipline.

• Question from Yale Jen (Laidlaw & Company): What triggered the increased Medicare sales this quarter and how much of that could be sustained in future quarters?
  Response: The uptick reflects a more focused sales organization; sustainable growth is expected as channel partnerships and the split sales teams (capital vs patient/payer) ramp into next year.

• Question from Yale Jen (Laidlaw & Company): You reaffirmed guidance to $24–$26M for 2025; what gives you confidence to achieve the implied Q4 growth?
  Response: Confidence is based on seasonally strong Q4, existing product backlog for both lines, and the managed pipeline.

• Question from Swayampakula Ramakanth (HC Wainwright): What happened with the AlterG decline and what needs to be done to stabilize growth?
  Response: Decline attributed to split sales focus; plan to dedicate a capital sales team to AlterG and a focused neuro rehab team to ReWalk in the U.S. to restore momentum.

• Question from Yale Jen (Laidlaw & Company): How is ReWalk 7 being introduced in Europe—are you targeting workers' comp or other segments and visibility into adoption?
  Response: ReWalk 7 has strong Germany rentals with high conversion to sales in 3–6 months, CE mark enables broader European access, but payer coverage rollout across countries remains in progress.

• Question from Yale Jen (Laidlaw & Company): Given past financial overhangs, how comfortable are you in overcoming the current position?
  Response: Management is optimistic—believes the fundamentals are repairable, products are innovative, and is actively engaging partners to strengthen the financial position.

• Question from Yale Jen (Laidlaw & Company): Update on expanding AlterG into the sports arena versus medical space?
  Response: Running U.S. beta programs with a bifurcated sales force targeting high-school/sports and rehab customers; execution underway with expectations of stronger results next year.

• Question from Yale Jen (Laidlaw & Company): For the sports arena, would that be primarily pay/self-pay instead of reimbursement?
  Response: Sports is largely self-pay, but revenue mix also includes government/grants (e.g., DOD) and international tenders—so not solely self-pay.

Contradiction Point 1

ReWalk Medicare Sales Growth

It involves differing perspectives on the growth and impact of Medicare sales on ReWalk, which is a crucial revenue stream for the company.

What percentage of ReWalk's revenue comes from Medicare versus other sources? - Yale Jen (Laidlaw & Company)

2025Q3: We've had good growth in Medicare. We've had a record quarter for ReWalk placements for Medicare beneficiaries this quarter, which as a percentage of traditional product sales, this pays approximately 50% of our total revenue. - Almog Adar(CFO)

What was the Medicare revenue for the quarter, and can you provide additional details? - Yale Jen (Laidlaw & Co.)

2025Q2: ReWalk Exoskeleton has medical device exemptions from tariffs. For AlterG, they are working to resolve any tariff situation, but the impact is immaterial currently. There is expected growth in ReWalk revenues for Q3 and Q4. - Almog Adar(CFO)

Contradiction Point 2

AlterG Sales Strategies and Market Expansion

It involves differing approaches and focus areas for the company's AlterG product, which impacts market strategy and potential revenue growth.

What caused the 15% decline in AlterG's performance? What steps are needed to stabilize and restart growth for AlterG? - Swayampakula Ramakanth (HC Wainwright)

2025Q3: The focus for AlterG this quarter was around the rehab space and the neuro rehab space. We have a team that's focused on AlterG specifically that's selling into the rehab space, selling into neuro rehab space, and we have another team that's focused on ReWalk 7 specifically that's selling into the neuro rehab space. - Mark Grant(CEO)

Has reimbursement improved with the ReWalk 7's advanced features? - Swayampakula Ramakanth (H.C. Wainwright)

2025Q2: Focus is on channel partners and targeted market strategies, with a renewed focus on professional athletics and high schools. - William Grant(President and Chief Commercial Officer)

Contradiction Point 3

ReWalk 7 Improvements and Pricing

It involves the description of improvements in ReWalk 7 and whether there have been changes in its pricing, which are crucial for understanding the competitive positioning and financial outlook of the product.

How many rental systems are currently in operation, and what is the U.S. versus Germany breakdown? - Yale Jen(Laidlaw & Company)

2025Q3: We have 33 active rentals, all of them in Germany. - Almog Adar(CFO)

What are the key differences between ReWalk 7 and ReWalk 6, and has the price changed? - Swayampakula Ramakanth(HC Wainwright)

2025Q1: ReWalk 7 has improvements in software for ease of use, new features like multiple speeds, safety, and smartwatch integration. Pricing remains the same, with CMS setting the price. - Larry Jasinski(CEO)

Contradiction Point 4

AlterG Performance and Market Expansion

It involves the performance and market expansion plans for AlterG, which are critical for understanding the company's growth trajectory and strategic focus.

What drove the increase in Medicare sales this quarter, and how much of it is sustainable in the future? - Swayampakula Ramakanth(HC Wainwright)

2025Q3: What you’re seeing now is a focused sales force where we’ve divided the sales force into two pieces. We have one that’s focused on capital sales and one that’s focused on the patient, payer, and access. - Mark Grant(CEO)

How has AlterG performed over the past 18 months, and what is your confidence level? - Swayampakula Ramakanth(HC Wainwright)

2025Q1: AlterG has shown growth with new NEO products, now accretive to business. Consolidation with a contract manufacturer and a single sales force have improved operations, with 19% and 17% growth in the last two quarters. - Larry Jasinski(CEO)

Contradiction Point 5

Medicare Revenue and Access

It directly impacts expectations regarding revenue growth from Medicare and the company's ability to access patients covered by different insurance providers, which are crucial for financial projections and market penetration.

What impact did the collaboration with CoreLife in the previous quarter have on Q3 or future periods? - Yale Jen(Laidlaw & Company)

2025Q3: The partnership with CoreLife has been going well. We have both been diligently and meticulously working into this partnership and building the pipeline over time. It has grown each quarter, and we are learning the training processes and what it takes to reach those patients for marketing efforts. - Mark Grant(CEO)

Are you aiming to improve revenue through the CorLife workers' compensation partnership? - Swayampakula Ramakanth(HC Wainwright)

2025Q1: Workers' comp is an ideal market as patients tend to be in better condition post-injury. CorLife provides extensive access to workman comp groups, which we didn't have before. - Larry Jasinski(CEO)