Tactile Systems 2025 Q3 Earnings Beats Estimates with 59.2% Net Income Growth

Tactile Systems (TCMD) delivered a strong Q3 2025 performance, surpassing revenue and EPS estimates while raising full-year guidance. The company’s strategic initiatives and product innovation drove robust results, positioning it for continued growth in the medical device sector.

Revenue

Tactile Systems reported $85.75 million in revenue for Q3 2025, marking a 17.3% year-over-year increase. The lymphedema segment contributed $72.38 million, while the airway clearance segment surged 71% to $13.37 million. Total revenue growth was fueled by operational efficiency and favorable Medicare policy shifts, particularly in airway clearance.

Earnings/Net Income

Earnings per share (EPS) rose 76.2% to $0.37, with net income jumping 59.2% to $8.21 million. The EPS outperformance reflects improved gross margins and cost management, underscoring the company’s financial strength.

Price Action

The stock price dipped 1.19% on the latest trading day but gained 5.13% for the week and 12.88% month-to-date. Post-earnings, TCMD surged 39.38% to $21.98, driven by strong revenue and EPS beats.

Post-Earnings Price Action Review

The 39.38% post-earnings surge highlights the stock’s sensitivity to quarterly results. Key drivers included the airway clearance segment’s 71% growth, margin expansion to 76%, and a $25M share repurchase program. However, risks like lymphedema segment volatility and regulatory challenges in the medical device sector remain. Analysts like Piper Sandler raised price targets, but long-term sustainability is uncertain without historical data.

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CEO Commentary

CEO Sheri Dodd emphasized progress in business transformation and product innovation, citing the $25M repurchase program and debt repayment as confidence signals. She highlighted alignment on strategy and optimism for 2025’s closing momentum.

Guidance

Full-year 2025 revenue guidance was raised to $317–$321 million, and adjusted EBITDA guidance to $38–$39.5 million, reflecting confidence in market conditions and operational leverage.

Additional News

1. Analyst Upgrades: BTIG upgraded TCMD to Buy with a $28 target, while Lake Street raised its price target to $32. Piper Sandler also increased its target to $20.

2. Share Repurchase Program: Tactile announced a $25M buyback, signaling financial confidence.

3. Product Innovation: FDA submissions for AfloVest and lower-extremity lymphedema expansion underscore growth potential.

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