Tactile Systems Technology Q1 2025: Navigating Contradictions in Sales Growth, EBITDA Guidance, and Medicare Impact

Sales growth expectations, EBITDA guidance and strategic investments, Medicare documentation impact and sales stabilization efforts, sales productivity and hiring pace impact, non-Medicare revenue growth are the key contradictions discussed in Tactile Systems Technology's latest 2025Q1 earnings call.



Revenue and Segment Performance:
- Tactile Systems Technology reported revenue of $61.3 million for Q1 2025, a 0.3% increase year-over-year.
- Revenue growth was driven by a 22% increase in airway clearance products, offset by a 3% decline in lymphedema products.

Sales Force Optimization and Impact:
- The company saw a decrease in sales headcount, with 264 total reps at the end of Q1 compared to 280 at the end of Q4.
- This decline was due to a strategic optimization of the sales organization and plans to rebalance headcount for future growth.

Technology and Investment Impact:
- Adjusted EBITDA decreased by 125% year-over-year, primarily due to planned technology and order process investments, including the launch of a new Salesforce CRM module.
- These investments are expected to enhance efficiency, speed, and data-driven insights in the long term.

Financial Guidance and Product Growth:
- Full-year revenue guidance was revised to a range of $309 million to $315 million, reflecting lower sales productivity and CRM integration impact.
- Despite this, the company remains optimistic about product growth, particularly with the launch of Nimbl and continuing momentum in the AffloVest segment.