UltraMIST's Q3 2025 Earnings Call: Contradictions Emerge in Site of Care Growth, System Placements, and Sales Strategy

The above is the analysis of the conflicting points in this earnings call

Date of Call: October 6, 2025

Financials Results

• Revenue: $11.4M to $11.6M, up 12%–14% sequentially and up 22%–24% YOY; below prior guidance of $12.0M–$12.7M

Guidance:

• FY2025 revenue guidance cut to $44M–$46M (~40% YOY growth at midpoint) from $48M–$50M prior.
• Q3 revenue pre-announced at $11.4M–$11.6M; record quarter but short of prior Q3 guidance.
• Management remains cautious on Q4 specifics; visibility improving but guidance kept conservative.
• Momentum improved meaningfully post-SAWC; September was best month ever, strength continuing into early Q4.
• Expect UltraMIST reimbursement to be unaffected by skin substitute changes; proposed CPT 97610 (2026) up ~$2–$4 (≈50–100 bps).

Business Commentary:

* Record Quarterly Revenue and System Sales: - SANUWAVE Health reported record revenue of $11.4 million to $11.6 million for Q3, representing 12% to 14% sequential growth and 22% to 24% growth compared to the previous year. - The record was driven by selling a record number of systems in the quarter, despite not meeting their previously announced guidance due to market uncertainty.

• Impact of Market Uncertainty on Growth:
• The uncertainty created by proposed changes in reimbursement for skin substitute and allograft products froze the market, causing a slow start to the quarter.

• This uncertainty seemed to alleviate later in the quarter, particularly after the SAWC convention, leading to an increase in business activity.

• Pivotal Focus on Hospital-Acquired Pressure Injuries (HAPI) Market:

• SANUWAVE Health is focusing on the HAPI market, estimated to be a $22 billion market in the U.S., as hospitals seek to prevent these injuries and improve patient outcomes.

• The company believes this market presents an opportunity for growth, as hospitals have a strong interest in preventing these injuries and improving patient quality of life.

• Adjustment in Annual Revenue Guidance:

• SANUWAVE Health adjusted its annual revenue guidance to $44 million to $46 million, representing approximately 40% year-on-year growth at the midpoint, down from their previous guidance of $48 million to $50 million.
• The adjustment reflects the impact of market uncertainty and the challenges in forecasting the closing of deals, while the company remains optimistic about future growth opportunities.

Sentiment Analysis:

• Record Q3 revenue and record systems placed, but missed prior guidance and reduced full-year outlook. Management cited market uncertainty from proposed skin substitute reimbursement changes, yet noted a marked pickup post-SAWC and continued early Q4 momentum.

Q&A:

• Question from Kyle Bauser (ROTH Capital Partners): Can you provide more detail on mix and the number of capital equipment systems sold in the quarter?
  Response: They placed 155 systems in Q3, a company record.

• Question from Kyle Bauser (ROTH Capital Partners): Did September strength and the SAWC conference drive clearer demand and is the momentum continuing into Q4?
  Response: Post-SAWC uncertainty eased; business traction rose in September and remains strong early in Q4.

• Question from Kyle Bauser (ROTH Capital Partners): Which sites of care are most active and potential growth drivers?
  Response: Mobile remains a major driver; traction building in wound centers; prioritizing hospitals/HAPI market as a key focus.

• Question from Kyle Bauser (ROTH Capital Partners): Is DFU vs. VLU utilization still roughly even?
  Response: They lack detailed visibility by wound type and cannot specify the mix.

• Question from Kyle Bauser (ROTH Capital Partners): Any color on the pipeline?
  Response: Targeting larger, higher-use customers; evidence work (posters/papers) coming; deals taking longer but pipeline remains strong.

• Question from Carl Byrnes (Northland Capital Markets): Was the CMS-related disruption more pronounced among smaller or larger customers?
  Response: Impact was broad-based across users of skin substitutes; no clear distinction by customer size.

• Question from Carl Byrnes (Northland Capital Markets): Could lower skin substitute pricing ultimately benefit UltraMIST usage and economics?
  Response: Yes; expect opportunity to drive evidence-based protocols and position UltraMIST as a complementary, cost-effective option.

• Question from Carl Byrnes (Northland Capital Markets): The full-year guide implies a Q4 ramp to ~$13M–$15M; what visibility do you have?
  Response: Visibility is strong, but they’re keeping guidance cautious.