TACTILE SYSTEMS TECHNOLOGY INC
For the period ended Mar 31, 2026. Filed May 4, 2026.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2026 · Filed May 4, 2026
TCMD$26.03-1.3%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-09-30; filed 2025-11-03.
0001104659-25-105543
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-03-31; filed 2026-05-04.
0001104659-26-054877
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 89 previous paragraphs and 71 current paragraphs.
39 unchanged; 27 reworded; 5 added; 21 removed; 2 previous and 0 current paragraphs rearranged.
Tables are not compared: 17 previous and 15 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (5)
Current report
The increase in the lymphedema product line revenue in the three months ended March 31, 2026, was driven by accelerating commercial momentum from our strong partnerships, execution of our go-to-market commercial strategy and disciplined focus on sales force productivity. The increase in the airway clearance product line revenue was primarily driven by strong partnerships and prioritized placement agreements with our top 10 respiratory DME providers.
Current report
Gross margin was 77% and 74% in the three months ended March 31, 2026 and 2025, respectively.
Current report
Research and development (“R&D”) expenses increased $1.0 million, or 59%, to $2.8 million in the three months ended March 31, 2026, compared to $1.7 million in the three months ended March 31, 2025. The increase was primarily attributable to a $0.6 million increase in IT and other professional fees related expenses and a $0.5 million increase in personnel-related compensation expenses.** **IT-related expenses reflected in both R&D expenses and Reimbursement, general and administrative expenses primarily relate to the ongoing implementation of new technology across the entire order process, replacing legacy systems, which we expect to continue through the remainder of 2026.
Current report
Amounts drawn under the revolving credit facility bear interest, at our option, at a rate equal to (a) the highest of (i) the prime rate, (ii) the federal funds rate plus 0.50% and (iii) Adjusted Term SOFR (defined as term Secured Overnight Financing Rate) for a one-month tenor plus 1% (the “Base Rate”) plus an applicable margin or (b) Adjusted Term SOFR for an interest period of one, three or six months, at our option, plus the applicable margin. The applicable margin is 0.75% to 1.75% on loans bearing interest at the Base Rate and 1.75% to 2.75% on loans bearing interest at Adjusted Term SOFR, in each case depending on our consolidated total leverage ratio.
Current report
Our obligations under the 2025 Credit Agreement are secured by a security interest in substantially all of our and our subsidiary’s assets and are also guaranteed by our subsidiary.
Removed paragraphs (21)
Previous report
Revenue increased $18.5 million, or 9%, to $225.9 million in the nine months ended September 30, 2025, compared to $207.4 million in the nine months ended September 30, 2024. The increase in total revenue was attributable to an increase of $11.9 million, or 47%, in sales of the airway clearance product line and an increase of $6.6 million, or 4%, in sales and rentals of the lymphedema product line in the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024.
Previous report
The increase in the airway clearance product line revenue in the three and nine months ended September 30, 2025, was primarily attributable to increased placements of AffloVest among our DME partners. The increase in the lymphedema product line revenue in the three and nine months ended September 30, 2025 was primarily attributable to operational execution and meaningful progress across business transformation, product innovation and market leadership initiatives.
Previous report
Gross margin was 76% and 75% in the three months ended September 30, 2025 and 2024, respectively, and 75% and 73% in the nine months ended September 30, 2025 and 2024, respectively.
Previous report
Sales and marketing expenses increased $4.6 million, or 6%, to $87.4 million in the nine months ended September 30, 2025, compared to $82.8 million in the nine months ended September 30, 2024. The increase was primarily attributable to a $3.2 million increase in personnel-related compensation expenses, a $0.9 million increase in travel and entertainment expenses, a $0.4 increase in expenses related to meetings and seminars, and a $0.1 million increase in expenses related to educational grants.
Previous report
Research and development (“R&D”) expenses decreased $0.2 million, or 9%, to $2.2 million in the three months ended September 30, 2025, compared to $2.4 million in the three months ended September 30, 2024. The decrease was primarily attributable to a $0.2 million decrease in clinical study related expenses and a $0.1 million decrease in personnel-related compensation expenses, partially offset by a $0.1 million increase in IT-related expenses.** **
Previous report
R&D expenses decreased $0.8 million, or 12%, to $6.0 million in the nine months ended September 30, 2025, compared to $6.8 million in the nine months ended September 30, 2024. The decrease was primarily attributable to a $0.8 million decrease in clinical study related expenses and a $0.3 million decrease in personnel-related compensation expenses, partially offset by a $0.3 million increase in IT-related expenses.** **
Previous report
Reimbursement, general and administrative expenses increased $12.3 million, or 24%, to $63.5 million in the nine months ended September 30, 2025, compared to $51.2 million in the nine months ended September 30, 2024. This increase was primarily attributable to a $8.1 million increase in personnel-related compensation expenses, a $2.7 million increase in IT-related expenses, and a $1.5 million increase in occupancy costs, depreciation expense and professional fees.
Previous report
Intangible asset amortization was $1.8 and $1.9 million for the nine months ended September 30, 2025 and 2024, respectively.
Previous report
Interest income decreased $25,000, or 1%, to $2.4 million in the nine months ended September 30, 2025, compared to $2.4 million in the nine months ended September 30, 2024. Interest expense decreased $0.6 million, or 36%, to $1.0 million in the nine months ended September 30, 2025, compared to $1.6 million in
Previous report
the nine months ended September 30, 2024, primarily due to the decrease in the outstanding balance and repayment of our term loan.
Previous report
We recorded an income tax expense of $3.4 million and $3.3 million for the nine months ended September 30, 2025 and 2024, respectively. The effective tax rate for the nine months ended September 30, 2025 was an expense of 28.9%, compared to an expense of 31.0% for the nine months ended September 30, 2024. The primary drivers of the change in the Company’s effective tax rate were attributable to a lower discrete expense in the current year period as compared to true-ups recognized in the prior year period and rate changes in the current year period compared to prior year period.
Previous report
On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted. Key income tax-related provisions of the OBBBA include the repeal of mandatory capitalization of research and development expenditures under Internal Revenue Code (IRC) Section 174 (reinstating full expensing beginning in 2025), extension of bonus depreciation, and revisions to international tax regimes. We have evaluated the financial implications of the OBBBA and have reflected its effects in the three months ended September 30, 2025. The OBBBA is expected to have no impact on our effective tax rate and a favorable impact on the timing of cash taxes. We currently expect our full-year 2025 cash tax benefit will be approximately $4.5 million.
Previous report
of stock-based compensation expense, $5.0 million of depreciation and amortization, $1.6 million of deferred income taxes, and $0.1 million of loss on disposals.
Previous report
On September 8, 2021, we entered into a First Amendment Agreement (the “Amendment”), which amended the 2021 Restated Credit Agreement (as amended by the Amendment, the “Credit Agreement”) with the lenders from time to time party thereto and Wells Fargo Bank, National Association, as administrative agent. The Amendment, among other things, added a $30.0 million incremental term loan to the $25.0 million revolving credit facility provided by the 2021 Restated Credit Agreement. The term loan is reflected on our condensed consolidated financial statements as a note payable. The Credit Agreement provides that, subject to satisfaction of certain conditions, we may increase the amount of the revolving loans available under the Credit Agreement and/or add one or more term loan facilities in an amount not to exceed $25.0 million in the aggregate, such that the total aggregate principal amount of loans available under the Credit Agreement (including under the revolving credit facility) does not exceed $80.0 million.
Previous report
On September 8, 2021, in connection with the closing of the acquisition of the AffloVest business, we borrowed the $30.0 million term loan and utilized that borrowing, together with a draw of $25.0 million under the revolving credit facility and cash on hand, to fund the purchase price.
Previous report
On February 22, 2022, we entered into a Second Amendment Agreement (the “Second Amendment”), which further amends the Credit Agreement. The Second Amendment modified the maximum leverage ratio, the minimum fixed charge coverage ratio and the minimum consolidated EBITDA covenants under the Credit Agreement, and added a minimum liquidity covenant, through the quarter ended June 30, 2023. The Second Amendment also increased the applicable margin for LIBOR rate loans under the Credit Agreement during the period commencing on the date of the Second Amendment and ending on the last day of the fiscal quarter ending June 30, 2023. Pursuant to the Second Amendment, we made a mandatory principal prepayment of the term loan of $3.0 million on February 22, 2022.
Previous report
On June 21, 2023, we entered into a Third Amendment Agreement (the “Third Amendment”) that replaced the interest rate benchmark under the Credit Agreement from LIBOR to the term Secured Overnight Financing Rate (“SOFR”). All tenors of term SOFR are subject to a credit spread adjustment of 0.10% (“Adjusted Term SOFR”).
Previous report
On August 1, 2023, we entered into a Fourth Amendment Agreement (the “Fourth Amendment”), which further amended the Credit Agreement. The Fourth Amendment, among other things, decreased the commitment fees payable under the revolving credit facility and eliminated the temporary increase in the applicable margin for Adjusted Term SOFR loans. The Fourth Amendment also eliminated the liquidity financial covenant and modified the remaining financial covenants to reflect the termination of the temporary covenant relief period that was in place until June 30, 2023 pursuant to the Second Amendment. In addition, the Fourth Amendment provided for an additional term loan in the amount of $8.25 million, which we used for a paydown of the revolving credit facility. The Fourth Amendment also extended the maturity date of the term loans and revolving credit facility under the Credit Agreement from September 8, 2024 to August 1, 2026.
Previous report
On November 1, 2024, we entered into a Fifth Amendment Agreement (the “Fifth Amendment”), which further amended the Credit Agreement. The Fifth Amendment permitted the Company to make payments to repurchase shares of its common stock, subject to certain limitations.
Previous report
For additional information regarding the 2025 Restated Credit Agreement, including interest rates, fees and maturities, see Note 8 – “Credit Agreement” of the condensed consolidated financial statements contained in this report.
Previous report
Inflation, changing prices, and tariffs did not have a material effect on our business during the quarter ended September 30, 2025. However, recent changes and announcements in U.S. and global tariff frameworks have negatively impacted, and could continue to negatively impact, our supply chain and increase our cost of goods sold. The ultimate impact of tariffs, including any related responses, are uncertain and will depend on various factors, including which tariffs are ultimately implemented, the timing of implementation, any exemptions available, whether exemptions are granted and maintained, and the amount, scope and nature of the tariffs. We continue to analyze the potential impact of recently announced tariffs, trade actions and related effects on our business and, at this time, we estimate that the impacts on our cost of goods sold could be up to $1.0 million for the year ended December 31, 2025, of which approximately $0.9 million was incurred through September 30, 2025. While we continue to actively work to mitigate tariff impacts, there is no assurance that such actions will be effective.
Reworded paragraphs (27)
Previous wording
We are a medical technology company that develops and commercializes medical devices in the United States. Our mission is to reveal and treat people with underserved chronic conditions and help them care for themselves at home. We focus our efforts on advancing the standard of care in home-based solutions for patients with lymphedema and chronic respiratory conditions by improving clinical, patient and economic outcomes. In our lymphedema product line, our sales and marketing channel focus includes (1) oncology-related clinicians who treat cancer survivors diagnosed with secondary lymphedema related to their cancer treatments, (2) vascular disease clinicians who support patients with lymphedema, chronic venous insufficiency, and lipedema and (3) wound, vein and lymphatic massage clinics. In our airway clearance product line, we support patients suffering from chronic, severe respiratory conditions, particularly bronchiectasis, and we sell our products indirectly through home medical equipment and DME providers. We generally employ a direct-to-patient and -clinician business model within our lymphedema portfolio, through which we obtain patient referrals and prescriptions from clinicians, manage insurance claims on behalf of our patients and their clinicians, deliver our solutions directly to patients and train them on the proper use of our solutions. Across our two product lines, our home-based solutions deliver cost-effective, clinically proven and long-term treatment for indicated patients.
Current wording
We are a medical technology company that develops and commercializes medical devices in the United States. Our mission is to help people suffering from chronic diseases live better and care for themselves at home. We focus our efforts on advancing the standard of care in treating underserved chronic diseases in the home to improve patient outcomes and quality of life and help control rising healthcare expenditures. Our areas of therapeutic focus are (1) vascular disease, with a goal of advancing the standard of care in treating lymphedema and chronic venous insufficiency, (2) oncology, where lymphedema is a common consequence among cancer survivors and (3) providing airway clearance therapy for those suffering from chronic respiratory conditions. We possess a unique, scalable platform to deliver at-home healthcare solutions throughout the United States. This evolving home care delivery model is recognized by policymakers and insurance payers as a key for controlling rising healthcare costs. Our solutions deliver cost-effective, clinically proven, long-term treatment for people with these chronic diseases. We generally employ a direct-to-patient and -provider model within our lymphedema portfolio, through which we obtain patient referrals from clinicians, manage insurance claims on behalf of our patients and their clinicians, deliver our solutions directly to patients and train them on the proper use of our solutions. This model allows us to engage directly with patients and clinicians, which are both critical audiences to which we can provide clinical evidence and education. For our respiratory therapy product, we have a durable medical equipment (“DME”) distribution model, through which we sell the AffloVest product to accredited DME providers, whose representatives gather and submit documentation for payer reimbursement, train patients on use of the device, and provide ongoing patient support.
Previous wording
Our current lymphedema products are the Flexitouch Plus, Entre Plus and Nimbl pneumatic compression pump systems and our airway clearance product is a High-Frequency Chest Wall Oscillation (“HFCWO”) device called AffloVest. The Flexitouch system product line is considered an advanced pneumatic compression device. The first generation Flexitouch system received 510(k) clearance from the U.S. Food and Drug Administration (the “FDA”) in July 2002, introducing a medical device technology to address the many limitations of self-administered home-based manual lymphatic drainage therapy. A second generation Flexitouch system received 510(k) clearance from the FDA in October 2006. In September 2016, we received 510(k) clearance from the FDA for the Flexitouch system in treating lymphedema of the head and neck. A third generation, Flexitouch Plus, received 510(k) clearance from the FDA in June 2017. In December 2020, we received 510(k) clearance from the FDA for two new indications for our Flexitouch Plus system: phlebolymphedema and lipedema. The Entre system product line and Nimbl product line are considered basic, or simple, pneumatic compression devices. These systems are sold or rented to patients who need a simple pump or who do not yet qualify for insurance reimbursement for an advanced compression device e.g., a Flexitouch Plus system. We introduced the Entre system in the United States in February 2013, this device was manufactured by Thermotek, Inc. and received FDA clearance in 2010. In 2015, we received FDA clearance for our own first generation Entre system and the second generation, Entre Plus, was released in March 2023. Nimbl, our next-generation pneumatic compression platform, received 510(k) clearance in June 2024 and was commercially launched for upper extremity lymphedema in October 2024 and was commercially launched for lower extremity lymphedema in February 2025. Sales and rentals of our lymphedema products represented 84% and 88% of our revenue in the nine months ended September 30, 2025 and 2024, respectively.
Current wording
Our current lymphedema products are the Flexitouch Plus, Entre Plus and Nimbl pneumatic compression pump systems and our airway clearance product is a High-Frequency Chest Wall Oscillation (“HFCWO”) device called AffloVest. The Flexitouch system product line is considered an advanced pneumatic compression device. The first generation Flexitouch system received 510(k) clearance from the U.S. Food and Drug Administration (the “FDA”) in July 2002, introducing a medical device technology to address the many limitations of self-administered home-based manual lymphatic drainage therapy. A second generation Flexitouch system received 510(k) clearance from the FDA in October 2006. In September 2016, we received 510(k) clearance from the FDA for the Flexitouch system in treating lymphedema of the head and neck. A third generation, Flexitouch Plus, received 510(k) clearance from the FDA in June 2017. In December 2020, we received 510(k) clearance from the FDA for two new indications for our Flexitouch Plus system: phlebolymphedema and lipedema. The Entre system product line and Nimbl product line are considered basic, or simple, pneumatic compression devices. These systems are sold or rented to patients who need a simple pump or who do not yet qualify for insurance reimbursement for an advanced compression device e.g., a Flexitouch Plus system. We introduced the Entre system in the United States in February 2013, this device was manufactured by Thermotek, Inc. and received FDA clearance in 2010. In 2015, we received FDA clearance for our own first generation Entre system and the second generation, Entre Plus, was released in March 2023. Nimbl, our next-generation pneumatic compression platform, received 510(k) clearance in June 2024 and was commercially launched for upper extremity lymphedema in October 2024 and was commercially launched for lower extremity lymphedema in February 2025. Nimbl has replaced most orders for our Entre system and we expect will continue to do so. Sales and rentals of our lymphedema products represented 83% of our revenue in each of the three months ended March 31, 2026 and 2025.
Previous wording
On September 8, 2021, we acquired the assets of the AffloVest airway clearance product line. AffloVest is a portable, wearable vest that provides airway clearance to treat patients with chronic respiratory conditions such as bronchiectasis or conditions resulting from neuromuscular disorders. For the nine months ended September 30, 2025 and 2024, sales of AffloVest represented 16% and 12% of our revenue, respectively.
Current wording
On September 8, 2021, we acquired the assets of the AffloVest airway clearance product line. AffloVest is a portable, wearable vest that provides airway clearance to treat patients with chronic respiratory conditions such as bronchiectasis or conditions resulting from neuromuscular disorders. For each of the three months ended March 31, 2026 and 2025, sales of AffloVest represented 17% of our revenue.
Previous wording
To support the growth of our business, we continue to invest in our commercial infrastructure, consisting of a lymphedema and respiratory sales force, marketing team including clinical education programs, patient
Current wording
To support the growth of our business, we continue to invest in our commercial infrastructure, consisting of a lymphedema and respiratory sales force, marketing team including clinical education programs, patient education team, reimbursement capabilities and clinical expertise. We market our lymphedema products using
Previous wording
education team, reimbursement capabilities and clinical expertise. We market our lymphedema products using a direct-to-patient and -clinician model. The AffloVest device is sold through respiratory durable medical equipment providers throughout the United States that service patients and bill third-party payers for the product. We employ a small group of respiratory specialists, who educate DME representatives, provide product demonstrations for targeted clinicians and support technical questions related to the AffloVest. As of September 30, 2025, we employed 167 account managers and 162 specialists for our lymphedema products and a team of 19 specialists supporting our airway clearance products. This compares to 167 account managers and 103 specialists for our lymphedema products and a team of 19 specialists supporting our airway clearance products as of September 30, 2024.
Current wording
a direct-to-patient and -clinician model. The AffloVest device is sold through respiratory durable medical equipment providers throughout the United States that service patients and bill third-party payers for the product. We employ a small group of respiratory specialists, who educate DME representatives, provide product demonstrations for targeted clinicians and support technical questions related to the AffloVest. As of March 31, 2026, we employed 172 account managers and 163 specialists for our lymphedema products and a team of 18 specialists supporting our airway clearance products. This compares to 161 account managers and 103 specialists for our lymphedema products and a team of 19 specialists supporting our airway clearance products as of March 31, 2025.
Previous wording
For the three months ended September 30, 2025, we generated revenue of $85.8 million and had net income of $8.2 million, compared to revenue of $73.1 million and net income of $5.2 million for the three months ended September 30, 2024. For the nine months ended September 30, 2025, we generated revenue of $225.9 million and had net income of $8.5 million, compared to revenue of $207.4 million and net income of $7.2 million for the nine months ended September 30, 2024. Our primary sources of capital since our initial public offering in 2016 have been from operating income, bank financing and our public offering in February 2023.
Current wording
For the three months ended March 31, 2026, we generated revenue of $75.3 million and had a net loss of $1.8 million, compared to revenue of $61.3 million and net loss of $3.0 million for the three months ended March 31, 2025. Our primary sources of capital since our initial public offering in 2016 have been from operating income, bank financing and our public offering in February 2023.
Previous wording
Comparison of the Three and Nine Months Ended September 30, 2025 and 2024
Current wording
Comparison of the Three Months Ended March 31, 2026 and 2025
Previous wording
Revenue increased $12.7 million, or 17%, to $85.8 million in the three months ended September 30, 2025, compared to $73.1 million in the three months ended September 30, 2024. The increase in total revenue was attributable to an increase of $7.1 million, or 11%, in sales and rentals of the lymphedema product line and an increase of $5.6 million, or 71%, in sales of the airway clearance product line in the three months ended September 30, 2025, compared to the three months ended September 30, 2024.
Current wording
Revenue increased $14.0 million, or 23%, to $75.3 million in the three months ended March 31, 2026, compared to $61.3 million in the three months ended March 31, 2025. The increase in total revenue was attributable to an increase of $11.7 million, or 23%, in sales and rentals of the lymphedema product line and an increase of $2.3 million, or 22%, in sales of the airway clearance product line in the three months ended March 31, 2026, compared to the three months ended March 31, 2025.
Previous wording
The following table summarizes our revenue by product line for the three and nine months ended September 30, 2025 and 2024, both in dollars and percentage of total revenue:
Current wording
The following table summarizes our revenue by product line for the three months ended March 31, 2026 and 2025, both in dollars and percentage of total revenue:
Previous wording
Cost of revenue increased $2.4 million, or 13%, to $20.8 million in the three months ended September 30, 2025, compared to $18.3 million in the three months ended September 30, 2024. Cost of revenue increased $1.7 million, or 3%, to $56.8 million in the nine months ended September 30, 2025, compared to $55.1 million in the nine months ended September 30, 2024. The increase in cost of revenue for both the three- and nine- month periods was primarily attributable to the increase in revenue.
Current wording
Cost of revenue increased $1.7 million, or 11%, to $17.7 million in the three months ended March 31, 2026, compared to $15.9 million in the three months ended March 31, 2025. The increase in cost of revenue was primarily attributable to the increase in revenue.
Previous wording
Sales and marketing expenses increased $3.0 million, or 11%, to $29.8 million in the three months ended September 30, 2025, compared to $26.8 million in the three months ended September 30, 2024. The increase was primarily attributable to a $2.3 million increase in personnel-related compensation expenses, a $0.3 million increase in travel and entertainment expenses, a $0.2 million increase in expenses for demo units,
Current wording
Sales and marketing expenses increased $5.2 million, or 19%, to $32.7 million in the three months ended March 31, 2026, compared to $27.5 million in the three months ended March 31, 2025. The increase was primarily attributable to a $4.1 million increase in personnel-related compensation expenses, a $1.3 million increase in expenses related to meetings and seminars and a $0.1 million increase in expenses for demo units, partially offset by a $0.3 million decrease in travel and entertainment expenses.
Previous wording
Reimbursement, general and administrative expenses increased $3.3 million, or 18%, to $21.4 million in the three months ended September 30, 2025, compared to $18.1 million in the three months ended September 30, 2024. This increase was primarily attributable to a $2.8 million increase in personnel-related compensation expenses and a $0.6 million increase in IT-related expenses, partially offset by a $0.1 million decrease in occupancy costs, depreciation expense and professional fees.
Current wording
Reimbursement, general and administrative expenses increased $3.0 million, or 15%, to $23.0 million in the three months ended March 31, 2026, compared to $20.0 million in the three months ended March 31, 2025. This increase was primarily attributable to a $1.2 million increase in personnel-related compensation expenses, a $0.8 million increase in acquisition and integration costs related to the LymphaTech acquisition, a $0.6 million increase in occupancy costs, depreciation expense and professional fees and a $0.4 million increase in IT-related expenses.
Previous wording
Interest income decreased $0.3 million, or 31%, to $0.7 million in the three months ended September 30, 2025, compared to $1.0 million in the three months ended September 30, 2024, primarily due to a lower cash balance in an Institutional Insured Liquid Deposit demand account due to the repayment of debt. Interest expense decreased $0.3 million, or 63%, to $0.2 million in the three months ended September 30, 2025, compared to $0.5 million in the three months ended September 30, 2024, primarily due to the repayment of debt.** **
Current wording
Interest income decreased $0.2 million, or 26%, to $0.7 million in the three months ended March 31, 2026, compared to $0.9 million in the three months ended March 31, 2025, primarily due to a lower cash balance in an Institutional Insured Liquid Deposit demand account due to funds being utilized for the LymphaTech acquisition. Interest expense decreased $0.4 million, or 93%, to $28,000 in the three months ended March 31, 2026, compared to $0.4 million in the three months ended March 31, 2025, primarily due to the repayment of debt.
Previous wording
We recorded an income tax expense of $3.2 million and $2.1 million for the three months ended September 30, 2025 and 2024, respectively. The effective tax rate for the three months ended September 30, 2025 was an expense of 28.2%, compared to an expense of 28.7% for the three months ended September 30, 2024. The primary driver of the change in our effective tax rate was attributable to the Company recording less expense related to stock-based compensation discrete items when compared to the prior year period.
Current wording
We recorded an income tax expense of $0.9 million compared to an income tax benefit of $1.1 million for the three months ended March 31, 2026 and 2025, respectively. The primary driver of the change in our effective tax rate was attributable to the Company recording stock-based compensation discrete items when compared to the prior year period.
Previous wording
On September 30, 2025, our principal sources of liquidity were cash of $66.0 million and net accounts receivable of $37.3 million. This compares to cash of $82.1 million and net accounts receivable of $43.2 million at September 30, 2024.
Current wording
On March 31, 2026, we had cash of $75.0 million and net accounts receivable of $38.2 million. This compares to cash of $83.6 million and net accounts receivable of $35.7 million at March 31, 2025.
Previous wording
Net cash provided by operating activities during the nine months ended September 30, 2024 was $24.3 million, resulting from non-cash net income adjustments of $11.0 million, net income of $7.2 million and a net increase in operating assets and liabilities of $6.1 million. The positive non-cash net income adjustments consisted primarily of $6.0 million of stock-based compensation expense and $5.1 million of depreciation. Cash provided relating to the change in operating assets and liabilities primarily consisted of a decrease in accounts receivable of $10.5 million, a decrease in inventories of $1.4 million and a $0.6 million increase in accounts payable, partially offset by a decrease in accrued payroll and related taxes of $3.7 million, an increase in prepaid expenses and other assets of $1.8 million, a decrease in income taxes payable of $0.8 million and a decrease in accrued expenses and other liabilities of $0.3 million.
Current wording
Net cash used in operating activities during the three months ended March 31, 2026 was $0.3 million, resulting from non-cash net income adjustments of $3.5 million, a net loss of $1.8 million and a net decrease in operating assets and liabilities of $1.8 million. The positive non-cash net income adjustments consisted primarily of $1.8 million of stock-based compensation expense, $1.6 million of depreciation, and a loss on disposal of property and equipment and intangibles of $0.1 million. Cash used relating to the change in operating assets and liabilities primarily consisted of a decrease in net accounts receivable of $5.7 million, a $2.2 million increase in accounts payable, a $0.8 million decrease in income taxes payable and a $0.6 million decrease in net investment in leases, partially offset by a decrease in accrued payroll and related taxes of $8.3 million, an increase in inventories of $2.6 million, an increase in right of use operating lease assets of $0.3 million and an increase in prepaid expenses and other assets of $0.1 million.
Previous wording
Net cash provided by operating activities during the nine months ended September 30, 2025 was $25.5 million, resulting from non-cash net income adjustments of $12.5 million, net income of $8.5 million, and a net increase in operating assets and liabilities of $4.6 million. Cash provided relating to the change in operating assets and liabilities primarily consisted of a decrease in net accounts receivable of $7.7 million, a $1.0 million increase in accrued expenses and other liabilities, a decrease in inventories of $2.6 million, a $2.1 million increase in accounts payable and a decrease in income taxes payable of $1.0 million, partially offset by a decrease in accrued payroll and related taxes of $3.2 million, an increase in prepaid expenses and other assets of $6.0 million, an increase in net investment in leases of $0.3 million and an increase in right of use operating lease assets of $0.3 million. The positive non-cash net income adjustments consisted primarily of $5.8 million
Current wording
Net cash provided by operating activities during the three months ended March 31, 2025 was $0.4 million, resulting from non-cash net income adjustments of $4.0 million, a net loss of $3.0 million and a net decrease in operating assets and liabilities of $0.7 million. The positive non-cash net income adjustments consisted primarily of $2.1 million of stock-based compensation expense and $1.7 million of depreciation. Cash used relating to the change in operating assets and liabilities primarily consisted of a decrease in net accounts receivable of $9.2 million, a $1.4 million increase in accounts payable and a $0.3 million increase in accrued expenses and other liabilities, partially offset by a decrease in accrued payroll and related taxes of $7.0 million, an increase in prepaid expenses and other assets of $2.5 million, a decrease in income taxes payable of $1.3 million, an increase in right of use operating lease assets of $0.3 million, an increase in net investment in leases of $0.3 million and an increase in inventories of $0.2 million.
Previous wording
Net cash used in investing activities during the nine months ended September 30, 2024, was $2.0 million, consisting of purchases of property and equipment primarily related to tenant improvements, and patent costs.
Current wording
Net cash used in investing activities during the three months ended March 31, 2026, was $7.1 million, primarily consisting of $6.2 million of net payments related to the acquisition of LymphaTech and $0.8 million of purchases of property and equipment and patent costs.
Previous wording
Net cash used in investing activities during thenine months ended September 30, 2025, was $2.2 million, consisting of purchases of property and equipment and patent costs.
Current wording
Net cash used in investing activities during the three months ended March 31, 2025, was $0.4 million, consisting of purchases of property and equipment and patent costs.
Previous wording
Net cash used in financing activities during the nine months ended September 30, 2024, was $1.2 million, primarily consisting of a $2.3 million payment made on our term loan, partially offset by $1.0 million in proceeds from the issuance of common stock under the ESPP.
Current wording
Net cash used in financing activities during the three months ended March 31, 2026, was $1.1 million, primarily consisting of payments of $1.1 million for the repurchase of our common stock.
Previous wording
Net cash used in financing activities during thenine months ended September 30, 2025, was $52.0 million, primarily consisting of payments of $26.6 million for the repurchase of our common stock and a payment of $26.3 million made on our term loan, partially offset by $0.8 millionin proceeds from the issuance of common stock under the ESPP.
Current wording
Net cash used in financing activities during the three months ended March 31, 2025, was $10.8 million, primarily consisting of payments of $10.0 million for the repurchase of our common stock and a payment of $0.8 million made on our term loan.
Previous wording
On April 30, 2021, we entered into an Amended and Restated Credit Agreement (the “2021 Restated Credit Agreement”) with the lenders from time to time party thereto, and Wells Fargo Bank, National Association, as Administrative Agent. The 2021 Restated Credit Agreement amended and restated in its entirety our prior credit agreement.
Current wording
On July 31, 2025, we entered into an Amended and Restated Credit Agreement with the lenders from time to time party thereto, and Wells Fargo Bank, National Association, as administrative agent (the “2025 Credit Agreement”), which amended and restated the credit agreement that we had in place prior to that time (the “Prior Credit Agreement”). The 2025 Credit Agreement provides for a $40.0 million revolving credit facility with a scheduled maturity date of July 31, 2028.
Previous wording
In connection with the entry into the 2025 Restated Credit Agreement, on July 31, 2025, we paid off the full amount outstanding under the term loan, which was $24.4 million (inclusive of principal and interest), using cash on hand. The 2025 Restated Credit Agreement removes the provisions from the Credit Agreement related to a committed term loan, such that the only term loan related provisions in the 2025 Restated Credit Agreement relate to our ability to request uncommitted incremental term loan facilities and/or an increase in the amount of the revolving loans available under the 2025 Restated Credit Agreement in an amount not to exceed $25.0 million in the aggregate, subject to the satisfaction of certain conditions.
Current wording
In connection with the entry into the 2025 Credit Agreement, on July 31, 2025, we paid off the full amount outstanding under the term loan that was outstanding under the Prior Credit Agreement, which was $24.4 million (inclusive of principal and interest), using cash on hand. The term loan had been reflected on our condensed consolidated financial statements as a note payable. The 2025 Credit Agreement removed the provisions from the Prior Credit Agreement related to a committed term loan, such that the only term loan related provisions in the 2025 Credit Agreement relate to our ability to request uncommitted incremental term loan facilities and/or an increase in the amount of the revolving loans available under the 2025 Credit Agreement in an amount not to exceed $25.0 million in the aggregate, subject to the satisfaction of certain conditions.
Previous wording
On July 31, 2025, we entered into an Amended and Restated Credit Agreement (the “2025 Restated Credit Agreement”), which amended and restated the Credit Agreement in its entirety. The 2025 Restated Credit Agreement, among other things, revised the applicable margin payable based on pricing levels determined by our consolidated total leverage ratio that range from 1.75% to 2.75% under the revolving credit facility, and revised the commitment fee to a rate per annum ranging from 0.125% to 0.250% for the unused portion of the revolving credit facility, also depending on our consolidated total leverage ratio. The 2025 Restated Credit Amendment also expanded the revolving credit facility from $25.0 million to $40.0 million and extended the maturity date of the revolving credit facility from August 1, 2026, to July 31, 2028.
Current wording
The 2025 Credit Agreement provides for a commitment fee at a rate per annum ranging from 0.125% to 0.250% for the unused portion of the revolving credit facility, depending on our consolidated total leverage ratio.
Previous wording
The 2025 Restated Credit Agreement also eliminated the minimum consolidated EBITDA financial covenant, such that the financial covenants now consist of a maximum consolidated total leverage ratio covenant and a minimum fixed charge coverage ratio covenant. In addition, the 2025 Restated Credit Agreement revised certain negative covenants, including the restricted payment covenant, which now permits the Company to repurchase shares of its common stock and make certain other payments, as long as the Company is not in default under the 2025 Restated Credit Agreement, has a consolidated total leverage ratio of no greater than 1.75 to 1.00, and has liquidity of not less than $30.0 million, in each case both before and after giving effect to such stock repurchases or the making of such payments.
Current wording
The 2025 Credit Agreement includes financial covenants consisting of a maximum consolidated total leverage ratio covenant and a minimum fixed charge coverage ratio covenant. In addition, the 2025 Credit Agreement includes customary negative covenants, including a restricted payment covenant that permits the Company to repurchase shares of its common stock and make certain other payments, as long as the Company is not in default under the 2025 Credit Agreement, has a consolidated total leverage ratio of no greater than 1.75 to 1.00, and has liquidity of not less than $30.0 million, in each case both before and after giving effect to such stock repurchases or the making of such payments. As of March 31, 2026, we were in compliance with all covenants under the 2025 Credit Agreement.
Previous wording
As of September 30, 2025, we had no outstanding borrowings under the 2025 Restated Credit Agreement.
Current wording
As of March 31, 2026, we had no outstanding borrowings under the 2025 Credit Agreement.
Previous wording
During the nine months ended September 30, 2025, we repurchased 2,143,099 shares for approximately $26.6 million. We used cash on hand to fund these repurchases.
Current wording
During the three months ended March 31, 2026, we repurchased 40,250 shares for approximately $1.1 million. We used cash on hand to fund these repurchases.
Rearranged previous paragraphs (2)
Previous report — wording carried elsewhere
a $0.1 million increase in expenses related to meetings and seminars and a $0.1 million increase in general office and printing expenses.
Previous report — wording carried elsewhere
On October 30, 2024, our Board of Directors authorized a program to repurchase up to $30.0 million of our common stock. Under the program, purchases could be made from time to time in the open market, in privately negotiated purchases, or both. The timing and number of shares to be purchased was based on the price of our common stock, general business and market conditions and other investment considerations and factors. The share repurchase program was scheduled to expire on October 31, 2026. As of June 24, 2025, we had utilized substantially all of the repurchase authorization under the program and therefore completed the share repurchase program. In aggregate under the program, we repurchased a total of 2,338,617 shares of common stock at a total cost of $30.0 million. The program did not obligate us to repurchase any specific number of shares and could have been suspended or discontinued at any time without prior notice.