What changed in this filing

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Item 1. Financial Statements

2026-05-04 compared with 2025-11-03 · 195 added, 199 removed, 377 unchanged (51% of the section changed)

2 unchanged sentences

Condensed Consolidated Balance Sheets

September 30,

(In thousands, except share and per share data)

21 unchanged sentences

Non-current liabilities

Note payable, non-current

Accrued warranty reserve, non-current

1 unchanged sentence

Operating lease liabilities, non-current

Other non-current liabilities

Total non-current liabilities

2 unchanged sentences

Preferred stock, $ 0.001 par value, 50,000,000 shares authorized;

none issued and outstanding as of September 30, 2025 and December 31, 2024

none issued and outstanding as of March 31, 2026 and December 31, 2025

Common stock, $ 0.001 par value, 300,000,000 shares authorized;

22,335,582 shares issued and outstanding as of September 30, 2025;

22,710,160 shares issued and outstanding as of March 31, 2026;

22,438,926 shares issued and outstanding as of December 31, 2025

7 unchanged sentences

Three Months Ended

Nine Months Ended

September 30,

(In thousands, except share and per share data)

12 unchanged sentences

Reimbursement, general and administrative

Intangible asset amortization

Intangible asset amortization and earn-out

Total operating expenses

Income from operations

Loss from operations

Interest income

Interest expense

Income before income taxes

Income tax expense

Net income per common share

Weighted-average common shares used to compute net income per common share

Loss before income taxes

Income tax expense (benefit)

Net loss per common share

Weighted-average common shares used to compute net loss per common share

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

2 unchanged sentences

(In thousands, except share data)

Balances, June 30, 2025

Stock-based compensation

Exercise of common stock options and vesting of performance and restricted stock units

Net income for the period

Balances, September 30, 2025

(Accumulated Deficit)

Balances, December 31, 2025

2 unchanged sentences

Share repurchases

( 2,143,099 )

Common shares issued for employee stock purchase plan

Net income for the period

Balances, September 30, 2025

Balances, June 30, 2024

Stock-based compensation

Exercise of common stock options and vesting of performance and restricted stock units

Net income for the period

Balances, September 30, 2024

Net loss for the period

Balances, March 31, 2026

Balances, December 31, 2024

1 unchanged sentence

Exercise of common stock options and vesting of performance and restricted stock units

Common shares issued for employee stock purchase plan

Net income for the period

Balances, September 30, 2024

Share repurchases

Net loss for the period

Balances, March 31, 2025

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

1 unchanged sentence

Condensed Consolidated Statements of Cash Flows

Nine Months Ended September 30,

Three Months Ended March 31,

(In thousands)

Cash flows from operating activities

Adjustments to reconcile net income to net cash provided by operating activities:

Adjustments to reconcile net loss to net cash (used in) provided by operating activities:

Depreciation and amortization

8 unchanged sentences

Right of use operating lease assets

Accounts receivable, non-current

Accounts payable

1 unchanged sentence

Accrued expenses and other liabilities

Net cash provided by operating activities

Net cash (used in) provided by operating activities

Cash flows from investing activities

Payments related to acquisition, net of cash acquired

Purchases of property and equipment

Proceeds from sale of property and equipment

Intangible assets expenditures

3 unchanged sentences

Proceeds from exercise of common stock options

Proceeds from the issuance of common stock from the employee stock purchase plan

Payments for repurchases of common stock

Net cash used in financing activities

Net (decrease) increase in cash

Net decrease in cash

Cash – beginning of period

11 unchanged sentences

(“we,” “us,” “our,” and the “Company”) manufactures and distributes medical devices for the treatment of patients with underserved chronic diseases at home.

Our lymphedema product portfolio includes Flexitouch® Plus, Entre™ Plus and Nimbl compression device systems.

These products help control the symptoms of lymphedema, a chronic and progressive condition.

Our lymphedema products are sold in the United States through a direct sales force that calls on vascular disease clinicians, vein and wound centers and oncology providers and clinicians, including lymphedema therapists.

Our lymphedema product portfolio includes Flexitouch® Plus, Entre™ Plus and Nimbl systems, which help control symptoms of lymphedema, a chronic progressive medical condition, through our direct sales force for use in the home and sell or rent them through vascular, wound and lymphedema clinics throughout the United States.

On September 8, 2021, we acquired the assets of the AffloVest airway clearance business (“AffloVest Acquisition”).

1 unchanged sentence

We sell this device through home medical equipment and durable medical equipment (“DME”) providers throughout the United States.

On February 17, 2026, we acquired all outstanding equity interests of LymphaTech, Inc.

(“LymphaTech”).

LymphaTech is a medical technology company pioneering a digital, three-dimensional (the “3D”) full body measurement and monitoring platform designed specifically for lymphedema .

We were originally incorporated in Minnesota under the name Tactile Systems Technology, Inc.

15 unchanged sentences

In the opinion of management, all adjustments (including those which are normal and recurring) considered necessary for a fair presentation of the interim financial information have been included.

The results for the nine months ended September 30, 2025, are not necessarily indicative of results to be expected for the year ending December 31, 2025, or for any other interim period or for any future year.

The condensed consolidated interim financial statements should be read in conjunction with the audited financial

statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2024.

The results for the three months ended March 31, 2026, are not necessarily indicative of results to be expected for the year ending December 31, 2026, or for any other interim period or for any future year.

The condensed consolidated interim financial statements should be read in conjunction with the audited financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2025.

Principles of Consolidation

The accompanying unaudited condensed consolidated financial statements include the accounts of Tactile Systems Technology, Inc.

and its wholly owned subsidiary, Swelling Solutions, Inc.

and its wholly owned subsidiaries, Swelling Solutions, Inc.

and LymphaTech, Inc.

All intercompany balances and transactions have been eliminated in consolidation.

4 unchanged sentences

Significant Accounting Policies

There were no material changes in our significant accounting policies during the nine months ended September 30, 2025.

There were no material changes in our significant accounting policies during the three months ended March 31, 2026.

See Note 3 – “Summary of Significant Accounting Policies” to the consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2025, for information regarding our significant accounting policies.

17 unchanged sentences

The Company is currently evaluating the effect that this standard will have on its consolidated financial statements and related disclosures.

In December 2023, the FASB issued ASU No.

2023-09, “Income Taxes (Topic 740):

Improvements to Income Tax Disclosures” which requires entities to enhance disclosures around income taxes.

The guidance is effective for annual periods beginning after December 15, 2024, with early adoption permitted.

is currently evaluating the effect this standard will have on its consolidated financial statements and related disclosures.

Inventories consisted of the following:

(In thousands)

At September 30, 2025

At March 31, 2026

At December 31, 2025

5 unchanged sentences

The purchase price of the AffloVest product line exceeded the net acquisition-date estimated fair value amounts of the identifiable assets acquired and the liabilities assumed by $ 31.1 million, which was assigned to goodwill.

In the first quarter of fiscal 2026, we completed the acquisition of LymphaTech.

The purchase price of LymphaTech exceeded the net acquisition-date estimated fair value amounts of the identifiable assets acquired and the liabilities assumed by $ 8.5 million, which was assigned to goodwill.

The changes in the carrying amount of goodwill were as follows:

(In thousands)

Goodwill at December 31, 2025

Addition for acquisition

Goodwill at March 31, 2026

Intangible Assets

Our patents and other intangible assets are summarized as follows:

At September 30, 2025

At March 31, 2026

(In thousands)

Definite-lived intangible assets:

Defensive intangible assets

Customer accounts

Customer relationships

6 unchanged sentences

Definite-lived intangible assets:

Defensive intangible assets

Customer accounts

Customer relationships

3 unchanged sentences

Total intangible assets

Amortization expense was $ 0.9 million for each of the three months ended September 30, 2025 and 2024, and $ 2.8 million for each of the nine months ended September 30, 2025 and 2024, of which $ 0.3 million in each of the three months ended September 30, 2025 and 2024, and $ 0.9 million in each of the nine months ended September 30, 2025 and 2024, was recorded in cost of sales revenue.

Amortization expense was $ 0.9 million and $ 1.0 million for the three months ended March 31, 2026 and 2025, respectively, of which $ 0.3 million in each of the three months ended March 31, 2026 and 2025, was recorded in cost of sales revenue.

Future amortization expenses are expected as follows:

(In thousands)

2025 (October 1 - December 31)

2026 (April 1 - December 31)

In the third quarter of 2025, we performed our annual goodwill impairment test utilizing both the qualitative and quantitative approach described in FASB ASU No.

4 unchanged sentences

(In thousands)

At September 30, 2025

At March 31, 2026

At December 31, 2025

Legal and consulting

Sales and use tax

In-transit inventory

Legal and consulting

Clinical studies

2 unchanged sentences

Three Months Ended

Nine Months Ended

September 30,

(In thousands)

7 unchanged sentences

Credit Agreement

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.

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.

On September 8, 2021, in connection with the closing of the AffloVest Acquisition, 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.

On February 22, 2022, we entered into a Second Amendment Agreement (the “Second Amendment”), which further amended 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.

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”).

Following the Third Amendment, the term loan and 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 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.

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.

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.

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.

except that, pursuant to the Second Amendment and the Third Amendment, during the period commencing on February 22, 2022 and ending on the last day of the fiscal quarter ending June 30, 2023, the applicable margin for LIBOR rate loans and Adjusted Term SOFR loans, as applicable, was 3.50 % .

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 under the Credit Agreement such that the undrawn portions of the revolving credit facility are subject to an unused line fee at a rate per annum from 0.125 % to 0.200 % , depending on our consolidated leverage ratio, and eliminated the language providing that the applicable margin for Adjusted Term SOFR loans was 3.50 % , such that the interest rates are in effect as set forth in the above paragraph.

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, such that the financial covenants now include a maximum consolidated total leverage ratio covenant, a minimum consolidated EBITDA covenant and a minimum fixed charge coverage ratio covenant.

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.

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 .

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.

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.

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.

As of September 30, 2025, we had no outstanding borrowings under the 2025 Restated Credit Agreement.

Our obligations under the 2025 Restated 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.

As of September 30, 2025, the 2025 Restated Credit Agreement contained a number of restrictions and covenants, including that we maintain compliance with a maximum consolidated total leverage ratio and a minimum fixed charge coverage ratio.

As of September 30, 2025, we were in compliance with all covenants under the 2025 Restated Credit Agreement.

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.

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.

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.

As of March 31, 2026, we had no outstanding borrowings under the 2025 Credit Agreement .

Commitments and Contingencies

13 unchanged sentences

These leases are typically greater than one year with fixed, escalating rents over the noncancelable terms and, therefore, ROU operating lease assets and operating lease liabilities are recorded on the Condensed Consolidated Balance Sheets, with rent expense recognized on a straight-line basis over the term of the lease.

The remaining lease terms vary from approximately one to six years as of September 30, 2025.

The remaining lease terms vary from approximately one to five years as of March 31, 2026.

We entered into a lease (“initial lease”) in October 2018, for approximately 80,000 square feet of office space for our new corporate headquarters in Minneapolis, Minnesota.

8 unchanged sentences

We also have operating lease agreements for certain computer and office equipment.

The remaining lease terms as of September 30, 2025, ranged from less than one year to approximately three years with fixed monthly payments that are included in the ROU operating lease assets and operating lease liabilities.

The remaining lease terms as of March 31, 2026, ranged from less than one year to approximately three years with fixed monthly payments that are included in the ROU operating lease assets and operating lease liabilities.

The leases provide an option to purchase the related equipment at fair market value at the end of the lease.

The leases will automatically renew as a month-to-month rental at the end of the lease if the equipment is not purchased or returned.

leases will automatically renew as a month-to-month rental at the end of the lease if the equipment is not purchased or returned.

Lease Position, Undiscounted Cash Flow and Supplemental Information

1 unchanged sentence

(In thousands)

At September 30, 2025

At March 31, 2026

At December 31, 2025

4 unchanged sentences

Weighted average discount rate

Nine Months Ended September 30,

Three Months Ended March 31,

Supplemental cash flow information for our operating leases:

Cash paid for operating lease liabilities

Non-cash right of use assets obtained in exchange for new operating lease obligations

The table below reconciles the undiscounted cash flows for the periods presented to the operating lease liabilities recorded on the Condensed Consolidated Balance Sheet for the periods presented:

(In thousands)

2025 (October 1 - December 31)

2026 (April 1 - December 31)

Total minimum lease payments

3 unchanged sentences

Non-current obligations under operating lease liabilities

Operating lease costs were $ 0.9 million for each of the three months ended September 30, 2025 and 2024.

Operating lease costs were $ 2.7 million and $ 2.6 million for the nine months ended September 30, 2025 and 2024, respectively.

Operating lease costs were $ 0.9 million for each of the three months ended March 31, 2026 and 2025.

Major Vendors

We had purchases from one vendor that accounted for 16 % and 22 % of our total purchases for the three months ended September 30, 2025 and 2024, respectively.

We had purchases from one vendor that accounted for 14 % and 20 % of our total purchases for the nine months ended September 30, 2025 and 2024, respectively.

We had purchases from one vendor that accounted for 13 % of our total purchases for each of the three months ended March 31, 2026 and 2025.

Purchase Commitments

We issued purchase orders prior to September 30, 2025, totaling $ 31.0 million for goods that we expect to receive within the next year.

We issued purchase orders prior to March 31, 2026, totaling $ 35.6 million for goods that we expect to receive within the next year.

Retirement Plan

We maintain a 401(k) retirement plan for our employees in which eligible employees can contribute a percentage of their pre-tax compensation.

We recorded an expense related to our discretionary contributions to the 401(k) plan of $ 0.5 million and $ 0.6 million for the three months ended September 30, 2025 and 2024, respectively, and $ 2.0 million and $ 1.7 million for the nine months ended September 30, 2025 and 2024, respectively.

We recorded an expense related to our discretionary contributions to the 401(k) plan of $ 0.8 million and $ 0.7 million for the three months ended March 31, 2026 and 2025, respectively.

Legal Proceedings

2 unchanged sentences

On October 25, 2024, the United States District Court, District of Massachusetts (Boston) unsealed two qui tam complaints against us, and we were served with these complaints on January 14, 2025, and January 21, 2025.

The United States has indicated that it is not intervening in either matter at this time.

The first complaint is captioned United States ex.

9 unchanged sentences

Both complaints seek damages, statutory penalties, attorneys’ fees, and costs.

On February 24, 2025, the parties (the relators under both complaints and the Company) filed a joint motion requesting that both actions be stayed until November 25, 2025, to provide time for the government to review and assess sample claims for the purpose of assessing the allegations.

On February 25, 2025, the Court granted the motion and issued orders that stay both actions until November 25, 2025.

We will defend the actions as they proceed .

On February 24, 2025, the parties (the relators under both complaints and the Company) filed a joint motion requesting that both matters (hereinafter the “Actions”) be stayed until November 25, 2025, to provide time for the government to review and assess sample claims for the purpose of assessing the allegations.

On February 25, 2025, the court granted the motion and issued orders that stayed the Actions until November 25, 2025.

By joint motions of the parties granted by the court, the stay was extended until March 25, 2026, and subsequently until June 23, 2026.

On April 14, 2026, the affected parties (government, relators, and the Company) reached an agreement in principle to settle the Actions for an aggregate payment by the Company of approximately $ 0.6 million, plus relators’ attorneys’ fees and costs.

In connection with the agreement in principle, the Company recorded an accrual of approximately $ 1.0 million, inclusive of the proposed settlement amount and estimated relators’ attorneys’ fees and related costs, which is reflected in accrued expenses on the Condensed Consolidated Balance Sheet as of March 31, 2026.

The accrual amount is based on several factors, conditions, and estimates, and the ultimate resolution of the Actions is subject to negotiation of final terms, approval by the parties and the execution of a definitive settlement agreement.

If no settlement is approved, we intend to continue to defend these Actions as they proceed, but we cannot predict with any degree of certainty their ultimate resolution or determine whether, or to what extent, any loss with respect to these Actions may exceed the amount that we have accrued.

Stockholders' Equity

Share Repurchase Program

On November 4, 2024, we announced that our board of directors authorized a program to repurchase shares of our common stock in the open market or in privately negotiated purchases, or both, in an aggregate amount not to exceed $ 30.0 million.

The share repurchase program became effective on October 30, 2024 and was scheduled to expire on October 31, 2026.

Upon purchase of the shares, we reduce our common stock for the par value of the shares with the excess cost applied against additional paid-in capital.

As of June 24, 2025, the Company had utilized substantially all of the repurchase authorization under the program and therefore completed the share repurchase program.

In aggregate under the program, the Company repurchased a total of 2,338,617 shares of common stock at a total cost of $ 30.0 million.

Repurchases were funded through available cash balances and ongoing business operating cash generation and could have been suspended or discontinued at any time.

Shares of stock repurchased under the program were immediately retired.

Repurchases under our share repurchase program reduce the weighted-average number of shares of common stock outstanding for basic and diluted earnings per share calculations.

We made repurchases under the share repurchase program in the following periods, which include the market price of the shares, commissions and excise tax:

On October 16, 2025, our Board of Directors authorized a new program to repurchase up to $ 25.0 million of our common stock, following the prior repurchase authorization that had been fully utilized.

Under the new program, purchases may 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 will be based on the price of the Company's common stock, general business and market conditions and other investment considerations and factors.

This share repurchase program expires on November 3, 2027.

The program does not obligate the Company to repurchase any specific number of shares and may be suspended or discontinued at any time without prior notice.

We made repurchases under the applicable share repurchase program in the following periods, which include the market price of the shares, commissions and excise tax:

Three Months Ended

Nine Months Ended

September 30,

(In thousands, except share and per share data)

Number of shares repurchased

Total share repurchased cost

Total shares repurchased cost

Average total cost per repurchased share

As of March 31, 2026, approximately $ 23.9 million of authorized share repurchases were remaining under the share repurchase program.

We expect that repurchases will be funded through available cash balances and ongoing business operating cash generation.

Shares of common stock repurchased under the program are immediately retired.

Repurchases under our share repurchase program reduce the weighted-average number of shares of common stock outstanding for basic and diluted earnings per share calculations.

Stock-Based Compensation

2 unchanged sentences

The 2025 Plan provides for the issuance of up to 1,850,000 shares of our common stock, plus the number of shares subject to any award under the 2016 Equity Incentive Plan (the “2016 Plan”) that was outstanding on May 7, 2025 and that later expires, is cancelled or forfeited, is settled for cash or otherwise does not result in the issuance of all of the shares subject to such award.

As of September 30, 2025, 1,856,492 shares were available for future grant pursuant to the 2025 Plan.

As of March 31, 2026, 1,503,952 shares were available for future grant pursuant to the 2025 Plan.

Following our stockholders’ approval of the 2025 Plan on May 7, 2025, no additional grants will be made under the 2016 Plan.

However, outstanding awards under the 2016 Plan will continue to be governed by their respective original terms.

We recorded stock-based compensation expense of $ 1.8 million and $ 2.1 million for the three months ended September 30, 2025 and 2024, respectively, and $ 5.8 million and $ 6.0 million for the nine months ended September 30, 2025 and 2024, respectively.

We recorded stock-based compensation expense of $ 1.8 million and $ 2.1 million for the three months ended March 31, 2026 and 2025, respectively.

This expense was allocated as follows:

Three Months Ended

Nine Months Ended

September 30,

(In thousands)

6 unchanged sentences

Stock options issued to participants other than non-employees typically vest over three or four years and typically have a contractual term of seven or ten years .

Stock-based compensation expense included in the Condensed Consolidated Statements of Operations for stock options was $ 0.0 million for each of the three months ended September 30, 2025 and 2024, and $ 0.0 million and $ 0.2 million for the nine months ended September 30, 2025 and 2024, respectively.

As of September 30, 2025, there was approximately $ 3,648 of total unrecognized pre-tax stock option expense under our equity compensation plans, which is expected to be recognized on a straight-line basis over a weighted-average period of 0.1 years.

Our stock option activity for the nine months ended September 30, 2025, was as follows:

No stock-based compensation expense was included in the Condensed Consolidated Statements of Operations for stock options for each of the three months ended March 31, 2026 and 2025.

As of March 31, 2026, there was no unrecognized pre-tax stock option expense under our equity compensation plans.

Our stock option activity for the three months ended March 31, 2026, was as follows:

Exercise Price

(In thousands except options and per share data)

Per Share (1)

Contractual Life

1 unchanged sentence

Cancelled/Expired

Balance at September 30, 2025

Options exercisable at September 30, 2025

Balance at March 31, 2026

Options exercisable at March 31, 2026

(1) The exercise price of each option granted during the periods shown was equal to the market price of the underlying stock on the date of grant.

(2) The aggregate intrinsic value of options exercised represents the difference between the exercise price of the option and the closing stock price of our common stock on the date of exercise.

The aggregate intrinsic value of options outstanding represents the difference between the exercise price of the option and the closing stock price of our common stock on the last trading day of the period.

Options exercisable of 385,514 as of September 30, 2024, had a weighted-average exercise price of $ 42.11 per share.

Options exercisable of 366,517 as of March 31, 2025, had a weighted-average exercise price of $ 41.49 per share.

Time-Based Restricted Stock Units

1 unchanged sentence

Time-based restricted stock units vest over one to three years .

Stock-based compensation expense included in the Condensed Consolidated Statements of Operations for time-based restricted stock units was $ 1.3 million and $ 1.5 million for the three months ended September 30, 2025 and 2024, respectively, and $ 4.2 million and $ 4.4 million for the nine months ended September 30, 2025 and 2024, respectively.

As of September 30, 2025, there was approximately $ 7.5 million of total unrecognized pre-tax compensation expense related to outstanding time-based restricted stock units that is expected to be recognized over a weighted-average period of 1.9 years.

Our time-based restricted stock unit activity for the nine months ended September 30, 2025, was as follows:

As of March 31, 2026, there was approximately $ 10.4 million of total unrecognized pre-tax compensation expense related to outstanding time-based restricted stock units that is expected to be recognized over a weighted-average period of 2.3 years.

Our time-based restricted stock unit activity for the three months ended March 31, 2026, was as follows:

Average Grant

2 unchanged sentences

Balance at December 31, 2025

Balance at September 30, 2025

Balance at March 31, 2026

(1) The aggregate intrinsic value of restricted stock units outstanding was based on our closing stock price on the last trading day of the period.

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These PSUs have both performance-based and time-based vesting features.

The PSUs granted in 2024 have three separate performance periods, and one-third of each grant will be earned if and to the extent performance goals based on revenue change and adjusted EBITDA margin are achieved in each of 2024 and 2025 (ranging from 25 % to 175 % of target), and one-third will be earned if and to the extent performance goals based on revenue change and adjusted EBITDA change are achieved in 2026 (ranging from 25 % to 175 % of target).

The PSUs granted in 2025 have three separate performance periods, and one-third of each grant will be earned if and to the extent performance goals based on revenue and adjusted EBITDA margin are achieved in 2025 (ranging from 25 % to 175 % of target), one-third will be earned if and to the extent performance goals based on revenue change and adjusted EBITDA change are achieved in 2026 (ranging from 25 % to 175 % of target), and one-third will be earned if and to the extent performance goals based on revenue change and adjusted EBITDA change are achieved in 2027 (ranging from 25 % to 175 % of target).

The PSUs granted in 2026 have three separate performance periods, and one-third of each grant will be earned if and to the extent performance goals based on revenue and adjusted EBITDA margin are achieved in 2026 (ranging from 25 % to 175 % of target), one-third will be earned if and to the extent performance goals based on revenue change and adjusted EBITDA change are achieved in 2027 (ranging from 25 % to 175 % of target), and one-third will be earned if and to the extent performance goals based on revenue change and adjusted EBITDA change are achieved in 2028 (ranging from 25 % to 175 % of target).

All earned and vested PSUs will be settled in shares of common stock.

Stock-based compensation expense recognized for PSUs was $ 0.4 million for each of the three months ended September 30, 2025 and 2024, and $ 1.1 million and $ 1.0 million for the nine months ended September 30, 2025 and 2024, respectively.

As of September 30, 2025, there was approximately $ 2.1 million of total unrecognized pre-tax compensation expense related to outstanding PSUs that is expected to be recognized over a weighted average period of 2.2 years.

Our PSU activity for the nine months ended September 30, 2025, was as follows:

Stock-based compensation expense recognized for PSUs was $ 0.3 million and $ 0.4 million for the three months ended March 31, 2026 and 2025, respectively.

As of March 31, 2026, there was approximately $ 4.0 million of total unrecognized pre-tax compensation expense related to outstanding PSUs that is expected to be recognized over a weighted average period of 2.5 years.

Our PSU activity for the three months ended March 31, 2026, was as follows:

Average Grant

2 unchanged sentences

Balance at December 31, 2025

Balance at September 30, 2025

Balance at March 31, 2026

(1) The aggregate intrinsic value of PSUs outstanding was based on our closing stock price on the last trading day of the period.

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The ESPP is available to all of our employees and employees of participating subsidiaries.

Participating employees may purchase common stock, on a voluntary

after-tax basis, at a price equal to 85 % of the lower of the closing market price per share of our common stock on the first or last trading day of each stock purchase period.

Participating employees may purchase common stock, on a voluntary after-tax basis, at a price equal to 85 % of the lower of the closing market price per share of our common stock on the first or last trading day of each stock purchase period.

The ESPP provides for six-month purchase periods, beginning on May 16 and November 16 of each calendar year.

A total of 1,600,000 shares of common stock was initially reserved for issuance under the ESPP.

This share reserve will automatically be supplemented each January 1, commencing in 2017 and ending on and including January 1, 2026, by an amount equal to the least of (a) 1 % of the shares of our common stock outstanding on the immediately preceding December 31, (b) 500,000 shares or (c) such lesser amount as our Board of Directors may determine.

This share reserve was automatically supplemented each January 1, commencing in 2017 and ending on and including January 1, 2026, by an amount equal to the least of (a) 1 % of the shares of our common stock outstanding on the immediately preceding December 31, (b) 500,000 shares or (c) such lesser amount as our Board of Directors may determine.

Pursuant to the automatic increase feature of the ESPP, 224,381 shares were added as available for issuance thereunder on January 1, 2026 and 240,780 shares were added as available for issuance thereunder on January 1, 2025.

As of September 30, 2025, 1,582,926 shares were available for future issuance under the ESPP.

We recognized stock-based compensation expense associated with the ESPP of $ 0.1 million and $ 0.2 million for the three months ended September 30, 2025 and 2024, respectively.

We recognized stock-based compensation expense associated with the ESPP of $ 0.5 million and $ 0.4 million for the nine months ended September 30, 2025 and 2024, respectively.

As of March 31, 2026, 1,745,124 shares were available for future issuance under the ESPP.

We recognized stock-based compensation expense associated with the ESPP of $ 0.2 million for each of the three months ended March 31, 2026 and 2025.

We derive our revenue from the sale and rental of our products to our customers in the United States.

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Three Months Ended

Nine Months Ended

September 30,

(In thousands)

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Airway clearance products

Our revenue by channel, inclusive of sales and rental revenue, for the three and nine months ended September 30, 2025 and 2024, are summarized in the following table:

Our revenue by channel, inclusive of sales and rental revenue, for the three months ended March 31, 2026 and 2025, are summarized in the following table:

Three Months Ended

Nine Months Ended

September 30,

(In thousands)

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We bill the patients’ insurance payers monthly over the duration of the rental term.

We record the net

investment in leases and recognize revenue upon commencement of the lease in the amount of the expected consideration to be received through the monthly payments.

We record the net investment in leases and recognize revenue upon commencement of the lease in the amount of the expected consideration to be received through the monthly payments.

Similar to our sales revenue, the transaction price is impacted by multiple factors, including the terms and conditions contracted by third-party payers.

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Completion of these payments represents the fair market value of the equipment, and as such, interest income is not applicable.

Rental revenue for each of the three and nine months ended September 30, 2025 and 2024, was primarily from private insurers.

Sales-type lease revenue and the associated cost of revenue for the three and nine months ended September 30, 2025 and 2024, was:

Rental revenue for each of the three months ended March 31, 2026 and 2025, was primarily from private insurers and Medicare.

Sales-type lease revenue and the associated cost of revenue for the three months ended March 31, 2026 and 2025, was:

Three Months Ended

Nine Months Ended

September 30,

(In thousands)

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Our provision for income taxes included current federal and state income tax expense, as well as deferred federal and state income tax expense.

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 the Company’s effective tax rate is attributable to the relative impact of stock based-compensation discrete tax items.

We recorded an income tax expense of $ 3.2 million and an expense of $ 2.1 million for the three 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.

We recorded an income tax expense of $ 3.4 million and an expense of $ 3.3 million for the nine months ended September 30, 2025 and 2024, respectively.

The effective tax rate for the three months ended March 31, 2026 was an expense of 96.8 % , compared to a benefit of 26.9 % for the three months ended March 31, 2025.

The primary driver of the change in the Company’s effective tax rate was attributable to the Company recording more expense related to stock-based compensation discrete items when compared to the prior year period.

We recorded an income tax expense of $ 0.9 million and an income tax benefit of $ 1.1 million for the three months ended March 31, 2026 and 2025, respectively.

We recognize the financial statement benefit of a tax position only after determining that the relevant tax authority is more-likely-than-not to sustain the position following an audit.

For tax positions meeting the more-likely-than-not threshold, the amount recognized in the condensed consolidated financial statements is the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement with the relevant tax authority.

The Company currently is not under examination in any jurisdictions.

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.

Net Income Per Share

The following table sets forth the computation of our basic and diluted net income per share:

The Company currently is not under income tax examination in any jurisdictions.

Net Loss Per Share

The following table sets forth the computation of our basic and diluted net loss per share:

Three Months Ended

Nine Months Ended

September 30,

(In thousands, except share and per share data)

Weighted-average shares outstanding

Weighted-average shares used to compute diluted net income per share

Net income per share - Basic

Net income per share - Diluted

The following common stock equivalents were excluded from the computation of diluted net income per share for the periods presented because including them would have been anti-dilutive:

Weighted-average shares used to compute diluted net loss per share

Net loss per share - Basic

Net loss per share - Diluted

The following common stock equivalents were excluded from the computation of diluted net loss per share for the periods presented because including them would have been anti-dilutive:

Three Months Ended

Nine Months Ended

September 30,

Restricted stock units

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Non-financial assets, such as equipment and leasehold improvements, and intangible assets are subject to non-recurring fair value measurements if they are deemed impaired.

Subsequent Event

On October 16, 2025, our Board of Directors authorized a new program to repurchase up to $ 25.0 million of our common stock.

Under the program, purchases may 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 will be based on

the price of the Company's common stock, general business and market conditions and other investment considerations and factors.

This share repurchase program expires on November 3, 2027.

The program does not obligate the Company to repurchase any specific number of shares and may be suspended or discontinued at any time without prior notice.

The following table provides information regarding the fair value measurement of our contingent consideration liability as of March 31, 2026, according to the three-level fair value hierarchy:

At March 31, 2026

Quoted Prices

(In thousands)

Recurring Fair Value Measurements:

Contingent Consideration

See Note 15 – “Business Combination” for additional information regarding this contingent consideration liability.

Business Combination

On February 17, 2026, we acquired all outstanding equity interests of LymphaTech pursuant to the Stock Purchase Agreement, dated as of February 17, 2026.

LymphaTech is a medical technology company pioneering a digital, three-dimensional (the “3D”) full body measurement and monitoring platform designed specifically for lymphedema.

We acquired LymphaTech to further expand our position as a leader in treating lymphedema by extending our solutions across the care continuum, including earlier identification, assessment, and long ‑ term monitoring.

The total purchase consideration for LymphaTech payable at closing, on a cash-free, debt-free basis, was approximately $ 7.2 million.

Each holder of issued and outstanding shares of LymphaTech capital stock received their pro rata portion (based on their relative ownership percentage) of the consideration paid at closing, less $ 0.2 million, which was utilized to pay the sellers’ transaction expenses.

The other component of purchase consideration is contingent consideration based on the achievement of non-financial milestones after closing, which contingent consideration had an estimated fair value of approximately $ 4.9 million as of the acquisition date.

The acquisition date fair value of contingent consideration was measured using the income approach, specifically the probability weighted expected return method for the milestone payments.

We will remeasure the fair value of the contingent liability on a quarterly basis.

Estimates and assumptions used in the valuation include the probability of achieving these non-financial milestones, the expected timing of achieving these milestones, and a discount rate.

These unobservable inputs represent a Level 3 measurement because they are supported by little or no market activity and reflect our own assumptions in measuring fair value.

Changes in the fair value subsequent to the acquisition date will be recognized in our consolidated statements of operations.

The acquisition of LymphaTech was funded by cash on hand.

We recognized transaction costs of $ 0.8 million in the three months ended March 31, 2026.

These costs are reported in Reimbursement, general and administrative expenses in our Condensed Consolidated Statements of Operations.

Transaction costs include, but are not limited to, investment banker, advisory, legal, and other professional fees.

The following table reflects the allocation of the purchase consideration between the amount paid at closing and the contingent consideration:

(In thousands)

Purchase Consideration

Cash consideration payments to LymphaTech stockholders

Estimated fair value of contingent consideration

Total purchase consideration

Fair Value of Assets Acquired and Liabilities Assumed

The acquisition of LymphaTech has been accounted for using the acquisition method of accounting in accordance with ASC 805, Business Combinations, with the Company treated as the accounting acquirer, which requires, among other things, that the assets acquired and liabilities assumed be recognized at their fair value on the acquisition date.

Acquisition accounting is dependent upon certain valuations and other studies that have yet to commence or progress to a stage where there is sufficient information for a definitive measurement.

The process for estimating the fair values of identifiable intangible assets and certain tangible assets and assumed liabilities requires the use of judgment in determining the appropriate assumptions and estimates.

The table below presents the preliminary estimated fair values of assets acquired and liabilities assumed on the acquisition date based on valuations and management estimates.

Fair value estimates are based on a complex series of judgments about future events and uncertainties and rely heavily on estimates and assumptions.

The judgments used to determine the estimated fair value assigned to each class of assets acquired and liabilities assumed, as well as asset lives, can materially impact our results of operations.

We are still finalizing the allocation of the purchase price, therefore, the fair value estimates assigned to intangible

assets, goodwill and the related tax impacts of the acquisition, among other items, are subject to change as additional information is received to complete our analysis and certain tax returns are finalized.

As a result, the preliminary estimates may be revised during the measurement period, which is 12 months following the acquisition date.

These differences could change the value of the intangible assets acquired, the contingent liabilities assumed, and the tax impacts related to the acquisition and could have a material impact on our results of operations and financial position.

(In thousands)

Estimated Fair Value

Current assets

Cash and cash equivalents

Accounts receivable, net

Total current assets

Non-current assets

Intangible assets

Total non-current assets

Total assets acquired

Liabilities and stockholders' equity

Current liabilities

Accrued expenses and other current liabilities

Unearned revenue

Total current liabilities

Non-current liabilities

Deferred income taxes

Total long term liabilities

Total liabilities assumed

Net assets acquired

(1) Of the $ 8.5 million of goodwill from the acquisition, none is expected to be tax deductible.

Goodwill is comprised of expected synergies for the combined operations and the assembled workforce acquired in the acquisition.

Identifiable Intangible Assets

The identifiable intangible assets acquired consist of a developed technology asset, customer relationship assets and a tradename asset.

The estimated fair value of the developed technology asset was prepared using the relief from royalty method which calculates the value of the developed technology based on royalties that would be paid if licensed by a third party.

The estimated fair value of customer relationship assets was prepared using the multi-period excess earnings method which calculates the present value of the incremental after-tax cash flows attributable solely to each customer relationship.

The estimated fair value of the tradename asset was prepared using the relief from royalty method which calculates the value of the tradename based on royalties that would be paid if licensed by a third party.

The estimated useful lives are based on forecasted periods of benefit for each intangible asset.

Estimated useful lives and estimated preliminary fair values are presented in the table below.

(In thousands)

Estimated Fair Value (1)

Estimated Useful Life

Developed technology

Customer relationships

Estimated fair value of intangible assets acquired

(1) The preliminary acquisition accounting, including the valuation of identifiable intangible assets, is subject to change during the measurement period.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements