Tactile Systems Technology, Inc.

Total revenue was $85.7 million in Q2 2026, up $6.8 million or 9% year over year. Lymphedema products and systems generated $73.6 million, up $7.7 million or 12%, while airway clearance revenue was $12.1 million, down $0.9 million or 7%. Gross margin was 76.3% versus 74.5% in Q2 2025. Operating income was $6.8 million, up 67%; net income was $7.8 million, or $0.34 per diluted share, versus $3.2 million, or $0.14 per diluted share; and adjusted EBITDA was $11.4 million, up 49%. For 2026, management now expects revenue of $360 million-$366 million, implying approximately 9% to 11% growth, gross margin of 76% to 76.5%, operating expenses up 10% to 12%, net interest income of about $2.4 million, a 28% tax rate, diluted weighted-average share count of about 23 million, and adjusted EBITDA of approximately $49 million to $51 million.

Sheri Dodd framed the quarter as another strong execution period, emphasizing healthy lymphedema demand, meaningful profitability expansion, and continued investment in growth. She highlighted progress on three priorities: improving access to care, expanding treatment options, and enhancing lifetime patient value. Her tone was optimistic but measured, especially around Medicare prior authorization and AffloVest inventory normalization, both of which she described as near-term issues rather than structural problems.

Elaine Birkemeyer focused on the mechanics behind the quarter’s improvement: revenue up $6.8 million, gross margin at 76.3% versus 74.5%, operating income up 67% to $6.8 million, and adjusted EBITDA up 49% to $11.4 million. She noted cash and cash equivalents of $69.9 million with no outstanding borrowings, and said the cash decline from year-end mainly reflected upfront ElastiMed payments and share repurchases. On guidance, she emphasized that full-year targets still assume temporary airway clearance inventory dynamics, the Medicare prior authorization transition, and continued strategic investment.

Analysts focused heavily on two issues: whether the Medicare prior authorization process was distorting lymphedema timing, and how long AffloVest channel inventory digestion would last. Management said the prior auth impact was a timing issue that is beginning to normalize as MACs gain familiarity, and that Q3 should still reflect some pushout from Q2, but less uncertainty than before. On AffloVest, they said the issue is confined to a few larger DME partners carrying elevated inventory, with burn-down expected in Q3 and ordering to normalize in Q4. They also clarified that MyoSleeve is expected to be an incremental VA growth contributor over time, but current guidance does not assume material contribution from it.