• Revenue: $6.1 million in Q3 2024, up 39% from $4.4 million in Q3 2023.
• ReWalk System Revenue: $2.5 million, up 73% from the prior year.
• AlterG Products Revenue: $3.6 million, increased by $0.6 million from Q3 2023.
• Gross Profit: $2.2 million or 36.2% of revenue in Q3 2024.
• Adjusted Gross Profit: $2.6 million or 42.5% of revenue.
• GAAP Operating Expenses: $5.4 million in Q3 2024, down from $8.8 million in Q3 2023.
• Adjusted Operating Expenses: $6.7 million in Q3 2024, compared to $6.9 million in Q3 2023.
• GAAP Operating Loss: $3.2 million in Q3 2024, compared to $7.9 million in Q3 2023.
• Adjusted Operating Loss: $4.1 million in Q3 2024, compared to $4.9 million in Q3 2023.
• Cash and Equivalents: $10.7 million at the end of Q3 2024, with no debt.
• Full-Year Revenue Expectation: Revised to $25 million to $26 million for 2024.

• Warning! GuruFocus has detected 7 Warning Signs with LFWD.

Release Date: November 12, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Lifeward Ltd (NASDAQ:LFWD) reported a 39% increase in revenue over the prior year quarter, indicating strong business growth.
• The company successfully expanded its Medicare coverage, now reaching over 17,000 individuals with potential access to an additional 25,000.
• Lifeward's ReWalk Exoskeleton technology is gaining traction, with 20 more individuals regaining ambulation in the quarter.
• The company has streamlined operations, resulting in the lowest adjusted operating expenses in the past five quarters.
• Lifeward ended the quarter with $10.7 million in cash and no debt, providing a solid financial foundation for future growth.

Negative Points

• The AlterG business experienced slower-than-expected growth due to delays in capital expenditures and integration challenges.
• ReWalk sales were adversely affected by delays in Medicare case processing, impacting expected revenue.
• The gross margin percentage declined due to lower absorption of factory overhead costs and higher labor costs.
• The company revised its full-year revenue expectations downward to a range of $25 million to $26 million for 2024.
• The process for claims review and approval by Medicare is time-consuming, affecting the timing of payments and cash flow.

Q & A Highlights

Q: How comfortable are you with the new guidance, and are there any issues with filing for CMS reimbursement? A: Larry Jasinski, CEO: We are comfortable with the guidance. The timing for CMS processing is longer than expected, averaging about 150 days for 2024 claims, which has impacted our timing this year. Mike Lawless, CFO, added that the documentation and validation process is more complex than traditional claims, requiring back-and-forth communication, which can delay processing.

Q: Is there a possibility for a positive surprise in AlterG business revenue, and how comfortable are you with its current performance? A: Larry Jasinski, CEO: The AlterG business is improving quarter over quarter. The technology is well-received, but capital equipment sales have been slower industry-wide in 2024. However, we expect a strong Q4 and have received 40 orders for the new NEO product, indicating positive momentum.

Q: What is the expected timeline to reach profitability, and how does the current business trajectory support this? A: Larry Jasinski, CEO: We expect substantial growth in ReWalk sales, driven by leads and potential market expansion. AlterG is expected to recover and grow with the new product launch. We believe this is achievable within our current cash reserves, depending on market uptake pace. Mike Lawless, CFO, added that streamlining efforts have made the organization more efficient, supporting profitability in 2025.

Q: Can you provide insight into the expected cash burn for Q4 and the company's sustainability without additional cash? A: Mike Lawless, CFO: We expect the Q4 burn rate to decrease significantly from Q3, depending on Medicare payments. Larry Jasinski, CEO, emphasized that revenue growth and expense reduction are key, with CMS uptake being a critical factor. The company is working towards sustainability without needing additional cash, assuming continued market growth.

Q: Are there any updates on the reimbursement process for Medicare claims and the impact on accounts receivable? A: Larry Jasinski, CEO: The reimbursement process is progressing, with claims starting from late last year. We expect approved claims to be paid eventually, with a high approval rate. Mike Lawless, CFO, noted that a portion of claims is reserved for potential non-approval, similar to other payors.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.