Myomo Q2 2026 Earnings Report

Myomo EPS Results

• Actual EPS: -$0.09
• Consensus EPS: -$0.10
• Beat/Miss: Beat by +$0.01
• One Year Ago EPS: N/A

Myomo Revenue Results

• Actual Revenue: $11.70 million
• Expected Revenue: $10.35 million
• Beat/Miss: Beat by +$1.35 million
• YoY Revenue Growth: N/A

Myomo Announcement Details

• Quarter: Q2 2026
• Date: 8/5/2026
• Time: After Market Closes
• Conference Call Date: Wednesday, August 5, 2026
• Conference Call Time: 4:30PM ET

Myomo (NYSEAMERICAN:MYO) is a medical technology company that develops, manufactures and markets wearable robotic devices designed to help people with neuromuscular disorders and upper-limb weakness regain movement and perform activities of daily living. The company’s products combine powered actuators, sensors and user-controlled interfaces in lightweight orthotic systems.

Myomo’s principal product is the MyoPro, a powered upper-limb orthosis intended for individuals whose arm and hand function has been impaired by conditions such as stroke, brachial plexus injury, multiple sclerosis, spinal cord injury or other neurological disorders. The device is customized and fitted for each user and is designed to support voluntary movement rather than replace it.

Founded in 2004, Myomo is headquartered in Boston, Massachusetts. It markets its products in the United States and internationally through a combination of direct sales, clinical referral networks and distribution partners. The company works with rehabilitation professionals, physicians and orthotists to evaluate patients, fit devices and support ongoing use.

Myomo Q2 2026 Earnings Call Transcript

Key Takeaways

• Positive Sentiment: Second-quarter revenue rose 21% year over year to $11.7 million, driven by a 19% increase in units recognized and a 2% increase in average selling price. Record MyoPro orders reached 255, up 23% year over year.
• Positive Sentiment: The shift toward recurring referral sources is gaining traction, accounting for 53% of revenue versus 26% a year ago and reaching the company’s 50% objective six months early. Myomo added more than 150 referral sites, while O&P revenue doubled year over year and international revenue grew 32%.
• Positive Sentiment: Profitability and cash use improved substantially: gross margin expanded to 72.1% from 62.7%, adjusted EBITDA loss narrowed to $0.8 million from $4.0 million, and operating cash burn fell to $1.9 million from $8.9 million. Management expects second-half cash burn below $2 million.
• Positive Sentiment: Myomo raised full-year 2026 revenue guidance to $45 million-$47 million from $43 million-$46 million, while forecasting third-quarter revenue of $11.5 million-$12 million and continued operating leverage.
• Neutral Sentiment: Product and clinical development remain on track, including the next-generation MyoPro 3, a hand-only prototype initially targeted at Germany, and a University of Utah randomized trial that has enrolled 25 of 50 patients. A six-month outcomes update is expected in the second half of 2026, with full publication anticipated in 2027.

Presentation

[Operator]

Good day, welcome to the Myomo second quarter 2026 financial results conference call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there'll be an opportunity to ask questions. To ask a question, you may press star then one on your telephone keypad. To withdraw your question, please press star then two. Please note this event is being recorded. I would now like to turn the conference over to Vivian Cervantes, Investor Relations. Please go ahead.

[Vivian Cervantes, Head of Investor Relations at Alliance Advisors]

Thank you, operator, good afternoon, everyone. This is Vivian Cervantes with Alliance Advisors IR. Welcome to the Myomo second quarter 2026 financial results conference call. With me today are Myomo's Chief Executive Officer, Paul Gudonis, and Chief Financial Officer, Dave Henry. Before we begin, I'd like to caution listeners that statements made during this call by management, other than historical facts, are forward-looking statements. The words anticipate, believe, estimate, expect, intend, guidance, outlook, confidence, target, project, and other similar expressions are typically used to identify such forward-looking statements. These forward-looking statements are not guarantees of future performance and may involve and are subject to risks and uncertainties and other factors that may affect Myomo's business, financial condition and operating results. These risks, uncertainties, and other factors are discussed in Myomo's filings with the SEC.

[Vivian Cervantes, Head of Investor Relations at Alliance Advisors]

Actual outcomes and results may differ materially from what's expressed or is implied by these forward-looking statements. Furthermore, except as required by law, Myomo undertakes no obligation to revise or update any forward-looking statements to reflect events or circumstances after the date of this call, today, August 5th, 2026. It's now my pleasure to turn the call over to Myomo CEO, Paul Gudonis. Paul, please go ahead.

[Paul Gudonis, CEO at Myomo]

Thanks, Vivian, good afternoon, everyone. Thank you all for joining us today. Our mission here at Myomo remains straightforward: to restore function and independence to people living with chronic arm and hand paralysis. Every day, we hear from patients whose lives have been changed by the MyoPro, individuals who can once again feed themselves, carry groceries, return to work, or simply use both hands for everyday activities. This mission and our goal to serve a much larger number of patients continue to guide every decision we make. From a business perspective, the second quarter demonstrated continued progress in executing the strategy we introduced earlier this year.

[Paul Gudonis, CEO at Myomo]

Rather than relying primarily on direct-to-consumer marketing, we're building a more durable and scalable business by evolving our go-to-market strategy by emphasizing recurring patient referrals, expanding reimbursement coverage, tightly managing our operational execution, and continuing our market leadership through innovation on our wearable robotics platform. Importantly, we're seeing measurable progress across all four of our success pillars, which I set out earlier this year. Our first success pillar is the shift to recurring patient sources. Overall revenue for the second quarter increased 21% year-over-year to $11.7 million, and recurring patient sources represented 53% of total revenue during the quarter. That's double the 26% of revenue from these sources a year ago. Our shift to recurring patient sources is resulting in an improvement in patient quality as well.

[Paul Gudonis, CEO at Myomo]

The conversion rate of referral leads into pipeline adds is significantly higher than the conversion rate of advertising sourced leads to pipeline adds. We added more than 150 referral sites, bringing us to over 300 active locations, with a growing number already referring a second patient or more. O&P revenue doubled versus the prior year, and the out-of-pocket care national rollout is progressing well alongside discussions with other national O&P organizations. Our second success pillar is to increase market access. We've signed additional Elevance state contracts under our national agreement, further expanding our in-network footprint. Among other payer relationships established in the quarter, we are now in network with Optum's workers' compensation product, which is a part of UnitedHealthcare. The benefit of being in network is higher authorization rates from contracted payers.

[Paul Gudonis, CEO at Myomo]

A still small but growing number of cases, we're seeing higher authorization rates compared with non-contracted payers, which demonstrates the value of these agreements in improving patient access and reimbursement efficiency. Meanwhile, we continue to serve a growing number of Medicare Part B patients with a 100% reimbursement rate for patients with the complete medical documentation supporting the delivery of a MyoPro to them. Our third success pillar is to demonstrate operating leverage. As I mentioned, revenue increased 21% while operating expenses grew only 1%. We improved our adjusted EBITDA by over $3 million compared to the second quarter of last year. Revenue per employee continues to improve as we implement new systems and efficient processes.

[Paul Gudonis, CEO at Myomo]

In our manufacturing organization, we now have a trained Six Sigma team that has been executing cost reduction initiatives, which include the mobile app rollouts to replace the cost of a laptop for each device. We're using our new facility here in Burlington, Massachusetts, to expand in-house assembly from outsourced contractors, and we made a very new investment in 3D printing capabilities. We still remain confident that these and other initiatives will result in expanding margins and lower cash burn. We're demonstrating the ability to grow revenues at a faster rate than operating expenses, which puts us on the path to profitability and sustainable positive cash flows. Our fourth success pillar is continued progress on product development and clinical research. Development of the next generation MyoPro 3 continues on schedule.

[Paul Gudonis, CEO at Myomo]

At the OTWorld Conference in Germany in May, which is the largest O&P industry event in Europe, we introduced a hand-only prototype for the German market, thus expanding future market opportunities by serving the patient population that needs only a device for hand function. This is the latest example of building upon our wearable robotics platform, which now includes a cloud-based data collection system and mobile app for communicating with patients and clinicians. Meanwhile, we're making good progress at the University of Utah randomized control trial, which has enrolled 25 of 50 patients and an updated six-month outcomes publication is planned for the second half of this year. As you can see, the key operating metrics continue to move forward in the right direction.

[Paul Gudonis, CEO at Myomo]

We're expanding recurring referral sources, increasing payer access, demonstrating operating leverage, investing in innovation based on our platform, and most importantly, helping more patients regain the use of their arms and hands. Some additional highlights in the quarter as I wrap up my remarks. The evolution in our go-to-market strategy to recurring patient sources is yielding terrific results, including record quarterly orders totaling 255 MyoPro units in the second quarter. One example of how the strategy is working is the case of Barbara, who was referred to Myomo by her therapist at a major rehab hospital in New Jersey, where she'd be attending therapy after her stroke. Barbara is 14 months post-stroke and had plateaued with her upper extremity progress. With limited ability to use her right arm, the therapist contacted us as a potential MyoPro candidate. After a positive evaluation, her physician provided the necessary medical documentation.

[Paul Gudonis, CEO at Myomo]

Her MyoPro was authorized by her health insurance plan, Blue Cross Blue Shield, within 30 days of the assessment, and she was fit with her custom MyoPro within 90 days of the referral. She's doing well. She's making great progress with her therapy and training on how to use her new MyoPro. She's also able to take advantage of our recently released four-finger saddle, which will help improve her functional grasp for the activities of daily living, which she can now do at home. Barbara's case exemplifies the effectiveness of our patient referral program, which engages recurring rehabilitation sources at the point of care to advance the patient's return to mobility and independence and can lead to a faster revenue cycle.

[Paul Gudonis, CEO at Myomo]

I'd also like to highlight that we enhanced our board with the appointment of Joe Manko of Horton Capital, one of our largest shareholders, and Will Febbo, a seasoned healthcare and med tech executive. Our expanded board strengthens our governance framework and strategic capabilities by adding directors with significant industry experience, financial expertise, and proven leadership in building shareholder value. With that overview, I'll now turn the call over to Dave Henry to review our financial results in greater detail.

[Dave Henry, CFO at Myomo]

Thank you, Paul, and good afternoon, everyone. As Paul just discussed, our go-to-market evolution continues to gain traction, and I am pleased to report another quarter of solid financial and operational execution. Our revenue for the second quarter of 2026 was $11.7 million, up 21% versus the prior year period. The increase was driven by both a higher average selling price, or ASP, and a higher number of revenue units. ASP for the quarter was approximately $55,500, up about 2% versus the prior year. We recognized revenue on 211 MyoPro units, an increase of 19% over the second quarter of 2025. Looking at payer mix, Medicare Part B patients represented 50% of second quarter revenue, compared with 56% in the prior year period. Medicare Advantage plans represented 16% of second quarter revenue, compared with 20% in the prior year period.

[Dave Henry, CFO at Myomo]

Our transition toward recurring patient sources continued to accelerate during the quarter. Recurring patient sources represented 53% of second quarter revenue, compared with 26% in the prior year quarter, achieving our objective of 50% of revenues from recurring patient sources six months ahead of schedule. Within these recurring channels, 23% of total revenue was generated by direct billing referrals through our MyoConnect program, up from 20% in the first quarter. We also continue to see strong momentum from our other recurring channels, with international revenue representing 17% of revenue, growing 32% year-over-year, and the U.S. O&P channel representing 10% of revenue, growing 130% year-over-year. VA patients represented 3% of revenue in the second quarter. Turning to our metrics, we received a record 255 MyoPro orders during the quarter, up 23% year-over-year.

[Dave Henry, CFO at Myomo]

Higher conversion of orders to revenue reflects the efficiency of our operations, as 57% of second quarter revenue units came from orders received during the quarter. We added 739 patients to the pipeline during the quarter, up 2% sequentially. Advertising spending was up 11% sequentially. Pipeline adds in the quarter were impacted by maintenance activities on our website, which resulted in a temporary pause in data sharing with our digital ad agency. Those activities have been completed and the website is functioning normally. Patient quality in the pipeline is improving, however, as 17% of pipeline adds in the second quarter were generated by direct billing referrals, which is reflective of our progress in adding referring sites and is an increase of 11% from the first quarter. To illustrate the impact of MyoConnect, typically about 25% of our pipeline adds on a quarterly basis are Medicare patients.

[Dave Henry, CFO at Myomo]

Looking at only MyoConnect pipeline adds so far in 2026, roughly 50% of patients entering the pipeline are Medicare patients. As a result, increasing direct billing referrals, combined with our continuing market access efforts, are improving patient quality and are starting to translate into a higher authorization rate as well. We ended the quarter with a backlog of 218 patients, down modestly from the first quarter as higher revenue velocity offset stronger order growth. Turning to our financial results, gross margin for the second quarter was 72.1%, up from 62.7% in the prior year quarter. The improvement was driven primarily by the higher ASP, lower overhead spending, and the favorable impact of material cost reductions, including the rollout of the Myomo mobile app, partially offset by somewhat higher clinical costs reclassified to cost of goods sold.

[Dave Henry, CFO at Myomo]

Operating expenses were $10.7 million, representing an increase of less than 1% compared with the second quarter of 2025. Higher general and administrative expenses offset lower advertising and R&D spending. Operating loss improved significantly to $2.3 million, compared with $4.6 million in the prior year quarter. Adjusted EBITDA improved to a loss of $800,000, compared with a loss of $4 million a year ago, representing a 79% year-over-year improvement. Note that a portion of the improvement in adjusted EBITDA is due to higher stock-based compensation expense, as certain employee incentive payments were paid in stock during the quarter as part of our cash management initiatives. Below operating loss, second quarter results include a non-cash charge of approximately $1.2 million related to a mark-to-market adjustment on the valuation of our derivative liabilities, as well as cash and non-cash interest expense associated with the Avenue Capital term loan.

[Dave Henry, CFO at Myomo]

Including these non-cash charges, net loss for the quarter was $4 million, or $0.09 a share, compared with $4.6 million or $0.11 per share in the second quarter of 2025. Turning now to our balance sheet and cash flow. As of June 30th, 2026, cash equivalents, and short-term investments total $13.5 million. Cash used in operating activities during the second quarter was $1.9 million, a substantial improvement compared with $8.9 million used in the second quarter of 2025. Prior year cash burn was impacted by a temporary payment hold imposed by the DME MACs and payment of 2024 incentive payments in cash. Let me conclude with our outlook. For the third quarter, we expect revenue to be in the range of $11.5 million-$12 million, representing 14%-19% year-over-year growth.

[Dave Henry, CFO at Myomo]

Given the strong first half performance and continued momentum across the business, we're raising our full year revenue guidance to a range of $45 million-$47 million, up from our previous guidance of $43 million-$46 million. We expect a modest sequential increase in operating expenses in the third quarter. We're also maintaining our previously communicated operating leverage objective to limit the growth of operating expenses in 2026 to half the rate of revenue growth. In addition, we expect total cash burn during the second half of the year to be less than $2 million. Overall, we're very pleased with the progress we're making. The evolution of our go-to-market approach, continued improvement in operating leverage, and strong execution position us well for the balance of 2026. With that financial overview, I'll turn the call back to Paul.

[Paul Gudonis, CEO at Myomo]

Thanks, Dave. Well, to summarize, we're keenly focused on implementing our four success pillars to grow MyoPro volume and revenues while improving the key financial metrics, including gross margin, adjusted EBITDA, and cash usage. We've now delivered over 3,000 devices to patients, and our technology platform is making a dramatic difference in their lives. While we've established Myomo as the market leader in addressing this large unmet need, we're still at the early stage of market penetration, with a prevalence population of hundreds of thousands of qualified individuals who are suffering with chronic arm paralysis and tens of thousands more each year going through rehab clinics that could be potential MyoPro candidates as well. Dave and I are ready to take your questions. Operator?

[Operator]

Thank you. We will now begin the question and answer session. To ask a question, you may press star then one on your telephone keypad. If you are using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you'd like to withdraw your question from the queue, please press star then two. At this time, we will pause momentarily to assemble our roster.

[Paul Gudonis, CEO at Myomo]

While we're waiting for the first question, I'd like to mention that in September, we'll be participating in the H.C. Wainwright 28th Annual Global Investment Conference in New York on September 14 and 15. We'll attend in person at this conference and are available for one-on-one meetings. Okay, operator, let's take the first question when you're ready.

[Operator]

Absolutely. Our first question comes from Chase Knickerbocker of CHLM. Please go ahead.

[Analyst at CHLM]

Hi, everyone. This is Jake on for Chase. Congrats on the results. Thanks for taking the questions. We're clearly inflecting back to growth here. Do you mainly attribute this to MyoConnect? Are you seeing much higher conversion rates of these patients that come through MyoConnect? Also, what portion of the pipeline is now made up of MyoConnect referrals?

[Paul Gudonis, CEO at Myomo]

You're right. We see the MyoConnect program really gaining momentum here. We are adding more sites, up to 300 referral sites. What we're seeing is, as Dave mentioned, not only better medically qualified patients because the therapists have been informed by us who makes a good MyoPro candidate, they tend to have better insurance. A larger percentage of them have Medicare Part B, which is an easier to get reimbursed for that patient. That MyoConnect program is really driving the growth. I also have some other growth drivers. Our O&P business is growing. In fact, we'll be at the AOPA National Conference next month to continue building relationships over there. Europe is growing strongly as well. We've got multiple growth drivers going on over here. I think Dave's going to answer your question about the pipeline.

[Dave Henry, CFO at Myomo]

Yeah. As I mentioned, there were 17% of our pipeline adds in the quarter were from the MyoConnect referrals. That was up from 11% in the first quarter. That's about 122, I believe, referrals. Referral pipeline adds.

[Analyst at CHLM]

Thank you. Thanks for that color. Just one more from me. How are you thinking about readout timing for the Utah RCT, and what's going to be the chief benefit that you will reap here, assuming good data? Is it predominantly increasing covered lives outside of Part B, or do you expect it to help with demand generation in O&P and within MyoConnect?

[Paul Gudonis, CEO at Myomo]

Well, I believe the answer to the second part is all of the above. I think we'll be able to go with our chief medical officer to medical directors at various payers and make the case that, look, the MyoPro is not experimental, it's not investigational. It's proven. It's being covered by Medicare and other payers. Thousands of people are benefiting from it, here's more research data about it. As I mentioned, we have 25 of the 50 patient subjects already in the study. We'll do a readout at six months, we expect the full publication sometime in 2027.

[Analyst at CHLM]

Great. Thank you.

[Operator]

Our next question comes from Scott Henry of AGP. Please go ahead.

[Scott Henry, Analyst at AGP]

Thank you. Good afternoon. Just starting with a couple of questions on the metrics. First, when you talk about the 255 orders, is that the same as what historically was referred to as authorizations?

[Dave Henry, CFO at Myomo]

Same thing, yes.

[Scott Henry, Analyst at AGP]

Okay, great.

[Paul Gudonis, CEO at Myomo]

Scott, it's a combination of insurance authorizations that we get from our direct billing operation, and then orders, POs we get from an O&P provider or a PO from a VA.

[Scott Henry, Analyst at AGP]

Okay. Historically, you've given us the reimbursement cumulative pipeline. Do you still have that number, or are we going to get that or not?

[Dave Henry, CFO at Myomo]

Yeah. The overall pipeline at the end of the quarter was 1,491 patients.

[Scott Henry, Analyst at AGP]

Okay. That's a little lower, but is there some rationalization of that? I know sometimes you kind of take some people out. It's not always apples to apples.

[Dave Henry, CFO at Myomo]

I think, yeah. Remember, with all of the challenges trying to get Medicare Advantage patients authorized, a lot of them stick in the pipeline a while. I think looking at pipeline adds because they're sort of closer, particularly as we migrate towards MyoConnect, I think that's probably a better metric to kind of look at instead of the overall pipeline and who might be stuck in there longer term. I would focus on the pipeline adds.

[Scott Henry, Analyst at AGP]

Okay. In there, I think the number was 739. Do you think that's a good number?

[Dave Henry, CFO at Myomo]

739.

[Scott Henry, Analyst at AGP]

Yeah. Is that a reasonable number going forward to reflect growth?

[Dave Henry, CFO at Myomo]

Yeah. As I mentioned, that 739 included the 122 referral pipeline adds. As I said, so far this year, roughly half of MyoConnect pipeline adds are Medicare. That compares with 25% for the overall program, which is driven by the advertising. We're seeing much better patients under MyoConnect, ones that have fewer contraindications. They're closer to their pre-stroke life. It's easier to obtain their reimbursement documents, and oh, by the way, more of them are Medicare. That really kind of explains why we're doing what we're doing.

[Scott Henry, Analyst at AGP]

Okay. Then, we are going into a midterm election year, it sounds like it's going to be a pretty active midterm, which can clog up the media and impact your ability to get the message out there. Do you think that'll have any impact on the back half of the year?

[Paul Gudonis, CEO at Myomo]

Typically, fourth quarter of every year, we tend to scale back the direct-to-consumer advertising for some of the reasons you mentioned, Scott. This year it's an election year, there's more competition for those eyeballs. There's also the holiday advertising that we have to deal with, and so on. That's why we're going to keep emphasizing our MyoConnect program. We're growing the number of people in the field with sales and clinical expertise to build more referral sites, and that's pretty immune from the advertising aspects.

[Scott Henry, Analyst at AGP]

Okay, great. I guess a final question, if we look at operating income, because I know there's a lot of noise by the time you get down to net loss. $2.2 million in the quarter was a pretty good quarter. Haven't seen many twos in the first digit there. Do you think we're now at a stage where it might even improve from this level? Or how should we think about operating income sequentially as we go through the year and onward?

[Dave Henry, CFO at Myomo]

I guess I would kind of look at the components of it. It might be easier to answer the question. We've given the revenue guidance. The gross margin, we were at 72%. I don't know why that would go down. Cost reductions continue at pace. We have more that are planned that will reduce manufacturing costs here in the second half of the year. Typically, second half revenues are stronger than first half revenues, so we will get the leverage impact of that. In terms of the operating expenses, I said that we would expect some modest operating expense growth in the third quarter. Fourth quarter, I don't expect fourth quarter to be higher than third. I would expect it to be along those same lines, I would say.

[Dave Henry, CFO at Myomo]

That should then translate then into sort of improvement in operating loss as we go through the rest, as we finish up the year here with presumingly, given our full-year guidance, that does sort of lead to higher fourth quarter revenue.

[Scott Henry, Analyst at AGP]

Okay, great. Thank you for the color there, and thank you for taking the questions.

[Dave Henry, CFO at Myomo]

Yep.

[Operator]

Our next question comes from Jeremy Pearlman of Maxim Group. Please go ahead.

[Jeremy Pearlman, Analyst at Maxim Group]

Okay. Good afternoon. Thank you for taking the question. Firstly, regarding you still have really great on the MyoConnect, the referrals, you're six months ahead of schedule to reach over 50%, but still roughly 50% is generating from direct consumer, direct-to-patient marketing. Maybe talk about how has that evolved since the beginning of the year, and how do you think that will evolve through the rest of 2026? How are you spending your advertising dollars, your marketing dollars in that bucket?

[Dave Henry, CFO at Myomo]

Yeah. I would expect that part of the modest increase in operating expenses is an expected increase in ad spending in third quarter, is something we typically do before we take our foot off the gas on advertising spending a little bit in the fourth quarter. Advertising spending is still an important part of what we're doing, and the advertising-driven revenues are still an important part of what we're doing. I just want to make sure that people understand we're not turning those off. It's going to be an important part of our business on an ongoing basis. We just want to see a greater mix of revenues coming from recurring patient sources.

[Jeremy Pearlman, Analyst at Maxim Group]

Right. Understood. Where can you think that could ultimately stabilize that percentage of referrals versus your direct to consumer?

[Dave Henry, CFO at Myomo]

I think as we look towards the end of the year, I mean, we had a goal of 50. I think 55% probably might be a reasonable number to exit the end of the year. Longer term, I think we're going to be in a position where MyoConnect is starting to mature here as we get toward the end of the year. Maybe a 60/40-ish kind of split, something like that, longer term might be where we land.

[Jeremy Pearlman, Analyst at Maxim Group]

Okay, great. Just last question on this referral program, not just the MyoConnect, but the O&P clinics and the VA. I'm sure you've done the due diligence. How much more runway do you have? You said you have 300, roughly 300 referrals, whatever you, I don't know how you refer them to, but referrals that are referring MyoPro patients to you. How much more runway do you have? Just number of actual clinics you could sign up or O&P clinics regardless.

[Paul Gudonis, CEO at Myomo]

There are several thousand stroke rehab clinics around the country, whether they're affiliated with major hospitals like Spaulding Rehabilitation Hospital here in Boston or Kessler Rehabilitation Center and so on. There's a lot of smaller neuro clinics around the country that see stroke patients. We're just at the early stage of this, and the MyoConnect program has two growth factors. One, increased penetration, more awareness by the therapists and the doctors at these rehab clinics, but also kind of what I'll call same-store sales growth. We're already starting to see that after their first referral, they'll make a second referral. Hopefully over time, as they see their patients benefiting from the MyoPro, we'll see increasing number of referrals per site. I see two drivers here that kind of lead to exponential growth. More referral sites and then more patients referred per site over time.

[Paul Gudonis, CEO at Myomo]

The same thing with the O&P clinics. Yeah, O&P clinics. The revenue is still relatively small out of the total mix. There are several thousand O&P clinics around the country. We have regular meetings with the senior executives of the ones that have been put together as national players. We're looking to increase our penetration among their clinicians and offices and continuing to find more entrepreneurial O&P clinics around the country as well. That's another growth factor, not only here in the U.S., but also in Germany.

[Jeremy Pearlman, Analyst at Maxim Group]

Great. Okay, great. Thank you so much for taking my questions. I'll jump back in the queue.

[Paul Gudonis, CEO at Myomo]

You're welcome.

[Operator]

Once again, if you have a question, please press star then one. Our next question comes from Edward Woo of Ascendiant Capital. Please go ahead.

[Edward Woo, Analyst at Ascendiant Capital]

Yeah. Congratulations on all the progress. My question is on international. It sounds like you're going to be introducing a hand only device in Germany. Will it only be in the German market, and would you be bringing it into the U.S. market?

[Paul Gudonis, CEO at Myomo]

Well, that's a very exciting new product development, and I was over in Leipzig, Germany in May with our team introducing this prototype, which is under development. The reason we're starting in Germany is because a hand-only product will be reimbursed in Germany. There's already a small competitor, HKK, which already has a hand-only device. We're bringing our technology platform to build a superior device to that. We know it'll get reimbursed in Germany, so we're starting there. Then we can work on how we get the appropriate HCPCS codes here in the U.S. to support rollout here in the U.S., because there certainly is patient demand for people who can move their upper arm, but they don't have the distal function. This would be available and expands our addressable market with this new product off our technology platform.

[Edward Woo, Analyst at Ascendiant Capital]

Is it going to require significant R&D, or is it already built into your plans for OpEx?

[Paul Gudonis, CEO at Myomo]

We will be covering that in our OpEx plans here. It's not a major redo of the product. It's really taking off the [audio distortion], reinvesting the weight with new sensors and powers and units. It's a relatively small R&D investment compared to the MyoPro 3.

[Edward Woo, Analyst at Ascendiant Capital]

Great. Well, thank you. I wish you guys good luck.

[Paul Gudonis, CEO at Myomo]

All right. Thank you, Ed.

[Operator]

This concludes the question and answer session. I would like to turn the conference back over to Paul for any closing remarks.

[Paul Gudonis, CEO at Myomo]

Well, thanks, operator, and thank you all for joining us today and for your questions. We look forward to seeing and hearing from you in the coming months. Again, thanks again, and have a good evening.

[Operator]

This concludes today's conference call. You may now disconnect your lines. Thank you for participating, and have a pleasant day.

Participants

Executives

• Paul Gudonis, CEO
• Dave Henry, CFO

Analysts

• Vivian Cervantes, Head of Investor Relations at Alliance Advisors
• Analyst at CHLM
• Scott Henry, Analyst at AGP
• Jeremy Pearlman, Analyst at Maxim Group
• Edward Woo, Analyst at Ascendiant Capital