Sanuwave Health Q2 2026 Earnings Report

Sanuwave Health EPS Results

• Actual EPS: -$0.08
• Consensus EPS: -$0.03
• Beat/Miss: Missed by -$0.05
• One Year Ago EPS: N/A

Sanuwave Health Revenue Results

• Actual Revenue: $9.74 million
• Expected Revenue: $11.50 million
• Beat/Miss: Missed by -$1.76 million
• YoY Revenue Growth: N/A

Sanuwave Health Announcement Details

• Quarter: Q2 2026
• Date: 8/6/2026
• Time: After Market Closes
• Conference Call Date: Friday, August 7, 2026
• Conference Call Time: 8:30AM ET

Sanuwave Health (NASDAQ:SNWV), Inc. is a medical technology company specializing in the development and commercialization of non-invasive acoustic wave therapies designed to stimulate tissue regeneration and accelerate healing. The company’s proprietary Extracorporeal Pulse Activated Technology (EPAT) delivers focused acoustic pressure waves to injured or chronic wound sites, activating the body’s natural repair mechanisms. Sanuwave’s primary therapeutic areas include advanced wound care for diabetic and venous ulcers, as well as orthopedic and musculoskeletal conditions.

The company’s lead product, the dermaPACE® system, holds clearance from the U.S. Food and Drug Administration for treatment of chronic diabetic foot ulcers. This portable, hand-held device provides a convenient alternative to conventional wound-care methods by delivering precision acoustic pulses directly to the affected tissue, thereby promoting neovascularization and reducing healing times. Sanuwave also supplies disposable treatment cartridges and related consumables to healthcare providers, and has established distribution agreements in North America and select overseas markets to broaden patient access.

Headquartered in Alpharetta, Georgia, Sanuwave Health originated as Tissue Regeneration Systems, Inc. before adopting its current name to reflect an expanded focus on regenerative medicine technologies. Under the leadership of Chief Executive Officer Jeff Bean, the company continues to advance its clinical research programs, pursue regulatory clearances for additional indications, and explore strategic partnerships. Sanuwave’s ongoing mission is to deliver innovative, non-invasive therapeutic solutions that improve patient outcomes and reduce healthcare costs worldwide.

Sanuwave Health Q2 2026 Earnings Call Transcript

Key Takeaways

• Positive Sentiment: Recurring applicator demand remained strong: UltraMIST applicator unit volume rose 27% year over year, while applicator revenue increased 13%, setting quarterly records.
• Negative Sentiment: Second-quarter revenue declined 3% to $9.7 million as UltraMIST system revenue fell 34%, hurt by industry financial pressure and an estimated 40–60 used systems that cannibalized new equipment sales.
• Negative Sentiment: Sanuwave withdrew its fiscal 2026 revenue guidance, citing uncertainty around market conditions and proposed Medicare reimbursement changes that could reduce physician-office reimbursement for UltraMIST from approximately $397 to $316 in 2027.
• Neutral Sentiment: The company reported a $0.7 million net loss, down from $0.6 million of net income a year earlier, while adjusted EBITDA fell to $1.2 million; cash was $9.4 million and the company remained compliant with its credit covenants after $2.9 million of scheduled debt repayment.
• Positive Sentiment: Management is pursuing growth in hospitals, burn care, pressure injuries, pediatric care, and long-term-care facilities, and noted that the proposed 2027 hospital outpatient rule would increase UltraMIST reimbursement by 14% in that setting.

Presentation

[Operator]

Hello, welcome everyone joining today's Sanuwave earnings call. At this time, all participants are in a listen-only mode. Later, you will have the opportunity to ask questions during the question-and-answer session. To register to ask a question at any time, please press star one on your telephone keypad. Please note this call is being recorded. We are standing by should you need any assistance. It is now my pleasure to turn the meeting over to Morgan Frank, Chairman and CEO of Sanuwave. Please go ahead.

[Morgan Frank, Chairman and CEO at Sanuwave]

Thank you, Leslie. Welcome to Sanuwave second quarter 2026 earnings call. Our Form 10-Q was filed with the SEC last night, along with our earnings release, and our updated presentation was made available on our website in the investor section. Please refer to that during the presentation. Joining on the call is Peter Sorensen, our CFO, and after the presentation, we will open the call to Q&A. Let me begin with the forward-looking statements and other disclosures. This call may contain forward-looking statements such as statements relating to future financial results, production expectations, plans for future business development activities, and expectations regarding the impact of changes in reimbursement levels and tariff rates. Investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, many of which are beyond the company's ability to control.

[Morgan Frank, Chairman and CEO at Sanuwave]

Description of these risks and uncertainties and other factors that could affect our financial results is included in our SEC filings. Actual results may differ materially from those projected in the forward-looking statements. The company undertakes no obligation to update any forward-looking statement. Certain percentages discussed in this call are calculated from the underlying whole dollar amounts and therefore may not recalculate from the rounded numbers used for disclosure purposes. As a reminder, our discussion today will include non-GAAP numbers. Reconciliations between our GAAP and non-GAAP results can be found in our recently filed 10-Q for the period ended June 30th, 2026.

[Morgan Frank, Chairman and CEO at Sanuwave]

As we discussed in several of our recent press releases, Q2 actually started out fairly strong and applicator sales remained so during the whole quarter, setting a new all-time record for both unit volumes up 13% sequentially from our previous record in Q1 and 27% year-on-year, and for applicator revenues up 8% sequentially from Q1 and surpassing the previous record from Q3 2025. These were up 13% year-over-year. We know that the release looks like it should be 14%. That's a whole number rounding issue that we mentioned. The diversion on price is predominantly from the shift to a reseller model into the company selling applicators at wholesale prices. Overall, during the quarter, applicator sales went largely to plan and on model.

[Morgan Frank, Chairman and CEO at Sanuwave]

We take this to be a good sign about customer confidence in the UltraMIST product, especially in such a difficult market in which so many wound care providers have gone BK or closed their doors as a result of CMS changes to skin substitute reimbursement and clawbacks of reimbursement associated with that modality. As we've said in the past, neither the wounds nor the patients have gone away. As the number of practitioner entities drop, we continue to see significant consolidation in the space. This has all been much as we expected. Where Q2 meaningfully diverged from plan and expectation was on the system sales side. As a number of UltraMIST customers, some of them quite large, have closed up shop in recent quarters, this has created an unprecedented market for used UltraMIST devices, which wound up having profound cannibalization effects on our business during the quarter.

[Morgan Frank, Chairman and CEO at Sanuwave]

I suppose if one were inclined to see good news here, it would be that at least people are buying them. Obviously, the bad news is that they weren't buying them from us. Many have asked about whether and to what extent we can size the impact that this had on the quarter. The honest answer to this is it's pretty difficult, because while we've seen a number of these transactions directly, either through the sales process or as new users reach out to us, there's simply no way to know what percentage of the overall trend we're capturing. Our best guess is that used systems accounted for 40 to 60 system sales in the quarter. Again, and just to be really clear here, it's difficult to be precise and this is our best estimate.

[Morgan Frank, Chairman and CEO at Sanuwave]

Customers buying applicators through resellers who are unable to check a serial number against the original purchasers list would not necessarily be visible as having bought a used system. Obviously, the same is true for existing customers who simply added another system. This also makes active systems a little tricky to calculate just now and creates the potential to undercount somewhat. Based on our ordered within the last six months, less those we know who have closed their doors, even if it was fewer than six months ago methodology, our count for active systems at the end of Q2 was 1,411, up 29 from the 1,382 at the end of Q1. We've shared some quite a market over the last 12 months.

[Morgan Frank, Chairman and CEO at Sanuwave]

The announcement of the pricing drop for skin subs to $127 a square centimeter took a $14 billion space and gave it something on the order of a 95% haircut. Reported CMS billing for 2026 thus far bears this out. Clawbacks on past payments have sucked huge amounts of money out of the space. This has put quite a few practitioners out of business, as many were users of both UltraMIST and Allograft. This has had a profound effect on the health of our customer base. Their used systems coming up for sale stand testament to this. Hopes that 2027 might see a skin substitute reimbursement pricing rise were not met when CMS provided early guidance on this topic.

[Morgan Frank, Chairman and CEO at Sanuwave]

We get some positive news from the calendar year 2027 Hospital Outpatient Prospective Payment System proposed rule released July 2nd, which proposes to increase reimbursement for UltraMIST by 14% for 2027 when used in the hospital outpatient setting. A place of service that includes a number of our customers and that has been an increasing focus for us. On July 14th, CMS calendar year 2027 Physician Fee Schedule proposed rule was released and obviously this news is not as good. 97610 was nominated as a mispriced code and changes to reimbursement suggested. If, and I really want to emphasize that this is still a proposed and not final rule, this rule were to go into effect, our read is that reimbursement for UltraMIST would drop from its present $397 average to approximately $316 in 2027, with further reductions to follow in 2028.

[Morgan Frank, Chairman and CEO at Sanuwave]

We disagree with a number of the assumptions CMS is using to arrive at these figures, and while getting into particulars is not appropriate in this venue, suffice it to say that both we and a great number of UltraMIST users, both professional and academic, plan to participate in this comment period. Honestly, it's been gratifying to get such a significant inpouring of support and we'll make the most of it. Having a product that your users truly love and believe in, and that is changing and saving patient lives and that provides profound savings to the overall system, is a good place from which to start. Just to take an example, diabetic foot ulcers are the number one cause of lower extremity amputations in the U.S. every year.

[Morgan Frank, Chairman and CEO at Sanuwave]

With 130,000 such amputations and an estimated lifetime cost of over $600,000 per patient emerging from each, the cost to the system from UltraMIST are de minimis relative to the potential for savings, which are enormous. Its role in underserved rural markets has been particularly large as well. While Sanuwave wholeheartedly supports CMS's goal of accurate data-driven payment, our goal in this comment period will be to ensure that the data that drives this decision is in fact both accurate and complete, and that it represents full practitioner costs and the systemic benefits of providing treatment under 97610, which of course is the intent of these rules and of this system. Comment period runs through September 14th, and we expect a final rule to be announced in or around the first week of November.

[Morgan Frank, Chairman and CEO at Sanuwave]

We wouldn't be the first company to get such a proposed rule overturned or reassessed, and we're going to try very hard to be the next one. We believe that there is a strong case to be made. In the meantime, we continue the longer-term push into indications like burn, hospital-acquired pressure injury, post-acute hospital inpatient, hospital outpatient, pediatric, and long-term care facilities, both to expand the reach of our product and because such users tend to be sticky long-term customers with high usage rates. These groups take longer to win over, but the groundwork we've laid over the last nine to 12 months is starting to bear some fruit here, and we're optimistic about continuing to make progress. With that, I'll now turn you over to Peter Sorensen, our CFO, who can walk you through the rest of our financials.

[Peter Sorensen, CFO at Sanuwave]

Thank you, Morgan. Revenue for the second quarter came in at $9.7 million, a decrease of 3% versus $10.1 million in the prior year quarter. Speaking directly to this decrease, the softness was concentrated in capital or system sales, while the recurring core applicator business held up well. UltraMIST's applicator revenue grew 13% year-over-year, with applicator unit volume up 27% year-over-year, reflecting continued strong demand across our active installed base. Before turning to the financials in more detail, a brief update on the sales tax matter we discussed on prior calls and in our filings. We have now finalized Voluntary Disclosure Agreements with a number of applicable states and have begun remitting the amounts due under them. As we work through the remaining states, the VDA process continues to do what is intended to do, limiting the look-back period and abating penalties in many jurisdictions.

[Peter Sorensen, CFO at Sanuwave]

In several cases, final settlements have come in below the amounts we had previously accrued. We continue to push this to completion with our third-party tax advisors and expect to finalize the remaining agreements as responses come in. With that, let's take a closer look at the financial results for the quarter. Revenue for the three months ended June 30th, 2026 totaled $9.7 million, a decrease of 3% compared to $10.1 million for the same period of 2025. The year-over-year decrease was driven by lower UltraMIST system revenue, which declined approximately 34% to $2.3 million from $3.4 million, reflecting weaker capital sales amid financial pressure across the industry and increased availability of used systems in the market. This was partially offset by continued growth in consumables. UltraMIST's applicator revenue, the recurring core of the business, grew approximately 13% year-over-year.

[Peter Sorensen, CFO at Sanuwave]

On a reported basis, our consumables, parts, and accessories line, which is primarily applicators but also includes parts and other miscellaneous items, increased approximately 12% to $7.3 million from $6.5 million. Gross margin as a percentage of revenue for the three months ended June 30th, 2026 was 76.2%, a decrease of approximately 183 basis points year-over-year from 78.1%. The decline was driven primarily by a shift in revenue mix toward consumables and away from higher margin system sales, together with lower average selling prices resulting from a higher mix of reseller or wholesale pricing. Operating loss for the three months ended June 30th, 2026 totaled $0.3 million, a swing of approximately $1.7 million compared to operating income of $1.4 million in the same period last year. That swing reflects roughly $0.4 million of lower gross margin and roughly $1.3 million of higher operating expenses.

[Peter Sorensen, CFO at Sanuwave]

OpEx for the quarter was $7.7 million compared to $6.4 million in the prior year quarter, an increase of approximately $1.3 million. By category, G&A expense increased approximately $0.5 million, sales and marketing increased approximately $0.2 million, R&D increased approximately $0.4 million as we continue to invest in product development, and depreciation and amortization increased approximately $0.1 million. Approximately $0.4 of that $1.3 million increase, roughly a third, was non-cash stock-based compensation spread across G&A, sales and marketing, and R&D. Within G&A, higher personnel costs, higher legal and professional fees, and higher bad debt expense together more than accounted for the increase. These were partially offset by an approximately $0.9 million favorable year-over-year swing in state and local sales tax, so the prior year sales tax charge gave way to a net benefit this quarter from the resolution of our VDAs at amounts below previously accrued balances.

[Peter Sorensen, CFO at Sanuwave]

Setting that sales tax benefit aside, the underlying increase in operating expense reflects our continued investment in headcount, R&D, and commercial capabilities. Despite these increases, we remain focused on disciplined cost management and expect operating leverage to improve as revenue scales. Net loss for the three months ended June 30th, 2026, was $0.7 million, compared to net income of $0.6 million for the same period in 2025. Year-over-year change was driven primarily by the swing in operating results I just described. Below the operating line, total other expense actually improved to $0.4 million from $0.9 million. Interest expense fell approximately $1.4 million year-over-year, following our September 2025 refinancing with JPMorgan, partially offset by the recurrence of a $1 million non-cash gain on the change in fair value derivative liabilities recognized in the prior year quarter. EBITDA for the three months ended June 30th, 2026, was +$0.1 million.

[Peter Sorensen, CFO at Sanuwave]

Adjusted EBITDA was +$1.2 million, compared to $3.2 million for the same period last year. The year-over-year decline reflects the lower operating results, including our continued investments in headcount, R&D, and commercial expansion. Total current assets amounted to $23.2 million as of June 30th, 2026, versus $24.6 million as of December 31st, 2025. Cash-and-cash equivalents totaled $9.4 million as of June 30th, 2026. During the first half of the year, we made $2.9 million in scheduled principal payments on our term loan and remained in compliance with all covenants under our JPMorgan credit agreement. To summarize, the second quarter was a more challenging one on the top line, with capital sales pressured by the industry environment. At the same time, the recurring core of our business continued to grow, our balance sheet liquidity remained sound, and we stayed disciplined on costs.

[Peter Sorensen, CFO at Sanuwave]

We're grateful for the continued trust and support of our stakeholders. As we move through the balance of 2026, we remain focused on operational discipline, expanding adoption of UltraMIST, and positioning Sanuwave for sustained profitable growth. With that, I'll turn the call back over to Morgan.

[Morgan Frank, Chairman and CEO at Sanuwave]

Thanks, Peter. With regard to guidance, we're going to adopt a cautious stance here and therefore, owing to market conditions, including the Medicare reimbursement developments discussed previously, Sanuwave is withdrawing its previously issued fiscal year 2026 revenue guidance, which should no longer be relied upon. The company will not provide quarterly nor annual guidance until there is greater clarity on these topics and expects to reassess this after CMS publishes its final rule, which is anticipated in the fourth quarter of 2026. As ever, I want to express my gratitude to the Sanuwave team for all the hard work and the commitment and the trust, and to our customers especially, who have been so engaged and supportive. Thanks to all of you, that's it for prepared remarks. Leslie, can we please open it up to questions?

[Operator]

Thank you. If you would like to ask a question, please press star one on your telephone keypad now. To leave the queue at any time, press star two. Once again, that is star one to ask a question. We will pause for a moment to allow everyone a chance to join the queue. Our first question comes from Sean Westropp with Deep Sail Capital. Your line is now open.

[Sean Westropp, Analyst at Deep Sail Capital]

Hey, Morgan, how are you?

[Morgan Frank, Chairman and CEO at Sanuwave]

Morning, Sean.

[Sean Westropp, Analyst at Deep Sail Capital]

Morning. Just wanted to ask on the breakdown on your customer side versus the for-profit, your mobile wound care versus hospital and other non, I guess, for-profit seeking businesses. What's the breakdown between those two groups? I'm not looking for an exact number, just kind of a standard way.

[Morgan Frank, Chairman and CEO at Sanuwave]

Yeah. I understand the impulse. One of the reasons that we have been sort of hesitant to provide that number with any real clarity is that it's sort of a fuzzier topic than one might expect at first pass. We have a lot of customers whose models are hybrid, who have brick-and-mortar facilities, who have mobile, some of which are combinations of HOPD and mobile. The delineation's not as sharp as you might expect, and so it's difficult to size with any precision. The upshot is, yeah, historically, we've done a lot of work in mobile. That tends to be one of the larger use case, or has historically been one of the larger use cases for UltraMIST. As we go forward with groups like Healogics and a number of our hospital customers, the complexion of that changes somewhat.

[Morgan Frank, Chairman and CEO at Sanuwave]

These customers tend to be slower to ramp-up, but have that sort of super-tanker momentum once they get going.

[Sean Westropp, Analyst at Deep Sail Capital]

Great. That makes sense. Thanks for that. If I could just ask one follow-up. You mentioned the numbers on the CMS reimbursement a little on what you guys think on the proposed side. I think it was like $397 down to $316. Can you just give us a little more color on how you're getting to the $316 number? That would be helpful.

[Morgan Frank, Chairman and CEO at Sanuwave]

Sure. In the proposed rule, it all sort of breaks down to what CMS calls RVUs, relative value units. Those are then multiplied by a conversion factor that gets you to the actual dollar value. Basically, you sum your RVUs for work, for practice expense, and for malpractice. You get a total RVU count. You then multiply that by a conversion factor, which we believe is going to be $3284 in 2027. Our understanding is that the proposed work RVU is 0.39, the practice expense RVU is 9.24, and the malpractice RVU is 0.01, which makes a fair bit of sense. I don't know if there's ever been a malpractice claim associated with UltraMIST. Our estimation is that gets you to a total of 9.64 RVUs.

[Morgan Frank, Chairman and CEO at Sanuwave]

You multiply that by the non-QP conversion factor of 32.8409, and that gets us to an estimate of $316.59.

[Sean Westropp, Analyst at Deep Sail Capital]

Got it. That was helpful. In terms of the process that you guys are going through to resubmit, is there any indications on when you will get any feedback on that, or is that just wait until the final rule, then you're going to hear that?

[Morgan Frank, Chairman and CEO at Sanuwave]

Yeah, it's a complicated process. There's a 60-day comment period. Obviously, we're going to do things like seek a meeting with CMS and see what we can achieve that way. Both we and customers will submit comments. I believe that 60-day period ends on September 14th, the final rule will likely be announced in or around the first week of November. I don't think there's a hard and fast date for it, traditionally, that's been a very tight range.

[Sean Westropp, Analyst at Deep Sail Capital]

Great. Thanks a lot, Morgan. I'll get back in the queue.

[Morgan Frank, Chairman and CEO at Sanuwave]

Thanks, Sean.

[Operator]

Thank you for your question. At this time, there are no further questions in the queue. I will now turn our meeting back to Morgan Frank.

[Morgan Frank, Chairman and CEO at Sanuwave]

Great. Well, thank you, Leslie. Thank you everyone for participating this morning. We will speak to you again next quarter.

[Operator]

Thank you. This brings us to the end of today's meeting. We appreciate your time and participation. You may now disconnect.

Participants

Analysts

• Morgan Frank, Chairman and CEO at Sanuwave
• Peter Sorensen, CFO at Sanuwave
• Sean Westropp, Analyst at Deep Sail Capital