What Hinge Health (HNGE) Said on Its Q3 Earnings Call

Key Points

• Strong Q3 performance: Revenue rose 52% year over year to $235 million, while gross margin reached 88%, non-GAAP operating margin was 33%, and adjusted free cash flow was $120 million.
• Outlook raised: Hinge Health increased its 2026 revenue guidance to $879 million–$881 million and operating-income forecast to $266 million–$268 million, citing stronger member engagement, higher yield and growth from the Cylinder acquisition.
• Expansion continues: Contracted clients grew 28% to 3,270, while migraine and gastrointestinal care offerings broaden the company beyond its core musculoskeletal business; commercial leadership will transition to Aaryn Pure after President Jim Pursley steps down at year-end 2026.

Hinge Health NYSE: HNGE reported third-quarter revenue growth of 52% year over year and raised its full-year outlook, as the digital musculoskeletal care company cited higher member engagement, client additions and improved operating leverage.

Revenue for the third quarter was $235 million, compared with $154 million a year earlier and above the company’s prior guidance range of $223 million to $225 million. Last-12-month calculated billings rose 54% to $960 million.

The company reported an 88% gross margin, up 480 basis points from the prior-year period. Non-GAAP income from operations was $77 million, producing a 33% operating margin, compared with a 20% margin in the third quarter of 2025. Free cash flow, excluding $7 million of one-time acquisition-related payments, was $120 million, or a 51% margin.

“Q3 was another strong proof point that automated care delivery works for our members, our clients, our partners, and our financials,” Co-Founder and Chief Executive Officer Daniel Perez said.

Guidance Raised as Yield Improves

Chief Financial Officer James Budge said the quarterly revenue outperformance was driven by stronger-than-anticipated billings, which in turn reflected higher yield, or the portion of eligible members who enroll and engage with the company’s programs.

Hinge Health said members joining through clinically targeted enrollment campaigns increased nearly 75% year over year, while member renewals increased almost 25%. Budge said the company views those improvements as structural rather than one-time factors.

For the fourth quarter, Hinge Health expects revenue of $249 million to $251 million, representing 46% growth at the midpoint. It forecast non-GAAP income from operations of $81 million to $83 million, or a 33% margin at the midpoint.

For full-year 2026, the company raised its revenue outlook to $879 million to $881 million from a prior range of $856 million to $860 million. It also lifted its non-GAAP operating-income forecast to $266 million to $268 million, representing a 30% operating margin at the midpoint.

The company now expects approximately 25.5 million last-12-month average eligible lives at year-end, about 500,000 above its prior expectation. Budge said the increase primarily reflects net new lives added through the acquisition of Cylinder. Hinge Health also increased its full-year yield assumption to 4.6% from 4.45%.

Hinge Health ended the quarter with $358 million in cash and investments. During the quarter, it repurchased 296,000 shares for $26 million and reported $209 million in outflows related to acquisitions and net share settlements on employee restricted stock unit vestings.

Commercial Growth and Leadership Transition

Chief Commercial Officer Aaryn Pure said the company ended the quarter with 3,270 contracted clients, up 28% from a year earlier. Hinge Health added three Fortune 15 clients and expanded to serve the full population of another large client.

The company said it closed nearly 1 million small- and medium-sized business, or SMB, lives through the third quarter. Pure said SMB sales can have faster sales cycles, higher initial yield and more favorable economics than larger-client sales.

Hinge Health has already received verbal agreements for more eligible lives this year than it closed during all of the prior year, according to management. The company said more than 10 million lives across over 800 clients now have access to multiple Hinge Health products, including musculoskeletal care, migraine care, gastrointestinal care or HingeSelect.

President Jim Pursley said he will step down from his executive role at the end of 2026 to spend more time with his family. He will join Hinge Health’s board. Pure, who has worked with Pursley at both Hinge Health and Livongo, is set to lead the company’s go-to-market function.

The company said it has more than 60 health plan, pharmacy benefit manager and third-party administrator partners, with 100% health-plan retention. Pure said Hinge Health is listed as a preferred partner with more health plans than before and that those channel relationships have contributed to its sales growth.

New Programs Expand Beyond MSK

While management emphasized that core musculoskeletal, or MSK, care remains its largest revenue contributor, the company discussed progress in its newer migraine and GI offerings.

Hinge Health’s Migraine Care Program remains in early access. Perez said surveyed members showed a 23% reduction in monthly migraine days and a 28% reduction in migraine duration, or approximately five hours. About two-thirds of members improved their HIT-6 scores, a measure of migraine impact, while just over half achieved a clinically meaningful change.

The migraine offering is available to approximately 9 million lives across more than 800 clients, following an expansion during the quarter. Most of those lives are expected to launch in early 2027. Budge said the company continues to expect migraine care to add roughly 10 to 20 basis points to yield in 2027, with a larger contribution expected over time.

Hinge Health also said its acquisition of Cylinder has supported its expansion into GI care. Since announcing the acquisition in August, the company said it has grown Cylinder’s GI client base by around 40%.

The company is developing an integrated GI Care Program for the Hinge Health app, targeted for release in summer 2027. The planned product will include an AI-powered intake process, food analysis using photos, voice notes or text, symptom tracking, and an AI-powered stool scan based on the Bristol Stool Scale. It is also expected to provide members direct access to GI specialists, dietitians and gut-brain therapists, along with pelvic floor therapy.

Management expects GI revenue contribution to become more meaningful in 2028, after a fuller 2027 selling season for the integrated offering. Budge said average selling prices are expected to remain roughly flat in 2027, with potential uplift in later periods as migraine and GI programs mature and more members use multiple programs.

About Hinge Health (NYSE:HNGE)

Hinge Health is a digital healthcare company focused on musculoskeletal (MSK) conditions, including back and joint pain. The company provides virtual care programs designed to help members manage pain, improve mobility and reduce the need for more costly or invasive treatments.

Its platform combines personalized exercise therapy, behavioral support, education and access to clinical professionals. Hinge Health also uses technologies such as motion-sensing wearable devices and artificial intelligence to help guide exercises, monitor progress and tailor care plans to individual needs.

Hinge Health primarily serves employers and health plans, which offer its programs to eligible members in the United States.

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