Sanara MedTech (SMTI) Financials

Sanara MedTech’s operating business continued to grow through the second quarter of 2026, but high interest costs and a heavily leveraged balance sheet remain key risks. Revenue increased to $28.1 million in Q2 2026 from $27.8 million in Q1 2026 and $25.8 million in the restated Q2 2025 results. Compared with Q3 2023 revenue of $16.0 million, the company has expanded sales substantially.

Gross profit was $26.2 million in Q2 2026, representing a gross margin of approximately 93%. The margin has generally remained strong, ranging from roughly 89% to 93% across the periods provided. However, operating income declined to $1.8 million from $2.6 million in Q1 2026 as selling, general and administrative expense increased to $22.6 million and research and development expense rose to $1.2 million.

Sanara reported a consolidated net loss of $452,864 in Q2 2026 after earning $458,603 in Q1. Interest expense totaled $1.8 million for the quarter, while total other expense was $2.2 million. The company’s operating business remains close to profitability, but financing costs continue to absorb much of its operating income.

Cash flow improved substantially during the latest quarter. Operating cash flow was $2.0 million in Q2 2026, compared with an outflow of $2.5 million in Q1. The improvement was helped by a $2.3 million favorable change in operating assets and liabilities. Cash and equivalents rose to $15.4 million from $13.6 million at the end of Q1, although quarterly cash generation has been inconsistent over the broader period.

• Revenue growth: Quarterly revenue rose from $16.0 million in Q3 2023 to $28.1 million in Q2 2026, indicating meaningful expansion of the operating business.
• Strong gross margins: Q2 2026 gross margin was approximately 93%, providing a substantial base to support operating expenses and debt service.
• Positive operating income: Sanara has reported positive operating income in each of the latest four reported quarters, despite remaining unprofitable at the net-income level.
• Improved operating cash flow: Operating cash flow recovered to $2.0 million in Q2 2026 from negative $2.5 million in Q1, and quarterly net cash increased by $1.8 million.
• Improved accounts receivable position: Accounts receivable declined to $12.6 million in Q2 2026 from $13.6 million in Q1, which helped support the latest quarter’s working-capital cash inflow.
• Restated historical results: Several 2024 and 2025 income-statement and cash-flow figures were restated in later filings, so investors should use caution when comparing older periods and should rely on the latest reported figures.
• Asset mix remains acquisition-oriented: Goodwill, intangible assets and long-term investments remain significant portions of total assets. This could support future growth, but it also makes reported equity more sensitive to impairments or valuation changes.
• Heavy leverage: Long-term debt was $47.0 million at June 30, 2026, compared with $15.4 million of cash. Total liabilities of $61.2 million were nearly eight times total equity of $7.9 million.
• High interest burden: Q2 interest expense of $1.8 million was approximately equal to the company’s $1.8 million of operating income. Cash interest paid was $1.5 million, limiting the amount of operating cash available for reinvestment or debt reduction.
• Profitability remains fragile: Sanara posted a net loss in Q2 after a small profit in Q1, and retained earnings remained negative at approximately $74.9 million. Continued losses or weak cash flow could place additional pressure on the balance sheet.