Tactile Systems Technology, Inc. reported its financial results for the nine months ended September 30, 2024, showing a revenue increase of 5% to $207.4 million compared to $196.8 million in the same period of 2023. The growth was primarily driven by a 6% rise in revenue from lymphedema products, which accounted for 88% of total revenue, and a 2% increase in airway clearance products, contributing 12% of total revenue. For the third quarter of 2024, revenue reached $73.1 million, up from $69.6 million in Q3 2023.
Despite the revenue growth, net income for the nine months ended September 30, 2024, decreased significantly by 64% to $7.2 million, compared to $20.3 million in the prior year. This decline was attributed to increased operating expenses, including a 3% rise in sales and marketing expenses and a 23% increase in research and development costs. The company reported a net income of $5.2 million for Q3 2024, a substantial drop from $22.3 million in Q3 2023.
Gross profit for the nine-month period increased by 9% to $152.3 million, with gross margins improving to 73.4% from 70.7% in the previous year. The cost of revenue decreased by 4% to $55.1 million, contributing to the improved gross margin.
Tactile Systems also highlighted strategic developments, including the completion of a public offering in February 2023, which raised approximately $34.6 million. The company has been expanding its sales force, increasing the number of field sales representatives for lymphedema products to 270, up from 246 in 2023. Additionally, the company introduced the Entre Plus system in March 2023 and received 510(k) clearance for the Nimbl system in June 2024.
The company’s financial position remains stable, with cash and cash equivalents totaling $82.1 million as of September 30, 2024, compared to $66.0 million a year earlier. Tactile Systems has also been managing its debt effectively, with outstanding borrowings under its credit agreement totaling $27.0 million, all from a term loan with a 7.10% interest rate.
Overall, while Tactile Systems Technology, Inc. experienced revenue growth, profitability was impacted by rising operational costs and a significant decrease in net income compared to the previous fiscal period.
About TACTILE SYSTEMS TECHNOLOGY INC
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