Key Highlights

  • Revenue rose 7% to USD 91.9 million, and lymphedema Revenue grew USD 9.5 million, or 13%.
  • Gross Margin was 77% versus 76%, the twelfth consecutive quarter of year-over-year gross margin expansion.
  • Net income was USD 7.2 million versus USD 8.2 million, and adjusted EBITDA was USD 14.3 million.
  • Adjusted EBITDA guidance rose to USD 50 million to USD 52 million, and revenue guidance stayed near USD 363 million.

Quarter in Numbers

Tactile Systems Technology, Inc. (NASDAQ:TCMD), a medical technology company serving lymphedema and chronic respiratory conditions, reported third-quarter 2026 revenue of USD 91.9 million versus USD 85.8 million. Sales revenue was USD 82.3 million versus USD 76.9 million, and rental revenue was USD 9.5 million versus USD 8.9 million. The increase came from a USD 9.5 million, or 13%, rise in sales and rentals of the lymphedema product line, partly offset by a USD 3.4 million, or 25%, decline in sales of the airway clearance product line.

Cost of revenue rose 3% to USD 21.4 million, and Gross Profit was USD 70.5 million versus USD 65.0 million. Gross margin was 77% versus 76%, and management cited an expansion of 90 basis points to 76.7%, the twelfth consecutive quarter of year-over-year improvement.

Operating Expenses and Earnings

Sales and Marketing expense rose 11% to USD 33.0 million, Research and Development expense rose 14% to USD 2.5 million, and reimbursement, general and administrative expense rose 15% to USD 24.7 million. Total operating expenses were USD 60.9 million versus USD 54.0 million, a 12.7% increase by our calculation, which outpaced gross profit growth of 8.4%. Income from operations was therefore USD 9.6 million versus USD 11.0 million. Reimbursement, general and administrative expense rose to 26.8% of revenue from 25.0%, and sales and marketing expense to 36.0% from 34.8%, by our calculation, which explains the margin decline. Sales revenue grew about 7.1% and rental revenue about 7.5%.

After interest income of USD 0.6 million, income before income taxes was USD 10.1 million versus USD 11.4 million, and income tax expense was USD 3.0 million versus USD 3.2 million. Net Income was USD 7.2 million versus USD 8.2 million. Adjusted EBITDA was USD 14.3 million.

Nine Months and Cash

For the nine months, revenue was USD 252.8 million versus USD 225.9 million, gross profit was USD 193.5 million versus USD 169.1 million, and income from operations was USD 14.9 million versus USD 10.5 million. Gross margin was 77% versus 75%, and interest expense fell to USD 0.1 million from USD 1.0 million. The company had cash of USD 75.1 million at September 30, 2026.

Guidance and Product Indicators

Management maintained full-year 2026 revenue guidance of USD 360 million to USD 366 million and raised adjusted EBITDA guidance to USD 50 million to USD 52 million, citing confidence in low double-digit growth and sequential improvement in airway clearance revenue in the fourth quarter. It also said full-year airway clearance revenue is projected to decline, reflecting the 25% decline in the quarter.

Items to track include lymphedema growth against Operating Expense growth, the airway clearance trajectory, gross margin progression, and the relationship between guidance and the third-quarter Operating Margin of 10.4%, which by our calculation was lower than the 12.8% of a year earlier.