Key Highlights

  • TCMD reported third-quarter 2026 Revenue of $91.9 million, up 7.1% from a year earlier.
  • Lymphedema revenue rose 13.1% to $81.8 million, while airway clearance revenue fell 25.1% to $10.0 million.
  • Net income was $7.2 million, or $0.31 per diluted share, compared with $8.2 million, or $0.36.
  • Gross Margin widened to 76.7% from 75.8%, and adjusted EBITDA was $14.3 million.
  • Full-year 2026 adjusted EBITDA guidance was raised to $50 million to $52 million.

Lymphedema Growth of 13.1% Outweighs a 25.1% AffloVest Decline

Tactile Systems Technology (NASDAQ:TCMD), which operates as Tactile Medical, reported results for the third quarter ended Sep 30, 2026, and discussed them on its Nov 3, 2026 earnings call. Total revenue was $91.9 million, up $6.1 million or 7.1% from a year earlier.

The company develops at-home pneumatic compression therapy for lymphedema, including the Flexitouch and Nimbl systems, and sells the AffloVest airway clearance device. Lymphedema revenue increased $9.5 million to $81.8 million, a 13.1% gain and about 11% higher than the second quarter.

Within lymphedema, Medicare revenue grew about 11% and commercial revenue about 17%, while VA revenue was roughly flat. Airway clearance revenue dropped $3.4 million to $10.0 million as some durable medical equipment customers worked through excess inventory during the transition to the next-generation AffloVest.

Higher Operating Costs Trim Net Income to $7.2 Million Despite Wider Gross Margin

Gross margin expanded to 76.7% of revenue from 75.8%, the twelfth consecutive quarter of annual improvement, on lower Manufacturing costs and favorable mix. Operating expenses rose $6.9 million, or 12.7%, to $60.9 million, reflecting the annualization of prior-year sales hiring and technology investment.

Operating income was $9.6 million versus $11.0 million. Net income was $7.2 million, or $0.31 per diluted share, compared with $8.2 million, or $0.36. For the nine months, net income was $13.2 million versus $8.5 million.

Adjusted EBITDA was $14.3 million, nearly level with $14.4 million a year earlier, and the margin was 15.6% versus 16.8%. Year-to-date adjusted EBITDA rose about 35% to $29.5 million.

Flexitouch Pro Filing and LymphaTech Clearance Frame the Next Growth Phase

The company filed a 510(k) application in October for Flexitouch Pro, an upgrade to its advanced compression system, and is targeting a commercial launch in the second half of 2027, subject to regulatory approval. The FDA also cleared an expanded indication for the LymphaTech 3D Scanner, which now supports lymphedema assessment, and a Category III billing code application is scheduled for final review in February 2027.

Management said clinic visits rose 19% in the quarter, and it has educated more than 13,000 clinicians in 2026. A new chief operating officer will oversee order operations and patient services. A MyoSleeve pilot with the VA starts in late fourth quarter and is not in the 2026 outlook.

Full-Year Revenue Guide of $360 Million to $366 Million Holds as Airway Clearance Outlook Softens

Tactile Systems Technology ended the quarter with $75.1 million in cash and no borrowings, after $12 million of Operating Cash Flow and $6.2 million of share repurchases. About $12.5 million remains under its $25 million buyback program.

The company kept 2026 revenue guidance at $360 million to $366 million, or 9% to 11% growth, and raised adjusted EBITDA guidance to $50 million to $52 million, versus $44.8 million in 2025. It now expects full-year airway clearance revenue to fall mid to high single digits, versus roughly flat previously. Next to watch is the fourth quarter, its seasonally largest, when management expects sequential growth in both lines but slower year-over-year lymphedema growth against a strong prior-year comparison.