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SANUWAVE Health (SNWV) Q2 FY26 earnings call: guidance and Q&A

Earnings call· Jun 2026 (Q2 FY26)· Health Care· Aug 7, 2026

Source: earnings call transcript

Executive summary

SANUWAVE Health Q2 FY26 — Strong Consumables Growth Amidst Reimbursement Uncertainty and Used System Cannibalization

SANUWAVE Health reported record-setting growth in its recurring applicator business, reflecting robust demand for its Ultramist product. However, overall revenue declined due to significant cannibalization from used system sales and a challenging market for capital equipment. The company withdrew its FY26 revenue guidance amidst uncertainty surrounding proposed CMS reimbursement changes for Ultramist, which could negatively impact future pricing, though it plans to actively participate in the comment period.

Highlights

4

  • Applicator unit volumes set a new all-time record, up 27% year-on-year.

  • Applicator revenues grew 13% year-over-year, surpassing the previous record.

  • CMS proposed a 14% increase in Ultramist reimbursement for 2027 in the hospital outpatient setting.

  • Final sales tax settlements came in below previously accrued amounts, resulting in a $0.9 million favorable swing.

Concerns

6

  • Total revenue decreased 3% year-over-year to $9.7 million.

  • Ultramist system revenue declined 34% year-over-year to $2.3 million due to cannibalization from used systems.

  • Operating results swung to a $0.3 million loss from a $1.4 million income in the prior year.

  • Net loss for the quarter was $0.7 million, compared to net income of $0.6 million in the prior year.

  • FY26 revenue guidance was withdrawn due to market conditions and CMS reimbursement uncertainty.

  • CMS proposed rule suggests Ultramist reimbursement could drop from $397 to $316 in 2027 for the physician fee schedule.

Guidance & targets

CategoryTargetConfidence
Fiscal Year 2026 Revenue
Guidance withdrawn
high materiality
Low

Risks & headwinds

Cannibalization from used Ultramist systems Q2 FY26, ongoing

Estimated 40-60 system sales impact in Q2 FY26, contributing to a 34% YoY decline in system revenue.

Mitigation:Focus on recurring applicator business and expansion into new indications/settings.

Proposed CMS reimbursement reduction for Ultramist (physician fee schedule) Starting 2027

Potential drop from $397 average to approximately $316 in 2027 for code 97.610, with further reductions in 2028.

Mitigation:Active participation in the CMS comment period (ends Sept 14th), seeking meetings with CMS, and presenting a strong case based on product value and systemic benefits.

Difficult market for wound care providers due to prior CMS changes Last 12 months, ongoing

Pricing drop for skin substitutes to $127 per square centimeter (a 95% haircut from a $14 billion space), leading to many practitioner bankruptcies or closures.

Mitigation:Focus on consolidation in the space, leveraging Ultramist as an alternative, and expanding into new, sticky customer segments.

What to watch in Q3 FY26

CMS final rule on Ultramist reimbursement

First week of November 2026 (Q4 FY26)
Current Proposed drop from $397 to $316 for physician fee schedule; proposed 14% increase for hospital outpatient setting.
Target Final reimbursement rates for 2027.

Why it matters

The final reimbursement rates will directly impact future revenue and profitability for Ultramist, a core product.

the final rule will likely be announced in or around the first week of November.

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Q&A highlights

Can you provide a breakdown of your customer base between for-profit mobile wound care and hospital/non-profit settings?

Morgan Frank explained that the customer models are often hybrid, making precise delineation difficult. Historically, mobile wound care has been a larger use case for Ultramist, but new groups like Keologics and hospital customers are slower to ramp up but offer more stable, long-term momentum.

“One of the reasons that we have been sort of hesitant to provide that number with any real clarity. Is. is that it's sort of a fuzzier topic than one might expect at first pass. Like we just, we have a lot of customers whose models models are hybrid.”

asked by Sean Westrope · answered by Morgan Frank

2 min read 6 chapters

Detailed narrative

Applicator Business Strength

The company reported strong performance in its recurring applicator business, setting new all-time records for both unit volumes and revenues. Applicator unit volumes increased 13% sequentially from Q1 and 27% year-on-year, while applicator revenues grew 8% sequentially from Q1 and 13% year-over-year.

This performance is seen as a positive indicator of customer confidence in the Ultramist product, especially given the difficult market conditions in wound care.

System Sales Headwinds

Q2 saw a significant divergence from plan in system sales, which declined 34% year-over-year to $2.3 million. This was primarily attributed to an 'unprecedented market for used Ultramis devices,' which created profound cannibalization effects. Management estimates that used systems accounted for 40 to 60 system sales in the quarter, impacting new system placements.

The active system count at the end of Q2 was 1,411, up 29 from Q1.

CMS Reimbursement Uncertainty

The company highlighted significant uncertainty regarding CMS reimbursement. While a proposed rule for the Calendar Year 2027 Hospital Outpatient Prospective Payment System suggests a 14% increase for Ultramist in hospital outpatient settings, another proposed rule for the physician fee schedule indicates a potential drop in reimbursement for Ultramist (code 97.610) from $397 to approximately $316 in 2027, with further reductions in 2028.

This follows previous drastic cuts to skin substitute reimbursement, which led to many wound care provider closures.

Advocacy for Ultramist Reimbursement

SANUWAVE Health, along with Ultramist users, plans to actively participate in the CMS comment period, which runs through September 14th. The goal is to ensure that the data driving reimbursement decisions is accurate and complete, reflecting full practitioner costs and the systemic benefits of Ultramist treatment, particularly its role in preventing amputations and providing significant savings to the healthcare system.

The final rule is expected around the first week of November.

Strategic Expansion and Diversification

The company continues its longer-term push into new indications and care settings, including burn, hospital-acquired pressure injury, post-acute, hospital inpatient, hospital outpatient, pediatric, and long-term care facilities. This strategy aims to expand the product's reach and secure sticky, long-term customers with high usage rates, with groundwork laid over the past 9-12 months starting to yield results.

Financial Performance and Cost Management

Overall revenue decreased 3% year-over-year to $9.7 million. The company reported an operating loss of $0.3 million and a net loss of $0.7 million, primarily due to lower gross margin from the shift to consumables and higher operating expenses. Operating expenses increased by $1.3 million, driven by investments in headcount, R&D, and commercial capabilities, partially offset by a $0.9 million favorable swing from sales tax resolutions.

Adjusted EBITDA was $1.2 million, down from $3.2 million in the prior year.

Summary of the company's earnings call; see how call summaries are prepared. Not investment advice.