How will MyoSleeve fit into the business model, what is the expected OpEx impact, and what revenue contribution can be expected?

MyoSleeve is expected to be an incremental growth contributor within the VA channel over time, but current guidance does not assume any material contribution. The agreement leverages existing VA infrastructure and sales force, minimizing additional OpEx, making it a 'plug and play' fit. “So, we do see MyoSleeve as an incremental growth contributor within the VA channel over time, but we -- our current guidance does not assume any material contribution from MyoSleeve.”

Why will ordering patterns normalize in Q4, what are current inventory levels, and when will the new AffloVest product impact kick in?

The temporary inventory dynamic is due to the new product launch, forcing DME partners to review inventory. This is limited to a few large partners, and the company has good visibility. Q3 will see inventory burn-down, with normalization in Q4. The new AffloVest (Gen 6) is a better product with connectivity and lighter design, exciting DMEs and patients, but there's no incremental reimbursement. “So that's why we're saying we believe that Q3, they'll start to burn through that inventory, and then starting in Q4, they'll start to pick back up on their overall ordering pattern.”

Clarify LymphaTech's contribution to lymphedema growth and the extent of the airway clearance guidance reduction.

LymphaTech is already built into the overall guidance but remains a small portion of the broader lymphedema business growth, which is primarily driven by referrals, productivity, and NCD-driven Flexitouch adoption. The airway clearance guidance change reflects current visibility on ordering patterns and expected normalization in the back half of the year. “Yes, so LymphaTech is already built into the overall guide. That's reflected when we talk about the health of the lymphedema business. But we'll say that, LymphaTech continues to be a really small portion of what is the broader lymphedema business growth for us.”

TCMD

Tactile Systems Technology (TCMD) Q2 FY26 earnings call: guidance and Q&A

Earnings call· Jun 2026 (Q2 FY26)· Health Care· Aug 10, 2026

Source: earnings call transcript

Executive summary

Tactile Systems Technology Q2 FY26 — Strong Lymphedema Growth and Profitability Expansion Offset Airway Clearance Headwinds

Tactile Medical delivered a strong second quarter, driven by robust performance in its lymphedema business and significant profitability expansion. While the airway clearance segment faced temporary headwinds from DME inventory adjustments related to a new product launch, the company reaffirmed its full-year adjusted EBITDA guidance. Strategic initiatives, including an expanded distribution agreement and LymphaTech's FDA submission, aim to broaden treatment options and improve patient access, positioning the company for sustainable long-term growth.

Highlights

Total revenue increased 9% year-over-year to $85.7 million.
Lymphedema revenue grew 12% year-over-year to $73.6 million.
Gross margin improved 180 basis points year-over-year to 76.3%.
Adjusted EBITDA increased 49% to $11.4 million.
Net income increased 142% to $7.8 million or $0.34 per diluted share.

Concerns

AffloVest revenue declined 7% year-over-year to $12.1 million due to temporary inventory management dynamics among DME partners.
Medicare prior authorization requirement introduced additional administrative steps, contributing to near-term moderation in Medicare order volumes.
Airway clearance revenue is now expected to be closer to flat year-over-year for FY26, revised from prior expectations.

Guidance & targets

Category	Target	Timeline	Confidence
Total Revenue	$360 million to $366 million high materiality	Full Year 2026 · FY26	High
Lymphedema Revenue Growth	low double-digit range medium materiality	Full Year 2026 · FY26	High
Airway Clearance Revenue Growth	closer to flat medium materiality	Full Year 2026 · FY26	Medium
GAAP Gross Margins	76% to 76.5% medium materiality	Full Year 2026 · FY26	High
GAAP Operating Expenses Growth	increase 10% to 12% medium materiality	Full Year 2026 · FY26	High
Net Interest Income	approximately $2.4 million low materiality	Full Year 2026 · FY26	High
Tax Rate	28% low materiality	Full Year 2026 · FY26	High
Fully Diluted Weighted Average Share Count	approximately 23 million shares low materiality	Full Year 2026 · FY26	High
Adjusted EBITDA	approximately $49 million to $51 million high materiality	Full Year 2026 · FY26	High

Segment performance

Segment	Revenue	YoY	QoQ	Margin
Lymphedema Continued strong execution, healthy referral trends, improved territory productivity, and NCD-driven Flexitouch adoption were primary drivers. Medicare prior authorization introduced near-term moderation in order volumes, but initial impacts are expected to normalize. Revenue increase: $7.7MNCD-driven Flexitouch adoptionHealthy referral trendsImproved territory productivity	$73.6M	12%	—	—
Airway Clearance Sales decline due to temporary inventory management dynamics among several large DME partners associated with the launch of the next-generation AffloVest system. Underlying fundamentals remain strong, with TTM revenue up 32% YoY. Revenue decrease: $0.9MTemporary inventory management dynamics among DME partnersNext-generation AffloVest system launch	$12.1M	-7%	—	—

Product announcements

Product	Type	Timeline	Details
Next-generation AffloVest system	launch	Q2 FY26
MyoSleeve	launch	July 2026

Deals & partnerships

ElastiMed Exclusive U.S. distribution agreement for MyoSleeve Upfront payments made (not quantified)

Agreement to bring MyoSleeve, a novel compression therapy device, specifically to veterans, active duty service members, and other beneficiaries served through the Department of Defense. MyoSleeve is a discreet, wearable, non-pneumatic compression device for the lower leg.

Risks & headwinds

Airway Clearance Inventory Management Dynamics Expected to continue through Q3 FY26, normalize in Q4 FY26.

AffloVest revenue declined 7% year-over-year to $12.1 million.

Mitigation:Working closely with DME partners; good visibility on inventory levels; underlying business fundamentals remain strong.

Medicare Prior Authorization Requirement Initial impacts expected to moderate; operational efficiency to improve as teams and MACs gain familiarity.

Medicare order volumes experienced near-term moderation; Medicare business was down in the quarter.

Mitigation:Company prepared for requirements ahead of effective date; well-positioned to execute new process; initial impacts expected to moderate.

What to watch in Q3 FY26

Airway Clearance Ordering Patterns

Q4 FY26

Current Temporary inventory management dynamics causing -7% YoY revenue decline in Q2.

Target Normalization of ordering patterns.

Why it matters

Normalization of ordering patterns is crucial for the recovery of the airway clearance segment and achieving full-year guidance.

Based on our visibility today, we expect these inventory management dynamics to continue influencing ordering patterns throughout the third quarter, with purchasing activity beginning to normalize in the fourth quarter as their inventory levels rebalance.

Find out whether TCMD delivers this. Inve re-checks your case every morning.

Q&A highlights

Quantify any order/revenue shift between Q2 and Q3 due to prior authorization and assess if strong underlying momentum offset turbulence.

Lymphedema's strong performance was driven by healthy referrals, improved territory productivity, and NCD-driven Flexitouch adoption. The Medicare prior authorization did cause a timing impact on orders, but this is normalizing, and the team was well-prepared, with MACs also improving. The Medicare business was down in Q2, reflecting this impact, and sequential Q3 growth is expected to be larger due to this timing push.

“So, a couple of things. Definitely, lymphedema was a primary driver of the upside, and we continue to see really strong execution across our commercial organization, which is both healthy referral trends. We have improved territory productivity, and then the continued NCD-driven Flexitouch adoption.”

asked by Kyle Edward Winborne · answered by Sheri Dodd

2 min read 5 chapters

Detailed narrative

Lymphedema Business Performance and Medicare Prior Authorization

The lymphedema business demonstrated strong momentum with 12% year-over-year revenue growth in Q2 FY26, driven by healthy referral trends, improved territory productivity, and NCD-driven Flexitouch adoption. The April 13th Medicare prior authorization requirement introduced administrative steps, causing near-term moderation in Medicare order volumes.

However, the company prepared for these requirements, and initial impacts are expected to moderate as operational efficiency improves and MACs gain familiarity with the new process.

Airway Clearance Segment Headwinds and Next-Gen AffloVest Launch

Sales of AffloVest declined 7% year-over-year in Q2 FY26, primarily due to temporary inventory management dynamics among several large DME partners. This was associated with the launch of the next-generation AffloVest system, which prompted DMEs to assess existing inventory. The company expects these dynamics to continue influencing ordering patterns through Q3, with normalization anticipated in Q4.

Despite this, underlying business fundamentals, patient demand, and the competitive position of AffloVest remain strong.

LymphaTech Acquisition and Strategic Expansion

The LymphaTech acquisition aims to address unmet needs in lymphedema diagnosis and monitoring. Its FDA-cleared platform provides objective, quantitative assessment of limb volume and circumference, generating 3D models for disease progression tracking. The company has submitted for an expanded indication as a diagnostic aid for lymphedema, with FDA approval expected in 2027, and is pursuing a Category III CPT code to establish a reimbursement pathway and support broader adoption.

This initiative targets the 20 million undiagnosed lymphedema patients in the U.S.

Clinical Evidence and Market Access Initiatives

Tactile Medical published the 6-month manuscript for its head and neck clinical evidence program in a peer-reviewed journal, demonstrating Flexitouch's efficacy in treatment-naive patients. This study supports expanding awareness and improving access to care for head and neck lymphedema patients, particularly by engaging commercial payors to remove restrictive experimental and investigational designations.

The Medicare NCD policy already allows coverage for these patients, and the publication is expected to drive clinician awareness.

New Treatment Option: MyoSleeve Distribution Agreement

The company announced an exclusive U.S. distribution agreement with ElastiMed for MyoSleeve, a discreet, wearable, non-pneumatic compression device for lower leg lymphedema. This product is specifically targeted at veterans, active duty service members, and other beneficiaries through the VA channel, where Tactile Medical has established relationships.

MyoSleeve expands the company's portfolio of lymphatic care solutions, offering an additional treatment option for earlier-stage patients and complementing existing pneumatic compression therapies.

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