Q4 2025 Tactile Systems Technology Inc Earnings Call

February 17, 2026

Operator: Please stand by. Welcome, ladies and gentlemen, to the Q4 and full year 2025 earnings conference call for Tactile Medical. At this time, all participants have been placed in listen-only mode. At the end of the company's prepared remarks, we will conduct a question-and-answer session. Please note that this conference call is being recorded and will be available on the company's website for replay shortly. I would now like to turn the call over to Sam Bentzinger, Investor Relations at Gilmartin Group, for a few introductory comments. Please go ahead.

Speaker #2: At the end of the company's prepared remarks, we will conduct a question-and-answer session. Please note that this conference call is being recorded and will be available on the company's website for replay shortly.

Speaker #2: I would now like to turn the call over to Sam Bentzinger, Investor Relations at Gilmartin Group, for a few introductory comments. Please go ahead.

Speaker #2: Good afternoon, and thank you for joining the call today. With me from Tactile's management team are Sheri Dodd, Chief Executive Officer, and Elaine Birkemeyer, Chief Financial Officer.

Sam Bentzinger: Good afternoon, and thank you for joining the call today. With me from Tactile's management team are Sheri Dodd, Chief Executive Officer, and Elaine Birkemeyer, Chief Financial Officer. Before we begin, I'd like to remind everyone that our remarks and responses to your questions today may contain forward-looking statements that are based on the current expectations of management and involve inherent risks and uncertainties. These could cause actual results to differ materially from those indicated, including those identified in the Risk Factors section of our annual report on Form 10-K to be filed with the Securities and Exchange Commission, as well as our most recent 10-Q filing. Such factors may be updated from time to time in our filings with the SEC, which are available on our website.

Speaker #2: Before we begin, I'd like to remind everyone that our remarks and responses to your questions today may contain forward-looking statements that are based on the current expectations of management and involve inherent risks and uncertainties.

Speaker #2: These could cause actual results to differ materially from those indicated, including those identified in the risk factors section of our annual report on Form 10-K to be filed with the Securities and Exchange Commission, as well as our most recent 10-Q Q filing.

Speaker #2: Such factors may be updated from time to time in our filings with the SEC, which are available on our website. We undertake no obligation to publicly update or revise our forward-looking statements as a result of new information, future events, or otherwise.

Sam Bentzinger: We undertake no obligation to publicly update or revise our forward-looking statements as a result of new information, future events, or otherwise. This call will also include references to certain financial measures that are not calculated in accordance with generally accepted accounting principles or GAAP. We generally refer to these as non-GAAP financial measures. Reconciliations of those non-GAAP financial measures to the most comparable measures calculated and presented in accordance with GAAP are available in the earnings press release on the investor relations portion of our website. With that, I'll now turn the call over to Sheri.

Speaker #2: This call will also include references to certain financial measures that are not calculated in accordance with generally accepted accounting principles or GAAP. We generally refer to these as non-GAAP financial measures.

Speaker #2: Reconciliations of those non-GAAP financial measures to the most comparable measures calculated and presented in accordance earnings press release on the Investor Relations portion of our website.

Speaker #2: With that, I'll now turn the call over to Sheri.

Speaker #3: Thanks, Sam. Good afternoon, everyone, and welcome to our fourth quarter and full year 2025 earnings call. Here with me is Elaine Birkemeyer, our Chief Financial Officer.

Sheri L. Dodd: Thanks, Sam. Good afternoon, everyone, and welcome to our Q4 and full year 2025 earnings call. Here with me is Elaine Birkemeyer, our Chief Financial Officer. 2025 was a pivotal year for Tactile Medical as we advanced our mission of improving the lives of over 95,000 patients with lymphedema and chronic inflammatory lung disease, while also strengthening the foundation of our business for scale. Through disciplined execution across our commercial and operational strategies, we delivered strong, profitable revenue growth while continuing to make critical investments in people and workflow-related processes. Total revenue for the full year was $329.5 million, a 12% increase year over year.

Sheri Dodd: Thanks, Sam. Good afternoon, everyone, and welcome to our Q4 and full year 2025 earnings call. Here with me is Elaine Birkemeyer, our Chief Financial Officer. 2025 was a pivotal year for Tactile Medical as we advanced our mission of improving the lives of over 95,000 patients with lymphedema and chronic inflammatory lung disease, while also strengthening the foundation of our business for scale. Through disciplined execution across our commercial and operational strategies, we delivered strong, profitable revenue growth while continuing to make critical investments in people and workflow-related processes. Total revenue for the full year was $329.5 million, a 12% increase year over year.

Speaker #3: 2025 was a pivotal year for tactile medical. As we advanced our mission of improving the lives of over 95,000 patients with lymphedema and chronic inflammatory lung disease, while also strengthening the foundation of our business for scale.

Speaker #3: Through disciplined execution across our commercial and operational strategies, we delivered strong, profitable revenue growth while continuing to make critical investments in people and workflow-related processes.

Speaker #3: Total revenue for the full year was $329.5 million, a 12% increase year over year. Beyond the top line, we expanded our full-year gross margins by 190 basis points year over year to 75.9% and adjusted EBITDA increased 21% year over year to 44.8 million.

Sheri L. Dodd: Beyond the top line, we expanded our full year gross margins by 190 basis points year-over-year to 75.9%, and Adjusted EBITDA increased 21% year-over-year to $44.8 million. From a cash perspective, we repaid the full outstanding principal balance of $26.3 million to retire our term loan and repurchased $26.5 million of our stock. We ended 2025 with $83.4 million in cash and cash equivalents and generated close to $43 million in operating cash flow during the year. This strong cash generation is durable and positions us to continue reinvesting in the business and drive growth in 2026 and beyond. Our focus on strategy, refinement, and execution throughout 2025 culminated in a strong Q4.

Sheri Dodd: Beyond the top line, we expanded our full year gross margins by 190 basis points year-over-year to 75.9%, and Adjusted EBITDA increased 21% year-over-year to $44.8 million. From a cash perspective, we repaid the full outstanding principal balance of $26.3 million to retire our term loan and repurchased $26.5 million of our stock. We ended 2025 with $83.4 million in cash and cash equivalents and generated close to $43 million in operating cash flow during the year. This strong cash generation is durable and positions us to continue reinvesting in the business and drive growth in 2026 and beyond. Our focus on strategy, refinement, and execution throughout 2025 culminated in a strong Q4.

Speaker #3: From a cash perspective, we repaid the full outstanding principal balance of $26.3 million to retire our term loan and repurchased $26.5 million of our stock.

Speaker #3: We ended 2025 with 83.4 million in cash and cash equivalents and generated close to $43 million in operating cash flow during the year. This strong cash generation is durable and positions us to continue reinvesting in the business and drive growth in 2026 and beyond.

Speaker #3: Our focus on strategy refinement and execution throughout 2025 culminated in a strong Q4. The commercial momentum we described during our last call persisted through the fourth quarter, and we delivered total Q4 revenue growth of $21% year over year, resulting in $103.6 million of revenue.

Sheri L. Dodd: The commercial momentum we described during our last call persisted through the fourth quarter, and we delivered total Q4 revenue growth of 21% year-over-year, resulting in $103.6 million of revenue. By business line, lymphedema revenue increased 16% year-over-year to $89.5 million, and airway clearance revenue increased 66% year-over-year to $14.1 million. For 2026, we expect total revenue to be in the range of $357 to 365 million, representing year-over-year growth between 8% and 11%. This outlook reflects the strength of our expanded sales force, improving sales rep productivity, and our market-leading positions in both lymphedema and airway clearance therapy, while also incorporating a potential short-term market impact from the recently announced Medicare prior authorization requirement for pneumatic compression devices.

Sheri Dodd: The commercial momentum we described during our last call persisted through the fourth quarter, and we delivered total Q4 revenue growth of 21% year-over-year, resulting in $103.6 million of revenue. By business line, lymphedema revenue increased 16% year-over-year to $89.5 million, and airway clearance revenue increased 66% year-over-year to $14.1 million. For 2026, we expect total revenue to be in the range of $357 to 365 million, representing year-over-year growth between 8% and 11%. This outlook reflects the strength of our expanded sales force, improving sales rep productivity, and our market-leading positions in both lymphedema and airway clearance therapy, while also incorporating a potential short-term market impact from the recently announced Medicare prior authorization requirement for pneumatic compression devices.

Speaker #3: By business line, lymphedema revenue increased 16% year over year to $89.5 million, and airway clearance revenue increased 66% year over year to $14.1 million.

Speaker #3: For 2026, we expect total revenue to be in the range of $357 to $365 million, representing year-over-year growth between 8 and 11%. This outlook reflects the strength of our expanded sales force, improving sales rep productivity, and our market-leading positions in both lymphedema and airway clearance therapy, while also incorporating a potential short-term market impact from the recently announced Medicare prior authorization requirement for pneumatic compression devices.

Speaker #3: Importantly, this outlook also reflects our proven ability to adapt and execute effectively in a dynamic reimbursement environment. Elaine will elaborate more on this guidance and new prior authorization requirement shortly.

Sheri L. Dodd: Importantly, this outlook also reflects our proven ability to adapt and execute effectively in a dynamic reimbursement environment. Elaine will elaborate more on this guidance and new prior authorization requirements shortly. In addition to our strong Q4 and 2025 financial performance, this afternoon we announced our acquisition of LymphaTech, a privately held medical technology company pioneering a novel approach to assessing and monitoring fluid in patients with chronic swelling, such as lymphedema. This is an exciting milestone in Tactile's evolution from a product-based company to a comprehensive integrated lymphedema solutions leader, and I believe it has meaningful potential to enable more accurate identification of lymphatic dysfunction, adoption of lymphedema therapy, and new capabilities to inform future product development. For the remainder of the call, I will review our strong Q4 performance by business line and then discuss our acquisition of LymphaTech in more detail.

Sheri Dodd: Importantly, this outlook also reflects our proven ability to adapt and execute effectively in a dynamic reimbursement environment. Elaine will elaborate more on this guidance and new prior authorization requirements shortly. In addition to our strong Q4 and 2025 financial performance, this afternoon we announced our acquisition of LymphaTech, a privately held medical technology company pioneering a novel approach to assessing and monitoring fluid in patients with chronic swelling, such as lymphedema. This is an exciting milestone in Tactile's evolution from a product-based company to a comprehensive integrated lymphedema solutions leader, and I believe it has meaningful potential to enable more accurate identification of lymphatic dysfunction, adoption of lymphedema therapy, and new capabilities to inform future product development. For the remainder of the call, I will review our strong Q4 performance by business line and then discuss our acquisition of LymphaTech in more detail.

Speaker #3: In addition to our strong Q4 and 2025 financial performance, this afternoon we announced our acquisition of Lymphatech, a privately held medical technology company pioneering a novel approach to assessing and monitoring fluid in patients with chronic swelling, such as lymphedema.

Speaker #3: This is an exciting milestone in Tactile's evolution from a product-based company to a comprehensive, integrated lymphedema solutions leader, and I believe it has meaningful potential to enable more accurate identification of lymphatic dysfunction, adoption of lymphedema therapy, and new capabilities to inform future product development.

Speaker #3: For the remainder of the call, I will review our strong Q4 performance by business line and then discuss our acquisition of Lymphatech in more detail.

Speaker #3: I will then provide updates on our ongoing strategic priorities, which we anticipate will continue to drive momentum through 2026. As a reminder, these priorities include improving access to care, expanding treatment options to optimize patient care and reinforce our market-leading position, and enhancing the lifetime patient value with both products and services given the chronic nature of the disease states we support.

Sheri L. Dodd: I will then provide updates on our ongoing strategic priorities, which we anticipate will continue to drive momentum through 2026. As a reminder, these priorities include improving access to care, expanding treatment options to optimize patient care and reinforce our market-leading position, and enhancing the lifetime patient value with both products and services, given the chronic nature of the disease states we support. Elaine will follow with a review of our full fourth quarter results and outlook for 2026. With that, let's turn to a deeper review of our fourth quarter performance. In our lymphedema business line, we grew revenue 16% year-over-year and 24% sequentially in Q4, demonstrating sustained momentum and the strength of our recovery over the past several quarters.

Sheri Dodd: I will then provide updates on our ongoing strategic priorities, which we anticipate will continue to drive momentum through 2026. As a reminder, these priorities include improving access to care, expanding treatment options to optimize patient care and reinforce our market-leading position, and enhancing the lifetime patient value with both products and services, given the chronic nature of the disease states we support. Elaine will follow with a review of our full fourth quarter results and outlook for 2026. With that, let's turn to a deeper review of our fourth quarter performance. In our lymphedema business line, we grew revenue 16% year-over-year and 24% sequentially in Q4, demonstrating sustained momentum and the strength of our recovery over the past several quarters.

Speaker #3: Elaine will follow with a review of our full fourth quarter results and outlook for 2026. With that, let's turn to a deeper review of our fourth quarter performance.

Speaker #3: In our lymphedema business line, we grew revenue 16% year over year and 24% sequentially in Q4, demonstrating sustained momentum and the strength of our recovery over the past several quarters.

Speaker #3: The drivers of performance are consistent with what we highlighted previously and reflect continued execution of our go-to-market commercial strategy, which integrates both people and technology.

Sheri L. Dodd: The drivers of performance are consistent with what we highlighted previously and reflect continued execution of our go-to-market commercial strategy, which integrates both people and technology. On the people front, as mentioned last quarter, we achieved our year-end goal for sales rep hiring and remain pleased with the caliber of our recently hired reps. This phase of our go-to-market strategy is now behind us, and we believe we have the appropriate rep coverage in place to meet and drive demand across all geographic locations. The rebalance of our sales force infrastructure and accelerated hiring have enabled us to achieve a ratio of one account manager to one product specialist, a staffing model that will support and optimize productivity based on the diversity of clinical selling and order support activities that are required in the field.

Sheri Dodd: The drivers of performance are consistent with what we highlighted previously and reflect continued execution of our go-to-market commercial strategy, which integrates both people and technology. On the people front, as mentioned last quarter, we achieved our year-end goal for sales rep hiring and remain pleased with the caliber of our recently hired reps. This phase of our go-to-market strategy is now behind us, and we believe we have the appropriate rep coverage in place to meet and drive demand across all geographic locations. The rebalance of our sales force infrastructure and accelerated hiring have enabled us to achieve a ratio of one account manager to one product specialist, a staffing model that will support and optimize productivity based on the diversity of clinical selling and order support activities that are required in the field.

Speaker #3: On the people front, as mentioned last quarter, we achieved our year-end goal for sales rep hiring and remain pleased with the caliber of our recently hired reps.

Speaker #3: This phase of our go-to-market strategy is now behind us, and we believe we have the appropriate rep coverage in place to meet and drive demand across all geographic locations.

Speaker #3: The rebalance of our sales force infrastructure and accelerated hiring have enabled us to achieve a ratio of one account manager to one product specialist, a staffing model that will support and optimize productivity based on the diversity of clinical selling and order support activities that are required in the field.

Speaker #3: With our go-to-market playbook in hand, we will strategically add field resources as needed, as we continue to refine territory splits and scale over time.

Sheri L. Dodd: With our go-to-market playbook in hand, we will strategically add field resources as needed as we continue to refine territory splits and scale over time. Sales productivity has been further aided by technology, including the introduction of our CRM in February of last year. The CRM capabilities that launched and enhanced over the past 12 months have been invaluable in supporting visibility, accountability, and sales effectiveness, and we will continue to strengthen the tool with additional features and functionality enhancements, including more data and analytics, to ensure our field organization is equipped with the right resources and insights to drive referral growth and customer value. We have strong confidence and conviction in the market and our approach to commercial execution.

Sheri Dodd: With our go-to-market playbook in hand, we will strategically add field resources as needed as we continue to refine territory splits and scale over time. Sales productivity has been further aided by technology, including the introduction of our CRM in February of last year. The CRM capabilities that launched and enhanced over the past 12 months have been invaluable in supporting visibility, accountability, and sales effectiveness, and we will continue to strengthen the tool with additional features and functionality enhancements, including more data and analytics, to ensure our field organization is equipped with the right resources and insights to drive referral growth and customer value. We have strong confidence and conviction in the market and our approach to commercial execution.

Speaker #3: Sales productivity has been further aided by technology, including the introduction of our CRM in February of last year. The CRM capabilities at launch and enhanced over the past 12 months have been invaluable in supporting visibility, accountability, and sales effectiveness, and we will continue to strengthen the tool with additional features and functionality enhancements, including more data and analytics to ensure our field organization is equipped with the right resources and insights to drive referral growth and customer value.

Speaker #3: We have strong confidence and conviction in the market, and our approach to commercial execution. The combination of clear territory design, intentional resource staffing, a robust and integrated CRM, and detailed provider channel strategies and tactics position us well for 2026 and the years ahead.

Sheri L. Dodd: The combination of clear territory design, intentional resource staffing, a robust and integrated CRM, and detailed provider channel strategies and tactics position us well for 2026 and the years ahead. Regarding our payer mix, our Medicare channel remained particularly strong in Q4, driven by a couple of factors. In addition to continuing to lap a softer prior year comparison, resulting from the documentation challenges that began in Q2 of 2024, we also began to see patients who met the new NCD unique characteristics requirement move directly to our Flexitouch Advanced pump after completing conservative therapy without first undergoing a basic pump trial. This is a big win for patients, which ultimately accelerates access to the most appropriate therapy for their condition, and we are pleased to see momentum growing. Turning now to airway clearance.

Sheri Dodd: The combination of clear territory design, intentional resource staffing, a robust and integrated CRM, and detailed provider channel strategies and tactics position us well for 2026 and the years ahead. Regarding our payer mix, our Medicare channel remained particularly strong in Q4, driven by a couple of factors. In addition to continuing to lap a softer prior year comparison, resulting from the documentation challenges that began in Q2 of 2024, we also began to see patients who met the new NCD unique characteristics requirement move directly to our Flexitouch Advanced pump after completing conservative therapy without first undergoing a basic pump trial. This is a big win for patients, which ultimately accelerates access to the most appropriate therapy for their condition, and we are pleased to see momentum growing. Turning now to airway clearance.

Speaker #3: Regarding our payer mix, our Medicare channel remained particularly strong in Q4, driven by a couple of factors. In addition to continuing to lap a softer prior year comparison, resulting from the documentation challenges that began in Q2 of 2024, we also began to see patients who met the new NCD unique characteristics requirement move directly to our FlexiTouch Advanced Pump after completing conservative therapy without first undergoing a basic pump trial.

Speaker #3: This is a big win for patients, which ultimately accelerates access to the most appropriate therapy for their condition, and we are pleased to see momentum growing.

Speaker #3: Turning now to airway clearance and patients we support with chronic inflammatory lung disease. Sales of Aflovest increased 66% year over year, and 6% sequentially in the fourth quarter to conclude an incredible year for this business line.

Sheri L. Dodd: In patients we support with chronic inflammatory lung disease, sales of AffloVest increased 66% year-over-year and 6% sequentially in Q4 to conclude an incredible year for this business line. We are thrilled with this performance, which is a testament to our focused commercial strategy as executed by our skilled airway clearance field team. As broader awareness of bronchiectasis and its available treatment options continues to expand, so does demand for AffloVest. While the claims data are lagging, we believe we have now achieved a market-leading position in the airway clearance category as our commercial momentum accelerates, supported by the strong partnerships and prioritized placement agreements we have secured within the top 10 respiratory DMEs. In 2026, we expect growth in airway clearance to normalize as compared to the elevated level achieved in 2025.

Sheri Dodd: In patients we support with chronic inflammatory lung disease, sales of AffloVest increased 66% year-over-year and 6% sequentially in Q4 to conclude an incredible year for this business line. We are thrilled with this performance, which is a testament to our focused commercial strategy as executed by our skilled airway clearance field team. As broader awareness of bronchiectasis and its available treatment options continues to expand, so does demand for AffloVest. While the claims data are lagging, we believe we have now achieved a market-leading position in the airway clearance category as our commercial momentum accelerates, supported by the strong partnerships and prioritized placement agreements we have secured within the top 10 respiratory DMEs. In 2026, we expect growth in airway clearance to normalize as compared to the elevated level achieved in 2025.

Speaker #3: We are thrilled with this performance, which is a testament to our focused commercial strategy as executed by our skilled airway clearance field team. As broader awareness of bronchiectasis and its available treatment options continues to expand, so does demand for Aflovest.

Speaker #3: While the claims data are lagging, we believe we have now achieved a market-leading position in the airway clearance category, as our commercial momentum accelerates, supported by the strong partnerships and prioritized placement agreements we have secured within the top 10 respiratory DMEs.

Speaker #3: In 2026, we expect growth in airway clearance to normalize, as compared to the elevated level achieved in 2025. From a commercial execution perspective, we will continue to focus on what has worked so well for us to date: strengthening our relationships with each of our top DME partners, penetrating deeper within these accounts, providing high-quality medical education and training for providers and DME staff, and launching an enhanced Aflovest therapy to better serve patients.

Sheri L. Dodd: From a commercial execution perspective, we will continue to focus on what has worked so well for us to date, strengthening our relationships with each of our top DME partners, penetrating deeper within these accounts, providing high-quality medical education and training for providers and DME staff, and launching an enhanced AffloVest therapy to better serve patients. With that backdrop on our Q4 results, I would like now to discuss our acquisition of LymphaTech in more detail. As mentioned, this is an exciting development for Tactile that adds both breadth to our current capabilities and depth to our R&D. Specifically, with LymphaTech, we are expanding our current market-leading portfolio of lymphedema solutions with digital 3D scanning technology for chronic swelling measurement and monitoring, while broadening our R&D with new competencies and programs to extend LymphaTech's current capabilities into next-generation approaches for disease assessment and treatment.

Sheri Dodd: From a commercial execution perspective, we will continue to focus on what has worked so well for us to date, strengthening our relationships with each of our top DME partners, penetrating deeper within these accounts, providing high-quality medical education and training for providers and DME staff, and launching an enhanced AffloVest therapy to better serve patients. With that backdrop on our Q4 results, I would like now to discuss our acquisition of LymphaTech in more detail. As mentioned, this is an exciting development for Tactile that adds both breadth to our current capabilities and depth to our R&D. Specifically, with LymphaTech, we are expanding our current market-leading portfolio of lymphedema solutions with digital 3D scanning technology for chronic swelling measurement and monitoring, while broadening our R&D with new competencies and programs to extend LymphaTech's current capabilities into next-generation approaches for disease assessment and treatment.

Speaker #3: With that backdrop on our Q4 results, I would like now to discuss our acquisition of Lymphatech in more detail. As mentioned, this is an exciting development for tactile that adds both breath to our current capabilities and depth to our R&D.

Speaker #3: Specifically, with Lymphatech, we are expanding our current market-leading portfolio of lymphedema solutions with digital 3D scanning technology for chronic swelling measurement and monitoring, while broadening our R&D with new competencies and programs to extend Lymphatech's current capabilities into next-generation approaches for disease assessment and treatment.

Speaker #3: Taken wholly, this acquisition strengthens our market leadership in conditions associated with lymphatic dysfunction, and we expect it to meaningfully contribute to our ongoing strategic priorities of improving access to care, expanding treatment options, and enhancing the lifetime patient value.

Sheri L. Dodd: Taken wholly, this acquisition strengthens our market leadership in conditions associated with lymphatic dysfunction, and we expect it to meaningfully contribute to our ongoing strategic priorities of improving access to care, expanding treatment options, and enhancing the lifetime patient value. LymphaTech's primary technology is a handheld, clinically validated solution that uses proprietary algorithms and mobile scanning to deliver highly accurate fluid volume and precise circumference measurements. These elements, along with skin changes, are critical to identifying lymphedema and informing the appropriate therapy options. The LymphaTech platform immediately generates a full clinical-grade 3D model of the body and limbs, replacing traditional manual measurement methods that are time-consuming, highly variable, and dependent on clinician technique. When combined with clinician assessment of the skin, the platform delivers clinicians with a more accurate, repeatable measurement that reduces variability and streamlines clinical workflow.

Sheri Dodd: Taken wholly, this acquisition strengthens our market leadership in conditions associated with lymphatic dysfunction, and we expect it to meaningfully contribute to our ongoing strategic priorities of improving access to care, expanding treatment options, and enhancing the lifetime patient value. LymphaTech's primary technology is a handheld, clinically validated solution that uses proprietary algorithms and mobile scanning to deliver highly accurate fluid volume and precise circumference measurements. These elements, along with skin changes, are critical to identifying lymphedema and informing the appropriate therapy options. The LymphaTech platform immediately generates a full clinical-grade 3D model of the body and limbs, replacing traditional manual measurement methods that are time-consuming, highly variable, and dependent on clinician technique. When combined with clinician assessment of the skin, the platform delivers clinicians with a more accurate, repeatable measurement that reduces variability and streamlines clinical workflow.

Speaker #3: Lymphatech's primary technology is a handheld, clinically validated solution that uses proprietary algorithms and mobile scanning to deliver highly accurate fluid volume and precise circumference measurements.

Speaker #3: These elements, along with skin changes, are critical to identifying lymphedema and informing the appropriate therapy options. The Lymphatech platform immediately generates a full clinical-grade 3D model of the body and limbs, replacing traditional manual measurement methods that are time-consuming, highly variable, and dependent on clinician technique.

Speaker #3: When combined with clinician assessment of the skin, the platform delivers clinicians with a more accurate, repeatable measurement that reduces variability and streamlines clinical workflow.

Speaker #3: By introducing greater objectivity and efficiency into lymphedema assessment, the platform helps instill confidence in clinical decision-making and enables providers to focus more time on patient care.

Sheri L. Dodd: By introducing greater objectivity and efficiency into lymphedema assessment, the platform helps instill confidence in clinical decision-making and enables providers to focus more time on patient care. In addition to real-time measurement, the platform also supports longitudinal surveillance and monitoring, allowing clinicians to track changes over time, including disease progression and treatment response. Beyond clinical benefits, the patient experience is next level. The 3D model measurement output offers a compelling visual of the patient's chest, trunk, head, neck, and/or limb, helping them to better understand their condition and keep them engaged in their disease management throughout the care journey. We expect these digital measurement capabilities to enable more accurate disease identification and thereby accelerate therapy access for the 20 million undiagnosed symptomatic patients in the United States. This acquisition is a milestone in Tactile's evolution from a product-based company to a comprehensive integrated solutions leader for lymphatic dysfunction.

Sheri Dodd: By introducing greater objectivity and efficiency into lymphedema assessment, the platform helps instill confidence in clinical decision-making and enables providers to focus more time on patient care. In addition to real-time measurement, the platform also supports longitudinal surveillance and monitoring, allowing clinicians to track changes over time, including disease progression and treatment response. Beyond clinical benefits, the patient experience is next level. The 3D model measurement output offers a compelling visual of the patient's chest, trunk, head, neck, and/or limb, helping them to better understand their condition and keep them engaged in their disease management throughout the care journey. We expect these digital measurement capabilities to enable more accurate disease identification and thereby accelerate therapy access for the 20 million undiagnosed symptomatic patients in the United States. This acquisition is a milestone in Tactile's evolution from a product-based company to a comprehensive integrated solutions leader for lymphatic dysfunction.

Speaker #3: In addition to real-time measurement, the platform also supports longitudinal surveillance and monitoring, allowing clinicians to track changes over time, including disease progression and treatment response.

Speaker #3: Beyond clinical benefits, the patient experience is next level. The 3D model measurement output offers a compelling visual of the patient's chest, trunk, head, neck, and/or limb, helping them to better understand their condition and keep them engaged in their disease management throughout the care journey.

Speaker #3: We expect these digital measurement capabilities to enable more accurate disease identification and thereby accelerate therapy access for the 20 million undiagnosed, symptomatic patients in the United States.

Speaker #3: This acquisition is a milestone in Tactile's evolution from a product-based company to a comprehensive, integrated solutions leader for lymphatic dysfunction. By bringing Tactile and Lymphatech together, we become uniquely positioned to support patients and clinicians from early identification and intervention to innovative connected therapy with long-term support and monitoring alongside our Kiley patient engagement application.

Sheri L. Dodd: By bringing Tactile and LymphaTech together, we become uniquely positioned to support patients and clinicians from early identification and intervention to innovative connected therapy, with long-term support and monitoring alongside our Kylee patient engagement application. We expect this acquisition to directly support our longer-term strategy as we seek to capitalize on the growing scientific and clinical understanding of lymphatic dysfunction and lead the next wave of technological innovation. We are very excited about this announcement and for the LymphaTech team, who share our combined passion for providing advanced solutions to large, underserved patient populations to join Tactile. We will provide additional details regarding the integration on subsequent calls. Turning now to recent updates on each of our three strategic priorities. These priorities are designed to unlock our TAM and enable scalable, profitable growth, and they will continue to be areas of focus for us as we move through 2026.

Sheri Dodd: By bringing Tactile and LymphaTech together, we become uniquely positioned to support patients and clinicians from early identification and intervention to innovative connected therapy, with long-term support and monitoring alongside our Kylee patient engagement application. We expect this acquisition to directly support our longer-term strategy as we seek to capitalize on the growing scientific and clinical understanding of lymphatic dysfunction and lead the next wave of technological innovation. We are very excited about this announcement and for the LymphaTech team, who share our combined passion for providing advanced solutions to large, underserved patient populations to join Tactile. We will provide additional details regarding the integration on subsequent calls. Turning now to recent updates on each of our three strategic priorities. These priorities are designed to unlock our TAM and enable scalable, profitable growth, and they will continue to be areas of focus for us as we move through 2026.

Speaker #3: We expect this acquisition to directly support our longer-term strategy as we seek to capitalize on the growing scientific and clinical understanding of lymphatic dysfunction, and lead the next wave of technological innovation.

Speaker #3: We are very excited about this announcement and for the Lymphatech team, who share our combined passion for providing advanced solutions to large, underserved patient populations, to join Tactile.

Speaker #3: We will provide additional details regarding the integration on subsequent calls. Turning now to recent updates on each of our three strategic priorities. These priorities are designed to unlock our TAM and enable scalable, profitable growth, and they will continue to be areas of focus for us as we move through 2026.

Speaker #3: I will begin with an update on our foundational priority to improve access to care, specifically with respect to our head and neck lymphedema RCT.

Sheri L. Dodd: I will begin with an update on our foundational priority to improve access to care, specifically with respect to our head and neck lymphedema RCT. First, I'm pleased to share that the 2-month results from our RCT, comparing Flexitouch Plus to usual care in patients with head and neck lymphedema, were published in the Journal of the Sciences and Specialties of the Head and Neck in January. These results, which were initially presented at the ASCO annual meeting last June, concluded that Flexitouch Plus is an effective first-line treatment for head and neck cancer survivors with lymphedema, compared to receiving therapist-guided treatment without a compression device. Second, following the presentation of long-term data from our RCT at the ACRM fall conference in October, I'm also pleased to report that the 6-month manuscript has been submitted and is currently in review.

Sheri Dodd: I will begin with an update on our foundational priority to improve access to care, specifically with respect to our head and neck lymphedema RCT. First, I'm pleased to share that the 2-month results from our RCT, comparing Flexitouch Plus to usual care in patients with head and neck lymphedema, were published in the Journal of the Sciences and Specialties of the Head and Neck in January. These results, which were initially presented at the ASCO annual meeting last June, concluded that Flexitouch Plus is an effective first-line treatment for head and neck cancer survivors with lymphedema, compared to receiving therapist-guided treatment without a compression device. Second, following the presentation of long-term data from our RCT at the ACRM fall conference in October, I'm also pleased to report that the 6-month manuscript has been submitted and is currently in review.

Speaker #3: First, I'm pleased to share that the two-month results from our RCT comparing FlexiTouch Plus to usual care in patients with head and neck lymphedema were published in the Journal of the Sciences and Specialties of the Head and Neck in January.

Speaker #3: These results, which were initially presented at the ASCO annual meeting last June, concluded that FlexiTouch Plus is an effective first-line treatment for head and neck cancer survivors with lymphedema, compared to receiving therapist-guided treatment without a compression device.

Speaker #3: Second, following the presentation of long-term data from our RCT at the ACRM fall conference in October, I'm also pleased to report that the six-month manuscript has been submitted and is currently in review.

Speaker #3: Additional manuscripts will be submitted this year, and will include a deeper analysis into structural barriers associated with usual care and the role of device technology in more quickly addressing the debilitating symptoms of this population.

Sheri L. Dodd: Additional manuscripts will be submitted this year and include a deeper analysis into structural barriers associated with usual care and the role of device technology in more quickly addressing the debilitating symptoms of this population. This is truly a landmark study. Never before has there been a large RCT assessing short- and long-term outcomes of advanced pneumatic compression therapy as an evidence-supported alternative to usual care in treatment-naive head and neck cancer survivors with lymphedema. We are leveraging these data to support our ongoing discussions with commercial payers regarding their current experimental and investigational policy language for head and neck lymphedema device therapy. Clinical data and patient value examples like these strengthen our oncology channel engagement and help to increase awareness of the clinical benefits of Flexitouch Plus for patients in this therapeutic area.

Sheri Dodd: Additional manuscripts will be submitted this year and include a deeper analysis into structural barriers associated with usual care and the role of device technology in more quickly addressing the debilitating symptoms of this population. This is truly a landmark study. Never before has there been a large RCT assessing short- and long-term outcomes of advanced pneumatic compression therapy as an evidence-supported alternative to usual care in treatment-naive head and neck cancer survivors with lymphedema. We are leveraging these data to support our ongoing discussions with commercial payers regarding their current experimental and investigational policy language for head and neck lymphedema device therapy. Clinical data and patient value examples like these strengthen our oncology channel engagement and help to increase awareness of the clinical benefits of Flexitouch Plus for patients in this therapeutic area.

Speaker #3: This is truly a landmark study. Never before has there been a large RCT assessing short- and long-term outcomes of advanced pneumatic compression therapy as an evidence-supported alternative to usual care, and treatment-naive head and neck cancer survivors with lymphedema.

Speaker #3: We are leveraging these data to support our ongoing discussions with commercial payers regarding their current experimental and investigational policy language for head and neck lymphedema device therapy.

Speaker #3: Clinical data and patient value examples like these strengthen our oncology channel engagement and help to increase awareness of the clinical benefits of FlexiTouch Plus for patients in this therapeutic area.

Speaker #3: While extensive coverage has not yet been fully opened, we are encouraged by the growing momentum and interest, and will continue to work with commercial payers to influence their policies and reduce access barriers.

Sheri L. Dodd: While extensive coverage has not yet been fully opened, we are encouraged by the growing momentum and interest, and will continue to work with commercial payers to influence their policies and reduce access barriers. Beyond clinical evidence, we are also focused on improving access to care by transforming each step of the order process through the implementation of new technology and more efficient workflows. A key component of this effort is the use of AI-enabled technology to improve speed, accuracy, and efficiency for PCD orders. During Q4, we successfully completed the first phase of our new AI platform, implementing it across our order intake process, as well as for certain parts of our medical record review, specifically for orders in our Medicare channel.

Sheri Dodd: While extensive coverage has not yet been fully opened, we are encouraged by the growing momentum and interest, and will continue to work with commercial payers to influence their policies and reduce access barriers. Beyond clinical evidence, we are also focused on improving access to care by transforming each step of the order process through the implementation of new technology and more efficient workflows. A key component of this effort is the use of AI-enabled technology to improve speed, accuracy, and efficiency for PCD orders. During Q4, we successfully completed the first phase of our new AI platform, implementing it across our order intake process, as well as for certain parts of our medical record review, specifically for orders in our Medicare channel.

Speaker #3: Beyond clinical evidence, we are also focused on improving access to care by transforming each step of the order process through the implementation of new technology and more efficient workflows.

Speaker #3: A key component of this effort is the use of AI-enabled technology to improve speed, accuracy, and efficiency for PCD orders. During the fourth quarter, we successfully completed the first phase of our new AI platform, implementing it across our order intake process, as well as for certain parts of our medical record review, specifically for orders in our Medicare channel.

Speaker #3: With the foundation set in early learnings gleaned from the initial rollout, we will continue expanding the use of this technology across the entire order process this year, including patient eligibility and verification of benefits, full medical record review, and order qualification, and prior authorization.

Sheri L. Dodd: With the foundation set and early learnings gleaned from the initial rollout, we will continue expanding the use of this technology across the entire order process this year, including patient eligibility and verification of benefits, full medical record review and order qualification, and prior authorization. Once fully implemented, we expect this technology to accelerate speed to therapy, reduce revenue-impacting errors, and improve operating efficiency, each of which should contribute to enhanced operating margins moving forward. I would like now to spend a few moments discussing our product roadmap for 2026 and broader strategic priority of expanding treatment options. This priority spans both business lines and is centered on identifying ongoing unmet needs and addressing them through patient-centric innovation. We delivered on this in 2025 with the introduction of Nimbl for upper and lower extremity lymphedema, and continue to be very pleased with patient and clinician adoption.

Sheri Dodd: With the foundation set and early learnings gleaned from the initial rollout, we will continue expanding the use of this technology across the entire order process this year, including patient eligibility and verification of benefits, full medical record review and order qualification, and prior authorization. Once fully implemented, we expect this technology to accelerate speed to therapy, reduce revenue-impacting errors, and improve operating efficiency, each of which should contribute to enhanced operating margins moving forward. I would like now to spend a few moments discussing our product roadmap for 2026 and broader strategic priority of expanding treatment options. This priority spans both business lines and is centered on identifying ongoing unmet needs and addressing them through patient-centric innovation. We delivered on this in 2025 with the introduction of Nimbl for upper and lower extremity lymphedema, and continue to be very pleased with patient and clinician adoption.

Speaker #3: Once fully implemented, we expect this technology to accelerate speed to therapy, reduce revenue-impacting errors, and improve operating efficiency. Each of which should contribute to enhanced operating margins moving forward.

Speaker #3: I would like now to spend a few moments discussing our product roadmap for 2026 and the broader strategic priority of expanding treatment options. This priority spans both business lines and is centered on identifying ongoing unmet needs and addressing them through patient-centric innovation.

Speaker #3: We delivered on this in 2025 with the introduction of Nimble for upper and lower extremity lymphedema, and continue to be very pleased with patient and clinician adoption.

Speaker #3: Nearly a full year into its launch in a crowded market, we have moved into a market leadership position in the basic compression pump category, and we expect to continue growing this category and serving more patients with Nimble.

Sheri L. Dodd: Nearly a full year into its launch in a crowded market, we have moved into market leadership position in the basic compression pump category, and we expect to continue growing this category and serving more patients with Nimbl. Product innovation will unlock future growth opportunities, and as we look ahead to this year and beyond, there are two specific additional areas of innovation I would like to highlight. First, on the airway clearance side. In early Q4, we submitted a 510(k) to FDA for our next generation AffloVest product. While the product remains under FDA review, we expect to commercially launch it later this year to ensure it's available for the 2026 through 2027 winter respiratory season.

Sheri Dodd: Nearly a full year into its launch in a crowded market, we have moved into market leadership position in the basic compression pump category, and we expect to continue growing this category and serving more patients with Nimbl. Product innovation will unlock future growth opportunities, and as we look ahead to this year and beyond, there are two specific additional areas of innovation I would like to highlight. First, on the airway clearance side. In early Q4, we submitted a 510(k) to FDA for our next generation AffloVest product. While the product remains under FDA review, we expect to commercially launch it later this year to ensure it's available for the 2026 through 2027 winter respiratory season.

Speaker #3: Product innovation will unlock future growth opportunities, and as we look ahead to this year and beyond, there are two specific additional areas of innovation I would like to highlight.

Speaker #3: First, on the airway clearance side. In early Q4, we submitted a 510(k) to FDA for our next-generation Aflovest product. While the product remains under FDA review, we expect a commercially launch it later this year to ensure its available for the 2026 through 2027 winter respiratory season.

Speaker #3: We are very excited about this next-generation device, which will feature further weight reduction, the addition of digital connectivity, and improved sizing adjustability to allow for a more customized fit.

Sheri L. Dodd: We are very excited about this next generation device, which will feature further weight reduction, the addition of digital connectivity, and improved sizing adjustability to allow for a more customized fit. We are confident these enhancements will support the patient experience while promoting adherence. Our second innovation area is focused on the advanced pump category. Our roadmap includes the phased introduction of incremental features and product enhancements for Flexitouch, including making the device smaller, lighter, more user-friendly, and with less external hosing. These updates will support the patient experience, and we will provide additional updates as we progress through our product development cycles this year. Additional enhancements will follow and may include new features that change the way therapy is delivered. With the acquisition of LymphaTech, we now also have access to an expanded capability skill set and a separate product roadmap from their development team.

Sheri Dodd: We are very excited about this next generation device, which will feature further weight reduction, the addition of digital connectivity, and improved sizing adjustability to allow for a more customized fit. We are confident these enhancements will support the patient experience while promoting adherence. Our second innovation area is focused on the advanced pump category. Our roadmap includes the phased introduction of incremental features and product enhancements for Flexitouch, including making the device smaller, lighter, more user-friendly, and with less external hosing. These updates will support the patient experience, and we will provide additional updates as we progress through our product development cycles this year. Additional enhancements will follow and may include new features that change the way therapy is delivered. With the acquisition of LymphaTech, we now also have access to an expanded capability skill set and a separate product roadmap from their development team.

Speaker #3: We are confident these enhancements will support the patient experience while promoting adherence. Our second innovation area is focused on the advanced pump category. Our roadmap includes the phased introduction of incremental features and product enhancements for FlexiTouch, including making the device smaller, lighter, more user-friendly, and with less external hosing.

Speaker #3: These updates will support the patient experience, and we will provide additional updates as we progress through our product development cycles this year. Additional enhancements will follow.

Speaker #3: It may include new features that change the way therapy is delivered. With the acquisition of Lymphatec, we now also have access to an expanded capability skill set, and a separate product roadmap from their development team.

Speaker #3: Over the next few months, we'll be looking for roadmap integration points, being deliberate and strategic to ensure new therapies and product designs improve the patient experience without compromising therapy effectiveness.

Sheri L. Dodd: Over the next few months, we'll be looking for roadmap integration points, being deliberate and strategic to ensure new therapies and product designs improve the patient experience without compromising therapy effectiveness. Our third strategic priority is aimed at enhancing the lifetime patient value by supporting lymphedema patients across the full care continuum, encompassing a more efficient and personalized engagement before, during, and after the order and delivery process. In 2026, we plan to continue focusing on targeted care navigation pilots, leveraging our existing resources to further solidify patient engagement throughout the complex and drawn-out order process and reduce patient linkage. These pilots are designed to proactively reach patients at key moments in the care journey, helping set expectations, reinforce required next steps, and support timely progression through the order workflow.

Sheri Dodd: Over the next few months, we'll be looking for roadmap integration points, being deliberate and strategic to ensure new therapies and product designs improve the patient experience without compromising therapy effectiveness. Our third strategic priority is aimed at enhancing the lifetime patient value by supporting lymphedema patients across the full care continuum, encompassing a more efficient and personalized engagement before, during, and after the order and delivery process. In 2026, we plan to continue focusing on targeted care navigation pilots, leveraging our existing resources to further solidify patient engagement throughout the complex and drawn-out order process and reduce patient linkage. These pilots are designed to proactively reach patients at key moments in the care journey, helping set expectations, reinforce required next steps, and support timely progression through the order workflow.

Speaker #3: Our third strategic priority is aimed at enhancing the lifetime patient value by supporting lymphedema patients across the full care continuum, encompassing a more efficient and personalized engagement before, during, and after the order and delivery process.

Speaker #3: In 2026, we plan to continue focusing on targeted care navigation pilots, leveraging our existing resources to further solidify patient engagement throughout the complex and drawn-out order process, and reduce patient leakage.

Speaker #3: These pilots are designed to proactively reach patients at key moments in the care journey, helping set expectations, reinforce required next steps, and support timely progression through the order workflow.

Speaker #3: Our initial pilots have demonstrated proof of concept, showing that patients' value clearer communication and guidance earlier in the process. While we continue to evaluate longer-term technology investments, our near-term focus remains on refining these pilots, optimizing communication touchpoints, and expanding their impact in a measured and scalable way.

Sheri L. Dodd: Our initial pilots have demonstrated proof of concept, showing that patients value clearer communication and guidance earlier in the process. While we continue to evaluate longer-term technology investments, our near-term focus remains on refining these pilots, optimizing communication touch points, and expanding their impact in a measured and scalable way. We believe this approach will improve yield, enhance the patient experience, and over time, reduce the need for sales rep involvement in the order process. As you can see, we are continuing to execute well across a diverse set of strategic priorities that are designed to unlock our TAM and drive consistent growth over the near, mid, and longer term. In each of these areas, we have multiple catalysts ahead, including continued commercialization, acceleration, and progress across our product and clinical roadmaps, which we expect will support our momentum moving forward.

Sheri Dodd: Our initial pilots have demonstrated proof of concept, showing that patients value clearer communication and guidance earlier in the process. While we continue to evaluate longer-term technology investments, our near-term focus remains on refining these pilots, optimizing communication touch points, and expanding their impact in a measured and scalable way. We believe this approach will improve yield, enhance the patient experience, and over time, reduce the need for sales rep involvement in the order process. As you can see, we are continuing to execute well across a diverse set of strategic priorities that are designed to unlock our TAM and drive consistent growth over the near, mid, and longer term. In each of these areas, we have multiple catalysts ahead, including continued commercialization, acceleration, and progress across our product and clinical roadmaps, which we expect will support our momentum moving forward.

Speaker #3: We believe this approach will improve yield. Enhance the patient experience and, over time, reduce the need for sales rep involvement in the order process.

Speaker #3: As you can see, we are continuing to execute well across a diverse set of strategic priorities that are designed to unlock our TAM and drive consistent growth over the near, mid, and longer term.

Speaker #3: In each of these areas, we have multiple catalysts ahead, including continued commercialization acceleration and progress across our product and clinical roadmaps, which we expect will support our momentum moving forward.

Speaker #3: With that, I will now have Elaine review our Q4 financial results in more detail and provide an update on our guidance and outlook for 2026.

Sheri L. Dodd: With that, I will now have Elaine review our Q4 financial results in more detail and provide an update on our guidance and outlook for 2026.

Sheri Dodd: With that, I will now have Elaine review our Q4 financial results in more detail and provide an update on our guidance and outlook for 2026.

Speaker #2: Thanks, Sheri. Unless noted otherwise, I'll reference this to fourth-quarter financial results around a gap and year-over-year basis. Total revenue in the fourth quarter increased by $18 million or 21% to $103.6 million.

Elaine M. Birkemeyer: Thanks, Sheri. Unless noted otherwise, all references to Q4 financial results are on a GAAP and year-over-year basis. Total revenue in the Q4 increased by $80 million, or 21%, to $103.6 million. By product line, sales and rentals of lymphedema products, which includes our Flexitouch, Entre, and Nimbl systems, increased $12.4 million, or 16%, to $89.5 million. Sales of our airway clearance products, which includes our AffloVest system, increased $5.6 million, or 66%, to $14.1 million. Continuing down the PNL, gross margin was 78.2% of revenue, compared to 75.2% in the Q4 of 2024. The increase in gross margin was attributable primarily to lower manufacturing costs and stronger collections reflected in our revenue.

Elaine Birkemeyer: Thanks, Sheri. Unless noted otherwise, all references to Q4 financial results are on a GAAP and year-over-year basis. Total revenue in the Q4 increased by $80 million, or 21%, to $103.6 million. By product line, sales and rentals of lymphedema products, which includes our Flexitouch, Entre, and Nimbl systems, increased $12.4 million, or 16%, to $89.5 million. Sales of our airway clearance products, which includes our AffloVest system, increased $5.6 million, or 66%, to $14.1 million. Continuing down the PNL, gross margin was 78.2% of revenue, compared to 75.2% in the Q4 of 2024. The increase in gross margin was attributable primarily to lower manufacturing costs and stronger collections reflected in our revenue.

Speaker #2: By product line, sales and rentals of lymphedema products, which includes our FlexiTouch Entree and Nimble Systems, increased 12.4 million or 16% to 89.5 million dollars.

Speaker #2: And sales of our airway clearance products, which includes our AffloVest system, increased $5.6 million, or 66%, to $14.1 million. Continuing down the P&L, gross margin was 78.2% of revenue compared to 75.2% in the fourth quarter of 2024.

Speaker #2: The increase in gross margin was attributable primarily to lower manufacturing costs and stronger collections reflected in our revenue. First quarter operating expenses increased, 10.4 million dollars or 20% to 62.2 million dollars.

Elaine M. Birkemeyer: Q1 operating expenses increased $10.4 million, or 20% to $62.2 million. The change in GAAP operating expenses reflected a $4.7 million dollar increase in sales and marketing expenses, a $0.5 million dollar increase in research and development expenses, and a $5.2 million dollar increase in reimbursement, general and administrative expenses, including and primarily driven by strategic investments. Operating income increased $6.3 million, or 50% to $18.8 million. Interest income decreased $0.3 million, or 28% to $0.7 million, due to our decreased cash position. Interest expense decreased $0.5 million, or 98% to $11,000. Income tax expense increased $5.5 million, or 169% year-over-year to $8.8 million.

Elaine Birkemeyer: Q1 operating expenses increased $10.4 million, or 20% to $62.2 million. The change in GAAP operating expenses reflected a $4.7 million dollar increase in sales and marketing expenses, a $0.5 million dollar increase in research and development expenses, and a $5.2 million dollar increase in reimbursement, general and administrative expenses, including and primarily driven by strategic investments. Operating income increased $6.3 million, or 50% to $18.8 million. Interest income decreased $0.3 million, or 28% to $0.7 million, due to our decreased cash position. Interest expense decreased $0.5 million, or 98% to $11,000. Income tax expense increased $5.5 million, or 169% year-over-year to $8.8 million.

Speaker #2: The change in GAAP operating expenses reflected a $4.7 million increase in sales and marketing expenses, a $0.5 million increase in research and development expenses, and a $5.2 million increase in reimbursement, general, and administrative expenses, including and primarily driven by strategic investment.

Speaker #2: Operating income increased $6.3 million, or 50%, to $18.8 million. Interest income decreased $0.3 million, or 28%, to $0.7 million due to our decreased cash position.

Speaker #2: Interest expense decreased 0.5 million dollars or 98% to 11,000 dollars. Income tax expense increased 5.5 million dollars or 169% year-over-year to 8.8 million dollars.

Speaker #2: Net income increased 0.9 million dollars or 9% to 10.6 million dollars or 46 cents per diluted share compared to 9.7 million dollars or 40 cents per diluted share.

Elaine M. Birkemeyer: Net income increased $0.9 million, or 9%, to $10.6 million, or $0.46 per diluted share, compared to $9.7 million, or $0.40 per diluted share. Adjusted EBITDA increased to $22 million compared to $16.2 million. With respect to our balance sheet, we had $83.4 million in cash and cash equivalents and no outstanding borrowings at quarter end. This compares to $94.4 million in cash and $26.3 million of outstanding borrowings as of December 31, 2024. Turning to a review of our 2026 outlook. For the full year of 2026, we expect total revenue in the range of $357 to 365 million, representing growth of approximately 8% to 11% year-over-year.

Elaine Birkemeyer: Net income increased $0.9 million, or 9%, to $10.6 million, or $0.46 per diluted share, compared to $9.7 million, or $0.40 per diluted share. Adjusted EBITDA increased to $22 million compared to $16.2 million. With respect to our balance sheet, we had $83.4 million in cash and cash equivalents and no outstanding borrowings at quarter end. This compares to $94.4 million in cash and $26.3 million of outstanding borrowings as of December 31, 2024. Turning to a review of our 2026 outlook. For the full year of 2026, we expect total revenue in the range of $357 to 365 million, representing growth of approximately 8% to 11% year-over-year.

Speaker #2: Adjusted EBITDA increased to $22.0 million compared to $16.2 million. With respect to our balance sheet, we had $83.4 million in cash and cash equivalents and no outstanding borrowings at quarter end.

Speaker #2: This compares to 94.4 million dollars in cash and 26.3 million dollars of outstanding borrowings as of December 31st, 2024. Turning to review of our 2026 outlook, for the full year 2026, we expect total revenue in the range of 357 to 365 million dollars representing growth of approximately 8 to 11 percent year-over-year.

Speaker #2: This guidance assumes both our lymphedema and airway clearance businesses will grow in a similar overall range with airway clearance growing modestly faster. As typical, our guidance range reflects several factors including expected strength in airway clearance and ongoing commercial momentum in lymphedema driven by our go-to-market strategy.

Elaine M. Birkemeyer: This guidance assumes both our lymphedema and airway clearance businesses will grow in a similar overall range, with airway clearance growing modestly faster. As typical, our guidance range reflects several factors, including expected strength in airway clearance and ongoing commercial momentum in lymphedema, driven by our go-to-market strategy. This guidance also contemplates a recent Medicare regulatory update related to pneumatic compression devices. Specifically, in January, CMS announced a new prior authorization requirement for basic and advanced pneumatic compression device codes billed under traditional Medicare fee for service. With this update, medical device suppliers will be required to obtain prior authorization before furnishing these devices and submitting claims to Medicare beginning 13 April. To step back for a minute, Medicare policy in our category is and has been a dynamic and evolving environment.

Elaine Birkemeyer: This guidance assumes both our lymphedema and airway clearance businesses will grow in a similar overall range, with airway clearance growing modestly faster. As typical, our guidance range reflects several factors, including expected strength in airway clearance and ongoing commercial momentum in lymphedema, driven by our go-to-market strategy. This guidance also contemplates a recent Medicare regulatory update related to pneumatic compression devices. Specifically, in January, CMS announced a new prior authorization requirement for basic and advanced pneumatic compression device codes billed under traditional Medicare fee for service. With this update, medical device suppliers will be required to obtain prior authorization before furnishing these devices and submitting claims to Medicare beginning 13 April. To step back for a minute, Medicare policy in our category is and has been a dynamic and evolving environment.

Speaker #2: This guidance also contemplates a recent Medicare regulatory update related to pneumatic compression devices. Specifically in January, CMS announced a new prior authorization requirement for basic and advanced pneumatic compression device codes billed under traditional Medicare fee-for-service.

Speaker #2: With this update, medical device suppliers will be required to obtain prior authorization before furnishing these devices and submitting claims to Medicare beginning April 13th.

Speaker #2: To step back for a minute, Medicare policy in our category is and has been a dynamic and evolving environment. The pneumatic compression device codes impacted by this recent change have been included on the DME Master List for many years, meaning that they were eligible to be selected for prior authorization at any time.

Elaine M. Birkemeyer: The pneumatic compression device codes impacted by this recent change have been included on the DME master list for many years, meaning that they were eligible to be selected for prior authorization at any time. It's our understanding that as part of CMS's annual review and update process, certain DME categories are periodically moved to the required prior authorization list to provide additional oversight. This update reflects that broader CMS process and is not specific to Tactile or unique to pneumatic compression devices. Ultimately, this new requirement will add additional administrative steps to the order process for Medicare fee-for-service patients. As the industry adjusts to this requirement, we expect a temporary short-term impact across the broader lymphedema market, which we've incorporated into our guidance for 2026.

Elaine Birkemeyer: The pneumatic compression device codes impacted by this recent change have been included on the DME master list for many years, meaning that they were eligible to be selected for prior authorization at any time. It's our understanding that as part of CMS's annual review and update process, certain DME categories are periodically moved to the required prior authorization list to provide additional oversight. This update reflects that broader CMS process and is not specific to Tactile or unique to pneumatic compression devices. Ultimately, this new requirement will add additional administrative steps to the order process for Medicare fee-for-service patients. As the industry adjusts to this requirement, we expect a temporary short-term impact across the broader lymphedema market, which we've incorporated into our guidance for 2026.

Speaker #2: It's our understanding that as part of CMS's annual review and update process, certain DME categories are periodically moved to the required prior authorization list to provide additional oversight.

Speaker #2: This update reflects that broader CMS process and has not specific to tactile or unique to pneumatic compression devices. Ultimately, this new requirement will add additional administrative steps to the order process for Medicare fee-for-service patients.

Speaker #2: As the industry adjusts to this requirement, we expect a temporary, short-term impact across the broader lymphedema market, which we've incorporated into our guidance for 2026.

Speaker #2: Importantly, we do not expect this change to alter our ability to deliver growth in line with the overall lymphedema market during this period. As the industry leader, and as DME provider with longevity in this market, we believe we are best positioned to navigate this change.

Elaine M. Birkemeyer: Importantly, we do not expect this change to alter our ability to deliver growth in line with the overall lymphedema market during this period. As the industry leader and a DME provider with longevity in this market, we believe we are best positioned to navigate this change. We already have extensive experience operating in other prior authorization environments across Medicare Advantage and commercial plans, and the investments we made in 2025 to strengthen our back-office infrastructure, documentation workflows, and payer engagement capabilities position us well to navigate this transition efficiently. Once the industry has adjusted, we expect the lymphedema market to return to its normal growth trajectory. As that occurs, we believe our scale, experience, and operating discipline position us to perform at least in line with the broader market.

Elaine Birkemeyer: Importantly, we do not expect this change to alter our ability to deliver growth in line with the overall lymphedema market during this period. As the industry leader and a DME provider with longevity in this market, we believe we are best positioned to navigate this change. We already have extensive experience operating in other prior authorization environments across Medicare Advantage and commercial plans, and the investments we made in 2025 to strengthen our back-office infrastructure, documentation workflows, and payer engagement capabilities position us well to navigate this transition efficiently. Once the industry has adjusted, we expect the lymphedema market to return to its normal growth trajectory. As that occurs, we believe our scale, experience, and operating discipline position us to perform at least in line with the broader market.

Speaker #2: We already have extensive experience operating in other prior authorization environments across Medicare Advantage and commercial plans. And the investments we made in 2025 to strengthen our back-office infrastructure documentation workflows and payer engagement capabilities position us well to navigate this transition efficiently.

Speaker #2: Once the industry has adjusted, we expect the lymphedema market to return to its normal growth trajectory. As that occurs, we believe our scale, experience, and operating discipline position us to perform at least in line with the broader market.

Speaker #2: More broadly, we believe this change can benefit patients by helping ensure therapies are clinically appropriate and supported by evidence, promoting more consistent and timely access to care with fewer coverage disruptions.

Elaine M. Birkemeyer: More broadly, we believe this change can benefit patients by helping ensure therapies are clinically appropriate and supported by evidence, promoting more consistent and timely access to care with fewer coverage disruptions. As always, we will continue to work closely with clinicians, payers, and patients as the industry navigates this change to support seamless access to therapy and optimize patient outcomes. Turning to quarterly shaping, we expect Q1 growth to be higher than the balance of the year, driven by the timing of last year's recovery, with growth moderating as we move through 2026. With that backdrop, for modeling purposes for the full year 2026, we expect our GAAP gross margins to be approximately 76%, our GAAP operating expenses to increase 8% to 10% year-over-year as we annualize our sales organization investments and advance our tech-related investments throughout the year.

Elaine Birkemeyer: More broadly, we believe this change can benefit patients by helping ensure therapies are clinically appropriate and supported by evidence, promoting more consistent and timely access to care with fewer coverage disruptions. As always, we will continue to work closely with clinicians, payers, and patients as the industry navigates this change to support seamless access to therapy and optimize patient outcomes. Turning to quarterly shaping, we expect Q1 growth to be higher than the balance of the year, driven by the timing of last year's recovery, with growth moderating as we move through 2026. With that backdrop, for modeling purposes for the full year 2026, we expect our GAAP gross margins to be approximately 76%, our GAAP operating expenses to increase 8% to 10% year-over-year as we annualize our sales organization investments and advance our tech-related investments throughout the year.

Speaker #2: As always, we will continue to work closely with clinicians, payers, and patients as the industry navigates this change to support seamless access to therapy and optimized patient outcomes.

Speaker #2: Turning to quarterly shaping, we expect Q1 growth to be higher than the balance of the year, driven by the timing of last year's recovery with growth moderating as we move through 2026.

Speaker #2: With that backdrop for modeling purposes for the full year 2026, we expect our gap growth margins to be approximately 76%. Our gap operating expenses to increase 8 to 10 percent year-over-year as we annualize our sales organization investments and advance our tech-related investments throughout the year.

Speaker #2: The interest income of approximately $3 million and tax rate of 28% and a fully diluted weighted average share count of approximately 22 to 23 million shares.

Elaine M. Birkemeyer: Net interest income of approximately $3 million, a tax rate of 28%, and a fully diluted weighted average share count of approximately 22 to 23 million shares. We expect to generate adjusted EBITDA of approximately $49 to 51 million in 2026. This outlook reflects the annualization of 2025 investments and continued strategic initiatives in 2026, which we believe are important to support long-term growth and operating leverage. Our adjusted EBITDA expectation assumes certain non-cash items, including stock compensation expense of approximately $9 million, intangible amortization of approximately $3.6 million, and depreciation expense of approximately $3.2 million. With that, I'll turn the call back to Sheri for some closing remarks. Sheri?

Elaine Birkemeyer: Net interest income of approximately $3 million, a tax rate of 28%, and a fully diluted weighted average share count of approximately 22 to 23 million shares. We expect to generate adjusted EBITDA of approximately $49 to 51 million in 2026. This outlook reflects the annualization of 2025 investments and continued strategic initiatives in 2026, which we believe are important to support long-term growth and operating leverage. Our adjusted EBITDA expectation assumes certain non-cash items, including stock compensation expense of approximately $9 million, intangible amortization of approximately $3.6 million, and depreciation expense of approximately $3.2 million. With that, I'll turn the call back to Sheri for some closing remarks. Sheri?

Speaker #2: We expect to generate adjusted EBITDA of approximately 49 to 51 million dollars in 2026. This outlook reflects the annualization of 2025 investments and continued strategic initiatives in 2026, which we believe are important to support long-term growth and operating leverage.

Speaker #2: Our adjusted EBITDA expectation assumes certain non-cash items, including stock compensation expense of approximately $9 million and tangible amortization of approximately $3.6 million and depreciation expense of approximately $3.2 million.

Speaker #2: With that, I'll turn the call back to Sheri for some closing remarks. Sheri.

Speaker #3: Thank you, Elaine. Our Q4 and full-year 2025 financial performance was strong, and we are very proud of our accomplishments and momentum. We are executing well against our strategic priorities, and our investments in people and various workflow processes are materializing and paying off as expected.

Sheri L. Dodd: Thank you, Elaine. Our Q4 and full year 2025 financial performance was strong, and we are very proud of our accomplishments and momentum. We are executing well against our strategic priorities, and our investments in people and various workflow processes are materializing and paying off as expected. The foundation we have built over the past year gives us confidence in our ability to continue delivering consistent performance in line with overall market growth. With multiple catalysts ahead, including continued commercial momentum and progress across our product and clinical roadmaps, we believe we are entering 2026 from a position of strength. As we have seen, the lymphedema payer policy environment is adjusting, and as the industry leader, we are well prepared to react and effectively respond to any change that may arise.

Sheri Dodd: Thank you, Elaine. Our Q4 and full year 2025 financial performance was strong, and we are very proud of our accomplishments and momentum. We are executing well against our strategic priorities, and our investments in people and various workflow processes are materializing and paying off as expected. The foundation we have built over the past year gives us confidence in our ability to continue delivering consistent performance in line with overall market growth. With multiple catalysts ahead, including continued commercial momentum and progress across our product and clinical roadmaps, we believe we are entering 2026 from a position of strength. As we have seen, the lymphedema payer policy environment is adjusting, and as the industry leader, we are well prepared to react and effectively respond to any change that may arise.

Speaker #3: The foundation we have built over the past year gives us confidence in our ability to continue delivering consistent performance in line with overall market growth.

Speaker #3: With multiple catalysts ahead, including continued commercial momentum and progress across our product and clinical roadmaps, we believe we are entering 2026 from a position of strength.

Speaker #3: As we have seen, the lymphedema payer policy environment is adjusting, and as the industry leader, we are well prepared to react and effectively respond to any change that may arise.

Speaker #3: We have confidence in our business and look forward to sharing updates with you as we move through 2026. I'd like to thank our team here at Tactile for their combined efforts in 2025.

Sheri L. Dodd: We have confidence in our business and look forward to sharing updates with you as we move through 2026. I'd like to thank our team here at Tactile for their combined efforts in 2025. Without them, none of what we achieved would have been possible. With that, operator, we'll now open the call for questions.

Sheri Dodd: We have confidence in our business and look forward to sharing updates with you as we move through 2026. I'd like to thank our team here at Tactile for their combined efforts in 2025. Without them, none of what we achieved would have been possible. With that, operator, we'll now open the call for questions.

Speaker #3: Without them, none of what we achieved would have been possible. With that, Operator, we'll now open the call for questions.

Speaker #1: Thank you, we will now be conducting a question-and-answer session. If you would like to ask a question, please press star one on your telephone keypad.

Operator: Thank you. We will now be conducting a question-and-answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. Our first question will come from Adam Mader with Piper Sandler.

Speaker #1: A confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your question from the queue.

Speaker #1: For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. In our first question, we'll come from Adam Mater with Piper Sandler.

Adam Maeder: Hi, this is Kyle Winborne on for Adam. Congrats on a good quarter, and thanks for taking our questions. I guess I'd like to start with the lymphedema business. Performance was strong again in Q4 and really started to pick up momentum there in the back half of last year. Can we just drill into what drove this a little more? Did you start to see the NCD interpretation kind of fully turn into a tailwind there in Q4, as you've discussed? Just seeing really good productivity and performance as a result of the increased headcount, like you discussed in the prepared remarks. Can you just kind of unpack the performance there for us?

Kyle Winborne: Hi, this is Kyle Winborne on for Adam. Congrats on a good quarter, and thanks for taking our questions. I guess I'd like to start with the lymphedema business. Performance was strong again in Q4 and really started to pick up momentum there in the back half of last year. Can we just drill into what drove this a little more? Did you start to see the NCD interpretation kind of fully turn into a tailwind there in Q4, as you've discussed? Just seeing really good productivity and performance as a result of the increased headcount, like you discussed in the prepared remarks. Can you just kind of unpack the performance there for us?

Speaker #4: Hi, this is Kyle Wynborn on for Adam. Congrats on a good quarter, and thanks for taking our questions. I guess I'd like to start with the lymphedema business performance was strong again in Q4 and really started to pick up momentum there in the back half of last year.

Speaker #4: Can we just drill into what drove this a little more? Did you start to see the NCD interpretation kind of fully turn into a tailwind there in Q4 as you discussed?

Speaker #4: Just seeing really good productivity and performance as a result of the increased headcount, like you discussed in the prepared remarks. Can you just kind of unpack the performance there for us?

Speaker #5: Yeah, hi Kyle, you basically noted all the things that I was going to say. Really, what we're seeing in Q4 was multiple investments in people, processes, and technology all coming together that really enabled the company to outperform expectations.

Sheri L. Dodd: Yeah. Hi, Kyle. You, you basically noted all the things that I was going to say. Really, what we're seeing in Q4 was multiple investments in people, processes, and technology all coming together that really enabled the company to outperform expectations. So for sure, being able to have the CRM, we talked about that, that launched a year ago about this time. By the time we got to Q4, we had really strong adoption. The data was coming through. It really was built into the workflow for our sales organization. The other part of our go-to-market strategy was just increasing the number of reps. And as you saw, we had a nice acceleration of hiring as well as onboarding reps. Many of them came in in Q2 and Q3, so they started showing more productivity into Q4.

Sheri Dodd: Yeah. Hi, Kyle. You, you basically noted all the things that I was going to say. Really, what we're seeing in Q4 was multiple investments in people, processes, and technology all coming together that really enabled the company to outperform expectations. So for sure, being able to have the CRM, we talked about that, that launched a year ago about this time. By the time we got to Q4, we had really strong adoption. The data was coming through. It really was built into the workflow for our sales organization. The other part of our go-to-market strategy was just increasing the number of reps. And as you saw, we had a nice acceleration of hiring as well as onboarding reps. Many of them came in in Q2 and Q3, so they started showing more productivity into Q4.

Speaker #5: So for sure, being able to have the CRM we talked about that launched a year ago about this time by the time we got to Q4, we had really strong adoption.

Speaker #5: The data was coming through. It really was built into the workflow for our sales organization. The other part of our go-to-market strategy was just increasing the number of reps.

Speaker #5: And as you saw, we had a nice acceleration of hiring as well as onboarding reps. Many of them came in during Q2 and Q3, so they started showing more productivity into Q4.

Speaker #5: And then I would say we did see some modest tailwind from that Medicare patients moving directly to Flexitouch under the new NCD criteria. That was something that, as you know, we held on kind of going leaning into that more until we had more confidence that the policy was settled and had been defined.

Sheri L. Dodd: And then I would say we did see some modest tailwind from that Medicare patients moving directly to Flexitouch under the new NCD criteria. That was something that, as you know, we held on kind of leaning into that more until we had more confidence that the policy was settled and, and had been defined. But we did start to see some of that come through, which was nice to see, and that's momentum we expect to see going through in 2026. And then, of course, our airway. You didn't ask, but I'll just throw in our airway clearance business. Just did great. Again, just a result of strategy and executing those partnerships and, and the, the training and education that we did. So those were the things that brought together a really stellar year, stellar quarter for us and an overall really stellar year.

Sheri Dodd: And then I would say we did see some modest tailwind from that Medicare patients moving directly to Flexitouch under the new NCD criteria. That was something that, as you know, we held on kind of leaning into that more until we had more confidence that the policy was settled and, and had been defined. But we did start to see some of that come through, which was nice to see, and that's momentum we expect to see going through in 2026. And then, of course, our airway. You didn't ask, but I'll just throw in our airway clearance business. Just did great. Again, just a result of strategy and executing those partnerships and, and the, the training and education that we did. So those were the things that brought together a really stellar year, stellar quarter for us and an overall really stellar year.

Speaker #5: But we did start to see some of that come through, which was nice to see, and that's momentum we expect to see going through in 2026.

Speaker #5: And then, of course, you didn't ask, but I'll just throw in—our airway clearance business just did great. Again, just a result of strategy and executing those partnerships, and the training and education that we did.

Speaker #5: So those were the things that brought together a really stellar quarter for us, in an overall really stellar year.

Speaker #4: Great, that's super helpful. I guess to follow up, then, on the lymphedema business as we look into '26, and just kind of understanding the guidance that you gave maybe kind of around that top line growth number for the total business. And I guess as we think about some of these new prior auth requirements that you discussed, along with maybe some of these tailwinds that are just starting to kick in from the NCD, I mean, can you just kind of help us balance the two?

Adam Maeder: ... Great! That's super helpful. I guess to follow up then on the lymphedema business as we look into 2026, and just kind of understanding the guidance that you gave, maybe kind of around that top line growth number for the total business. And I guess as we think about, you know, some of these new prior auth requirements that you discussed, along with maybe some of these tailwinds that we're just starting to kick in from the NCD, I mean, can you just kind of help us balance the two? I mean, did they kind of offset? How did you piece maybe kind of some of those headwinds and tailwinds there, you know, around reimbursement for 2026? Thanks.

Kyle Winborne: ... Great! That's super helpful. I guess to follow up then on the lymphedema business as we look into 2026, and just kind of understanding the guidance that you gave, maybe kind of around that top line growth number for the total business. And I guess as we think about, you know, some of these new prior auth requirements that you discussed, along with maybe some of these tailwinds that we're just starting to kick in from the NCD, I mean, can you just kind of help us balance the two? I mean, did they kind of offset? How did you piece maybe kind of some of those headwinds and tailwinds there, you know, around reimbursement for 2026? Thanks.

Speaker #4: I mean, do they kind of offset? How did you piece maybe some of those headwinds and tailwinds together around reimbursement for 2026?

Speaker #4: Thanks.

Speaker #5: Sure. So very consistent with our guidance philosophy, our outlook that we put forward really incorporates a very balanced and thoughtful approach based on the information we know at the time.

Sheri L. Dodd: Sure. So very consistent with our, our guidance philosophy. Our outlook that we put forward really incorporates a very balanced and thoughtful approach based on the information we know at the time. So if I look on the momentum and the tailwinds, we have the NCD, we have a much more seasoned sales organization. They're coming in strong. We, we basically, at the end of Q4, have the total number of reps we need. We have that ratio of a 1-to-1 that we talked about. So for every account manager, we also have a product specialist. Nothing has changed in terms of that patient population. We still have this underserved population. We have very strong channel strategies, so all of those things are, are in place, and, we anticipate continuing to drive forward.

Sheri Dodd: Sure. So very consistent with our, our guidance philosophy. Our outlook that we put forward really incorporates a very balanced and thoughtful approach based on the information we know at the time. So if I look on the momentum and the tailwinds, we have the NCD, we have a much more seasoned sales organization. They're coming in strong. We, we basically, at the end of Q4, have the total number of reps we need. We have that ratio of a 1-to-1 that we talked about. So for every account manager, we also have a product specialist. Nothing has changed in terms of that patient population. We still have this underserved population. We have very strong channel strategies, so all of those things are, are in place, and, we anticipate continuing to drive forward.

Speaker #5: So if I look on the momentum and the tailwinds, we have the NCD, we have a much more seasoned sales organization that are coming in strong.

Speaker #5: We basically, at the end of Q4, have the total number of reps we need. We have that ratio of a one-to-one that we talked about.

Speaker #5: So, for every account manager, we also have a product specialist. Nothing has changed in terms of that patient population. We still have this underserved population.

Speaker #5: We have very strong channel strategies, so all of those things are in place. And we anticipate continuing to drive forward. For sure, the change that the Medicare requirement is asking for and the prior auth is a change than we had seen in 2025.

Sheri L. Dodd: For sure, the change that the Medicare requirement is asking for in the prior auth is a change than we had seen in 2025. But the fact is, is that we are going to be prepared for this. We already do prior authorization in our commercial business. We have to stand it up for Medicare. Medicare has never prior authorized this category before, so they'll be learning as well. So we felt it was prudent to not get ahead of our skis on this. We are prepared. We will address this. And, you know, as we work through what it takes and what that patient flow looks like, we always have the opportunity of adjusting our guidance in Q3 as we get more experience in this area.

Sheri Dodd: For sure, the change that the Medicare requirement is asking for in the prior auth is a change than we had seen in 2025. But the fact is, is that we are going to be prepared for this. We already do prior authorization in our commercial business. We have to stand it up for Medicare. Medicare has never prior authorized this category before, so they'll be learning as well. So we felt it was prudent to not get ahead of our skis on this. We are prepared. We will address this. And, you know, as we work through what it takes and what that patient flow looks like, we always have the opportunity of adjusting our guidance in Q3 as we get more experience in this area.

Speaker #5: But the fact is that we are going to be prepared for this. We already do prior authorization in our commercial business. We have to stand it up for Medicare.

Speaker #5: Medicare has never prior authorized this category before, so they'll be learning as well. So we felt it was prudent to not get ahead of our skis on this.

Speaker #5: We are prepared. We will address this. And as we work through what it takes and what that patient flow looks like, we always have the opportunity of adjusting our guidance in Q3 as we get more experience in this area.

Speaker #5: But yes, we did a balance of headwinds and tailwinds, but this prior auth is a shorter-term headwind and one that we feel very prepared to address.

Sheri L. Dodd: But yes, we did a balance of headwinds and tailwinds, but this prior auth is a shorter term headwind and one that we feel very prepared to address.

Sheri Dodd: But yes, we did a balance of headwinds and tailwinds, but this prior auth is a shorter term headwind and one that we feel very prepared to address.

Speaker #4: Super helpful. Thank you.

Adam Maeder: Super helpful. Thank you.

Kyle Winborne: Super helpful. Thank you.

Speaker #5: Thanks.

Sheri L. Dodd: Thanks.

Sheri Dodd: Thanks.

Speaker #1: And our next question comes from Ryan Zimmerman with BTIG.

Operator: Our next question comes from Ryan Zimmerman with BTIG.

Speaker #6: Yeah.

[Analyst] (BTIG): Hi, Elaine, Sheri, this is Izzy on for Ryan. Thanks for taking the questions, and I apologize for any background noise. I also want to echo the congrats on the solid quarter as well. So just to start, I was curious if you could talk a little bit more about the LymphaTech acquisition that you guys announced today. Any color that you can provide on the expected commercialization model or high-level thoughts that we can think about for 2026 and our models with that deal coming in?

Izzy McMahon: Hi, Elaine, Sheri, this is Izzy on for Ryan. Thanks for taking the questions, and I apologize for any background noise. I also want to echo the congrats on the solid quarter as well. So just to start, I was curious if you could talk a little bit more about the LymphaTech acquisition that you guys announced today. Any color that you can provide on the expected commercialization model or high-level thoughts that we can think about for 2026 and our models with that deal coming in?

Speaker #1: Hi, Elaine. Sheri, this is Izzy on for Ryan. Thanks for taking the questions. I apologize for any background noise. I also want to echo the congrats on the solid quarter as well.

Speaker #1: So just to start, I was curious if you could talk a little bit more about the lymphotech acquisition that you guys announced today. Any color that you can provide on the expected commercialization model or high-level thoughts that we can think about for 2026 and our models with that deal coming in?

Speaker #5: Sure. Hi, Izzy. We are really excited about this acquisition to our business. Again, I have been and leaders before and all of you as well has been asking about how can you unlock that TAM, that $20 million patients in the US alone that have lymphedema, but have yet to be diagnosed.

Sheri L. Dodd: Sure. Hi, Izzy. You know, we are really excited about this, this acquisition to our business. Again, I have been and leaders before, and all of you as well, has been asking about how can you unlock that TAM, that 20 million patients in the US alone that have lymphedema but have yet to be diagnosed. So it fits so nice into our overall strategy and that continuum of care. So very excited about that. What we're also really thrilled about is, one, they already have a commercialized product, and so that commercialization model right now looks like, use for measurement and surveillance with compression garment manufacturers, use that for, digitizing, fitting, and ordering. And then a few centers use it as just part of their overall workflow.

Sheri Dodd: Sure. Hi, Izzy. You know, we are really excited about this, this acquisition to our business. Again, I have been and leaders before, and all of you as well, has been asking about how can you unlock that TAM, that 20 million patients in the US alone that have lymphedema but have yet to be diagnosed. So it fits so nice into our overall strategy and that continuum of care. So very excited about that. What we're also really thrilled about is, one, they already have a commercialized product, and so that commercialization model right now looks like, use for measurement and surveillance with compression garment manufacturers, use that for, digitizing, fitting, and ordering. And then a few centers use it as just part of their overall workflow.

Speaker #5: So, it fits so nicely into our overall strategy and that continuum of care, so we're very excited about that. What we're also really thrilled about is, one, they already have a commercialized product.

Speaker #5: And so that commercialization model right now looks like use for measurement and surveillance, with compression garment manufacturers using that for digitizing fitting and ordering.

Speaker #5: And then a few centers use it as just part of their overall workflow. Longer term, we do see this opportunity to integrate lymphotech into our commercial engine, put it into our reps' hands, and look at a very strategic segmentation approach to how would we go sell this in those centers where they have large volume, where workflow efficiency is really going to make a difference.

Sheri L. Dodd: Longer term, we do see this opportunity to integrate LymphaTech into our commercial engine, put it into our reps' hands, and look at a very strategic segmentation approach to how would we go sell this in those centers where they have large volume, where workflow efficiency is really going to make a difference. Plus, you have this great patient experience where you don't have someone wrapping a tape measure around your limbs and it being different based on who's doing it for you, that this is one where it's a no touch, and then the patient gets to actually see what their fluid volume looks like in their limbs. It's very sticky for them to understand the disease that they have. So we're not putting in the bag of our reps right now. It's certainly, it's available in the market.

Sheri Dodd: Longer term, we do see this opportunity to integrate LymphaTech into our commercial engine, put it into our reps' hands, and look at a very strategic segmentation approach to how would we go sell this in those centers where they have large volume, where workflow efficiency is really going to make a difference. Plus, you have this great patient experience where you don't have someone wrapping a tape measure around your limbs and it being different based on who's doing it for you, that this is one where it's a no touch, and then the patient gets to actually see what their fluid volume looks like in their limbs. It's very sticky for them to understand the disease that they have. So we're not putting in the bag of our reps right now. It's certainly, it's available in the market.

Speaker #5: Plus, you have this great patient experience where you don't have someone wrapping a tape measure around your limbs and it being different based on who's doing it for you, that this is one where it's a no-touch and then the patient gets to actually see what their fluid volume looks like in their limbs.

Speaker #5: Very sticky for them to understand the disease that they have. So we're not putting in the bag of our reps right now. It certainly is available in the market.

Speaker #5: There's also a regulatory and reimbursement strategy that's in play and we'll be looking at how we can continue to develop that so that there's a payment mechanism in place for use of the tool with clinicians.

Sheri L. Dodd: There's also a regulatory and reimbursement strategy that's in play, and we'll be looking at how we can continue to develop that so that, you know, there's a payment mechanism in place for use of the tool with clinicians. But we're going to be doing more of the specific work as we get into the integration. And again, just super excited to now have this in the portfolio, really cementing and solidifying, you know, our strategy to really lead in this area and have that full care continuum of technologies and solutions for both patients and clinicians.

Sheri Dodd: There's also a regulatory and reimbursement strategy that's in play, and we'll be looking at how we can continue to develop that so that, you know, there's a payment mechanism in place for use of the tool with clinicians. But we're going to be doing more of the specific work as we get into the integration. And again, just super excited to now have this in the portfolio, really cementing and solidifying, you know, our strategy to really lead in this area and have that full care continuum of technologies and solutions for both patients and clinicians.

Speaker #5: But we're going to be doing more of the specific work as we get into the integration. And again, just super excited to now have this in the portfolio, really cementing and solidifying our strategy to really lead in this area and have that full care continuum of technologies and solutions for both patients and clinicians.

Speaker #1: Got it, that's helpful. And then, just to go back to the guidance for a second—I was curious, what will get you to that 8% versus that 11%, understanding all of the headwinds and tailwinds that you've called out for the year?

[Analyst] (BTIG): Got it. That's helpful. And then just to go back to the guidance for a second, I was curious what will get you to that 8% versus that 11%, understanding all of the headwinds and tailwinds that you've called out for the year and the reimbursement dynamics as well. Thanks for taking the questions.

Izzy McMahon: Got it. That's helpful. And then just to go back to the guidance for a second, I was curious what will get you to that 8% versus that 11%, understanding all of the headwinds and tailwinds that you've called out for the year and the reimbursement dynamics as well. Thanks for taking the questions.

Speaker #1: And the reimbursement dynamics as well. Thanks for taking the questions.

Speaker #5: Sure. I mean, I think that that bottom 8 so a couple of things, especially when you look at it from a lymphedema standpoint, we said last year and we'll say again that we believe that we're going to grow at the pace of the market.

Sheri L. Dodd: Sure. I mean, I think that that bottom 8-- so a couple of things, especially when you look at it from a lymphedema standpoint. We we said last year, and we'll say again, that we believe that we're going to grow at the pace of the market. We do believe that this prior auth is likely going to pull down some of that market growth. That 10% CAGR is reflective of some years higher and some years lower, and reimbursement has been a big factor in it being higher and it being lower. So I would imagine an 8% would be the prior auth is, you know, really challenging, not necessarily on our side, but for the, the reviewers. It's going to be a manual review. It's not an AI review. They've got to come up to speed. If they're super conservative, don't get trained.

Sheri Dodd: Sure. I mean, I think that that bottom 8-- so a couple of things, especially when you look at it from a lymphedema standpoint. We we said last year, and we'll say again, that we believe that we're going to grow at the pace of the market. We do believe that this prior auth is likely going to pull down some of that market growth. That 10% CAGR is reflective of some years higher and some years lower, and reimbursement has been a big factor in it being higher and it being lower. So I would imagine an 8% would be the prior auth is, you know, really challenging, not necessarily on our side, but for the, the reviewers. It's going to be a manual review. It's not an AI review. They've got to come up to speed. If they're super conservative, don't get trained.

Speaker #5: We do believe that this prior auth is likely going to pull down some of that market growth. That 10% taker is reflective of some years higher and some years lower.

Speaker #5: And reimbursement has been a big factor in it being higher and it being lower. So, I would imagine an 8% would be—the prior auth is really challenging, not necessarily on our side, but for the reviewers. It's going to be a manual review.

Speaker #5: It's not an AI review. They've got to come up to speed. If they're super conservative, don't get trained. I mean, those things that could potentially drag it down, that would be what we saw as being kind of pulling down the lower.

Sheri L. Dodd: I mean, those things that could potentially drag it down, that would be what we saw as being kind of pulling down the lower.

Sheri Dodd: I mean, those things that could potentially drag it down, that would be what we saw as being kind of pulling down the lower.

Speaker #5: But there's nothing else that's inherently disrupting the business itself. Again, the patients are there. Our channels are here. We've got the biggest Salesforce we've ever had.

[Company Representative] (Tactile Systems Technology): ... But there's nothing else that's inherently disrupting the business itself. Again, the patients are there, our channels are here. We've got the biggest sales force we've ever had. We've operationalizing our back office. We've got CRM tools. So all of those things are kind of countering what might be a little bit of that temporary drag.

Sheri Dodd: ... But there's nothing else that's inherently disrupting the business itself. Again, the patients are there, our channels are here. We've got the biggest sales force we've ever had. We've operationalizing our back office. We've got CRM tools. So all of those things are kind of countering what might be a little bit of that temporary drag.

Speaker #5: We've operationalizing our back office. We've got CRM tools. So all of those things are kind of countering what might be a little bit of that temporary drag.

Speaker #1: And our next question comes from Brendan an Vasquez with William Blair.

Operator: Our next question comes from Brandon Vasquez with William Blair.

Speaker #4: Hey, thanks for taking the question. I wanted to follow up on the last one. The NCD changes—maybe you can just start, give us a little bit more color. You mentioned you've been doing prior auths on the private side already for a little while.

Margaret Kaczor Andrew: Hey, thanks for taking the question. I wanted to follow up on the last one on the NCD changes. Maybe you can just start, give us a little bit more color. You know, you mentioned you've been doing prior auths on the private side already for a little while. Talk to us a little bit about what does that process look like? You know, you have a lot of CMS and private experience now, so how much could a prior auth process lengthen that process for the CMS patients specifically, and in part, 'cause I'm trying to understand, you know, what's embedded within the 26 guidance. Does the market contract for a quarter or 2 before it returns to growth?

Brandon Vazquez: Hey, thanks for taking the question. I wanted to follow up on the last one on the NCD changes. Maybe you can just start, give us a little bit more color. You know, you mentioned you've been doing prior auths on the private side already for a little while. Talk to us a little bit about what does that process look like? You know, you have a lot of CMS and private experience now, so how much could a prior auth process lengthen that process for the CMS patients specifically, and in part, 'cause I'm trying to understand, you know, what's embedded within the 26 guidance. Does the market contract for a quarter or 2 before it returns to growth?

Speaker #4: Talk to us a little bit about what does that process look like? You have a lot of CMS and private experience now. So how much could a prior auth process lengthen that process for the CMS patients specifically?

Speaker #4: And in part, because I'm trying to understand what's embedded within the '26 guidance? Does the market contract for a quarter or two before it returns to growth?

Speaker #4: And is that what's embedded in your guidance? Or does this remain a growth market for the next couple of quarters?

Margaret Kaczor Andrew: Is that what's embedded in your guidance, or does this remain a growth market for the next couple of quarters?

Brandon Vazquez: Is that what's embedded in your guidance, or does this remain a growth market for the next couple of quarters?

Speaker #3: Yeah, I'm going to turn it over to Elaine to address some of the specifics. You originally called out a change in the NCD, and I just want to make sure that nothing is changing with the NCD.

[Company Representative] (Tactile Systems Technology): Yeah, I'm gonna turn over to Elaine to address some of the specifics. I just, you, you originally called out a change in the NCD, and I just wanna make sure that the... Nothing is changing with the NCD, so the NCD is still in place, and that really, we feel, has turned into a headwind, where those patients who meet the criteria for an advanced pump can get an advanced pump. This is different in that new policy, specifically for, for Medicare in the fee-for-service on prior auth, not tied at all to NCD. But I'll let Elaine talk about the process that, that prior auth looks like in our commercial business.

Sheri Dodd: Yeah, I'm gonna turn over to Elaine to address some of the specifics. I just, you, you originally called out a change in the NCD, and I just wanna make sure that the... Nothing is changing with the NCD, so the NCD is still in place, and that really, we feel, has turned into a headwind, where those patients who meet the criteria for an advanced pump can get an advanced pump. This is different in that new policy, specifically for, for Medicare in the fee-for-service on prior auth, not tied at all to NCD. But I'll let Elaine talk about the process that, that prior auth looks like in our commercial business.

Speaker #3: So the NCD is still in place, and that really, we feel, has turned into a headwind where those patients who meet the criteria for an advanced pump can get an advanced pump.

Speaker #3: This is different in that new policy specifically for Medicare in the fee-for-service on prior auth, not tied at all to NCD, but all of Elaine talked about the process that prior auth looks like in our commercial business.

Speaker #5: Yeah, I mean, really, the process is you create a package with what is usually some type of cover document that has specific information that a payer is looking for, plus all of the supporting evidence, medical records.

Elaine Birkemeyer: Yeah, I mean, really, the process is, you create a package with that is usually some type of cover document that's the specific information that a payer is looking for, plus all of the supporting evidence, medical records. It could be the demonstration that they can don and doff and so forth. And that is submitted, could be via fax, via their portal, and then we actually would find a response, typically by checking the portal. Now, that does elongate the process. And so we've seen that with commercial. We've got some payers that are really quick in turning around and some that take longer. As I think you know, this has been a really big attention in the public space as far as getting prior auth in a much faster turnaround time.

Speaker #5: It could be the demonstration that they can down and dock and so forth. And that is submitted. It could be via fax, via their portal.

Speaker #5: And then we actually would find a response typically by checking the portal. Now, that does elongate the process. And so we've seen that with commercial.

Speaker #5: We've got some payers that are really quick in turning around, and some that take longer. As I think you know, this has been a really big attention in the public space as far as getting prior auth in a much faster turnaround time.

Speaker #5: I think the focus is really getting that within a week. And so we're hopeful we start to see that. Same thing with Medicare. So really, when we think about, to your point, is this a short-term kind of slowdown from an industry?

Elaine Birkemeyer: I think the focus is really getting that within a week, and so we're hopeful we start to see that same thing with Medicare. So really, when we think about, to your point, is this a short-term kind of slowdown from an industry? I think that's what we're suggesting, is there's nothing fundamental changing. The industry and Medicare, we need, we just need to learn this new process. And it really is a combination of the technical requirements. What exactly is gonna constitute all of the parts and pieces of that submission packet? And how do we most efficiently get the information to and from Medicare, as well as any of these uncertainties when it comes to what they're looking for?

Speaker #5: I think that's what we're suggesting—is there's nothing fundamentally changing. The industry and Medicare, we just need to learn this new process. And it really is a combination of the technical requirements, what exactly is going to constitute all of the parts and pieces of that submission packet, and how do we most efficiently get the information to and from Medicare, as well as any idiosyncrasies when it comes to what they're looking for.

Speaker #5: So, we're really experienced. And so, we've got also the ability with our new technology to be much more nimble at implementing changes. So this is why we're acknowledging it could, for a short-term period, kind of slow the growth of the industry, but we feel we're really well positioned to navigate this.

Elaine Birkemeyer: So we're really experienced, and so we've got the, also the ability with our new technology to be much more nimble at implementing changes. So this is why we're acknowledging it could, for a short-term period, kind of slow the growth of the industry, but we feel we're really well positioned to navigate this. And so we don't see this as a, US, significant kind of long-term headwind for us.

Speaker #5: And so we don't see this as a significant kind of long-term headwind for us.

Speaker #4: Okay, great. And maybe shifting topics a little bit, Elaine, I think correct me if I'm wrong, but I think this was probably the best EBITDA margin quarter in the company's history.

Margaret Kaczor Andrew: Okay, great. And maybe shifting topics a little bit, Elaine, I think, correct me if I'm wrong, but I think this is probably the best EBITDA margin quarter in the company's history. Just talk to us a little about where you're getting the most leverage, and then where can the EBITDA margin go from here? I mean, you guys obviously gave a 26 guide, but where do you see the biggest opportunities for additional leverage within the PNL? Thanks, and congrats again on a nice quarter.

Brandon Vazquez: Okay, great. And maybe shifting topics a little bit, Elaine, I think, correct me if I'm wrong, but I think this is probably the best EBITDA margin quarter in the company's history. Just talk to us a little about where you're getting the most leverage, and then where can the EBITDA margin go from here? I mean, you guys obviously gave a 26 guide, but where do you see the biggest opportunities for additional leverage within the PNL? Thanks, and congrats again on a nice quarter.

Speaker #4: Just talk to us a little about where you're getting the most leverage, and then where can the EBITDA margin go from here? I mean, you guys obviously gave a '26 guide, but where do you see the biggest opportunities for additional leverage within the P&L?

Speaker #4: Thanks, and congrats again on a nice quarter.

Speaker #5: Yeah, I'm so, yes. Thank you for seeing that. That's something that we've been excited about—being able to grow profitability. And if you go back to where we started the year, this is much better than we expected.

Elaine Birkemeyer: Yeah, so yes, thank you for seeing that. That's something that we've been excited about, being able to grow profitability. And if you go back to where we started the year, this is much better than we expected. So I think, you know, a combination of, you know, really good discipline from a cost management perspective, as well as starting to see benefit from those investments we've been making. So as we talked about even some of the AI tools, and they are starting to pay off. As we move into this year, you, you'll see that our guide suggests, you know, an increase, a more modest one, and this is a combination of, you know, us annualizing some of the investments, such as our sales force. We didn't carry the expense for the full year.

Speaker #5: So I think a combination of really good discipline from a cost management perspective as well as starting to see benefit from those investments we've been making.

Speaker #5: So, we've talked about even some of the AI tools, and they are starting to pay off. As we move into this year, you'll see that our guide suggests an increased, more modest one.

Speaker #5: And this is a combination of us annualizing some of the investments, such as our Salesforce. We didn't carry the expense for the full year.

Speaker #5: We will in this coming year, in 2026, as well as continue to finish out the strategic investments that are underway now. So we're happy that we're going to be able to continue to expand margins, albeit a bit more modestly this year.

Elaine Birkemeyer: We will, in this coming year, in 2026, as well as continuing, to, you know, you finish out the strategic investments that are underway now. So, we're happy that we're gonna be able to continue to expand margins, you know, albeit a bit more modestly this year, you know, while we're able to continue those investments. Longer term, once we get these investments behind us, we do expect to see, gross margin rates grow at a faster pace than we're suggesting for 2026.

Speaker #5: While we're able to continue those investments, longer term, once we get these investments behind us, we do expect to see gross margin rates grow at a faster pace than we're suggesting for 2026.

Speaker #1: And again, that is STAR 1, if you would like to ask a question. We'll go next to Ben Haener with Lake Street Capital Markets.

Operator: And again, that is star one, if you would like to ask a question. We'll go next to Ben Haner with Lake Street Capital Markets.

Speaker #6: Good afternoon. Thanks for taking the questions. First off, for me, just for clarity's sake on the prior authorization, it doesn't sound to me like you have the specific requirements that CMS is going to be demanding.

[Company Representative] (Tactile Systems Technology): Good afternoon. Thanks for taking the questions. First off, for me, just for clarity's sake on the prior authorization, it doesn't sound to me like you have the specific requirements that CMS is gonna be demanding. And just based upon your work with commercial insurers in the past, it doesn't sound like either that there's anything that is kind of out of the box, where clinicians are not used to kind of collecting the data, and it's more of a question of how quickly CMS can turn it around. Is that the right way to think about this here?

Ben Haynor: Good afternoon. Thanks for taking the questions. First off, for me, just for clarity's sake on the prior authorization, it doesn't sound to me like you have the specific requirements that CMS is gonna be demanding. And just based upon your work with commercial insurers in the past, it doesn't sound like either that there's anything that is kind of out of the box, where clinicians are not used to kind of collecting the data, and it's more of a question of how quickly CMS can turn it around. Is that the right way to think about this here?

Speaker #6: And just based upon your work with commercial insurers in the past, it doesn't sound like either that there's anything that is kind of out of the box where clinicians are not used to kind of collecting the data, and it's more of a question of how quickly CMS can turn it around.

Speaker #6: Is that the right way to think about this here?

Speaker #5: So I would say with Medicare, it's been a we've been learning day by day. We are we do understand kind of what forms we need to fill in.

Elaine Birkemeyer: So I would say with Medicare. It's been – we've been learning day by day. You know, we understand kind of what forms we need to fill in. We're pretty clear, because remember, we're getting approved post-claim. So we're pretty. We have a good understanding of what Medicare is looking for for a successful claim, which should translate very well from a prior auth perspective. But there are some technical things of, you know, what's the best way to submit it? Are there going to be any things from a prior auth that's a little bit different? So that's kind of the learning there. Unfortunately, every payer is different, so there isn't something that's quite out of the box.

Speaker #5: We're pretty clear because, remember, we're getting approved post-claim. So we're pretty—we have a good understanding of what Medicare is looking for for a successful claim, which should translate very well from a prior auth perspective.

Speaker #5: But there are some technical things of what's the best way to submit it? Are there going to be any things from a prior auth that's a little bit different?

Speaker #5: So that's kind of the learning there. Unfortunately, every payer is different, so there isn't something that's quite out of the box. But we are excited to be leveraging some of our newer technology that does leverage AI to help facilitate and stand this process up.

Elaine Birkemeyer: But we are excited to be leveraging some of our newer technology that does leverage AI to help facilitate and stand this process up. So I think, you know, that, that's something that, we're excited that will help not only make this more efficient for us, but hopefully make that turnaround time for the patient more quick as well.

Speaker #5: So I think that’s something that we’re excited about, that will help not only make this more efficient for us, but hopefully make that turnaround time for the patient quicker as well.

Speaker #4: Okay, great. That's helpful. And then just on the bronchiectasis drug that launched here a number of months ago, are you seeing any impact in terms of growing the market there, with kind of any color that you have there?

Ben Haynor: Okay, great. That's helpful. And then just on the bronchiectasis drug that launched here a number of months ago, are you seeing any impact in terms of growing the market there? What's kind of any color that you have there?

Speaker #5: Sure. I mean, the patient population that's in our airway clearance business really mimics the underserved, underdiagnosed population that we see in lymphedema. So, the bronchiectasis growth, I would say—or at least the awareness—has been driven by, say, pharmaceutical entrants, but a lot more awareness, disease awareness, brought in training and education to the pulmonology and respiratory community.

Sheri L. Dodd: Sure. I mean, the patient population, it's in our airway clearance business, really mimics the underserved, underdiagnosed population that we see in lymphedema. So the bronchiectasis growth, I would say, or at least the awareness, has been driven by, say, pharmaceutical entrants, brought a lot more awareness, disease awareness, brought in, training and education to, the pulmonology and respiratory community. And so we've seen a nice uptick from that standpoint. The other good thing here, Ben, is that there is not a, nor guidelines, nor clinical, clinical decision that a drug should be used ahead of this therapy. They're meant to be used together. The drug therapy reduces inflammation, but it does not actually move the mucus, which is the big challenge for these patients when they get, mucus and then they get infections.

Sheri Dodd: Sure. I mean, the patient population, it's in our airway clearance business, really mimics the underserved, underdiagnosed population that we see in lymphedema. So the bronchiectasis growth, I would say, or at least the awareness, has been driven by, say, pharmaceutical entrants, brought a lot more awareness, disease awareness, brought in, training and education to, the pulmonology and respiratory community. And so we've seen a nice uptick from that standpoint. The other good thing here, Ben, is that there is not a, nor guidelines, nor clinical, clinical decision that a drug should be used ahead of this therapy. They're meant to be used together. The drug therapy reduces inflammation, but it does not actually move the mucus, which is the big challenge for these patients when they get, mucus and then they get infections.

Speaker #5: And so we've seen a nice uptick from that standpoint. The other good thing here, Ben, is that there are not any guidelines nor clinical decisions stating that a drug should be used ahead of best therapy.

Speaker #5: They're meant to be used together. The drug therapy reduces inflammation, but it does not actually move the mucus, which is the big challenge for these patients when they get mucus and then they get infection.

Speaker #5: So, it's going to work really nicely together. And so, we appreciate the fact that there is more awareness from a disease state, and we also appreciate our physician being in our top 10 DMEs and having the preferred placement.

Sheri L. Dodd: So it's going to work really nicely together, and so we appreciate the fact that there is more awareness from a disease state, and we also appreciate our position being in our top ten DMEs and having the preferred placement and seeing the growth. So this continues to be a really attractive market for us, and a lot of patients that need to be served.

Sheri Dodd: So it's going to work really nicely together, and so we appreciate the fact that there is more awareness from a disease state, and we also appreciate our position being in our top ten DMEs and having the preferred placement and seeing the growth. So this continues to be a really attractive market for us, and a lot of patients that need to be served.

Speaker #5: And seeing the growth. So this continues to be a really attractive market for us and a lot of patients that need to be served.

Speaker #4: Got it. That's all I had. Congrats on the quarter, and thanks for taking the questions.

Ben Haynor: Got it. That's all I have. Congrats on the quarter, and thanks for taking the questions.

Speaker #5: Yeah, thank you, Ben.

Sheri L. Dodd: Yeah. Thank you, Ben.

Sheri Dodd: Yeah. Thank you, Ben.

Speaker #1: And there are no further questions. Ladies and gentlemen, thank you for your participation. This does conclude today's teleconference. You may disconnect your lines and have a wonderful day.

Operator: There are no further questions. Ladies and gentlemen, thank you for your participation. This does conclude today's teleconference. You may disconnect your lines, and have a wonderful day.

Q4 2025 Tactile Systems Technology Inc Earnings Call

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