Tactile Systems Technology Inc (TCMD) Reports 6.6% Revenue Increase in Q3 2023
TCMD's total revenue for Q3 2023 increased by 6.6% to $69.6 million, compared to $65.3 million in Q3 2022.
Revenue from lymphedema products increased by 15.3%, offsetting a 35.9% decrease in sales of the airway clearance product line.
Operating income was $8.0 million in Q3 2023, compared to an operating loss of $1.6 million in Q3 2022.
Net income in Q3 2023 was $22.3 million, compared to a net loss of $2.3 million in Q3 2022.
On November 6, 2023, Tactile Systems Technology Inc (NASDAQ:TCMD) released its financial results for the third quarter ended September 30, 2023. The company reported a solid financial and operational performance, with a significant increase in revenue from its lymphedema products, which more than offset the decrease in revenue from its airway clearance product line.
Financial Performance
TCMD's total revenue in Q3 2023 increased by $4.3 million, or 6.6%, to $69.6 million, compared to $65.3 million in Q3 2022. This increase was primarily due to a $8.3 million, or 15.3%, increase in sales and rentals of the lymphedema product line, which more than offset a $4.0 million, or 35.9%, decrease in sales of the airway clearance product line.
Gross profit in Q3 2023 increased by $2.6 million, or 5.5%, to $49.4 million, compared to $46.8 million in Q3 2022. Operating expenses decreased by $7.0 million, or 14.5%, to $41.4 million, compared to $48.4 million in Q3 2022. As a result, operating income was $8.0 million in Q3 2023, compared to an operating loss of $1.6 million in Q3 2022.
Net Income and Earnings Per Share
Net income in Q3 2023 was $22.3 million, or $0.94 per diluted share, compared to a net loss of $2.3 million, or $0.11 per diluted share, in Q3 2022. The significant increase in net income was primarily due to the strong performance of the lymphedema product line and the decrease in operating expenses.
Balance Sheet and Cash Flow
As of September 30, 2023, TCMD had $66.0 million in cash and cash equivalents and $46.8 million of outstanding borrowings under its credit agreement. This compares to $21.9 million in cash and cash equivalents and $49.0 million of outstanding borrowings as of December 31, 2022.
Outlook for 2023
TCMD now expects full year 2023 total revenue in the range of $273.0 million to $277.0 million, representing growth of approximately 11% to 12% year-over-year. This is a slight adjustment from the company's prior 2023 revenue guidance expectation of total revenue in the range of $274.0 million to $278.0 million.
Despite the challenges faced in the airway clearance product line, TCMD's strong performance in the lymphedema product line and its continued improvements in salesforce productivity and operational efficiency have positioned the company for a strong conclusion to 2023.
Explore the complete 8-K earnings release (here) from Tactile Systems Technology Inc for further details.
This article first appeared on GuruFocus.
