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LL

Lifeward Ltd. (LFWD)·Q2 2025 Earnings Summary

Executive Summary

  • Q2 2025 revenue was $5.72M, down 15% year over year and up 14% quarter over quarter; GAAP EPS was -$0.58, non-GAAP EPS -$0.31. Gross margin improved to 43.9% GAAP (44.0% non-GAAP) despite the absence of a one-time Medicare benefit in Q2 2024 .
  • Results missed S&P Global consensus: revenue $5.72M vs $6.62M*, and EPS -$0.31 vs -$0.305*; the company reset FY25 guidance to revenue of $24–$26M and non-GAAP net loss of $12–$14M, lower than prior revenue guidance of $28–$30M . Values retrieved from S&P Global*.
  • Operational highlights: record ReWalk placements for Medicare beneficiaries since fee schedule, >130 U.S. qualified leads, 20 ReWalk 7 units installed post-FDA clearance, and in-house ReWalk manufacturing transition completed; quarterly cash burn improved to $3.9M .
  • Strategic leadership changes and payer access catalysts: appointment of new CEO and CFO; an Administrative Law Judge affirmed ReWalk Personal Exoskeleton as “reasonable and necessary,” supporting reimbursement and future coverage expansion .
  • Near-term stock narrative catalysts: guidance reset (lower revenue/outlook focus on non-GAAP net loss), payer cycle timing clarity (Medicare processing still slow but improving), CE approval pending for ReWalk 7 in Europe, and AlterG channel strategy and backlog positioning .

What Went Well and What Went Wrong

What Went Well

  • Achieved record quarterly ReWalk placements for Medicare beneficiaries and expanded payer base; U.S. pipeline grew to >130 qualified leads, third consecutive quarter of pipeline growth .
  • Product innovation and launch execution: FDA clearance and U.S. launch of ReWalk 7 with >20 units installed; features include improved battery life, push-button control, stair/curb activation, and cloud connectivity .
  • Operational efficiency: improved quarterly cash burn to $3.9M (from $5.6M in Q2 2024 and $5.5M in Q1 2025) driven by cost actions and facility consolidation; in-house ReWalk manufacturing completed to enhance cost, quality, and flexibility .

What Went Wrong

  • Top-line miss versus consensus and year-over-year decline: revenue $5.72M vs $6.62M* consensus and down 15% YoY, impacted by timing of AlterG deliveries to international distributors and lapping one-time Medicare revenue in Q2 2024 . Values retrieved from S&P Global*.
  • Operating expenses increased to $9.1M (vs $7.2M in Q2 2024) due to a $2.8M goodwill impairment triggered by share price decline; GAAP operating loss widened to $6.6M .
  • Medicare collections slower than expected, and elevated inventory from manufacturing transition and dual-support for ReWalk 6/7, temporarily weighing on cash and near-term margins .

Financial Results

Revenue, EPS, and Margins vs Prior Periods

MetricQ2 2024Q1 2025Q2 2025
Revenue ($USD Millions)$6.71 $5.03 $5.72
GAAP EPS ($)-$0.50 -$0.46 -$0.58
Non-GAAP EPS ($)-$0.42 -$0.44 -$0.31
GAAP Gross Margin (%)41.1% 42.2% 43.9%
Non-GAAP Gross Margin (%)46.9% 42.2% 44.0%
GAAP Operating Loss ($M)$(4.44) $(4.85) $(6.56)
Non-GAAP Operating Loss ($M)$(3.72) $(4.63) $(3.51)

Consensus vs Actual (Quarterly)

MetricConsensus Q2 2025Actual Q2 2025
Revenue ($USD Millions)$6.62*$5.72
Primary EPS ($)-$0.305*-$0.31

Values retrieved from S&P Global*.

Segment Revenue Breakdown

Segment ($USD Millions)Q2 2024Q1 2025Q2 2025
Traditional Products & Services (ReWalk, MyoCycle, ReStore)$3.10 $1.70 $2.50
AlterG Products & Services$3.60 $3.30 $3.20
Total Revenue$6.71 $5.03 $5.72

KPIs and Operating Metrics

KPIQ4 2024Q1 2025Q2 2025
U.S. ReWalk Qualified Leads (pipeline)>110 >120 >130
Germany ReWalk Leads in Process44 —46 (incl. 34 active rentals)
AlterG Systems Backlog25 (Q4 backlog) —15
Cash & Cash Equivalents ($M)$6.75 (12/31/24) $5.73 (3/31/25) $5.14 (6/30/25)
Operating Cash Use ($M, quarterly)—$(5.49) $(3.90)
Gross Margin (GAAP, %)24.4% (Q4) 42.2% 43.9%

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
RevenueFY 2025$28–$30M (Q4 2024 and reiterated Q1 2025) $24–$26M Lowered
Non-GAAP Net LossFY 2025Not previously provided; prior focus was non-GAAP operating loss $7–$9M $12–$14M New metric introduced; implies worse bottom-line vs prior OpLoss focus
Adjusted Gross MarginFY 202547%–49% Not updated in Q2 PR Not updated
Non-GAAP Operating ExpensesFY 2025$22–$23M Not updated in Q2 PR Not updated
Non-GAAP Operating LossFY 2025$7–$9M Not updated in Q2 PR Not updated

Earnings Call Themes & Trends

TopicPrevious Mentions (Q4 2024, Q1 2025)Current Period (Q2 2025)Trend
Medicare reimbursement timing/processCycle longer than expected but improving; baseline supporting private payers Collections slower than anticipated; working with MACs to improve processing; near-term claims being processed faster than older submissions Gradual improvement, still a headwind
Pipeline growth>110 U.S. qualified leads; building leads via digital/media programs >130 U.S. qualified leads; 3rd consecutive quarter of growth; Germany 46 leads, 34 active rentals Improving
Product innovation (ReWalk 7)Expected FDA clearance mid-year FDA cleared; >20 installs; CE mark pending Positive execution
Manufacturing/operationsFremont closure; focus on efficiencies In-house ReWalk manufacturing completed; expected margin benefits after inventory normalization Improving (near-term inventory drag)
Payer access & legalCMS price set; BARMER agreement ALJ ruling affirms “reasonable and necessary,” supports coverage expansion Positive regulatory/legal tailwind
Tariffs/macroNot highlightedMedical device exemptions on ReWalk; minor China/Taiwan tariff impact for AlterG Neutral/immaterial

Management Commentary

  • “During the second quarter of 2025, we advanced on multiple fronts; improving cash burn… securing regulatory and legal milestones… strengthening our manufacturing capabilities… broadening our global reach… These achievements position Lifeward for greater efficiency, scale, and impact” — Mark Grant, CEO .
  • “We expect our quarterly operating loss to narrow further… as sales volume continues to grow and efficiency measures take hold… cash usage higher than expected due to slower Medicare collections and increased inventory from manufacturing transition” — Almog Adar, CFO .
  • “We intend to expand reimbursement over time… right now… we’re really trying to penetrate the market and understand all the payer environments” — Mark Grant on pricing across payer channels .
  • “Near-term claims are being processed… further out claims… are still in the works… we’re figuring it out both sides” — Mark Grant on payer processing .

Q&A Highlights

  • Medicare and pipeline detail: Excluding last year’s one-time $0.7M Medicare revenue, Medicare-related sales grew YoY with the highest quarterly placements since fee schedule; U.S. pipeline >130 qualified leads across CMS, workers’ comp, VA .
  • Tariffs: ReWalk classified as a medical device with exemptions; AlterG faces some China/Taiwan tariff exposure, currently immaterial .
  • Reimbursement/pricing: For Medicare, ReWalk 6 and 7 have same ASP; pricing varies across non-Medicare payers; focus on penetration ahead of pricing changes .
  • AlterG commercialization: Channel partner expansion globally and focused go-to-market in sports; backlog of 15 systems and strong pipeline expected to support H2 deliveries .
  • Guidance rationale: Reset reflects elongated payer cycles and realistic pacing under new leadership; growth expected in H2 but with disciplined execution .

Estimates Context

  • Q2 2025 results missed consensus: revenue $5.72M vs $6.62M*, EPS -$0.31 vs -$0.305*; non-GAAP operating loss improved YoY despite impairment in GAAP results . Values retrieved from S&P Global*.
  • Forward quarters: Q3 2025 consensus revenue $6.31M*, EPS -$0.19* (3 estimates); Q4 2025 revenue $8.01M*, EPS -$0.0867* (3 estimates). Given FY guidance lowered to $24–$26M, Street may need to reduce H2 revenue assumptions and reassess margin trajectory*. Values retrieved from S&P Global*.

Key Takeaways for Investors

  • Miss vs consensus and lowered FY guidance are near-term negatives; however, underlying non-GAAP operating loss improved YoY and cash burn reduced, indicating operating discipline amid payer cycle challenges .
  • Regulatory/legal tailwinds (ALJ ruling; CMS framework) and ReWalk 7 launch support medium-term adoption; CE approval in Europe is a potential catalyst .
  • Manufacturing insourcing should enhance margins over time, though temporary inventory impacts persist; expect gradual gross margin improvement as transitions complete .
  • AlterG backlog/pipeline and channel strategy provide diversification; watch conversion timing to smooth quarterly lumpiness .
  • Monitor payer processing metrics (DSO, Medicare collections cadence) and pipeline conversion rates; improving cycles will be key to achieving the new FY guidance .
  • Leadership changes (new CEO/CFO) emphasize rigorous execution and payer engagement; expect disciplined growth with back-half weighting .
  • Near-term trading implications: risk of estimate cuts and sentiment sensitivity to reimbursement timing; medium-term thesis tied to scaling across payers, Europe CE for ReWalk 7, and margin expansion.

Appendix: Additional Data Points

  • Revenue by geography Q2 2025: U.S. $3.06M; Europe $2.10M; APAC $0.12M; Rest of World $0.44M .
  • Balance sheet snapshot (6/30/25): Cash & equivalents $5.14M; inventories $7.62M; no debt .
  • Non-GAAP reconciliation items in Q2: impairment $2.78M; restructuring $0.70M; earnout remeasurement $(0.61)M; stock-based comp $0.18M .

Values retrieved from S&P Global* where marked with an asterisk.