Lifeward Ltd. (LFWD)·Q3 2025 Earnings Summary

Executive Summary

• Q3 revenue rose 8% q/q to $6.20M but was slightly below consensus ($6.31M*), while non-GAAP EPS of $(0.19) matched consensus; GAAP gross margin improved to 43.7% from 36.2% y/y, reflecting cost actions and Fremont plant closure. *
• Traditional products (ReWalk/MyoCycle/ReStore) grew 24% y/y to $3.1M on record Medicare ReWalk placements; AlterG declined 15% y/y to $3.1M on timing/mix. Management reiterated FY25 revenue $24–$26M and non-GAAP net loss $12–$14M.
• Liquidity remained tight with $2.0M cash at quarter-end; post-quarter, LFWD entered a $3.0M secured, 15% convertible loan due May 2026 (convertible at $0.45/sh), strengthening near-term liquidity; CFO said cash runway extends into Q4’26.
• Strategic catalysts: second consecutive record Medicare placements, first Medicare Advantage payment, and CE mark for ReWalk 7 enabling broader Europe commercialization (~40% of exoskeleton sales historically).

What Went Well and What Went Wrong

• What Went Well

  • Record Medicare placements for ReWalk in a second straight quarter; CEO: “record Medicare placements, and meaningful improvements in operating efficiency” as transformation measures take hold.
  • Gross margin expanded to 43.7% (GAAP and non-GAAP) vs 36.2% y/y, driven by lower production costs after the Fremont closure.
  • First commercial Medicare Advantage payment for ReWalk 7; CE mark for ReWalk 7 opens Europe, historically ~40% of exoskeleton sales.

• What Went Wrong

  • AlterG revenue fell 15% y/y to $3.1M on timing/mix; management is refocusing with a dedicated capital sales team and sports channel push.
  • Cash balance of $2.0M required a $3.0M secured, 15% loan post-quarter; while supportive, the terms (secured, 15% coupon, convertible) underscore funding risk.
  • Operating expenses (GAAP) rose y/y due to a prior-year earnout write-down comparison, though non-GAAP opex declined to $5.7M (vs $6.7M y/y).

Financial Results

Actual vs Wall Street (S&P Global)

• Q3 2025 Revenue: $6.20M vs $6.31M consensus* (miss ~1.8%). *
• Q3 2025 Non-GAAP EPS: $(0.19) vs $(0.19) consensus* (in line). *

Forward Consensus (S&P Global)

Segment and Mix

Geography (Revenue)

KPIs and Operating Metrics

Notes: “Consensus” figures marked with an asterisk are values retrieved from S&P Global.*

Guidance Changes

Implied Q4 2025 revenue range based on YTD $16.95M: ~$7.05–$9.05M (vs Q4 consensus $8.01M*). *

Earnings Call Themes & Trends

Management Commentary

• CEO (Mark Grant): “simplify how we operate, sharpen our commercial priorities… These results… are early signs that this work is starting to take hold.”
• CFO (Almog Adar): “non-GAAP operating loss was $3.0M… expect… to further reduce in Q4’25 as sales volume grows and efficiency measures take hold.”
• CEO on go-to-market: “dedicated capital team… selling AlterG, and… highly focused neuro rehab team… selling ReWalk” to regain focus in U.S.
• CFO on mix and KPIs: “$2.9M is related to the ReWalk products” within traditional revenue; “approximately 50% of [ReWalk] total revenue” from Medicare.
• CFO on runway: “sufficient cash to fund operations into the fourth quarter of 2026,” following the $3M loan.
• Regulatory/commercial: CE mark achieved; “European market… represents approximately 40% of exoskeleton sales” with established reimbursement in Germany.

Q&A Highlights

• Pipeline and rentals: 33 active rentals, all Germany; 49 Germany leads; U.S. pipeline >117 qualified leads. Conversion of rentals typically in 3–6 months.
• ReWalk revenue detail: ~$2.9M of the $3.1M “traditional” was ReWalk in Q3; Medicare accounts for ~50% of ReWalk revenue.
• Seasonality/backlog: Q4 is “usually the strongest” for both AlterG and ReWalk; confidence in guidance tied to backlog and pipeline.
• AlterG strategy: U.S. refocus via dedicated capital team and sports channel initiatives; Germany performing well.
• Liquidity: $3.0M loan (15%, secured, convertible at $0.45/sh; matures May 14, 2026) enhances near-term liquidity.

Estimates Context

• Q3 2025: Revenue slight miss ($6.20M vs $6.31M*), non-GAAP EPS in line ($(0.19) vs $(0.19)).
• Q4 2025 consensus implies sequential step-up ($8.01M* revenue, EPS $(0.0867)), consistent with management’s seasonal strength and backlog commentary.
• Estimate base remains thin (Q3: 2–3 estimates), so revisions can be volatile; sustained Medicare throughput, AlterG execution, and EU uptake are key swing factors.*
  Note: Asterisked values are from S&P Global consensus.

Key Takeaways for Investors

• Mixed print: modest revenue miss but margin strength and EPS in line; underlying mix shows ReWalk momentum offset by AlterG timing. *
• Transformation traction: non-GAAP opex down y/y ($5.7M vs $6.7M) and gross margin sustained ~44% as cost actions flow through.
• Liquidity bridged but at a cost: $3.0M, 15% secured convertible loan buys time; monitor cash conversion as Medicare processing improves.
• Near-term setup: Q4 seasonality plus backlog support guidance; consensus Q4 revenue ~$8.0M* sits inside implied range—execution on AlterG and U.S. salesforce bifurcation is pivotal. *
• EU optionality: CE mark for ReWalk 7 and established German reimbursement offer a second growth leg; watch rentals-to-sales conversion.
• KPI focus: ReWalk units up sharply (15 vs 4 y/y); Germany rentals (33) and U.S. pipeline (>117) provide visibility if payer throughput continues to improve.
• Risk/reward: Funding risk moderated near term, but AlterG softness and small-cap liquidity remain watchpoints; upside from Medicare Advantage, payer wins, and channel partnerships.

Appendix: Additional Details

Loan Terms (8-K Item 1.01)

• $3.0M secured promissory note with Oramed; 15% interest; matures May 14, 2026; convertible at $0.45/sh (4.99% ownership cap); customary covenants and default provisions; potential $500k termination fee.

YTD Performance Snapshot

S&P Global estimates disclaimer: All values marked with an asterisk (*) are retrieved from S&P Global consensus estimates.