MYOMO, INC. (MYO)·Q1 2025 Earnings Summary

Executive Summary

• Revenue beat, EPS slight miss: Q1 2025 revenue was $9.83M vs consensus $9.22M*, while diluted EPS was -$0.08 vs consensus -$0.076*; strength came from Medicare Part B (59% of revenue), higher ASP (~$54K), and 45% intra-quarter “fill” units .
• Guidance maintained: Management guided Q2 revenue to $9.0–$9.5M and reiterated FY 2025 revenue at $50–$53M, anticipating acceleration in 2H as pipeline and O&P certification scale .
• Operating velocity high but forward indicators mixed: Record pipeline adds (700, +42% YoY) and strong gross margin (67.2%) contrasted with backlog down 9% and cost per pipeline add up 31% due to social media algorithm changes and payer utilization management .
• Stock reaction catalysts: Execution against 2H acceleration (lead quality improvements, O&P Center of Excellence certifications, MyoPro 2x launch) and path to ~70% GM in 2H could drive sentiment; watch Medicare Advantage authorization trends and advertising mix shift efficacy .

What Went Well and What Went Wrong

What Went Well

• Revenue growth and mix: Product revenue rose 162% YoY to $9.83M, with 182 units delivered (+100% YoY) and Medicare Part B at 59% of revenue; gross margin expanded 600 bps to 67.2% .
• Higher pricing and velocity: ASP ~$54K (+31% YoY), with 45% of revenue units filled within the quarter, indicating faster conversion cycles, aided by Medicare Part B .
• Channel/product execution: >300 CPOs completed initial training; launch of MyoPro 2x aims to improve independence and clinical outcomes (“our best product yet”) .

What Went Wrong

• Lead-gen disruption: Meta algorithm changes disrupted lead flow, increasing cost per pipeline add to ~$2,300 (+31% YoY) during early Q1; efficiency improved by March/April but raised CAC near term .
• Medicare Advantage friction: Continued high denial rates reduced authorization conversion; CFO noted first-time MA authorization rates “less than half” prior (~30%) levels, pressing backlog and conversions .
• Backlog contraction: Backlog fell 9% YoY to 249 units, reflecting higher intra-quarter revenue velocity and lower pre-authorizations (particularly MA) .

Financial Results

Revenue Mix (Q1 2025):

Key KPIs and Operating Metrics:

Guidance Changes

Earnings Call Themes & Trends

Management Commentary

• “We delivered 182 MyoPro revenue units in the first quarter, up 100% from Q1 2024, and our ASP increased by about 30% over the prior year… Q1 revenues increased by more than 160% to $9.8 million with Medicare Part B patients representing 60% of revenue.” — CEO Paul Gudonis .
• “Given our backlog entering second quarter… we expect second quarter revenue to be between $9 million and $9.5 million… For the full year, we continue to expect 2025 revenue to be in the range of $50 million to $53 million.” — CFO David Henry .
• On margin trajectory: “Second quarter I would expect probably slightly lower gross margin… but… in the second half of the year, we should be approaching 70% gross margins again.” — CFO David Henry .
• On O&P scaling: “We’ve now done initial training for more than 300 CPOs… conducting multi-day certification classes… which include evaluating patients… to expand their patient pipeline and revenue potential.” — CEO Paul Gudonis .
• On lead-gen remediation: “We made some changes… we had a record number of leads in April… it should be sustainable.” — CEO Paul Gudonis .

Q&A Highlights

• Advertising efficiency and sustainability: Management expects improved per-lead cost versus Jan/Feb; aiming for ~$1.4–$1.5K cost per pipeline add (vs $2.3K in Q1) as optimizations hold .
• Authorization conversion dynamics: Lower authorization rate tied to MA utilization management and back-end loaded Q1 pipeline adds; MA first-time authorization rate “less than half” prior (~30%) .
• 2H revenue cadence: Higher pipeline adds and Medicare mix support elevated fill percentage and reduced backlog needs to achieve guided 2H ramp .
• Gross margin outlook: Slight dip in Q2 on lower volume, trend toward ~70% in 2H .
• O&P channel path: Certification classes to enable clinics to independently evaluate, manage reimbursement and dispense MyoPro; expected 2H contribution ramp .

Estimates Context

• Q1 2025: Revenue $9.83M vs consensus $9.22M* (beat); EPS -$0.08 vs consensus -$0.076* (slight miss).
• Prior/future context: Q4 2024 revenue $12.07M vs $9.90M* (beat); Q2 2025 revenue $9.65M vs $9.15M* (beat), EPS -$0.11 vs -$0.106* (inline/miss).
• FY 2025 consensus now ~$40.11M revenue* and -$0.365 EPS*; targets ~$5.10* with 5 estimates, reflecting the subsequent guidance reduction disclosed in Q2 .
  Values retrieved from S&P Global.*

Key Takeaways for Investors

• Q1 execution: Strong revenue beat on Medicare mix and ASP, but EPS slightly below consensus due to elevated OpEx and advertising inefficiencies early in quarter .
• Near-term watch: Lead quality/advertising mix (shift beyond digital to improve engagement), MA authorization/trend line, and backlog rebuilding to support 2H ramp .
• Margin path: Expect modest GM dip in Q2 on volume, trend toward ~70% in 2H as ASP/mix and absorption improve; track unit volume and manufacturing throughput .
• O&P channel inflection: >300 CPOs trained and certification underway; look for rising O&P-driven orders in 2H to diversify revenue and reduce direct channel bottlenecks .
• Product catalyst: MyoPro 2x launch enhances donning/fit/function and supports clinician workflows—potentially improving adoption and outcomes .
• Liquidity and cash trajectory: Sufficient liquidity; plan to return to positive operating cash flow by Q4 2025; monitor working capital, receivables cycles, audits, and credit line usage (noted in Q2) .
• Thesis framing: Long runway in Medicare Part B and international, with O&P channel scaling; risk remains around MA denials and lead-gen efficiency—execution on guidance and 2H acceleration is the narrative to move the stock .