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ReWalk Robotics Ltd. (RWLK)·Q2 2024 Earnings Summary

Executive Summary

  • Q2 2024 revenue was $6.7M, up over 400% year over year, driven by expanded access under Medicare and improving AlterG sales; gross margin improved to 41.1% with adjusted gross margin at 46.9% .
  • GAAP net loss improved to $4.3M (−$0.50 per share) vs. −$4.6M (−$0.55) in Q2 2023; adjusted net loss was −$3.6M (−$0.42) .
  • Full-year 2024 revenue guidance maintained at $28M–$32M, with management expecting sequential revenue improvement through year-end .
  • Medicare claims from prior submissions began to be paid post-quarter; AR included $2.6M of Medicare claims submitted in 2023 and H1 2024, a near-term cash flow catalyst .
  • Third-party consensus indicates a modest beat on revenue (~$53.5K) and EPS ($0.05), but S&P Global data was unavailable for this report; see Estimates Context .

What Went Well and What Went Wrong

What Went Well

  • Record ReWalk revenue with 20 systems placed, supported by finalized Medicare pricing and growing physician confidence to prescribe for on-label SCI patients .
  • Sequential AlterG revenue improvement to $3.6M in Q2 (up $0.8M vs. Q1), aided by commercial integration progress and the new NEO product line launch .
  • Management execution on Medicare processing and payments: “We are succeeding with the basics of execution with building a Medicare processing pipeline and by successfully getting paid…” — CEO Larry Jasinski .

What Went Wrong

  • Operating expenses rose to $7.2M (adjusted $6.9M) from $5.7M (adjusted $4.5M) YoY due to AlterG acquisition headcount and commercial investments, keeping operating loss elevated despite revenue growth .
  • Operating cash outflow of $5.6M was adversely impacted by long MAC lead times to set up and commence initial claims payments, delaying cash conversion .
  • Gross margin declined YoY on a GAAP basis (41.1% vs. 43.1%), though adjusted GM improved (46.9% vs. 43.3%); the mix and absorption dynamics continue to be a margin management focus .

Financial Results

MetricQ2 2023Q1 2024Q2 2024
Revenue ($USD Millions)$1.337 $5.283 $6.707
Gross Margin (%)43.1% 26.4% 41.1%
Adjusted Gross Margin (%)43.3% 33.7% 46.9%
Operating Loss ($USD Millions)$(5.158) $(6.502) $(4.443)
Adjusted Operating Loss ($USD Millions)$(3.946) $(5.525) $(3.723)
Net Loss ($USD Millions)$(4.642) $(6.276) $(4.304)
GAAP EPS ($USD)$(0.55) $(0.73) $(0.50)
Adjusted EPS ($USD)$(0.40) $(0.62) $(0.42)
Cash & Equivalents ($USD Millions)N/A$20.744 $15.131

Segment/Product Mix (sales):

Segment/ProductQ1 2024Q2 2024
Historical products/services (ReWalk exoskeletons, MyoCycles, ReStore exo-suits) ($USD Millions)$2.5 $3.1
AlterG products/services ($USD Millions)$2.8 $3.6

KPIs and Operating Details:

KPIQ2 2024Notes
ReWalk systems placed20 Record ReWalk revenue in Q2
Medicare AR from 2023/H1 2024 submissions ($USD Millions)$2.6 Began to be paid subsequent to Q2
Operating cash flow ($USD Millions)$(5.6) Impacted by MAC lead times
Non-GAAP adjustments (Q2)Amortization $832; SBC $376; Earnout remeasurement $(488) Adjusted net loss $(3.584)

Actual vs. Consensus (third-party, not S&P Global):

MetricActualConsensusBeat/(Miss)
Revenue ($USD Millions)$6.707 ~$6.653 +$0.0535
GAAP EPS ($USD)$(0.50) ~$(0.55) +$0.05

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Revenue ($USD Millions)FY 2024$28–$32M (Q4’23 8-K) $28–$32M Maintained
Quarterly revenue cadence2H 2024Sequential improvement expected (Q1’24 8-K) Sequential improvement expected Maintained
Non-GAAP Gross MarginFY 2024Expand to high-40%s (Q4’23 8-K) Not reiterated in Q2 releaseNo update (prior remains reference)
Non-GAAP OpExFY 2024Decline from Q4’23 run rate via integration savings (Q4’23 8-K) Not reiterated in Q2 releaseNo update (prior remains reference)
Non-GAAP Operating LossFY 2024Low double-digit millions (Q4’23 8-K) Not reiterated in Q2 releaseNo update (prior remains reference)

Earnings Call Themes & Trends

TopicPrevious Mentions (Q4’23 and Q1’24)Current Period (Q2’24)Trend
Medicare reimbursement/claimsCMS finalized Home Health Rule; fee schedule finalized; MACs approved 14 claims; access expansion narrative Processing pipeline established; payments began for prior submissions; physicians prescribing with confidence Strengthening execution and cash conversion
AlterG integration & productIntegration complete; synergies targeted ($3M net savings) Sequential revenue improvement; NEO product line launched for independent clinics Improving sales effectiveness; new product momentum
Product innovation/RegulatoryReWalk portfolio breadth (ReStore, MyoCycle); brand transformation to Lifeward FDA submission for 7th-gen ReWalk to enhance daily use Advancing pipeline
Regional sales mixQ4 showed balanced U.S./Europe growth U.S. $3.849M; Europe $2.308M in Q2 U.S.-led, Europe supportive
Operating efficiencyIntegration savings planned; non-GAAP margin expansion targets Opex up YoY from acquisition/investments; adjusted GM improved to 46.9% Mixed: margin improving, opex elevated short term

Management Commentary

  • “We are succeeding with the basics of execution with building a Medicare processing pipeline and by successfully getting paid. In addition our integration of two companies has expanded our scale and positions us well for the coming quarters.” — CEO Larry Jasinski .
  • “Lifeward has experienced a transformation of the market with the finalized Medicare payment for ReWalk personal exoskeletons… This signifies a significant expansion of access…” — CEO Larry Jasinski (Q1 context) .
  • “Our organizational integration work is now completed… ready to maximize the opportunity created by the newly established Medicare benefit category for exoskeletons…” — CEO Larry Jasinski (Q4 context) .

Q&A Highlights

  • Themes included Medicare claims timing and payment commencement, expected sequential revenue improvement, and AlterG NEO adoption; call participants included H.C. Wainwright and Lake Street Capital Markets analysts .
  • Management reiterated confidence in the Medicare pipeline conversion and continued sales traction from commercial team integration and NEO launch .

Estimates Context

  • S&P Global Wall Street consensus data was unavailable for this report due to mapping/rate-limit issues; thus, we cannot anchor comparisons on SPGI.
  • Third-party data indicates actual revenue of $6.707M vs. consensus ~$6.653M (+$53.5K) and GAAP EPS of −$0.50 vs. consensus −$0.55 (+$0.05) .
  • Given the modest beats and management’s sequential improvement outlook, estimates may move up slightly for 2H 2024, particularly revenue cadence; margin revisions should incorporate improved adjusted gross margin and AlterG mix.

Key Takeaways for Investors

  • Medicare payment commencement is a tangible cash flow inflection; watch AR conversion and operating cash flow in Q3/Q4 as MAC processing normalizes .
  • Revenue trajectory looks constructive: Q2 beat, sequential AlterG improvement, and management’s explicit expectation of sequential revenue growth through 2024 .
  • Margins are improving on an adjusted basis; continued mix/volume gains (ReWalk systems, AlterG NEO) should aid absorption and lift adjusted GM toward the high-40s target communicated in Q4 .
  • Opex remains elevated from acquisition integration and commercial investments; monitor delivery of the $3M savings plan and its flow-through to non-GAAP operating loss trajectory .
  • Regulatory pipeline advances (7th-gen ReWalk FDA submission) broaden medium-term product appeal, supporting physician adoption and payer engagement .
  • Short-term trading: catalysts include additional Medicare payments recognition, AlterG NEO order momentum, and any guidance updates; risks include timing variability in claim processing and operating expense execution .
  • Medium-term thesis: scale from integrated portfolio (ReWalk + AlterG) underpinned by reimbursement expansion, with operating leverage potential as volumes rise and integration savings materialize .

Additional Sources and Prior-Period References:

  • Q2 2024 earnings press release (8-K 2.02) .
  • Q1 2024 earnings press release (8-K 2.02) .
  • Q4 2023/FY 2023 earnings press release (8-K 2.02) .
  • Company press release announcing Q2 earnings timing (Aug 8, 2024) .
  • Public posting of Q2 2024 results (GlobeNewswire) .