ReWalk Robotics Ltd. (RWLK)·Q3 2023 Earnings Summary

Executive Summary

• Record revenue of $4.40M, up 397% year over year, driven by AlterG contribution ($2.9M) and stronger U.S. sales in legacy ReWalk and MyoCycle; Europe was softer . Gross margin fell to 19.6% GAAP due to purchase accounting and amortization, but non-GAAP adjusted gross margin improved sharply to 45.1% .
• CMS finalized the 2024 Home Health Rule, placing exoskeletons in the Medicare brace benefit (lump-sum payment) and proposed a preliminary reimbursement level for the ReWalk Personal Exoskeleton—key catalysts to expand access and accelerate adoption .
• AlterG acquisition closed Aug 11; integration progressed and adds scale and higher-margin products, supporting a path to profitability; $2.9M of Q3 revenue reflects partial-quarter AlterG contribution .
• Liquidity remains solid with $32.6M cash and no debt; Q3 operating cash use was $7.4M (including ~$2.0M M&A-related) and $19.0M cash paid at close for AlterG (plus potential earnouts) .

What Went Well and What Went Wrong

• What Went Well

  • Record quarterly revenue ($4.40M) with strong U.S. performance and initial AlterG contribution; non-GAAP gross margin rose to 45.1% vs. 25.4% a year ago, reflecting higher volumes and mix plus AlterG’s margin profile .
  • Regulatory momentum: CMS finalized Home Health Rule for exoskeletons and proposed preliminary reimbursement, a pivotal step toward Medicare coverage; management: “we are very close to expanding access to our life-changing technology for all Medicare beneficiaries” .
  • Portfolio expansion and scale: AlterG closed and integration underway; management emphasized scale and commercial capabilities to “accelerate our path to profitability” .

• What Went Wrong

  • GAAP gross margin compressed to 19.6% (from 24.9% YoY; 43.1% QoQ), impacted by purchase accounting inventory step-up and amortization following AlterG (non-GAAP add-backs reconcile to 45.1%) .
  • Operating loss widened to $(7.94)M (from $(5.43)M YoY) on higher SG&A (integration, M&A costs) and G&A (amortization), partly offset by non-GAAP improvement in operating loss to $(4.92)M .
  • Europe demand was softer, partially offsetting stronger U.S. exoskeleton and MyoCycle sales in legacy ReWalk .

Financial Results

• Headline comparison (YoY and QoQ; consensus unavailable from S&P Global):

Note: S&P Global consensus data for RWLK was unavailable via our estimates tool at this time.

• Q3 2023 revenue composition:

• Regional revenue

• Balance sheet / liquidity KPIs

Why the margin/OP effects: GAAP margin dilution from AlterG purchase accounting and intangible amortization; the company provides reconciliations showing the non-GAAP normalization (inventory step-up, amortization, M&A costs) .

Guidance Changes

• No formal quantitative revenue, margin, OpEx, or tax guidance was issued in the Q3 materials.

Earnings Call Themes & Trends

Note: Full transcript hosted externally; company IR link to webcast; third-party transcript available on MarketScreener .

Management Commentary

• “Our progress with CMS to finalize a benefit category and propose a reimbursement rate means that we are very close to expanding access to our life-changing technology for all Medicare beneficiaries.” — Larry Jasinski, CEO .
• “We acquired and began our integration of AlterG which provides us scale and commercial capabilities to capitalize on the expanding market for exoskeletons and accelerate our path to profitability.” — Larry Jasinski .
• Rationale behind margin optics: GAAP gross margin included purchase accounting inventory step-up and amortization; non-GAAP adjusted gross margin of 45.1% highlights underlying profitability improvements in legacy ReWalk and AlterG .

Q&A Highlights

Note: Transcript available via company IR webcast archive and third-party site; themes below reflect topics addressed on or around the call date .

• Medicare coverage timing and operational readiness: Management discussed claim submission activity and operational plans to process Medicare orders once payments are underway .
• AlterG integration and synergy capture: Questions centered on integration pace, cross-selling opportunities, and how AlterG’s gross margin profile affects consolidated margins; management pointed to integration progress and non-GAAP margin improvements .
• Pipeline and regulatory: Clarifications around ReWalk 7 510(k) submission timeline by year-end and future product roadmap .
• Cash burn and runway: Discussion of quarterly operating cash outflows and M&A-related expenses; management cited $7.4M operating cash use in Q3 with ~$2.0M related to M&A and no debt outstanding .

Estimates Context

• Wall Street consensus (S&P Global) for Q3 2023 EPS and revenue was unavailable via our SPGI tool for this ticker mapping at the time of analysis; as a result, we cannot assess beat/miss versus S&P Global consensus for Q3 2023 [tool limitation noted]. Given this, investors should focus on the operational drivers (AlterG contribution, CMS final rule) and margin normalization on a non-GAAP basis .

Key Takeaways for Investors

• Structural catalyst: CMS final rule and preliminary reimbursement proposal materially de-risk U.S. Medicare access, a potential multi-year adoption driver once payments commence .
• Scale and mix shift: AlterG adds commercial scale and higher-margin products; despite GAAP margin compression from purchase accounting, non-GAAP margins improved, supporting a path to operating leverage as volumes ramp .
• Strong U.S. setup vs. Europe: Near-term growth skewed to U.S.; Europe softer; execution focus should remain on U.S. reimbursement activation and commercial integration .
• Liquidity sufficient for near-term execution: $32.6M cash and no debt provide runway to integrate AlterG, advance Medicare commercialization, and complete ReWalk 7 510(k) submission .
• Watch list of near-term catalysts: 510(k) submission for ReWalk 7 by YE23; Medicare payment operationalization; AlterG integration milestones; potential policy advances for veterans’ access; AI autonomy progress in next-gen exoskeletons .
• Risk factors: Timing of Medicare payments, integration execution, Europe demand, and ongoing cash burn are key variables to monitor .

Additional Source Documents

• Q3 2023 earnings press release (8-K 2.02 exhibit): ReWalk Robotics Reports Third Quarter 2023 Financial Results .
• Prior quarters press releases: Q2 2023 (Aug 11, 2023) ; Q1 2023 (May 11, 2023) .
• Earnings call access and transcript links: Company IR webcast page ; MarketScreener transcript page .
• Related press releases (contextual): Medicare Coverage Solidified (Nov 2, 2023) ; New Bill for Veteran Access (Nov 10, 2023) ; AI Autonomy Demonstration (Nov 28, 2023) .