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SANUWAVE Health, Inc. (SNWV)·Q1 2025 Earnings Summary

Executive Summary

  • Q1 2025 delivered record Q1 revenue of $9.34M (+61% YoY) and gross margin of 79.0%, with GAAP operating income of $1.0M; UltraMIST consumables revenue rose 43% to $5.8M and systems sold more than doubled to 98 units .
  • The company guided Q2 2025 revenue to $10.0–$10.7M (+40–50% YoY) and reiterated FY 2025 revenue guidance of $48–$50M; Q1 revenue exceeded prior guidance ($8.4–$9.0M) set on the Q4 2024 call .
  • Net loss widened to $(5.68)M, driven primarily by a $4.90M non-cash loss from the change in fair value of derivative liabilities; adjusted EBITDA improved to $2.33M, reflecting stronger unit economics and pricing discipline .
  • Management highlighted robust pipeline, domestic manufacturing insulating margins from tariffs, and inventory build to support “elephant hunting” with larger customers; debt refinancing options are being explored given high-cost debt .
  • Near-term catalysts: sustained margin strength, Q2 revenue trajectory vs guidance and Street, progress on debt refi, and execution with larger enterprise accounts .

What Went Well and What Went Wrong

  • What Went Well

    • Record Q1 revenue and margin expansion: $9.34M (+61% YoY) and 79.0% gross margin (+640bps YoY) on stronger systems pricing and manufacturing efficiencies .
    • Commercial momentum: 98 systems placed (+128% YoY) with no unusually large orders; installed base reached 1,145 systems, enabling consumables pull-through .
    • Preparedness for large customers and tariff resilience: inventory built to “comfortably” support large orders; production domestic, so no expected tariff impact (“do not anticipate any material…margin issues resulting from the current tariff situation”) .

  • What Went Wrong

    • Net loss increased YoY to $(5.68)M, primarily due to non-cash derivative liability fair value change ($4.90M), offsetting operating improvements .
    • Operating expenses rose to $6.40M (+$1.15M YoY), including $0.98M stock-based compensation and a one-time $0.295M NASDAQ uplist fee impacting operating profit and EBITDA .
    • Sequential systems placements fell to 98 from 135 in Q4 2024 due to normal seasonality and sales force transition; consumables usage dips in Q1 given patient cost sharing reset .

Financial Results

Sequential trend: Q3 2024 → Q4 2024 → Q1 2025

MetricQ3 2024Q4 2024Q1 2025
Revenue ($USD Millions)$9.360 $10.326 $9.342
Gross Margin %75.5% 77.9% 79.0%
Operating Income ($USD Millions)$1.953 $2.522 $0.986
Net Income (Loss) ($USD Millions)$(20.657) $(12.748) $(5.676)
Diluted EPS ($USD)$(6.49) N/A$(0.66)
Adjusted EBITDA ($USD Millions)$2.109 $3.655 $2.326

Year-over-year comparison: Q1 2024 → Q1 2025

MetricQ1 2024Q1 2025
Revenue ($USD Millions)$5.786 $9.342
Gross Margin %72.6% 79.0%
Operating Income (Loss) ($USD Millions)$(1.050) $0.986
Net Loss ($USD Millions)$(4.528) $(5.676)
Diluted EPS ($USD)$(1.46) $(0.66)
Adjusted EBITDA ($USD Millions)$(0.059) $2.326

Segment/Product KPIs and Mix

KPIQ1 2024Q4 2024Q1 2025
UltraMIST systems sold (units)43 135 98
UltraMIST consumables revenue ($USD Millions)$4.1 $5.9 $5.8
UltraMIST revenue share (%)N/A>99% 99%
Installed base (systems in field)N/AN/A1,145

Balance Sheet and Cash Flow Highlights

MetricDec 31, 2024Mar 31, 2025
Cash and Cash Equivalents ($USD Millions)$10.237 $8.501
Inventory ($USD Millions)$4.149 $5.457
Senior Secured Debt ($USD Millions)$25.305 $26.037
Warrant Liability ($USD Millions)$8.107 $13.008
Net Cash from Operations ($USD Millions, quarter)$1.100 (Q1’24) $(1.517) (Q1’25)

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Revenue ($USD Millions)Q1 2025$8.4–$9.0 Actual: $9.342 — Beat vs guidance (top-end exceeded)
Revenue ($USD Millions)Q2 2025N/A$10.0–$10.7 (+40–50% YoY) New
Revenue ($USD Millions)FY 2025$48–$50 $48–$50 Maintained

Earnings Call Themes & Trends

TopicPrevious Mentions (Q-2: Q3 2024)Previous Mentions (Q-1: Q4 2024)Current Period (Q1 2025)Trend
Large orders variability (“pigs through a python”)Expect variability as large orders move revenue; began gaining traction with larger customers Record Q4 revenue pipeline; continued engagement with larger customers Inventory built to “take yes” on large orders; 58 new customers; pursuing “elephant hunting” strategy Scaling up enterprise focus
Margins & pricingGM 75.5%; improving on scale GM 77.9%; mid-70s outlook GM 79.0%; 640bps YoY expansion from systems pricing and manufacturing efficiencies Sustained improvement
Capital structure & listingReverse split and note/warrant exchange (post-Q3) Simplified capital structure; uplisting to Nasdaq in March 2025 NASDAQ listing fee ($295k) impacted operating profit/EBITDA in Q1 Normalizing post-uplist
Supply chain & tariffsNot highlightedDomestic production reiterated Domestic production; no anticipated material margin/tariff impact Stable, insulated
Debt cost/refinancingElevated interest expense YoY Debt structure improved post exchanges High-cost debt acknowledged; exploring refi opportunities to lower rates Potential improvement
IP monetizationN/A$2.5M license/option agreement in 2024 non-recurring IP assertion SPV option partner “making great progress” (profit share potential) Optionality

Management Commentary

  • “Placing 98 new systems in the quarter (128% more than same quarter last year) is a great start to the year… we now have… a comfortable level of both systems and applicators in stock to allow us to aggressively pursue our ‘elephant hunting’ strategy” — Morgan Frank, CEO .
  • “Gross margin… 79%… an increase of over 640 basis points… attributed to reduced costs in UltraMist system production and a strategic focus on pricing” — Peter Sorensen, CFO .
  • “We do not anticipate any material cost availability or margin issues resulting from the current tariff situation. Our production is domestic” — Morgan Frank, CEO .
  • “We’re certainly looking at refi opportunities… feel pretty good about the likelihood we can do something to improve our interest rate” — Morgan Frank, CEO .

Q&A Highlights

  • Customer mix and time-to-close: 58 new customers in Q1; time-to-sale ranges from days (inbound quotes) to several months for larger capital outlays; focus on scaling with customers likely to expand .
  • Debt refinancing: Management is actively exploring refinancing to address expensive debt; specifics premature but confidence expressed in improving interest rates .
  • IP assertion optionality: Partner has option to move patents into SPV; mid-single-digit million payment upon exercise with profit share on success; progress reported but details limited due to confidentiality .
  • Evolving sales strategy: Hiring seasoned med-device leadership targeting larger enterprise accounts (nursing homes/SNF chains, home health), with broader outreach as penetration still ~1% .

Estimates Context

  • Q1 2025: Wall Street consensus (S&P Global) for revenue/EPS was unavailable; comparison anchored to company guidance, which was exceeded (actual $9.342M vs $8.4–$9.0M guidance) .
  • Q2 2025: Revenue consensus mean is $10.14M* (1 estimate); EPS consensus is $(0.09)* (1 estimate). Company guidance midpoint ($10.35M) is slightly above consensus; watch for potential upside if execution continues.
  • FY 2025: Revenue consensus mean is $44.31M* (2 estimates) vs company guidance $48–$50M — Street is below management; EBITDA consensus is $13.29M* for FY 2025, implying expectations for continued margin leverage.

Values retrieved from S&P Global.*

Selected Estimates vs Guidance

MetricPeriodConsensus Mean*# of Estimates*Company GuidanceContext
Revenue ($USD Millions)Q1 2025N/AN/A$8.4–$9.0 Actual $9.342 beat guidance
Revenue ($USD Millions)Q2 2025$10.14*1*$10.0–$10.7 Midpoint above consensus
EPS ($USD)Q2 2025$(0.09)*1*N/ALoss expected
Revenue ($USD Millions)FY 2025$44.31*2*$48–$50 Street below mgmt
EBITDA ($USD Millions)FY 2025$13.29*N/AN/AStreet sees double-digit EBITDA

Key Takeaways for Investors

  • Strong Q1 execution with record Q1 revenue and 640bps GM expansion; profitability at the operating line indicates scalable unit economics and pricing power .
  • UltraMIST flywheel strengthening: installed base growth and consumables revenue underpin recurring mix; seasonality likely normalizing into Q2 and Q3 .
  • Guidance implies continued growth into Q2; with the midpoint slightly above Street, a beat and raise setup is possible if enterprise momentum and margin discipline persist (Q2 guidance) and Q2 consensus*.
  • Non-GAAP dynamics matter: derivative liability mark-to-market and stock comp can obscure underlying operating progress; focus on adjusted EBITDA trajectory and cash generation .
  • Balance sheet watch: high-cost senior secured debt ($26.0M) and increased warrant liability are key overhangs; management is pursuing refinancing to improve interest burden — a tangible refi could re-rate equity .
  • Operational insulation from tariffs due to domestic manufacturing supports margin stability amid macro uncertainty; inventory build positions SNWV to fulfill large orders quickly .
  • Trading setup: Near-term catalysts include Q2 print vs guidance/consensus, refi progress, and enterprise wins; medium-term thesis centers on installed base expansion, consumables mix, and EBITDA scaling.

Appendix: Additional Q1 2025 Press Releases and Prior Quarters

  • Preliminary Q1 revenue: $9.1–$9.3M; confirmed domestic production and minimal tariff risk .
  • Q4 2024 results: revenue $10.3M (+47% YoY), GM 77.9%, operating income $2.5M, adjusted EBITDA $3.7M; initiated FY 2025 revenue guidance $48–$50M .
  • Q3 2024 results: revenue $9.36M (+89% YoY), GM 75.5%, operating income $2.0M, adjusted EBITDA $2.1M; set expectation for large-order variability .