Sanuwave Health (NASDAQ:SNWV) reported second-quarter 2026 revenue of $9.7 million, down 3% from $10.1 million a year earlier, as lower UltraMIST system sales offset continued growth in the company’s recurring applicator business.
Chairman and Chief Executive Officer Morgan Frank said applicator sales remained strong throughout the quarter, with unit volume rising 13% sequentially from the prior record set in the first quarter and 27% year over year. Applicator revenue increased 8% sequentially and 13% year over year, surpassing the company’s prior quarterly revenue record set in the third quarter of 2025.
Used Systems Pressure Capital Sales
The company’s capital-equipment sales were affected by the availability of used UltraMIST devices following closures among wound-care providers. Frank said the market disruption followed changes to Medicare reimbursement for skin substitutes and reimbursement clawbacks, which have put financial pressure on practitioners that used both UltraMIST and Allograft.
UltraMIST system revenue fell about 34% year over year to $2.3 million from $3.4 million. Frank said the company estimates that used systems may have accounted for 40 to 60 system sales during the quarter, though he cautioned that the estimate is difficult to measure precisely.
“Obviously, the bad news is that they weren’t buying them from us,” Frank said of purchasers acquiring used equipment.
Based on systems that had ordered within the prior six months, excluding customers known to have closed, Sanuwave estimated it had 1,411 active systems at the end of the second quarter, compared with 1,382 at the end of the first quarter.
Chief Financial Officer Peter Sorensen said consumables, parts and accessories revenue increased about 12% to $7.3 million from $6.5 million. The category is primarily composed of applicators, along with parts and other items.
Margins and Earnings
Gross margin declined to 76.2% from 78.1% a year earlier. Sorensen attributed the 183-basis-point decrease to a revenue mix shift toward consumables and away from higher-margin system sales, as well as lower average selling prices from a higher reseller and wholesale mix.
The company reported an operating loss of $0.3 million, compared with operating income of $1.4 million in the prior-year quarter. Operating expenses increased to $7.7 million from $6.4 million, reflecting higher general and administrative expense, sales and marketing costs, research and development spending, and depreciation and amortization.
Approximately $0.4 million of the operating-expense increase was related to non-cash stock-based compensation, Sorensen said. The company also recorded a favorable year-over-year state and local sales-tax swing of about $0.9 million as voluntary disclosure agreement settlements in several states came in below previously accrued amounts.
Net loss was $0.7 million, compared with net income of $0.6 million a year earlier. EBITDA was positive $0.1 million, while adjusted EBITDA was positive $1.2 million, down from $3.2 million in the prior-year quarter.
As of June 30, Sanuwave had $23.2 million in current assets and $9.4 million in cash and cash equivalents. The company made $2.9 million in scheduled principal payments on its term loan during the first half and remained in compliance with covenants under its JPMorgan credit agreement.
CMS Proposal Creates Reimbursement Uncertainty
Frank said a proposed 2027 Hospital Outpatient Prospective Payment System rule would increase reimbursement for UltraMIST by 14% when used in hospital outpatient settings. However, the proposed 2027 Physician Fee Schedule includes potential changes to reimbursement under billing code 97610.
Under Sanuwave’s reading of the proposed physician-fee rule, average UltraMIST reimbursement could decline from approximately $397 currently to about $316 in 2027, with additional reductions expected in 2028. Frank emphasized that the proposal is not final and said Sanuwave and UltraMIST users plan to participate in the CMS comment process.
The comment period runs through Sept. 14, and the company expects CMS to issue a final rule around the first week of November. Frank said Sanuwave disagrees with some of CMS’s assumptions and intends to advocate for data that it believes more fully reflects practitioner costs and the broader benefits of treatment.
Guidance Withdrawn
Given market conditions and reimbursement uncertainty, Sanuwave withdrew its previously issued full-year 2026 revenue guidance. The company said it will not provide quarterly or annual guidance until there is greater clarity regarding the reimbursement developments and expects to reassess the decision after CMS publishes its final rule in the fourth quarter.
Frank said Sanuwave continues to pursue adoption in burns, hospital-acquired pressure injuries, post-acute and inpatient hospital settings, pediatric care, and long-term care facilities. He said these customer groups can take longer to adopt the product but may become long-term, high-usage users.
About Sanuwave Health (NASDAQ:SNWV)
Sanuwave Health, Inc is a medical technology company specializing in the development and commercialization of non-invasive acoustic wave therapies designed to stimulate tissue regeneration and accelerate healing. The company’s proprietary Extracorporeal Pulse Activated Technology (EPAT) delivers focused acoustic pressure waves to injured or chronic wound sites, activating the body’s natural repair mechanisms. Sanuwave’s primary therapeutic areas include advanced wound care for diabetic and venous ulcers, as well as orthopedic and musculoskeletal conditions.
The company’s lead product, the dermaPACE® system, holds clearance from the U.S.
