Myomo Posts Strong Q2 2025 Revenue Growth but Faces Pipeline and Cash Flow Challenges; Strategic Shifts Underway to Improve Lead Quality and Conversion Rates
Myomo, a leading wearable medical robotics company specializing in devices that restore upper-limb function for individuals suffering from neurological disorders and paralysis, has announced its financial and operating results for the three and six months ended June 30, 2025. The company delivered record second-quarter revenue growth, driven by higher unit sales and stronger pricing, but also acknowledged that forward-looking operating metrics were pressured by lead quality issues, pipeline conversion challenges, and elevated cash usage.
Second Quarter 2025 Highlights
For the second quarter of 2025, Myomo generated revenue of $9.7 million, marking a 28% increase compared to the $7.6 million posted in the same quarter of 2024. Medicare Part B patients accounted for 56% of total revenue, underscoring the importance of this payer channel for the business.
The company recognized revenue on 178 MyoPro units, up 13% from the prior year. Notably, 53% of these units were fulfilled from orders and insurance authorizations received during the same quarter—a metric Myomo referred to as its “highest velocity” revenue to date. The average selling price (ASP) rose by 14% year-over-year to approximately $54,200, reflecting both pricing adjustments and product mix.
For the first six months of 2025, Myomo reported $19.5 million in revenue, up 73% from the comparable period in 2024.
However, other operating indicators were less robust. Orders and insurance authorizations totaled 207 units, down 3% from the second quarter of 2024. Backlog—a measure of orders and authorizations not yet converted into revenue—stood at 230 units as of June 30, 2025, a decline of 18% year-over-year.
The company added 816 new medically qualified candidates to its patient pipeline during the quarter, up 49% from a year ago. Overall, the pipeline grew to 1,611 patients, a 37% year-over-year increase.
Profitability and Margins
Gross margin came in at 62.7% for the quarter, down from 70.8% in Q2 2024, with management citing higher material and overhead costs as the primary reasons. On a year-to-date basis, gross margin was 65.0%, compared with 67.6% a year earlier.
Operating expenses surged 65% year-over-year to $10.6 million, reflecting higher payroll due to increased headcount, expanded engineering and R&D activity, and significantly higher advertising spending. Advertising costs totaled $2.2 million, up 162% from Q2 2024.
While the cost per lead remained in line with the prior year and a record number of leads were generated, Myomo reported that lead quality suffered following an algorithm change by one of its digital advertising vendors earlier in 2025. This drove the cost per direct billing pipeline add to $2,926, an 89% year-over-year increase.
The company recorded an operating loss of $4.6 million, compared with a $1.1 million loss in Q2 2024. Net loss was also $4.6 million, or $0.11 per share, versus $1.1 million, or $0.03 per share, a year earlier. Adjusted EBITDA came in at $(4.0) million, compared with $(1.2) million in the prior year period.
Year-to-date, Myomo’s operating loss totaled $8.1 million, net loss was $8.1 million, or $0.20 per share, and Adjusted EBITDA stood at $(6.8) million.
CEO Commentary and Strategic Adjustments
Paul R. Gudonis, Myomo’s Chairman and CEO, said that revenue exceeded internal expectations, but acknowledged that certain forward-looking metrics fell short.
“Second quarter revenues exceeded our expectations with 28% growth as we further strengthened our ability to convert current quarter authorizations and orders into revenue,” Gudonis said. “However, several forward-looking operating metrics were not as strong as we anticipated due to factors affecting lead quality and pipeline conversion.”
To address these challenges, Myomo is shifting its advertising focus from digital platforms to television advertising, which has historically delivered higher-quality leads and better patient engagement. In addition, the company’s clinical team is engaging directly with therapists and physicians across the U.S. to raise awareness of the MyoPro’s benefits, with the goal of increasing patient referrals from healthcare providers.
“We believe that enhancing our eco-system of knowledgeable providers and moving forward in the patients’ continuum of care will help secure additional patient referrals for both us and our O&P partners,” Gudonis added.
Pipeline and Conversion Challenges
Despite a strong pipeline increase, Myomo reported that conversion rates to both pipeline adds and orders were impacted by:
- Lead Quality – Digital advertising changes affected the quality of patient inquiries.
- Clinical Disqualifications – A more outcome-focused approach by the clinical team led to more patients being deemed ineligible for MyoPro treatment.
- Cycle Time Dynamics – Historical data suggests that 40–50% of pipeline additions in any given quarter come from leads generated a year or more prior. This means much of the 2025 advertising spend is expected to contribute to pipeline growth in 2026 and beyond.
Cost Controls and Workforce Reduction
In July 2025, Myomo reduced its workforce by about 8% and cut certain outside service expenses, actions expected to lower cash expenditures by at least $2 million over the next 12 months.
Cash Flow and Liquidity
As of June 30, 2025, Myomo held $15.5 million in cash, cash equivalents, and short-term investments. This included $4.0 million in borrowings from its line of credit and term loan facilities during the quarter. Excluding these borrowings, cash and investments declined by approximately $10 million from March 31, 2025.
Cash used in operating activities was $8.9 million in Q2 2025, compared with $1.9 million in Q2 2024.
According to CFO David Henry, elevated cash usage reflected several factors:
- Higher operating losses.
- Capital expenditures for software development and facility improvements.
- Production of demo units for clinicians and O&P partners.
- A $2.9 million payment for 2024 incentive compensation.
- A $1.5 million temporary payment hold by a DME MAC due to an address change.
- An increase in days sales outstanding from pre-payment audits by other DME MACs.
- Repayment to an insurance payer for a prior-period overpayment.
Henry noted that the payment hold was lifted and aged receivables were paid in early August. Most claims under audit have now been resolved, with only a handful denied—decisions Myomo plans to appeal.
Excluding non-recurring cash outflows, normalized cash burn for the quarter was approximately $4.9 million, which the company expects will be similar in the second half of 2025.
Management stated that current liquidity is sufficient to fund operations for the next 12 months.
