Sanuwave Health (NASDAQ:SNWV) reported record first-quarter revenue and rising consumables utilization, while management said the advanced wound care market began to recover after a difficult start to the year tied to changes in reimbursement for skin substitutes.
Chairman and CEO Morgan Frank said the first quarter of 2026 began with what he described as a “shock pause” in January, as the advanced wound care market “seemed to sort of lock up for a moment.” He said many market participants appeared to have expected that new CMS pricing for skin substitutes would be rescinded or modified before taking effect, which did not happen.
Q1 Revenue Rises as Consumables Utilization Improves
CFO Peter Sorensen said revenue for the three months ended March 31, 2026, totaled $9.6 million, up 3% from $9.3 million in the same period of 2025. He said the result marked the highest first-quarter revenue in company history, though it came in at the low end of the company’s guidance range for 3% to 10% growth.
Sorensen said consumables utilization grew 22% year over year and 4% sequentially from the fourth quarter of 2025. Frank said Sanuwave sold 97 systems in the quarter despite a slow January and ongoing elevated churn tied to financial stress among practitioners.
The company’s Active Systems count rose to 1,382 from 1,292 at year-end, a net increase of 90. Frank said the metric is intended to reflect systems owned by customers that have ordered applicators in the trailing six months, while accounting for churn, reactivation, new customer acquisitions and reseller sell-through.
Frank said the increase in Active Systems, along with some recovery in usage rates among existing customers, drove the company to an all-time record for applicator unit sales. However, he said that did not translate into an all-time record for applicator revenue because a greater share of sales went through resellers that purchase at wholesale prices. He also noted that some long-standing distributors transitioned into resellers, moving related customers from retail pricing with commissions to wholesale pricing.
Margins and Expenses Reflect Reseller Mix and Growth Investments
Gross margin was 77.3% in the first quarter, down 177 basis points from the year-earlier period. Sorensen attributed the decline to lower pricing on UltraMIST systems and applicators due to wholesale pricing for resellers.
Sanuwave reported an operating loss of $1.1 million for the quarter, compared with operating income of $0.6 million a year earlier. Operating expenses rose to $8.6 million from $6.8 million. Sorensen said the increase reflected several factors, including:
- $380,000 of higher non-cash stock-based compensation;
- $384,000 of higher payroll-related expenses due to increased headcount;
- $346,000 of higher non-personnel research and development spending;
- About $300,000 of non-recurring expenses tied to restatement work on the 10-K, including tax, legal and audit fees;
- About $400,000 of higher sales and marketing costs to support UltraMIST outreach.
The company reported a net loss of $1.4 million, compared with a net loss of $6.1 million in the prior-year quarter. Sorensen said the improvement was primarily due to a $4.9 million non-cash loss from the change in fair value of derivative liabilities that did not recur in the first quarter of 2026. Interest expense was also $1.4 million lower year over year, mainly reflecting the company’s senior debt refinancing with JPMorgan at the end of the third quarter of 2025.
EBITDA was negative $0.6 million, while adjusted EBITDA was positive $1.1 million, compared with $2.3 million in the year-earlier period. Sorensen said the adjusted EBITDA decline reflected planned investments in headcount, research and development, and commercial expansion.
Management Sees Market Adapting After Reimbursement Shift
Frank said Sanuwave remains focused across hospitals, wound centers, physicians’ offices and long-term care settings. He said the company is seeing renewed interest from long-term care and nursing facilities seeking to perform their own wound care, as well as “particular strength” in hospitals and encouraging progress in mobile wound care.
Frank pushed back on the idea that mobile wound care is going away, saying patients and wounds “are not going away” and that many patients are not interested in or capable of traveling to a wound center. He said the market is changing as CMS and Medicare Administrative Contractor documentation standards tighten, which he said favors more sophisticated providers.
He also said the mobile wound care market is experiencing consolidation because lower allograft reimbursement has made some prior business models harder to support. “The patient count stays the same, but the market adapts,” Frank said.
Frank identified rural care as one area of concern, citing long travel times and lower pay rates indexed to local wages. He said the payer system has an incentive to address the issue because the cost of not treating wounds could become much higher than the cost of providing care.
Guidance Maintained, With Stronger Second Half Expected
For the second quarter, Frank said Sanuwave expects year-over-year revenue growth of 10% to 15%, representing $11.1 million to $11.6 million. The company maintained full-year 2026 guidance of $51 million to $55 million.
In response to a question from Ian Cassel of IFCM about confidence in stronger second-half growth, Frank said Sanuwave has historically benefited from seasonality, with the second half typically stronger than the first half in prior years. He said the company is also seeing more engagement from large accounts and national accounts than it has previously, including first placements and demonstrations with large systems.
Frank said the company has had success when customers evaluate UltraMIST and see results, which can lead to broader adoption across their practices. He also said the company is investing in research and development, including incremental improvements to the existing product, line extensions and adjacent areas, though he said Sanuwave is not yet ready to discuss those initiatives publicly.
On clinical evidence, Frank said Sanuwave is working with users to generate data on cost effectiveness and additional use cases. He said UltraMIST has a broad label and that investors could expect papers and white papers in coming quarters outlining potential expanded use cases.
Sorensen said Sanuwave had $24 million in current assets as of March 31, 2026, compared with $24.6 million at year-end 2025. Cash and cash equivalents totaled $10.8 million at quarter-end. He also said the company has entered into voluntary disclosure agreements with almost all applicable states related to a sales tax issue previously discussed in its 10-K, with the goal of limiting potential tax exposure look-back periods and abating potential penalties in some states.
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.
