SANUWAVE Health, Inc.

What they do

Sanuwave develops and markets directed-energy products using low-frequency, non-thermal ultrasound delivered through a fluid mist to treat acute and chronic wounds. Its only commercial product is the UltraMIST system, FDA-cleared under K140782 for indications including diabetic foot ulcers, venous leg ulcers, split thickness wounds/skin grafts, deep tissue pressure injuries and surgical wounds, and reimbursed by CMS under category one code 97610. The system is sold to hospitals, physician offices, wound centers, nursing homes, skilled nursing facilities and mobile wound care providers, and treatments must be administered by a healthcare professional. Revenue follows a razor/razorblade model: customers buy an UltraMIST system, then each treatment uses a sterile single-use applicator sold in cases of 12.

Revenue drivers

• UltraMIST consumables (applicators) — Single-use sterile applicators, sold in cases of 12, are the largest revenue stream, representing approximately 58% of total 2025 revenues; applicator revenue rose 13% to $7.3 million in Q2 2026 and accounted for roughly 75% of quarterly revenue, above the company's 60-65% target range.
• UltraMIST systems — Capital sales of the UltraMIST device itself; 82 systems were sold in Q2 2026, down from 116 in Q2 2025 and 97 in Q1 2026, and the company cited a market for used UltraMIST systems as a drag on its own system sales.
• Installed base of active systems — As of December 31, 2025 there were 1,292 active systems in the field, defined as systems owned by customers who ordered consumable applicators within the prior 6 months, which drives recurring applicator demand.
• U.S. wound care market — The company estimates the U.S. wound care market exceeds $67 billion per year, spread across categories such as ointments, specialized bandages, topical skin substitutes, negative pressure and hyperbaric oxygen; UltraMIST systems and consumables were approximately 99% of 2025 revenues.

Recent performance

Q2 2026 revenue was $9.7 million, down 3% from $10.1 million in Q2 2025, and was slightly above the high end of revised guidance provided on June 16, 2026. Q2 2026 gross margin was 76.2% versus 78.1% a year earlier, and GAAP operating result swung to a $(0.3) million loss from $1.4 million of operating income. Net loss for Q2 2026 was $0.7 million versus net income of $0.6 million in Q2 2025, and Adjusted EBITDA fell to $1.2 million from $3.2 million. Ultramist applicator revenue grew 13% to $7.3 million, and applicator unit volumes set an all-time record, up 13% sequentially and 27% year over year, even as system sales declined.

Strategy

Management describes the year as focused on profitable growth: full-year 2025 revenue rose 35% to $44.1 million, gross margin improved to 77% from 75%, and operating income increased 29% to $4.9 million. The company has been working to remediate previously identified material weaknesses in internal control over financial reporting and restated prior-period financial statements, and refinanced its debt in September 2025, which reduced interest expense by $2.8 million in the first half of 2026. It is contesting the CMS proposed 2027 rule for 97610 reimbursement, stating material disagreements with CMS's methodology and assumptions and intending to participate actively in the comment period with customer and academic support. The company has withdrawn fiscal 2026 guidance and will not provide quarterly or annual guidance until there is clarity on reimbursement.

Risks

• CMS reimbursement uncertainty for 97610 — CMS's proposed 2027 rule for code 97610 reimbursement could reduce payments, and management says it disagrees with CMS's methodology and assumptions and will contest the proposal during the comment period.
• Material weaknesses in internal control — The company identified material weaknesses in internal control over financial reporting that were not remediated as of December 31, 2025, and concluded disclosure controls and procedures were not effective as of that date.
• Customer stress from allograft recoupments — Management attributes weaker system sales partly to ongoing stress in its customer base from CMS reimbursement changes and recoupments around allografts.
• Emergence of a used-system market — A significant market for used UltraMIST systems led to lower-than-expected sales of new systems by the company and pushed applicators to 75% of Q2 2026 revenue, above its 60-65% target range.

Outlook

Sanuwave withdrew its previously issued fiscal year 2026 guidance, saying it should no longer be relied upon, and will not provide quarterly or annual guidance until there is greater clarity on market and reimbursement conditions. Management expects to reassess after CMS publishes its final rule, which is anticipated in the fourth quarter of 2026. The company continues to advance its position in the CMS comment period on the proposed 2027 97610 reimbursement rule and held a business update call on August 7, 2026.