Tactile Systems Technology, Inc.

What they do

Tactile Medical develops and sells at-home medical devices for lymphedema, chronic venous insufficiency, and airway clearance. Its lymphedema portfolio (Flexitouch Plus, Entre Plus, Nimbl) is sold directly to patients and providers, while its AffloVest airway clearance product is sold through DME distributors. The company generates revenue from both product sales and rentals, with lymphedema products accounting for 84% of 2025 revenue.

Revenue drivers

• Lymphedema products (Flexitouch Plus, Entre Plus, Nimbl) — 84% of 2025 revenue; sold and rented via a direct-to-patient/provider model, with Nimbl replacing most Entre orders.
• AffloVest airway clearance product — 16% of 2025 revenue; sold through accredited DME providers; next-generation AffloVest Gen 6 launched in 2026.
• MyoSleeve (non-pneumatic compression device) — Exclusive VA/DoD distribution rights acquired in April 2026; not yet commercially available.

Recent performance

Q2 2026 revenue rose 9% year-over-year to $85.7 million, driven by 12% growth in lymphedema sales, partially offset by a 7% decline in airway clearance due to DME inventory adjustments. Gross margin expanded to 76%, and net income increased to $7.8 million from $3.2 million in Q2 2025. For the first half of 2026, revenue increased 15% to $161.0 million. Full-year 2025 revenue was $329.5 million with net income of $19.1 million.

Strategy

Management is investing in product innovation and portfolio expansion, including the 2026 launches of AffloVest Gen 6 and LymphaTech's 3D measurement platform. The company is broadening distribution via the exclusive MyoSleeve VA/DoD agreement and continues to invest in commercial infrastructure for both lymphedema and respiratory segments. It also repurchased $5.3 million of stock in Q2 2026.

Risks

• Medicare reimbursement changes — Prior authorization requirements for pneumatic compression devices begin April 2026, which may cause claim denials or shipment delays.
• Dependence on DME distribution for AffloVest — Airway clearance revenue is subject to inventory management dynamics and ordering patterns of a few large DME providers.
• Integration and commercialization of new products — LymphaTech and MyoSleeve are early-stage; the latter is not yet generating revenue and involves intangible asset amortization.
• Competition and medical technology disruption — The company faces competitive pressure in the pneumatic compression market and must maintain technological leadership.

Outlook

Management expects continued growth in the lymphedema business and remains optimistic about AffloVest's long-term opportunity despite temporary Q2 inventory issues. The company anticipates MyoSleeve to become commercially available in the second half of 2026. They project sustainable, profitable growth driven by portfolio breadth and operational leverage.