SANUWAVE, a leading provider of next-generation FDA-approved wound care products, has reported its financial results for the third quarter of 2023, showing strong revenue growth and improved operating performance.
The company’s revenue for the third quarter of 2023 totaled $5.0 million, an increase of 19%, as compared to $4.2 million for the same period of 2022. This growth falls within the previously provided guidance range of an approximately 15 to 25% increase for Q3 2023 as compared to Q3 2022. Revenue for the nine months ended September 30, 2023 totaled $13.4 million, an increase of 19%, as compared to $11.2 million for the same period of 2022.
The main driver of the revenue growth was the company’s flagship product, the UltraMIST® System, a painless, noncontact, low-frequency ultrasound wound healing therapy that delivers ultrasound energy into and below the surface of the wound to promote healing. UltraMIST® consumables revenue increased by 24% to $3.1 million, versus $2.5 million for the same quarter last year and constituted 62% of overall revenues in the three months ended September 30, 2023. UltraMIST systems and consumables represented in excess of 90% of SANUWAVE’s overall revenues in Q3.
The company also sold 55 UltraMIST® systems in Q3 2023, up from 28 in Q1 2023 and 49 in Q2 2023, demonstrating the increasing demand and adoption of the innovative technology in the wound care market. UltraMIST® has been clinically demonstrated to promote healing across a wide range of chronic and acute wounds, such as diabetic foot ulcers, pressure ulcers, venous leg ulcers, surgical wounds, and burns.
In addition to UltraMIST®, the company also offers the dermaPACE® System, a proprietary form of shockwave technology that uses high-energy acoustic pressure waves in the shockwave spectrum delivered directly into the wound bed to promote wound healing and wound closure. The dermaPACE® System has been approved by the FDA for the treatment of diabetic foot ulcers and is currently undergoing clinical trials for other indications, such as pressure ulcers and venous leg ulcers.
The company’s gross margin as a percentage of revenue amounted to 71% for the three months ended September 30, 2023, vs 72% for the same period last year. For the nine-months ended September 30, 2023, gross margins amounted to 71% vs. 72% for the same period last year. The slight decrease in gross margin was mainly due to the mix of product sales and the impact of tariffs on certain components.
The company’s operating loss for the three months ended September 30, 2023 totaled $0.5 million, which is an improvement of $2.0 million compared to the same period in 2022 as a result of the company’s efforts to drive profitable growth and manage expenses during 2023. The company’s net loss for the three months ended September 30, 2023 was $23.7 million, compared to a net loss of $1.1 million for the same period in 2022. Net loss for the three months ended September 30, 2023 was primarily due to continued non-cash losses on the fair value of derivative liabilities. The company’s adjusted EBITDA loss 1 for the three months ended September 30, 2023 was $0.3 million versus a loss of $2.2 million for the same period last year, an improvement of $1.9 million.
The company’s CEO, Kevin Richardson, commented on the results: “We are very pleased with our Q3 performance, which reflects our continued execution of our growth strategy and our commitment to delivering value to our customers, patients, and shareholders. We have achieved significant revenue growth, driven by the strong demand for our UltraMIST® System, which is becoming the standard of care for advanced wound healing. We have also improved our operating efficiency and reduced our cash burn, while investing in our R&D and clinical programs to expand our product portfolio and address new market opportunities. We are confident that we have the right products, the right team, and the right vision to achieve our long-term goals and create sustainable value for all our stakeholders.”
The company also provided an update on its business outlook and guidance for the full year 2023. The company expects to achieve revenue growth of approximately 15 to 25% for the full year 2023, as compared to 2022. The company also expects to achieve positive adjusted EBITDA 1 for the full year 2023, excluding any non-cash or one-time charges.
The company will host a conference call and webcast to discuss its Q3 2023 financial results and business update on November 10, 2023 at 9:00 AM ET. The conference call can be accessed by dialing (877) 407-9753 (U.S. and Canada) or (201) 493-6739 (International). The webcast can be accessed through the company’s website at sanuwave.com.
1 Adjusted EBITDA is a non-GAAP financial measure that the company defines as net income (loss) excluding interest expense, depreciation and amortization, change in fair value of derivative liabilities, and other non-cash or one-time charges. The company believes that adjusted EBITDA provides useful information to investors and analysts in assessing its operating performance and liquidity. However, adjusted EBITDA should not be considered as an alternative to net income (loss) or any other measure of financial performance or liquidity calculated in accordance with GAAP. The company’s calculation of adjusted EBITDA may differ from other companies and may not be comparable to similarly titled measures. A reconciliation of adjusted EBITDA to net income (loss), the most directly comparable GAAP measure, is provided in the table below.
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