Rewalk Robotics Earnings Call: Growth Amid Challenges

Rewalk Robotics Ltd. ((LFWD)) has held its Q4 earnings call. Read on for the main highlights of the call.

The recent earnings call for Rewalk Robotics Ltd. presented a mixed sentiment, highlighting both significant achievements and ongoing challenges. While the company celebrated substantial revenue growth and strategic partnerships, concerns about ReWalk sales, declining gross margins, and financial health issues were also evident, tempering the overall positive outlook.

Record Revenue Achievement

Lifeward reported a record quarterly revenue of $7.5 million in Q4 2024, contributing to an impressive 85% annual revenue growth, reaching $25.7 million for the year. This achievement underscores the company’s ability to drive significant top-line growth, marking a milestone in its financial performance.

Operational Efficiency Improvements

In a bid to enhance operational efficiency, Lifeward undertook strategic measures by closing two locations and reducing headcount by 35%. These actions are part of a broader sustainable growth plan aimed at streamlining operations and improving the company’s cost structure.

Strategic Partnerships and Market Expansion

Lifeward made strides in expanding its market presence through strategic partnerships. Notably, the company secured a significant contract with BARMER in Germany, expanded distribution rights for MyoCycle, and launched a national accounts program for AlterG, positioning itself for future growth.

New Product Launches

The company introduced a new generation of the AlterG product, known as NEO, and completed FDA usability studies for ReWalk 7. These product launches are expected to bolster Lifeward’s product portfolio and drive future sales growth.

ReWalk Sales Below Expectations

Despite the positive developments, ReWalk sales fell short of expectations, primarily due to delays and attrition in Medicare cases. This shortfall impacted the overall sales performance, highlighting a key area of concern for the company.

Gross Margin Decline

The GAAP gross margin experienced a decline, dropping to 24.4% in Q4 2024 from 35.5% in Q4 2023. This decrease was mainly attributed to restructuring charges, signaling a need for improved cost management.

Impairment Charge

Lifeward recorded a $9.8 million impairment charge on intangible assets, which adversely affected GAAP operating expenses. This charge reflects the company’s ongoing efforts to reassess and optimize its asset base.

Going Concern Qualification

The auditors issued a going concern qualification, raising concerns about the adequacy of Lifeward’s balance sheet to sustain its business operations. This qualification underscores the financial challenges the company faces as it navigates its growth strategy.

Forward-Looking Guidance

Looking ahead, Lifeward provided guidance for 2025, projecting full-year revenue between $28 million and $30 million, with an adjusted gross margin of 47% to 49%. The company aims to reduce non-GAAP operating expenses to $22 million to $23 million, targeting a quarterly operating loss at or below $1 million by Q4. Strategic initiatives include expanding ReWalk placements with CMS, penetrating the workers’ compensation market, and enhancing distribution for MyoCycle and AlterG products. Lifeward plans to implement a sustainable growth plan to optimize product mix, reduce costs, and maintain disciplined spending.

In summary, the earnings call for Rewalk Robotics Ltd. reflected a balanced sentiment, with notable revenue growth and strategic advancements being offset by challenges in sales performance and financial health. The company’s forward-looking guidance indicates a focus on strategic growth and operational efficiency, aiming to overcome current hurdles and achieve its financial objectives.