Myomo Q2 2026 earnings: Gross margin expansion narrows the operating loss

Myomo (NYSE American: MYO) reported Q2 2026 revenue of $11.7 million, up 21% year over year, while GAAP diluted loss per share narrowed to $0.09 from $0.11. Higher unit volume, a modest increase in average selling price, and lower product costs lifted gross margin by 9.4 percentage points, helping reduce the operating and adjusted EBITDA losses.

Core financial results

Revenue growth reflected a 19% increase in recognized MyoPro units to 211 and a 2% rise in average selling price to approximately $55,500. Cost of revenue declined 9% despite the higher sales volume, allowing gross profit to grow faster than revenue.

Operating expenses increased by less than 1%, as higher general and administrative costs were largely offset by lower research and development and advertising expenses. This combination produced clear operating leverage, although the company remained unprofitable.

Adjusted EBITDA is a non-GAAP measure that excludes items including interest, depreciation, stock-based compensation, derivative-liability remeasurement, and income taxes.

Business and operating performance

Myomo added 739 patients to its pipeline during the quarter. MyoConnect pipeline additions increased 40% sequentially, while improved referral quality and broader in-network access helped generate a record 255 orders, up 23% year over year.

The mix of patient sources also shifted. Provider referrals, orthotics and prosthetics partners, and Department of Veterans Affairs patients accounted for 53% of quarterly revenue, compared with 26% one year earlier. Revenue from the U.S. O&P channel increased 130%, while international channel revenue rose 32%.

Additional state contracts were completed under Myomo’s arrangement with Elevance’s Anthem Blue Cross Blue Shield network. Including Medicare and VA patients, the company said it now has in-network access to more than 100 million covered lives.

On product development, the University of Utah randomized controlled trial had enrolled 25 of its planned 50 subjects. MyoPro3 development continued, and Myomo introduced a prototype hand-only product for the German market during the quarter.

Margin expansion drove operating leverage, but below-the-line costs limited the net-loss improvement

Cost of revenue fell by approximately $338,000 even as revenue increased by more than $2 million. Management attributed the gross-margin expansion primarily to the higher selling price and cost reductions, including material savings from the Myomo Mobile App. Higher clinical costs classified within cost of goods sold provided a partial offset.

Gross profit consequently increased by approximately $2.4 million, while operating expenses rose by only about $55,000. That translated into a roughly $2.3 million reduction in the operating loss.

The improvement was less pronounced at the GAAP net-income level. Myomo recorded $1.7 million of net other expense, including a $1.2 million noncash charge from remeasuring derivative liabilities and approximately $536,000 of net interest expense. In the prior-year quarter, the company recorded approximately $107,000 of net other income.

Cash flow and balance sheet

Second-quarter operating cash use declined to $1.9 million from $8.9 million. For the first six months of 2026, operating cash use was $4.1 million, compared with $11.5 million in the same period of 2025.

Cash, cash equivalents, and short-term investments totaled $13.5 million at June 30, 2026. That was down from approximately $18.4 million at December 31, 2025, showing that improved operating cash flow had not yet eliminated the reduction in liquidity.

Earnings guidance

Myomo raised its full-year revenue guidance and expects continued year-over-year growth in the third quarter. Management also expects operating expenses to increase modestly from Q2 as the company expands MyoConnect, while reiterating its full-year operating-leverage expectation.

The guidance indicates that Myomo expects the improved referral network and broader market access to continue supporting demand. Achieving the cash-burn target will also require the company to maintain the operating leverage demonstrated in Q2 while funding further MyoConnect expansion.

Recent insider transactions

The supplied six-month insider data showed 1,087,284 shares acquired across 19 purchase transactions and 212,462 shares sold across three transactions, resulting in net purchases of 874,822 shares. Among the recent transactions, director Thomas F. Kirk reported two direct purchases before the quarter’s results were released.

Risks investors need to watch

• Myomo remains unprofitable and continues to consume cash. Operating and adjusted EBITDA losses narrowed substantially, but the company still used $1.9 million of operating cash during Q2 and ended the period with $13.5 million in cash and short-term investments.
• Growth depends on reimbursement and referral conversion. The company’s ability to convert pipeline additions and orders into recognized revenue remains tied to payer coverage, sufficient reimbursement, and the fitting and delivery of customized devices.
• Medicare concentration remains a source of exposure. Myomo identifies its revenue concentration among Medicare Part B patients as a risk, even as it adds commercial payer contracts and expands VA and provider referral channels.
• Margin gains may not progress evenly. Material-cost reductions and higher selling prices helped Q2 gross margin, but higher clinical costs were an offset. MyoConnect expansion is also expected to produce modestly higher sequential operating expenses in Q3.
• Derivative liabilities can create GAAP earnings volatility. The quarter’s $1.2 million noncash remeasurement charge significantly reduced the benefit of improved operating performance at the net-loss level.

Summary

Myomo’s Q2 2026 results showed that higher unit volume, broader referral sources, and product-cost reductions can translate into operating leverage when expenses remain controlled. Gross-margin expansion sharply narrowed the operating and adjusted EBITDA losses, while cash use also improved. The next points to monitor are whether referral and payer expansion can sustain revenue growth, whether the margin improvement holds, and whether Myomo can meet its target of less than $2 million in second-half cash burn.