Double-digit growth at Tactile Systems (NASDAQ: TCMD) as Q1 2026 loss narrows

Rhea-AI Filing Summary

Tactile Systems Technology, Inc. reported first‑quarter 2026 revenue of $75.3 million, up 23% from $61.3 million a year earlier, driven by growth in both lymphedema and airway clearance products. Gross margin improved to 77% from 74%, but the company posted a net loss of $1.8 million, narrower than the $3.0 million loss in the prior‑year quarter.

Lymphedema products generated $62.2 million, or 83% of revenue, while airway clearance products contributed $13.0 million, or 17%. Cash was $75.0 million with no borrowings on a $40.0 million revolving credit facility, providing liquidity alongside ongoing share repurchases of $1.1 million in the quarter.

During the quarter, Tactile Systems closed the LymphaTech acquisition for $7.2 million in cash plus contingent consideration initially valued at $4.9 million, adding 3D measurement technology and $8.5 million of goodwill. The company also recorded a $1.0 million accrual tied to an agreement in principle to settle previously disclosed False Claims Act lawsuits.

Insights

Medical technology equity analyst

Strong top-line growth and a tuck-in acquisition offset by continued, though smaller, losses.

Tactile Systems grew Q1 2026 revenue to $75.3M, a 23% increase, with lymphedema products at $62.2M and airway clearance at $13.0M. Gross margin expanded to 77%, reflecting mix and scale benefits, and operating loss narrowed to $1.5M.

The balance sheet remains solid with $75.0M in cash and no revolver borrowings under the $40.0M credit facility, even after $7.2M paid for the LymphaTech acquisition and $1.1M of share repurchases. LymphaTech adds 3D lymphedema measurement technology and $4.1M of new intangibles.

The company accrued about $1.0M for an agreement in principle to settle False Claims Act actions, which, if finalized, would remove a legal overhang at a relatively modest cost. Future quarters will show whether the growth rate and improving margins translate into sustained profitability as integration costs subside and IT investments supporting the order process continue through 2026.

Key Figures

Revenue: $75.3M Net loss: $1.8M Lymphedema product revenue: $62.2M +5 more

8 metrics

Revenue $75.3M Three months ended March 31, 2026

Net loss $1.8M Three months ended March 31, 2026

Lymphedema product revenue $62.2M Q1 2026, 83% of total revenue

Airway clearance product revenue $13.0M Q1 2026, 17% of total revenue

Cash balance $75.0M As of March 31, 2026

LymphaTech purchase consideration $12.1M Q1 2026 total estimated purchase consideration

Settlement-related accrual $1.0M Accrual for agreement in principle to settle Actions

Share repurchases $1.1M 40,250 shares in Q1 2026 at $26.67 average

Key Terms

sales-type leases, gross margin, contingent consideration, goodwill impairment test, +2 more

6 terms

sales-type leases financial

"Our rental revenue is derived from rent-to-purchase arrangements that... are recognized as sales-type leases."

gross margin financial

"Gross margin was 77% and 74% in the three months ended March 31, 2026 and 2025, respectively."

Gross margin is the difference between how much money a company makes from selling its products and how much it costs to produce them, expressed as a percentage of sales. It shows how efficiently a company is turning sales into profit before other expenses like marketing or salaries. Higher gross margin means the company keeps more money from each sale, which is a good sign of financial health.

contingent consideration financial

"The other component of purchase consideration is contingent consideration based on the achievement of non-financial milestones after closing..."

Contingent consideration is an additional payment agreed when one company buys another that will be paid later only if specific future targets are met, such as revenue, profit, or regulatory milestones. It matters to investors because it shifts risk between buyer and seller and affects the acquiring company's future cash flow and reported value — like promising a bonus after results are proven.

goodwill impairment test financial

"In the third quarter of 2025, we performed our annual goodwill impairment test utilizing both the qualitative and quantitative approach..."

False Claims Act regulatory

"The Scarborough Complaint alleges that we submitted false claims and made false statements in connection with the Medicare programs, in violation of the Federal False Claims Act."

A False Claims Act is a law that lets the government and private whistleblowers sue companies that knowingly submit false bills or statements to obtain government money or benefits. For investors it matters because such lawsuits can trigger large fines, settlements or reputational damage—similar to a leak in a ship that can force expensive repairs and slow operations—potentially reducing cash flow, increasing legal costs, and harming stock value.

Adjusted Term SOFR financial

"Amounts drawn under the revolving credit facility bear interest... at the Base Rate plus an applicable margin or Adjusted Term SOFR plus the applicable margin."

Adjusted term SOFR is a forward‑looking interest benchmark based on short‑term overnight Treasury repo rates, with a small extra amount added to reflect differences from legacy rates. Think of it as a quoted price that has been nudged to make payments comparable to older benchmarks; it matters to investors because it directly influences borrowing costs, bond yields and cash‑flow forecasts, affecting valuations and hedging outcomes.

10-Q Quarterly Reports: What Changes Quarter to Quarter →

P1Y0.3333http://fasb.org/us-gaap/2025#OperatingLeaseRightOfUseAssethttp://fasb.org/us-gaap/2025#OperatingLeaseRightOfUseAssethttp://fasb.org/us-gaap/2025#OperatingLeaseLiabilityCurrenthttp://fasb.org/us-gaap/2025#OperatingLeaseLiabilityCurrenthttp://fasb.org/us-gaap/2025#OperatingLeaseLiabilityNoncurrenthttp://fasb.org/us-gaap/2025#OperatingLeaseLiabilityNoncurrent0001027838--12-312026Q1falseP3M0.33330.3333P1Y0.33330.33330.3333P7YP3Y0001027838us-gaap:CommonStockMember2026-01-012026-03-310001027838us-gaap:CommonStockMember2025-01-012025-03-310001027838us-gaap:RetainedEarningsMember2026-03-310001027838us-gaap:AdditionalPaidInCapitalMember2026-03-310001027838us-gaap:RetainedEarningsMember2025-12-310001027838us-gaap:AdditionalPaidInCapitalMember2025-12-310001027838us-gaap:RetainedEarningsMember2025-03-310001027838us-gaap:AdditionalPaidInCapitalMember2025-03-310001027838us-gaap:RetainedEarningsMember2024-12-310001027838us-gaap:AdditionalPaidInCapitalMember2024-12-310001027838us-gaap:CommonStockMember2026-03-310001027838us-gaap:CommonStockMember2025-12-310001027838us-gaap:CommonStockMember2025-03-310001027838us-gaap:CommonStockMember2024-12-310001027838tcmd:FollowOnPublicOfferingMember2023-02-270001027838us-gaap:IPOMember2016-08-020001027838us-gaap:EmployeeStockOptionMember2025-01-012025-12-310001027838us-gaap:EmployeeStockOptionMember2025-12-310001027838us-gaap:EmployeeStockOptionMember2025-03-310001027838tcmd:EquityIncentivePlan2025Member2026-03-310001027838tcmd:EquityIncentivePlan2016Member2025-05-070001027838tcmd:EquityIncentivePlan2025Member2025-05-070001027838us-gaap:EmployeeStockMember2026-01-012026-01-010001027838us-gaap:EmployeeStockMember2025-01-012025-01-010001027838tcmd:TimeBasedRestrictedStockUnitsRsusMembertcmd:EquityIncentivePlan2016And2025Member2025-12-310001027838tcmd:PerformanceBasedStockSettledRestrictedStockUnitsMember2025-12-310001027838tcmd:TwoThousandTwentySixPsuMemberus-gaap:ShareBasedCompensationAwardTrancheTwoMember2026-01-012026-03-310001027838tcmd:TwoThousandTwentySixPsuMemberus-gaap:ShareBasedCompensationAwardTrancheThreeMember2026-01-012026-03-310001027838tcmd:TwoThousandTwentySixPsuMemberus-gaap:ShareBasedCompensationAwardTrancheOneMember2026-01-012026-03-310001027838tcmd:TwoThousandTwentyFivePsuMemberus-gaap:ShareBasedCompensationAwardTrancheTwoMember2026-01-012026-03-310001027838tcmd:TwoThousandTwentyFivePsuMemberus-gaap:ShareBasedCompensationAwardTrancheOneMember2026-01-012026-03-310001027838srt:MinimumMembertcmd:TimeBasedRestrictedStockUnitsRsusMembertcmd:EquityIncentivePlan2016And2025Member2026-01-012026-03-310001027838srt:MaximumMembertcmd:TimeBasedRestrictedStockUnitsRsusMembertcmd:EquityIncentivePlan2016And2025Member2026-01-012026-03-310001027838srt:MinimumMemberus-gaap:EmployeeStockOptionMember2026-01-012026-03-310001027838srt:MaximumMemberus-gaap:EmployeeStockOptionMember2026-01-012026-03-310001027838tcmd:TimeBasedRestrictedStockUnitsRsusMember2026-01-012026-03-310001027838tcmd:VeteransAdministrationMember2026-01-012026-03-310001027838tcmd:PrivateInsurersMember2026-01-012026-03-310001027838tcmd:MedicareMember2026-01-012026-03-310001027838tcmd:DurableMedicalEquipmentDistributorsMember2026-01-012026-03-310001027838tcmd:VeteransAdministrationMember2025-01-012025-03-310001027838tcmd:PrivateInsurersMember2025-01-012025-03-310001027838tcmd:MedicareMember2025-01-012025-03-310001027838tcmd:DurableMedicalEquipmentDistributorsMember2025-01-012025-03-310001027838tcmd:TermLoanMember2025-07-312025-07-310001027838tcmd:FollowOnPublicOfferingMember2023-02-272023-02-2700010278382025-01-012025-12-310001027838us-gaap:RetainedEarningsMember2026-01-012026-03-310001027838us-gaap:RetainedEarningsMember2025-01-012025-03-310001027838us-gaap:SubsequentEventMember2026-04-142026-04-140001027838srt:MinimumMemberus-gaap:RevolvingCreditFacilityMember2025-07-312025-07-310001027838srt:MaximumMemberus-gaap:RevolvingCreditFacilityMember2025-07-312025-07-310001027838us-gaap:RevolvingCreditFacilityMember2025-07-310001027838srt:MinimumMemberus-gaap:EquipmentMember2026-03-310001027838srt:MinimumMemberus-gaap:BuildingMember2026-03-310001027838srt:MaximumMemberus-gaap:EquipmentMember2026-03-310001027838srt:MaximumMemberus-gaap:BuildingMember2026-03-310001027838srt:MinimumMember2026-03-310001027838us-gaap:EquipmentMember2026-01-012026-03-310001027838us-gaap:TradeNamesMember2026-03-310001027838us-gaap:PatentsMember2026-03-310001027838us-gaap:TradeNamesMember2025-12-310001027838us-gaap:PatentsMember2025-12-310001027838tcmd:LymphatechMember2026-03-310001027838tcmd:AfflovestPMember2021-09-300001027838us-gaap:TradeNamesMember2026-03-310001027838us-gaap:PatentsMember2026-03-310001027838us-gaap:DevelopedTechnologyRightsMember2026-03-310001027838us-gaap:CustomerRelationshipsMember2026-03-310001027838us-gaap:PatentsMember2025-12-310001027838us-gaap:DevelopedTechnologyRightsMember2025-12-310001027838us-gaap:CustomerRelationshipsMember2025-12-310001027838us-gaap:EmployeeStockOptionMember2026-03-310001027838tcmd:TimeBasedRestrictedStockUnitsRsusMembertcmd:EquityIncentivePlan2016And2025Member2026-03-310001027838tcmd:PerformanceBasedStockSettledRestrictedStockUnitsMember2026-03-310001027838tcmd:DefinedContribution401kRetirementPlanMember2026-01-012026-03-310001027838tcmd:DefinedContribution401kRetirementPlanMember2025-01-012025-03-310001027838srt:MinimumMemberus-gaap:RevolvingCreditFacilityMemberus-gaap:SecuredOvernightFinancingRateSofrMember2025-07-312025-07-310001027838srt:MinimumMemberus-gaap:RevolvingCreditFacilityMemberus-gaap:BaseRateMember2025-07-312025-07-310001027838srt:MaximumMemberus-gaap:RevolvingCreditFacilityMemberus-gaap:SecuredOvernightFinancingRateSofrMember2025-07-312025-07-310001027838srt:MaximumMemberus-gaap:RevolvingCreditFacilityMemberus-gaap:BaseRateMember2025-07-312025-07-310001027838us-gaap:RevolvingCreditFacilityMemberus-gaap:FederalFundsEffectiveSwapRateMember2025-07-312025-07-310001027838us-gaap:RevolvingCreditFacilityMemberus-gaap:BaseRateMember2025-07-312025-07-310001027838us-gaap:ProductMember2026-01-012026-03-310001027838tcmd:RentalProductServiceMember2026-01-012026-03-310001027838us-gaap:ProductMember2025-01-012025-03-310001027838tcmd:RentalProductServiceMember2025-01-012025-03-310001027838us-gaap:CostOfGoodsTotalMemberus-gaap:SupplierConcentrationRiskMembertcmd:VendorOneMember2026-01-012026-03-310001027838us-gaap:CostOfGoodsTotalMemberus-gaap:SupplierConcentrationRiskMembertcmd:VendorOneMember2025-01-012025-03-310001027838us-gaap:EmployeeStockMember2026-03-310001027838us-gaap:EmployeeStockMember2016-04-2700010278382025-03-3100010278382024-12-310001027838us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMember2026-03-310001027838us-gaap:FairValueMeasurementsRecurringMember2026-03-310001027838tcmd:LymphatechIncMember2026-01-012026-03-3100010278382025-07-012025-09-300001027838tcmd:CorporateHeadQuarterSecondLeaseMember2018-12-310001027838tcmd:CorporateHeadQuarterInitialLeaseMember2018-10-310001027838us-gaap:RestrictedStockUnitsRSUMember2026-01-012026-03-310001027838us-gaap:PerformanceSharesMember2026-01-012026-03-310001027838us-gaap:EmployeeStockOptionMember2026-01-012026-03-310001027838tcmd:EmployeeStockPurchasePlanMember2026-01-012026-03-310001027838us-gaap:RestrictedStockUnitsRSUMember2025-01-012025-03-310001027838us-gaap:PerformanceSharesMember2025-01-012025-03-310001027838us-gaap:EmployeeStockOptionMember2025-01-012025-03-310001027838tcmd:EmployeeStockPurchasePlanMember2025-01-012025-03-310001027838us-gaap:SellingAndMarketingExpenseMember2026-01-012026-03-310001027838us-gaap:ResearchAndDevelopmentExpenseMember2026-01-012026-03-310001027838us-gaap:GeneralAndAdministrativeExpenseMember2026-01-012026-03-310001027838us-gaap:EmployeeStockOptionMember2026-01-012026-03-310001027838us-gaap:CostOfSalesMember2026-01-012026-03-310001027838tcmd:TimeBasedRestrictedStockUnitsRsusMembertcmd:EquityIncentivePlan2016And2025Member2025-01-012025-03-310001027838us-gaap:SellingAndMarketingExpenseMember2025-01-012025-03-310001027838us-gaap:ResearchAndDevelopmentExpenseMember2025-01-012025-03-310001027838us-gaap:GeneralAndAdministrativeExpenseMember2025-01-012025-03-310001027838us-gaap:EmployeeStockOptionMember2025-01-012025-03-310001027838us-gaap:EmployeeStockMember2025-01-012025-03-310001027838us-gaap:CostOfSalesMember2025-01-012025-03-310001027838tcmd:PerformanceBasedStockSettledRestrictedStockUnitsMember2025-01-012025-03-310001027838us-gaap:AdditionalPaidInCapitalMember2026-01-012026-03-310001027838us-gaap:AdditionalPaidInCapitalMember2025-01-012025-03-310001027838tcmd:LymphatechIncMemberus-gaap:TradeNamesMember2026-02-172026-02-170001027838tcmd:LymphatechIncMemberus-gaap:DevelopedTechnologyRightsMember2026-02-172026-02-170001027838tcmd:LymphatechIncMemberus-gaap:CustomerRelationshipsMember2026-02-172026-02-170001027838srt:MinimumMembertcmd:TwoThousandTwentySixPsuMember2026-01-012026-03-310001027838srt:MinimumMembertcmd:TwoThousandTwentyFivePsuMember2026-01-012026-03-310001027838srt:MaximumMembertcmd:TwoThousandTwentySixPsuMember2026-01-012026-03-310001027838srt:MaximumMembertcmd:TwoThousandTwentyFivePsuMember2026-01-012026-03-310001027838tcmd:TwoThousandTwentySixPsuMember2026-01-012026-03-310001027838tcmd:TwoThousandTwentyFivePsuMember2026-01-012026-03-310001027838tcmd:TimeBasedRestrictedStockUnitsRsusMembertcmd:EquityIncentivePlan2016And2025Member2026-01-012026-03-310001027838tcmd:PerformanceBasedStockSettledRestrictedStockUnitsMember2026-01-012026-03-310001027838srt:MinimumMember2026-01-012026-03-310001027838srt:MaximumMember2026-01-012026-03-310001027838tcmd:LymphedemaProductsMember2026-01-012026-03-310001027838tcmd:AirwayClearanceProductsMember2026-01-012026-03-310001027838tcmd:LymphedemaProductsMember2025-01-012025-03-310001027838tcmd:AirwayClearanceProductsMember2025-01-012025-03-310001027838tcmd:VendorOneMember2026-03-310001027838tcmd:VendorOneMember2025-03-310001027838us-gaap:IPOMember2016-08-022016-08-020001027838us-gaap:EmployeeStockMember2026-01-012026-03-310001027838us-gaap:RevolvingCreditFacilityMember2026-03-310001027838srt:MaximumMemberus-gaap:RevolvingCreditFacilityMember2026-01-012026-03-3100010278382025-07-310001027838tcmd:LymphatechIncMember2026-02-170001027838tcmd:LymphatechIncMember2026-02-172026-02-1700010278382025-01-012025-03-310001027838tcmd:CorporateHeadQuarterThirdLeaseMember2019-12-310001027838tcmd:CorporateHeadQuarterSecondLeaseMember2019-12-3100010278382025-12-3100010278382026-03-3100010278382025-10-1600010278382026-04-3000010278382026-01-012026-03-31xbrli:sharesiso4217:USDutr:sqftiso4217:USDxbrli:sharesxbrli:puretcmd:itemtcmd:segment

Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended: March 31, 2026

or

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 001-37799

Tactile Systems Technology, Inc.

(Exact name of registrant as specified in its charter)

Delaware	3701 Wayzata Blvd, Suite 300	41-1801204
(State or other jurisdiction of incorporation or organization)	Minneapolis, Minnesota 55416	(I.R.S. Employer Identification No.)
​	(Address and zip code of principal executive offices)	​
​	​	​
​	(612) 355-5100	​
​	(Registrant’s telephone number, including area code)	​

​

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, Par Value $0.001 Per Share	TCMD	The Nasdaq Stock Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes ☑  No ◻

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).  Yes ☑  No ◻

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

​ ​					​		​
Large accelerated filer	☐	​	Accelerated filer	☑	​	Non-accelerated filer	◻
​	​	​	​	​	​	​	​
Smaller reporting company	☐	​	Emerging growth company	☐	​	​	​

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ◻

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes ☐  No ☑

22,556,260 shares of common stock, par value $0.001 per share, were outstanding as of April 30, 2026.

​

Table of Contents

TABLE OF CONTENTS

	​		​
	​	PART I—FINANCIAL INFORMATION	​
​	​	​	​	​
Item 1.	​	Financial Statements	​	4
Item 2.	​	Management’s Discussion and Analysis of Financial Condition and Results of Operations	​	24
Item 3.	​	Quantitative and Qualitative Disclosures About Market Risk	​	32
Item 4.	​	Controls and Procedures	​	32
	​		​	​
	​	PART II—OTHER INFORMATION	​	​
	​		​	​
Item 1.	​	Legal Proceedings	​	32
Item 1A.	​	Risk Factors	​	32
Item 2.	​	Unregistered Sales of Equity Securities and Use of Proceeds	​	33
Item 3.	​	Defaults Upon Senior Securities	​	33
Item 4.	​	Mine Safety Disclosures	​	33
Item 5.	​	Other Information	​	33
Item 6.	​	Exhibits	​	34

​

​

2

Table of Contents

Forward-Looking Information

All statements, other than statements of historical facts, contained in this Quarterly Report on Form 10-Q, including statements regarding our business, operations and financial performance and condition, as well as our plans, objectives and expectations for our business, operations and financial performance and condition, are forward-looking statements. In some cases, you can identify forward-looking statements by the following words: “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “might,” “ongoing,” “plan,” “potential,” “predict,” “project,” “should,” “target,” “will,” “would,” or the negative of these terms or other comparable terminology, although not all forward-looking statements contain these words. Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our results, levels of activity, performance or achievements to be materially different from the information expressed or implied by the forward-looking statements in this Quarterly Report on Form 10-Q. These risks, uncertainties and other factors include, but are not limited to:

● our ability to obtain reimbursement from third-party payers for our products;

● adverse economic conditions, including inflation, rising interest rates or recession;

● the adequacy of our liquidity to pursue our business objectives;

● price increases for supplies and components;

● wage and component price inflation;

● loss of a key supplier or other supply chain disruptions;

● entry of new competitors and/or competitive products;

● compliance with and changes in federal, state and local government laws and regulations;

● technological obsolescence of, or quality issues with, our products;

● our ability to expand our business through strategic acquisitions;

● our ability to integrate acquisitions and related businesses;

● the effects of current and future U.S. and foreign trade policy and tariff actions; and

● the inability to carry out research, development and commercialization plans.

You should read the matters described in “Risk Factors” and the other cautionary statements made in our Annual Report on Form 10-K for the year ended December 31, 2025, and in subsequent Quarterly Reports on Form 10-Q. We cannot assure you that the forward-looking statements in this report will prove to be accurate and therefore you are encouraged not to place undue reliance on forward-looking statements. Actual results or events could differ materially from the plans, intentions and expectations disclosed in the forward-looking statements we make. You are urged to carefully review and consider the various disclosures made by us in this report and in other filings with the Securities and Exchange Commission (the “SEC”) that advise of the risks and factors that may affect our business. Other than as required by law, we undertake no obligation to update or revise these forward-looking statements, whether as a result of new information, future events or otherwise. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures or investments that we may make.

​

3

Table of Contents

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements

​	​	​	​	​	​	​
Tactile Systems Technology, Inc.
Condensed Consolidated Balance Sheets
(Unaudited)
​	​ ​ ​	March 31,		​ ​ ​	December 31,
(In thousands, except share and per share data)	​ ​ ​	2026		​ ​ ​	2025
Assets	​	​		​	​	​
Current assets	​	​	​	​	​	​
Cash	​	$	74,993	​	$	83,446
Accounts receivable, net	​		38,219	​		43,876
Net investment in leases	​		15,198	​		15,754
Inventories	​		16,581	​		14,025
Prepaid expenses and other current assets	​		7,851	​		8,066
Total current assets	​		152,842	​		165,167
Non-current assets	​	​	​	​	​	​
Property and equipment, net	​		5,196	​		5,117
Right of use operating lease assets	​		13,310	​		13,798
Intangible assets, net	​		42,306	​		39,167
Goodwill	​	​	39,554	​	​	31,063
Deferred income taxes	​		8,721	​		9,783
Other non-current assets	​		10,187	​		9,847
Total non-current assets	​		119,274	​		108,775
Total assets	​	$	272,116	​	$	273,942
Liabilities and Stockholders' Equity	​	​	​	​	​	​
Current liabilities	​	​	​	​	​	​
Accounts payable	​	$	7,124	​	$	4,968
Accrued payroll and related taxes	​		11,041	​		19,378
Accrued expenses	​		8,545	​		8,531
Income taxes payable	​		2,161	​		1,428
Operating lease liabilities	​		3,237	​		3,195
Other current liabilities	​		3,904	​		3,457
Total current liabilities	​		36,012	​		40,957
Non-current liabilities	​	​	​	​	​	​
Accrued warranty reserve, non-current	​		1,068	​		1,045
Income taxes payable, non-current	​		370	​		275
Operating lease liabilities, non-current	​	​	11,937	​		12,763
Other non-current liabilities	​	​	4,863	​	​	—
Total non-current liabilities	​		18,238	​		14,083
Total liabilities	​		54,250	​		55,040
​	​	​	​	​	​	​
Stockholders’ equity:	​	​	​	​	​	​
Preferred stock, $0.001 par value, 50,000,000 shares authorized; none issued and outstanding as of March 31, 2026 and December 31, 2025	​		—	​		—
Common stock, $0.001 par value, 300,000,000 shares authorized; 22,710,160 shares issued and outstanding as of March 31, 2026; 22,438,926 shares issued and outstanding as of December 31, 2025	​		22	​		22
Additional paid-in capital	​		164,667	​		163,940
Retained earnings	​		53,177	​		54,940
Total stockholders’ equity	​		217,866	​		218,902
Total liabilities and stockholders’ equity	​	$	272,116	​	$	273,942

​

​

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

​

​

4

Table of Contents

​

​	​	​	​	​	​	​
Tactile Systems Technology, Inc.
Condensed Consolidated Statements of Operations
(Unaudited)
​	​	​	​	​	​	​
​	​	​	​	​	​	​
​	​	Three Months Ended
​	​	March 31,
(In thousands, except share and per share data)	​ ​ ​	2026		​ ​ ​	2025
Revenue	​	​	​	​	​	​
Sales revenue	​	$	66,966	​	$	52,469
Rental revenue	​		8,301	​		8,799
Total revenue	​		75,267	​		61,268
Cost of revenue	​	​	​	​	​	​
Cost of sales revenue	​		15,259	​		13,891
Cost of rental revenue	​		2,394	​		2,031
Total cost of revenue	​		17,653	​		15,922
Gross profit	​	​	​	​	​	​
Gross profit - sales revenue	​		51,707	​		38,578
Gross profit - rental revenue	​		5,907	​		6,768
Gross profit	​		57,614	​		45,346
Operating expenses	​	​	​	​	​	​
Sales and marketing	​		32,732	​		27,516
Research and development	​		2,776	​		1,741
Reimbursement, general and administrative	​		23,044	​		19,998
Intangible asset amortization and earn-out	​	​	596	​	​	633
Total operating expenses	​		59,148	​		49,888
Loss from operations	​		(1,534)	​		(4,542)
Interest income	​	​	666	​	​	895
Interest expense	​	​	(28)	​	​	(424)
Loss before income taxes	​		(896)	​		(4,071)
Income tax expense (benefit)	​		867	​		(1,097)
Net loss	​	$	(1,763)	​	$	(2,974)
Net loss per common share	​	​	​	​	​	​
Basic	​	$	(0.08)	​	$	(0.13)
Diluted	​	$	(0.08)	​	$	(0.13)
Weighted-average common shares used to compute net loss per common share	​	​	​	​	​	​
Basic	​	​	22,561,053	​	​	23,710,643
Diluted	​	​	22,561,053	​	​	23,710,643

​

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

​

​

5

Table of Contents

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Tactile Systems Technology, Inc.

Condensed Consolidated Statements of Stockholders’ Equity

(Unaudited)

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Additional

​

Retained

​

​

​

​

​

Common Stock

​

Paid-In

​

Earnings

​

​

​

(In thousands, except share data)

Shares

Par Value

Capital

(Accumulated Deficit)

Total

Balances, December 31, 2025

​

22,438,926

​

$

22

​

$

163,940

​

$

54,940

​

$

218,902

Stock-based compensation

​

—

​

​

—

​

​

1,780

​

​

—

​

​

1,780

Exercise of common stock options and vesting of performance and restricted stock units

​

311,484

​

​

—

​

​

20

​

​

—

​

​

20

Share repurchases

​

(40,250)

​

​

—

​

​

(1,073)

​

​

—

​

​

(1,073)

Net loss for the period

​

—

​

​

—

​

​

—

​

​

(1,763)

​

​

(1,763)

Balances, March 31, 2026

​

22,710,160

​

$

22

​

$

164,667

​

$

53,177

​

$

217,866

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Balances, December 31, 2024

​

23,883,475

​

$

24

​

$

180,719

​

$

35,854

​

$

216,597

Stock-based compensation

​

—

​

​

—

​

​

2,066

​

​

—

​

​

2,066

Exercise of common stock options and vesting of performance and restricted stock units

​

336,599

​

​

—

​

​

10

​

​

—

​

​

10

Share repurchases

​

(635,603)

​

​

—

​

​

(10,068)

​

​

—

​

​

(10,068)

Net loss for the period

​

—

​

​

—

​

​

—

​

​

(2,974)

​

​

(2,974)

Balances, March 31, 2025

​

23,584,471

​

$

24

​

$

172,727

​

$

32,880

​

$

205,631

​

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

6

Table of Contents

​

​	​	​	​	​	​	​
Tactile Systems Technology, Inc.
Condensed Consolidated Statements of Cash Flows
(Unaudited)
​	​	​
​	​	Three Months Ended March 31,
(In thousands)	​ ​ ​	2026		​ ​ ​	2025
Cash flows from operating activities	​	​	​	​	​	​
Net loss	​	$	(1,763)	​	$	(2,974)
Adjustments to reconcile net loss to net cash (used in) provided by operating activities:	​	​	​	​	​	​
Depreciation and amortization	​	​	1,639	​	​	1,726
Deferred income taxes	​	​	24	​	​	252
Stock-based compensation expense	​	​	1,780	​	​	2,066
Loss on disposal of property and equipment and intangibles	​	​	73	​	​	5
Changes in assets and liabilities, net of acquisition:	​	​	​	​	​	​
Accounts receivable, net	​	​	5,676	​	​	9,244
Net investment in leases	​	​	556	​	​	(310)
Inventories	​	​	(2,556)	​	​	(201)
Income taxes payable	​	​	828	​	​	(1,347)
Prepaid expenses and other assets	​	​	(125)	​	​	(2,452)
Right of use operating lease assets	​	​	(296)	​	​	(267)
Accounts payable	​	​	2,171	​	​	1,387
Accrued payroll and related taxes	​	​	(8,337)	​	​	(6,994)
Accrued expenses and other liabilities	​	​	(9)	​	​	282
Net cash (used in) provided by operating activities	​	​	(339)	​	​	417
Cash flows from investing activities	​	​	​	​	​	​
Payments related to acquisition, net of cash acquired	​	​	(6,226)	​	​	—
Purchases of property and equipment	​	​	(821)	​	​	(379)
Intangible assets expenditures	​	​	(14)	​	​	(28)
Net cash used in investing activities	​	​	(7,061)	​	​	(407)
Cash flows from financing activities	​	​	​	​	​	​
Payments on note payable	​	​	—	​	​	(750)
Proceeds from exercise of common stock options	​	​	20	​	​	10
Payments for repurchases of common stock	​	​	(1,073)	​	​	(10,018)
Net cash used in financing activities	​	​	(1,053)	​	​	(10,758)
Net decrease in cash	​	​	(8,453)	​	​	(10,748)
Cash – beginning of period	​	​	83,446	​	​	94,367
Cash – end of period	​	$	74,993	​	$	83,619
​	​	​	​	​	​	​
Supplemental cash flow disclosure	​	​	​	​	​	​
Cash paid for interest	​	$	21	​	$	444
Cash paid for taxes	​	$	14	​	$	15
Accrued excise tax on stock repurchases	​	$	—	​	$	50
Capital expenditures incurred but not yet paid	​	$	63	​	$	189

​

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

​

7

Table of Contents

​

Tactile Systems Technology, Inc.

Notes to the Condensed Consolidated Financial Statements

(Unaudited)

Note 1. Nature of Business and Operations

Tactile Systems Technology, Inc. (“we,” “us,” “our,” and the “Company”) manufactures and distributes medical devices for the treatment of patients with underserved chronic diseases at home. Our lymphedema product portfolio includes Flexitouch® Plus, Entre™ Plus and Nimbl systems, which help control symptoms of lymphedema, a chronic progressive medical condition, through our direct sales force for use in the home and sell or rent them through vascular, wound and lymphedema clinics throughout the United States.

On September 8, 2021, we acquired the assets of the AffloVest airway clearance business (“AffloVest Acquisition”). AffloVest is a portable, wearable vest that treats patients with chronic respiratory conditions. We sell this device through home medical equipment and durable medical equipment (“DME”) providers throughout the United States.

On February 17, 2026, we acquired all outstanding equity interests of LymphaTech, Inc. (“LymphaTech”). LymphaTech is a medical technology company pioneering a digital, three-dimensional (the “3D”) full body measurement and monitoring platform designed specifically for lymphedema.

We were originally incorporated in Minnesota under the name Tactile Systems Technology, Inc. on January 30, 1995. During 2006, we established a merger corporation and subsequently, on July 21, 2006, merged with and into this merger corporation, resulting in our reincorporation as a Delaware corporation. The resulting corporation assumed the name Tactile Systems Technology, Inc. In September 2013, we began doing business as “Tactile Medical”.

On August 2, 2016, we closed the initial public offering of our common stock, which resulted in the sale of 4,120,000 shares of our common stock at a public offering price of $10.00 per share. We received net proceeds from the initial public offering of approximately $35.4 million, after deducting underwriting discounts and approximately $2.9 million of transaction expenses.

On February 27, 2023, we closed on a public offering of 2,875,000 shares of our common stock at a public offering price of $13.00 per share. We received net proceeds from this offering of $34.6 million after deducting underwriting discounts, commissions, and offering expenses.

Our business is affected by seasonality. In the first quarter of each year, when most patients have started a new insurance year and have not yet met their annual out-of-pocket payment obligations, we experience substantially reduced demand for our products. We typically experience higher revenue in the third and fourth quarters of the year when patients have met their annual insurance deductibles, thereby reducing their out-of-pocket costs for our products, and because patients desire to exhaust their flexible spending accounts at year end. This seasonality applies only to purchases and rentals of our products by patients covered by commercial insurance and is not relevant to Medicare, Medicaid or the Veterans Administration, as those payers either do not have plans that have declining deductibles over the course of the plan year and/or do not have plans that include patient deductibles for purchases or rentals of our products.

Note 2. Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial reporting and pursuant to the rules and regulations of the SEC. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments (including those which are normal and recurring) considered necessary for a fair presentation of the interim financial information have been included.

8

Table of Contents

The results for the three months ended March 31, 2026, are not necessarily indicative of results to be expected for the year ending December 31, 2026, or for any other interim period or for any future year. The condensed consolidated interim financial statements should be read in conjunction with the audited financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2025.

Principles of Consolidation

The accompanying unaudited condensed consolidated financial statements include the accounts of Tactile Systems Technology, Inc. and its wholly owned subsidiaries, Swelling Solutions, Inc. and LymphaTech, Inc. All intercompany balances and transactions have been eliminated in consolidation.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and to disclose contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.

Note 3. Summary of Significant Accounting Policies

Significant Accounting Policies  

There were no material changes in our significant accounting policies during the three months ended March 31, 2026. See Note 3 – “Summary of Significant Accounting Policies” to the consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2025, for information regarding our significant accounting policies.

Business Segments  

The Company operates as one operating segment. The Company's Chief Operating Decision Maker (“CODM”) is its Chief Executive Officer, who reviews financial information presented on a consolidated basis. The CODM uses consolidated net income (loss) as the measure of segment profit or loss. Significant segment expenses are those expenses reported in the Consolidated Statement of Operations. The CODM assesses performance for the segment, allocates resources and monitors budget versus actual results using consolidated revenue and net income (loss) which is reflected in the Consolidated Statement of Operations.

Accounting Pronouncements Not Yet Adopted

In September 2025, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2025-06, “Intangibles – Goodwill and Other – Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software” which modernizes the accounting for internal-use software costs to better align with the way that software is currently developed. The update removes all reference to the project stages of software development and establishes two criteria that must be met to begin capitalizing software costs. This update is effective for interim and annual periods beginning after December 15, 2027, with early adoption permitted. The Company is currently evaluating the effect that this standard will have on its consolidated financial statements and related disclosures.

In November 2024, the FASB issued ASU No. 2024-03, “Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses” which requires entities to disclose additional information about specific expense categories in the notes to financial statements on an annual and interim basis. The guidance is effective for annual periods beginning after December 15, 2026, and interim periods beginning after December 15, 2027, with early adoption permitted. The Company is currently evaluating the effect that this standard will have on its consolidated financial statements and related disclosures.

9

Table of Contents

Note 4. Inventories

Inventories consisted of the following:

​

​	​	​	​	​	​	​
(In thousands)	​ ​ ​	At March 31, 2026		​ ​ ​	At December 31, 2025
Finished goods	​	$	5,528	​	$	5,280
Component parts and work-in-process	​		11,053	​		8,745
Total inventories	​	$	16,581	​	$	14,025

​

​

​

Note 5. Goodwill and Intangible Assets

Goodwill

In the third quarter of fiscal 2021, we completed the AffloVest Acquisition. The purchase price of the AffloVest product line exceeded the net acquisition-date estimated fair value amounts of the identifiable assets acquired and the liabilities assumed by $31.1 million, which was assigned to goodwill. In the first quarter of fiscal 2026, we completed the acquisition of LymphaTech. The purchase price of LymphaTech exceeded the net acquisition-date estimated fair value amounts of the identifiable assets acquired and the liabilities assumed by $8.5 million, which was assigned to goodwill.

The changes in the carrying amount of goodwill were as follows:

​

​	​	​	​
(In thousands)	​	​
Goodwill at December 31, 2025	​	$	31,063
Addition for acquisition	​	​	8,491
Goodwill at March 31, 2026	​	$	39,554

​

Intangible Assets

​

Our patents and other intangible assets are summarized as follows:

​

​	​	​	​	​	​	​	​	​	​	​	​
​	​	Weighted-	​	At March 31, 2026
​	​	Average	​	Gross		​	​		​	​
​	​	Amortization	​	Carrying		​	Accumulated		​	Net
(In thousands)	​ ​ ​	Period	​	Amount		​	Amortization		​	Amount
Definite-lived intangible assets:	​	​	​	​	​	​	​	​	​	​	​
Patents	​	11 years	​	$	1,099	​	$	338	​	$	761
Tradenames	​	10 years	​	​	370	​	​	—	​	​	370
Customer relationships	​	8 years	​	​	31,540	​	​	10,877	​	​	20,663
Developed technology	​	7 years	​	​	16,200	​	​	5,390	​	​	10,810
Subtotal	​	​	​	​	49,209	​	​	16,605	​	​	32,604
Unamortized intangible assets:	​	​	​	​	​	​	​	​	​	​	​
Tradenames	​	​	​	​	9,500	​	​	—	​	​	9,500
Patents pending	​	​	​	​	202	​	​	—	​	​	202
Total intangible assets	​	​	​	$	58,911	​	$	16,605	​	$	42,306

​

​

10

Table of Contents

​

​	​	​	​	​	​	​	​	​	​	​	​
​	​	Weighted-	​	At December 31, 2025
​	​	Average	​	Gross		​	​		​	​
​	​	Amortization	​	Carrying		​	Accumulated		​	Net
(In thousands)	​ ​ ​	Period	​	Amount		​	Amortization		​	Amount
Definite-lived intangible assets:	​	​	​	​	​	​	​	​	​	​	​
Patents	​	11 years	​	$	1,083	​	$	318	​	$	765
Customer relationships	​	9 years	​	​	31,000	​	​	10,280	​	​	20,720
Developed technology	​	7 years	​	​	13,000	​	​	5,095	​	​	7,905
Subtotal	​	​	​	​	45,083	​	​	15,693	​	​	29,390
Unamortized intangible assets:	​	​	​	​	​	​	​	​	​	​	​
Tradenames	​	​	​	​	9,500	​	​	—	​	​	9,500
Patents pending	​	​	​	​	277	​	​	—	​	​	277
Total intangible assets	​	​	​	$	54,860	​	$	15,693	​	$	39,167

​

Amortization expense was $0.9 million and $1.0 million for the three months ended March 31, 2026 and 2025, respectively, of which $0.3 million in each of the three months ended March 31, 2026 and 2025, was recorded in cost of sales revenue. Future amortization expenses are expected as follows:

​

​	​	​	​
(In thousands)	​	​	​
2026 (April 1 - December 31)	​ ​ ​	$	3,152
2027	​	​	4,107
2028	​		4,106
2029	​		4,103
2030	​		4,098
Thereafter	​		13,038
Total	​	$	32,604

​

In the third quarter of 2025, we performed our annual goodwill impairment test utilizing both the qualitative and quantitative approach described in FASB ASU No. 2021-03, “Intangibles—Goodwill and Other (Topic 350) – Accounting Alternative for Evaluating Triggering Events.” Based on the testing using the qualitative approach, it was determined that it was not more likely than not that the fair value of the reporting unit was less than the carrying value. As a result, it was not deemed necessary to proceed to the quantitative test and no impairment was recognized.

Note 6. Accrued Expenses

Accrued expenses consisted of the following:

​

​	​	​	​	​	​	​
(In thousands)	​ ​ ​	At March 31, 2026		​ ​ ​	At December 31, 2025
Legal and consulting	​	​	2,267	​	​	1,285
Sales and use tax	​	$	1,646	​	$	1,837
Travel	​	​	1,471	​	​	1,424
Warranty	​	​	1,185	​	​	1,285
In-transit inventory	​	​	1,175	​	​	1,931
Clinical studies	​	​	15	​	​	64
Other	​		786	​		705
Total	​	$	8,545	​	$	8,531

​

​

​

11

Table of Contents

Note 7. Warranty Reserves

The activity in the warranty reserve during and as of the end of the reporting periods presented was as follows:

​

​	​	​	​	​	​	​
​	​	Three Months Ended
​	​	March 31,
(In thousands)	​ ​ ​	2026		​ ​ ​	2025
Beginning balance	​	$	2,330	​	$	2,993
Warranty provision	​		511	​		480
Processed warranty claims	​		(588)	​		(699)
Ending balance	​	$	2,253	​	$	2,774
​	​	​	​	​	​	​
Accrued warranty reserve, current	​	$	1,185	​	$	1,573
Accrued warranty reserve, non-current	​	​	1,068	​	​	1,201
Total accrued warranty reserve	​	$	2,253	​	$	2,774

​

​

Note 8. Credit Agreement

On July 31, 2025, we entered into an Amended and Restated Credit Agreement with the lenders from time to time party thereto, and Wells Fargo Bank, National Association, as administrative agent (the “2025 Credit Agreement”), which amended and restated the credit agreement that we had in place prior to that time (the “Prior Credit Agreement”). The 2025 Credit Agreement provides for a $40.0 million revolving credit facility with a scheduled maturity date of July 31, 2028.

In connection with the entry into the 2025 Credit Agreement, on July 31, 2025, we paid off the full amount outstanding under the term loan that was outstanding under the Prior Credit Agreement, which was $24.4 million (inclusive of principal and interest), using cash on hand. The term loan had been reflected on our condensed consolidated financial statements as a note payable. The 2025 Credit Agreement removed the provisions from the Prior Credit Agreement related to a committed term loan, such that the only term loan related provisions in the 2025 Credit Agreement relate to our ability to request uncommitted incremental term loan facilities and/or an increase in the amount of the revolving loans available under the 2025 Credit Agreement in an amount not to exceed $25.0 million in the aggregate, subject to the satisfaction of certain conditions.

Amounts drawn under the revolving credit facility bear interest, at our option, at a rate equal to (a) the highest of (i) the prime rate, (ii) the federal funds rate plus 0.50% and (iii) Adjusted Term SOFR (defined as term Secured Overnight Financing Rate) for a one-month tenor plus 1% (the “Base Rate”) plus an applicable margin or (b) Adjusted Term SOFR for an interest period of one, three or six months, at our option, plus the applicable margin. The applicable margin is 0.75% to 1.75% on loans bearing interest at the Base Rate and 1.75% to 2.75% on loans bearing interest at Adjusted Term SOFR, in each case depending on our consolidated total leverage ratio.

The 2025 Credit Agreement provides for a commitment fee at a rate per annum ranging from 0.125% to 0.250% for the unused portion of the revolving credit facility, depending on our consolidated total leverage ratio.

The 2025 Credit Agreement includes financial covenants consisting of a maximum consolidated total leverage ratio covenant and a minimum fixed charge coverage ratio covenant. In addition, the 2025 Credit Agreement includes customary negative covenants, including a restricted payment covenant that permits the Company to repurchase shares of its common stock and make certain other payments, as long as the Company is not in default under the 2025 Credit Agreement, has a consolidated total leverage ratio of no greater than 1.75 to 1.00, and has liquidity of not less than $30.0 million, in each case both before and after giving effect to such stock repurchases or the making of such payments. As of March 31, 2026, we were in compliance with all covenants under the 2025 Credit Agreement.

12

Table of Contents

Our obligations under the 2025 Credit Agreement are secured by a security interest in substantially all of our and our subsidiary’s assets and are also guaranteed by our subsidiary.

As of March 31, 2026, we had no outstanding borrowings under the 2025 Credit Agreement.

Note 9. Commitments and Contingencies

Lease Obligations

We lease property and equipment under operating leases, typically with terms greater than 12 months, and determine if an arrangement contains a lease at inception. In general, an arrangement contains a lease if there is an identified asset and we have the right to direct the use of and obtain substantially all of the economic benefit from the use of the identified asset. We record an operating lease liability at the present value of lease payments over the lease term on the commencement date. The related right of use (“ROU”) operating lease asset reflects rental escalation clauses, as well as renewal options and/or termination options. The exercise of lease renewal and/or termination options are at our discretion and are included in the determination of the lease term and lease payment obligations when it is deemed reasonably certain that the option will be exercised. When available, we use the rate implicit in the lease to discount lease payments to present value; however, certain leases do not provide a readily determinable implicit rate. Therefore, we must estimate our incremental borrowing rate to discount the lease payments based on information available at lease commencement.

We classify our leases as buildings, vehicles or computer and office equipment and do not separate lease and non-lease components of contracts for any of the aforementioned classifications. In accordance with applicable guidance, we do not record leases with terms that are less than one year on the Condensed Consolidated Balance Sheets.

None of our lease agreements contain material restrictive covenants or residual value guarantees.

Buildings

We lease certain office and warehouse space at various locations in the United States where we provide services. These leases are typically greater than one year with fixed, escalating rents over the noncancelable terms and, therefore, ROU operating lease assets and operating lease liabilities are recorded on the Condensed Consolidated Balance Sheets, with rent expense recognized on a straight-line basis over the term of the lease. The remaining lease terms vary from approximately one to five years as of March 31, 2026.

We entered into a lease (“initial lease”) in October 2018, for approximately 80,000 square feet of office space for our new corporate headquarters in Minneapolis, Minnesota. In December 2018, we amended the initial lease to add approximately 29,000 square feet of additional office space, which is accounted for as a separate lease (“second lease”) in accordance with ASU No. 2016-02, “Leases” (Topic 842) (“ASC 842”). In December 2019, we further amended the lease which extended the expiration date of the initial lease, extended the expiration date of and added approximately 4,000 square feet to the second lease, as well as added approximately 37,000 square feet of additional office space, accounted for as a separate lease (“third lease”) in accordance with ASC 842. The portion of the space covered under the initial lease was placed in service in September 2019. The portion of the space covered under the second lease commenced in September 2020. Finally, the portion of the space covered under the third lease commenced in September 2021. The three portions were recognized as an operating lease and included in the ROU operating lease assets and operating lease liabilities on the Condensed Consolidated Balance Sheets.

Computer and Office Equipment

We also have operating lease agreements for certain computer and office equipment. The remaining lease terms as of March 31, 2026, ranged from less than one year to approximately three years with fixed monthly payments that are included in the ROU operating lease assets and operating lease liabilities. The leases provide an option to purchase the related equipment at fair market value at the end of the lease. The

13

Table of Contents

leases will automatically renew as a month-to-month rental at the end of the lease if the equipment is not purchased or returned.

Lease Position, Undiscounted Cash Flow and Supplemental Information

The table below presents information related to our ROU operating lease assets and operating lease liabilities that we have recorded:

​

​	​	​	​	​	​	​
(In thousands)	​ ​ ​	At March 31, 2026		​ ​ ​	At December 31, 2025
Right of use operating lease assets	​	$	13,310	​	$	13,798
​	​	​	​	​	​	​
Operating lease liabilities:	​	​	​	​	​	​
Current	​	$	3,237	​	$	3,195
Non-current	​		11,937	​		12,763
Total	​	$	15,174	​	$	15,958
​	​	​	​	​	​	​
Operating leases:	​	​	​	​	​	​
Weighted average remaining lease term	​		4.7 years	​	​	4.9 years
Weighted average discount rate	​	​	4.3%	​	​	4.3%
​	​	​	​	​	​	​
​	​	Three Months Ended March 31,
​	​	2026		​	2025
Supplemental cash flow information for our operating leases:	​	​	​	​	​	​
Cash paid for operating lease liabilities	​	$	951	​	$	925

​

The table below reconciles the undiscounted cash flows for the periods presented to the operating lease liabilities recorded on the Condensed Consolidated Balance Sheet for the periods presented:

​

​	​	​	​
(In thousands)	​	​	​
2026 (April 1 - December 31)	​	$	2,857
2027	​	​	3,311
2028	​		3,275
2029	​		3,310
2030	​		3,340
Thereafter	​		352
Total minimum lease payments	​	​	16,445
Less: Amount of lease payments representing interest	​	​	(1,271)
Present value of future minimum lease payments	​	​	15,174
Less: Current obligations under operating lease liabilities	​	​	(3,237)
Non-current obligations under operating lease liabilities	​	$	11,937

​

Operating lease costs were $0.9 million for each of the three months ended March 31, 2026 and 2025.

Major Vendors

We had purchases from one vendor that accounted for 13% of our total purchases for each of the three months ended March 31, 2026 and 2025.

Purchase Commitments

We issued purchase orders prior to March 31, 2026, totaling $35.6 million for goods that we expect to receive within the next year.

14

Table of Contents

Retirement Plan

We maintain a 401(k) retirement plan for our employees in which eligible employees can contribute a percentage of their pre-tax compensation. We recorded an expense related to our discretionary contributions to the 401(k) plan of $0.8 million and $0.7 million for the three months ended March 31, 2026 and 2025, respectively.

Legal Proceedings

From time to time, we are subject to various claims and legal proceedings arising in the ordinary course of business. Regardless of outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources and other factors.

On October 25, 2024, the United States District Court, District of Massachusetts (Boston) unsealed two qui tam complaints against us, and we were served with these complaints on January 14, 2025, and January 21, 2025. The first complaint is captioned United States ex. rel. Benjaman Scarborough vs. Tactile Systems Technology, Inc., Case No. 1:21-cv-10813-IT, and was filed under seal on May 17, 2021, on behalf of the United States by a former employee (the “Scarborough Complaint”). The Scarborough Complaint alleges that we submitted false claims and made false statements in connection with the Medicare programs, in violation of the Federal False Claims Act. The second complaint is captioned United States ex. rel. Jackie Gorham, an individual, and Dustin Gast, an individual, vs. Tactile Systems Technology, Inc. Case No. 1:21-cv-11809-IT, and was filed under seal on September 1, 2021, on behalf of the United States by two former employees (the “Gorham Complaint”). The Gorham Complaint alleges that we submitted false claims and made false statements in connection with the Medicare, Medicare Advantage plans, Medicaid and other government payers, in violation of the Federal False Claims Act and submitted false claims resulting from kickbacks in violation of the Federal False Claims Act and the Federal Anti-Kickback Statute. Both complaints seek damages, statutory penalties, attorneys’ fees, and costs. On February 24, 2025, the parties (the relators under both complaints and the Company) filed a joint motion requesting that both matters (hereinafter the “Actions”) be stayed until November 25, 2025, to provide time for the government to review and assess sample claims for the purpose of assessing the allegations. On February 25, 2025, the court granted the motion and issued orders that stayed the Actions until November 25, 2025. By joint motions of the parties granted by the court, the stay was extended until March 25, 2026, and subsequently until June 23, 2026.

On April 14, 2026, the affected parties (government, relators, and the Company) reached an agreement in principle to settle the Actions for an aggregate payment by the Company of approximately $0.6 million, plus relators’ attorneys’ fees and costs. In connection with the agreement in principle, the Company recorded an accrual of approximately $1.0 million, inclusive of the proposed settlement amount and estimated relators’ attorneys’ fees and related costs, which is reflected in accrued expenses on the Condensed Consolidated Balance Sheet as of March 31, 2026. The accrual amount is based on several factors, conditions, and estimates, and the ultimate resolution of the Actions is subject to negotiation of final terms, approval by the parties and the execution of a definitive settlement agreement. If no settlement is approved, we intend to continue to defend these Actions as they proceed, but we cannot predict with any degree of certainty their ultimate resolution or determine whether, or to what extent, any loss with respect to these Actions may exceed the amount that we have accrued.

15

Table of Contents

Note 10. Stockholders' Equity

Share Repurchase Program

On October 16, 2025, our Board of Directors authorized a new program to repurchase up to $25.0 million of our common stock, following the prior repurchase authorization that had been fully utilized. Under the new program, purchases may be made from time to time in the open market, in privately negotiated purchases, or both. The timing and number of shares to be purchased will be based on the price of the Company's common stock, general business and market conditions and other investment considerations and factors. This share repurchase program expires on November 3, 2027. The program does not obligate the Company to repurchase any specific number of shares and may be suspended or discontinued at any time without prior notice.

We made repurchases under the applicable share repurchase program in the following periods, which include the market price of the shares, commissions and excise tax:

​

​	​	​	​	​	​	​
​	​	​	Three Months Ended
​	​	​	March 31,
(In thousands, except share and per share data)	​	​	2026	​	​	2025
Number of shares repurchased	​	​	40,250	​	​	635,603
Total shares repurchased cost	​	$	1,073	​	$	10,068
Average total cost per repurchased share	​	$	26.67	​	$	15.76

​

As of March 31, 2026, approximately $23.9 million of authorized share repurchases were remaining under the share repurchase program. We expect that repurchases will be funded through available cash balances and ongoing business operating cash generation. Shares of common stock repurchased under the program are immediately retired. Repurchases under our share repurchase program reduce the weighted-average number of shares of common stock outstanding for basic and diluted earnings per share calculations.

Stock-Based Compensation

On May 7, 2025, our stockholders approved the Tactile Systems Technology, Inc. 2025 Equity Incentive Plan (the “2025 Plan”), which authorizes us to grant stock options, stock appreciation rights, restricted stock, stock units and other stock-based awards to employees, non-employee directors and certain consultants and advisors. The 2025 Plan provides for the issuance of up to 1,850,000 shares of our common stock, plus the number of shares subject to any award under the 2016 Equity Incentive Plan (the “2016 Plan”) that was outstanding on May 7, 2025 and that later expires, is cancelled or forfeited, is settled for cash or otherwise does not result in the issuance of all of the shares subject to such award. As of March 31, 2026, 1,503,952 shares were available for future grant pursuant to the 2025 Plan.

Following our stockholders’ approval of the 2025 Plan on May 7, 2025, no additional grants will be made under the 2016 Plan. However, outstanding awards under the 2016 Plan will continue to be governed by their respective original terms.

We recorded stock-based compensation expense of $1.8 million and $2.1 million for the three months ended March 31, 2026 and 2025, respectively. This expense was allocated as follows:

​

​	​	​	​	​	​	​
​	​	Three Months Ended
​	​	March 31,
(In thousands)	​ ​ ​	2026		​ ​ ​	2025
Cost of revenue	​	$	90	​	$	99
Sales and marketing expenses	​	​	447	​	​	503
Research and development expenses	​	​	44	​	​	33
Reimbursement, general and administrative expenses	​	​	1,199	​	​	1,431
Total stock-based compensation expense	​	$	1,780	​	$	2,066

​

16

Table of Contents

Stock Options

Stock options issued to participants other than non-employees typically vest over three or four years and typically have a contractual term of seven or ten years. No stock-based compensation expense was included in the Condensed Consolidated Statements of Operations for stock options for each of the three months ended March 31, 2026 and 2025. As of March 31, 2026, there was no unrecognized pre-tax stock option expense under our equity compensation plans.

Our stock option activity for the three months ended March 31, 2026, was as follows:

​

​	​	​	​	​	​	​	​	​	​	​
​	​ ​ ​	​	​	Weighted-		​	Weighted-	​	​	​
​	​	​	​	Average		​	Average	​	Aggregate
​	​	Options	​	Exercise Price		​	Remaining	​	Intrinsic
(In thousands except options and per share data)	​	Outstanding	​	Per Share (1)		​	Contractual Life	​	Value (2)
Balance at December 31, 2025	​	225,448	​	$	43.87	​	1.8 years	​	$	316
Exercised	​	(2,127)	​	​	10.00	​	​	​	$	​
Cancelled/Expired	​	(7,453)	​	​	59.43	​	​	​	​	​
Balance at March 31, 2026	​	215,868	​	$	43.67	​	1.6 years	​	$	161
​	​	​	​	​	​	​	​	​	​	​
Options exercisable at March 31, 2026	​	215,868	​	$	43.87	​	1.6 years	​	$	161

​

(1) The exercise price of each option granted during the periods shown was equal to the market price of the underlying stock on the date of grant.

(2) The aggregate intrinsic value of options exercised represents the difference between the exercise price of the option and the closing stock price of our common stock on the date of exercise. The aggregate intrinsic value of options outstanding represents the difference between the exercise price of the option and the closing stock price of our common stock on the last trading day of the period.

Options exercisable of 366,517 as of March 31, 2025, had a weighted-average exercise price of $41.49 per share.

Time-Based Restricted Stock Units

We have granted time-based restricted stock units to certain participants under the 2016 Plan and the 2025 Plan that are stock-settled with common shares. Time-based restricted stock units vest over one to three years. Stock-based compensation expense included in the Condensed Consolidated Statements of Operations for time-based restricted stock units was $1.3 million and $1.5 million for the three months ended March 31, 2026 and 2025, respectively. As of March 31, 2026, there was approximately $10.4 million of total unrecognized pre-tax compensation expense related to outstanding time-based restricted stock units that is expected to be recognized over a weighted-average period of 2.3 years.

Our time-based restricted stock unit activity for the three months ended March 31, 2026, was as follows:

​

​	​	​	​	​	​	​	​	​
​	​	​	​	Weighted-		​	​	​
​	​ ​ ​	​	​ ​ ​	Average Grant		​ ​ ​	Aggregate
​	​	Units	​	Date Fair Value		​	Intrinsic
(In thousands except unit and per unit data)	​	Outstanding	​	Per Unit		​	Value (1)
Balance at December 31, 2025	​	718,621	​	$	13.92	​	$	20,840
Granted	​	212,336	​	​	28.25	​	​	​
Vested	​	(213,980)	​	​	14.68	​	​	​
Cancelled	​	(26,302)	​	​	14.60	​	​	​
Balance at March 31, 2026	​	690,675	​	$	18.07	​	$	18,047

​

(1) The aggregate intrinsic value of restricted stock units outstanding was based on our closing stock price on the last trading day of the period.

17

Table of Contents

Performance-Based Restricted Stock Units

We have granted performance-based restricted stock units (“PSUs”) to certain participants. These PSUs have both performance-based and time-based vesting features. The PSUs granted in 2025 have three separate performance periods, and one-third of each grant will be earned if and to the extent performance goals based on revenue and adjusted EBITDA margin are achieved in 2025 (ranging from 25% to 175% of target), one-third will be earned if and to the extent performance goals based on revenue change and adjusted EBITDA change are achieved in 2026 (ranging from 25% to 175% of target), and one-third will be earned if and to the extent performance goals based on revenue change and adjusted EBITDA change are achieved in 2027 (ranging from 25% to 175% of target). The PSUs granted in 2026 have three separate performance periods, and one-third of each grant will be earned if and to the extent performance goals based on revenue and adjusted EBITDA margin are achieved in 2026 (ranging from 25% to 175% of target), one-third will be earned if and to the extent performance goals based on revenue change and adjusted EBITDA change are achieved in 2027 (ranging from 25% to 175% of target), and one-third will be earned if and to the extent performance goals based on revenue change and adjusted EBITDA change are achieved in 2028 (ranging from 25% to 175% of target). All earned and vested PSUs will be settled in shares of common stock.

Stock-based compensation expense recognized for PSUs was $0.3 million and $0.4 million for the three months ended March 31, 2026 and 2025, respectively. As of March 31, 2026, there was approximately $4.0 million of total unrecognized pre-tax compensation expense related to outstanding PSUs that is expected to be recognized over a weighted average period of 2.5 years.

Our PSU activity for the three months ended March 31, 2026, was as follows:

​

​	​	​	​	​	​	​	​	​
​	​	​	​	Weighted-		​	​	​
​	​ ​ ​	​	​ ​ ​	Average Grant		​ ​ ​	Aggregate
​	​	PSUs	​	Date Fair Value		​	Intrinsic
(In thousands except unit and per unit data)	​	Outstanding	​	Per Unit		​	Value (1)
Balance at December 31, 2025	​	310,296	​	$	14.76	​	$	8,999
Granted	​	108,846	​	​	28.25	​	​	​
Adjusted	​	12,705	​	​	​	​	​	​
Vested	​	(95,377)	​	​	​	​	​	​
Balance at March 31, 2026	​	336,470	​	$	19.33	​	$	8,792

​

(1) The aggregate intrinsic value of PSUs outstanding was based on our closing stock price on the last trading day of the period.

Employee Stock Purchase Plan

Our employee stock purchase plan (“ESPP”), which was approved by our Board of Directors on April 27, 2016, and by our stockholders on June 20, 2016, allows participating employees to purchase shares of our common stock at a discount through payroll deductions. The ESPP is available to all of our employees and employees of participating subsidiaries. Participating employees may purchase common stock, on a voluntary after-tax basis, at a price equal to 85% of the lower of the closing market price per share of our common stock on the first or last trading day of each stock purchase period. The ESPP provides for six-month purchase periods, beginning on May 16 and November 16 of each calendar year.

A total of 1,600,000 shares of common stock was initially reserved for issuance under the ESPP. This share reserve was automatically supplemented each January 1, commencing in 2017 and ending on and including January 1, 2026, by an amount equal to the least of (a) 1% of the shares of our common stock outstanding on the immediately preceding December 31, (b) 500,000 shares or (c) such lesser amount as our Board of Directors may determine. Pursuant to the automatic increase feature of the ESPP, 224,381 shares were added as available for issuance thereunder on January 1, 2026 and 240,780 shares were added as available for issuance thereunder on January 1, 2025. As of March 31, 2026, 1,745,124 shares were available for future issuance under the ESPP. We recognized stock-based compensation expense associated with the ESPP of $0.2 million for each of the three months ended March 31, 2026 and 2025.

18

Table of Contents

Note 11. Revenue

We derive our revenue from the sale and rental of our products to our customers in the United States. The following table presents our revenue, inclusive of sales and rental revenue, disaggregated by product line:

​

​	​	​	​	​	​	​
​	​	Three Months Ended
​	​	March 31,
(In thousands)	​ ​ ​	2026		​	2025
Revenue	​	​	​	​	​	​
Lymphedema products	​	$	62,221	​	$	50,554
Airway clearance products	​	​	13,046	​	​	10,714
Total	​	$	75,267	​	$	61,268
​	​	​	​	​	​	​
Percentage of total revenue	​	​	​	​	​	​
Lymphedema products	​		83%	​		83%
Airway clearance products	​	​	17%	​	​	17%
Total	​		100%	​		100%

​

Our revenue by channel, inclusive of sales and rental revenue, for the three months ended March 31, 2026 and 2025, are summarized in the following table:

​

​	​	​	​	​	​	​
​	​	Three Months Ended
​	​	March 31,
(In thousands)	​ ​ ​	2026		​	2025
Private insurers and other payers	​	$	34,974	​	$	28,943
Veterans Administration	​	​	6,203	​	​	6,537
Medicare	​	​	21,044	​	​	15,074
Durable medical equipment distributors	​	​	13,046	​	​	10,714
Total	​	$	75,267	​	$	61,268

​

Our rental revenue is derived from rent-to-purchase arrangements that typically range from three to ten months. As title transfers to the patient, with whom we have the contract, upon the termination of the lease term and because collectability is probable, under ASC 842, these are recognized as sales-type leases. Each rental agreement contains two components, the controller and related garments, both of which are interdependent and recognized as one lease component.

The revenue and associated cost of revenue of sales-type leases are recognized on the lease commencement date and a net investment in leases is recorded on the Condensed Consolidated Balance Sheets. We bill the patients’ insurance payers monthly over the duration of the rental term. We record the net investment in leases and recognize revenue upon commencement of the lease in the amount of the expected consideration to be received through the monthly payments. Similar to our sales revenue, the transaction price is impacted by multiple factors, including the terms and conditions contracted by third-party payers. As the rental contract resides with the patients, we have elected the portfolio approach, at the payer level, to determine the expected consideration, which considers the impact of early terminations. While the contract is with the patient, in certain circumstances, the third-party payer elects an initial rental period with an option to extend. We assess the likelihood of extending the lease at the onset of the lease to determine if the option is reasonably certain to be exercised. As the lease is short-term in nature, we anticipate collection of substantially all of the net investment within the first year of the lease agreement. Completion of these payments represents the fair market value of the equipment, and as such, interest income is not applicable.

19

Table of Contents

Rental revenue for each of the three months ended March 31, 2026 and 2025, was primarily from private insurers and Medicare. Sales-type lease revenue and the associated cost of revenue for the three months ended March 31, 2026 and 2025, was:

​

​	​	​	​	​	​	​	​
​	​	Three Months Ended					​
​	​	March 31,					​
(In thousands)	​	2026		​	2025		​
Sales-type lease revenue	​	$	8,301	​	$	8,799	​
Cost of sales-type lease revenue	​		2,394	​		2,031	​
Gross profit	​	$	5,907	​	$	6,768	​

​

Note 12. Income Taxes

We record our interim provision for income taxes by applying our estimated annual effective tax rate to our year-to-date pre-tax income and adjusting for discrete tax items recorded in the period. Deferred income taxes result from temporary differences between the reporting of amounts for financial statement purposes and income tax purposes. These differences relate primarily to different methods used for income tax reporting purposes, including for depreciation and amortization, warranty and vacation accruals, and deductions related to allowances for doubtful accounts receivable and inventory reserves. Our provision for income taxes included current federal and state income tax expense, as well as deferred federal and state income tax expense.

The effective tax rate for the three months ended March 31, 2026 was an expense of 96.8%, compared to a benefit of 26.9% for the three months ended March 31, 2025. The primary driver of the change in the Company’s effective tax rate was attributable to the Company recording more expense related to stock-based compensation discrete items when compared to the prior year period. We recorded an income tax expense of $0.9 million and an income tax benefit of $1.1 million for the three months ended March 31, 2026 and 2025, respectively.

We recognize the financial statement benefit of a tax position only after determining that the relevant tax authority is more-likely-than-not to sustain the position following an audit. For tax positions meeting the more-likely-than-not threshold, the amount recognized in the condensed consolidated financial statements is the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement with the relevant tax authority.

The Company currently is not under income tax examination in any jurisdictions.

Note 13. Net Loss Per Share

The following table sets forth the computation of our basic and diluted net loss per share:

​

​	​	​	​	​	​	​
​	​	Three Months Ended
​	​	March 31,
(In thousands, except share and per share data)	​ ​ ​	2026		​ ​ ​	2025
Net loss	​	$	(1,763)	​	$	(2,974)
Weighted-average shares outstanding	​	​	22,561,053	​	​	23,710,643
Weighted-average shares used to compute diluted net loss per share	​	​	22,561,053	​	​	23,710,643
Net loss per share - Basic	​	$	(0.08)	​	$	(0.13)
Net loss per share - Diluted	​	$	(0.08)	​	$	(0.13)

​

20

Table of Contents

The following common stock equivalents were excluded from the computation of diluted net loss per share for the periods presented because including them would have been anti-dilutive:

​

​	​	​	​	​
​	​	Three Months Ended
​	​	March 31,
​	​ ​ ​	2026	​ ​ ​	2025
Restricted stock units	​	690,675	​	811,503
Common stock options	​	215,868	​	374,398
Performance stock units	​	336,470	​	286,821
Employee stock purchase plan	​	43,450	​	72,280
Total	​	1,286,463	​	1,545,002

​

Note 14. Fair Value Measurements

We determine the fair value of our assets and liabilities based on the exchange price that would be received for an asset or paid to transfer a liability (exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value maximize the use of observable inputs and minimize the use of unobservable inputs. We use a fair value hierarchy with three levels of inputs, of which the first two are considered observable and the last unobservable, to measure fair value. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1). The next highest priority is based on quoted prices for similar assets or liabilities in active markets or quoted prices for identical or similar assets or liabilities in non-active markets or other observable inputs (Level 2). The lowest priority is given to unobservable inputs (Level 3).

​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

The carrying amounts of financial instruments such as accounts receivable, other current assets, accounts payable, accrued expenses and other current liabilities approximate their related fair values due to the short-term maturities of these items. Non-financial assets, such as equipment and leasehold improvements, and intangible assets are subject to non-recurring fair value measurements if they are deemed impaired.

The following table provides information regarding the fair value measurement of our contingent consideration liability as of March 31, 2026, according to the three-level fair value hierarchy:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

At March 31, 2026

​

​ ​ ​

Quoted Prices

​ ​ ​

​

​

​ ​ ​

​

​

​ ​ ​

​

​

​

​

in Active

​

Significant

​

​

​

​

​

​

​

​

Markets for

​

Other

​

Significant

​

​

​

​

Identical

​

Observable

​

Unobservable

​

​

​

​

Assets

​

Inputs

​

Inputs

​

​

(In thousands)

​

(Level 1)

​

(Level 2)

​

(Level 3)

​

Total

Recurring Fair Value Measurements:

​

​

​

​

​

​

​

​

​

​

​

​

Contingent Consideration

​

$

—

​

—

​

$

4,863

​

$

4,863

Total

​

$

—

​

$

—

​

$

4,863

​

$

4,863

​

See Note 15 – “Business Combination” for additional information regarding this contingent consideration liability.

21

Table of Contents

Note 15. Business Combination

On February 17, 2026, we acquired all outstanding equity interests of LymphaTech pursuant to the Stock Purchase Agreement, dated as of February 17, 2026. LymphaTech is a medical technology company pioneering a digital, three-dimensional (the “3D”) full body measurement and monitoring platform designed specifically for lymphedema. We acquired LymphaTech to further expand our position as a leader in treating lymphedema by extending our solutions across the care continuum, including earlier identification, assessment, and long‑term monitoring.

The total purchase consideration for LymphaTech payable at closing, on a cash-free, debt-free basis, was approximately $7.2 million. Each holder of issued and outstanding shares of LymphaTech capital stock received their pro rata portion (based on their relative ownership percentage) of the consideration paid at closing, less $0.2 million, which was utilized to pay the sellers’ transaction expenses. The other component of purchase consideration is contingent consideration based on the achievement of non-financial milestones after closing, which contingent consideration had an estimated fair value of approximately $4.9 million as of the acquisition date.

The acquisition date fair value of contingent consideration was measured using the income approach, specifically the probability weighted expected return method for the milestone payments. We will remeasure the fair value of the contingent liability on a quarterly basis. Estimates and assumptions used in the valuation include the probability of achieving these non-financial milestones, the expected timing of achieving these milestones, and a discount rate. These unobservable inputs represent a Level 3 measurement because they are supported by little or no market activity and reflect our own assumptions in measuring fair value. Changes in the fair value subsequent to the acquisition date will be recognized in our consolidated statements of operations.

The acquisition of LymphaTech was funded by cash on hand. We recognized transaction costs of $0.8 million in the three months ended March 31, 2026. These costs are reported in Reimbursement, general and administrative expenses in our Condensed Consolidated Statements of Operations. Transaction costs include, but are not limited to, investment banker, advisory, legal, and other professional fees.

The following table reflects the allocation of the purchase consideration between the amount paid at closing and the contingent consideration:

​

​	​	​	​
(In thousands)	​ ​ ​	Purchase Consideration
Cash consideration payments to LymphaTech stockholders	​	$	7,230
Estimated fair value of contingent consideration	​	​	4,863
Total purchase consideration	​	$	12,093

​

Fair Value of Assets Acquired and Liabilities Assumed

The acquisition of LymphaTech has been accounted for using the acquisition method of accounting in accordance with ASC 805, Business Combinations, with the Company treated as the accounting acquirer, which requires, among other things, that the assets acquired and liabilities assumed be recognized at their fair value on the acquisition date. Acquisition accounting is dependent upon certain valuations and other studies that have yet to commence or progress to a stage where there is sufficient information for a definitive measurement. The process for estimating the fair values of identifiable intangible assets and certain tangible assets and assumed liabilities requires the use of judgment in determining the appropriate assumptions and estimates.

The table below presents the preliminary estimated fair values of assets acquired and liabilities assumed on the acquisition date based on valuations and management estimates. Fair value estimates are based on a complex series of judgments about future events and uncertainties and rely heavily on estimates and assumptions. The judgments used to determine the estimated fair value assigned to each class of assets acquired and liabilities assumed, as well as asset lives, can materially impact our results of operations. We are still finalizing the allocation of the purchase price, therefore, the fair value estimates assigned to intangible

22

Table of Contents

assets, goodwill and the related tax impacts of the acquisition, among other items, are subject to change as additional information is received to complete our analysis and certain tax returns are finalized. As a result, the preliminary estimates may be revised during the measurement period, which is 12 months following the acquisition date. These differences could change the value of the intangible assets acquired, the contingent liabilities assumed, and the tax impacts related to the acquisition and could have a material impact on our results of operations and financial position.

​	​	​	​
​		​	​
(In thousands)	​ ​ ​	Estimated Fair Value
Assets		​	​
Current assets		​	​
Cash and cash equivalents	​	$	1,004
Accounts receivable, net	​	​	19
Total current assets	​	​	1,023
Non-current assets		​	​
Intangible assets	​	​	4,110
Goodwill(1)	​	​	8,491
Total non-current assets	​	​	12,601
Total assets acquired	​	$	13,624
Liabilities and stockholders' equity	​	​	​
Current liabilities		​	​
Accrued expenses and other current liabilities	​	$	180
Unearned revenue	​	​	313
Total current liabilities	​	​	493
Non-current liabilities		​	​
Deferred income taxes	​	​	1,038
Total long term liabilities	​	​	1,038
Total liabilities assumed	​	$	1,531
​	​	​	​
Net assets acquired	​	$	12,093

​

(1) Of the $8.5 million of goodwill from the acquisition, none is expected to be tax deductible. Goodwill is comprised of expected synergies for the combined operations and the assembled workforce acquired in the acquisition.

Identifiable Intangible Assets

The identifiable intangible assets acquired consist of a developed technology asset, customer relationship assets and a tradename asset. The estimated fair value of the developed technology asset was prepared using the relief from royalty method which calculates the value of the developed technology based on royalties that would be paid if licensed by a third party. The estimated fair value of customer relationship assets was prepared using the multi-period excess earnings method which calculates the present value of the incremental after-tax cash flows attributable solely to each customer relationship. The estimated fair value of the tradename asset was prepared using the relief from royalty method which calculates the value of the tradename based on royalties that would be paid if licensed by a third party. The estimated useful lives are based on forecasted periods of benefit for each intangible asset. Estimated useful lives and estimated preliminary fair values are presented in the table below.

​	​	​	​	​	​
(In thousands)	​ ​ ​	Estimated Fair Value(1)		​	Estimated Useful Life
Developed technology	​	$	3,200	​	10 years
Customer relationships	​	​	540	​	5 years
Tradename	​	​	370	​	10 years
Estimated fair value of intangible assets acquired	​	$	4,110	​	​

​

(1) The preliminary acquisition accounting, including the valuation of identifiable intangible assets, is subject to change during the measurement period.

23

Table of Contents

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the condensed consolidated financial statements and the accompanying notes thereto included elsewhere in this report.

Overview

We are a medical technology company that develops and commercializes medical devices in the United States. Our mission is to help people suffering from chronic diseases live better and care for themselves at home. We focus our efforts on advancing the standard of care in treating underserved chronic diseases in the home to improve patient outcomes and quality of life and help control rising healthcare expenditures. Our areas of therapeutic focus are (1) vascular disease, with a goal of advancing the standard of care in treating lymphedema and chronic venous insufficiency, (2) oncology, where lymphedema is a common consequence among cancer survivors and (3) providing airway clearance therapy for those suffering from chronic respiratory conditions. We possess a unique, scalable platform to deliver at-home healthcare solutions throughout the United States. This evolving home care delivery model is recognized by policymakers and insurance payers as a key for controlling rising healthcare costs. Our solutions deliver cost-effective, clinically proven, long-term treatment for people with these chronic diseases. We generally employ a direct-to-patient and -provider model within our lymphedema portfolio, through which we obtain patient referrals from clinicians, manage insurance claims on behalf of our patients and their clinicians, deliver our solutions directly to patients and train them on the proper use of our solutions. This model allows us to engage directly with patients and clinicians, which are both critical audiences to which we can provide clinical evidence and education. For our respiratory therapy product, we have a durable medical equipment (“DME”) distribution model, through which we sell the AffloVest product to accredited DME providers, whose representatives gather and submit documentation for payer reimbursement, train patients on use of the device, and provide ongoing patient support.

Our current lymphedema products are the Flexitouch Plus, Entre Plus and Nimbl pneumatic compression pump systems and our airway clearance product is a High-Frequency Chest Wall Oscillation (“HFCWO”) device called AffloVest. The Flexitouch system product line is considered an advanced pneumatic compression device. The first generation Flexitouch system received 510(k) clearance from the U.S. Food and Drug Administration (the “FDA”) in July 2002, introducing a medical device technology to address the many limitations of self-administered home-based manual lymphatic drainage therapy. A second generation Flexitouch system received 510(k) clearance from the FDA in October 2006. In September 2016, we received 510(k) clearance from the FDA for the Flexitouch system in treating lymphedema of the head and neck. A third generation, Flexitouch Plus, received 510(k) clearance from the FDA in June 2017. In December 2020, we received 510(k) clearance from the FDA for two new indications for our Flexitouch Plus system: phlebolymphedema and lipedema. The Entre system product line and Nimbl product line are considered basic, or simple, pneumatic compression devices. These systems are sold or rented to patients who need a simple pump or who do not yet qualify for insurance reimbursement for an advanced compression device e.g., a Flexitouch Plus system. We introduced the Entre system in the United States in February 2013, this device was manufactured by Thermotek, Inc. and received FDA clearance in 2010. In 2015, we received FDA clearance for our own first generation Entre system and the second generation, Entre Plus, was released in March 2023. Nimbl, our next-generation pneumatic compression platform, received 510(k) clearance in June 2024 and was commercially launched for upper extremity lymphedema in October 2024 and was commercially launched for lower extremity lymphedema in February 2025. Nimbl has replaced most orders for our Entre system and we expect will continue to do so. Sales and rentals of our lymphedema products represented 83% of our revenue in each of the three months ended March 31, 2026 and 2025.

On September 8, 2021, we acquired the assets of the AffloVest airway clearance product line. AffloVest is a portable, wearable vest that provides airway clearance to treat patients with chronic respiratory conditions such as bronchiectasis or conditions resulting from neuromuscular disorders. For each of the three months ended March 31, 2026 and 2025, sales of AffloVest represented 17% of our revenue.

To support the growth of our business, we continue to invest in our commercial infrastructure, consisting of a lymphedema and respiratory sales force, marketing team including clinical education programs, patient education team, reimbursement capabilities and clinical expertise. We market our lymphedema products using

24

Table of Contents

a direct-to-patient and -clinician model. The AffloVest device is sold through respiratory durable medical equipment providers throughout the United States that service patients and bill third-party payers for the product. We employ a small group of respiratory specialists, who educate DME representatives, provide product demonstrations for targeted clinicians and support technical questions related to the AffloVest. As of March 31, 2026, we employed 172 account managers and 163 specialists for our lymphedema products and a team of 18 specialists supporting our airway clearance products. This compares to 161 account managers and 103 specialists for our lymphedema products and a team of 19 specialists supporting our airway clearance products as of March 31, 2025.

We invest in our reimbursement function to improve operational efficiencies and enhance individual payer expertise, while continuing our strategic focus of payer development. Our payer relations function focuses on payer policy development, education, contract negotiations, and data analysis. Our reimbursement operations function is responsible for verifying patient insurance benefits, individual patient case development, prior authorization submissions, case follow-up, and appeals when necessary.

We also have a clinical team, consisting of a scientific advisory board, in-house therapists and nurses, and a Chief Medical Officer, that serves as a resource to clinicians and patients and guides the development of clinical evidence in support of our products. Most clinical studies require observation and interaction with clinicians and patients to monitor results and progress.

We rely on third-party contract manufacturers for the sourcing of parts, the assembly of our controllers and the manufacturing of the garments used with our systems. We conduct final assembly of the garments used with our products, perform quality assurance and ship our products from our facility in Minnesota. We also manufacture and ship the AffloVest device from our Minnesota-based facility.

In July 2022, we launched Kylee™ a free mobile app that makes it easier for patients to manage their conditions by tracking treatments and symptoms, as well as having direct access to educational resources. Flexitouch Plus and Nimbl devices include Bluetooth technology, which is viewable using Kylee.

For the three months ended March 31, 2026, we generated revenue of $75.3 million and had a net loss of $1.8 million, compared to revenue of $61.3 million and net loss of $3.0 million for the three months ended March 31, 2025. Our primary sources of capital since our initial public offering in 2016 have been from operating income, bank financing and our public offering in February 2023.

We operate in one segment for financial reporting purposes.

​

25

Table of Contents

Results of Operations

Comparison of the Three Months Ended March 31, 2026 and 2025

The following table presents our results of operations for the periods indicated:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Three Months Ended

​

​

​

​

​

​

​

​

March 31,

​

Change

(In thousands)

​

2026

​

2025

​

$

​

%

Condensed Consolidated Statement

​

​

​

​

% of

​

​

​

​

% of

​

​

​

​

​

​

of Operations Data:

​

​

​

​

revenue

​

​

​

​

revenue

​

​

​

​

​

​

Revenue

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Sales revenue

​

$

66,966

​

89

%

​

$

52,469

​

86

%

​

$

14,497

​

28

%

Rental revenue

​

​

8,301

​

11

%

​

​

8,799

​

14

%

​

​

(498)

​

(6)

%

Total revenue

​

​

75,267

​

100

%

​

​

61,268

​

100

%

​

​

13,999

​

23

%

Cost of revenue

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Cost of sales revenue

​

​

15,259

​

20

%

​

​

13,891

​

23

%

​

​

1,368

​

10

%

Cost of rental revenue

​

​

2,394

​

3

%

​

​

2,031

​

3

%

​

​

363

​

18

%

Total cost of revenue

​

​

17,653

​

23

%

​

​

15,922

​

26

%

​

​

1,731

​

11

%

Gross profit

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Gross profit - sales revenue

​

​

51,707

​

69

%

​

​

38,578

​

63

%

​

​

13,129

​

34

%

Gross profit - rental revenue

​

​

5,907

​

8

%

​

​

6,768

​

11

%

​

​

(861)

​

(13)

%

Gross profit

​

​

57,614

​

77

%

​

​

45,346

​

74

%

​

​

12,268

​

27

%

Operating expenses

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Sales and marketing

​

​

32,732

​

43

%

​

​

27,516

​

45

%

​

​

5,216

​

19

%

Research and development

​

​

2,776

​

4

%

​

​

1,741

​

3

%

​

​

1,035

​

59

%

Reimbursement, general and administrative

​

​

23,044

​

31

%

​

​

19,998

​

32

%

​

​

3,046

​

15

%

Intangible asset amortization

​

​

596

​

1

%

​

​

633

​

1

%

​

​

(37)

​

(6)

%

Total operating expenses

​

​

59,148

​

79

%

​

​

49,888

​

81

%

​

​

9,260

​

19

%

Loss from operations

​

​

(1,534)

​

(2)

%

​

​

(4,542)

​

(7)

%

​

​

3,008

​

(66)

%

Interest income

​

​

666

​

1

%

​

​

895

​

1

%

​

​

(229)

​

(26)

%

Interest expense

​

​

(28)

​

—

%

​

​

(424)

​

(1)

%

​

​

396

​

(93)

%

Loss before income taxes

​

​

(896)

​

(1)

%

​

​

(4,071)

​

(7)

%

​

​

3,175

​

(78)

%

Income tax expense (benefit)

​

​

867

​

1

%

​

​

(1,097)

​

(2)

%

​

​

1,964

​

(179)

%

Net loss

​

$

(1,763)

​

(2)

%

​

$

(2,974)

​

(5)

%

​

$

1,211

​

(41)

%

​

​

26

Table of Contents

​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

​

​

Revenue

Revenue increased $14.0 million, or 23%, to $75.3 million in the three months ended March 31, 2026, compared to $61.3 million in the three months ended March 31, 2025. The increase in total revenue was attributable to an increase of $11.7 million, or 23%, in sales and rentals of the lymphedema product line and an increase of $2.3 million, or 22%, in sales of the airway clearance product line in the three months ended March 31, 2026, compared to the three months ended March 31, 2025.

The increase in the lymphedema product line revenue in the three months ended March 31, 2026, was driven by accelerating commercial momentum from our strong partnerships, execution of our go-to-market commercial strategy and disciplined focus on sales force productivity. The increase in the airway clearance product line revenue was primarily driven by strong partnerships and prioritized placement agreements with our top 10 respiratory DME providers.

The following table summarizes our revenue by product line for the three months ended March 31, 2026 and 2025, both in dollars and percentage of total revenue:

​	​	​	​	​	​	​	​	​	​	​	​
​	​	Three Months Ended					​	​	​	​	​
​	​	March 31,					​	Change
(In thousands)	​ ​ ​	2026		​	2025		​	$		​	%
Revenue	​	​	​	​	​	​	​	​	​	​	​
Lymphedema products	​	$	62,221	​	$	50,554	​	$	11,667	​	23%
Airway clearance products	​	​	13,046	​	​	10,714	​	​	2,332	​	22%
Total	​	$	75,267	​	$	61,268	​	$	13,999	​	23%
​	​	​	​	​	​	​	​	​	​	​	​
Percentage of total revenue	​	​	​	​	​	​	​	​	​	​	​
Lymphedema products	​		83%	​		83%	​		​	​	​
Airway clearance products	​	​	17%	​	​	17%	​	​	​	​	​
Total	​		100%	​		100%	​		​	​	​

​

​

Our business is affected by seasonality. In the first quarter of each year, when most patients have started a new insurance year and have not yet met their annual out-of-pocket payment obligations, we experience substantially reduced demand for our products. We typically experience higher revenue in the third and fourth quarters of the year when patients have met their annual insurance deductibles, thereby reducing their out-of-pocket costs for our products, and have an increasing desire to exhaust their flexible spending accounts at year end. This seasonality applies only to purchases and rentals of our products by patients covered by commercial insurance and is not relevant to Medicare, Medicaid or the Veterans Administration, as those payers either do not have plans that have declining deductibles over the course of the plan year and/or do not have plans that include patient deductibles for purchases or rentals of our products.

Cost of Revenue and Gross Margin

Cost of revenue increased $1.7 million, or 11%, to $17.7 million in the three months ended March 31, 2026, compared to $15.9 million in the three months ended March 31, 2025. The increase in cost of revenue was primarily attributable to the increase in revenue.

Gross margin was 77% and 74% in the three months ended March 31, 2026 and 2025, respectively.

Sales and Marketing Expenses

Sales and marketing expenses increased $5.2 million, or 19%, to $32.7 million in the three months ended March 31, 2026, compared to $27.5 million in the three months ended March 31, 2025. The increase was primarily attributable to a $4.1 million increase in personnel-related compensation expenses, a $1.3 million increase in expenses related to meetings and seminars and a $0.1 million increase in expenses for demo units, partially offset by a $0.3 million decrease in travel and entertainment expenses.

27

Table of Contents

Research and Development Expenses

Research and development (“R&D”) expenses increased $1.0 million, or 59%, to $2.8 million in the three months ended March 31, 2026, compared to $1.7 million in the three months ended March 31, 2025. The increase was primarily attributable to a $0.6 million increase in IT and other professional fees related expenses and a $0.5 million increase in personnel-related compensation expenses. IT-related expenses reflected in both R&D expenses and Reimbursement, general and administrative expenses primarily relate to the ongoing implementation of new technology across the entire order process, replacing legacy systems, which we expect to continue through the remainder of 2026.

Reimbursement, General and Administrative Expenses

Reimbursement, general and administrative expenses increased $3.0 million, or 15%, to $23.0 million in the three months ended March 31, 2026, compared to $20.0 million in the three months ended March 31, 2025. This increase was primarily attributable to a $1.2 million increase in personnel-related compensation expenses, a $0.8 million increase in acquisition and integration costs related to the LymphaTech acquisition, a $0.6 million increase in occupancy costs, depreciation expense and professional fees and a $0.4 million increase in IT-related expenses.

Intangible Asset Amortization

Intangible asset amortization remained consistent at $0.6 million for each of the three months ended March 31, 2026 and 2025.

Interest Income and Interest Expense

Interest income decreased $0.2 million, or 26%, to $0.7 million in the three months ended March 31, 2026, compared to $0.9 million in the three months ended March 31, 2025, primarily due to a lower cash balance in an Institutional Insured Liquid Deposit demand account due to funds being utilized for the LymphaTech acquisition. Interest expense decreased $0.4 million, or 93%, to $28,000 in the three months ended March 31, 2026, compared to $0.4 million in the three months ended March 31, 2025, primarily due to the repayment of debt.

Income Taxes

We recorded an income tax expense of $0.9 million compared to an income tax benefit of $1.1 million for the three months ended March 31, 2026 and 2025, respectively. The primary driver of the change in our effective tax rate was attributable to the Company recording stock-based compensation discrete items when compared to the prior year period.

​

28

Table of Contents

Liquidity and Capital Resources

Cash Flows

On March 31, 2026, we had cash of $75.0 million and net accounts receivable of $38.2 million. This compares to cash of $83.6 million and net accounts receivable of $35.7 million at March 31, 2025.  

The following table summarizes our cash flows for the periods indicated:

​	​	​	​	​	​	​
​	​	Three Months Ended
​	​	March 31,
(In thousands)	​ ​ ​	2026		​ ​ ​	2025
Net cash (used in) provided by:	​	​	​	​	​	​
Operating activities		$	(339)	​	$	417
Investing activities	​	​	(7,061)	​	​	(407)
Financing activities	​	​	(1,053)	​	​	(10,758)
Net decrease in cash		$	(8,453)	​	$	(10,748)

​

​

Operating Activities

Net cash used in operating activities during the three months ended March 31, 2026 was $0.3 million, resulting from non-cash net income adjustments of $3.5 million, a net loss of $1.8 million and a net decrease in operating assets and liabilities of $1.8 million. The positive non-cash net income adjustments consisted primarily of $1.8 million of stock-based compensation expense, $1.6 million of depreciation, and a loss on disposal of property and equipment and intangibles of $0.1 million. Cash used relating to the change in operating assets and liabilities primarily consisted of a decrease in net accounts receivable of $5.7 million, a $2.2 million increase in accounts payable, a $0.8 million decrease in income taxes payable and a $0.6 million decrease in net investment in leases, partially offset by a decrease in accrued payroll and related taxes of $8.3 million, an increase in inventories of $2.6 million, an increase in right of use operating lease assets of $0.3 million and an increase in prepaid expenses and other assets of $0.1 million.

Net cash provided by operating activities during the three months ended March 31, 2025 was $0.4 million, resulting from non-cash net income adjustments of $4.0 million, a net loss of $3.0 million and a net decrease in operating assets and liabilities of $0.7 million. The positive non-cash net income adjustments consisted primarily of $2.1 million of stock-based compensation expense and $1.7 million of depreciation. Cash used relating to the change in operating assets and liabilities primarily consisted of a decrease in net accounts receivable of $9.2 million, a $1.4 million increase in accounts payable and a $0.3 million increase in accrued expenses and other liabilities, partially offset by a decrease in accrued payroll and related taxes of $7.0 million, an increase in prepaid expenses and other assets of $2.5 million, a decrease in income taxes payable of $1.3 million, an increase in right of use operating lease assets of $0.3 million, an increase in net investment in leases of $0.3 million and an increase in inventories of $0.2 million.

Investing Activities

Net cash used in investing activities during the three months ended March 31, 2026, was $7.1 million, primarily consisting of $6.2 million of net payments related to the acquisition of LymphaTech and $0.8 million of purchases of property and equipment and patent costs.

Net cash used in investing activities during the three months ended March 31, 2025, was $0.4 million, consisting of purchases of property and equipment and patent costs.

Financing Activities

Net cash used in financing activities during the three months ended March 31, 2026, was $1.1 million, primarily consisting of payments of $1.1 million for the repurchase of our common stock.

29

Table of Contents

Net cash used in financing activities during the three months ended March 31, 2025, was $10.8 million, primarily consisting of payments of $10.0 million for the repurchase of our common stock and a payment of $0.8 million made on our term loan.

Credit Agreement

On July 31, 2025, we entered into an Amended and Restated Credit Agreement with the lenders from time to time party thereto, and Wells Fargo Bank, National Association, as administrative agent (the “2025 Credit Agreement”), which amended and restated the credit agreement that we had in place prior to that time (the “Prior Credit Agreement”). The 2025 Credit Agreement provides for a $40.0 million revolving credit facility with a scheduled maturity date of July 31, 2028.

In connection with the entry into the 2025 Credit Agreement, on July 31, 2025, we paid off the full amount outstanding under the term loan that was outstanding under the Prior Credit Agreement, which was $24.4 million (inclusive of principal and interest), using cash on hand. The term loan had been reflected on our condensed consolidated financial statements as a note payable. The 2025 Credit Agreement removed the provisions from the Prior Credit Agreement related to a committed term loan, such that the only term loan related provisions in the 2025 Credit Agreement relate to our ability to request uncommitted incremental term loan facilities and/or an increase in the amount of the revolving loans available under the 2025 Credit Agreement in an amount not to exceed $25.0 million in the aggregate, subject to the satisfaction of certain conditions.

Amounts drawn under the revolving credit facility bear interest, at our option, at a rate equal to (a) the highest of (i) the prime rate, (ii) the federal funds rate plus 0.50% and (iii) Adjusted Term SOFR (defined as term Secured Overnight Financing Rate) for a one-month tenor plus 1% (the “Base Rate”) plus an applicable margin or (b) Adjusted Term SOFR for an interest period of one, three or six months, at our option, plus the applicable margin. The applicable margin is 0.75% to 1.75% on loans bearing interest at the Base Rate and 1.75% to 2.75% on loans bearing interest at Adjusted Term SOFR, in each case depending on our consolidated total leverage ratio.

The 2025 Credit Agreement provides for a commitment fee at a rate per annum ranging from 0.125% to 0.250% for the unused portion of the revolving credit facility, depending on our consolidated total leverage ratio.

The 2025 Credit Agreement includes financial covenants consisting of a maximum consolidated total leverage ratio covenant and a minimum fixed charge coverage ratio covenant. In addition, the 2025 Credit Agreement includes customary negative covenants, including a restricted payment covenant that permits the Company to repurchase shares of its common stock and make certain other payments, as long as the Company is not in default under the 2025 Credit Agreement, has a consolidated total leverage ratio of no greater than 1.75 to 1.00, and has liquidity of not less than $30.0 million, in each case both before and after giving effect to such stock repurchases or the making of such payments. As of March 31, 2026, we were in compliance with all covenants under the 2025 Credit Agreement.

Our obligations under the 2025 Credit Agreement are secured by a security interest in substantially all of our and our subsidiary’s assets and are also guaranteed by our subsidiary.

As of March 31, 2026, we had no outstanding borrowings under the 2025 Credit Agreement.

Share Repurchase Program

​

On October 16, 2025, our Board of Directors authorized a new program to repurchase up to $25.0 million of our common stock. Under the program, purchases may be made from time to time in the open market, in privately negotiated purchases, or both. The timing and number of shares to be purchased will be based on the price of the Company's common stock, general business and market conditions and other investment considerations and factors. This share repurchase program expires on November 3, 2027. The program does not obligate the Company to repurchase any specific number of shares and may be suspended or discontinued at any time without prior notice.

30

Table of Contents

During the three months ended March 31, 2026, we repurchased 40,250 shares for approximately $1.1 million. We used cash on hand to fund these repurchases.

Future Cash Requirements

For a discussion of our material estimated future cash requirements under our contractual obligations and commercial commitments, in total and disaggregated into current and long-term, see “Future Cash Requirements” included in Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for the year ended December 31, 2025. There have been no material changes since December 31, 2025.

Adequacy of Resources

Our future cash requirements may vary significantly from those now planned and will depend on many factors, including:

● the impacts of inflation, rising interest rates or a recession on our business;

● sales and marketing resources needed to further penetrate our market;

● expansion of our operations;

● IT investments to scale our business;

● response of competitors to our solutions and applications;

● costs associated with clinical research activities;

● increases in interest rates;

● labor shortages and wage inflation;

● component price inflation;

● costs to develop and implement new products and revisions to existing products; and

● use of capital for acquisitions or licenses, if any.

Historically, we have experienced increases in our expenditures consistent with the growth in our revenue, operations and personnel, and we anticipate that our expenditures will continue to increase as we expand our business.

We believe our cash and cash flows from operations will be sufficient to meet our working capital, capital expenditure, debt repayment and related interest, and other cash requirements for at least the next twelve months.

Recent Accounting Pronouncements

Refer to Note 3 – “Summary of Significant Accounting Policies” of the condensed consolidated financial statements contained in this report for a description of recently issued accounting pronouncements that are applicable to our business.

​

​

31

Table of Contents

Critical Accounting Estimates

Critical accounting estimates are those that involve a significant level of estimation uncertainty and have had or are reasonably likely to have a material impact on our financial condition and results of operations. For additional information, please see the discussion of our most critical accounting estimates under “Critical Accounting Estimates” in Management’s Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for the year ended December 31, 2025.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

For a discussion on our market risks, see Item 7A, “Quantitative and Qualitative Disclosures About Market Risk,” included in our Annual Report on Form 10-K for the year ended December 31, 2025. There have been no material changes since December 31, 2025.

Item 4. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures as of March 31, 2026. The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Based on the evaluation of our disclosure controls and procedures as of March 31, 2026, our Chief Executive Officer and Chief Financial Officer concluded that, as of such date, our disclosure controls and procedures were effective at the reasonable assurance level.

Changes in Internal Control over Financial Reporting

There was no change in our internal control over financial reporting, as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act, that occurred during the quarter ended March 31, 2026, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II—OTHER INFORMATION

Item 1. Legal Proceedings.

Information pertaining to certain legal proceedings in which we are involved can be found in Note 9 – “Commitments and Contingencies” to our condensed consolidated financial statements included in Part I, Item 1 of this report and is incorporated herein by reference.

Item 1A. Risk Factors.

In addition to the other information set forth in this Quarterly Report on Form 10-Q, you should carefully consider the factors discussed in “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2025, which could materially affect our business, financial condition or future results. There have been no material changes in our risk factors from those disclosed in that report.

32

Table of Contents

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

Issuer Purchases of Equity Securities

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Total Number

​

Approximate

​

​

​

​

​

​

​

​

​

of Shares

​

Dollar Value of

​

​

​

​

​

​

​

​

​

Purchased as

​

Shares that

​

​

​

​

​

​

​

​

​

Part of Publicly

​

May Yet Be

​

​

Total Number

​

Average

​

Announced

​

Purchased

​

​

of Shares

​

Price Paid

​

Plans or

​

Under the Plans or

Period

​

Purchased

​

Per Share(1)

​

Programs

​

Programs(2)

January 1, 2026 - January 31, 2026

​

—

​

​

$

—

​

​

—

​

$

25,000,000

February 1, 2026 - February 28, 2026

​

—

​

​

​

—

​

​

—

​

​

25,000,000

March 1, 2026 - March 31, 2026

​

40,250

​

​

​

26.67

​

​

40,250

​

​

23,927,840

Total

​

40,250

​

​

​

​

​

​

40,250

​

​

​

​

(1) Amount includes commissions paid.

(2) On November 3, 2025, we announced that our board of directors authorized a program to repurchase shares of our common stock in an aggregate amount not to exceed $25.0 million. The share repurchase program became effective on November 3, 2025 and expires on November 3, 2027.

Item 3. Defaults Upon Senior Securities.

Not applicable.

Item 4. Mine Safety Disclosures.

Not applicable.

Item 5. Other Information.

Trading Arrangements

During the quarter ended March 31, 2026, none of our directors or officers (as defined in Rule 16a-1(f) of the Exchange Act) adopted or terminated any contract, instruction or written plan for the purchase or sale of our securities that was intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) of the Exchange Act or any non-Rule 10b5-1 trading arrangement (as defined in Item 408(c) of Regulation S-K).

​

33

Table of Contents

Item 6. Exhibits.

The exhibits filed as part of this Quarterly Report on Form 10-Q are set forth on the Exhibit Index below.

​

EXHIBIT INDEX

​	​	​	​	​	​	​	​	​	​	​
​	​	​	​	Incorporated by Reference					​	​
Exhibit	​	​	​	​	​	​	​	Exhibit	​	Filed
Number	​	Description of Exhibit	​	Form	​	Date of Filing	​	Number	​	Herewith
​	​	​	​	​	​	​	​	​	​	​
3.1	​	Amended and Restated Certificate of Incorporation, conformed version reflecting all amendments through May 8, 2024	​	10-Q	​	08/05/2024	​	3.3	​	​
​	​	​	​	​	​	​	​	​	​	​
3.2	​	Amended and Restated By-laws, effective December 19, 2022	​	10-K	​	02/21/2023	​	3.2	​	​
​	​	​	​	​	​	​	​	​	​	​
31.1	​	Certification of Principal Executive Officer pursuant to Rule 13a-14(a) / 15d-14(a) of the Securities Exchange Act of 1934, as amended	​	​	​	​	​	​	​	X
​	​	​	​	​	​	​	​	​	​	​
31.2	​	Certification of Principal Financial Officer pursuant to Rule 13a-14(a) / 15d-14(a) of the Securities Exchange Act of 1934, as amended	​	​	​	​	​	​	​	X
​	​	​	​	​	​	​	​	​	​	​
32.1	​	Certification of Principal Executive Officer pursuant to 18 U.S.C. §1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002	​	​	​	​	​	​	​	X
​	​	​	​	​	​	​	​	​	​	​
32.2	​	Certification of Principal Financial Officer pursuant to 18 U.S.C. §1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002	​	​	​	​	​	​	​	X
​	​	​	​	​	​	​	​	​	​	​
101.1	​	Inline XBRL for the following financial statements from the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2026: (i) Balance Sheets, (ii) Statements of Operations, (iii) Statements of Stockholders’ Equity, (iv) Statements of Cash Flows, and (v) Notes to the Condensed Consolidated Financial Statements; and for the information set forth in Part II, Item 5.	​	​	​	​	​	​	​	X
​	​	​	​	​	​	​	​	​	​	​
104.1	​	Cover page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101.1)	​	​	​	​	​	​	​	X
​	​	​	​	​	​	​	​	​	​	​

​

​

34

Table of Contents

​

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	​		​
	​	Tactile Systems Technology, Inc.
​	​	​
Date: May 4, 2026	​	By:	/s/ Elaine M. Birkemeyer
	​		Elaine M. Birkemeyer
	​		Chief Financial Officer
	​		(Principal financial and accounting officer)

​

​

35

FAQ

How did Tactile Systems (TCMD) perform financially in Q1 2026?

Tactile Systems generated $75.3 million in Q1 2026 revenue, up 23% from $61.3 million a year earlier. Gross margin improved to 77%, and the net loss narrowed to $1.8 million compared with a $3.0 million loss in the prior-year quarter.

What drove Tactile Systems’ revenue growth in Q1 2026?

Revenue growth came from both core businesses. Lymphedema products contributed $62.2 million, up from $50.6 million, while airway clearance products delivered $13.0 million, up from $10.7 million. Management cited stronger commercial execution and partnerships across product lines.

What is notable about Tactile Systems’ cash and debt position as of March 31, 2026?

As of March 31, 2026, Tactile Systems held $75.0 million in cash and had no borrowings outstanding under its $40.0 million revolving credit facility. This liquidity position existed despite funding the LymphaTech acquisition and ongoing share repurchases during the quarter.

What are the key details of Tactile Systems’ LymphaTech acquisition?

On February 17, 2026, Tactile Systems acquired LymphaTech for about $7.2 million in cash plus contingent consideration initially valued at $4.9 million. The deal added 3D lymphedema measurement technology, $4.1 million of identifiable intangibles, and $8.5 million of goodwill.

How did legal proceedings affect Tactile Systems’ Q1 2026 results?

In Q1 2026, the company reached an agreement in principle to settle two False Claims Act actions for about $0.6 million plus relators’ attorneys’ fees and costs. It recorded a total $1.0 million accrual, reflected in accrued expenses, to cover the proposed settlement and estimated related costs.

How much stock did Tactile Systems repurchase in Q1 2026?

During Q1 2026, Tactile Systems repurchased 40,250 shares of common stock for approximately $1.1 million at an average total cost of $26.67 per share. Around $23.9 million remained authorized under the company’s share repurchase program at quarter-end.