Mobia Medical (NASDAQ:MOBI) Q3 2026 Earnings Call

0:00 Good afternoon and welcome to the MOBIA Medical Third Quarter 2026 Earnings Conference Call. At this time, all participants are in listen-only mode. After the speaker's prepared remarks, we will conduct a question and answer session. Please note that today's call is being recorded. I would now like to turn the call over to Louisa Smith of Gilmartin Group Investor Relations for MOBIA Medical. Louisa, please go ahead.

0:31 Good afternoon and thank you for being on today's call. Joining me from Mobia Medical are Richard Foust, President and Chief Executive Officer, and Bunker Curnes, Chief Financial Officer. Earlier today, Mobia Medical issued a press release announcing financial results for the quarter ended September 30th, 2026. Copy of the press release is available on the investor relations section of the company's website. Before we begin, I would like to remind you that management will make remarks during this call that constitute forward-looking statements within the meaning of the federal securities laws and that are being made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Any statements made during this call that relate to expectations or predictions of future events, results, or performance, including our full year 2026 revenue guidance, are forward-looking statements. These statements involve material risks and uncertainties that could cause actual results or events to differ materially from those anticipated or implied by these forward-looking statements.

1:37 Accordingly, you should not place undue reliance on these statements. For a full list and description of the risks and uncertainties associated with our business, please refer to the section captioned Risk Factors and Management Discussion and Analysis of Financial Condition and Results of Operations and our filings with the Securities and Exchange Commission. This conference call contains time-sensitive information and is accurate only as of the live broadcast today, November 5th, 2026. Mobia Medical disclaims any intention or obligation, except as required by law, to update or revise any forward-looking statements, whether because of new information, future events or otherwise. With that, I will now turn the call over to Richard.

2:22 Thank you, Louisa. Good afternoon, everyone, and thank you for joining us today. We are pleased to welcome you to MOBIA Medical's Q3 2026 earnings call and are eager to share some details behind our strong third quarter performance. But first, we will begin with a real patient story that grounds us in why we do this work. Bill was 52 at the height of his career and in excellent physical condition. when he suffered an ischemic stroke after his daily run. He lost nearly all function in his right arm and hand that day. Over the next three months, he underwent intensive physical therapy, but his arm remained immobile.

3:07 Because the hospital where Bill was treated was a Vivistem Center, his care team brought him back for evaluation once his recovery plateaued. and he began VidaStem Therapy six months after his stroke. After just six weeks of VidaStem Therapy, he had made more progress than in the previous six months. He was now dressing independently, tying his shoes with both hands and preparing meals. That was in 2022 and today there is nothing he cannot do independently. Bill's story shows what is possible with Viva Stem Therapy, and his story is not an outlier. Every day we hear from enthusiastic patients whose lives have been changed with Viva Stem Therapy.

4:01 These patient stories are why we are so committed to this mission, and this quarter's results show that our work is paying off. Let me take you through our Q3 results and outlook for the rest of 2026. Revenue totaled $15.6 million for the quarter, representing a 73% growth over the prior year. With this performance and the strong fundamentals of the business, we are raising our full year revenue guidance. We now expect total 2026 revenue in the range of $57.0 million to $57.5 million, up from our prior guidance of $54 million to $56 million.

4:54 Bunker will cover additional financial details and guidance assumptions later in our remarks. This quarter's performance reflects the strong fundamentals of our business. We address a large unmet need with a clinically validated solution that is generating patient demand, backed by strong market access and a favorable financial profile. Let me take a moment to discuss each of those elements. First, we are addressing a compelling unmet need for a highly motivated patient population that is symptomatic. There are approximately 9 million ischemic stroke survivors in the United States, many living with lasting impairments in their arms and hands.

5:42 And until Vivistem therapy, there were no proven options once their recovery plateaued. This is why patients and healthcare providers are eager to adopt Vivistem therapy. The first and only clinically validated FDA-approved device for chronic ischemic stroke survivors with moderate to severe upper extremity impairments. Importantly, we have successfully treated patients several decades after their strokes. With Vivistem therapy, there is no expiration date on recovery. Second, Vivistem therapy is backed by strong and growing clinical evidence. and physician support.

6:28 Our published clinical data demonstrates meaningful clinical improvement, durability through two years and reproducibility in real world settings. This evidence alongside growing adoption is driving increased awareness in the physician community. In August, we were pleased to announce that the American Heart Association and American Stroke Association revised their stroke Dr. Joseph Levy, Dr. Joseph Levy, Dr. Joseph Levy, As we continue to collect and publish real-world data, we believe that similar recognition from additional professional societies will present and that this will serve as a key building block in establishing broad utilization and payer coverage across the country.

7:39 Third, we continue to be well-positioned on reimbursement with a well-established Category 1 CPT code associated with an average Medicare payment rate for approximately $45,000, and a highly effective in-house prior authorization and market access team, ViviStem therapy is accessible to patients and hospitals are getting paid for performing the procedure. With a large serviceable market, which we estimate to be over $30 billion in the U.S. alone, a highly valued product, and a gross margin above 80%, We have all the ingredients for a sustainable, high-growth business that can create operating leverage at scale.

8:26 We have a unique opportunity in front of us. Our commercial engine is optimized to capture it effectively through a thoughtful process of building new territories, launching business and programs, and engaging patients in the stroke ecosystem. I'm going to dive a little bit deeper into the specifics of what this market build looks like. Our field team is organized into territories, each with a territory manager, or TM, and a therapy development specialist, or TDS. TMs are responsible for partnering with hospitals and healthcare providers, while TDSs partner with therapy sites and support patient education in the community. TMs focus on engaging with stroke hospitals.

9:12 Stroke hospitals have the expertise and infrastructure to lead the way in defining new standards of care for chronic stroke recovery. They are the center of the stroke care ecosystem with connections to occupational and physical therapy sites in the community that enable the continuity of care beyond acute survival and into chronic recovery. We estimate there is a relatively concentrated base of approximately 1,500 primary and comprehensive stroke centers across the United States. At each stroke hospital, our TMs build relationships with the entire stroke care team, including neurosurgeons, neurologists, physiatrists, and stroke coordinators.

9:59 Our TMs learn how acute stroke care currently works at each site and then determine how VivisDem programs can fit in so that the hospital has a comprehensive chronic stroke recovery pathway. In concert, Our TDSs work with the stroke care ecosystem outside of the hospital, such as therapy sites and patient support groups to drive awareness and referrals. Our TDSs also onboard the therapy sites around the stroke hospital that will deliver in-clinic therapy to ViviSTEM patients and partner with these sites to ensure care continuity and successful patient outcomes. Putting that together, Each new ViviSTEM program we open is a stroke hospital that will screen and implant patients with connections to the therapy sites that will identify eligible patients and provide in-clinic ViviSTEM therapy after implant. This is what constitutes a high-quality, sustainable ViviSTEM program.

11:06 Importantly, we are not disrupting existing care pathways. Rather, we are extending the treatment continuum beyond the acute and subacute phases. Through this process, we are creating advocates for ViviSTEM therapy, not just creating users of our technology. Our third quarter reflects continued success in building the market for ViviSTEM therapy, increased awareness and recognition among the physician community, ViviSTEM programs built with care and attention, and more patients experiencing new possibilities in their recovery journey. Whether they are returning to their favorite hobby, picking up their grandchild again, or cooking a meal on their own, our patients continue regaining independence that was once out of their reach.

11:57 That is Mobia's why, and we are just getting started. With that, I will turn the call over to Bunker to review our third quarter financial results. Bunker?

12:09 Thank you, Richard, and good afternoon, everyone. Total revenue for the third quarter of 2026 was $15.6 million, representing year-over-year growth of 73% compared to $9 million in the third quarter of 2025. We sold approximately 425 units in the quarter. This growth was driven by the broader adoption of Vivisim therapy at both new and existing programs, leading to higher unit sales. Revenue came in ahead of our expectations. Thank you for joining us today. An increase of 78% over the 22.5 average active territories in the same period last year. We anticipate continuing to add new territories at a relatively consistent pace.

13:22 Our gross margin was 83.2% for the third quarter of 2026, compared to 79.6% in the third quarter of 2025. The increase in gross margin was primarily due to lower freight and tariff costs recognized in cost of goods sold as a percent of sales, as well as lower inventory write-offs compared to the prior year period. As expected, our per unit product costs remained relatively consistent this quarter, and we continue to expect gross margin to remain in the low 80s moving forward. Total operating expenses for the quarter were $31.5 million versus $18.4 million in the third quarter of 2025. The increase in OPEX spending is primarily due to an increase in personnel-related expenses driven by headcount, particularly within our commercial organization, as well as $2.2 million in additional stock-based compensation expense.

14:20 We continue to invest in our commercial organization and the infrastructure needed to support growth, while remaining focused on improving operating leverage over time. Net loss was $17.3 million, or $0.52 per share in the third quarter of 2026 compared to a net loss of $11.4 million or $13.31 per share in the third quarter of 2025. The year-over-year improvement in net loss per share primarily reflects the significant increase in common shares outstanding following the company's May 2026 IPO and the related conversion of outstanding convertible preferred stock and convertible notes into common stock. Turning to the balance sheet, cash and cash equivalents as of September 30th, 2026 were $160.7 million.

15:13 Looking ahead to the remainder of 2026, we are raising our revenue guidance and now expect total revenue to be in the range of $57 million to $57.5 million, representing growth of approximately 78% to 79% over the full year 2025, compared to our prior guidance of $54 million to $56 million. This outlook reflects our continued confidence in the commercial strategy, including our expansion of sales territories across the US, the durability of our patient funnel, and momentum from hospitals activating and investing in their Viviston programs. With that, I will turn the call back to Richard for a few closing comments.

15:55 Thanks, Bunker. We continue to be enthusiastic about the opportunity ahead of us. We are addressing a significant unmet need with a first of its kind therapy that is backed by robust clinical evidence and growing recognition in the physician community. Our business has the key elements for significant impact and scalable growth. Our team is demonstrating excellence every day and executing in service of this important mission. We are inspired by healthcare providers, therapists, patients, and caregivers that we partner with every day. And we won't stop until ViviSTEM therapy is the standard of care for stroke recovery.

16:45 With that, I will turn the call over to the operator for Q&A. Thank you. Thank you. At this time, we will conduct a question and answer session. As a reminder, to ask a question, you're going to need to press star 1 1 on your telephone and wait for your name to be announced. We ask that you limit yourself to one question and one follow-up. Please stand by while we compile the Q&A roster. Our first question comes from Travis Steed from BOFA. Your line is now open.

17:24 Hey, congrats on the good quarter. I'll ask kind of both my questions up front to keep it efficient. But first question, just maybe touch on the quarter beat raise. It looks like you're raising by the beat to all kind of make sense. I don't know if there's any call you'd like to give on the outlook, you know, what's assumed on utilization. And then the follow-up question I'll go ahead and get out of the way is on the new tech APC code. and the final rule I assume gives more confidence around reimbursement next year. So what's the process to get the level six code look like from here and any updates to the timeline? Thanks a lot.

18:00 Travis, this is Richard. Thank you for the question. I'll start by saying that Q3 was a really strong quarter, great execution, doing what we need to do to grow the number of active territories that we had as well as driving adoption. As you know, we have a large market, compelling unmet need, great clinical and patient outcomes with physician support, and we're well positioned with our reimbursement and patient access situation right now. You know, 73% growth year over year is a very strong showing. When we think about what drove that overage, I would put it down to strong commercial execution and really more growth coming from existing customers, which, as you know, is really healthy.

18:46 In terms of the guide, you know, we feel really confident with the guide. You know, it's also we have very disciplined and thoughtful approach, and so we're very comfortable with a 78% to 79% growth kind of year-over-year with all the momentum that we have coming from Q3. Lastly, in regards to your question about the OPPS ruling that, you know, just recently dropped, thank you for the question, you know, it sets us up exactly as you said, which all of the things that we thought would happen are going to happen. And so we can roll forward our strategy that is working today and growing the company as need be. So we're highly confident and excited about that outcome. Thank you. Our next question comes from Robert Marcus from JPM.

19:36 Your line is now open.

19:38 Oh, great. I'll offer congratulations as well on a nice quarter. Now that reimbursement continues to improve and certainty improves, maybe speak to the reception you're getting out in the field. What's the sales team doing to continue to bring in new accounts and drive utilization? And just speak to the receptivity in the field. Thanks.

20:10 Yeah, Robbie, this is Richard. It's a very good question. And I would say I'm going to start by the building blocks of kind of what we are putting together to build a brand new market in stroke recovery. Starts with having this refined and disciplined approach commercially, which we continue to be able to execute against. And then these other building blocks, which are unlocks for us. We recently published two year clinical outcomes, which reinforces the sustainability of our technology. as well as most recently being included in the AHA guidelines. And all of those things lead to further engagement. And I would say physicians leaning into our story.

20:56 Specifically, when I think about the AHA guidelines, it is a validation for patients and for physicians to really pay attention to us at even higher level. And the example that I'll give for you Just to put it into plain terms, we were working on a hospital that was part of a larger IDN. And after the guidelines came out, that hospital system reevaluated and decided to make it a full IDN implementation. And so I think in a lot of ways, the unlock and the validation that we're getting as we move forward and begin to make this progress is all of the natural Thank you.

21:42 The priorities today remain the same. We are investing in a commercial organization and the flywheel of all the things that we've built over the last number of years. This is hiring territory managers and TDSs, investing in our prior off team and all of the patient education that goes with that.

22:28 So that is where most of our investment is going. Bunker, would you like to add any comments to that?

22:34 Well, just to say that, as we said during the scripted remarks, a territory manager that we hire really becomes an active territory for us after approximately nine months. And that nine months is our commitment and investment into that commercial territory to help ensure that they can drive the correct growth and outlook for those different areas. So we really are focused on spending the majority of our spend in the commercial organization, and we feel like that is the correct strategy for us going forward. Thank you. Our next question comes from Ryan Zimmerman from U.S. Bancorp BTIG. Your line is now open. Hi, this is Jacqueline on for Ryan. Thank you for taking the question.

23:25 For active territories coming in at 40 in the third quarter implying four and a half net ads in the quarter, on the second quarter call it was mentioned that four to five ads per quarter was a comfortable range. Does that still hold true for the fourth quarter, or does the trajectory heading into 27 look different?

23:43 Yeah, thank you. I would say that the pace of new hires and new ads continues to be measured and consistent. It's really how we think about the business, making sure that we're set up for success on a continuous basis and we have the right people in place so that when they do become an active territory, they can really help to drive the revenues forward. While we don't necessarily guide to specific numbers, I think you've seen our territory ads over the last several quarters, and we intend to maintain a consistent pace moving forward. Thank you. And with revenue coming in at 15.6, up 73% year-over-year, can you walk us through how much of the growth was territory-driven versus improving productivity in existing territories?

24:29 Yeah, I would say to answer that question, we don't really give a breakout on that specific metric. But what I can say is disproportionately more of the growth came from existing customers.

24:41 Yeah, the productivity of those individual territories, as Richard said, is not necessarily something that we direct to, but that consistent growth of the active territories and those territories considering to act, again, consistently. They're performing well. The rinse, wash, repeat of the next territory in is continuing to deliver those results. And so we see a lot of, you know, good signs for the future. Great, thank you. Our next question comes from Drew Curtis from Wolf Research. Your line is now open.

25:21 Hey guys, this is Drew on for Mike. Kind of building off the last question, as your commercial organization continues to scale, is there any change to how long it takes the new territory to become productive? And then for the more mature territories, are you starting to see higher unit volumes there?

25:39 Yeah, so I'll take this. So two things. One is I think over a long horizon, obviously, you know, the volume that a hospital does will increase over time. We're not in a position yet since we're so early in our build to talk specifically about what that looks like. And in terms of, you know, how things mature, there's so much room in front of us. We're talking about a TAM of $30 billion. And within a territory, as you know, what we are doing is activating patients and and where patients go to get their procedure done is sometimes dependent on what is most convenient for them. And so that's really why we talk about a territory approach.

26:27 But we do expect over a longer time horizon as we build this out across the country. for us to continue to drive adoption. And so that is our plan. I would say just in where we are today, we're still in the process of building and developing.

26:44 Yeah, I think it's about driving the continued awareness in the territories, which is awareness of our future patients, it's awareness of our physicians, it's awareness of those referral pathways. And we're still at the early days of that process, but we're starting to see some real momentum build.

26:59 And then I guess On the clinical evidence piece, you're continuing to generate data for ViviSTEM. Just broadly, what's the next major data milestone on the horizon, and how do you see this potentially influencing payer coverage and more physician adoption?

27:18 Yeah, I would say we expect within the next, within 2027, to be able to publish our Thank you so much. are very credible Lancet publication with triple-blinded, randomized, sham-controlled study.

28:07 And what was the second part of the question? If you could repeat that, please.

28:11 Yeah, just how that would potentially drive more payer coverage and physician adoption.

28:15 Yeah, I would say on the payer coverage, there's a lot of elements to payer coverage. I would say definitely real-world evidence is one of that element. But I think it's not just the publishing of the data, it's publishing A large enough amount of patients at the right time point. And then the second part of payer coverage is really the number of paid claims. And so there's a lot of different elements that have to line up for any specific payer before that would occur. This concludes the question and answer session. I would now like to turn it back to Richard Foust for closing remarks.

28:57 Thank you all for your interest in Movia Medical. As we close out today's call, I want to reiterate that this is what motivates our team every day. Vivisem, stroke survivors are able to regain something that they thought was gone forever. The need is still far greater than the number of patients we reach today, and we are just getting started in changing the standard of care. We're proud of the progress this quarter, and were even more excited about what's ahead. Thank you for joining us.