Electromed Reports 13.1% Revenue Growth to $15.7 Million in Q3 2025

Electromed, Inc. reported a significant increase in financial performance for the three and nine months ended March 31, 2025, as detailed in its latest 10-Q filing. The company achieved net revenues of $15.7 million for the third quarter, a 13.1% increase from $13.9 million in the same period last year. For the nine-month period, revenues rose to $46.6 million, up 16.9% from $39.9 million. The net income for the third quarter was $1.9 million, compared to $1.5 million in the prior year, while year-to-date net income reached $5.3 million, an increase from $3.3 million.

The growth in revenue was primarily driven by a 14.8% increase in homecare sales, which totaled $14.1 million for the quarter, attributed to higher patient referrals and improved efficiencies in the reimbursement department. Hospital sales, however, saw a slight decline of 7.5% in the third quarter, totaling $724,000, although they increased by 11.9% year-to-date. Homecare distributor revenue surged by 32.8% in the quarter, reflecting strong demand from distribution partners. The overall gross profit margin improved to 78.0% for both the quarter and year-to-date, up from 74.8% and 76.3%, respectively, in the prior year.

Electromed's operational metrics indicate a strategic focus on expanding its sales force, which increased to 62 field sales employees as of March 31, 2025, compared to 59 a year earlier. The company has also been investing in research and development, with R&D expenses rising by 65.9% in the third quarter, reflecting a commitment to product enhancements. The total employee headcount has remained stable, supporting the company's growth initiatives.

In terms of liquidity, Electromed reported cash and cash equivalents of $15.2 million as of March 31, 2025, down from $16.1 million at the end of the previous fiscal year. The company generated $7.5 million in cash from operating activities during the nine months, which was bolstered by increased net income and effective management of working capital. However, cash used in financing activities totaled $8.2 million, primarily due to share repurchases and tax payments related to stock awards.

Looking ahead, Electromed remains optimistic about its growth trajectory, citing ongoing investments in sales and marketing, as well as product development. The company anticipates that its current cash reserves and available credit will be sufficient to meet its operational needs for the next twelve months. However, it acknowledges potential risks, including changes in reimbursement policies and market competition, which could impact future performance.