Earnings

Electromed Extends Growth Streak as Revenue Pace Cools

The Tip Desk · November 10, 2026 · 3 min read

Net revenues reached $18.7 million in the fiscal first quarter, up 10.6% from a year earlier, as operating income rose 30.7% to $3.5 million.

Electromed, Inc. (ELMD), a maker of airway clearance devices, posted net revenues of $18.7 million for the three months ended September 30, 2026, a 10.6% increase from $16.9 million a year earlier and its 16th consecutive quarter of year-over-year revenue growth.

That pace was slower than 11.6% growth in the immediately preceding fiscal quarter and 18.4% two quarters earlier. Direct homecare revenue, the company’s core, rose 17.6% to $17.5 million from $14.9 million. Operating income increased 30.7% to $3.5 million, or 18.7% of net revenues, from $2.7 million, or 15.8% of net revenues. Net income was $2.8 million, or $0.32 a diluted share.

President and Chief Executive Officer Jim Cunniff said the results reflected the direct-to-patient model and operating leverage, including an 80.0% gross margin. Gross profit was $14.9 million, or 80.0% of net revenues, compared with $13.2 million, or 78.1% of net revenues, a year earlier. The company attributed the margin lift to revenue mix. Gross margin had been 78.7% in the prior fiscal quarter and 78.8% two quarters earlier.

Electromed said the revenue increase was primarily due to more sales representatives and higher productivity. It averaged 63 homecare field sales representatives in the quarter. Annualized homecare revenue per weighted average direct sales representative was $1,109,000, inside the company’s target range of $1,050,000 to $1,150,000. Two quarters earlier the company averaged 57 representatives and annualized homecare revenue per weighted average direct sales representative was $1,168,000.

Selling, general and administrative expenses were $11.2 million, up $0.9 million, or 8.6%, which the company said was primarily due to increased salaries and incentive compensation, travel and meals related to the higher average sales-representative headcount and higher overall compensation costs. Operating income growth slowed from 25.8% in the prior fiscal quarter and 76.0% two quarters earlier. Operating margin was 18.7% of net revenues, down from 19.7% in the prior quarter and 20.3% two quarters earlier.

Non-homecare revenue was $1.2 million. Hospital revenue fell 31.6% to $0.7 million, homecare distributor revenue fell 55.9% to $0.4 million, and other revenue fell 23.0% to $0.1 million. Hospital revenue had grown 42.5% to $1.0 million two quarters earlier.

Cash and cash equivalents were $15.9 million at September 30, 2026, after a $4.6 million decline in the quarter, versus a $1.2 million decline a year earlier. The company said the decrease was driven primarily by $4.3 million of share repurchases. It had $30.3 million in accounts receivable, no debt, working capital of $44.9 million and total shareholders’ equity of $52.5 million.

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Electromed, Inc. — all coverage and financials