Sanuwave Q3 Ultramist System Sales Collapse After Proposed CMS Rule

The Tip Desk · November 11, 2026 · 3 min read

Third-quarter revenue fell 24% to $8.6 million as Ultramist systems dropped to 40 units and the company swung to a $1.4 million net loss.

Sanuwave Health (SNWV), a provider of FDA-cleared wound care products, reported third-quarter revenue of $8.6 million, down 24% from $11.3 million a year earlier, a much steeper year-over-year decline than the 3% drop in the second quarter.

Ultramist system sales were the break. The company sold 40 systems in the three months ended September 30, 2026, down from 155 a year earlier and from 82 in the second quarter. Chief executive Morgan Frank said the quarter was “very much the story of the CMS proposed rule.” He said a proposal to hold skin-substitute pricing at 2026 levels for 2027 caused some mobile wound-care practitioners, particularly those in rural home care, to exit some or all of their operations, affecting a number of customers. Proposed changes to the 97610 code, he said, put the market in a “wait and see” stance that, with an ongoing market for used Ultramist units, had a significant effect on system sales.

Applicator revenue, the consumable side of the business, rose 2% to $6.9 million from $6.8 million a year earlier, after a 13% year-over-year increase to $7.3 million in the second quarter. Gross margin was 77.3% of revenue, versus 77.6% a year earlier.

GAAP results reversed. Operating loss was $1.1 million, compared with operating income of $0.9 million in the year-ago quarter. Net loss was $1.4 million, or $0.16 a share, versus net income of $9.7 million, or $1.13 a share, a year earlier. The company said the year-ago net income included a $6.1 million non-cash gain on the change in fair value of derivative liabilities and a one-time $5.0 million gain on the sale of patents, neither of which recurred, and that the swing was partially offset by a $1.5 million decrease in interest expense. Adjusted EBITDA fell to $0.7 million from $3.2 million a year earlier, after $1.2 million in the second quarter.

Cash and cash equivalents were $6.6 million on September 30, 2026. The company said that balance was affected by about $2.3 million paid under sales-tax voluntary disclosure agreements during the quarter. The balance sheet also showed $655 thousand drawn on a secured revolving credit facility and a current portion of a secured term loan of $5.7 million, with a non-current secured term-loan balance, net of debt issuance costs, of about $11.4 million.

Frank said the silver linings were a 14% increase in hospital outpatient department rates for 97610 and removal of Q1 status from the code, which will allow it to be billed at the same time as other procedures rather than packaged to zero. He said CMS and the American Medical Association RUC have both signaled interest in looking at the structure of the 97610 code around scaling factors for multiple, large, or difficult wounds. The company said it will seek to encourage and engage with that work. It also said it continues to gain traction in hospitals and other users for whom cost savings by halting wound progression is the primary concern, and continues to see that as a core opportunity going forward.

A business update is scheduled for a conference call on November 11, 2026.