Electromed Posts 17% Gain in Fiscal Q4
Key Points
Revenue (GAAP) climbed 17.3% year over year to $17.4 million in Q4 FY2025, marking record quarterly and annual results.
Gross margin expanded to 78.3%, with operating income up 30.2% from the prior-year quarter.
No financial guidance was provided for the coming quarters or year.
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Electromed (NYSEMKT:ELMD), a medical device company specializing in airway clearance therapy, reported record financial results for the quarter and fiscal year ended August 26, 2025. The company’s revenue rose to $17.4 million, a 17.3% increase from the same period last year, and diluted earnings per share (GAAP) reached $0.25, up from $0.20 in Q4 FY2024. These results surpassed the growth rate of the previous quarter, reflecting strong momentum in the core business. Electromed saw improvement across key profitability metrics, including a gross margin gain and significant growth in operating income. The quarter capped a strong year of operational and financial progress, though management offered no forward-looking guidance.
| Metric | Q4 FY 2025(3 months ended June 30, 2025) | Q4 FY 2024(3 months ended June 30, 2024) | Y/Y Change |
|---|---|---|---|
| EPS – Diluted | $0.25 | $0.20 | 25.0 % |
| Revenue | $17.4 million | $14.8 million | 17.6 % |
| Operating Income | $3.0 million | $2.3 million | 30.4 % |
| Gross Margin | 78.3 % | 76.2 % | 2.1 pp |
| Cash and Cash Equivalents | $15.3 million | $16.1 million | (5.1 %) |
| Shareholders’ Equity | $43.2 million | $44.5 million | (2.9 %) |
Company Overview and Business Focus
Electromed develops and markets medical devices in the respiratory care field. Its main product is the SmartVest System, which delivers High Frequency Chest Wall Oscillation (HFCWO) therapy to help patients clear mucus from their lungs. The system is primarily used by patients suffering from chronic lung conditions such as bronchiectasis, cystic fibrosis, and neuromuscular conditions such as cerebral palsy and ALS.
The company's business relies heavily on its direct-sales focused homecare model. Electromed’s strategy centers on sales rep productivity, expanding its reach in underpenetrated markets, and driving adoption of SmartVest through clinical education, reimbursement support, and patient outreach. Maintaining product effectiveness, regulatory compliance, and favorable reimbursement conditions are critical success factors for the company’s growth.
Quarter in Review: Financial and Operational Highlights
During the quarter, Electromed delivered accelerated growth compared to previous periods, with revenue rising 17.3% year-over-year. This growth was achieved in both its core Direct Homecare business, which brought in $15.4 million (up 14.8% year-over-year), and the non-homecare segment, which recorded full-year gains of 28.8% in FY2025. The primary driver was an increase in the number of direct sales representatives, resulting in more patient referrals and higher revenue per approval. Management noted, “The increase in revenue was primarily due to incremental referrals and approvals driven by an increase in direct sales representatives as well as higher net revenues per approval.”
Gross margin reached 78.3%, up from 76.2% a year ago, reflecting improved efficiency and higher revenue per device. Operating income increased 30.2% to $3.0 million, translating to a higher operating margin. Full-year operating income climbed 46.8% in FY2025 compared to FY2024. Diluted EPS (GAAP) was $0.25, a 25% improvement compared to Q4 FY2024. Net income (GAAP) came in at $2.2 million, up 20.6% from a year earlier.
On the cost side, Selling, General, and Administrative (SG&A) expenses rose 17.0% to $10.3 million. This increase was linked to additions in sales, marketing, and reimbursement personnel as the company scaled up to support its higher referral volumes. Research and development spending also rose but remained a small portion of revenues, totaling $996,000 for FY2025.
Electromed generated a record $11.4 million in operating cash for FY2025, maintaining a solid balance sheet with $15.3 million in cash and no debt as of June 30, 2025. The company repurchased $10.0 million in stock during FY2025, which, along with tax settlements, reduced its year-end cash position slightly. Shareholders’ equity finished at $43.2 million, and working capital stood at $34.6 million as of June 30, 2025. The direct sales force ended the year at 55 representatives, and Annualized homecare revenue per sales rep reached $1,058,000, above the company’s $0.9–$1.0 million target range.
Recent Achievements, Context, and Risks
Electromed continued to emphasize the SmartVest family, its core line of airway clearance devices. The SmartVest employs HFCWO, a process that uses rhythmic pulses to loosen and mobilize mucus, aiding patients with chronic lung disease in clearing their airways. No new product launches occurred during the quarter, with management opting to focus on scaling the existing business and investing in process improvements.
The company launched a manufacturing optimization plan to boost device production capacity and started roll-out of a new Customer Relationship Management (CRM) system to streamline sales operations. These infrastructure investments, highlighted in the earnings release, are scheduled to complete in fiscal 2026 and are aimed at supporting continued growth and efficiency.
Efforts to penetrate the homecare market deepened in the quarter. The expansion of the direct sales team and increased productivity per representative both contributed to the record revenue result. According to management, “The annualized homecare revenue per weighted average direct sales representative was $1,058,000, slightly higher than Electromed’s target range of $900,000 to $1,000,000.” Hospital and distributor channels outside homecare also showed strong growth, signaling additional market opportunity.
On the cash flow side, the year’s significant share repurchases totaled $10.0 million. The company finished the fiscal year with no debt and a healthy capital structure.
Looking Ahead: Guidance and Considerations
Management did not provide specific financial guidance for upcoming quarters or the next fiscal year.
With no guidance, investors and observers should keep an eye on the company’s ability to continue scaling sales productivity, maintaining margin gains, and executing planned operational upgrades. Continued reliance on a single product line and rising SG&A expenses are areas to watch, especially if revenue growth slows or product demand shifts unexpectedly.
Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.
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