Myomo (NYSE: MYO) reported Q3 EPS of ($0.70), $0.35 better than the analyst estimate of ($1.05). Revenue for the quarter came in at $1.93 million versus the consensus estimate of $1.17 million.

Financial and operational highlights for the third quarter of 2020 include the following (all comparisons are with the third quarter of 2019, unless otherwise noted):

• Revenue was up 218% to a record $1.9 million with revenue units up 123% to a record 51 and a sequential increase in average selling price
• Revenue from the direct billing channel increased more than six-fold and represented 68% of total revenue
• Gross margin was 56%, up from 46% in the third quarter of 2019 and 51% in the second quarter of 2020
• The reimbursement pipeline had more than 750 MyoPro units as of September 30, 2020, with nearly 230 candidates entering the pipeline during the third quarter
• The MyoPro direct billing pipeline now represents nearly 70% of reimbursement pipeline units, and more than 95% of those entering the domestic pipeline during the third quarter are direct-bill candidates
• Backlog, which represents insurance authorizations received but not yet converted to revenue, was 162 units as of September 30, 2020, a 35% increase compared with 120 units as of June 30, 2020
• Insurance companies authorized a record 98 patients to receive a MyoPro during the third quarter

Management Commentary

“We achieved record revenue in the third quarter with deliveries of MyoPros authorized for insurance reimbursement at their highest level ever. As COVID-19 restrictions were lifted beginning mid-year, we were able to fit devices on patients while also securing a large number of new authorizations for patients in our pipeline,” stated Paul R. Gudonis, Myomo’s chairman and chief executive officer. “The shift to direct billing is supporting both revenue growth and margin improvement, while our ongoing digital transformation helped us grow our pipeline and backlog via telehealth and social media marketing. As a result, Myomo entered the fourth quarter with a record backlog of MyoPros to provide to patients and submit to insurers for payment,” he added.

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