Tactile Medical Q3 Revenue Rises 7% as Profit Falls

That matters because a company can usually spend its way to faster market share gains only for so long before investors start asking when those investments turn into leverage. Tactile’s gross margin edged up to 77% from 76%, which is a healthy sign, but operating expenses climbed 13% to $60.9 million, outpacing revenue and cutting into operating income, which fell to $9.6 million from $11.0 million.

The weakest spot was airway clearance, where sales fell 25% to $10.0 million. Management blamed the decline on dealers working through inventory during the rollout of a new AffloVest model, which could prove temporary if demand reappears once channel stocking normalizes. That said, investors will want to see evidence soon that the product transition is not masking a deeper slowdown in one of the company’s two businesses.

The bigger question is whether Tactile can convert double-digit growth in lymphedema into broader earnings power. The company is hiring and spending ahead of growth, but that strategy only works if sales acceleration follows. For now, the numbers suggest execution is good enough to keep the business expanding, but not yet strong enough to produce meaningful operating leverage.

Management held its 2026 revenue outlook and raised adjusted EBITDA guidance, but the new range still implies fourth-quarter adjusted EBITDA could come in below last year’s level. In other words, the guidance update reflects a strong first half, not a sudden improvement in the near-term trend.

For long-term investors, this is a classic “show me” moment. Tactile still has an attractive niche in medical devices, with its lymphedema franchise growing at a double-digit rate, but the stock will likely need a clearer path to slower expense growth and steadier airway clearance sales before the market gives it more credit. Worth watching, but patience remains the key.