Hinge Health, Inc. Class A ((HNGE)) has held its Q3 earnings call. Read on for the main highlights of the call.
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Hinge Health, Inc. Class A’s recent earnings call exuded optimism, underscored by substantial revenue growth, enhanced operational efficiency, and successful AI initiatives, all pointing to robust business momentum. Despite these positive developments, the company acknowledged potential challenges, including a seasonal slowdown in Q4 and uncertainties stemming from a federal government shutdown.
Strong Revenue Growth
Hinge Health reported impressive revenue figures for the third quarter, achieving $154 million, which marks a 53% increase year-over-year. The company’s calculated billings over the last 12 months reached $624 million, reflecting a 50% growth compared to the same period last year.
Improved Operational Efficiency
The company demonstrated significant improvements in operational efficiency, with a gross margin rising to 83% from 79% the previous year. Additionally, the operating margin improved markedly to 20%, a notable turnaround from a negative 4% in Q3 of the previous year.
AI and Automation Initiatives
Hinge Health has been at the forefront of AI-driven innovations, launching initiatives such as the AI care assistant Robin and advanced movement analysis capabilities. These efforts have resulted in a 120% increase in code output and a threefold acceleration in the deployment of new features compared to the previous year.
Successful Client Growth and Retention
The company ended the third quarter with 2,560 contracted clients, a 25% increase year-over-year. This growth was particularly strong in the federal space and among jumbo clients, underscoring Hinge Health’s successful client retention strategies.
High Free Cash Flow
Hinge Health reported a significant increase in free cash flow, generating $81 million this quarter compared to $28 million in Q3 of the previous year. This represents a free cash flow margin of 53%, highlighting the company’s strong financial health.
Seasonal Slowdown Expected
The company anticipates a seasonal slowdown in the fourth quarter, with revenue guidance set between $155 million and $157 million. This represents a 33% year-over-year growth at the midpoint, a decrease from the previous quarter’s performance.
Impact of Federal Government Shutdown
Hinge Health expressed concerns about the potential impact of a prolonged federal government shutdown on its operations, particularly beyond the new year, adding an element of uncertainty to its future outlook.
Forward-Looking Guidance
Looking ahead, Hinge Health has raised its full-year 2025 revenue guidance to a range of $572 million to $574 million, representing a 47% year-over-year growth. The company also projected non-GAAP income from operations between $106 million and $108 million, reflecting a 19% margin at the midpoint. These forecasts underscore the company’s confidence in its continued growth trajectory.
In summary, Hinge Health’s earnings call painted a picture of a company on a strong growth path, driven by robust revenue figures, improved operational metrics, and innovative AI initiatives. While challenges such as a seasonal slowdown and potential government shutdown loom, the company’s forward-looking guidance remains optimistic, suggesting continued momentum in the coming quarters.