Business Overview and History
Ekso Bionics Holdings, Inc. (NASDAQ:EKSO) is an industry leader in the design, development, and marketing of wearable robotic exoskeleton products that augment human strength, endurance, and mobility. The company's innovative technologies serve a diverse range of end markets, catering to both individuals with physical disabilities or impairments, as well as able-bodied users seeking enhanced performance in industrial or workplace settings.
Ekso Bionics was founded in 2005 and is headquartered in the San Francisco Bay Area. The company's origins can be traced back to research conducted at the University of California, Berkeley, where the foundational exoskeleton technology was first developed. Over the years, Ekso Bionics has evolved from a research-focused organization into a leading commercial provider of advanced exoskeleton solutions.
In its early years, the company faced significant challenges related to the development and commercialization of its advanced exoskeleton technology. Ekso Bionics invested heavily in research and development activities, resulting in operating losses and negative cash flows from operations since its inception. To fund its operations, the company primarily relied on the issuance and sale of equity securities and bank debt.
Despite these early challenges, Ekso Bionics achieved several important milestones. In 2012, the company introduced its first commercially available robotic exoskeleton, the Ekso, designed for use in rehabilitation settings. In 2016, Ekso Bionics launched the EksoGT, a next-generation exoskeleton specifically designed for stroke and spinal cord injury rehabilitation.
The company continued to expand its product portfolio in 2019 and 2020, introducing the EksoNR for neurorehabilitation and the EVO upper body exoskeleton for industrial applications. Ekso Bionics also strengthened its global distribution network, particularly in Europe and Asia-Pacific, to drive increased sales and adoption of its products.
The company's product portfolio is now divided into two primary segments: EksoHealth and EksoWorks. The EksoHealth segment focuses on the development and commercialization of exoskeleton devices for medical and rehabilitation applications, such as the EksoNR and Ekso Indego Therapy and Personal devices. These products are designed to assist individuals with neurological conditions, including stroke, acquired brain injury (ABI), multiple sclerosis (MS), and spinal cord injury (SCI), by enabling improved mobility, rehabilitation, and independence.
In contrast, the EksoWorks segment targets the industrial and workplace market, with the company's flagship product, the EVO exoskeleton, designed to enhance the capabilities of able-bodied users engaged in physically demanding tasks, such as overhead work in industries like aerospace, automotive, construction, and renewable energy.
Financial Performance
Ekso Bionics has historically faced challenges in achieving profitability, as the company has invested heavily in research and development to advance its exoskeleton technologies. For the fiscal year ended December 31, 2023, the company reported revenue of $18.28 million and a net loss of $15.20 million, or $1.10 per diluted share. The company's operating cash flow for the same period was negative $12.05 million, with a free cash flow of negative $12.21 million.
In the most recent quarter (Q3 2024), Ekso Bionics reported revenue of $4.13 million, a 10% decrease compared to Q3 2023. This decline was primarily due to lower volume of Enterprise Health device shipments and lower EksoNR subscriptions, partially offset by an increase in Personal Health device shipments. The company's net loss for Q3 2024 was $2.07 million, with an operating cash flow of negative $2.28 million and a free cash flow of negative $2.29 million.
Ekso Bionics generates revenue globally, with sales in the Americas, EMEA, and APAC regions. In Q3 2024, approximately 46% of revenue came from international markets, with strong demand in Europe.
The company's financial performance is divided into two main reportable segments: EksoHealth and EksoWorks. For the three months ended September 30, 2024, EksoHealth revenue was $4.09 million, with a gross profit of $2.25 million. For the nine months ended September 30, 2024, EksoHealth revenue was $12.43 million, with a gross profit of $6.75 million.
The EksoWorks segment reported revenue of $42 million for the three months ended September 30, 2024, and $405 million for the nine months ended September 30, 2024. Gross profit for EksoWorks was $44 million for the three months ended September 30, 2024, and $52 million for the nine months ended September 30, 2024.
Overall, Ekso Bionics' total revenue for the three months ended September 30, 2024, was $4.13 million, with a gross profit of $2.21 million. For the nine months ended September 30, 2024, total revenue was $12.84 million, and gross profit was $6.80 million.
Liquidity
As of September 30, 2024, Ekso Bionics had cash and restricted cash of $8.29 million, which included $2.00 million in restricted cash related to the company's secured term loan agreement. The company's working capital position stood at $13.56 million, with a current ratio of 2.81 and a quick ratio of 2.14, indicating a relatively strong liquidity position.
The company's debt-to-equity ratio was 0.57 as of September 30, 2024. Ekso Bionics has a $2 million secured term loan agreement with Banc of California, which requires the company to maintain cash equivalent to the outstanding loan balance as restricted cash.
Recent Developments and Key Milestones
In the third quarter of 2024, Ekso Bionics reported revenue of $4.13 million, a decrease from $4.61 million in the prior-year period. The company's gross margin for the quarter was 53.5%, up slightly from 53.3% in the third quarter of 2023. Operating expenses were reduced to $4.85 million, compared to $5.39 million in the same quarter of the previous year.
A significant milestone for Ekso Bionics during the quarter was the receipt of initial reimbursement from the Centers for Medicare & Medicaid Services (CMS) for the company's Ekso Indego Personal device. This approval marked a critical step in enhancing access to the company's innovative technology for individuals with spinal cord injuries covered by Medicare and Medicaid.
In September 2024, Ekso Bionics completed an underwritten public offering, generating net proceeds of approximately $5.0 million. The company intends to use these funds for general corporate purposes, including growth and expansion initiatives within the EksoHealth segment, research and development activities, and pursuing strategic opportunities.
The company reported "absolute record sales in North America in 2023" and "absolute record sales in Europe this year," indicating they exceeded prior performance in those regions. While specific guidance figures were not provided, Ekso Bionics expressed optimism about future growth, citing a strong pipeline and demand in both the enterprise and personal segments. The company also anticipates normalization of procurement cycles with Integrated Delivery Networks (IDNs) in the near term, which is expected to support future growth.
Risks and Challenges
Ekso Bionics operates in a highly competitive and rapidly evolving market, facing competition from both established players and emerging competitors. The company's success is dependent on its ability to continuously innovate, develop new products, and maintain its technological edge. Failure to do so could result in the company's products becoming obsolete or losing market share.
Additionally, Ekso Bionics' financial performance is closely tied to the adoption and reimbursement of its products by healthcare providers and third-party payers, such as CMS. Delays or changes in reimbursement policies could significantly impact the company's sales and profitability.
The company also faces operational challenges, including managing its supply chain, optimizing production efficiency, and controlling costs. Disruptions in these areas could adversely affect Ekso Bionics' ability to meet customer demand and maintain profitability.
Outlook and Conclusion
Ekso Bionics is navigating a complex and dynamic market, where the adoption of exoskeleton technology for medical and industrial applications continues to evolve. The company's focus on innovation, strategic partnerships, and expanding its customer base across both the EksoHealth and EksoWorks segments positions it for potential growth opportunities.
The recent CMS reimbursement approval for the Ekso Indego Personal device represents a significant milestone, potentially unlocking a larger addressable market for the company's personal health products. However, Ekso Bionics must continue to execute effectively on its commercial strategies, strengthen its financial position, and address the various risks and challenges it faces to capitalize on the long-term potential of the exoskeleton industry.
The market for exoskeleton technology is expected to grow at a compound annual growth rate (CAGR) of over 30% from 2023 to 2028, driven by increasing adoption in medical rehabilitation and industrial applications. Ekso Bionics is well-positioned to capitalize on this growth with its portfolio of innovative products.
As Ekso Bionics continues to evolve and adapt to the changing market dynamics, investors will closely monitor the company's ability to drive sustainable revenue growth, improve profitability, and solidify its position as a leader in the exoskeleton technology space. The company's focus on growing its EksoHealth segment, particularly with the recent Medicare reimbursement approval for its Ekso Indego Personal device, while also maintaining its EksoWorks industrial exoskeleton business, provides a diverse foundation for potential future success.