Tactile Systems Technology grew third-quarter revenue 7% to $91.9 million, but net income fell to $7.2 million from $8.2 million. Shares dropped about 8% in after-hours trading. Lymphedema revenue rose 13% to $81.8 million. Airway clearance revenue fell 25% to $10.0 million, which the company blames on suppliers running down old stock after the second-quarter launch of a new AffloVest. Gross margin rose to 77% from 76%, but operating expenses grew 13% to $60.9 million. Operating income fell to $9.6 million from $11.0 million. Management held its 2026 revenue outlook and raised its adjusted EBITDA forecast slightly.

Tactile Medical's spending outpaces sales: rapid earnings reaction. A product changeover and heavier spending weighed on Tactile Medical's third quarter, even as its main lymphedema franchise kept growing. Key points. * Lymphedema sales grew at a double-digit pace again, while the smaller airway clearance line shrank. * Higher sales and administrative spending pushed operating income below last year's level. * Management kept its 2026 revenue outlook and slightly raised its profit forecast. * 10 stocks The Motley Fool, LLC like better than Tactile Systems Technology" Tactile Systems Technology (TCMD -0.74%) grew third-quarter revenue 7% to $91.9 million, but net income fell to $7.2 million from $8.2 million. Shares dropped about 8% in after-hours trading. Its core lymphedema business is still growing at a double-digit pace. The problem is that spending is growing just as fast, so those sales gains aren't reaching profit. Key numbers. * Lymphedema revenue: $81.8 million, up 13% year over year. * Airway clearance revenue: $10.0 million, down 25%. * Gross margin: 77%, up from 76%. * Operating expenses: $60.9 million, up 13%. What it means. The airway clearance slump looks like a timing issue. Tactile launched a new version of its AffloVest vest in the second quarter, and the release blames the drop on medical equipment suppliers working through inventory during the switch. When dealers run down old stock before ordering a new model, sales dip even if patient demand holds. The release doesn't say when orders will normalize. TCMD - Tactile Systems Technology. $22.87 -$0.17 (-0.74%) NASDAQ · As of 4:00 PM ET 11/02/26 TCMD · 1Y +3.11% Key data points. Market cap $521.91M Day's range $22.73 - $23.84 52wk range $15.32 - $37.77 Volume 245.2K Avg volume 284.3K Gross margin 76.08% Spending is the bigger issue. Gross margin improved on lower manufacturing costs and better product mix, yet operating income fell to $9.6 million from $11.0 million. Sales and marketing, plus the reimbursement and administrative line, both grew faster than revenue. Tactile is hiring and spending ahead of growth, which only pays off if sales speed up. Management held its 2026 revenue outlook and nudged up its adjusted EBITDA forecast. But the new range, after nine months of results, implies fourth-quarter adjusted EBITDA about 2% to 10% below last year's. The raise reflects a strong first half, not a better finish. What to watch next. Watch whether airway clearance revenue rebounds in the fourth quarter as suppliers stock the new AffloVest. Then check whether expense growth slows to match sales. Should you buy stock in Tactile Systems Technology right now. Before you buy stock in Tactile Systems Technology, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now... and Tactile Systems Technology wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of its recommendation, you'd have $334,793!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of its recommendation, you'd have $1,257,420!* Now, it's worth noting Stock Advisor's total average return is 874% - a market-crushing outperformance compared to 209% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors. *Stock Advisor returns as of November 2, 2026.