ImpediMed Faces Pressure to Maintain Growth as Contract Renewals Dip in Q2 FY25

Strong Financial Performance and Operational Progress

ImpediMed Limited (ASX: IPD), a Brisbane-headquartered medical technology company, has delivered a robust second quarter for fiscal year 2025, reporting record revenue of A$3.3 million, a notable increase from A$2.7 million in the prior quarter. This growth was driven by distributor inventory restocking in international markets and a favourable currency impact from a weakening Australian dollar against the US dollar.

Cash receipts also reached a record A$3.4 million, while net operating cash outflows improved significantly to A$2.5 million, down from A$4.8 million in Q1 FY25. This reduction was aided by a timely R&D tax credit and more controlled administration expenses. The company ended the quarter with a healthy cash balance of A$17.7 million, including term deposits, providing a solid runway for ongoing operations.

Expanding Reimbursement Coverage and Market Penetration

One of the standout developments was the substantial increase in reimbursement coverage. The number of reimbursed covered lives surged to 258.5 million, representing 75% of the population, up from 146.6 million in the previous quarter. Additionally, 25 states now have reimbursement coverage exceeding 80%, a significant jump from 16 states reported in Q1 FY25. This expansion is critical for wider adoption of ImpediMed’s SOZO Digital Health Platform, which is FDA-cleared and CE-marked for lymphoedema and other clinical indications.

Notably, 11 of the top 15 payors, including 4 of the top 5, now reimburse for SOZO lymphoedema measurements, underscoring growing payer acceptance and validation of the technology’s clinical value.

Sales Momentum and Contract Renewals

ImpediMed’s sales pipeline continues to build momentum, with a 112% year-over-year increase to 622 units. During the quarter, 49 units were sold globally, 20 in the US and 29 in the rest of the world, marking a 75% increase over Q1 FY25. The company maintained a low churn rate of 3%, reflecting strong customer retention.

While the Total Contracted Value (TCV) for the quarter was A$3.2 million, down from A$4.8 million in Q1 FY25, this was primarily due to fewer renewals and new unit sales relative to the previous quarter’s large customer renewal. However, the quality of contracts and strong price increases averaging 23% on renewals provide a positive outlook. These contracts helped lift the Annual Recurring Revenue (ARR) to A$12.5 million, up from A$11.6 million at the end of Q1 FY25.

Leadership and Strategic Execution

In leadership news, Andrew Grant concluded his six-month role as VP of Product Development and Customer Solutions and was reappointed as a Non-Executive Director on the Board, signaling continuity and strengthened governance. The company’s go-to-market strategy remains on track, with increased media activity and conference presence driving awareness and clinical adoption.

ImpediMed’s SOZO platform continues to benefit from clinical endorsements, including references in the NCCN Clinical Practice Guidelines for oncology survivorship, reinforcing its position as a leading bioimpedance spectroscopy solution for lymphoedema screening and management.

Looking Ahead

With a strong cash position, expanding reimbursement footprint, and growing sales pipeline, ImpediMed is well-positioned to capitalize on the increasing demand for digital health solutions in lymphoedema and related conditions. The company’s focus on subscription-based SaaS revenue models and strategic pricing enhancements could drive sustainable growth in the coming quarters.