How Did Saluda Medical Boost Revenue 17% While Losses Widened 25%?

Revenue Growth Amid Expanding US Market

Saluda Medical, Inc., a commercial-stage medical device company specialising in neuromodulation therapies, reported a 17% increase in revenue to US$39.4 million for the six months ended 31 December 2025. This growth was primarily driven by an expanding number of active implanting physicians in the United States, a higher implant rate per physician, and strong international sales performance, particularly in Europe and Australia.

The company’s flagship product, the Evoke System, which delivers spinal cord stimulation therapy for chronic neuropathic pain, continues to gain traction. The number of US implanted patients grew 16.7% compared to the previous corresponding period, with momentum accelerating quarter-on-quarter during the half-year.

Widening Losses Reflect Investment and One-Off Costs

Despite the revenue gains, Saluda’s net loss after tax widened by 25% to US$66.8 million, compared to US$53.5 million in the prior period. The increase was driven by ongoing investments in expanding the US sales force, which outpaced revenue growth, as well as one-time operating expenses amounting to US$4.5 million. These included US$2.8 million in deferred offering costs written off following the abandonment of an alternative financing plan, and US$1.7 million in severance and restructuring costs related to a workforce reduction.

Additionally, the company recognised a non-cash net expense of US$7.1 million related to fair value adjustments on convertible notes and warrant liabilities prior to their conversion to common stock as part of the company’s initial public offering (IPO).

Successful ASX IPO and Capital Structure Transformation

On 30 November 2025, Saluda Medical completed its IPO on the Australian Securities Exchange, raising gross proceeds of AUD 230.8 million (approximately US$152.3 million). This capital raise was a pivotal event, enabling the conversion of all outstanding redeemable convertible preferred stock and convertible notes into common stock, thereby simplifying the company’s capital structure.

Prior to the IPO, the company also completed a common stock financing transaction in October 2025, raising an additional US$15 million. The combined transactions resulted in a deemed dividend of US$90 million recorded as additional paid-in capital, reflecting the fair value difference in the induced conversion of preferred instruments.

Cash Flow and Liquidity Position

Cash used in operating activities increased modestly by 4.5% to US$60.3 million, reflecting the company’s strategic investments in sales force expansion and controlled inventory management. As of 31 December 2025, Saluda held US$151.4 million in cash and cash equivalents, bolstered by the IPO proceeds, providing sufficient liquidity to fund operations for at least the next 12 months.

The company did not declare or pay any dividends during the period and does not currently recommend any dividend payments, consistent with its focus on growth and commercialisation.

Outlook and Market Implications

Saluda Medical remains committed to leveraging its novel neuromodulation platform to disrupt the spinal cord stimulation market and expand into additional therapeutic areas. While the company anticipates continued operating losses in the near term due to ongoing commercial investments, the strengthened balance sheet and expanded US sales force position it well for future growth.

Investors will be watching closely how effectively Saluda can convert its expanding sales efforts into sustainable profitability and how the market responds to its post-IPO capital structure and trading liquidity.