Ekso Bionics: Advancing Rapidly in the Exoskeleton Industry

24 Jul Ekso Bionics: Advancing Rapidly in the Exoskeleton Industry

Ekso Bionics Holdings, Inc. (NASDAQ: EKSO) designs, develops, and markets exoskeleton products that augment human strength, endurance, and mobility. Its exoskeleton technology serves multiple markets and can be utilized by able-bodied persons and persons with physical disabilities or impairments.

Ekso Bionics Holdings, Inc. (NASDAQ: EKSO)

Market Cap: $24.17M; Current Share Price: 1.33 USD
Data by YCharts

The Company and its Products
Ekso offers multiple products and services to customers from its diverse portfolio.

Products

• EksoNR is a wearable robotic exoskeleton specifically designed to be used in a rehabilitation setting to assist individuals recovering from both acute and chronic conditions.

Ekso Indego Therapy is a modular, adjustable, lightweight, lower-limb powered exoskeleton that can be custom-sized and fitted to patients for rehabilitation and wellness applications.

Ekso Indego Personal is a lightweight, powered lower limb orthosis that enables people with mobility impairments to walk independently.

Ekso Nomad is a power Knee Ankle Foot Orthosis (KAFO) currently under development. It is a pre-revenue product. Nomad will be available in limited volumes for clinical trials in 2024, with a commercial launch planned for 2025.

EVO is a wearable upper-body exoskeleton that elevates and supports workers’ arms to assist them with tasks from chest height to overhead. EVO has not been registered with or evaluated by the FDA.

Services

EksoPulse—EksoNR includes cloud connectivity through EksoPulse, which gathers and transmits statistics and device information during walking sessions.

EksoCare – For most Ekso Health products, the Company offers extended warranty and premium service options under the EksoCare program.

Device servicing and repair—The Company offers fee-for-service repairs and maintenance for devices not covered under warranty.

Training—The Company offers a range of training programs that demonstrate to customers how to use products safely and effectively.

The Company has two business segments:

The EksoHealth segment represents sales of regulated medical devices regardless of the end customer. It has two business lines: Enterprise Health and Personal Health.

Enterprise Health customers include inpatient rehabilitation hospitals, clinics, and some outpatient rehabilitation clinics. The Enterprise Health product line includes EksoNR and Ekso Indego Therapy.

Personal Health customers include the Veterans Administration, which provides products to qualified veterans for individual use, individuals covered under worker’s compensation insurance, and private individuals who pay out of pocket.

• The EksoWorks segment represents sales of products to able-bodied individuals for industrial or work-related use. The only active product within This segment is EVO.

On December 5, 2022, Ekso acquired the Human Motion and Control Business Unit from Parker Hannifin Corporation, an Ohio corporation. The assets acquired from the business unit included intellectual property rights for devices. These include the U.S. Food and Drug Administration (FDA) cleared lower-limb powered exoskeletons that enable task-specific overground gait training to patients with weakness or paralysis in their lower extremities.

We will discuss the critical rationale for covering this Company.

1. Significant Market Opportunity

In the Enterprise Health Market segment, the Company focuses on rehabilitation treatments that can benefit from EksoNR and Ekso Indego Therapy products. These treatments take place in inpatient rehabilitation facilities (IRF), long-term acute care hospitals (LTACH), skilled nursing facilities (SNF), and outpatient rehabilitation clinics, among others. Ekso can follow patients through their rehabilitative process from hospital to home. Overall, in the Health Market segment, Ekso expects an annual global market opportunity of $650m – $900m, an expanded market opportunity of about $875m – $1.3B through outpatient centers, and more than $300m through VA and CMS.

For Ekso Health, the addressable user population includes those with Stroke, Traumatic Brain Injury, Spinal Cord Injury, and Multiple Sclerosis.

The Ekso Works segment also has a promising future. The second most common category of injuries is over-exertion due to lifting, lowering, and repetitive motions (21.7%)³ of work-related injuries. The Company’s EVO product can help able-bodied workers reduce fatigue and increase endurance, leading to a healthier workforce.

The current market opportunity in the Works segment is more than $5 billion annually.

Thus, through its varied portfolio, Ekso is poised to capture a significant share in multiple markets by providing exoskeleton products to both able-bodied individuals and those with impairments.

2. Sound business strategy

Ekso constantly explores business development initiatives to fuel growth and long-term value. The Company has implemented the following strategies to build shareholder value.

Expanded product portfolio with a broader reach to a larger addressable market by providing patient care from hospital to home use

If acceptable pricing terms are established with CMS, the number of SCI individuals accessing Ekso Indego Personal’s potentially life-changing technology may significantly increase.

Robust revenue growth and a strong pipeline through a scalable commercial strategy

Major network operators are choosing EksoNR as the standard of care for Neurorehabilitation.

Ekso’s existing neuro-rehabilitation post-acute care customers are beginning to recommend Indego Personal to SCI patients for home therapy.

Building a greater awareness of EVO’s productivity and safety benefits to large addressable markets in manufacturing, construction, and service.

Focus on achieving scale and positive operating cash flow through top-line revenue growth, product line expansion, and continual operational improvements.

If successfully implemented, the above strategies can help Ekso achieve its aim of improving people’s lives with advanced robotics through a continuum of care from hospital to home.

3. Financial Performance

For Q1 FY24, revenue was $3.8 million compared to $4.1 million for Q1 FY23. Gross profit for Q1 FY24 and Q1 FY23 were $2.0 million, representing a gross margin of approximately 52% in the first quarter of 2024, compared to a gross margin of 49% for the same period in 2023.

Net loss applicable to common stockholders for Q1 FY24 was $3.4 million, or $0.20 per basic and diluted share, compared to a net loss of $4.4 million, or $0.33 per basic and diluted share, for the same period in 2023.

For FY23, the Company achieved record revenue of $18.3 million, compared to $12.9 million for FY22, an increase of 42% YoY.

Gross profit for FY23 was $9.1 million, representing a gross margin of approximately 50%, compared to gross profit of $6.2 million for FY22, representing a gross margin of 48%. Net loss applicable to common shareholders for FY23 was $15.2 million, or $1.10 per basic and diluted share, compared to $15.1 million, or $1.16 per basic and diluted share, for FY22.

Thus, the Company achieved exceptional YoY growth for FY23, and this trend may continue given the abundant market opportunity, subject to widespread adoption of the Company’s products.

Risks
Ekso has a promising future. However, the Company is subject to certain risks.

Firstly, the markets in which Ekso’s products are sold are highly competitive and continue to develop, making future performance uncertain. Moreover, coverage policies and reimbursement levels of third-party payers, including Medicare or Medicaid, may impact the sales of the Company’s products. Finally, Ekso has incurred significant losses to date and anticipates continuing to incur losses in the future, and it may not achieve or maintain profitability.

Conclusion
For FY23, Ekso achieved record revenue of $18.3 million, compared to $12.9 million for FY22, an increase of 42% YoY. The Company has significant opportunities in the markets it serves. Specifically, the Health segment has an annual global market opportunity of at least $650m—$900 m. On the other hand, the Works segment presents an annual opportunity of more than $5 billion, indicating a bright future for the Company.

However, Ekso operates in a highly competitive environment, and coverage policies and reimbursement levels of third-party payers may impact the sales of the Company’s products. This makes the Company’s future performance uncertain. Hence potential investors must proceed with caution.

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

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Reference:

https://ir.eksobionics.com/press-releases/detail/755/ekso-bionics-reports-record-annual-revenue-of-18-3-million

https://d1io3yog0oux5.cloudfront.net/_a41dfadee4c7c20d8e7c97e65ce4e1b8/eksobionics/db/261/2922/pdf/Ekso_IR_presentation_April_29_24.pdf

https://ir.eksobionics.com/press-releases/detail/758/ekso-bionics-announces-first-quarter-2024-financial-results

https://www.sec.gov/ix?doc=/Archives/edgar/data/1549084/000143774924013696/ekso20240331_10q.htm

https://www.sec.gov/ix?doc=/Archives/edgar/data/1549084/000143774924006423/ekso20230626_10k.htm