HNGE Q2 Earnings Meet Estimates, Sales Top, '26 View Raised, Stock Up

HNGE's Q2 Revenue and Billings Momentum

Hinge Health registered revenues of $212.8 million in the second quarter, up 53% year over year. The increase was primarily driven by stronger member yield, supported by clinically targeted enrollment campaigns, member referrals and renewals. The figure surpassed the Zacks Consensus Estimate by 6.1%.

LTM calculated billings reached $861.8 million, up from $568.4 million as of June 30, 2025. The company expanded its client base to 2,929 from 2,359 clients in the prior-year period.

Shares of HNGE were up approximately 3.1% during yesterday’s after-market trading following the second-quarter results. The stock has rallied 71% in the year-to-date period against the industry’s 5.9% fall. The broader S&P 500 Index has also increased 13.3% in the same time frame.

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HNGE’s Margin Trend

In the quarter under review, Hinge Health’s adjusted gross profit rose 60.7% year over year to $185.3 million. The adjusted gross margin expanded 400 basis points (bps) to 87%.

Research and development expenses declined 87.8% year over year to $34.1 million, sales and marketing expenses decreased 44.7% to $81.4 million, and general and administrative expenses fell 88.8% to $28 million. The sharp declines reflected significantly lower stock-based compensation expenses compared with the prior-year quarter, which included substantial IPO-related charges.

Total operating expenses of $143.5 million declined 78.8% year over year.

Adjusted operating income totaled $61.5 million, up 135.7% year over year. The adjusted operating margin was 29%, up 1,000 bps from the prior-year quarter’s figure.

HNGE’s Financial Position

Hinge Health exited second-quarter 2026 with cash and cash equivalents of $286.2 million compared with $186.7 million at the end of first-quarter 2026.

Cumulative net cash provided by operating activities at the end of second-quarter 2026 was $144.5 million compared with $25.2 million a year ago.

HNGE’s Guidance for Q3 & 2026

Hinge Health has initiated its financial outlook for the third quarter of 2026 and raised its outlook for the full year.

For the third quarter, the company expects revenues in the range of $223 million-$225 million, reflecting year-over-year growth of 45% at the midpoint. Adjusted operating income is expected to be between $61 million and $63 million, indicating year-over-year growth of 104% and an adjusted operating margin of 28% at the midpoint.

For the full year, HNGE now expects revenues in the range of $856 million-$860 million, up from the prior outlook of $798 million-$804 million. The revised range reflects year-over-year growth of 46% at the midpoint.

The company now expects adjusted operating income to be between $236 million and $244 million, up from the prior outlook of $217 million-$227 million. The updated guidance reflects year-over-year growth of 101% and an adjusted operating margin of 28% at the midpoint, up from 27% previously.

Wrapping Up

Hinge Health delivered mixed second-quarter 2026 results, with revenues surpassing expectations and earnings meeting the consensus mark. The performance was driven by improvement in member yield, supported by targeted enrollment campaigns, referrals and renewals. Strong growth in LTM calculated billings and expansion of the client base further reflected healthy business momentum. Expansion of both adjusted gross margin and adjusted operating margin during the quarter was encouraging.

Product expansion remained central to HNGE’s growth strategy. Its Migraine Care Program received approvals from more than 450 clients covering over 5 million lives, with early enrollment and engagement tracking in line with expectations. HNGE agreed to acquire Cylinder Health for $105 million in cash, accelerating its entry into gastrointestinal care. Cylinder Health serves nearly 100 clients across 2 million lives and has partnerships with two of the three largest pharmacy benefit managers and three of the five largest national health plans. The transaction is expected to close in the third quarter, with a broader integrated GI program rollout planned for 2027.

Commercial momentum remained strong, with the active pipeline ahead of the prior year and win rates improving. Momentum across enterprise and SMB clients, along with deeper health-plan distribution and growing adoption of HingeSelect, supports the company’s land-and-expand strategy.

HNGE raised its 2026 revenue outlook, backed by stronger yield trends, cost discipline and continued client demand. However, the near-term contribution from newer offerings, including gastrointestinal care, is expected to remain modest, leaving continued execution in the core musculoskeletal business as an important growth driver.

HNGE’s Zacks Rank & Other Key Picks

Hinge Health currently flaunts a Zacks Rank #1 (Strong Buy).

Some other top-ranked stocks from the broader medical space are West Pharmaceutical WST, McKesson MCK and Cardinal Health CAH, each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

West Pharmaceutical reported second-quarter 2026 adjusted earnings per share (EPS) of $2.37, which beat the Zacks Consensus Estimate by 13.9%. Revenues of $872.3 million surpassed the Zacks Consensus Estimate by 4.2%.

West Pharmaceutical has an estimated long-term earnings growth rate of 16%. WST’s earnings surpassed estimates in the trailing four quarters, the average surprise being 17.4%.

McKesson reported a fourth-quarter fiscal 2026 adjusted EPS of $11.69, which beat the Zacks Consensus Estimate by 1.1%. Revenues of $96.3 billion missed the Zacks Consensus Estimate by 5.5%.

McKesson has an estimated long-term earnings growth rate of 13.7%. MCK’s earnings surpassed estimates in the trailing four quarters, the average surprise being 3.1%.

Cardinal Health reported a third-quarter fiscal 2026 adjusted EPS of $3.17, which beat the Zacks Consensus Estimate by 13.2%. Revenues of $60.94 billion missed the Zacks Consensus Estimate by 2.3%.

Cardinal Health has an estimated long-term earnings growth rate of 17%. CAH’s earnings surpassed estimates in the trailing four quarters, the average surprise being 10.3%.

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This article originally published on Zacks Investment Research (zacks.com).

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