Nuwellis (NUWE) Q3 2026 earnings review
Nuwellis narrows its operating loss, but cash burn stays high
Nuwellis, the maker of the Aquadex fluid-removal machine for heart and kidney patients, trimmed its operating loss while underlying hospital demand grew. Reported third-quarter sales stayed at $2.2 million, but excluding a $0.4 million backorder catch-up a year ago, sales rose 22% by our math as pediatric sales climbed 20%. Chief executive Mike McCormick cut overhead and used outside manufacturing to shrink the operating loss to $2.1 million.
| Underlying net sales (ex-backorder) | +22% from a year ago by our math ($2.2M reported, unchanged) |
|---|---|
| Pediatric net sales | +20% from a year ago (+26% year-to-date) |
| Gross margin | 69.5% +4.3 percentage points from a year ago |
| Cash and cash equivalents | $8.3M 2.8 quarters of Q3 cash burn by our math |
⚖️ Verdict: ⚪ Neutral
The story is unchanged because lower accounting losses have not yet reduced the cash drain that forces constant share sales. Filing with regulators early to treat babies down to five kilograms and adding two partner devices give the sales team more to sell, and July's stock sales rebuilt stockholders' equity. The bad news: third-quarter operating cash burn remained near $3 million by our math, console sales slipped to eight machines, and the share count multiplied more than a hundredfold from a year ago.
The question now is whether lower operating expenses will cut actual cash burn before the $8.3 million cash balance runs low in 2027. Either the new console base and partner devices lift sales fast enough to shrink the quarterly cash drain, or the company must sell more stock next year. The third-quarter filing's circuit sales figure and fourth-quarter cash flow will tell.
🐂 Bull Case
Sales Rose 22% Without Last Year's Backorder
Nuwellis makes the Aquadex system, a machine that removes excess fluid from patients with heart failure or kidney trouble. Reported revenue stayed at $2.2 million, unchanged from a year ago, and rose 12% from the second quarter. Last year's third quarter included $0.4 million of delayed orders that the medical device maker cleared at once.
"Although our third quarter faced a tough comparison against the prior-year period when we fulfilled a significant backorder, the underlying momentum in our business remains strong, as evidenced by the growth in our pediatric segment," chief executive Mike McCormick said. Excluding that $0.4 million catch-up, sales rose 22% from a year ago by our math, led by a 20% gain in children's hospitals.
What to watch: fourth-quarter revenue against last year's $2.4 million, which included final international orders before the US group exited foreign markets. Holding sales near $2.2 million would show domestic demand can replace that lost foreign business.
Outsourced Manufacturing and Cost Cuts Narrowed Losses
Nuwellis moves closer to covering its bills when it raises gross margin and trims overhead that still runs past sales. In the third quarter, the operating loss shrank 24% from a year ago to $2.1 million as the medical technology company handed production to an outside factory and cut expenses to "align expenses with the highest-priority commercial and strategic programs".
- Gross margin: 69.5%, up 4.3 percentage points from 65.2% a year ago
- Cost of goods sold (cost of making the products): 30.5% of sales, down 4.3 percentage points from a year ago
- Selling, general and administrative expense (sales and overhead): 135.9% of sales, down 23.7 percentage points from 159.6% a year ago
- Research and development expense: 26.4% of sales, down 0.8 percentage points from 27.2% a year ago
Gross margin did dip from 76.1% in the second quarter, so the pricing boost from last year is leveling off. What to watch: whether quarterly operating expenses stay near $3.6 million in the fourth quarter, because keeping overhead there while sales grow is the only path to halving losses.
FDA Filing and Distribution Deals Expand Pediatric Reach
Children's hospitals are the fastest-growing part of Nuwellis, with pediatric sales up 26% over the first nine months of 2026. Right now, doctors can only use Aquadex under its official label on children who weigh at least 20 kilograms. In November, the device maker filed an application with regulators "to expand the indication of its Aquadex SmartFlow® System to include pediatric patients weighing five kilograms and above", beating its own fourth-quarter schedule.
Management also signed two partnerships to give its hospital sales reps more items to sell. It will co-promote Atrility Medical's AtriAmp, a heart-rhythm monitor used after surgery, and distribute Zorro-Flow, an external urine collection system for small children. McCormick said these deals "broaden our product offering in a capital-efficient manner through our established commercial infrastructure", avoiding the research bills of building devices from scratch.
What to watch: regulator feedback on the five-kilogram filing and first revenue from the two distributed products in early 2027. Approval would open infant intensive care units to the existing sales team.
🐻 Bear Case
Cash Burn Barely Budged and Share Count Multiplied
Nuwellis has funded its operations through repeated stock sales that shrink each existing shareholder's stake. McCormick said that "we significantly narrowed our operating loss and cash use during the quarter while continuing to invest in the areas that matter most to our long-term growth." The cash flow statement tells a tighter story than the income statement.
Across the first nine months, operations used $9.3 million of cash, up from $7.8 million a year earlier. Subtracting the first six months leaves $3.0 million of operating cash burn in the third quarter by our math, barely down from $3.2 million in the second quarter and $3.1 million in the first. To refill its bank account to $8.3 million, the medical device group raised $3.4 million in a July stock offering, took in $3.3 million from warrant exercises, and sold $1.4 million of shares on the open market.
Those stock sales pushed the average share count to 338,384, up more than a hundredfold from 2,646 a year ago, and total shares reached 540,912 by quarter end. What to watch: fourth-quarter operating cash burn, because at $3.0 million a quarter the $8.3 million cash balance lasts less than three quarters by our math.
Console Placements Slowed to Eight Units
Nuwellis runs a razor-and-blade model: it sells Aquadex consoles to hospitals so those hospitals will buy single-use blood circuits for every patient treatment. Over the first nine months of 2026, console sales rose 88% to 32 units from 17 a year earlier, which management says builds a larger base for recurring circuit sales.
Both the machine count and the disclosure around consumable sales are mixed. In the third quarter alone, the company sold 8 consoles, down from 12 in the same quarter last year and down from 9 in the second quarter and 15 in the first. Because the earnings release did not separate circuit revenue from console revenue, investors cannot yet see whether the 24 machines placed in the first half of the year sped up single-use circuit orders once last year's price increase turned one year old.
What to watch: the circuit sales growth rate in the third-quarter quarterly filing. A reading below the second quarter's 9% would show that new machines are still slow to turn into regular patient treatments.
Risks this quarter didn't answer
Four standing concerns depend on details that only appear in the full quarterly filing or on the conference call, leaving them open after the press release.
- Disposable circuit growth: missing from the release; the quarterly filing's revenue breakdown will show how circuit volume held up after last year's 5% price increase turned one year old.
- Customer concentration: two hospital accounts made up 26% of second-quarter sales; the filing's footnote will show if sales broadened.
- Clarity Prime kidney monitor: acquired with Rendiatech in March for a planned 2027 launch, but not mentioned in the release; any update on trial or engineering spend will test the research budget.
- Vivian pediatric dialysis device: unmentioned for a second straight quarter after earlier plans for a clinical trial; clarity on whether the five-kilogram Aquadex filing replaces it will matter for research costs.
👓 Other Themes
Noncash Warrant Gain Swung Net Income Comparison
Nuwellis reported a third-quarter net loss of $2.0 million, compared with net income of $0.5 million a year earlier. That swing came from accounting rules for stock warrants rather than hospital operations: last year's third quarter included a $3.2 million noncash gain when the value of warrant liabilities dropped, versus a $94 thousand gain this quarter. Without those noncash warrant moves, the net loss shrank from $2.7 million to $2.1 million by our math.
💲 Other KPIs
Stockholders' equity — the net value of assets minus liabilities on the balance sheet — swung from a $2.06 million deficit in June to $9.85 million in September. The July stock and warrant sales, plus moving warrants from liabilities into equity after the July reverse stock split, put the company back above the $2.5 million stock-exchange listing rule.
Uncollected customer bills fell 10.0% from $1.55 million in the second quarter even though quarterly sales rose 12.3%. Collecting bills faster than sales grew brought in cash during the quarter and shows hospitals are paying on time.
Unsold consoles and circuits on hand rose 1.6% from $1.74 million in the second quarter and stayed 7.3% below the $1.91 million held at the end of 2025. Working with its contract manufacturer has allowed the medical device maker to support 13% nine-month sales growth without tying up extra cash in stock.
🔮 Guidance
Unchanged. The release did not update last quarter's statement that cash lasts through the second quarter of 2027, which already included the $6.7 million raised in July. By our math, $8.3 million of cash against $3.0 million of third-quarter operating cash burn covers 2.8 quarters, taking the company to the middle of 2027.
❓ Key Questions
How fast did single-use circuit sales grow in Q3?
Circuit sales slowed from 15% growth in Q1 to 9% in Q2, helped by a 5% price increase from Q3 last year. With that price hike now a year old, Q3 circuit growth shows whether the 32 consoles placed this year are driving patient treatments.
Why did a $1.1M smaller operating loss save little cash?
Loss from operations narrowed from $3.17 million in Q2 to $2.05 million in Q3, yet operating cash burn only edged down from $3.18 million to $2.99 million by our math. Investors need to know if working-capital payouts masked a lower ongoing monthly burn.
What are the financial terms of the two distribution deals?
Nuwellis will sell Atrility Medical's AtriAmp monitor and distribute the Zorro-Flow urine system. Management called the deals capital-efficient, but did not disclose inventory commitments, minimum purchase rules, or the gross margin share it keeps on each sale.
What is the status of Clarity Prime and Vivian?
After buying Rendiatech in March to launch the Clarity Prime kidney monitor in 2027 and developing the grant-funded Vivian pediatric system, the Q3 release mentioned neither program. Investors need to know if engineering funds shifted to the distributed products instead.