Hinge Health Inc. (HNGE) Earnings & Analysis

Latest quarter

Hinge Health reported Q2 FY2026 revenue of $212.8 million, above the $200.5 million consensus. Adjusted earnings per share of $0.59 matched the consensus.

Revenue rose 53.0% from $139.1 million a year earlier. The filing attributed the increase primarily to existing clients, as the company retained members and added more members to its existing base. Hinge Health had 2,929 clients at June 30, 2026, compared with 2,359 a year earlier.

Gross margin rose to 86.4% from 70.3%. The filing attributed the increase primarily to lower stock-based compensation expense and more efficient care team operations. Diluted earnings per share were $0.52, compared with a loss of −$13.10 a year earlier; the filing said several expense categories had fallen as stock-based compensation costs associated with vesting conditions met at the IPO declined.

Free cash flow was $99.6 million, compared with $18.4 million a year earlier. The filing said free cash flow is typically highest in the second or third quarter, reflecting the timing of client billings.

Adjusted EPS is the figure the consensus estimates, not the GAAP EPS above.

What management said on the call

CFO James Budge said revenue came in above the company’s prior guidance because billings were better than expected. He attributed that performance to higher yield—the proportion of eligible people engaging with the service—while eligible lives and average selling price came in as expected. Budge pointed to targeted enrollment campaigns, member referrals and renewals as contributors.

Budge said trailing-12-month calculated billings reached $862.0 million. He explained that Hinge Health recognizes subscription revenue over the subscription period, while billings reflect when members engage.

On margins, Budge credited care team efficiency gains from AI and automation and said a one-time tariff refund also helped gross margin in the quarter. He said the company had tempered some costs without compromising its growth plans.

CEO Daniel Perez said the migraine program had attracted clients and that early enrollment and engagement were in line with expectations. He also described the agreement to acquire Cylinder Health as a way to enter gastrointestinal care. Perez said product integration remained to be done and targeted a broader rollout in 2027.

Asked about the acquisition, Perez said Cylinder served similar customers and shared distribution partners with Hinge Health. He described a planned service combining an AI-led experience and personalized nutrition guidance with access to gastrointestinal specialists. In another answer, Budge said Cylinder had been operating at a loss and that Hinge Health expected to bring it up to its own profitability profile over time.

Responding to a question about competition, President Jim Pursley said the company’s win rates had improved and credited investment in the product and member engagement. Looking ahead, Budge said eligible lives and average selling price were tracking in line with earlier expectations, while higher yield was the primary driver of the revenue guidance increase.

Guidance

Hinge Health raised its FY2026 revenue guidance to $856.0 million–$860.0 million and its non-GAAP operating income guidance to $236.0 million–$244.0 million, with a 28.0% non-GAAP operating margin at the midpoint. Budge said higher yield was the primary driver of the revenue increase. He also said the outlook includes $7.0 million–$8.0 million of Cylinder Health revenue for the remaining months of 2026.