Hinge Health, a digital physical therapy company, has updated its prospectus with first-quarter results that show significant revenue growth.

In the first quarter of 2025, Hinge Health reported US$123.8 million in revenue, a 50% increase from US$82.7 million in the same period last year.

This figure also reflects a rise from the US$117.3 million reported in the fourth quarter of 2024, which showed a 44% year-over-year growth.

The company turned profitable with US$17.1 million in net income, reversing a US$26.5 million loss from the same period last year.

Its gross margin rose to 81%, driven by a slight drop in cost of goods sold.

Despite market headwinds, the company is moving forward with its IPO, first filed in March 2025.

🔗 Source: CNBC

🧠 Food for thought

1️⃣ Digital health’s path to profitability becomes clearer amid IPO momentum

Hinge Health’s impressive financial transformation, from a $26.5 million loss to a $17.1 million profit while maintaining 50% revenue growth, represents a significant milestone in the digital health sector’s maturation 1.

This profitability shift comes at a critical moment when digital health funding has rebounded to $3 billion in Q1 2025, with average deal sizes increasing to $24.4 million, up from $15.5 million in the previous quarter 2.

The company’s gross margin improvement from 70% to 81% demonstrates how digital health companies can achieve substantial profitability once they reach scale, potentially changing investor perspectives about the sector 1.

This performance contrasts sharply with the sector’s historical challenges. Recent bankruptcies like 23andMe and the rarity of digital health IPOs highlight how unusual Hinge’s profitable growth trajectory is 3.

Hinge’s decision to update its prospectus and proceed with IPO plans, while peers delay due to market volatility, signals management’s confidence in their financial foundation and growth prospects 4.

2️⃣ MSK digital care transforms from niche to mainstream healthcare solution

Hinge Health’s journey from raising an $8 million Series A in 2017 to IPO preparations in 2025 showcases how musculoskeletal digital care has evolved from experimental technology to essential healthcare infrastructure 5.