Hinge Health Inc. (HNGE) stock surged Wednesday morning after the digital pain management company posted fourth-quarter results that blew past analyst expectations and offered an optimistic outlook for the year ahead.
The company reported adjusted earnings per share of 49 cents, comfortably beating the consensus estimate of 39 cents. Revenue reached $170.73 million, a 46% leap from the prior year and well above Wall Street's expectation of $156.64 million.
Profitability metrics showed meaningful improvement too. Gross margin expanded to 84% from 82% a year earlier, while adjusted gross margin hit 85%. Operating income climbed 31% to $27.3 million, but the real standout was adjusted operating income, which more than doubled to $48 million—a 124% increase year-over-year.
The Growth Machine Keeps Humming
Beyond the headline numbers, Hinge Health's operational metrics painted a picture of a business hitting its stride. Last twelve months calculated billings surged 44% year-over-year to $671.4 million. The client base expanded 25% to 2,830 clients, while membership jumped 47% to nearly 783,000 members.
Annual yield improved to 3.9% in 2025, up 50 basis points from the previous year—a sign the company is extracting more value from its client relationships.
"We closed out the year with an exceptional quarter and a strong selling season, driving our highest win rates to date and greatest number of eligible lives added in any year," said Daniel Perez, Co-Founder and CEO of Hinge Health.
Looking Ahead: 2026 Guidance Beats Expectations
For the first quarter of 2026, Hinge Health expects revenue between $171 million and $173 million, handily surpassing the consensus estimate of $160.28 million. The company projects adjusted operating income of $30-$32 million, which would represent an 18% operating margin at the midpoint.
The full-year 2026 guidance was equally impressive. Revenue is expected to land between $732 million and $742 million, well ahead of analyst expectations of $701.33 million.
"Our commercial momentum, combined with expanding margins and strong cash generation, gives us confidence in our ability to continue automating care delivery, sustain our position as a leader in digital musculoskeletal care, and drive attractive growth and increased margins in 2026," Perez said Tuesday.
Analyst Take: Momentum Building
William Blair weighed in Tuesday with an enthusiastic response: "The company exited the year with significant momentum and high visibility, leading to 2026 guidance that came in nicely above Street expectations for both revenue and operating income. Lastly, the 2025 selling season ended on a high note, with strong win rates and solid performance across all lines of business."
Analyst Ryan Daniels pointed to several encouraging signs, including a record 4.8 million net-new contracted lives, an all-time high win rate, and 97% client retention. William Blair maintains its Outperform rating on the stock and sees the recent weakness—shares have dropped roughly 41% over the past six months—as an attractive entry point for long-term investors.
Price Action: Hinge Health shares jumped 13.13% to $37.39 in premarket trading Wednesday.
