AOTI Reports 14% Revenue Growth in 2025 Amid US Healthcare Headwinds, Cuts Arizona Medicaid Services

Market access momentum and clinical validation

There was real progress on reimbursement access and endorsements:

• Medicaid Provider IDs expanded to 19 states, including California. Billing is active in six states, though near-term revenue outside New York is expected to be modest given sector headwinds.
• Multiple endorsements of TWO2 therapy: positive ECRI assessment and Cigna coverage in the US, a nationwide recommendation by Germany’s G-BA, and a NICE treatment recommendation in the UK with availability across the NHS.
• Eyes on the Wound roll-out advancing, adding remote monitoring and data capture to support outcomes and payer engagement.

All of this supports the central prize: a CMS local coverage determination for topical oxygen therapy. Medicare coverage would open a much larger US population and catalyse broader payer adoption over time. The company continues to guide to a near-term decision.

Cash, debt and covenants

Operating cash outflow improved to $4.8 million but remained negative, reflecting receivables growth and higher inventory to support demand. Cash rose to $13.4 million following an $11.0 million upsizing of the SWK Funding loan, taking total principal to $19.5 million and moving the Group to $6.5 million net debt. The effective interest rate on the facility was 13.18% at year end.

Covenants were amended and met at December 2025, including a minimum last-twelve-month revenue of $64.7 million and EBITDA of $6.0 million. Management says there is sufficient cash generation and headroom in the facility to fund working capital.

Outlook for 2026: a transitional year with H2 weighting

AOTI guides to low single digit reported revenue growth versus 2025, equivalent to mid-teens underlying growth excluding Arizona Medicaid. Adjusted EBITDA margin is expected to be high single digits and second-half weighted, reflecting the Arizona decision, sales force optimisation and elevated market access costs as the US market recalibrates.

Key revenue drivers in 2026 are the VA segment and New York Medicaid. International markets, including the UK and Germany, have positive reimbursement momentum but are expected to be non-material near term.

Why this update matters

In a year when US policy turbulence kneecapped predictability, AOTI still grew double digits and turned a profit. The tougher read-across is cash conversion and the working capital drag from Arizona. Management’s decision to pause new Arizona Medicaid starts is pragmatic and should stabilise cash needs, but it also trims near-term margin.

On the positive side, AOTI’s differentiated at-home TWO2 therapy and outcomes-based platform are aligned with where payers are heading. Provider IDs in 19 states, NICE and G-BA endorsements, and early wins with US payers all support the thesis. If CMS grants national coverage, the addressable market expands sharply and the existing 26-state commercial footprint provides leverage without heavy extra spend.

What I’m watching next

• CMS local coverage determination timing and scope for topical oxygen therapy.
• Arizona cash collections against the $15.6 million receivable and the pace of arbitration wins.
• VA growth normalisation through 2026 as DOGE disruption fades.
• Sales productivity gains from the late-2025 commercial restructuring.
• Debt service headroom versus working capital as Medicaid conversion outside New York remains slow.

Bottom line

These results are better than the macro would suggest. Revenue held up, the model stayed profitable, and AOTI kept investing in access and data to deepen payer stickiness. The balance sheet is now doing more of the heavy lifting to bridge receivables, which raises execution risk if collection timetables slip.

For patient retail investors, the crux is simple: can AOTI convert policy and clinical tailwinds into cash flow in 2026 while holding the line on debt, and will CMS arrive on cue. If yes, the company’s outcomes-based, at-home model should compound nicely from a stronger base. If no, the grind continues a little longer. For now, the strategy looks sound and the big catalyst is still in play.

Quick jargon buster

• Adjusted EBITDA – a profit measure before interest, tax, depreciation and amortisation, adjusted for non-underlying items.
• CMS local coverage determination – a Medicare decision that defines when and where a therapy is covered nationally or regionally.
• CECL – Current Expected Credit Losses accounting that books expected bad debts up front based on risk.
• VA, Medicaid, Medicare – US public payer programmes for veterans, low-income patients and seniors respectively.
• DME provider – Durable Medical Equipment provider that supplies medical devices directly to patients at home.