Hinge Health Reports Strong Q2 Results, Signaling Digital Health Resurgence

Hinge Health, a virtual physical therapy company, has reported impressive second-quarter results following its initial public offering (IPO) in May 2025. The company's performance signals a potential resurgence in the digital health sector, which has seen limited IPO activity since 2021.

Q2 Financial Highlights and Market Response

Hinge Health's Q2 revenue reached $139 million, marking a 55% year-over-year increase from $89.8 million in Q2 2024. This figure surpassed Wall Street analysts' expectations of $125 million. The company's strong performance led to an 18% surge in share price during after-hours trading on Tuesday.

Despite the revenue growth, Hinge Health reported a substantial net loss of $576 million, or $13.10 per share, compared to a loss of $13 million, or $0.96 per share, in the same period last year. However, the company demonstrated favorable operating leverage, with non-GAAP operating income of $26.1 million, significantly exceeding the Street target of $4 million.

The company's adjusted gross margin improved to 83%, up from 77% a year ago. Hinge Health also reported positive free cash flow of $32.6 million in Q2, including an adjustment for employer taxes related to stock-based compensation at IPO.

Expansion of Client Base and Service Offerings

Hinge Health's client base grew to 2,359, representing a 32% year-over-year increase. The company's calculated billings for the last twelve months reached $568 million, a 55% growth compared to the previous year.

In June, Hinge Health launched HingeSelect, a curated provider network for musculoskeletal (MSK) care. This network includes imaging centers and brick-and-mortar physical therapy providers, aiming to bridge the gap between in-person and digital care. The company has secured contracts with providers across more than 2,100 locations as of the end of Q2.

Daniel Perez, co-founder and CEO of Hinge Health, stated, "We have several large early client adopters, while we don't expect meaningful revenue impact until 2027, HingeSelect represents an important opportunity to improve member outcomes and client ROI while increasing yields and adding a high margin revenue stream for us as we'll recognize the percentage of the medical claims as net revenue."

Future Outlook and Industry Impact

For Q3, Hinge Health projects revenue between $141 million and $143 million, reflecting a year-over-year growth of 41% at the midpoint. The company also provided full-year 2025 guidance, expecting revenue between $548 million and $552 million, representing a 41% year-over-year growth at the midpoint.

Ryan Daniels, an analyst at William Blair, noted that Hinge Health's full-year guidance exceeded Street estimates on all key metrics. He commented, "We believe Hinge Health is well positioned to capitalize on a strong demand environment for digital MSK solutions, as employers seek cost savings solutions that also augment the employee experience."

The success of Hinge Health's IPO and subsequent financial performance may signal renewed investor confidence in the digital health sector, potentially paving the way for more companies to enter the public market in the coming months.