Hinge Health Reports Strong Q3 Results, Eyes Expansion Beyond Physical Therapy

Hinge Health, a leader in virtual physical therapy, has announced impressive third-quarter results for 2025, surpassing Wall Street expectations and signaling ambitious plans for growth and diversification. The company's performance underscores the increasing demand for digital health solutions and the potential for AI-driven healthcare services.

Robust Financial Performance

Hinge Health reported Q3 revenue of $154 million, marking a 53% increase from the previous year and exceeding analyst predictions of $142 million. The company's client base grew to 2,560, representing a 25% year-over-year increase. Notably, Hinge Health achieved non-GAAP income from operations of $30.4 million, a significant improvement from a $3.7 million loss in Q3 2024.

The company's financial health was further evidenced by record free cash flow of $81.3 million, compared to $27.5 million in Q3 2024. This strong performance has led Hinge Health to raise its full-year 2025 guidance, projecting revenue between $572 million and $574 million, reflecting a 47% growth at the midpoint.

AI-Driven Efficiency and Innovation

Central to Hinge Health's success is its focus on AI-powered solutions. The company has implemented AI throughout its operations, leading to significant improvements in productivity and user experience. CEO Daniel Perez highlighted that code output increased by 120%, with new features being pushed live three times faster compared to the previous year.

Recent AI-powered innovations include a movement analysis tool utilizing computer vision technology and an AI care assistant named Robin, providing 24/7 support for patients experiencing pain flare-ups. These advancements have contributed to improved operational efficiency, with adjusted gross margins reaching 83% compared to 79% a year ago.

Strategic Expansion and Future Outlook

Hinge Health is not content with dominating the virtual physical therapy market alone. The company has signaled intentions to expand beyond musculoskeletal care, eyeing potential M&A opportunities to broaden its healthcare automation capabilities.

In June, Hinge launched HingeSelect, a referral network of in-person providers complementing its virtual platform. This curated network includes imaging centers and brick-and-mortar physical therapy providers across all 50 states, positioning the company to create a comprehensive two-sided marketplace in healthcare delivery.

As Hinge Health continues to leverage its strong cash position and operational efficiency gains from AI initiatives, the company appears well-positioned to shape the future of automated healthcare delivery beyond its current focus on physical therapy.