KORU Medical Q2 2026 earnings: Core growth restores quarterly profitability

KORU Medical Systems (NASDAQ: KRMD) reported fiscal Q2 2026 net revenue of $12.0 million, up 18.2% from $10.2 million a year earlier, while GAAP diluted EPS improved to $0.01 from a per-share loss in Q2 2025. Gross margin rose 160 basis points to 65.1%, and adjusted EBITDA increased to $0.9 million as core revenue expanded 23.4%. The quarter ended June 30, 2026, and the results were released on August 5.

Core financial results

Revenue growth and better unit economics moved KORU back into quarterly operating profitability. Gross profit increased 21.2%, supported by higher volumes, lower manufacturing costs, and higher average selling prices.

Operating expenses rose 6.3%, substantially slower than revenue, although higher compensation, benefits, and legal fees increased selling, general, and administrative expenses. KORU recorded operating income of $627,000, compared with a $313,000 operating loss a year earlier.

Adjusted EBITDA and adjusted diluted EPS are non-GAAP measures. The release describes Q2 2025 diluted EPS as a loss; its narrative reports $(0.01), while the statement of operations rounds the figure to $(0.00).

Business and segment performance

Core revenue represented 95.0% of total revenue, up from 91.0% a year earlier. International core was the largest growth contributor, accounting for approximately 70% of KORU’s total year-over-year revenue increase, while pharma services and clinical trials declined because of customer order timing.

Domestic growth came from higher pump and consumable volumes, supported by new patient starts, market-share gains in new and existing accounts, and growth in the underlying subcutaneous immunoglobulin market. International growth reflected distributor purchases related to pre-filled syringe conversions and new patient starts in established European markets.

International growth led Q2, but conversion timing may slow the second half

International core produced the quarter’s largest increase, but management expects that growth to moderate during the remainder of 2026. The company cited regional launch dynamics in specific European markets transitioning to pre-filled syringes.

Management characterized this as a timing issue rather than a reduction in the size of the international opportunity. Even so, the outlook makes the timing of distributor purchases and patient conversions important because international core supplied most of the quarter’s incremental revenue.

Profitability, cash flow, and the balance sheet

KORU’s 18.2% revenue growth and 21.2% gross-profit growth outpaced the 6.3% increase in operating expenses, creating operating leverage. SG&A increased by approximately $0.6 million because of compensation and benefits associated with new hires and higher legal fees, partly offset by lower stock compensation, recruiting, and consulting costs. Research and development expense declined by approximately $0.1 million.

A $406,000 loss on the disposal of fixed assets contributed to $369,000 of total other expense, limiting the amount of operating income that reached the bottom line. Nevertheless, the company recorded positive GAAP net income for the quarter.

Cash and cash equivalents stood at $8.3 million on June 30, down from $8.9 million at the end of 2025. KORU used $0.5 million of cash during Q2, but for the first six months of 2026, operating cash flow was positive at $231,000, compared with an outflow of $698,000 in the prior-year period. Accounts-receivable collections and higher accounts payable supported cash flow, while an $833,000 inventory increase and a $2.0 million reduction in accrued expenses were offsets.

The disclosed intangible-asset acquisition totaled $961,035, with $461,035 paid in cash and $500,000 settled through the issuance of common stock. This investment contributed to the updated year-end cash outlook.

2026 guidance

KORU narrowed its full-year revenue range, raised its gross-margin outlook, and reiterated its expectation for positive adjusted EBITDA. The company also updated its year-end cash target to account for the connected-monitoring technology acquisition.

The revenue outlook now incorporates management’s expectation that international core growth will moderate as European markets work through pre-filled syringe conversion dynamics.

Management perspective

KORU acquired a connected-monitoring technology asset that could add real-time information about patient usage to its infusion platform. The company did not quantify the asset’s expected revenue or earnings contribution.

KORU also entered a multi-year supply agreement intended to support product assurance, operating execution, and longer-term gross-margin expansion. Financial terms were not disclosed.

In U.S. oncology, the company withdrew its 510(k) application for FreedomEDGE with Phesgo and shifted its strategy toward alternative molecules requiring higher infusion volumes. This changes the company’s oncology market-entry path and makes progress with those alternative molecules a future operating milestone.

Recent insider transactions

The supplied transaction records show six direct purchases by five insiders during May and June 2026, with reported transaction amounts totaling approximately $118,799. These records describe the transactions but do not establish the insiders’ views about KORU’s valuation or outlook.

Risks investors should monitor

• International conversion timing: International core drove most of Q2’s revenue increase, but management expects growth to moderate as certain European markets transition to pre-filled syringes.
• Customer order volatility: Pharma services and clinical-trial revenue fell 35.0% because of customer order timing, illustrating the potential for quarterly variability in this business.
• Oncology strategy reset: Withdrawal of the Phesgo 510(k) application removes that program from the company’s U.S. market-entry plan, while the timing and commercial potential of alternative higher-volume molecules remain unquantified.
• Expense discipline: Compensation, benefits, and legal fees increased SG&A. These costs could limit further operating leverage if revenue growth slows.
• Cash and working-capital execution: Inventory increased, Q2 used $0.5 million of cash, and the technology acquisition required cash investment, making delivery of the greater-than-$7.5-million year-end cash target an important measure of execution.

Summary

KORU’s Q2 2026 results showed stronger core volumes, a higher gross margin, and enough operating leverage to restore quarterly profitability. International core was the principal growth engine, but its expected moderation, the decline in clinical-trial revenue, and the revised U.S. oncology strategy create important execution questions for the remainder of 2026. Progress toward the updated revenue, margin, adjusted EBITDA, and cash targets will show whether the quarter’s profitability can be sustained.

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