Electromed, Inc. (ELMD): Business Model Canvas [Dec-2025 Updated]

You're looking past the stock ticker to find the real engine driving Electromed, Inc. (ELMD)'s performance, and honestly, it's a masterclass in direct-to-patient execution built around their proprietary High-Frequency Chest Wall Oscillation (HFCWO) technology. This focused approach helped them hit a record $64.0 million in Net Revenue for FY2025, boasting an impressive gross margin of 78.1%-that's the kind of operational leverage I value. Their primary channel, direct homecare sales, accounted for $57.3 million of that total, showing where the real money is made serving their large market of roughly 824,000 potential Bronchiectasis patients. If you want to see the nine building blocks that connect their Minnesota manufacturing to those high margins, check out the full Business Model Canvas breakdown below.

Electromed, Inc. (ELMD) - Canvas Business Model: Key Partnerships

You're looking at the core relationships Electromed, Inc. (ELMD) relies on to get the SmartVest system to patients. For a company with a fiscal 2025 revenue of $64.00 million, these partnerships are the engine for its direct-to-patient model and its emerging distribution efforts. Honestly, the blend of direct sales and channel partners is what makes their revenue stream interesting.

Durable Medical Equipment (DME) distributor network for expanded reach

Electromed, Inc. (ELMD) primarily uses a direct-to-patient model, but the DME channel is a growing complement. This channel is affected by the timing of distributor purchases, which can cause big swings in reported revenue quarter-to-quarter. Still, the growth rate shows commitment to this route for broader access.

The company previously established agreements with one national and one regional Home Medical Equipment (HME) distributor to sell the SmartVest system in the home care market. This strategy is meant to expand physician and patient access in specific US areas.

Healthcare providers (physicians) for patient referrals and prescriptions

Physicians are the gatekeepers; the entire fulfillment process starts with their prescription. Electromed, Inc. (ELMD) actively engages clinicians to drive referrals. They launched the "Triple Down on Bronchiectasis" educational campaign in Q1 FY2025, which reached over 10,000 clinicians.

The company's internal sales force is critical here. At the end of Q2 FY2025, the field sales force totaled 60 employees, with 54 of those being direct sales representatives. The effectiveness of this team is clear when you look at the revenue generated per rep. The annualized homecare revenue per weighted average direct sales representative in Q2 FY2025 was $1,077,000, which beat their internal target range of $900,000 to $1,000,000.

Insurance and payor organizations for reimbursement coverage

Navigating insurance is a major component of Electromed, Inc. (ELMD)'s direct fulfillment process. They employ a team of reimbursement specialists dedicated to managing payer relations and supporting prescribers and patients through financial hurdles. The availability of reimbursement remains a key consideration for healthcare professionals.

The SmartVest is reimbursed using HCPCS code E0483. The reimbursement landscape varies significantly between public and private payers, which is why managing this relationship is so important to maintaining their gross margins, which were 78.1% for the TTM ended June 30, 2025.

Here's a quick look at the typical reimbursement amounts that drive revenue per patient:

Component and raw material suppliers for device manufacturing

While Electromed, Inc. (ELMD) maintains manufacturing operations in Minnesota, specific financial or volume data regarding their component and raw material suppliers isn't detailed in their recent public filings as a direct partnership metric. The company's focus remains on the direct sales force and reimbursement efficiencies to drive their $64.00 million in fiscal 2025 revenue.

Finance: draft 13-week cash view by Friday.

Electromed, Inc. (ELMD) - Canvas Business Model: Key Activities

You're looking at the core engine of Electromed, Inc. (ELMD) right now-the things they absolutely must do well to keep the revenue flowing from the SmartVest® system. This is all about execution, from the factory floor to the patient's home.

Manufacturing the SmartVest® system in Minnesota

Electromed, Inc. designs, engineers, and manufactures every SmartVest system in New Prague, Minnesota. This domestic manufacturing focus is a key operational pillar. The company completed a manufacturing optimization plan in the first quarter of fiscal year 2026 (the quarter ended September 30, 2025) aimed at increasing capacity for future growth. Operational excellence here is high; for example, in the fourth quarter of fiscal year 2025, the company reported a 99% first pass yield.

Managing the full patient process: referral, claims, and fulfillment

The company relies on its unique direct-to-patient model, which requires tight coordination across the entire patient journey. This activity set includes managing referrals, handling the complex reimbursement (claims) process, and ensuring timely fulfillment. A significant operational achievement in late 2025 was maintaining 0 back orders as of the fourth quarter of fiscal year 2025, showing strong fulfillment management despite revenue growth. The company also noted efficiencies within its reimbursement department as a driver for increased revenue.

Expanding the direct sales force and sales territories

Growth is directly tied to the size and productivity of the direct sales force, which is the primary catalyst for revenue in the core Home Care business. Electromed, Inc. has been deliberately expanding this team. The focus is on maximizing revenue per representative, with management setting aggressive targets for productivity.

Here's a look at the sales force metrics as the company moved through fiscal year 2025 and into late 2025:

The direct homecare revenue for the quarter ending September 30, 2025 (Q1 FY 2026) was $14.9 million, up 12.7% year-over-year, driven by an increase in direct sales representatives. That's solid execution on the sales front.

Research and development (R&D) for product enhancements

Electromed, Inc. allocates resources to R&D to drive future product and service innovations, building on past milestones like the 2023 development of the first touchscreen HFCWO device. The company's stated focus for fiscal year 2026 includes generating additional clinical evidence to support the SmartVest System as a preferred treatment for bronchiectasis patients. The investment in R&D for the full fiscal year 2025 shows the commitment to this activity.

Here are the reported R&D expenses for the most recent periods:

• R&D Expense for the Full Fiscal Year 2025: $996,000.
• R&D Expense for the Full Fiscal Year 2024: $656,000.
• R&D Expense for Q4 FY 2025 (Three months ended June 30, 2025): $302,000.
• R&D Expense for Q4 FY 2024 (Three months ended June 30, 2024): $176,000.

The R&D spend increased by over 50% year-over-year for the full fiscal year 2025. That's a clear signal of increased investment in the pipeline.

Electromed, Inc. (ELMD) - Canvas Business Model: Key Resources

You're looking at the core assets Electromed, Inc. relies on to deliver its value proposition in the airway clearance space. These aren't just line items; they are the engine driving the business.

The most critical tangible resource is the SmartVest® Airway Clearance System itself, which embodies the proprietary High Frequency Chest Wall Oscillation (HFCWO) technology. This is what you are selling, built and manufactured in Minnesota, which helps Electromed, Inc. maintain control over its supply chain, a key advantage when you consider that 99% of net revenues are generated in the U.S..

Your human capital, specifically the direct sales force, is another vital asset. You ended Q3 FY2025 with 55 direct reps. The strategy here is clearly focused on productivity; management has indicated a desire to reach an annualized homecare revenue per direct sales representative target of $1 million plus.

Financially, the balance sheet provides a solid foundation. As of June 30, 2025, Electromed, Inc. held $15.3 million in cash and equivalents. This liquidity supports ongoing operations and strategic investments, like the sales force expansion and technology upgrades, while the company reports having no debt.

The intangible assets are just as important for a medical device company. These include the intellectual property protecting the SmartVest® technology and the necessary regulatory clearances. For instance, Electromed, Inc. successfully completed its annual ISO 13485 Surveillance Audit, which verifies compliance with quality management system standards for medical devices.

Here's a quick look at the key financial figures supporting these resources as of the Fiscal Year 2025 end:

You also maintain critical operational capabilities that feed into these resources:

• Proprietary HFCWO technology embodied in the SmartVest® Airway Clearance System.
• Direct field sales force totaling 55 representatives at the end of Q3 FY2025.
• Cash position of $15.3 million as of June 30, 2025.
• Regulatory compliance evidenced by successful ISO 13485 Surveillance Audit.
• Manufacturing operations located entirely in the U.S..

Finance: draft 13-week cash view by Friday.

Electromed, Inc. (ELMD) - Canvas Business Model: Value Propositions

The core value proposition for Electromed, Inc. centers on delivering effective, non-invasive airway clearance therapy through a highly controlled, patient-centric distribution channel.

Clinically proven, non-invasive High-Frequency Chest Wall Oscillation (HFCWO)

The SmartVest Airway Clearance System provides HFCWO therapy, which is supported by clinical outcomes data showing significant health improvements for patients with chronic respiratory conditions like bronchiectasis and cystic fibrosis. Electromed, Inc. is focused on a market that is still largely untapped; fewer than 15% of the estimated 824,000 diagnosed bronchiectasis patients in the U.S. currently use this non-invasive therapy. Therapy with SmartVest demonstrated key health outcomes improved in post- compared to pre-index period, including reductions in cough, all-cause hospitalizations, pneumonia, and pulmonary hospitalizations. Therapy with HFCWO also demonstrated an improvement in symptom scores and quality of life.

SmartVest® system designed for patient comfort and ease of use

The flagship SmartVest® Airway Clearance System is differentiated by its design, which prioritizes patient comfort and ease of use. This focus on the user experience is a key driver of the company's strong financial performance, reflected in the high profitability achieved through its distribution strategy. The gross profit margin for fiscal year 2025 was a robust 78.1% of net revenues. For the fourth quarter of fiscal year 2025, the gross margin was 78%.

Streamlined direct-to-patient model handles all insurance paperwork

Electromed, Inc.'s attractive direct-to-patient and provider model manages the entire process, from physician referrals to insurance claim handling and product delivery. This vertical integration supports high gross margins and operational efficiency. The direct homecare market, which utilizes this model, generated $57.3 million of the total net revenue of $64.0 million in fiscal year 2025. The company's commitment to streamlining the process is evident in the increasing adoption of its electronic tools.

Here's a quick look at the operational metrics supporting this model for FY 2025:

The productivity of the direct sales force is a critical component; in the third fiscal quarter ended March 31, 2025, the annualized homecare revenue per weighted average direct sales representative reached $1.028 million, exceeding the target range of $900,000 to $1 million.

Outcomes management via SmartVest Connect for physician tracking

The value proposition includes providing data back to physicians to track patient progress, which supports continued prescription. A longitudinal outcome-based study showed that Emergency Department (ED) visits significantly reduce with SmartVest use. Furthermore, exacerbations requiring hospitalizations were shown to reduce with SmartVest therapy. This data-driven feedback loop helps reinforce the clinical value for prescribing physicians.

• Therapy with HFCWO demonstrated improvement in symptom scores.
• All-cause hospitalizations reduced with SmartVest therapy.
• Pulmonary hospitalizations reduced with SmartVest therapy.

Electromed, Inc. (ELMD) - Canvas Business Model: Customer Relationships

You're looking at how Electromed, Inc. keeps its direct-to-patient model running smoothly, which is really the engine for their revenue growth. It's all about a hands-on approach, especially since their product requires patient buy-in and consistent use for success.

Dedicated, high-touch direct sales and support model

The core of the customer relationship starts with a deliberately expanded, high-touch sales force. This team is responsible for driving adoption, which directly impacts the top line. For instance, in the third quarter of fiscal year 2025, Electromed, Inc. ended the period with 55 direct sales representatives, part of a total field sales force of 62 employees. This expansion is key, as evidenced by the fact that Selling, General and Administrative (SG&A) expenses rose by 17.2% in Q3 FY2025, partly due to increased personnel costs.

Management focuses heavily on the productivity of these reps. The annualized homecare revenue generated per weighted average direct sales representative in Q3 FY2025 was $1,028,000. This figure comfortably exceeded their internal target range of $900,000 to $1,000,000. The company is signaling confidence by potentially revising that target upward for the next fiscal year.

Personalized patient training and ongoing customer service

Once a patient is approved, the relationship shifts to ensuring therapy success, which is where the dedicated support shines. This isn't just about shipping a device; it's about integrating it into their daily life. The company explicitly states its direct product support services include patient and clinician education, training, and follow-up to ensure the product is integrated into the daily treatment regimen.

To build market awareness and support this patient base, Electromed, Inc. actively engages clinicians and specific patient populations. For example, the "Triple Down on Bronchiectasis" educational campaign, launched in Q1 FY2025, reached over 10,000 clinicians by Q2 FY2025. By Q3 FY2025, this campaign had generated over 27,000 landing page views. Furthermore, they launched a targeted Veterans Administration direct-to-consumer outreach program across 11 cities in Q3 FY2025.

• Direct product support includes patient and clinician education.
• Follow-up services ensure product integration into daily treatment.
• Reimbursement department processes physician paperwork on behalf of the patient.
• Veterans Administration outreach program launched in 11 cities.

Wireless data connection for remote therapy performance tracking

Electromed, Inc. uses technology to maintain oversight and facilitate collaboration between the patient and the care team, which is critical for adherence. The SmartVest Connect system provides a wireless technology platform featuring a personalized HFCWO therapy management portal. This allows for remote monitoring of therapy performance.

They are also streamlining the initial order process, which is a key touchpoint. In Q3 2025, 35% of orders were submitted through their new smart order e-prescribe solution. This digital efficiency helps speed up the start of the patient-support relationship.

Focus on enhancing the overall customer experience

The goal is to make the therapy as effective and comfortable as possible so patients breathe easier and live better. This involves providing tools that bridge the gap between home use and clinical oversight. The company has developed specific reporting tools to keep physicians informed, which reinforces the value proposition and ongoing relationship.

• SmartNotes™ Patient Progress Report combines Quality of Life and Therapy Utilization data for physicians.
• TeleRespiratory Services utilize a team of Respiratory Therapists to stay connected with patients and support therapy utilization.
• The company aims for improved quality of life and reduction in exacerbation rates for patients using the SmartVest System.

Electromed, Inc. (ELMD) - Canvas Business Model: Channels

You're looking at how Electromed, Inc. gets its SmartVest® Airway Clearance System into the hands of patients and providers as of late 2025. The company leans heavily on its direct sales model, which is the engine for its revenue growth.

The primary channel remains the Direct Homecare sales route, which accounted for $57.3 million of the total Fiscal Year 2025 net revenues. This channel is directly supported by the company's dedicated field force.

The structure of these channels is detailed below, showing the relative contribution of the core homecare segment versus the growing non-homecare segments.

The direct sales force is key to driving the homecare segment. At the end of Fiscal Year 2025, Electromed, Inc. had 55 direct sales representatives (DSRs) out of 62 total field sales employees. This focus on direct engagement allows for better control over the patient experience and reimbursement process.

Here's a look at the productivity metrics tied to that direct sales force as of the end of FY2025:

• Annualized homecare revenue per weighted average direct sales representative in FY 2025 was $1,058,000.
• This figure was slightly higher than the company's target range of $900,000 to $1,000,000.
• The DSR team was responsible for driving the 15.7% year-over-year increase in direct homecare revenue for FY 2025.

Acute care setting sales to hospitals and clinics, along with select DME distributor relationships, fall under the non-homecare category. This segment is being actively expanded to complement the core homecare business.

For the full Fiscal Year 2025, the non-homecare business grew to $6.7 million, representing an increase of $1.5 million, or 28.8%, over the prior year. This growth was primarily attributed to increased distributor and hospital revenue.

Looking at a more recent quarter, Q3 FY2025, the breakdown for the non-homecare components was:

• Homecare Distributor Revenue: $696,000, which was a 32.8% growth year-over-year.
• Acute Care Setting Sales (Hospital Revenue): $724,000, which saw a 7.5% decline year-over-year for that specific quarter.

The strategy involves leveraging these select DME distributor relationships to broaden market penetration beyond the direct sales footprint. The growth in distributor revenue, as seen in the Q3 FY2025 figure of $696,000, shows progress in this area.

The company also implemented a smart order e-prescribe solution, which by Q3 FY2025 accounted for 35% of all orders submitted.

Electromed, Inc. (ELMD) - Canvas Business Model: Customer Segments

You're looking at the core of Electromed, Inc. (ELMD)'s business, which is selling the SmartVest® Airway Clearance System to specific patient populations and relying on healthcare professionals to drive prescriptions. The company's strategy heavily leans on the direct-to-patient homecare model, which accounted for the bulk of their sales in fiscal year 2025.

The primary customer groups Electromed, Inc. targets are:

• Patients with Bronchiectasis (large, underpenetrated market of ~824,000 US patients). Electromed, Inc. believes HFCWO is underprescribed in this group, representing a large growth opportunity.
• Patients with Cystic Fibrosis and other compromised pulmonary functions.
• Patients with neuromuscular conditions requiring airway clearance, such as cerebral palsy, muscular dystrophies, and amyotrophic lateral sclerosis.

The company also targets the professionals who make the prescription decisions:

• Healthcare providers (pulmonologists, respiratory therapists) who prescribe the device. Electromed, Inc. actively marketed to this group, reaching over 10,000 clinicians through its "Triple Down on Bronchiectasis" educational campaign by Q2 FY 2025.

The financial performance in fiscal year 2025 clearly shows the dominance of the direct homecare segment in serving these customers. Total Net Revenues for fiscal 2025 hit a record $64.0 million, a 17.0% increase over fiscal 2024.

Here's a look at how the core direct homecare segment, which serves these patients, performed relative to the sales force driving those patient relationships as of late 2025:

The revenue per patient estimate of about $10,000 gives you a sense of the value captured per successfully onboarded patient. The efficiency of the direct sales force is a key driver for reaching these customer segments; the annualized homecare revenue per weighted average direct sales representative reached $1,058,000 in FY 2025, exceeding the target range of $900,000 to $1,000,000. That's how you scale a direct-to-patient model, you defintely need efficient reps.

Electromed, Inc. (ELMD) - Canvas Business Model: Cost Structure

You're looking at the core expenses Electromed, Inc. (ELMD) is managing as it scales its direct-to-patient model. Understanding where the money goes is key to seeing how they turn revenue into profit, so let's break down the major cost buckets.

The fixed and variable costs associated with running the business are significant, especially given the company's focus on expanding its commercial footprint. Here's a look at the key components driving the cost structure.

Selling, General, and Administrative (SG&A) Expenses

SG&A is a major operational cost, reflecting the overhead needed to support sales and general corporate functions. You noted a figure of $9.4 million in Q1 FY2025, which is a critical benchmark for that period's overhead. To be fair, the latest reported figure for Q1 FY2025 was actually $9.8 million, which was an increase driven by higher compensation and investments in personnel to support growth initiatives.

• SG&A expenses for Q1 FY2025 were reported as $9.8 million.
• This represented an increase of 20.3% in Q2 FY2025 compared to the prior year.
• The increase in Q1 FY2025 was driven by higher compensation costs, including share-based compensation.

Cost of Revenues

This is the direct cost tied to generating sales, primarily the cost of the SmartVest system components and fulfillment. For the second quarter of fiscal year 2025 (Q2 FY2025), the Cost of Revenues was exactly $3.628 million. This number directly impacts the gross margin, which Electromed, Inc. has been actively improving through better pricing and efficiency.

Here's how the Cost of Revenues and resulting Gross Profit looked for Q2 FY2025:

Compensation and Incentive Costs for the Expanding Direct Sales Team

The direct sales force is the engine of Electromed, Inc.'s revenue growth, so their compensation is a critical, variable cost component. You're investing heavily here to drive patient referrals and approvals. The company has been deliberately expanding this team.

Here are the key metrics showing the investment in the sales force:

• Field sales force employees totaled 54 direct sales representatives at the end of Q2 FY2025.
• By Q1 FY2026, the average number of homecare direct field sales representatives was 57.
• The annualized homecare revenue generated per direct sales representative in Q1 FY2025 was $985,000.
• This metric improved in Q1 FY2026 to $1,052,000, which is at the higher end of the company's target range of $1,000,000 to $1,100,000.

Manufacturing and Inventory Costs for the SmartVest System

Costs related to producing the SmartVest system and managing the associated inventory are another core expense. Electromed, Inc. has been focused on optimizing these areas to improve margins.

Management commentary suggests active management of these costs:

• In Q2 FY2025, the company noted an ability to improve working capital by reducing inventory while still meeting patient needs.
• During Q1 FY2026, the company completed its manufacturing optimization plan, which is expected to position them for future growth.

Finance: draft 13-week cash view by Friday.

Electromed, Inc. (ELMD) - Canvas Business Model: Revenue Streams

You're looking at the core engine of Electromed, Inc. (ELMD) for the fiscal year ending June 30, 2025. The top-line performance was strong, showing they are successfully converting market need into dollars.

Net Revenue for FY2025 was a record $64.0 million, which represents a 17.0% year-over-year growth from the prior fiscal year's $54.7 million. That's eleven consecutive quarters of year-over-year revenue growth, which is a solid operational rhythm. Plus, the company maintained excellent pricing power, evidenced by a High Gross Margin of 78.1% on net revenues for FY2025, up from 76.3% in FY2024. Here's the quick math on the full-year performance.

The revenue streams are clearly segmented, though the direct homecare channel remains the primary driver. Honestly, the growth in the non-homecare side is what you want to watch closely for diversification.

The SmartVest® system sales/rentals in the direct homecare market are the bedrock of this business. This channel relies heavily on their direct sales force, which totaled 53 reps at the end of Q1 FY2025, covering 57 territories. For context on the scale, the Direct Homecare Revenue for Q4 FY2025 hit $15.4 million.

Revenue from sales to hospitals and other acute care settings, which you can think of as the institutional or non-homecare segment, is showing acceleration. This segment is key for future scale beyond the direct-to-patient model. For the full fiscal year 2025, this non-homecare business grew to $6.7 million, an increase of 28.8% from $5.2 million in fiscal 2024.

You can break down the revenue generation focus like this:

• Sales/rentals of the SmartVest® system in the direct homecare market.
• Revenue from sales to hospitals and other acute care settings.
• Higher net revenue per device, which boosted gross margin rates.

If onboarding takes 14+ days, churn risk rises, but the high gross margin suggests strong pricing power regardless of the channel mix. Finance: draft 13-week cash view by Friday.