Hinge Health’s shares were up 13% in after-hours trading Tuesday after the digital health company reported a strong fourth quarter and a bright outlook for 2026.
The digital musculoskeletal care provider, which went public in late May, brought in fourth-quarter revenue of $171 million, up 46% from the same period a year ago and easily topping Wall Street analyst estimate of $155 million for Q4 revenue. The company posted fourth-quarter adjusted earnings of 49 cents per share, significantly exceeding analyst estimates of 14 cents per share. Hinge Health’s non-GAAP income from operations increased 124% to $48 million during quarter.
Free cash flow for the quarter was $61.5 million, representing a free cash flow margin of 36%.
The company’s full-year 2025 revenue jumped 51% year-over-year to reach $588 million compared to revenue of $390 revenue in 2024, according to its Q4 and full-year financial results.
Hinge Health also reported strong client growth, with the number of clients increasing 25% to 2,830, while contracted lives expanded to 25 million from 20 million a year earlier. Hinge Health’s membership increased 47% year over year to 782,890 members.
The company also benefitted from strong operational efficiency as it reported gross margin of 85% in Q4 and gross margin of 83% for the full year 2025. Operating margin reached 28% in Q4 with a full-year 2025 operating margin of 20%, which executives touted to the impact of its investments in automation.
The company finished the year with a cash balance of $479 million.
For 2025, Hinge health generated $180 million in free cash flow, with a free cash flow margin of 31%.
“In the last decade, there’s been less than 10 tech companies that have delivered over $500 million of revenue, 50% revenue growth and 30% free cash flow margin, and we’re number 10,” Daniel Perez, co-founder and CEO of Hinge Health, told Fierce Healthcare in an interview prior to the earnings call. “Currently it’s really just Palantir and Nvidia who are delivering numbers like that, so we’re in very elite territory right now as a business, and that’s because of our investments in AI. We serve nearly 50% more people in 2025 while keeping our care team costs flat. On the customer front, we grew our reach to 25 million people across over 2,800 clients. But guess what? Almost 90% of Americans still do not have access to a digital PT solution, so we’re just getting started there.”
He added, “It was a hell of a year, and it’s really one for the record books.”
The company had a strong selling season, adding 4.8 million net new contracted lives to end the year. “That breaks down to 22 million self-insured lives and 2.6 million lives across fully insured Medicare Advantage and federal employee programs,” James Pursley, Hinge Health president, said during the call. On the enterprise side, Hinge’s clients now represent 53% of the Fortune 100 and 45% of the Fortune 500, he noted. The company boasts an annual client retention rate of 97%, he said.
But Hinge Health is not slowing down as it looks to take advantage of its position in the market to expand to more health plans and employers and build out more AI capabilities.
For the first quarter of 2026, the company expects revenue between $171 million and $173 million and non-GAAP income from operations to be between $30 million and $32 million, reflecting year-over-year growth of 108% and non-GAAP operating margin of 18% at the midpoint.
For the full year 2026, Hinge Health forecasts revenue of $732 to $742 million, surpassing analyst expectations of $700 million.
Hinge, which launched in late 2014, developed software combined with artificial intelligence to automate physical therapy services for joint and muscle health. The company has designed its platform to address a broad spectrum of musculoskeletal (MSK) care, including acute injury, chronic pain and postsurgical rehabilitation. To address the automation of care, Hinge has developed AI-powered motion tracking technology, a proprietary FDA-cleared wearable device called Enso and an AI-supported care team to deliver scalable and personalized MSK care.
“What we’re delivering is automated care delivery that improves outcomes, improves experiences and reduces costs, and we think this is a generational opportunity to automate the world’s largest services industry, which is healthcare,” Perez said in an interview.
Hinge Health’s growth comes as employers face growing healthcare costs and look for cost-savings solutions, which drives demand for digital MSK solutions.
“Healthcare is becoming an increasingly critical cost item for employers’ budgets. We’re approaching about $600 million of revenue for the U.S. PT market that we believe is valued at about $60 billion so we’re just getting started. But when it comes to our employer customers, we felt we didn’t come this far with automating your physical therapy spend so that we could stop at physical therapy, even at $60 billion,” Perez noted. “PT is just 1% of U.S. healthcare spend. We’re hard at work developing our next product to automate another slice of healthcare.”
Perez added that Hinge Health’s work in the AI-enabled digital health space is a “50-year journey.”
“We’re going to continue to peel away aspects of healthcare, automate them for our customers, so we can improve their outcomes, experiences and lower their costs, and we’re delivering very strong outcomes and very strong cost savings for our employer customers, and that’s given them a lot of trust in the next products that we’re going to be launching,” he said.
Hinge Health has made major investments in AI including new AI-powered features to better track MSK care outcomes and to provide members with 24/7 support. Hinge developed an AI-based movement analysis tool that uses computer vision technology to guide members through targeted movements, capturing joint angles, symmetry and endurance.
It also launched an AI care assistant, named Robin, that provides 24/7 support to help quickly triage patients who have pain flare-ups. The AI assistant can collect more details, share resources and summarize the situation for the member’s physical therapist to help accelerate care.
The company’s AI tools have significantly improved efficiency it served 47% more members in 2025 while keeping care team costs flat, Perez said during the call. “One major driver of this improvement was our successful rollout of automated AI-powered communications for routine messaging freeing up our care team to focus on higher-value human interactions where they can make the biggest difference,” he said.
During a Q&A with investors and analysts on the earnings call, Perez also shrugged off growing competition from AI companies in healthcare.
“Since the start of our existence, we always had potential new entrant threats, either large tech companies, incumbent health care companies or new startups, but we’ve thwarted those off and thrive because our competitive advantages go well beyond just a code base. Those advantages include our proprietary data, our distribution channels, a product experience that extends beyond software and our clinical validation,” Perez told investors and analysts during the company’s earnings call.
In Q4, Hinge Health surpassed 100 million lifetime member activity sessions with 41 million of those sessions completed in 2025 alone, Perez said.
Hinge Health’s proprietary data based on those sessions gives it a distinct advantage, he asserted. “Even if OpenAI and Gemini scrape the entire Internet, they have not conducted 100 million treatment sessions like we have. Simply put, we may have the largest and most granular data set for MSK conditions in the entire world,” he noted.
The company’s product experience extends beyond software to also include hardware and in-person care, he said.
Last summer, Hinge launched a referral network of in-person providers to complement its virtual physical therapy platform. The curated provider network for MSK care, called HingeSelect, includes imaging centers and brick-and-mortar physical therapy providers to help bridge the gap between in-person and digital care.
Through this hybrid care offering, Hinge Health is redirecting individuals from high-cost care to lower-cost care, according to executives.
“About 85% of HingeSelect members were able to move forward with a conservative care plan, most often digital physical therapy. This demonstrates HingeSelect can bend the cost curve,” Pursley said on the call.
“When it comes to automating health care, you won’t do it with software alone. You’re going to need hardware as well as in-person care elements,” Perez said, also noting the company’s clinical validation. “You could build some apps in a day or build some apps in a weekend, but a two-year outcome study still takes two years no matter how much AI you put into it,” he added.
William Blair analyst Ryan Daniels noted that Hinge Health stock has fallen 38% since last quarter to just above the company’s $32 IPO price. But Daniels noted in an analyst report that Hinge Health is well-positioned to capitalize on a strong demand environment for digital MSK solutions.
“We believe that Hinge is a market leader with significant advantages both on the product and go-to-market fronts, thus translating into a durable competitive position in an attractive market for virtual MSK solutions,” Daniels wrote.
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