Key Highlights

  • Third quarter 2026 net Revenue rose 8% to $28.4 million from $26.3 million.
  • Gross Margin held at 93% of net revenue.
  • Operating income was $0.7 million, compared with $2.9 million a year earlier, after about $3.0 million of legal and advisory costs.
  • Net loss from continuing operations was $1.3 million, or $0.15 per diluted share.

Sanara MedTech Inc. (NASDAQ:SMTI) reported unaudited financial results for the third quarter ended September 30, 2026, on November 12, 2026. The Fort Worth, Texas company develops and sells medical technology products aimed at the surgical market, with a focus on improving clinical outcomes and reducing healthcare costs. Revenue grew while gross margin held steady, but Operating Income fell and the company reported a loss from continuing operations, largely because of legal and advisory expenses.

Revenue and Gross Profit

Net revenue for the third quarter was $28.4 million, an 8% increase from $26.3 million in the third quarter of 2025. Gross Profit was $26.3 million, or 93% of net revenue, compared with $24.5 million, also 93% of net revenue, a year earlier. For the first nine months, net revenue rose 12% to $84.4 million, and gross profit was $78.4 million, or 93% of net revenue.

The gross margin was unchanged year over year at 93% while revenue grew. Because the gross margin is already high, most of the change in profit comes from operating expenses rather than from product costs.

Operating Income and Net Loss

Operating income was $0.7 million, compared with $2.9 million in the third quarter of 2025. The release said the third-quarter figure included approximately $3.0 million in legal and advisory service costs, which explains most of the decline in operating income.

The company reported a net loss from continuing operations of $1.3 million, or $0.15 per diluted share, compared with Net Income from continuing operations of $0.8 million, or $0.09 per share, a year earlier. The release reports these figures on a continuing operations basis, and readers should refer to the full statements for any discontinued operations effects.

Revenue growth of 8% in the quarter and 12% for the nine months indicates that the company's sales continued to expand even as one-time costs weighed on operating income. Readers comparing the two growth rates can see that the year-to-date pace is faster than the quarterly one, which indicates that quarterly growth was lower than the year-to-date average.

Sector Context

Medical device and wound care companies typically carry high gross margins, with profit driven by sales volume, reimbursement conditions and the cost of sales and marketing. Operating results in this segment can be affected by one-time legal or advisory costs, which often arise during strategic or corporate actions.

The company's third-quarter cost pattern reflects that dynamic. Its underlying gross Economics remained stable, but the non-recurring advisory costs were large enough to move the operating result from a profit level comparable to the prior year to a much smaller figure.

Risks and What Lies Ahead

The company's near-term results depend on whether legal and advisory costs continue, and on how its sales growth translates into operating leverage. A repeat of the third-quarter expense level would keep operating margins under pressure even with revenue growth.

The release does not explain the nature of the advisory work in detail, so investors should look for further disclosure in the company's filings. Future quarters will show whether operating income recovers toward prior levels as those costs fall away.

Sanara's results also show the effect of a high gross margin on operating performance. Because the gross profit is so large relative to revenue, changes in operating expenses have a direct effect on operating income. The release shows the legal and advisory costs as the main driver of the year-over-year change, so the trend in those costs will be central to how the margin profile develops.

Final Word

The third quarter shows Sanara growing revenue by 8% and holding a 93% gross margin, while operating income fell and the company reported a loss from continuing operations. The drop reflects roughly $3.0 million of legal and advisory costs, which the company treats as a separate item within the period. Whether those costs prove temporary will shape the company's profit trend in the coming quarters.