(The “and Reddit” part first…a couple weeks ago @wpr101 and I started a subreddit: https://www.reddit.com/r/GrowthStockInvesting/ I just wanted to announce this as of course you’re all invited to join. We’re both Reddit shareholders and thought it would be cool to get more involved there as users / moderators. We’re hoping to have discussions there similar to the ones here on Saul’s. Nothing on Saul’s will change, btw…I think I’ll try posting my thoughts in both places…which leads me to Hinge Health…below is a post I made on Reddit last week after Hinge reported Q1 earnings. I thought they were a blowout! Hinge Health Q1 2026)
Hinge just crushed it!
In Q4 they had given a FY guide of 742m revenue (+26% Yoy) and 156m net income.
In Q1 they raised it to 804m revenue (+37% YoY) and – wait for it – 215m net income!
Clearly they know how to play the beat and raise game. Obviously they will raise again in Q2 and Q3, and then beat in Q4. It’s just a question of how much. I don’t imagine they’ll be able to do what they did here, but clearly growth will be over 40% and maybe even around 50% YoY going forward.
Even as I wrote that I was thinking…how on earth are they able to raise it that much? Here’s at least part of it: One big leading metric is LTM calculated billings which came in at 769.9m. Last quarter that was 671.4m. It’s not enough to say that this was their largest add ever. I need to show you the numbers:
Q3 2024: 49.1
Q4 2024: 50.6
Q1 2025: 39.5
Q2 2025: 61.4
Q3 2025: 55.8
Q4 2025: 47.2
Q1 2026: 98.5 (wow)
Anyway, I’m pretty glad they had such a huge quarter. Their initial FY guide was kind of meh at +26%, but raising to +37% immediately changes things! I had been trimming but I just added back a few shares in the after hours market today.
(Adding more as I post this here at Saul’s…I think it’s interesting that the market hasn’t had a stronger reaction to the quarter. I guess there’s still plenty of doubters with this business. The price seems pretty attractive to me…but I’m curious to hear what others think.)
Bear