Prospectus Summary
PROSPECTUS SUMMARY This summary highlights information contained elsewhere in this prospectus and does not contain all of the information that you should consider in making your investment decision. Before investing in our Class A common stock, you should carefully read this entire prospectus, including our consolidated financial statements and the related notes included elsewhere in this prospectus and the information set forth under the sections titled “Risk Factors,” “Special Note Regarding Forward-Looking Statements,” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”Overview
Our vision is to build a new health system that transforms outcomes, experience and costs by using technology to scale and automate the delivery of care.
Hinge Health leverages software, including AI, to largely automate care for joint and muscle health, delivering an outstanding member experience, improved member outcomes, and cost reductions for our clients. We have designed our platform to address a broad spectrum of MSK care—from acute injury, to chronic pain, to post-surgical rehabilitation. Members receive personalized and largely automated MSK care through our AI-powered motion tracking technology and a proprietary electrical nerve stimulation wearable device, all designed and monitored by our AI-supported care team of licensed physical therapists, physicians, and board-certified health coaches. Our platform can improve pain and function and reduce the need for surgeries, all while driving health equity by allowing members to engage in their exercise therapy sessions from anywhere and embrace movement as a way of life.
There is no shortage of new technologies in the healthcare industry, yet the cost of care continues to rise. In other industries, the launch of new technologies has generally improved end-user experiences and lowered costs. In healthcare, however, new technologies have not always been successful in lowering the cost of care or improving clinical outcomes. We believe there are two key reasons for healthcare’s idiosyncratic response to technology:
At Hinge Health, we have taken these challenges head-on.
To address the automation of care, we have weaved together AI-enabled capabilities - such as our AI-powered motion tracking technology, TrueMotion, our proprietary FDA-cleared wearable device, Enso, and our AI-supported care team - to deliver scalable and personalized MSK care. According to our estimates based on data from 2024, our platform reduced the number of human care team hours associated with traditional physical therapy by approximately 95%. We have done this while improving our high member satisfaction over time.
To address healthcare reimbursement constraints, we developed novel billing methods for our innovative technology by both directly selling to employers while also partnering with health plans, pharmacy benefit managers (“PBMs”), third-party administrators (“TPAs”), and other ecosystem entities to efficiently provide our platform to clients and members.
While the MSK market is massive, existing solutions have fallen short as they are often expensive, ineffective, inconvenient to access, and delivered in a one-to-one or few-to-one care setting. Effective MSK care should be engaging, easy to use, and accessible anytime, anywhere. We developed Hinge Health to be simple and accessible, complete, personalized, and scalable.
We have developed an efficient go-to-market model by working directly with our partners and clients. We seek to be the best solution on the market, the most validated solution on the market, and the easiest to buy. Our clients are primarily self-insured employers and include many of the nation’s leading enterprises across a broad range of industries and sizes. Within this segment, we also serve many public sector self-insured employers, such as state and local city governments and labor unions. In most instances, we partner with clients’ health plans, TPAs, PBMs, or other ecosystem entities to reduce the friction of contracting, procurement, security and IT reviews, onboarding, and billing. We are also in the early stages of expanding to serve health plans’ fully-insured and Medicare Advantage populations and federal insurance plans. As of December 31, 2024, we had approximately 20 million contracted lives across more than 2,250 clients. We had active client agreements with 49% of the Fortune 100 companies and 42% of the Fortune 500 companies, as of December 31, 2024. Despite this progress, our current contracted lives only represent 5% of our total addressable market.
We believe that we grow efficiently because of our scalable, repeatable go-to-market model. We sell through our direct sales force and our partners. Once we contract with a client, we are most often the sole digital MSK care provider offered to their contracted lives. Our average contract term is three years. For the term of each contract, we are able to enroll, engage, and re-engage the client’s eligible lives, driving a recurring, repeatable revenue model, which is demonstrated in our net dollar retention of 117% as of December 31, 2024. Our 12-month client retention rate was 98% as of December 31, 2024. Additionally, we have a high level of client satisfaction, as shown by our client net promoter score (“NPS”) of 87 as of October 31, 2024. We also invested early in building our partner network. As of December 31, 2024, we had over 50 partners, including four out of the five largest national health plans by self-insured lives, and the top three PBMs by market share. As of that date, we had retained 100% of our partners that we choose to work with since inception, excluding partners who were acquired. As of February 1, 2025, our partners increased to include the five largest national health plans based on self-insured lives.
We have experienced significant growth since our inception, with a recurring revenue business model. As of December 31, 2024, we had over 532,000 members and more than 2,250 clients, compared to approximately 371,000 members and approximately 1,650 clients as of December 31, 2023. Our revenue was $390.4 million and $292.7 million for the years ended December 31, 2024 and 2023, respectively, representing a year-over-year growth rate of 33%. Gross profit was $299.9 million and $194.2 million for the years ended December 31, 2024 and 2023, respectively. For the year ended December 31, 2024, we achieved a gross margin of 77% compared to 66% for the year ended December 31, 2023. For the year ended December 31, 2024, our non-GAAP gross margin was 78%, compared to 70% for the year ended December 31, 2023. Net cash provided by operating activities was $49.0 million and net cash used in operating activities was $63.9 million for the years ended December 31, 2024 and 2023, respectively, and free cash flow was $45.2 million and an outflow of $68.5 million for the years ended December 31, 2024 and 2023, respectively. See the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Non-GAAP Financial Measures” for a reconciliation of non-GAAP gross profit and gross margin to GAAP gross profit and free cash flow to net cash provided by (used in) operating activities. We incurred net losses of $11.9 million and $108.1 million for the years ended December 31, 2024 and 2023, respectively. As of December 31, 2024, we had an accumulated deficit of $522.7 million.
Industry Background
MSK Conditions Are Widespread and Significantly Impact Quality of Life.
MSK pain is pervasive – it affects people around the world, across all ages, genders, and socioeconomic backgrounds. MSK conditions impact an estimated 1.7 billion people worldwide and are a leading contributor to disability. Within the United States alone, our current core market, approximately 40% of adults suffered from an MSK disorder in 2021, according to the WHO Estimator. The pain caused by MSK conditions can have debilitating effects on one’s quality of life, comorbidities, mental well-being, and ability to work. In 2023, we and a third-party research firm conducted a study of 7,291 individuals in the United States that suffered from chronic and acute MSK pain (the “MSK Care 2024 Survey”). Findings from the survey indicate that pain, especially chronic pain, can create a vicious cycle of fear, depression, sleep issues, activity avoidance, and more. Among the takeaways from the State of MSK Care 2024 Survey:
Rising Costs Related to MSK Conditions Are Too Big to Ignore.
The U.S. economy suffers from the weight of MSK medical costs. According to an MSK total addressable market analysis that we commissioned from Health Advances LLC (the “MSK TAM Report”), MSK medical costs in the U.S. rose to an estimated $661 billion in annual aggregate total direct spend in 2023 and an additional estimated $624 billion in indirect costs, such as worker productivity loss, resulting in an estimated total MSK burden of nearly $1.3 trillion in 2023. MSK conditions are one of the top drivers of healthcare spending in the United States and accounted for nearly one in seven dollars spent on healthcare expenses in 2023. Because of population growth and aging, the number of people living globally with MSK conditions and associated functional limitations is increasing. Employers notice the costs: for example, approximately 74% of employers reported that MSK conditions were a top three driver of their healthcare spending in 2024, according to a survey conducted by Business Group on Health.
The Current Approach to MSK Pain Management Is Ineffective, Costly, and Unsustainable, Which Highlights the Need for a Scalable Alternative.
Medical literature indicates that conservative care management through physical therapy should be first-line treatment for many chronic MSK conditions. However, there is often a disconnect between the MSK care that is needed and the care that is received. According to the Hinge Health People in Pain Survey conducted by us and a third-party research firm in 2022 of individuals that suffered from chronic and acute MSK pain (the “Hinge Health People in Pain Survey”), almost half of respondents reported that they wouldn’t be able to manage pain without professional help. However, our analysis of Health Claims Data (as defined in the section titled “Market and Industry Data”) indicates that only approximately 9% of adults in the United States pursued in-person physical therapy in 2023. While the Hinge Health People in Pain Survey found that 70% of respondents reported that they understood the health benefits available to them, 64% of respondents reported that they were not currently using a care plan created by a professional. We believe the reason for the disparities and disconnect between the MSK care needed and the MSK care received is that the legacy system for treating MSK conditions is often difficult to access, expensive, incomplete, and can drive people to potentially avoidable surgeries, injections, and pain medications.
Our Market Opportunity
We believe there is a substantial opportunity to use technology and AI to transform how individuals approach physical therapy, treatment of chronic and acute pain, and care management for MSK conditions. Within the United States alone, our current core market, approximately 40% of adults suffered from an MSK disorder in 2021, according to the WHO Estimator. According to the MSK TAM Report, MSK medical costs rose to an estimated $661 billion in annual aggregate total direct spend in 2023. Based on our analysis of Health Claims Data, we believe that over $70 billion of that spend is on physical therapy. Further, MSK conditions incurred an additional $624 billion in indirect costs, such as worker productivity loss, resulting in an estimated total MSK burden of nearly $1.3 trillion.
We have a history of product innovation, and we plan to continue to expand our programs. We recently launched a program that delivers specialized care for women’s pelvic health, a segment that is historically underserved. Another segment that we have identified as being underserved is specialized MSK care for women in their perimenopause, menopause, and postmenopausal phases. An estimated 71% of perimenopausal women experience MSK pain, according to a 2020 study on MSK pain during the menopausal transition published in the Neural Plasticity journal. As we introduce new programs, we further expand our addressable market opportunity by increasing the eligible lives that can benefit from our technology platform.
The demand for physical therapy is expected to increase due to an aging population and an increasingly sedentary lifestyle. At the same time, thousands of physical therapists have left the profession. We believe the trend of increased demand, coupled with a shortage of physical therapists, will continue. To that end, we believe we are well positioned to address the large and durable market opportunity for our platform and products and continue to grow our business.
Our Platform
We are a leading technology platform for individuals seeking to treat and prevent joint and muscle pain. We leverage technology and AI to automate and scale a care plan designed and monitored by our care team, while delivering improved member outcomes, personalized member experiences, and cost reductions for our clients.
We designed our platform to treat and prevent a broad spectrum of joint and muscle pain through scalable and personalized care. We offer a wide range of support with multiple programs, including for those suffering from chronic pain to those considering surgical interventions or undergoing post-surgery rehabilitation. Our platform and programs aim to treat and prevent MSK pain and injuries across the body, including the neck, upper back, shoulders, elbows, forearms, wrists, hands, lower back, hips, pelvic region, thighs, knees, shins, calves, ankles, and feet. Our AI-powered motion tracking technology allows our software to provide exercise adjustments in real time remotely, which reduces the human hours associated with traditional physical therapy and results in a more scalable and personalized model of care. We use AI and machine learning to provide personalized care through our programs, which are customized based on a member’s affected areas and movement threshold.
We routinely expand our platform with new programs, capabilities, and features. Over the last three years, we have launched new programs to address six additional affected areas, including specialized programs to address women’s pelvic health and fall prevention. We also launched Enso to deliver a non-addictive, non-invasive alternative for pain relief, developed HingeConnect for real-time care interventions and external provider coordination, and integrated TrueMotion technology to replace wearable sensors.
Our Value Proposition
Value to Our Members:
At Hinge Health, we put our members first. Pain is personal. When a member reports a reduction in pain, they often share their experience with others. As of December 31, 2024, approximately nine out of ten members surveyed by us have reported being satisfied with our programs. Hinge Health was the top-rated digital MSK care app in the Apple App store and Google Play store as of December 31, 2024, each with a 4.9 rating based on approximately 80,000 combined reviews. We believe that our platform can address needs across demographics, occupations, and lifestyles with no direct costs for members.
Value to Our Clients:
Our clients are the businesses and organizations that pay for our platform for their covered employees and adult dependents, either by contracting with us directly or by contracting through one of our partners. Our clients are primarily self-insured employers and include many of the nation’s leading enterprises across a broad range of industries and sizes. Much of the value to our members is aligned with the value to our client. Below are the added benefits that our clients receive through our platform.
Value to Our Ecosystem Partners:
We have a vast ecosystem partner network that includes: health plans, PBMs, TPAs, digital health providers, centers of excellence, healthcare navigation partners, brokers, and consultants. Similar to our approach with members and clients, we strive to create value for ecosystem partners. Examples of the value we help create with our partners include:
Our Competitive Strengths
We seek to be the best solution on the market, the most validated solution on the market, and the easiest to buy. We believe the following strengths differentiate our platform and programs, which will drive our continued success with new and existing clients and members.
also enables us to automate the delivery of care at scale that is monitored by our care team—where members have the potential to benefit from the technology and expertise of our entire platform.
Our Growth Strategy
We have experienced significant growth since inception, which we attribute to expanding our client base, increasing adoption across our existing client base, launching new programs, and expanding into new markets. We believe we are well positioned for continued growth, as we believe our current total contracted lives only represent approximately 5% of our target addressable market.
offer our platform to fully-insured health plan populations, Medicare Advantage populations, and federal insurance plans. In many cases, after we have delivered positive outcomes for our partners’ self-insured employers, they decide to contract with us for their fully-insured and Medicare Advantage lines of business. These two populations, combined with the federal insurance populations we are also expanding into, represent an estimated 96 million additional lives in the United States. In the third quarter of 2024, we began introducing our global program to clients that are United States-based multinational corporations. We expanded into Canada in the third quarter of 2024, and we expect to offer our global program in several European countries in the first half of 2025 and continue to grow that program globally in 2025. Initially, we are expanding through the global footprint of our current clients’ employee base with the objective of supporting our clients’ employees in geographies that are key to them. We also plan to expand to non-U.S. based employers and government payers in countries outside of the United States over time. We are in the early stages of our international expansion, but we believe that international expansion could increase our number of contracted lives.
Risk Factors Summary
Our business is subject to a number of risks and uncertainties of which you should be aware before making a decision to invest in our Class A common stock. These risks are more fully described in the section titled “Risk Factors” immediately following this prospectus summary. These risks include, among others, the following:
Corporate Information
We were originally established as a private limited company under the laws of England and Wales in January 2012 under the name Marblar Limited. In March 2016, we incorporated Hinge Health, Inc. as a Delaware corporation. In April 2016, Marblar Limited and Hinge Health, Inc. entered into a Share Exchange Agreement pursuant to which Hinge Health, Inc. purchased the outstanding equity of Marblar Limited in exchange for capital stock of Hinge Health, Inc. As a result, Hinge Health, Inc. assumed the business and operations of Marblar Limited. Our principal executive offices are located at 455 Market Street, Suite 700, San Francisco, California 94105, and our telephone number is (415) 726-2206. Our website address is www.hingehealth.com. Information contained on, or that can be accessed through, our website does not constitute part of this prospectus, and the inclusion of our website address in this prospectus is an inactive textual reference only.
Channels for Disclosure of Information
After the completion of this offering, we intend to announce information to the public through filings with the U.S. Securities and Exchange Commission (the “SEC”), the investor relations page on our website, press releases, public conference calls, and webcasts.
The information disclosed on the foregoing channels could be deemed to be material information. As such, following this offering, we encourage investors, the media, and others to follow the channels listed above and to review the information disclosed through such channels. Our disclosure of information on the foregoing channels does not limit our obligations to make required disclosures as prescribed by U.S. federal securities laws, including in SEC filings.
Any updates to the list of disclosure channels through which we will announce information will be posted on the investor relations page on our website.
Implications of Being an Emerging Growth Company
We are an emerging growth company as defined in the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). We will remain an emerging growth company until the earliest of: (i) the last day of the fiscal year following the fifth anniversary of the consummation of this offering; (ii) the last day of the fiscal year in which we have total annual gross revenue of at least $1.235 billion; (iii) the last day of the fiscal year in which we are deemed to be a “large accelerated filer” as defined in Rule 12b-2 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), which would occur if the market value of our common stock held by non-affiliates exceeded $700.0 million as of the last business day of the second fiscal quarter of such year; or (iv) the date on which we have issued more than $1.0 billion in non-convertible debt securities during the prior three-year period. An emerging growth company may take advantage of specified reduced reporting requirements and is relieved of certain other significant requirements that are otherwise generally applicable to public companies. As a result, the information that we provide to our stockholders may be different than you might receive from other public reporting companies in which you hold equity interests. As an emerging growth company, we have elected to take advantage of certain of the reduced disclosure obligations in the registration statement of which this prospectus is a part and may elect to take advantage of other reduced reporting requirements in future filings. In particular: