Hinge Health is one of the latest crop of tech IPOs and one you may have missed. It’s a B2B2C digital health platform that provides musculoskeletal (MSK) care to employees through their employers and health plans. Using AI-powered motion tracking, personalized exercise therapy, and FDA-cleared pain relief devices, they’ve replaced traditional physical therapy with a scalable digital solution that serves 2,300+ enterprise clients including 49% of the Fortune 100.
Hinge Health delivered a monstrous quarter:
- $556M ARR growing 55% YoY (!)
- And revenue growth is accelerating
- 83% non-GAAP gross margins (+600 bps)
- $130M FCF (23% FCF margin)
- 117% NDR, 98% client retention.
At $3.9B enterprise value, it trades maybe … too chealy … at ~7x ARR.
How a B2B2C health platform achieved the Rule of 78 (55% growth + 23% FCF margin) with best-in-class retention metrics
Hinge Health represents one of the standout IPOs from 2025’s resurgent tech offering market, which has seen 80% more IPOs than 2024 as of this writing, including blockbusters like Figma ($1.2B raised, tripled on debut), CoreWeave ($1.5B raised), Circle ($1B raised), and Chime. Unlike the speculative 2020-2021 IPO frenzy, this batch combines growth with profitability — Hinge Health’s Rule of 78 performance puts it among the elite.
5 Interesting Learnings
#1. 117% NDR + 98% Logo Retention = The Holy Grail Combination
The Numbers: 117% net dollar retention, 98% client retention, 3.4% annual yield expanding +40 basis points YoY, driving 52% billings growth to $507M LTM.
Hinge Health achieved both high logo retention AND high expansion through “yield expansion within logos.” Instead of expanding seat count, they expanded member enrollment within existing client populations from 3.0% to 3.4% annually.
The mechanics: Their HingeConnect AI identifies high-risk MSK members within client populations, while new programs (Women’s Pelvic Health, Fall Prevention, Menopause) capture more of each employee base. Existing clients don’t just renew — they drive 17% organic growth through deeper penetration.
#2. Free Cash Flow Swing: -$69M to +$45M on Just $97M Revenue Growth
The Numbers: $114M free cash flow improvement ($69M loss to $45M positive) while adding only $97M incremental revenue. FCF margin jumped from -23% to +12%.
This is pure SaaS operational leverage. S&M dropped from 57% to 38% of revenue, R&D from 42% to 19%, G&A from 26% to 14%. They invested heavily in 2022-2023 to build AI infrastructure and partnership network, then saw massive leverage in 2024.
The real insight: Hinge spent two years building their platform, then revenue scaled faster than costs. Classic SaaS “J-curve” executed perfectly.
#3. 50% Revenue Growth at $550m+ ARR
That’s the bar today for a great IPO, approaching 50% growth approaching $500m ARR. Phew. Hinge Health has done it, however.
The Numbers: $124M Q1 2025 revenue (50% YoY growth), $507M LTM billings (52% YoY growth), while achieving 81% gross margins and 12% operating margins.
Most software companies see growth decelerate as they scale. Hinge Health maintained 50%+ growth through their partnership flywheel: 50+ partnerships including all 5 largest health plans and all 3 top PBMs, with 100% partner retention.
Partners facilitate easier contracting and faster implementation, accelerating their direct sales motion while expanding into fully-insured populations they couldn’t reach directly.
#4. Gross Margins Expanding 1,100 Basis Points While Scaling
The Numbers: Non-GAAP gross margins: 70% (2023) → 78% (2024) → 81% (Q1 2025). That’s 1,100 basis points expansion during hypergrowth.
This happened through fundamental service delivery transformation: AI-powered care team reduced human hours by ~95% vs traditional physical therapy, GenAI automated care workflows, and TrueMotion AI eliminated hardware costs by using smartphone cameras instead of wearables.
Not typical SaaS margin expansion through fixed cost leverage — this is category innovation through technology that completely changed unit economics.
5. 2,300+ Clients Across 25+ Industries
The Numbers: 2,300+ clients, 49% of Fortune 100, 42% of Fortune 500, ~20M contracted lives, 87 Client NPS, representing 25+ industries from tech to manufacturing to healthcare.
Hinge Health built a horizontal platform that works across every industry because MSK issues are universal. Their platform handles prevention, acute care, chronic care, surgical decision support, and pre/post surgery rehab — replacing entire MSK care workflows, not just point solutions.
The result: $661B TAM opportunity (MSK is larger healthcare spend than diabetes, cancer, or cardiovascular) with 90%+ whitespace even in existing markets (~195M untapped lives).
