Hinge Health Goes Public, Plans to Expand AI Automation in Healthcare Delivery

Physical therapy company Hinge Health made a significant leap by going public this week, marking a milestone in the digital health sector. Founded in 2014 by Daniel Perez and Gabriel Mecklenburg, Hinge Health focuses on providing virtual care for musculoskeletal conditions, including joint and back pain. The company's unique approach combines personalized care plans, exercise therapy, messaging with clinicians, and wearable pain-relief devices. This innovative model has helped Hinge Health achieve impressive financial performance, recording an 81% gross margin and generating $123.8 million in revenue with a $17.1 million profit in the first quarter of 2025. The cornerstone of Hinge Health's success is its heavy investment in artificial intelligence (AI). CEO Daniel Perez explained that AI has enabled the company to reduce clinician hours spent on physical therapy (PT) by 95%, significantly lowering operational costs. Hinge Health uses AI for care coordination and motion tracking, employing AI-powered computer vision to monitor patient exercises and adjust treatment plans accordingly. This technology ensures that patients receive precise guidance and support, enhancing the effectiveness of their therapy. Looking ahead, Perez envisions expanding the company's AI capabilities to cover more aspects of care delivery, ultimately aiming to automate as much of the process as possible. He mentioned that Hinge Health plans to release new advancements in musculoskeletal care this summer and is considering venturing into other specialties around 2026, all leveraged by AI. According to Perez, this automation is not just a technological ambition but a necessity for the future of healthcare. Hinge Health debuted on the New York Stock Exchange (NYSE) on Thursday under the ticker "HNGE" with an initial share price of $32, placing its valuation at $2.6 billion. The stock performed robustly, jumping to $39.25 a share, a 23% increase from its initial pricing. Despite broader market volatility, Hinge Health's stock continued to rise, increasing by about 4% on Friday even as the S&P 500 fell by 1%. The company's decision to proceed with its IPO was influenced by its positive cash flow. In April, the possibility of market turmoil due to President Donald Trump’s tariff plans threatened to delay the offering, but Hinge Health resumed its plans in May as markets stabilized. Perez emphasized that being a sustainable business is crucial for facing market volatility. He noted that several clients facing financial challenges have accelerated their adoption of Hinge Health’s services to reduce overall healthcare costs. Hinge Health’s business model, which involves selling its services to employers and health plans to lower medical expenses, positions it well against economic uncertainty. The company's positive financial metrics and strategic use of AI to streamline operations offer a compelling case for investors seeking stability and growth in the digital health sector. However, the journey to profitability for many digital health startups is challenging. While Hinge Health posted a profit in the first quarter of 2025, it experienced a net loss of $11.9 million in 2024. Competitors like Sword Health and Omada Health are also turning to AI to improve efficiency and reduce costs. Sword Health is developing AI technologies to assist clinicians in managing a larger number of patients simultaneously, and Omama Health recently introduced AI-powered nutrition tools to enhance its food-as-medicine approach, particularly for patients on GLP-1 drugs like Ozempic. Industry insiders view Hinge Health's IPO as a positive signal for the digital health market. The company’s success highlights the potential of AI in transforming traditional healthcare delivery, making it more accessible and cost-effective. Hinge Health's financial resilience and innovative use of technology suggest that it may set a benchmark for other startups hoping to go public in the near future. As Perez aptly put it, "When you become a sustainable business, the questions you have with prospective investors are very, very different. It’s, 'how fast could you grow?' Not, 'will you still be around?'" Hinge Health's strong performance underscores its commitment to delivering sustainable and scalable solutions in the healthcare industry. With a solid foundation and ambitious plans, the company is poised to continue pushing the boundaries of digital health, potentially paving the way for a new era of AI-driven healthcare services.