[Forward-Looking Statements](index=4&type=section&id=Forward-Looking%20Statements) Axogen provides forward-looking statements on future results and business developments, subject to risks and uncertainties - Axogen, Inc. provides forward-looking statements regarding anticipated future results and business developments, based on management's current expectations and predictions. These statements are subject to risks and uncertainties that may cause actual results to differ materially[8](index=8&type=chunk)[9](index=9&type=chunk) - Key forward-looking statements include: continued growth in the nerve protection category, targeted strategy for nerve repair indication expansion, anticipated FDA approval of Avance® Nerve Graft by September 2025, and sufficient liquidity to fund operations for at least the next twelve months[10](index=10&type=chunk) [Part I - Financial Information](index=5&type=section&id=Part%20I%20-%20Financial%20Information) This part presents Axogen's unaudited condensed consolidated financial statements and management's discussion and analysis [Item 1. Financial Statements](index=5&type=section&id=Item%201.%20Financial%20Statements) This section presents Axogen, Inc.'s unaudited condensed consolidated financial statements, including the Balance Sheets, Statements of Operations, Statements of Cash Flows, and Statements of Changes in Shareholders' Equity, along with detailed notes explaining significant accounting policies, financial instrument valuations, and other financial commitments for the periods ended June 30, 2025 and 2024 [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) This section provides a snapshot of Axogen's financial position, detailing assets, liabilities, and equity at specific dates Condensed Consolidated Balance Sheets | (in thousands) | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $20,036 | $27,554 | | Investments | $9,886 | $5,928 | | Accounts receivable, net | $28,029 | $24,105 | | Inventory | $36,774 | $33,183 | | Total current assets | $103,419 | $99,217 | | Total assets | $205,453 | $203,728 | | **Liabilities and Shareholders' Equity** | | | | Accounts payable and accrued expenses | $22,770 | $28,641 | | Total current liabilities | $24,980 | $30,610 | | Total liabilities | $93,177 | $99,821 | | Total shareholders' equity | $112,276 | $103,907 | | Total liabilities and shareholders' equity | $205,453 | $203,728 | - Total assets increased by **$1,725 thousand** from December 31, 2024, to June 30, 2025, primarily driven by increases in investments, accounts receivable, and inventory, partially offset by a decrease in cash and cash equivalents[13](index=13&type=chunk) - Total liabilities decreased by **$6,644 thousand**, mainly due to a reduction in accounts payable and accrued expenses, while shareholders' equity increased by **$8,369 thousand**[13](index=13&type=chunk) [Condensed Consolidated Statements of Operations](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) This section details Axogen's financial performance, including revenues, expenses, and net income or loss over specific periods Condensed Consolidated Statements of Operations | (in thousands, except per share amounts) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Revenues | $56,662 | $47,912 | $105,222 | $89,289 | | Cost of goods sold | $14,644 | $12,567 | $28,271 | $21,325 | | Gross profit | $42,018 | $35,345 | $76,951 | $67,964 | | Total costs and expenses | $40,346 | $35,773 | $76,940 | $72,952 | | Income (loss) from operations | $1,672 | $(428) | $11 | $(4,988) | | Net income (loss) | $579 | $(1,921) | $(3,255) | $(8,556) | | Net income (loss) per common share - basic | $0.01 | $(0.04) | $(0.07) | $(0.20) | | Net income (loss) per common share - diluted | $0.01 | $(0.04) | $(0.07) | $(0.20) | - For the three months ended June 30, 2025, revenues increased by **18.3% YoY** to **$56,662 thousand**, and the company reported a net income of **$579 thousand**, a significant improvement from a net loss of **$(1,921) thousand** in the prior year period[16](index=16&type=chunk) - For the six months ended June 30, 2025, revenues increased by **17.8% YoY** to **$105,222 thousand**, and the net loss decreased to **$(3,255) thousand** from **$(8,556) thousand** in the prior year period[16](index=16&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) This section outlines Axogen's cash inflows and outflows from operating, investing, and financing activities Condensed Consolidated Statements of Cash Flows | (in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | $(5,449) | $(8,101) | | Net cash used in investing activities | $(5,608) | $(4,484) | | Net cash provided by financing activities | $3,539 | $748 | | Net decrease in cash and cash equivalents, and restricted cash | $(7,518) | $(11,837) | | Cash and cash equivalents, and restricted cash, end of period | $26,036 | $25,189 | - Net cash used in operating activities decreased by **$2,652 thousand (32.7%)** for the six months ended June 30, 2025, primarily due to a decrease in net loss[19](index=19&type=chunk)[114](index=114&type=chunk) - Net cash used in investing activities increased by **$1,124 thousand**, driven by higher purchases of investments, partially offset by proceeds from investment sales and decreased property and equipment purchases[19](index=19&type=chunk)[115](index=115&type=chunk) - Net cash provided by financing activities increased by **$2,791 thousand**, mainly due to increased proceeds from the exercise of stock options[19](index=19&type=chunk)[116](index=116&type=chunk) [Condensed Consolidated Statements of Changes in Shareholders' Equity](index=10&type=section&id=Condensed%20Consolidated%20Statements%20of%20Changes%20in%20Shareholders'%20Equity) This section details changes in Axogen's shareholders' equity, including net income/loss, stock compensation, and option exercises Condensed Consolidated Statements of Changes in Shareholders' Equity | (in thousands, except share amounts) | Balance at Dec 31, 2024 | Net Loss (6M 2025) | Stock-based Compensation (6M 2025) | Exercise of Stock Options (6M 2025) | Balance at Jun 30, 2025 | | :--- | :--- | :--- | :--- | :--- | :--- | | Common Stock (Amount) | $441 | — | — | $4 | $457 | | Additional Paid-in Capital | $394,726 | — | $8,077 | $3,543 | $406,334 | | Accumulated Deficit | $(291,260) | $(3,255) | — | — | $(294,515) | | Total Shareholders' Equity | $103,907 | $(3,255) | $8,077 | $3,547 | $112,276 | - Total shareholders' equity increased from **$103,907 thousand** at December 31, 2024, to **$112,276 thousand** at June 30, 2025, primarily driven by stock-based compensation and proceeds from stock option exercises, despite a net loss[22](index=22&type=chunk) [Notes to Unaudited Condensed Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed explanations of Axogen's significant accounting policies, financial instrument valuations, and other commitments [1. Nature of Business](index=11&type=section&id=1.%20Nature%20of%20Business) This note describes Axogen's core business in peripheral nerve regeneration and repair, operating as a single segment - Axogen, Inc. specializes in the science, development, and commercialization of technologies for peripheral nerve regeneration and repair, with products including Avance Nerve Graft, Axoguard Nerve Connector, Axoguard Nerve Protector, Axoguard HA+ Nerve Protector™, Axoguard Nerve Cap, and Avive+ Soft Tissue Matrix™[24](index=24&type=chunk) - The Company operates as a single segment, with substantially all assets and revenues derived from sales to customers in the U.S.[24](index=24&type=chunk) [2. Summary of Significant Accounting Policies](index=11&type=section&id=2.%20Summary%20of%20Significant%20Accounting%20Policies) This note outlines Axogen's key accounting principles, including financial statement preparation and cash management - The unaudited condensed consolidated financial statements are prepared in accordance with Form 10-Q and Rule 10-01 of Regulation S-X, reflecting normal recurring adjustments, and should be read with the 2024 Annual Report on Form 10-K[26](index=26&type=chunk)[27](index=27&type=chunk) - Cash and cash equivalents include short-term, highly liquid investments, with **$19,536 thousand** not FDIC-insured or in excess of limits as of June 30, 2025[28](index=28&type=chunk) - Restricted cash of **$6,000 thousand** at June 30, 2025, and December 31, 2024, is held as collateral for a lease agreement[29](index=29&type=chunk)[30](index=30&type=chunk) - Recent accounting pronouncements, ASU 2024-03 and ASU 2023-09, will require enhanced disclosures for income statement expenses and income taxes, effective for annual periods beginning after December 15, 2026, and December 15, 2024, respectively[31](index=31&type=chunk)[32](index=32&type=chunk) [3. Inventory](index=12&type=section&id=3.%20Inventory) This note details Axogen's inventory composition and changes, including finished goods, work in process, and raw materials Inventory | (in thousands) | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Finished goods | $31,266 | $27,054 | | Work in process | $1,485 | $1,325 | | Raw materials | $4,023 | $4,804 | | Total Inventory | $36,774 | $33,183 | - Total inventory increased by **$3,591 thousand** from December 31, 2024, to June 30, 2025, primarily due to an increase in finished goods[34](index=34&type=chunk) - The Company reserved **$3,679 thousand** for potential inventory losses as of June 30, 2025, up from **$1,630 thousand** at December 31, 2024[34](index=34&type=chunk) [4. Property and Equipment, Net](index=13&type=section&id=4.%20Property%20and%20Equipment%2C%20Net) This note presents Axogen's property and equipment, net of accumulated depreciation, and related depreciation expenses Property and Equipment, Net | (in thousands) | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Property and equipment, at cost | $105,658 | $104,578 | | Less: accumulated depreciation | $(23,266) | $(19,911) | | Property and equipment, net | $82,392 | $84,667 | - Net property and equipment decreased by **$2,275 thousand** from December 31, 2024, to June 30, 2025, primarily due to accumulated depreciation exceeding new additions[35](index=35&type=chunk) - Depreciation expense for the six months ended June 30, 2025, was **$3,385 thousand**, an increase from **$3,177 thousand** in the prior year period[35](index=35&type=chunk) [5. Intangible Assets, Net](index=13&type=section&id=5.%20Intangible%20Assets%2C%20Net) This note details Axogen's intangible assets, including patents and trademarks, and associated amortization expenses Intangible Assets, Net | (in thousands) | June 30, 2025 Net Carrying Amount | December 31, 2024 Net Carrying Amount | | :--- | :--- | :--- | | Patents | $5,489 | $5,017 | | Trademarks | $626 | $562 | | Total intangible assets | $6,115 | $5,579 | - Net intangible assets increased by **$536 thousand** from December 31, 2024, to June 30, 2025, driven by an increase in patents and trademarks[36](index=36&type=chunk) - Amortization expense for the six months ended June 30, 2025, was **$133 thousand**, slightly down from **$138 thousand** in the prior year period[36](index=36&type=chunk) [6. Fair Value Measurements](index=14&type=section&id=6.%20Fair%20Value%20Measurements) This note describes Axogen's fair value measurements for financial instruments, including money market funds and debt derivatives Fair Value Measurements | (in thousands) | June 30, 2025 Total | December 31, 2024 Total | | :--- | :--- | :--- | | **Assets:** | | | | Money market funds | $10,869 | $19,399 | | U.S. Treasuries | $9,886 | $5,928 | | Total assets | $20,755 | $25,327 | | **Liabilities:** | | | | Debt derivative liabilities | $2,078 | $2,400 | - The fair value of debt derivative liabilities decreased from **$2,400 thousand** at December 31, 2024, to **$2,078 thousand** at June 30, 2025, reflecting a change in fair value included in net income (loss)[41](index=41&type=chunk) - Debt derivative liabilities are measured using a probability-weighted expected return model based on three potential settlement scenarios for the Credit Facility, with significant unobservable inputs including discount rates and probabilities of prepayment/held-to-maturity[42](index=42&type=chunk)[43](index=43&type=chunk)[45](index=45&type=chunk) [7. Leases](index=16&type=section&id=7.%20Leases) This note details Axogen's lease obligations, including operating lease costs, sublease income, and right-of-use assets Leases | (in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Operating lease costs | $1,830 | $1,826 | | Short-term lease costs | $262 | $375 | | Variable lease costs | $48 | $289 | | Sublease income | $(541) | — | | Total operating lease expense | $1,599 | $2,490 | - Total operating lease expense decreased by **$891 thousand** for the six months ended June 30, 2025, compared to the prior year, primarily due to **$541 thousand** in sublease income[47](index=47&type=chunk) - The Company has operating lease right-of-use assets of **$13,527 thousand** and long-term lease obligations of **$18,040 thousand** as of June 30, 2025, with a weighted average operating lease term of **8.4 years**[49](index=49&type=chunk)[50](index=50&type=chunk) [8. Long-Term Debt, Net of Debt Discount and Financing Fees](index=18&type=section&id=8.%20Long-Term%20Debt%2C%20Net%20of%20Debt%20Discount%20and%20Financing%20Fees) This note outlines Axogen's long-term debt, including Credit Facility details, interest rates, and derivative liabilities Long-Term Debt, Net of Debt Discount and Financing Fees | (in thousands) | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Credit Facility - first tranche | $35,000 | $35,000 | | Credit Facility - second tranche | $15,000 | $15,000 | | Less: unamortized debt discount and deferred financing fees | $(2,062) | $(2,504) | | Long-term debt, net | $47,938 | $47,496 | - The Company has **$50,000 thousand** outstanding under its Credit Facility, with the first tranche maturing June 30, 2027, and the second tranche maturing June 30, 2028[55](index=55&type=chunk) - Interest is calculated at **7.5%** plus the greater of Adjusted SOFR or **2.0% (11.90% at June 30, 2025)**, plus quarterly royalty payments from a revenue participation agreement, totaling approximately **1.5% per year** of additional interest[56](index=56&type=chunk) - The fair value of debt derivative liabilities was **$2,078 thousand** at June 30, 2025, and **$2,400 thousand** at December 31, 2024, with changes reported in the Condensed Consolidated Statements of Operations[57](index=57&type=chunk) [9. Stock-Based Compensation](index=19&type=section&id=9.%20Stock-Based%20Compensation) This note details Axogen's stock-based compensation expense and the types of awards granted to employees and officers Stock-Based Compensation | (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Stock-based compensation expense | $5,168 | $3,907 | $8,077 | $7,826 | - Total stock-based compensation expense increased to **$8,077 thousand** for the six months ended June 30, 2025, from **$7,826 thousand** in the prior year period[64](index=64&type=chunk) - Awards granted during the six months ended June 30, 2025, included Restricted Stock Units (RSUs) and Performance Stock Units (PSUs) to officers and employees, with vesting conditions tied to time, revenue CAGR, TSR, sales quota goals, and BLA approval milestones[63](index=63&type=chunk)[65](index=65&type=chunk) [10. Net Income (Loss) Per Common Share](index=20&type=section&id=10.%20Net%20Income%20%28Loss%29%20Per%20Common%20Share) This note presents Axogen's basic and diluted net income (loss) per common share calculations and anti-dilutive exclusions Net Income (Loss) Per Common Share | (in thousands, except per share amounts) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Net income (loss) | $579 | $(1,921) | $(3,255) | $(8,556) | | Weighted average shares outstanding - basic | 46,063,092 | 43,713,313 | 45,605,419 | 43,473,541 | | Net income (loss) per common share - basic | $0.01 | $(0.04) | $(0.07) | $(0.20) | | Net income (loss) per common share - diluted | $0.01 | $(0.04) | $(0.07) | $(0.20) | - Basic and diluted EPS improved to **$0.01** for the three months ended June 30, 2025, from **$(0.04)** in the prior year, and to **$(0.07)** for the six months ended June 30, 2025, from **$(0.20)** in the prior year[66](index=66&type=chunk) - Anti-dilutive shares, including stock options and restricted/performance stock units, were excluded from diluted EPS calculations for periods with net losses[66](index=66&type=chunk) [11. Income Taxes](index=20&type=section&id=11.%20Income%20Taxes) This note explains Axogen's income tax position, including the absence of expense/benefit due to net operating losses - The Company recorded no income tax expense or benefit for the three and six months ended June 30, 2025 and 2024, due to net operating losses with fully reserved benefits[67](index=67&type=chunk)[101](index=101&type=chunk)[108](index=108&type=chunk) - A full valuation allowance is maintained against deferred tax assets, and future utilization of net operating loss carryforwards may be limited by IRC Section 382[68](index=68&type=chunk) - The Company is evaluating the potential effects of the recently signed One Big Beautiful Bill Act (OBBBA) on its financial statements, which makes permanent key elements of the Tax Cuts and Jobs Act of 2017[70](index=70&type=chunk)[93](index=93&type=chunk) [12. Segments](index=21&type=section&id=12.%20Segments) This note clarifies that Axogen operates as a single operating and reportable segment for financial reporting - Axogen operates as a single operating and reportable segment, as the Chief Executive Officer (CODM) reviews only consolidated financial information for resource allocation and performance assessment[72](index=72&type=chunk) [13. Commitments and Contingencies](index=21&type=section&id=13.%20Commitments%20and%20Contingencies) This note details Axogen's contractual obligations, operational dependencies, potential grant repayments, and legal proceedings - The Company has service agreements, including with Solvita for tissue processing, and exclusive distribution and supply agreements with Evergen for Axoguard products, expiring in 2030 or 2031[73](index=73&type=chunk)[74](index=74&type=chunk)[75](index=75&type=chunk)[76](index=76&type=chunk) - Axogen is highly dependent on its processing facilities in Ohio and could be harmed by prolonged unavailability[79](index=79&type=chunk) - The Company is in discussions with grant authorities regarding unmet job creation milestones for economic development grants, potentially owing up to **$950 thousand**, though some waivers and extensions have been received[80](index=80&type=chunk) - There is an alternative interpretation of the make-whole payment calculation for the Credit Facility, which could result in significantly larger payments (e.g., approximately **$26,900 thousand** if prepaid on June 30, 2025, compared to the Company's estimate of approximately zero if held to maturity)[81](index=81&type=chunk)[82](index=82&type=chunk) - The Company is subject to various legal proceedings in the ordinary course of business, which management believes are adequately covered by insurance or indemnified, or not expected to have a material adverse effect[84](index=84&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=25&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on Axogen's financial condition and operational results for the three and six months ended June 30, 2025, compared to the prior year. It covers revenue growth drivers, changes in gross profit and expenses, and an analysis of liquidity and capital resources, highlighting key business achievements and future outlook [Overview](index=25&type=section&id=Overview) This section provides a high-level introduction to Axogen's mission and leadership in peripheral nerve repair - Axogen is a leading company focused on peripheral nerve regeneration and repair, providing innovative solutions to restore nerve function and quality of life for patients with peripheral nerve injuries[87](index=87&type=chunk) [Product Portfolio](index=25&type=section&id=Product%20Portfolio) This section describes Axogen's comprehensive product offerings for peripheral nerve repair and their market availability - The Company's comprehensive product portfolio for peripheral nerve repair includes Avance Nerve Graft, Axoguard Nerve Connector, Axoguard Nerve Protector, Axoguard HA+ Nerve Protector™, Axoguard Nerve Cap, and Avive+ Soft Tissue Matrix™[88](index=88&type=chunk)[91](index=91&type=chunk) - Products are available in the U.S., Canada, Germany, the UK, Spain, South Korea, and other countries, with substantially all revenues derived from U.S. sales[88](index=88&type=chunk) [Business Outlook](index=25&type=section&id=Business%20Outlook) This section outlines Axogen's strategic focus on market expansion and mitigation efforts against macroeconomic risks - Axogen's strategy focuses on deepening presence in high-potential accounts like Level 1 trauma centers and academic-affiliated hospitals by expanding nerve repair indications and driving adoption across surgical specialties[89](index=89&type=chunk) - The Company is assessing steps to mitigate potential adverse effects from the evolving macroeconomic environment, including financial market volatility and geopolitical tensions, which could impact net revenue[90](index=90&type=chunk)[92](index=92&type=chunk) [Summary of Operational and Business Highlights](index=26&type=section&id=Summary%20of%20Operational%20and%20Business%20Highlights) This section highlights key operational achievements, including revenue growth, expanded insurance coverage, and FDA approval milestones - Revenues for Q2 2025 increased by **18.3%** to **$56,662 thousand**, and gross profit increased by **18.9%** to **$42,018 thousand** compared to Q2 2024[96](index=96&type=chunk) - Expanded coverage and reimbursement for nerve repair products by an estimated **10 million new covered lives** in 2025, bringing total new lives covered to approximately **17 million** and private payer coverage to over **55%**[96](index=96&type=chunk) - The FDA accepted the BLA for Avance® Nerve Graft, with a Prescription Drug User Fee Act goal date of September 5, 2025. Regulatory milestones, including a late-cycle meeting, pre-licensing inspection, and sponsor inspection, were completed in Q2 2025[96](index=96&type=chunk) [Results of Operations - Three Months Ended June 30, 2025 and 2024](index=26&type=section&id=Results%20of%20Operations%20-%20Three%20Months%20Ended%20June%2030%2C%202025%20and%202024) This section analyzes Axogen's financial performance for the three months ended June 30, 2025, compared to the prior year Results of Operations - Three Months Ended June 30, 2025 and 2024 | (dollars in thousands) | 2025 Amount | 2025 % of Revenue | 2024 Amount | 2024 % of Revenue | | :--- | :--- | :--- | :--- | :--- | | Revenues | $56,662 | 100.0% | $47,912 | 100.0% | | Gross profit | $42,018 | 74.2% | $35,345 | 73.8% | | Income (loss) from operations | $1,672 | 3.0% | $(428) | (0.9)% | | Net income (loss) | $579 | 1.0% | $(1,921) | (4.0)% | - Revenues increased by **$8,750 thousand (18.3%)** due to a **12.2% increase in unit volume** and a combined **6.1% net impact** from changes in price and product mix[97](index=97&type=chunk) - Gross margin improved to **74.2%** from **73.8%**, driven by lower inventory write-offs and shipping costs (**0.9% increase**), partially offset by higher product costs (**0.5% decrease**)[98](index=98&type=chunk) - Total costs and expenses increased by **12.8%** to **$40,346 thousand**, primarily due to higher compensation costs (**$3,167 thousand**) and marketing program costs (**$912 thousand**)[99](index=99&type=chunk) - Other expense, net decreased by **$400 thousand (26.8%)**, mainly due to increases in other income and changes in fair value of debt derivative liabilities, and a decrease in interest expense[100](index=100&type=chunk) [Results of Operations - Six Months Ended June 30, 2025 and 2024](index=28&type=section&id=Results%20of%20Operations%20-%20Six%20Months%20Ended%20June%2030%2C%202025%20and%202024) This section analyzes Axogen's financial performance for the six months ended June 30, 2025, compared to the prior year Results of Operations - Six Months Ended June 30, 2025 and 2024 | (dollars in thousands) | 2025 Amount | 2025 % of Revenue | 2024 Amount | 2024 % of Revenue | | :--- | :--- | :--- | :--- | :--- | | Revenues | $105,222 | 100.0% | $89,289 | 100.0% | | Gross profit | $76,951 | 73.1% | $67,964 | 76.1% | | Income (loss) from operations | $11 | — | $(4,988) | (5.6)% | | Net loss | $(3,255) | (3.1)% | $(8,556) | (9.6)% | - Revenues increased by **$15,933 thousand (17.8%)** due to an **11.8% increase in unit volume** and a combined **5.5% net impact** from changes in price and product mix[104](index=104&type=chunk) - Gross margin decreased to **73.1%** from **76.1%**, primarily due to higher product costs (**2.8% decrease**) and increased inventory write-offs (**0.5% decrease**), partially offset by lower shipping costs (**0.4% increase**)[105](index=105&type=chunk) - Total costs and expenses increased by **5.5%** to **$76,940 thousand**, driven by sales and marketing (**13.5% increase**) but offset by decreases in research and development (**8.0% decrease**) and general and administrative (**1.2% decrease**) expenses[106](index=106&type=chunk) - Other expense, net decreased by **$302 thousand (8.5%)**, mainly due to decreases in interest expense and other expenses, partially offset by decreases in investment income and changes in fair value of debt derivative liabilities[107](index=107&type=chunk) [Critical Accounting Estimates](index=29&type=section&id=Critical%20Accounting%20Estimates) This section identifies Axogen's critical accounting policies requiring significant judgment and estimation, with no material changes - The Company's critical accounting policies include Inventories, Derivative Instruments, and Stock-based Compensation, which require substantial judgment and estimation. No material changes to these estimates occurred during the quarter[109](index=109&type=chunk) [Liquidity and Capital Resources](index=29&type=section&id=Liquidity%20and%20Capital%20Resources) This section analyzes Axogen's liquidity sources, capital structure, and future funding requirements - As of June 30, 2025, principal liquidity sources were cash and cash equivalents and investments totaling **$29,922 thousand**, a decrease of **$3,560 thousand** from December 31, 2024[110](index=110&type=chunk) - Current assets exceeded current liabilities by **$78,439 thousand**, with a current ratio of **4.1x**, and management believes existing liquidity and product sales will fund operations for at least the next twelve months[112](index=112&type=chunk) - The Company has **$50,000 thousand** outstanding under its Credit Facility, with quarterly interest and revenue participation payments due. A make-whole payment is required upon maturity or earlier repayment, calculated to achieve an **11.5% IRR** for the lender[117](index=117&type=chunk) - Future capital requirements depend on factors like customer base expansion, sales force growth, and regulatory approvals. Additional funding may be sought through equity or debt, with no assurance of availability on acceptable terms[118](index=118&type=chunk) [Contractual Obligations and Commitments](index=31&type=section&id=Contractual%20Obligations%20and%20Commitments) This section details Axogen's future contractual obligations, including debt principal, interest, and lease payments Contractual Obligations and Commitments | Contractual Obligations (in thousands) | 2025 Remaining | 2026-2027 | 2028-2029 | Thereafter | Total | | :--- | :--- | :--- | :--- | :--- | :--- | | Credit Facility principal | $— | $35,000 | $15,000 | $— | $50,000 | | Credit Facility interest | $2,975 | $9,816 | $892 | $— | $13,683 | | Credit Facility revenue participation payments | $232 | $1,512 | $231 | $— | $1,975 | | Operating and financing lease obligations | $2,089 | $7,404 | $6,306 | $15,386 | $31,185 | | Insurance financing agreements | $897 | $— | $— | $— | $897 | | Total | $6,193 | $53,732 | $22,429 | $15,386 | $97,740 | [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=31&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section discusses Axogen's exposure to market risks, primarily interest rate risk associated with its Credit Facility. It highlights that changes in the Adjusted SOFR rate could affect interest expense, with a 100 basis point increase potentially raising annual interest expense by approximately $500 thousand - Axogen has interest rate exposure from its **$50,000 thousand** Credit Facility, where interest is calculated as **7.5%** plus the greater of Adjusted SOFR or **2.0% (11.90% at June 30, 2025)**[124](index=124&type=chunk) - A **100 basis point increase** in interest rates would increase annual interest expense by approximately **$500 thousand**, which is not expected to materially affect results of operations[124](index=124&type=chunk) [Item 4. Controls and Procedures](index=31&type=section&id=Item%204.%20Controls%20and%20Procedures) This section confirms that Axogen's management, including its principal executive and financial officers, evaluated the effectiveness of its disclosure controls and procedures as of June 30, 2025, and concluded they were effective. No material changes in internal control over financial reporting occurred during the quarter - Management concluded that Axogen's disclosure controls and procedures were effective as of June 30, 2025, providing reasonable assurance of achieving desired objectives[125](index=125&type=chunk)[126](index=126&type=chunk) - There were no material changes in internal control over financial reporting during the three months ended June 30, 2025[127](index=127&type=chunk) [Part II - Other Information](index=32&type=section&id=Part%20II%20-%20Other%20Information) This part covers other required disclosures, including legal proceedings, risk factors, and equity security sales [Item 1. Legal Proceedings](index=32&type=section&id=Item%201.%20Legal%20Proceedings) This section refers to the legal proceedings disclosures in Note 13 - Commitments and Contingencies, indicating that Axogen is involved in various claims and lawsuits in the ordinary course of business, which management believes are not expected to have a material adverse effect - Axogen is subject to various claims, lawsuits, and proceedings in the ordinary course of business, as detailed in Note 13[128](index=128&type=chunk) - Management believes these matters are adequately covered by insurance or indemnified, or are not expected to result in a material adverse effect on the Company's financial condition, results of operations, or cash flows[84](index=84&type=chunk) [Item 1A. Risk Factors](index=32&type=section&id=Item%201A.%20Risk%20Factors) This section states that there have been no material changes to the risk factors previously disclosed in Axogen's 2024 Annual Report on Form 10-K. Investors are advised to carefully consider all disclosed risks, as they could materially harm the business and stock price - No material changes to the risk factors disclosed in the 2024 Annual Report on Form 10-K have occurred[129](index=129&type=chunk) - Investment in Axogen involves a high degree of risk, and potential investors should review all risk factors, as they could materially affect the business, financial condition, results of operations, and stock price[129](index=129&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=32&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section indicates that there were no unregistered sales of equity securities or use of proceeds to report during the period - No unregistered sales of equity securities and use of proceeds occurred[130](index=130&type=chunk) [Item 3. Defaults Upon Senior Securities](index=32&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) This section states that there were no defaults upon senior securities to report - No defaults upon senior securities occurred[131](index=131&type=chunk) [Item 4. Mine Safety Disclosures](index=32&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This section indicates that mine safety disclosures are not applicable to Axogen's operations - Mine safety disclosures are not applicable to the Company[132](index=132&type=chunk) [Item 5. Other Information](index=32&type=section&id=Item%205.%20Other%20Information) This section reports that no director or officer adopted or terminated a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement during the quarter ended June 30, 2025 - No director or officer adopted or terminated a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement during the quarter ended June 30, 2025[133](index=133&type=chunk) [Item 6. Exhibits](index=33&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including separation and employment agreements, certifications of principal executive and financial officers, and XBRL-related documents - Exhibits include Separation Agreement and Employment Agreement (both dated May 7, 2025), Certifications of Principal Executive and Financial Officers (pursuant to Sarbanes-Oxley Act), and various Inline XBRL Taxonomy documents[134](index=134&type=chunk)

分组1 - AxoGen reported quarterly earnings of $0.12 per share, exceeding the Zacks Consensus Estimate of $0.06 per share, and showing an increase from $0.05 per share a year ago, resulting in an earnings surprise of +100.00% [1] - The company achieved revenues of $56.66 million for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 7.11%, and up from $47.91 million year-over-year [2] - Over the last four quarters, AxoGen has surpassed consensus EPS estimates three times and topped consensus revenue estimates four times [2] 分组2 - The stock has underperformed, losing about 23.9% since the beginning of the year, while the S&P 500 has gained 7.6% [3] - The current consensus EPS estimate for the coming quarter is $0.07 on revenues of $55.93 million, and for the current fiscal year, it is $0.20 on revenues of $216.4 million [7] - The Zacks Industry Rank for Medical - Instruments is currently in the bottom 37% of over 250 Zacks industries, indicating potential underperformance compared to higher-ranked industries [8]

Financial Data and Key Metrics Changes - Revenue for Q2 2025 was $56.7 million, reflecting an 18.3% increase compared to Q2 2024 and a 16.7% sequential increase over Q1 2025 [5][18] - Gross profit for the quarter was $42 million, up from $35.3 million in Q2 2024, representing a gross margin of 74.2%, an increase from 73.8% in the same period last year [18][19] - Net income for the quarter was $600,000 or $0.01 per share, compared to a net loss of $1.9 million or $0.04 per share in Q2 2024 [21] Business Line Data and Key Metrics Changes - Sales growth was driven by double-digit growth across all nerve repair target markets, including extremities, oral, maxillofacial, head and neck, and breast [5][6] - The advanced nerve graft remains the primary growth driver, complemented by other nerve repair products [6] - High potential accounts contributed approximately 70% of revenue growth in the first half of 2025, with 641 active high potential accounts, an increase of 19 accounts or 3% compared to 2024 [8][9] Market Data and Key Metrics Changes - Coverage for nerve repair using synthetic conduits or allografts has increased to over 55% among commercial payers, with an estimated 17 million additional lives covered year to date [13] - The company expects to achieve nearly complete commercial coverage over the strategic plan period, with significant progress noted in the healthcare climate in the U.S. [40][41] Company Strategy and Development Direction - The company is focused on executing its strategic plan, investing in innovation, optimizing resource allocation, and driving towards profitability [23] - The Biologics License Application (BLA) for the advanced nerve graft is on track for anticipated approval in September 2025, which will secure 12 years of market exclusivity [16][17] - The company aims to double its breast sales force by the end of 2025, targeting 22 representatives and two regional sales directors [10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to grow the business consistent with previously provided guidance, despite potential deceleration in the second half of the year due to BLA logistics [32] - The leadership team believes that the treatment penetration of nerve care is still low, indicating significant growth opportunities [28][29] - The company remains focused on maintaining operational efficiency and leveraging improvements post-BLA approval [56] Other Important Information - Operating expenses increased to $40.3 million, but as a percentage of revenue, they decreased by 3.5%, indicating improved operating leverage [20] - The company expects to be net cash flow positive for the year and to self-fund its strategic plan with growing cash from operations [22][23] Q&A Session Summary Question: Insights on business progress in the first half of the year - Management noted that growth is driven by effective sales management and strategies to increase adoption of nerve care [26][27] Question: Dynamics for the second half of the year - Management indicated a conservative approach until the BLA process is finalized, which may affect logistics and product supply [32] Question: Sales rep productivity and seasonal trends - Management expects historical seasonality to continue, with specific increases in procedures during favorable weather and year-end [36] Question: Coverage expansion and its drivers - Management highlighted the importance of updated evidence and clinician advocacy in driving coverage expansion [40][41] Question: BLA process and interactions with the FDA - Management described the interactions as professional and cooperative, with ongoing discussions about quality systems and labeling [46][82] Question: Manufacturing improvements post-BLA approval - Management outlined plans for continuous improvement processes and electronic systems to enhance operational efficiency [56] Question: Gross margin changes and future write-offs - Management indicated that while there may be future write-offs, they do not foresee significant issues at the moment [92]

Financial Performance - Q2 2025 revenue increased to $56.7 million, representing an 18.3% year-over-year growth[12,22] - Q2 2025 gross margin was 74.2%, a 0.4% increase compared to 2024[24] - Net income for Q2 2025 was $0.6 million, compared to a loss of $1.9 million in Q2 2024[26] - Adjusted EBITDA for Q2 2025 was $9.3 million, compared to $5.6 million in Q2 2024[26] - Operational cash flow increased by $7.8 million, from $28.1 million on March 31, 2025, to $35.9 million on June 30, 2025[28] Business Growth & Development - High Potential (HiPo) accounts yielded approximately 70% of year-over-year revenue growth year-to-date[12] - HiPo accounts have yielded a 21% year-over-year increase in average account productivity year-to-date[12] - The company added approximately 10 million estimated additional covered lives in Q2 via BCBS policy changes, with approximately 17 million estimated new lives year-to-date[14] Guidance - The company raised its full-year 2025 revenue growth guidance to at least 17%, or $219 million[30]

[Executive Summary](index=1&type=section&id=Executive%20Summary) Axogen, Inc. reported strong second quarter 2025 financial results, with significant revenue growth and a shift to net income. The company raised its full-year revenue guidance to at least 17% growth, or $219 million, reflecting confidence in its market development strategies and commercial execution - Axogen reported strong Q2 2025 results, with revenue growth and a **Shift to profit**, and raised full-year revenue guidance to at least **17% growth** or **$219 million**[1](index=1&type=chunk)[3](index=3&type=chunk) [Second Quarter 2025 Financial Results](index=1&type=section&id=Second%20Quarter%20Financial%20Results) Axogen achieved robust financial performance in Q2 2025, marked by double-digit revenue growth, improved gross margin, and a return to net income compared to a net loss in the prior year. Adjusted financial metrics also showed significant improvement [Key Financial Metrics](index=1&type=section&id=Key%20Financial%20Metrics) In Q2 2025, Axogen's revenue increased by 18.3% year-over-year to $56.7 million, with gross margin improving to 74.2%. The company reported a net income of $0.6 million ($0.01 per share) and adjusted net income of $5.7 million ($0.12 per share), a substantial improvement from a net loss in Q2 2024. Adjusted EBITDA also grew significantly to $9.3 million Key Financial Metrics | Metric | Q2 2025 | Q2 2024 | Change (YoY) | Q1 2025 | Change (QoQ) | | :----- | :------ | :------ | :----------- | :------ | :----------- | | Revenue | $56.7M | $47.9M | +18.3% | N/A | +16.7% (vs Q1 2025) | | Gross Margin | 74.2% | 73.8% | +0.4 pp | 71.9% | +2.3 pp | | Net Income (Loss) | $0.6M | ($1.9M) | Shift to profit | N/A | N/A | | Net Income (Loss) per share | $0.01 | ($0.04) | Shift to profit | N/A | N/A | | Adjusted Net Income | $5.7M | $2.0M | +185% | N/A | N/A | | Adjusted Net Income per share | $0.12 | $0.05 | +140% | N/A | N/A | | Adjusted EBITDA | $9.3M | $5.6M | +66.1% | N/A | N/A | - Cash and cash equivalents, restricted cash, and investments increased **$7.8 million** during the second quarter of 2025, reaching **$35.9 million** at June 30, 2025, compared to **$39.5 million** at December 31, 2024[5](index=5&type=chunk) [Business Highlights](index=1&type=section&id=Summary%20of%20Business%20Highlights) Axogen's Q2 2025 business highlights include broad-based revenue growth across all key markets and significant progress in expanding coverage and reimbursement for nerve repair solutions. The company also advanced its Biologics License Application (BLA) for Avance® Nerve Graft, completing critical regulatory milestones [Market Development and Commercial Execution](index=1&type=section&id=Market%20Development%20and%20Commercial%20Execution) Axogen achieved double-digit revenue growth across all its markets, including Extremities, Oral Maxillofacial & Head and Neck, and Breast. The company also expanded coverage and reimbursement for nerve repair, adding an estimated 10 million new covered lives in 2025, bringing the total to approximately 17 million new lives and over 55% commercial payer coverage - Second quarter 2025 revenue growth was broad-based, with double-digit growth from Q2 2024 in all markets: Extremities, Oral Maxillofacial & Head and Neck, and Breast[6](index=6&type=chunk) - Expanded coverage and reimbursement for nerve repair by an estimated **10 million new covered lives** in 2025, totaling approximately **17 million new lives** and bringing **commercial payer coverage to more than 55%**[6](index=6&type=chunk) [Regulatory Milestones](index=2&type=section&id=Regulatory%20Milestones) The FDA accepted Axogen's Biologics License Application (BLA) for Avance® Nerve Graft on November 1, 2024, with a Prescription Drug User Fee Act (PDUFA) goal date of September 5, 2025. During Q2 2025, Axogen completed key regulatory steps, including the late-cycle meeting with the FDA, pre-licensing inspection, and sponsor inspection under the Bioresearch Monitoring program, supporting anticipated approval - FDA accepted the BLA for Avance® Nerve Graft on November 1, 2024, with a PDUFA goal date of September 5, 2025[7](index=7&type=chunk) - Completed key regulatory milestones in Q2 2025 for Avance® Nerve Graft BLA, including the late-cycle meeting, pre-licensing inspection, and sponsor inspection[7](index=7&type=chunk) [2025 Financial Guidance](index=2&type=section&id=2025%20Financial%20Guidance) Axogen has raised its full-year 2025 revenue guidance to at least 17% growth, or $219 million. The company maintains its gross margin expectation of 73% to 75%, noting a potential 1% negative impact from anticipated Avance® Nerve Graft BLA approval costs. Axogen also reiterates its expectation to be net cash flow positive for the full year - Full-year 2025 revenue guidance raised to at least **17% growth**, or **$219 million**[8](index=8&type=chunk) - Gross margin for the year is expected to be in the range of **73% to 75%**, with a **~1% negative impact** from anticipated Avance® Nerve Graft BLA approval costs[8](index=8&type=chunk) - Company expects to be **net cash flow positive** for the full year[8](index=8&type=chunk) [About Axogen](index=2&type=section&id=About%20Axogen) Axogen (NASDAQ: AXGN) is a leading company dedicated to the science, development, and commercialization of technologies for peripheral nerve regeneration and repair. The company aims to restore nerve function and improve quality of life for patients with peripheral nerve injuries through innovative, clinically proven, and economically effective solutions [Product Portfolio](index=2&type=section&id=Product%20Portfolio) Axogen's product portfolio includes a range of solutions for peripheral nerve repair and regeneration. Key products are Avance Nerve Graft (human nerve allograft), Axoguard Nerve Connector (coaptation aid), Axoguard Nerve Protector (nerve wrap), Axoguard HA+ Nerve Protector (next-gen nerve protector), Axoguard Nerve Cap (neuroma reduction), and Avive+ Soft Tissue Matrix (tissue protection). These products are available in the US, Canada, Germany, UK, Spain, South Korea, and other countries - Axogen's product portfolio includes Avance Nerve Graft, Axoguard Nerve Connector, Axoguard Nerve Protector, Axoguard HA+ Nerve Protector, Axoguard Nerve Cap, and Avive+ Soft Tissue Matrix[12](index=12&type=chunk) - Products are available in the United States, Canada, Germany, the United Kingdom, Spain, South Korea, and several other countries[12](index=12&type=chunk) [Non-GAAP Financial Measures](index=3&type=section&id=About%20Non-GAAP%20Financial%20Measures) Axogen uses non-GAAP financial measures such as EBITDA, Adjusted EBITDA, Adjusted Net Income/Loss, and Adjusted Net Income/Loss Per Common Share - diluted to supplement its GAAP financial statements. These measures exclude noncash stock compensation expense and other items to provide additional insights into the company's operational performance and facilitate period-to-period comparisons for management and investors - Non-GAAP measures include EBITDA, Adjusted EBITDA (excluding noncash stock compensation), and Adjusted Net Income/Loss (excluding noncash stock compensation)[14](index=14&type=chunk) - These non-GAAP measures are used for financial and operational decision-making, to evaluate period-to-period comparisons, and provide greater transparency for investors and analysts[15](index=15&type=chunk) [Financial Statements](index=4&type=section&id=Financial%20Statements) This section presents Axogen's unaudited condensed consolidated financial statements, including the Balance Sheets, Statements of Operations, Reconciliation of GAAP to Non-GAAP Measures, Statements of Changes in Shareholders' Equity, and Statements of Cash Flows for the periods ended June 30, 2025, and December 31, 2024 (for balance sheet) or June 30, 2024 (for income statement and cash flow) [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of June 30, 2025, Axogen's total assets increased slightly to $205.45 million from $203.73 million at December 31, 2024. Current assets rose to $103.42 million, driven by increases in investments and accounts receivable. Total liabilities decreased to $93.18 million from $99.82 million, while total shareholders' equity increased to $112.28 million from $103.91 million Condensed Consolidated Balance Sheets (in thousands) | Metric (in thousands) | June 30, 2025 | December 31, 2024 | Change | | :-------------------- | :------------ | :---------------- | :----- | | Total Assets | $205,453 | $203,728 | +$1,725 | | Total Current Assets | $103,419 | $99,217 | +$4,202 | | Cash and cash equivalents | $20,036 | $27,554 | -$7,518 | | Investments | $9,886 | $5,928 | +$3,958 | | Accounts receivable, net | $28,029 | $24,105 | +$3,924 | | Total Liabilities | $93,177 | $99,821 | -$6,644 | | Total Shareholders' Equity | $112,276 | $103,907 | +$8,369 | [Condensed Consolidated Statements of Operations](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) For the three months ended June 30, 2025, Axogen reported revenues of $56.66 million, an 18.3% increase year-over-year. Gross profit rose to $42.02 million, and the company achieved a net income of $0.58 million, a significant improvement from a net loss of $1.92 million in Q2 2024. For the six months ended June 30, 2025, revenues were $105.22 million, and net loss decreased to $3.26 million from $8.56 million in the prior year period Condensed Consolidated Statements of Operations (in thousands) | Metric (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Change (YoY) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Change (YoY) | | :-------------------- | :------------------------------- | :------------------------------- | :----------- | :----------------------------- | :----------------------------- | :----------- | | Revenues | $56,662 | $47,912 | +18.3% | $105,222 | $89,289 | +17.8% | | Gross profit | $42,018 | $35,345 | +18.9% | $76,951 | $67,964 | +13.2% | | Income (loss) from operations | $1,672 | ($428) | Shift to profit | $11 | ($4,988) | Shift to profit | | Net income (loss) | $579 | ($1,921) | Shift to profit | ($3,255) | ($8,556) | Reduced loss | | Net income (loss) per common share — diluted | $0.01 | ($0.04) | Shift to profit | ($0.07) | ($0.20) | Reduced loss | [Reconciliation of GAAP to Non-GAAP Financial Measures](index=6&type=section&id=Reconciliation%20of%20GAAP%20Financial%20Measures%20to%20Non-GAAP%20Financial%20Measures) The reconciliation shows that for Q2 2025, Adjusted EBITDA was $9.26 million, up from $5.62 million in Q2 2024, and Adjusted Net Income was $5.75 million, a significant increase from $1.99 million in Q2 2024. For the six months ended June 30, 2025, Adjusted EBITDA was $12.14 million, and Adjusted Net Income was $4.82 million, compared to a loss in the prior year. These adjustments primarily account for noncash stock-based compensation expense Reconciliation of GAAP to Non-GAAP Financial Measures (in thousands) | Metric (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Change (YoY) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Change (YoY) | | :-------------------- | :------------------------------- | :------------------------------- | :----------- | :----------------------------- | :----------------------------- | :----------- | | Net income (loss) (GAAP) | $579 | ($1,921) | Shift to profit | ($3,255) | ($8,556) | Reduced loss | | EBITDA - non-GAAP | $4,091 | $1,717 | +138.3% | $4,059 | ($1,198) | Shift to profit | | Adjusted EBITDA - non-GAAP | $9,259 | $5,624 | +64.6% | $12,136 | $6,628 | +83.1% | | Adjusted net income (loss) - non-GAAP | $5,747 | $1,986 | +189.4% | $4,822 | ($730) | Shift to profit | | Adjusted net income (loss) per common share - diluted - non-GAAP | $0.12 | $0.05 | +140% | $0.10 | ($0.02) | Shift to profit | [Condensed Consolidated Statements of Changes in Shareholders' Equity](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Changes%20in%20Shareholders'%20Equity) Axogen's total shareholders' equity increased from $103.91 million at December 31, 2024, to $112.28 million at June 30, 2025. This increase was primarily driven by stock-based compensation and proceeds from the exercise of stock options and ESPP stock purchases, partially offset by the net loss for the six-month period Condensed Consolidated Statements of Changes in Shareholders' Equity (in thousands) | Metric (in thousands) | June 30, 2025 | December 31, 2024 | Change | | :-------------------- | :------------ | :---------------- | :----- | | Total Shareholders' Equity | $112,276 | $103,907 | +$8,369 | | Stock-based compensation (6 months) | $8,077 | N/A | N/A | | Exercise of stock options and ESPP (6 months) | $3,547 | N/A | N/A | [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For the six months ended June 30, 2025, net cash used in operating activities decreased to $5.45 million from $8.10 million in the prior year period, primarily due to a reduced net loss and higher stock-based compensation. Net cash used in investing activities increased to $5.61 million, mainly due to higher purchases of investments. Net cash provided by financing activities significantly increased to $3.54 million, driven by proceeds from stock option exercises and ESPP. Overall, there was a net decrease in cash and cash equivalents, and restricted cash of $7.52 million Condensed Consolidated Statements of Cash Flows (in thousands) | Metric (in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Change | | :-------------------- | :------------------------------- | :------------------------------- | :----- | | Net cash used in operating activities | ($5,449) | ($8,101) | -$2,652 (**less cash used**) | | Net cash used in investing activities | ($5,608) | ($4,484) | +$1,124 (**more cash used**) | | Net cash provided by financing activities | $3,539 | $748 | +$2,791 | | Net decrease in cash and cash equivalents, and restricted cash | ($7,518) | ($11,837) | -$4,319 (**less decrease**) | | Cash and cash equivalents, and restricted cash, end of period | $26,036 | $25,189 | +$847 | [Additional Information](index=2&type=section&id=Additional%20Information) This section provides important legal disclaimers regarding forward-looking statements, outlining potential risks and uncertainties that could cause actual results to differ materially from projections. It also includes details for the investor conference call and company contact information [Cautionary Statements Concerning Forward-Looking Statements](index=3&type=section&id=Cautionary%20Statements%20Concerning%20Forward-Looking%20Statements) This section highlights that the press release contains forward-looking statements based on management's current expectations, which are subject to various risks and uncertainties. These risks include leadership transitions, supply chain issues, inflation, hospital staffing, product development timelines, regulatory processes, financial performance, and geopolitical conflicts, as detailed in the company's Form 10-K. The company assumes no responsibility to update these statements - Statements are forward-looking and subject to risks including leadership transitions, supply chain issues, inflation, hospital staffing, product development, regulatory approvals, and geopolitical conflicts[13](index=13&type=chunk) - Actual results may differ materially from projections, and the company assumes no responsibility to publicly update or revise any forward-looking statements[13](index=13&type=chunk) [Conference Call & Contact Information](index=3&type=section&id=Conference%20Call) Axogen hosted a conference call and webcast for the investment community on August 5, 2025, at 8:00 a.m. ET. Replay information is available on the company's investor relations website. Contact information for investor relations is also provided - Conference call and webcast held on August 5, 2025, at 8:00 a.m. ET, with replay available on the company's investor website[9](index=9&type=chunk)[10](index=10&type=chunk) - Investor contact: InvestorRelations@axogeninc.com[16](index=16&type=chunk)

Core Insights - Axogen, Inc. has raised its full-year revenue guidance to at least 17% growth, equating to approximately $219 million [5] - The company reported strong second-quarter results, with revenue of $56.7 million, an 18.3% increase compared to the same quarter in 2024 [6][7] - The CEO expressed confidence in the company's strategic plan and market development objectives, emphasizing the goal of making peripheral nerve function restoration a standard of care [3] Financial Performance - Second-quarter revenue was $56.7 million, reflecting an 18.3% increase year-over-year and a 16.7% increase from the first quarter of 2025 [6][7] - Gross margin for the second quarter was 74.2%, up from 73.8% in the same quarter of 2024 [6] - Net income for the quarter was $0.6 million, or $0.01 per share, compared to a net loss of $1.9 million, or $0.04 per share, in the second quarter of 2024 [6][7] - Adjusted net income for the quarter was $5.7 million, or $0.12 per share, compared to $2.0 million, or $0.05 per share, for the same period in 2024 [6][7] Business Highlights - The company achieved broad-based revenue growth across all markets, including Extremities, Oral Maxillofacial & Head and Neck, and Breast [7] - Coverage and reimbursement for nerve repair using synthetic conduits or allografts expanded by an estimated 10 million new covered lives in 2025, totaling approximately 17 million new lives covered [7] - The FDA accepted the filing of the Biologics License Application for Avance® Nerve Graft, with a goal date for approval set for September 5, 2025 [7] Cash Position - As of June 30, 2025, the balance of cash and cash equivalents, restricted cash, and investments was $35.9 million, down from $39.5 million at the end of 2024 [6] - The company expects to be net cash flow positive for the full year [5]

Company Overview - Axogen, Inc. is a global leader in developing and marketing innovative surgical solutions for the restoration of peripheral nerve function [1] - The company focuses specifically on the science, development, and commercialization of technologies for peripheral nerve regeneration and repair [2] - Axogen's products address the needs of patients suffering from traumatic injuries or surgical procedures that impact peripheral nerve function [2] Product Portfolio - Axogen offers a comprehensive portfolio of products for peripheral nerve repair, including: - Avance Nerve Graft®, a biologically active processed human nerve allograft for bridging severed peripheral nerves [2] - Axoguard Nerve Connector®, a porcine submucosa extracellular matrix coaptation aid for tensionless repair of severed peripheral nerves [2] - Axoguard Nerve Protector®, a product used to wrap and protect damaged peripheral nerves [2] - Axoguard HA+ Nerve Protector™, designed to enhance nerve gliding and provide protection for peripheral nerve injuries [2] - Avive+ Soft Tissue Matrix™, a multi-layer amniotic membrane allograft for tissue protection during repair [2] - Axoguard Nerve Cap®, used to protect a peripheral nerve end and reduce the development of symptomatic neuroma [2] Market Presence - Axogen's products are available in multiple markets, including the United States, Canada, the United Kingdom, South Korea, and several European and international markets [2] - The company plays a vital role in addressing diverse patient needs in peripheral nerve repair across various applications and surgical specialties [2]

Company Overview - Axogen, Inc. (NASDAQ: AXGN) is a global leader in developing and marketing innovative surgical solutions for the restoration of peripheral nerve function [1][3] - The company focuses specifically on the science, development, and commercialization of technologies for peripheral nerve regeneration and repair [3] Product Portfolio - Axogen offers a comprehensive portfolio of products for peripheral nerve repair, including: - Avance Nerve Graft®, a biologically active processed human nerve allograft for bridging severed peripheral nerves [3] - Axoguard Nerve Connector®, a porcine submucosa extracellular matrix coaptation aid for tensionless repair of severed peripheral nerves [3] - Axoguard Nerve Protector®, a product used to wrap and protect damaged peripheral nerves [3] - Axoguard HA+ Nerve Protector™, designed to enhance nerve gliding and provide protection for peripheral nerve injuries [3] - Avive+ Soft Tissue Matrix™, a multi-layer amniotic membrane allograft for tissue repair [3] - Axoguard Nerve Cap®, used to protect a peripheral nerve end and reduce the development of symptomatic or painful neuroma [3] Market Applications - Axogen's products are utilized across various applications and surgical specialties, including: - Traumatic injuries, oral and maxillofacial surgery, breast reconstruction, and surgical treatment of pain [3] - The company addresses both scheduled procedures, such as nerve reconstruction after surgical removal of painful neuromas, and emergent procedures arising from injuries [3] Upcoming Financial Reporting - Axogen will report its 2025 second quarter financial results on August 5, 2025, before the market opens [1] - An investment-community conference call and webcast will follow the release at 8 a.m. ET [1]

AxoGen (AXGN) FY Conference June 11, 2025 02:00 PM ET Speaker0 All good? All right. Well, to everyone who was here today to learn a little bit about AxoGen. Just before I get started, just want to draw everyone's attention to our forward looking statements. You're familiar with these and we will certainly be making forward looking statements but we may or may not be updating these on a regular basis. So, little bit about me. My name is Mike Dale. I've been, as you can tell by my gray hair, around for a litt ...

Company Overview - Axogen, Inc. (NASDAQ: AXGN) is a leader in developing and marketing surgical solutions for peripheral nerve injuries [1][3] - The company focuses on the science, development, and commercialization of technologies for peripheral nerve regeneration and repair [3] - Axogen's products aim to restore peripheral nerve function and improve the quality of life for patients with nerve damage [3] Product Portfolio - Axogen offers a comprehensive portfolio of products for various applications, including traumatic injuries, oral and maxillofacial surgery, breast reconstruction, and pain treatment [3] - Key products include: - Avance Nerve Graft®: a processed human nerve allograft for bridging severed peripheral nerves [3] - Axoguard Nerve Connector®: an extracellular matrix coaptation aid for tensionless repair of severed nerves [3] - Axoguard Nerve Protector®: a product used to protect damaged nerves and reinforce reconstruction [3] - Axoguard HA+ Nerve Protector™: designed to enhance nerve gliding and provide protection for peripheral nerve injuries [3] - Avive+ Soft Tissue Matrix™: an amniotic membrane allograft for tissue protection during repair [3] - Axoguard Nerve Cap®: used to protect a peripheral nerve end and reduce the development of painful neuromas [3] Market Presence - Axogen's products are available in the United States, Canada, the United Kingdom, South Korea, and several other international markets [3] - The company addresses both scheduled and emergent procedures, highlighting its vital role in peripheral nerve repair [3]