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Core Insights - TransMedics (TMDX) reported $143.82 million in revenue for Q3 2025, a year-over-year increase of 32.2%, with an EPS of $0.66 compared to $0.12 a year ago, indicating strong growth in financial performance [1] - The revenue fell short of the Zacks Consensus Estimate by 0.76%, while the EPS exceeded the consensus estimate by 78.38% [1] Revenue Breakdown - OCS transplant revenue in the United States totaled $139.01 million, a 32.5% year-over-year increase, but below the average estimate of $141.27 million [4] - OCS transplant revenue from all other countries was $3.63 million, exceeding the average estimate of $3.54 million, representing a 40.5% year-over-year increase [4] - Specific OCS transplant revenues included: - Lung revenue in the U.S. at $3.73 million, below the estimate of $3.96 million [4] - Heart revenue in the U.S. at $27.4 million, below the estimate of $28.6 million [4] - Liver revenue in the U.S. at $107.88 million, slightly below the estimate of $108.54 million [4] - Combined lung net revenue (U.S. & Other countries) at $4.11 million, below the estimate of $4.27 million, with a year-over-year change of 5.2% [4] - Combined heart net revenue (U.S. & Other countries) at $30.59 million, below the estimate of $31.68 million, with a year-over-year change of 13.6% [4] - Combined liver net revenue (U.S. & Other countries) at $107.94 million, below the estimate of $108.63 million, with a year-over-year change of 40.8% [4] Service and Product Revenue - Service revenue was reported at $56.15 million, slightly below the average estimate of $56.76 million, with a year-over-year increase of 30.9% [4] - Net product revenue was reported at $87.68 million, below the average estimate of $89.15 million, with a year-over-year increase of 33.1% [4] Stock Performance - TransMedics shares have returned +15.6% over the past month, outperforming the Zacks S&P 500 composite's +3.8% change [3] - The stock currently holds a Zacks Rank 4 (Sell), indicating potential underperformance in the near term [3]

Core Insights - TransMedics (TMDX) reported quarterly earnings of $0.66 per share, exceeding the Zacks Consensus Estimate of $0.37 per share, and showing significant growth from $0.12 per share a year ago, resulting in an earnings surprise of +78.38% [1] - The company achieved revenues of $143.82 million for the quarter ended September 2025, slightly missing the Zacks Consensus Estimate by 0.76%, but up from $108.76 million year-over-year [2] - TransMedics has outperformed the S&P 500, with shares increasing approximately 108% since the beginning of the year compared to the S&P 500's gain of 17.2% [3] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $0.41 on revenues of $154.29 million, and for the current fiscal year, it is $2.34 on revenues of $600.12 million [7] - The estimate revisions trend for TransMedics was unfavorable prior to the earnings release, resulting in a Zacks Rank 4 (Sell) for the stock, indicating expected underperformance in the near future [6] Industry Context - The Medical - Instruments industry, to which TransMedics belongs, is currently ranked in the top 39% of over 250 Zacks industries, suggesting a favorable outlook compared to lower-ranked industries [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5]

Financial Data and Key Metrics Changes - Total revenue for Q3 2025 was approximately $144 million, representing a year-over-year growth of approximately 32.2% [6][19] - Operating profit for Q3 was approximately $23.3 million, up from $3.9 million in Q3 2024, reflecting an operating margin increase to over 16% [7][21] - Net income for Q3 was $24 million, a 477% year-over-year increase, with earnings per share at $0.71 [22] Business Line Data and Key Metrics Changes - Revenue growth by organ segment: liver revenue grew nearly 41%, heart revenue grew approximately 14%, and lung revenue grew approximately 5% year-over-year [6][19] - Transplant logistics service revenue for Q3 was $27.2 million, representing approximately 35% year-over-year growth [7][20] Market Data and Key Metrics Changes - U.S. transplant revenue was approximately $139 million, up 32% year-over-year, with a sequential decline of 9% [19] - The company maintained coverage of approximately 78% of National OCS Program missions requiring air transport, up from 61% in Q3 2024 [8][20] Company Strategy and Development Direction - The company is focused on capitalizing on global momentum to promote organ transplantation and save more lives through its OCS technology and logistics services [5][6] - Plans to launch the first ex-U.S. NOP program in Italy, with expectations to establish a dedicated transplant logistics network in Europe [10][11] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving a strong finish for 2025 and anticipates continued growth in U.S. national transplant volumes [12][28] - The company narrowed its full-year 2025 revenue guidance to a range of $595 million to $605 million, reflecting approximately 36% growth over 2024 [16][23] Other Important Information - The company is actively investing in R&D and infrastructure to support long-term scalability and efficiency [24][25] - The development of the Gen3 OCS platform is underway, with significant progress expected to be shared in the second half of 2026 [15][26] Q&A Session Summary Question: What is the trajectory into Q4 and 2026? - Management expects to issue guidance for 2026 at the next earnings call, focusing on ending 2025 strong [30][32] Question: What challenges are anticipated in expanding to Europe? - Europe is not homogeneous; each country has specific requirements, but there is a universal need for a dedicated transplant logistics network [33][35] Question: Will the Enhanced and De Novo trials start enrolling patients in Q4? - The first patients are expected to be enrolled in Q4 2025, with full conditions expected to be cleared in early 2026 [37] Question: How will the double-shifting of aircraft impact the business? - Double-shifting aims to maximize fleet efficiency and increase the number of missions flown, potentially improving margins [70][72] Question: What is the confidence level in reaching the 10,000 transplant target? - The company is confident in reaching the 10,000 transplant target, with expectations that heart and lung programs will accelerate growth [75][76]

Q3 2025 Performance - Product revenue reached $87.7 million, representing a 33.1% year-over-year growth but an 8.8% decrease compared to the previous quarter[3] - Total revenue for Q3 2025 was $143.8 million, a 32.2% increase year-over-year but an 8.6% decrease quarter-over-quarter[4] - Service revenue amounted to $56.1 million, showing a 30.9% year-over-year growth but an 8.4% decrease from the previous quarter[5] - Net income for Q3 2025 was $24.3 million, a significant increase of $20.1 million year-over-year but a decrease of $10.6 million quarter-over-quarter[5] - Total cash reached $466.2 million, an increase of $65.6 million quarter-over-quarter[5] Revenue Breakdown by Organ - Liver revenue was $107.94 million, a 40.8% increase year-over-year but a 7.0% decrease quarter-over-quarter[11, 16] - Heart revenue was $30.589 million, a 13.6% increase year-over-year and a 14.2% decrease quarter-over-quarter[11, 16] - Lung revenue was $4.11 million, a 5.2% increase year-over-year and a 10.2% decrease quarter-over-quarter[11, 16] Service Revenue Details - Clinical service revenue decreased by 8.7% quarter-over-quarter but increased by 29.0% year-over-year[14] - Logistics revenue decreased by 8.9% quarter-over-quarter but increased by 35.2% year-over-year[14] - Flight school revenue increased by 15.7% quarter-over-quarter but decreased by 5.7% year-over-year[14] Financial Metrics - Gross margin for Q3 2025 was 58.8%, a 2.9 percentage point increase year-over-year but a 2.6 percentage point decrease quarter-over-quarter[4] - Operating margin for Q3 2025 was 16.2%, a 12.6 percentage point increase year-over-year[4] Updated 2025 Revenue Guidance - The company updated its total revenue guidance for 2025 to a range of $595 million to $605 million, projecting a 36% growth at the midpoint of the range[20]

Financial Performance - Total revenue for the three and nine months ended September 30, 2025, was $143.8 million and $444.7 million, respectively, with net income of $24.3 million and $84.9 million[101]. - Net product revenue for the three months ended September 30, 2025, was $87.7 million, an increase of $21.8 million (33.1%) compared to $65.9 million in 2024[121]. - Total revenue for the three months ended September 30, 2025, reached $143.8 million, up $35.1 million (32.3%) from $108.8 million in 2024[121]. - Gross profit increased by $23.7 million (38.9%) to $84.6 million for the three months ended September 30, 2025, compared to $60.8 million in 2024[121]. - Net income for the three months ended September 30, 2025, was $24.3 million, a significant increase of $20.1 million (476.5%) compared to $4.2 million in 2024[121]. - For the nine months ended September 30, 2025, net income was $84.9 million, an increase of $56.3 million (197.3%) compared to $28.6 million in 2024[134]. - Total OCS transplant revenue for the nine months ended September 30, 2025, was $441.7 million, an increase of $125.0 million (39.4%) compared to $316.6 million for the same period in 2024[135]. - Gross profit increased by $79.3 million (approximately 25.0%) to $379.0 million for the nine months ended September 30, 2025, compared to $299.7 million in 2024[139]. - Overall gross margin improved to 61% for the nine months ended September 30, 2025, compared to 59% in the same period of 2024[140]. Expenses and Costs - Operating expenses for the three months ended September 30, 2025, totaled $61.3 million, an increase of $4.4 million (7.7%) from $56.9 million in 2024[121]. - Research, development, and clinical trials expenses are anticipated to rise as the company continues product development and regulatory approval efforts[116]. - Research, development, and clinical trials expenses increased by $1.0 million (7.0%) to $15.3 million for the three months ended September 30, 2025, compared to $14.3 million in 2024[128]. - Total research, development, and clinical trials expenses rose by $8.9 million (22.5%) to $48.4 million in 2025 from $39.5 million in 2024[141]. - Selling, general, and administrative expenses are expected to increase as the company expands its commercial team and infrastructure to support sales growth[117]. - Selling, general, and administrative expenses rose by $3.4 million (7.9%) to $46.0 million for the three months ended September 30, 2025, compared to $42.7 million in 2024[130]. - Selling, general, and administrative expenses increased by $12.0 million (9.9%) to $133.7 million for the nine months ended September 30, 2025, compared to $121.7 million in 2024[142]. Liquidity and Financing - The company has an accumulated deficit of $383.3 million as of September 30, 2025[101]. - The company has entered into a credit agreement borrowing $60.0 million and issued $460.0 million in aggregate principal amount of Notes to finance operations[118]. - Cash balance as of September 30, 2025, was $466.2 million, serving as the principal source of liquidity[145]. - Net cash provided by operating activities was $158.3 million for the nine months ended September 30, 2025, significantly up from $29.1 million in 2024[146]. - Interest expense decreased slightly to $10.4 million for the nine months ended September 30, 2025, from $10.8 million in 2024[143]. - The company issued $460.0 million in convertible senior notes on May 11, 2023, with a 1.5% interest rate and a maturity date of June 1, 2028[153]. - The company entered into a credit agreement with CIBC, borrowing $60.0 million, with amendments made on May 8, 2023, June 23, 2023, and November 9, 2023[158]. - The company is required to maintain a minimum liquidity amount of either the consolidated adjusted EBITDA loss for the trailing four months or $10.0 million, and total net revenue must be at least 75% of the revenue plan presented to CIBC[161]. - As of September 30, 2025, the company was in compliance with all financial covenants of the CIBC Credit Agreement[161]. - The company believes existing cash will fund operating expenses and capital requirements for at least 12 months following the filing of the Quarterly Report[163]. Growth and Expansion - The company expects operating and capital expenditures to increase as it focuses on growing commercial sales and expanding its transplant logistics capabilities[101]. - The company plans to construct a new manufacturing facility in Mirandola, Italy, to support the next generation OCS technology platform and enhance international supply capabilities[105]. - In July 2025, the company purchased land in Mirandola, Italy, for future research and development and manufacturing facilities[164]. Technology and Products - The OCS technology platform includes three FDA-approved products for heart, lung, and liver transplantations, representing a significant advancement in organ preservation[99]. - Service revenue from transplant logistics services increased following the acquisition of Summit Aviation, contributing $1.2 million and $3.1 million for the three and nine months ended September 30, 2025, respectively[108]. - Total OCS transplant revenue for the three months ended September 30, 2025, was $142.6 million, an increase of $35.1 million (32.6%) from $107.5 million in 2024[122]. - Revenue from OCS transplant in the United States was $429.8 million, up $124.6 million (40.0%) from $305.2 million in the prior year, driven by higher sales volumes of OCS Liver and OCS Heart disposable sets[137]. Risk Factors - The company is exposed to interest rate and foreign currency exchange rate risks due to variable rate debt instruments and transactions in various foreign currencies[168]. - The company expects costs and expenses to increase as it expands its commercial team, manufacturing, and regulatory approval efforts for new products[162].

Financial Performance - Total revenue for Q3 2025 was $143.8 million, a 32% increase from $108.8 million in Q3 2024[4] - Gross margin improved to 59% in Q3 2025, up from 56% in Q3 2024[5] - Net income for Q3 2025 was $24.3 million, or 17% of revenue, compared to $4.2 million in Q3 2024[6] - The company raised its full year 2025 revenue guidance to a range of $595 million to $605 million, representing a 36% growth at the midpoint compared to the previous year[7] - Operating expenses for Q3 2025 were $61.3 million, an increase from $56.9 million in Q3 2024, driven by higher research and development investments[5] - Research and development expenses in Q3 2025 were $15.3 million, compared to $14.3 million in Q3 2024[14] Assets and Collaborations - Cash reserves were $466.2 million as of September 30, 2025, up from $336.7 million at the end of 2024[16] - The company owned 21 aircraft as of September 30, 2025, and increased to 22 aircraft by October 29, 2025[5] - TransMedics announced a strategic collaboration with Mercedes-Benz Group AG to deploy a fleet of vehicles dedicated to organ transportation in Italy[5] Future Goals - The company aims to perform 10,000 U.S. NOP transplants by 2028, leveraging its OCSTM technology and NOPTM networks[3]

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