Organogenesis (ORGO) - 2025 Q1 - Quarterly Results

First Quarter 2025 Financial Results Q1 2025 Performance Summary Organogenesis reported a 21% year-over-year decrease in net revenue to $86.7 million for Q1 2025, driven by a 23% decline in the Advanced Wound Care segment, while the Surgical & Sports Medicine segment grew by 11% The company experienced a significant increase in net loss to $18.8 million, compared to a $2.1 million loss in Q1 2024, and an Adjusted EBITDA loss of $12.5 million Management expressed confidence in their commercial strategy despite market challenges and noted progress in the ReNu development plan, with a BLA submission expected by year-end 2025 Q1 2025 Key Financial Metrics vs. Q1 2024 | Metric | Q1 2025 | Q1 2024 | Change | | :--- | :--- | :--- | :--- | | Net Revenue | $86.7M | $110.0M | -$23.3M (-21%) | | - Advanced Wound Care | $79.9M | $103.9M | -23% | | - Surgical & Sports Medicine | $6.8M | $6.1M | +11% | | Net Loss | $18.8M | $2.1M | +$16.7M | | Adjusted Net Loss | $13.4M | $1.4M | +$12.0M | | Adjusted EBITDA | ($12.5M) | $2.6M | -$15.1M | - CEO Gary S. Gillheeney, Sr. stated the company managed anticipated disruption well and is confident in its ability to execute its commercial strategy for the remainder of the year, leveraging strong brand equity and customer relationships[3] - The development of ReNu is progressing, with all patients expected to complete the second phase 3 study by the end of Q2 2025 The company remains on track to submit the Biologics License Application (BLA) by the end of 2025[3] Detailed Financial Analysis (Q1 2025) In Q1 2025, gross profit fell 23% to $63.0 million with a gross margin of 73%, down from 74% in Q1 2024 Operating expenses increased by 5% to $89.7 million, largely due to a $6.6 million write-down expense for an asset held for sale This led to an operating loss of $26.7 million, a significant increase from the $3.9 million loss in the prior-year period The company ended the quarter with $110.5 million in cash and no debt - Gross profit decreased by $18.3 million to $63.0 million in Q1 2025, with the gross margin slightly contracting to 73% from 74% in Q1 2024[6] - Operating expenses rose 5% to $89.7 million, primarily driven by a new $6.6 million write-down expense R&D expenses decreased by 17%, while SG&A expenses remained relatively flat[7] - The company's cash, cash equivalents, and restricted cash position decreased from $136.2 million at the end of 2024 to $110.5 million as of March 31, 2025, with no outstanding debt[11] Q1 2025 vs Q1 2024 Profit and Loss Details | Metric | Q1 2025 | Q1 2024 | Change | | :--- | :--- | :--- | :--- | | Operating Loss | ($26.7M) | ($3.9M) | +$22.9M | | Net Loss | ($18.8M) | ($2.1M) | +$16.7M | | Net Loss per Share | ($0.17) | ($0.02) | ($0.15) | Fiscal Year 2025 Guidance Full Year 2025 Outlook Organogenesis reaffirmed its full-year 2025 revenue guidance of $480.0 million to $535.0 million, representing a change of flat to 11% growth year-over-year The company updated its profitability guidance, now expecting net income between $4.7 million and $34.0 million, and Adjusted EBITDA between $43.6 million and $83.2 million Fiscal Year 2025 Guidance | Metric | Low End | High End | YoY Change vs. 2024 | | :--- | :--- | :--- | :--- | | Net Revenue | $480.0M | $535.0M | ~0% to +11% | | - Advanced Wound Care | $450.0M | $500.0M | -1% to +10% | | - Surgical & Sports Medicine | $30.0M | $35.0M | +6% to +23% | | Net Income | $4.7M | $34.0M | N/A | | Adjusted Net Income | $15.3M | $44.6M | N/A | | EBITDA | $20.0M | $59.6M | N/A | | Adjusted EBITDA | $43.6M | $83.2M | N/A | Consolidated Financial Statements Consolidated Balance Sheets As of March 31, 2025, Organogenesis reported total assets of $467.4 million, a decrease from $497.9 million at year-end 2024 The decline was primarily driven by a reduction in cash and cash equivalents Total liabilities also decreased to $99.3 million from $112.6 million, mainly due to lower accounts payable and accrued expenses Total stockholders' equity stood at $242.9 million Balance Sheet Summary (in thousands) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total Current Assets | $268,160 | $285,941 | | Cash and cash equivalents | $109,965 | $135,571 | | Accounts receivable, net | $103,320 | $109,861 | | Total Assets | $467,394 | $497,886 | | Total Current Liabilities | $65,053 | $77,477 | | Total Liabilities | $99,325 | $112,570 | | Total Stockholders' Equity | $242,902 | $262,897 | Consolidated Statements of Operations For the three months ended March 31, 2025, the company's net revenue was $86.7 million, down from $110.0 million in the prior-year period Gross profit was $63.0 million A loss from operations of $26.7 million was recorded, significantly higher than the $3.9 million loss in Q1 2024 The net loss for the quarter was $18.8 million, or ($0.17) per share, compared to a net loss of $2.1 million, or ($0.02) per share, in Q1 2024 Q1 Statement of Operations (in thousands, except per share data) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net revenue | $86,693 | $109,976 | | Gross profit | $62,970 | $81,280 | | Total operating expenses | $89,716 | $85,132 | | Loss from operations | $(26,746) | $(3,852) | | Net loss | $(18,843) | $(2,100) | | Net loss per share (Basic & Diluted) | $(0.17) | $(0.02) | Consolidated Statement of Cash Flows In Q1 2025, net cash used in operating activities was $19.9 million, an increase from $10.2 million in Q1 2024 Net cash used in investing activities was $3.6 million for property and equipment purchases Net cash used in financing activities was $2.1 million This resulted in a total decrease in cash, cash equivalents, and restricted cash of $25.6 million for the quarter Q1 Cash Flow Summary (in thousands) | Cash Flow Activity | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | $(19,935) | $(10,162) | | Net cash used in investing activities | $(3,626) | $(2,222) | | Net cash used in financing activities | $(2,056) | $(2,608) | | Change in cash, cash equivalents and restricted cash | $(25,617) | $(14,992) | | Cash, cash equivalents, and restricted cash, end of period | $110,534 | $89,346 | Non-GAAP Financial Measures and Reconciliations Reconciliation of GAAP Net Loss to Non-GAAP Adjusted EBITDA For Q1 2025, the company reported an Adjusted EBITDA loss of $12.5 million, a significant decrease from an Adjusted EBITDA income of $2.6 million in Q1 2024 The reconciliation from a GAAP net loss of $18.8 million includes adjustments for interest, taxes, D&A, stock-based compensation, and a $6.6 million write-down for an asset held for sale Q1 Adjusted EBITDA Reconciliation (in thousands) | Line Item | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net loss | $(18,843) | $(2,100) | | Interest (income) expense, net | $(961) | $514 | | Income tax benefit | $(6,940) | $(2,243) | | Depreciation and amortization | $3,444 | $3,072 | | Amortization of intangible assets | $842 | $901 | | EBITDA | $(22,458) | $144 | | Stock-based compensation expense | $3,367 | $2,407 | | Write-down to fair value for asset held for sale | $6,567 | $— | | Adjusted EBITDA | $(12,524) | $2,551 | Reconciliation of GAAP Net Loss to Non-GAAP Adjusted Net Loss The company's adjusted net loss for Q1 2025 was $13.4 million, compared to an adjusted net loss of $1.4 million in Q1 2024 The adjustment from the GAAP net loss of $18.8 million primarily accounts for the amortization of intangible assets and the write-down of an asset held for sale, net of tax effects Q1 Adjusted Net Loss Reconciliation (in thousands) | Line Item | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net loss | $(18,843) | $(2,100) | | Amortization of intangible assets | $842 | $901 | | Write-down to fair value for asset held for sale | $6,567 | $— | | Tax on above | $(2,000) | $(241) | | Adjusted net loss | $(13,434) | $(1,440) | Reconciliation of GAAP Loss from Operations to Non-GAAP Operating Loss Non-GAAP operating loss for Q1 2025 was $19.3 million, an increase from a $3.0 million loss in the prior-year quarter This figure is derived from the GAAP operating loss of $26.7 million by adding back the amortization of intangible assets and the write-down for an asset held for sale Q1 Non-GAAP Operating Loss Reconciliation (in thousands) | Line Item | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Loss from operations | $(26,746) | $(3,852) | | Amortization of intangible assets | $842 | $901 | | Write-down to fair value for asset held for sale | $6,567 | $— | | Non-GAAP operating loss | $(19,337) | $(2,951) | Projected Non-GAAP Reconciliations for Fiscal Year 2025 For the full fiscal year 2025, the company provided reconciliations for its guidance Projected GAAP net income of $4.7 million to $34.0 million is expected to reconcile to an Adjusted EBITDA of $43.6 million to $83.2 million Similarly, projected adjusted net income is expected to be between $15.3 million and $44.6 million FY2025 Projected GAAP Net Income to Adjusted EBITDA (in thousands) | Line Item | 2025 Low | 2025 High | | :--- | :--- | :--- | | Net income | $4,700 | $34,000 | | Adjustments (Interest, Tax, D&A, etc.) | $15,300 | $25,600 | | EBITDA | $20,000 | $59,600 | | Additional Adjustments (Stock Comp, Write-down, FDA fee) | $23,600 | $23,600 | | Adjusted EBITDA | $43,600 | $83,200 | FY2025 Projected GAAP Net Income to Adjusted Net Income (in thousands) | Line Item | 2025 Low | 2025 High | | :--- | :--- | :--- | | Net income | $4,700 | $34,000 | | Adjustments (Amortization, Write-down, FDA fee) | $14,500 | $14,500 | | Tax on above | $(3,900) | $(3,900) | | Adjusted net income | $15,300 | $44,600 | Other Information Forward-Looking Statements This report contains forward-looking statements regarding the company's expected financial performance for fiscal 2025 and strategic plans These statements are subject to numerous risks and uncertainties, including changes in product reimbursement levels, competition, technological changes, the ability to raise funds, and regulatory approvals, which could cause actual results to differ materially from expectations - Forward-looking statements include guidance on revenue, net income, and EBITDA for fiscal 2025[26] - Key risks include uncertainty in coverage and reimbursement (including proposed LCDs effective as soon as Jan 1, 2026), significant competition, rapid technological change, and the ability to obtain regulatory approval for products like ReNu[26] About Organogenesis Holdings Inc. Organogenesis Holdings Inc. is a leading regenerative medicine company that develops, manufactures, and commercializes solutions for the advanced wound care and surgical and sports medicine markets, offering a comprehensive portfolio of innovative products - The company focuses on regenerative medicine solutions for advanced wound care and surgical/sports medicine markets[27]