Organogenesis (ORGO) - 2025 Q2 - Quarterly Results

Executive Summary & Business Outlook Organogenesis Holdings Inc. is a regenerative medicine company reporting Q2 2025 financial results, with the CEO expressing confidence in strategic outlook and future policy changes Company Overview Organogenesis Holdings Inc. is a regenerative medicine company specializing in product solutions for Advanced Wound Care and Surgical & Sports Medicine markets - Organogenesis Holdings Inc. is a leading regenerative medicine company focused on developing, manufacturing, and commercializing product solutions for Advanced Wound Care and Surgical & Sports Medicine markets[1] CEO Commentary and Strategic Outlook The CEO expressed satisfaction with Q2 performance and the company's ability to navigate a disrupted environment. He anticipates 2026 policy changes to bring industry stability and opportunities, reinforcing confidence in the company's comprehensive portfolio and the transformational potential of ReNu for knee OA, with Phase 3 data expected in September - CEO Gary S. Gillheeney, Sr. is pleased with the team's Q2 performance and focus on helping customers navigate a disrupted environment[3] - Policy changes expected in 2026 are anticipated to be a 'watershed moment' for the industry, bringing stability and creating opportunities[3] - The company remains confident in the transformational potential of ReNu for knee OA and expects to share top-line data from its second Phase 3 study in September[3] Second Quarter 2025 Financial Highlights Organogenesis reported a decrease in net product revenue and a net loss for Q2 2025, though the net loss improved compared to Q2 2024. Adjusted net income and Adjusted EBITDA, however, saw significant declines | Metric | Q2 2025 (Millions) | Q2 2024 (Millions) | Change (Millions) | Change (%) | | :-------------------------- | :----------------- | :----------------- | :---------------- | :--------- | | Net product revenue | $100.8 | $130.2 | $(29.5) | (23%) | | Net loss | $(9.4) | $(17.0) | $7.6 | 45% | | Adjusted net loss | $(7.5) | $0.2 | $(7.7) | - | | Adjusted EBITDA loss | $(3.6) | $15.6 | $(19.3) | - | - Net product revenue from Advanced Wound Care products decreased by 25% to $92.7 million[4] - Net product revenue from Surgical & Sports Medicine products increased by 16% to $8.1 million[4] Second Quarter 2025 Financial Results This section provides a detailed breakdown of Organogenesis's financial performance for the second quarter of 2025, covering revenue, expenses, and profitability metrics Net Product Revenue Net product revenue for Q2 2025 decreased by 23% year-over-year, primarily due to a significant decline in Advanced Wound Care products, partially offset by growth in Surgical & Sports Medicine products | Product Category | Q2 2025 (Thousands) | Q2 2024 (Thousands) | Change (Thousands) | Change (%) | | :------------------------- | :------------------ | :------------------ | :----------------- | :--------- | | Advanced Wound Care | $92,696 | $123,237 | $(30,541) | (25%) | | Surgical & Sports Medicine | $8,083 | $6,997 | $1,086 | 16% | | Total Net Product Revenue | $100,779 | $130,234 | $(29,455) | (23%) | - The decrease in net product revenue was primarily driven by a $30.5 million, or 25%, decrease in Advanced Wound Care products[5] - The decrease was partially offset by a $1.1 million, or 16%, increase in Surgical & Sports Medicine products[5] Gross Profit and Operating Expenses Gross profit decreased by 28% in Q2 2025, with the gross margin declining to 73%. Total operating expenses decreased by 21%, driven by reductions in R&D and impairment expenses, while SG&A saw a smaller decrease | Metric | Q2 2025 (Thousands) | Q2 2024 (Thousands) | Change (Thousands) | Change (%) | | :---------------------- | :------------------ | :------------------ | :----------------- | :--------- | | Gross Profit | $73,100 | $101,000 | $(27,900) | (28%) | | Gross Profit Margin | 73% | 78% | -5% pts | - | | Total Operating Expenses| $113,581 | $144,126 | $(30,545) | (21%) | | Cost of Goods Sold | $27,630 | $29,198 | $(1,568) | (5%) | | R&D Expense | $10,395 | $15,587 | $(5,192) | (33%) | | SG&A Expenses | $73,810 | $76,540 | $(2,730) | (4%) | | Impairment & Write-down | $1,746 | $22,801 | $(21,055) | (92%) | - The company recorded $0.2 million in grant income during Q2 2025[6] Profitability (GAAP & Non-GAAP) Organogenesis reported an improved GAAP net loss for Q2 2025 compared to the prior year, with a smaller operating loss. However, adjusted net income shifted to a loss, and Adjusted EBITDA turned negative, indicating a decline in underlying operational profitability | Metric | Q2 2025 (Thousands) | Q2 2024 (Thousands) | Change (Thousands) | Change (%) | | :-------------------------- | :------------------ | :------------------ | :----------------- | :--------- | | Operating Loss | $(12,576) | $(13,892) | $1,316 | 9% |\n| Total Other Income (Expense)| $742 | $(648) | $1,390 | - | | Net Loss | $(9,392) | $(17,043) | $7,651 | 45% | | Net Loss Per Share (Basic & Diluted) | $(0.10) | $(0.13) | $0.03 | 23% | | Adjusted Net Loss | $(7,503) | $211 | $(7,714) | - | | Adjusted EBITDA Loss | $(3,640) | $15,649 | $(19,289) | - | | Non-GAAP Operating Loss | $(9,989) | $9,743 | $(19,732) | - | Cash and Debt Position As of June 30, 2025, the company's cash, cash equivalents, and restricted cash significantly decreased compared to December 31, 2024, while maintaining no outstanding debt obligations | Metric | June 30, 2025 (Millions) | December 31, 2024 (Millions) | Change (Millions) | | :-------------------------------------- | :----------------------- | :--------------------------- | :---------------- | | Cash, cash equivalents, restricted cash | $73.7 | $136.2 | $(62.5) | | Outstanding Debt Obligations | $0 | $0 | $0 | First Half 2025 Financial Results This section presents Organogenesis's financial performance for the first half of 2025, including revenue, cost structures, and profitability across GAAP and non-GAAP measures Net Product Revenue For the first half of 2025, net product revenue decreased by 22% year-over-year, primarily driven by a substantial decline in Advanced Wound Care products, partially offset by growth in Surgical & Sports Medicine products | Product Category | H1 2025 (Thousands) | H1 2024 (Thousands) | Change (Thousands) | Change (%) | | :------------------------- | :------------------ | :------------------ | :----------------- | :--------- | | Advanced Wound Care | $172,623 | $227,101 | $(54,478) | (24%) | | Surgical & Sports Medicine | $14,849 | $13,109 | $1,740 | 13% | | Total Net Product Revenue | $187,472 | $240,210 | $(52,738) | (22%) | - The decrease in net product revenue was driven by a $54.5 million, or 24%, decrease in Advanced Wound Care products[12] - This was partially offset by a $1.7 million, or 13%, increase in Surgical & Sports Medicine products[12] Gross Profit and Operating Expenses Gross profit for the first half of 2025 decreased by 25%, with the gross margin falling to 73%. Total operating expenses decreased by 12%, mainly due to lower R&D and impairment expenses, while SG&A saw a modest reduction | Metric | H1 2025 (Thousands) | H1 2024 (Thousands) | Change (Thousands) | Change (%) | | :---------------------- | :------------------ | :------------------ | :----------------- | :--------- | | Gross Profit | $136,100 | $182,300 | $(46,200) | (25%) | | Gross Profit Margin | 73% | 76% | -3% pts | - | | Total Operating Expenses| $227,020 | $257,954 | $(30,934) | (12%) | | Cost of Goods Sold | $51,353 | $57,894 | $(6,541) | (11%) | | R&D Expense | $21,035 | $28,397 | $(7,362) | (26%) | | SG&A Expenses | $146,319 | $148,862 | $(2,543) | (2%) | | Impairment & Write-down | $8,313 | $22,799 | $(14,486) | (64%) | Profitability (GAAP & Non-GAAP) For the first half of 2025, Organogenesis experienced an increased GAAP net loss and operating loss compared to the prior year. Adjusted net loss and Adjusted EBITDA also worsened significantly, reflecting a challenging first half for profitability | Metric | H1 2025 (Thousands) | H1 2024 (Thousands) | Change (Thousands) | Change (%) | | :-------------------------- | :------------------ | :------------------ | :----------------- | :--------- | | Operating Loss | $(39,322) | $(17,744) | $(21,578) | (122%) | | Total Other Income (Expense)| $1,705 | $(1,139) | $2,844 | - | | Net Loss | $(28,235) | $(19,143) | $(9,092) | (47%) | | Net Loss Per Share (Basic & Diluted) | $(0.27) | $(0.14) | $(0.13) | (93%) | | Adjusted Net Loss | $(20,938) | $(1,232) | $(19,706) | (1600%) | | Adjusted EBITDA Loss | $(16,164) | $18,200 | $(34,364) | - | | Non-GAAP Operating Loss | $(29,326) | $6,792 | $(36,118) | - | Cash and Debt Position As of June 30, 2025, the company's cash, cash equivalents, and restricted cash significantly decreased compared to the end of 2024, with no outstanding debt obligations | Metric | June 30, 2025 (Millions) | December 31, 2024 (Millions) | Change (Millions) | | :-------------------------------------- | :----------------------- | :--------------------------- | :---------------- | | Cash, cash equivalents, restricted cash | $73.7 | $136.2 | $(62.5) | | Outstanding Debt Obligations | $0 | $0 | $0 | Fiscal Year 2025 Guidance The company updated its fiscal year 2025 guidance, projecting revenue and profitability ranges for the full year Revenue Guidance Organogenesis updated its fiscal year 2025 revenue guidance, projecting overall net product revenue to be roughly flat to an increase of 6% year-over-year, with Advanced Wound Care products showing slight growth and Surgical & Sports Medicine products expecting stronger growth | Metric | FY 2025 Guidance Range (Millions) | FY 2024 (Millions) | YoY Change Range (%) | | :-------------------------------------- | :-------------------------------- | :----------------- | :------------------- | | Net product revenue | $480.0 - $510.0 | $482.0 | Flat to 6% | | Advanced Wound Care product revenue | $450.0 - $475.0 | $453.6 | -1% to 5% | | Surgical & Sports Medicine product revenue | $30.0 - $35.0 | $28.4 | 6% to 23% | Profitability Guidance The company updated its profitability guidance for fiscal year 2025, expecting a range from a net loss to a net income, and projecting positive adjusted net income, EBITDA, and Adjusted EBITDA | Metric | FY 2025 Guidance Range (Millions) | | :------------------ | :-------------------------------- | | Net income (loss) | $(6.4) - $16.4 | | Adjusted net income | $5.5 - $28.3 | | EBITDA | $6.2 - $37.0 | | Adjusted EBITDA | $31.1 - $61.9 | Unaudited Consolidated Financial Statements This section provides the unaudited consolidated financial statements, including balance sheets, statements of operations, and cash flow data for the reported periods Consolidated Balance Sheets The balance sheet shows a decrease in total assets and total liabilities from December 31, 2024, to June 30, 2025, primarily driven by a reduction in cash and cash equivalents | Metric (Thousands) | June 30, 2025 | December 31, 2024 | | :----------------------------- | :------------ | :---------------- | | Cash and cash equivalents | $73,076 | $135,571 | | Total current assets | $260,223 | $285,941 | | Total assets | $461,128 | $497,886 | | Total current liabilities | $65,839 | $77,477 | | Total liabilities | $99,909 | $112,570 | | Total stockholders' equity | $233,242 | $262,897 | - Accounts receivable, net, increased from $109.9 million to $120.4 million[22] - Inventories, net, increased from $26.2 million to $33.0 million[22] Consolidated Statements of Operations and Comprehensive Loss The consolidated statements of operations show a decrease in total revenue for both the three and six months ended June 30, 2025, leading to increased operating and net losses compared to the prior year periods | Metric (Thousands) | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :----------------------------- | :------------ | :------------ | :------------ | :------------ | | Net product revenue | $100,779 | $130,234 | $187,472 | $240,210 | | Total revenue | $101,005 | $130,234 | $187,698 | $240,210 | | Total operating expenses | $113,581 | $144,126 | $227,020 | $257,954 | | Loss from operations | $(12,576) | $(13,892) | $(39,322) | $(17,744) | | Net loss and comprehensive loss| $(9,392) | $(17,043) | $(28,235) | $(19,143) | | Net loss per share (Basic & Diluted) | $(0.10) | $(0.13) | $(0.27) | $(0.14) | - Grant income of $0.2 million was recorded in Q2 and H1 2025, which was not present in the prior year[24] - Impairment and write-down expenses were significantly lower in Q2 2025 ($1.7 million) compared to Q2 2024 ($22.8 million)[24] Consolidated Statement of Cash Flows The consolidated statement of cash flows indicates a significant increase in net cash used in operating activities for the first half of 2025 compared to the prior year, primarily driven by changes in working capital, leading to a substantial decrease in cash, cash equivalents, and restricted cash | Metric (Thousands) | H1 2025 | H1 2024 | | :----------------------------------------------- | :------------ | :------------ | | Net loss | $(28,235) | $(19,143) | | Net cash used in operating activities | $(52,808) | $(5,424) | | Net cash used in investing activities | $(7,264) | $(4,102) | | Net cash used in financing activities | $(2,344) | $(4,335) | | Change in cash, cash equivalents and restricted cash | $(62,416) | $(13,861) | | Cash, cash equivalents, and restricted cash, end of period | $73,735 | $90,477 | - Significant changes in operating assets and liabilities include a $13.6 million increase in accounts receivable (use of cash) and a $15.9 million increase in inventories (use of cash) in H1 2025[26] - Purchases of property and equipment increased to $7.3 million in H1 2025 from $4.1 million in H1 2024[26] Non-GAAP Financial Measures Reconciliation This section reconciles GAAP financial measures to non-GAAP metrics such as Adjusted EBITDA, Adjusted Net Income, and Non-GAAP Operating Income for both historical and projected periods Adjusted EBITDA Reconciliation Adjusted EBITDA, a key non-GAAP metric used by management, showed a significant shift from income in Q2 and H1 2024 to a loss in Q2 and H1 2025, reflecting a decline in operational performance excluding certain non-cash and infrequent items - Adjusted EBITDA excludes interest, income tax, depreciation, amortization of intangibles, stock-based compensation, and other infrequent adjustments[28] | Metric (Thousands) | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :-------------------------- | :-------- | :-------- | :--------- | :--------- | | Net loss | $(9,392) | $(17,043) | $(28,235) | $(19,143) | | EBITDA | $(7,928) | $(9,720) | $(30,386) | $(9,576) | | Stock-based compensation | $2,542 | $2,568 | $5,909 | $4,975 | | Write-down for asset held for sale | $1,746 | — | $8,313 | — | | Impairment of property | — | $18,842 | — | $18,842 | | Write-down of software costs| — | $3,959 | — | $3,959 | | Adjusted EBITDA | $(3,640) | $15,649 | $(16,164) | $18,200 | Adjusted Net Income (Loss) Reconciliation Adjusted net income (loss) for Q2 and H1 2025 significantly declined compared to the prior year, moving from a positive adjusted net income in Q2 2024 to a substantial adjusted net loss in Q2 2025, after accounting for amortization of intangibles and other specific adjustments - Adjusted net income (loss) is defined as GAAP net loss plus amortization of intangible assets and other infrequent adjustments, less the estimated tax on these adjustments[30] | Metric (Thousands) | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :-------------------------- | :-------- | :-------- | :--------- | :--------- | | Net loss | $(9,392) | $(17,043) | $(28,235) | $(19,143) | | Amortization of intangibles | $841 | $834 | $1,683 | $1,735 | | Write-down for asset held for sale | $1,746 | — | $8,313 | — | | Impairment of property | — | $18,842 | — | $18,842 | | Write-down of software costs| — | $3,959 | — | $3,959 | | Tax on above | $(698) | $(6,381) | $(2,699) | $(6,625) | | Adjusted net income (loss) | $(7,503) | $211 | $(20,938) | $(1,232) | Non-GAAP Operating Income (Loss) Reconciliation Non-GAAP operating income (loss) for Q2 and H1 2025 shifted from income in the prior year to a loss, indicating a deterioration in core operating performance when excluding amortization of intangibles and other specific non-operating adjustments - Non-GAAP operating income (loss) is defined as GAAP loss from operations plus amortization of intangible assets and other infrequent adjustments[33] | Metric (Thousands) | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :-------------------------- | :-------- | :-------- | :--------- | :--------- | | Loss from operations | $(12,576) | $(13,892) | $(39,322) | $(17,744) | | Amortization of intangibles | $841 | $834 | $1,683 | $1,735 | | Write-down for asset held for sale | $1,746 | — | $8,313 | — | | Impairment of property | — | $18,842 | — | $18,842 | | Write-down of software costs| — | $3,959 | — | $3,959 | | Non-GAAP operating income (loss) | $(9,989) | $9,743 | $(29,326) | $6,792 | Projected Non-GAAP Reconciliations The company provided projected reconciliations for its fiscal year 2025 guidance, showing expected ranges for EBITDA, Adjusted EBITDA, and Adjusted Net Income, which are used by management to evaluate operating results | Metric (Thousands) | FY 2025L | FY 2025H | | :-------------------------- | :-------- | :-------- | | Net income (loss) | $(6,400) | $16,400 | | EBITDA | $6,200 | $37,000 | | Adjusted EBITDA | $31,100 | $61,900 | | Adjusted net income | $5,500 | $28,300 | - Projected Adjusted EBITDA includes adjustments for stock-based compensation, write-down for asset held for sale, and FDA fees[36] - Projected Adjusted Net Income includes adjustments for amortization of intangible assets, write-down for asset held for sale, FDA fees, and related tax impacts[37] Corporate Information This section provides essential corporate information, including forward-looking statements, a company overview, and investor and media contact details Forward-Looking Statements This section outlines the forward-looking nature of statements in the release, cautioning readers about inherent risks and uncertainties that could cause actual results to differ materially from projections, including regulatory changes, competition, technological shifts, and product commercialization challenges - Forward-looking statements relate to expectations or forecasts of future events, including expected revenue, net income, adjusted net income, EBITDA, and Adjusted EBITDA for fiscal 2025[38] - Key risk factors include the impact of changes to coverage and reimbursement levels (e.g., proposed LCDs and CMS rules for 2026), significant competition, rapid technological change, and the ability to convince physicians of product safety and efficacy[38] - Other risks include the ability to raise funds, potential future losses, regulatory changes, supply chain issues, and the commercialization status of products like ReNu and Dermagraft[38] About Organogenesis Holdings Inc. Organogenesis Holdings Inc. is a regenerative medicine company offering a broad portfolio of innovative products for advanced wound care and surgical & sports medicine markets, aiming to address patient needs across the continuum of care - Organogenesis Holdings Inc. is a leading regenerative medicine company[39] - The company focuses on developing, manufacturing, and commercializing solutions for advanced wound care and surgical and sports medicine markets[39] - It offers a comprehensive portfolio of innovative regenerative products[39] Investor and Media Contacts Contact information is provided for investor inquiries through ICR Healthcare and for press and media inquiries directly with Organogenesis - Investor inquiries should be directed to Mike Piccinino, CFA at ICR Healthcare (OrganoIR@icrinc.com)[40] - Press and media inquiries should be directed to Organogenesis (communications@organo.com)[40]