Artivion(AORT) - 2025 Q2 - Quarterly Results

Company Information Contacts This section provides investor relations contact information for Artivion, Inc., including Lance A. Berry, Executive Vice President and CFO, and Brian Johnston and Laine Morgan of Gilmartin Group LLC - Investor contacts: Lance A. Berry (Artivion Executive Vice President and CFO) and Brian Johnston / Laine Morgan (Gilmartin Group LLC)[1] Second Quarter 2025 Financial Performance Executive Summary & Key Achievements Artivion demonstrated strong performance in Q2 2025 with 14% constant currency revenue growth and 33% adjusted EBITDA growth, advancing strategic initiatives and improving capital structure - The company achieved 14% constant currency revenue growth and 33% adjusted EBITDA growth in Q2 2025, demonstrating business scalability and EBITDA margin expansion[4] - Both On-X and stent graft product lines achieved over 20% growth at constant currency[5] - Received US FDA Investigational Device Exemption (IDE) approval to initiate the ARTIZEN pivotal trial, evaluating Arcevo LSA for treating acute and chronic aortic arch pathologies[5] - Successfully exited previously issued notes by converting $99.5 million of 2025 convertible senior notes due July 1 into common stock, significantly improving the capital structure[5][6] 2025 Second Quarter Key Financial Metrics | Metric | Q2 2025 (Million USD) | Q2 2024 (Million USD) | YOY Growth (GAAP) | YOY Growth (Constant Currency) | | :------------------- | :--------------- | :--------------- | :--------------- | :------------------- | | Revenue | $113.0 | $98.0 | 15% | 14% | | Net Income | $1.3 | $(2.1) | - | - | | Diluted Net Income Per Share (USD) | $0.03 | $(0.05) | - | - | | Non-GAAP Net Income | $10.7 | $2.9 | - | - | | Non-GAAP Diluted Net Income Per Share (USD) | $0.24 | $0.07 | - | - | | Adjusted EBITDA | $24.8 | $18.6 | 33% | - | Detailed Financial Results Artivion achieved $113 million in total revenue for Q2 2025, a 15% year-over-year increase, with growth in product and preservation services revenue, a gross margin of $73.1 million, and a net profit of $1.3 million 2025 Second Quarter and First Half Consolidated Operating Results | Metric (Thousand USD) | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :----------------------- | :--------------- | :--------------- | :----------- | :----------- | | Product Revenue | 87,444 | 73,210 | 166,242 | 144,324 | | Preservation Services Revenue | 25,528 | 24,809 | 45,708 | 51,126 | | Total Revenue | 112,972 | 98,019 | 211,950 | 195,450 | | Cost of Product Revenue | 28,315 | 24,545 | 53,578 | 48,295 | | Cost of Preservation Services Revenue | 11,545 | 10,150 | 21,683 | 20,885 | | Total Cost of Revenue | 39,860 | 34,695 | 75,261 | 69,180 | | Gross Margin | 73,112 | 63,324 | 136,689 | 126,270 | | Operating Expenses | 64,728 | 56,817 | 126,160 | 94,452 | | Operating Income | 8,384 | 6,507 | 10,529 | 31,818 | | Net Income (Loss) | 1,345 | (2,121) | 840 | 5,412 | | Diluted Net Income (Loss) Per Share (USD) | 0.03 | (0.05) | 0.02 | 0.13 | 2025 Financial Outlook Updated Guidance Artivion raised its full-year 2025 revenue and adjusted EBITDA guidance midpoints, reflecting strong Q2 performance and confidence in future growth, projecting 12% to 14% constant currency revenue growth and 21% to 28% adjusted EBITDA growth - The company raised the midpoints of its full-year 2025 revenue and adjusted EBITDA guidance, reflecting strong Q2 performance and greater confidence in the overall growth outlook[8][9] 2025 Full-Year Financial Guidance | Metric | New Guidance (2025) | Old Guidance (2025) | Growth Rate (vs 2024) | | :------------------- | :--------------- | :--------------- | :------------------- | | Reported Revenue (Million USD) | $435 - $443 | $423 - $435 | - | | Constant Currency Revenue Growth | 12% - 14% | 11% - 14% | - | | Adjusted EBITDA (Million USD) | $86 - $91 | $84 - $91 | 21% - 28% | - Full-year 2025 foreign currency impact is expected to be approximately flat compared to 2024[8] Non-GAAP Financial Measures Explanation of Non-GAAP Measures This section explains Artivion's non-GAAP financial measures, which provide useful insights into operational performance by excluding non-recurring or non-cash items to better assess core business results - Non-GAAP financial measures include non-GAAP revenue, non-GAAP net income, EBITDA, adjusted EBITDA, non-GAAP general, administrative, and marketing expenses, and free cash flow[10] - The company uses non-GAAP measures for management review of operating performance and strategic planning, providing useful information on unusual non-operating transactions, operating expense structure, and excluding foreign currency fluctuations and non-cash compensation expenses[11] - Non-GAAP measures primarily exclude depreciation and amortization, interest income and expense, non-cash compensation expense, foreign currency revaluation gains and losses, income tax expense or benefit, business development, integration and severance expenses, debt inducement/extinguishment losses, non-cash interest expense, capital expenditures, and other non-recurring items[10] - The company does not provide a reconciliation of forward-looking adjusted EBITDA to comparable GAAP measures due to the inherent uncertainty and unpredictability of the impact and timing of these potential expenses or benefits[12] Corporate Information Webcast and Conference Call Information Artivion will host a conference call and webcast on August 7, 2025, to discuss Q2 results, with replay information and access details provided - The company will host a conference call and webcast on August 7, 2025, at 4:30 PM ET to discuss results[13] - A replay of the conference call will be available approximately one hour after the event via phone or the investor section of the company's website[13][14] About Artivion, Inc. Artivion, Inc. is a medical device company based near Atlanta, focused on providing solutions for cardiac and vascular surgeons treating aortic diseases, with products sold in over 100 countries worldwide - Artivion, Inc. is a medical device company focused on developing solutions for the most challenging problems faced by cardiac and vascular surgeons in treating aortic diseases[15] - Key products include aortic stent grafts, surgical sealants, On-X mechanical heart valves, and implantable cardiac and vascular human tissues[15] - Artivion's products are sold in over 100 countries worldwide[15] Forward-Looking Statements This section contains forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995, reflecting management's expectations for future performance, which are subject to various risks and uncertainties that may cause actual results to differ materially - Forward-looking statements include expectations for revenue, year-over-year growth, profitability, foreign currency impact, capital requirements, competitive advantages, product portfolio, business strategy, and full-year 2025 revenue and adjusted EBITDA guidance[16] - These statements are subject to various risks, uncertainties, estimates, and assumptions that could cause actual results to differ materially from current expectations[16] - Key risks include the timing and outcome of regulatory decisions, international operational risks, anticipated benefits of clinical trials and regulatory approvals, potential unknown impacts of the 2024 cybersecurity incident, and benefits of market expansion in Asia Pacific and Latin America[16] - The company does not undertake to update its forward-looking statements[16] Financial Statements Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) Artivion reported $113 million in total revenue for Q2 2025, a 15% year-over-year increase, with a net profit of $1.3 million and diluted EPS of $0.03, and $212 million in total revenue for the first half with $0.84 million net profit Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) (Thousand USD) | Metric | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--------------------------------- | :--------------- | :--------------- | :----------- | :----------- | | Total Revenue | 112,972 | 98,019 | 211,950 | 195,450 | | Gross Margin | 73,112 | 63,324 | 136,689 | 126,270 | | Operating Income | 8,384 | 6,507 | 10,529 | 31,818 | | Net Income (Loss) | 1,345 | (2,121) | 840 | 5,412 | | Diluted Net Income (Loss) Per Share (USD) | 0.03 | (0.05) | 0.02 | 0.13 | | Comprehensive Income (Loss) | 17,113 | (4,444) | 22,939 | 1,561 | Condensed Consolidated Balance Sheets As of June 30, 2025, Artivion's total assets increased to $838 million, total liabilities decreased to $418 million, and shareholders' equity significantly rose to $419 million, primarily due to increased additional paid-in capital Condensed Consolidated Balance Sheets (Thousand USD) | Metric | June 30, 2025 | December 31, 2024 | | :------------------- | :--------------- | :--------------- | | Cash and Cash Equivalents | 53,476 | 53,463 | | Accounts Receivable, Net | 91,440 | 79,462 | | Inventories | 86,723 | 79,766 | | Total Current Assets | 318,820 | 290,080 | | Goodwill | 253,802 | 240,958 | | Total Assets | 838,387 | 789,101 | | Total Current Liabilities | 66,670 | 66,823 | | Long-Term Debt, Net | 215,538 | 314,152 | | Total Liabilities | 418,485 | 512,901 | | Common Stock | 486 | 434 | | Additional Paid-in Capital | 497,318 | 376,607 | | Total Stockholders' Equity | 419,902 | 276,200 | Condensed Consolidated Statement of Cash Flows In H1 2025, Artivion reported $1.9 million cash outflow from operating activities, $6.9 million outflow from investing activities, and $6.5 million inflow from financing activities, primarily from stock option exercises and common stock issuance Condensed Consolidated Statement of Cash Flows (Thousand USD) | Metric | H1 2025 | H1 2024 | | :----------------------- | :----------- | :----------- | | Net Cash Provided by (Used in) Operating Activities | (1,942) | 642 | | Net Cash Used in Investing Activities | (6,925) | (6,124) | | Net Cash Provided by Financing Activities | 6,535 | 556 | | Effect of Exchange Rate Changes | 2,345 | 1,005 | | Net Increase (Decrease) in Cash and Cash Equivalents | 13 | (3,921) | | Cash and Cash Equivalents at End of Period | 53,476 | 55,019 | Financial Highlights Revenue Breakdown by Product and Geography In Q2 2025, Artivion's total revenue was $113 million, with strong performance from aortic stent grafts and On-X product lines, and North America as the largest revenue contributor 2025 Second Quarter and First Half Revenue Breakdown (Thousand USD) | Product Category | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :----------------- | :--------------- | :--------------- | :----------- | :----------- | | Aortic Stent Grafts | 39,841 | 32,190 | 76,443 | 64,293 | | On-X | 25,572 | 20,645 | 47,146 | 40,326 | | Surgical Sealants | 19,288 | 18,545 | 37,394 | 35,526 | | Other Products | 2,743 | 1,830 | 5,259 | 4,179 | | Total Product Revenue | 87,444 | 73,210 | 166,242 | 144,324 | | Preservation Services | 25,528 | 24,809 | 45,708 | 51,126 | | Total Revenue | 112,972 | 98,019 | 211,950 | 195,450 | | Region | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :----------------------- | :--------------- | :--------------- | :----------- | :----------- | | North America | 57,569 | 48,662 | 105,362 | 99,590 | | Europe, Middle East, and Africa | 38,713 | 34,145 | 75,758 | 67,733 | | Asia Pacific | 11,131 | 9,653 | 19,345 | 17,262 | | Latin America | 5,559 | 5,559 | 11,485 | 10,865 | | Total Revenue | 112,972 | 98,019 | 211,950 | 195,450 | GAAP to Non-GAAP Reconciliations Reconciliation of Revenues This section reconciles GAAP revenue to non-GAAP constant currency revenue, illustrating the impact of exchange rate changes on product and regional revenues, with 14% constant currency total revenue growth in Q2 2025 2025 Second Quarter Revenue Reconciliation (Thousand USD) | Product Category | GAAP Revenue (2025) | GAAP Revenue (2024) | FX Impact | Constant Currency Revenue (2024) | Constant Currency YOY Change | | :----------------- | :---------------- | :---------------- | :------- | :-------------------- | :----------------- | | Aortic Stent Grafts | 39,841 | 32,190 | 584 | 32,774 | 22% | | On-X | 25,572 | 20,645 | 41 | 20,686 | 24% | | Surgical Sealants | 19,288 | 18,545 | 61 | 18,606 | 4% | | Other Products | 2,743 | 1,830 | 4 | 1,834 | 50% | | Total Product Revenue | 87,444 | 73,210 | 690 | 73,900 | 18% | | Preservation Services | 25,528 | 24,809 | (17) | 24,792 | 3% | | Total Revenue | 112,972 | 98,019 | 673 | 98,692 | 14% | | Region | GAAP Revenue (2025) | GAAP Revenue (2024) | FX Impact | Constant Currency Revenue (2024) | Constant Currency YOY Change | | :----------------------- | :---------------- | :---------------- | :------- | :-------------------- | :----------------- | | North America | 57,569 | 48,662 | (46) | 48,616 | 18% | | Europe, Middle East, and Africa | 38,713 | 34,145 | 1,091 | 35,236 | 10% | | Asia Pacific | 11,131 | 9,653 | — | 9,653 | 15% | | Latin America | 5,559 | 5,559 | (372) | 5,187 | 7% | | Total Revenue | 112,972 | 98,019 | 673 | 98,692 | 14% | 2025 First Half Revenue Reconciliation (Thousand USD) | Product Category | GAAP Revenue (2025) | GAAP Revenue (2024) | FX Impact | Constant Currency Revenue (2024) | Constant Currency YOY Change | | :----------------- | :---------------- | :---------------- | :------- | :-------------------- | :----------------- | | Aortic Stent Grafts | 76,443 | 64,293 | (724) | 63,569 | 20% | | On-X | 47,146 | 40,326 | (231) | 40,095 | 18% | | Surgical Sealants | 37,394 | 35,526 | (256) | 35,270 | 6% | | Other Products | 5,259 | 4,179 | — | 4,179 | 26% | | Total Product Revenue | 166,242 | 144,324 | (1,211) | 143,113 | 16% | | Preservation Services | 45,708 | 51,126 | (84) | 51,042 | -10% | | Total Revenue | 211,950 | 195,450 | (1,295) | 194,155 | 9% | | Region | GAAP Revenue (2025) | GAAP Revenue (2024) | FX Impact | Constant Currency Revenue (2024) | Constant Currency YOY Change | | :----------------------- | :---------------- | :---------------- | :------- | :-------------------- | :----------------- | | North America | 105,362 | 99,590 | (198) | 99,392 | 6% | | Europe, Middle East, and Africa | 75,758 | 67,733 | (119) | 67,614 | 12% | | Asia Pacific | 19,345 | 17,262 | — | 17,262 | 12% | | Latin America | 11,485 | 10,865 | (978) | 9,887 | 16% | | Total Revenue | 211,950 | 195,450 | (1,295) | 194,155 | 9% | Reconciliation of General, Administrative, and Marketing Expense, EBITDA, Adjusted EBITDA, and Free Cash Flows This section reconciles GAAP to non-GAAP general, administrative, and marketing expenses, EBITDA, adjusted EBITDA, and free cash flow, with Q2 2025 adjusted EBITDA reaching $24.8 million, a 33% year-over-year increase 2025 Second Quarter and First Half Expense, EBITDA, and Free Cash Flow Reconciliation (Thousand USD) | Metric | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :------------------------------------------------- | :--------------- | :--------------- | :----------- | :----------- | | GAAP General, Administrative, and Marketing Expenses | 57,665 | 49,320 | 112,369 | 80,009 | | Adjusted Non-GAAP General, Administrative, and Marketing Expenses | 53,372 | 47,287 | 106,410 | 95,363 | | GAAP Net Income (Loss) | 1,345 | (2,121) | 840 | 5,412 | | Non-GAAP EBITDA | 16,222 | 11,415 | 26,892 | 37,557 | | Non-GAAP Adjusted EBITDA | 24,764 | 18,643 | 42,312 | 35,955 | | Net Cash Provided by (Used in) Operating Activities (GAAP) | 15,011 | 6,135 | (1,942) | 642 | | Non-GAAP Free Cash Flow | 11,724 | 3,622 | (8,867) | (5,482) | - Adjustments to Adjusted EBITDA include non-cash compensation, business development, integration and severance expenses, cybersecurity incident-related expenses, debt inducement/extinguishment losses, and foreign currency revaluation gains and losses[29] Reconciliation of Net Income and Diluted Income Per Common Share This section reconciles GAAP to non-GAAP net income and diluted EPS, with Q2 2025 non-GAAP adjusted net income at $10.7 million and non-GAAP diluted EPS at $0.24, significantly higher than GAAP figures 2025 Second Quarter and First Half Net Income and Diluted Income Per Common Share Reconciliation (Thousand USD, except per share data) | Metric | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--------------------------------------- | :--------------- | :--------------- | :----------- | :----------- | | GAAP Net Income (Loss) | 1,345 | (2,121) | 840 | 5,412 | | GAAP Diluted Net Income (Loss) Per Share (USD) | 0.03 | (0.05) | 0.02 | 0.13 | | Non-GAAP Adjusted Net Income | 10,732 | 2,913 | 13,226 | 5,545 | | Non-GAAP Adjusted Diluted Net Income Per Share (USD) | 0.24 | 0.07 | 0.30 | 0.13 | | GAAP Diluted Weighted Average Common Shares | 45,378 | 41,683 | 44,503 | 42,405 | | Non-GAAP Diluted Weighted Average Common Shares | 45,378 | 42,624 | 44,503 | 42,405 | - Non-GAAP adjustments include amortization expense, business development, integration and severance expenses, non-cash interest expense, cybersecurity incident-related expenses, and debt inducement/extinguishment losses, along with the tax impact of these adjustments[31]