Izzy G.

Izzy (on behalf of Ryan Zimmerman of BTIG) inquired about the drivers behind the exceptionally strong 83% year-over-year growth in advanced wound care revenue for Q4 2025, specifically asking if customer inventory pull-forward ahead of January 1st reimbursement changes contributed significantly. Izzy also sought to understand if the projected 2026 revenue decline was primarily due to the mathematical impact of the $127 reduced price point or lower unit volumes from market confusion, and asked about early signs of market share gains or competitive shifts.

Answer

CFO Dave Francisco stated that significant inventory pull-forward was unlikely as products are patient-focused, and noted the absence of anticipated aggressive pricing tactics. He clarified that while the $127 price point was expected, the primary challenge for Q1 2026 and the overall decline forecast stems from significant clinician confusion following CMS's December 30th comments, impacting utilization. Francisco confirmed observing aggressive pricing pressure, suggesting competitors clearing inventory, and early indications of changing competitive dynamics. President, CEO, and Chair of the Board Gary S. Gillheeney, Senior, added that these issues are transitory, expecting low-cost products to not sustain and clinician confusion to be resolved, affirming confidence in navigating the market changes.

Izzy from BTIG inquired about the drivers behind Organogenesis Holdings' strong 83% year-over-year growth in advanced wound care for Q4 2025, specifically asking if inventory pull-forward ahead of January 1st reimbursement changes played a significant role. Izzy also sought clarification on the factors contributing to the forecasted revenue decline in 2026, distinguishing between the mathematical impact of the reduced $127 price and lower unit volumes due to market confusion. Furthermore, Izzy asked for early signs of market share gains and competitive dynamics, such as smaller competitors exiting or supply issues, two months into Q1 2026.

Answer

Dave Francisco, CFO, stated that inventory pull-forward was not a significant factor, as products are patient-focused, but noted an absence of anticipated aggressive pricing tactics in Q4 2025. Regarding the 2026 outlook, Mr. Francisco explained that while the $127 price reduction was expected and manageable, the primary challenge is significant clinician confusion stemming from CMS's December 30th comments, which is impacting utilization. Gary S. Gillheeney, Senior, President, CEO, and Chair of the Board, reinforced that these issues are transitory, anticipating that low-cost products will not sustain throughout the year and that market confusion regarding sweeping health policy changes will resolve. Mr. Francisco also mentioned observing aggressive pricing pressure in Q1 2026, suggesting competitors are clearing inventory, and noted early signs of changing competitive dynamics.

Izzy asked for more details on the LymphaTech acquisition, including its expected commercialization model and high-level thoughts for its impact on 2026 financial models. She also inquired about the factors that would lead Tactile Medical to achieve the lower (8%) versus the higher (11%) end of its 2026 revenue guidance.

Answer

CEO Sheri Dodd expressed excitement about the LymphaTech acquisition's potential to unlock the undiagnosed lymphedema patient population. She noted LymphaTech's existing commercial model for measurement and surveillance, and its use by compression garment manufacturers. Longer-term, Tactile plans to integrate LymphaTech into its commercial engine, targeting high-volume centers, and developing regulatory and reimbursement strategies. Regarding 2026 guidance, Ms. Dodd indicated that the 8% growth scenario would likely be driven by challenges in the Medicare prior authorization implementation, such as conservative reviewers or training delays, which could temporarily drag down market growth.

Izzy inquired about the LymphaTech acquisition, seeking color on the expected commercialization model and high-level thoughts for 2026 modeling. Izzy also asked what factors would lead to the lower (8%) versus higher (11%) end of the 2026 revenue guidance range.

Answer

Sheri Dodd, Chief Executive Officer, expressed excitement about the LymphaTech acquisition, noting its current use for measurement and surveillance by compression garment manufacturers and some centers. She outlined future plans to integrate LymphaTech into Tactile's commercial engine, focusing on strategic segmentation and workflow efficiency, while also developing regulatory and reimbursement strategies. Regarding guidance, Sheri Dodd explained that the 8% reflects potential challenges with Medicare prior authorization, such as conservative reviewers or training delays, while the 11% assumes smoother adaptation, emphasizing the strong underlying business fundamentals.

Izzy from BTIG, on behalf of Ryan Zimmerman, asked for the basis of management's confidence in the second-half recovery of its private label business. The analyst also questioned if the strong 15% growth in the instruments portfolio was influenced by any tariff-related demand pull-forward.

Answer

CFO Lea Knight quantified the expected private label step-up at approximately $10 million in H2 vs. H1, though she adjusted the full-year forecast to a low single-digit decline. She reiterated confidence in a mid-single-digit growth trajectory for the business in 2026. CEO Mojdeh Poul clarified that the instrument business performance is inherently lumpy and the strong quarter was not driven by tariffs, expecting a return to its typical low-to-mid single-digit growth trend for the full year.