Adagio Medical Holdings, Inc. (ADGM)·Q3 2024 Earnings Summary

Executive Summary

• Revenue increased to $0.185M in Q3 2024 from $0.041M in Q3 2023, driven by the introduction of the vCLAS cryoablation catheter; gross margin improved to -209% from -517% YoY due to higher sales volume .
• Operating expenses rose to $10.2M vs. $8.9M YoY on transaction and public-company costs; press release reports net loss of $4.6M vs. $10.8M YoY, while the 10-Q pro forma shows a combined Q3 net loss of $12.971M, highlighting presentation differences due to Successor/Predecessor accounting and fair value adjustments .
• Cash, cash equivalents, and short-term investments were $28.3M as of Sep 30, 2024; management still disclosed substantial doubt about going concern, intending to pursue financing, U.S. approvals, and cost actions .
• Strategic progress: CMS Category B coverage secured for vCLAS in the FULCRUM‑VT pivotal IDE study (September), with first U.S. pivotal procedures performed in October; European adoption continued with highlighted cases at major conferences .
• No formal guidance or Wall Street consensus (S&P Global) estimates were available for comparison; S&P Global data was unavailable for retrieval at time of analysis.*

What Went Well and What Went Wrong

What Went Well

• Strong early commercial traction: vCLAS introduction drove revenue growth and improved gross margin YoY; “we anticipate a swift ramp-up in the number of active centers and procedures” (CEO) .
• U.S. clinical progress: CMS Category B coverage for vCLAS in the pivotal FULCRUM‑VT IDE and first pivotal procedures initiated, a key catalyst for center activation .
• European momentum: Continued expansion of successful vCLAS commercial cases and physician presentations, underscoring clinical enthusiasm and procedural outcomes .

What Went Wrong

• Operating cost intensity: OpEx increased to $10.2M principally from transaction and public company costs, pressuring near-term profitability .
• Accounting/control risk: The company announced non‑reliance and restatements for prior financials due to accrued interest misstatement; a material weakness in controls was identified, with remediation underway .
• Liquidity risk: Despite $28.3M cash, management disclosed substantial doubt about going concern absent additional financing, U.S. approvals, and cost actions .

Financial Results

Year-over-Year Comparison (Q3)

EPS (Reported per 10‑Q; not directly comparable due to Successor/Predecessor basis)

Pro Forma Combined (as presented in 10‑Q)

Q3 2024 KPIs

Note: Sequential comparisons are limited by Successor/Predecessor split and fair value adjustments (convertible notes/warrants) that produced Successor net income despite press-release net loss .

Guidance Changes

No formal numerical guidance was disclosed in Q3 materials; liquidity/going concern comments were provided in the 10‑Q .

Earnings Call Themes & Trends

No earnings call transcript was filed; themes below synthesize press releases and filings.

Management Commentary

• “In the US, our primary focus today is driving enrollment in the FULCRUM‑VT IDE study…with CMS coverage…we anticipate a swift ramp‑up in the number of active centers and procedures.” — Olav Bergheim, CEO .
• “Once physicians appreciate the depth of endocardial lesions, the low complication rate, and the acute effectiveness of Adagio’s technology, it quickly becomes one of their preferred tools for ventricular ablations.” — Olav Bergheim, CEO .
• Emphasis on mission to address challenges in VT ablations, improve outcomes, and expand EU procedural cadence .

Q&A Highlights

No Q3 2024 earnings call transcript was filed; therefore, there are no Q&A highlights available for this period.

Estimates Context

• Wall Street consensus (S&P Global) EPS and revenue estimates for Q3 2024 were unavailable at time of analysis due to retrieval limits.*
• As such, estimate beat/miss vs consensus cannot be assessed; future updates should revisit once S&P Global access is available.*

Key Takeaways for Investors

• Early commercial traction is translating to YoY revenue growth and gross margin improvement, albeit margins remain negative and scale is modest ($0.185M revenue) .
• U.S. pivotal execution milestones (CMS Category B coverage, first procedures) should catalyze site activation and data generation, key for eventual PMA .
• Operating expenses reflect public‑company transition and clinical build‑out, keeping near‑term losses elevated; press release net loss of $4.6M contrasts with 10‑Q Successor net income from fair value adjustments, and pro forma combined net loss of $12.971M — investors should focus on cash burn and normalized economics .
• Liquidity of $28.3M provides runway, but management disclosed substantial doubt on going concern without further financing and U.S. approvals; financing and cost controls are critical near‑term .
• Accounting/control remediation following a non‑reliance 8‑K introduces execution risk; monitoring remediation progress is essential .
• European clinical adoption and conference visibility remain positive signals for vCLAS demand and physician engagement .
• No formal guidance provided; stock narrative likely hinges on pivotal enrollment cadence, EU revenue ramp, financing progress, and control remediation .

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* S&P Global estimates unavailable: Values could not be retrieved at time of analysis due to system limits.