ANGIODYNAMICS INC (ANGO)·Q2 2025 Earnings Summary

Executive Summary

• Pro forma revenue was $73.0M (+9.2% YoY) with Med Tech up 25% and Med Device ~flat; gross margin was 54.7% (GAAP gross margin disclosed at 54.8%), adjusted EPS improved to $(0.04) and adjusted EBITDA was $3.1M .
• Mechanical thrombectomy outperformed: AngioVac +50.7% YoY to $8.1M and AlphaVac +33.3% YoY to $2.5M; Auryon +21.8% to $13.7M; NanoKnife disposables +23.1% to $5.0M .
• Management raised FY25 guidance: Med Tech growth to 12–15% (from 10–12%), Adjusted EBITDA to $1–$3M (from -$2.5M to $0), and Adjusted EPS to $(0.34)–$(0.38) (from $(0.38)–$(0.42)); total net sales range maintained at $282–$288M .
• Regulatory milestones for NanoKnife (FDA 510(k) for prostate and Category I CPT codes for IRE in prostate/liver effective Jan 1, 2026) position the company for medium-term adoption; near-term inflection tied to payer coverage ramp and CPT effective date .

What Went Well and What Went Wrong

What Went Well

• “We had a very strong second quarter… Med Tech segment… grew 25%… reporting adjusted EBITDA of $3.1M and generated $2.5M in operating cash flow” .
• Mechanical thrombectomy momentum: “AngioVac revenue… $8.1M, an increase of 50.7% YoY,” and “AlphaVac… increased 33.3% YoY,” with portfolio synergies driving adoption .
• NanoKnife catalysts achieved: “received FDA 510(k) clearance for… prostate tissue ablation” and “CPT Category I codes… for prostate and liver,” supporting reimbursement and market access .

What Went Wrong

• Med Device gross margin declined 240 bps YoY to 47.8%, with pressure from inflation and outsourcing transition costs; Med Device revenue was -0.4% YoY .
• GAAP net loss of $10.7M (GAAP EPS $(0.26)), reflecting restructuring, amortization, and transition costs; adjusted net loss was $(1.7)M .
• International sales declined 6.6% YoY to $10.3M, while U.S. sales carried growth (+12.3% YoY to $62.7M) .

Financial Results

Notes on non-GAAP: Adjusted EPS and EBITDA exclude amortization, change in contingent consideration, acquisition/restructuring/other items, and apply a 23% tax effect assumption; see reconciliation tables for details .

Guidance Changes

Earnings Call Themes & Trends

Management Commentary

• “We now expect to deliver positive adjusted EBITDA for the full year, illustrating continued execution on our goal of delivering sustained profitability” — James Clemmer .
• “We received an expanded indication for the NanoKnife system for prostate… and… CPT Category I code for the treatment of lesions in the prostate and in liver” — James Clemmer .
• “Med Tech gross margin was 63.7%… Med Device gross margin was 47.8%, primarily driven by inflationary pressures and costs associated with the transition to outsource manufacturing” — Stephen Trowbridge .
• “We expect this transition to generate approximately $15 million in annualized savings by fiscal 2027” — James Clemmer .
• “AlphaVac’s 35.5% reduction in clot burden… compares favorably to the 9.3% reduction reported in the current market leaders IDE data” — James Clemmer (on APEX publication) .

Q&A Highlights

• Thrombectomy acceleration and sustainability: management cited cross-selling synergies between AlphaVac and AngioVac and continued expansion of specialized sales resources to sustain growth .
• Auryon trajectory: focus remains on hospital penetration while maintaining OBL presence; EU commercialization is targeted and staged; reimbursement dynamics are managed market-by-market .
• Gross margin cadence: benefits from Med Tech mix offset by under-absorbed overhead during manufacturing transfer; long-term margin expansion expected post-transfer .
• NanoKnife reimbursement: first CPT reimbursement readout expected in summer (July) with permanent CPT code effective Jan 1, 2026; adoption building via physician/patient education .
• Commercial resourcing: thrombectomy sales force is expanding in 2025; Auryon investments continue, with oncology likely requiring added support as CPT and payer coverage mature .

Estimates Context

• Wall Street consensus (S&P Global) for EPS and revenue was unavailable at time of this analysis due to access limits; therefore, beat/miss versus consensus cannot be determined. Estimates comparisons will be provided once S&P Global data access is restored.
• Given the raised FY25 guidance for Adjusted EBITDA and Adjusted EPS, Street models likely need upward revisions for FY25 profitability and Med Tech growth; Med Device growth has been reduced to flat, tempering that segment’s contribution .

Key Takeaways for Investors

• Strong Med Tech execution is the core driver: AngioVac/AlphaVac +50.7%/+33.3% YoY and Auryon +21.8% YoY demonstrate competitive share gains; expect continued double-digit thrombectomy growth as portfolio synergies scale .
• NanoKnife is strategically de-risked (FDA 510(k) + CPT Category I), with a larger inflection likely post CPT effective date and payer coverage ramp; near-term growth led by disposables and prostate procedure adoption .
• Guidance raised on profitability (Adjusted EBITDA and Adjusted EPS) despite manufacturing transition headwinds; long-term $15M annualized savings support margin expansion and cash generation .
• Mix shift to Med Tech increases gross margin; watch near-term under-absorption and Med Device inflation/outsourcing costs, but trajectory improves as transfer completes .
• Balance sheet remains solid (cash $54.1M at Q2-end; no debt), with prudent revolver plans for working capital flexibility; operating cash flow positive in Q2 .
• Trading setup: catalysts include payer reimbursement updates (summer), continued thrombectomy adoption, EU Auryon ramp, and Q4 seasonality (strongest quarter) — monitor sequential dip in Q3 per cadence commentary .
• Risks: International softness (-6.6% YoY), Med Device margin pressure, and execution on manufacturing transfer; however, strategic focus on high-growth, higher-margin Med Tech mitigates medium-term risk .

Appendix: Additional Data Reconciliations

• Non-GAAP adjustments in Q2: amortization ($2.562M), contingent consideration ($0.156M), acquisition/restructuring/other ($5.868M), tax effect ($0.410M) — driving adjusted EPS $(0.04) and adjusted EBITDA $3.1M .
• Balance sheet snapshot: assets $291.6M; stockholders’ equity $186.8M at Nov 30, 2024 .