Executive Summary

Q2 2025 delivered broad-based strength: revenue $56.7M (+18.3% YoY, +16.7% QoQ), gross margin 74.2% (+40 bps YoY, +230 bps QoQ), GAAP diluted EPS $0.01, and adjusted EPS $0.12; adjusted EBITDA rose to $9.3M .
Results exceeded S&P Global consensus: revenue beat by ~$4.0M ($52.6M* est) and EPS beat by $0.16 (-$0.04* est vs $0.12 actual, Primary EPS basis)*. Values retrieved from S&P Global.
Guidance raised: FY25 revenue to at least 17% growth or $219M; gross margin reiterated at 73–75% (including ~1% one-time BLA-related impact); net cash flow positive reiterated .
Key catalysts: advancing Avance BLA (late-cycle meeting, inspections completed in Q2) and expanding commercial coverage (+~10M lives in Q2; ~17M YTD; >55% of commercial lives now covered) . Note: post-quarter, FDA extended PDUFA goal date to December 5, 2025 (from September 5) following a Major Amendment submission, potentially shifting expected labeling feedback to November .

What Went Well and What Went Wrong

What Went Well

Double-digit growth in all target markets (Extremities, OMF/H&N, Breast) drove revenue to $56.7M and GM to 74.2% . CEO: “strong revenue growth across the full range of our nerve repair solutions reflects the soundness of our market development strategies” .
Sales execution and HiPo account focus: ~70% of YTD revenue growth from high potential accounts vs 66% goal; average HiPo account productivity +21% YoY; 641 active HiPo accounts (+3% YoY) .
Coverage tailwinds: BCBS policy changes added ~10M covered lives in Q2 and ~17M YTD; >55% of commercial lives now covered; management expects acceleration post-BLA approval .

What Went Wrong

Cost headwinds from Avance processing transition: product costs increased YoY given added steps/tests ahead of biologic transition; Q1 gross margin was pressured (71.9% vs 78.8% in Q1’24), though Q2 improved to 74.2% .
EBITDA vs consensus mixed: S&P Global consensus EBITDA for Q2 was ~$6.5M*, while actual (Primary/GAAP EBITDA basis per S&P data) was ~$3.4M*, despite strong adjusted EBITDA of $9.3M . Values retrieved from S&P Global.
Near-term logistics uncertainty tied to BLA: trunk stock likely curtailed post-approval, requiring supply model changes; management is prudently conservative on H2 cadence pending final FDA mechanics .

Financial Results

Headline Metrics vs Prior Periods

Metric	Q2 2024	Q1 2025	Q2 2025
Revenue ($USD Millions)	$47.912	$48.560	$56.662
GAAP Diluted EPS ($USD)	-$0.04	-$0.08	$0.01
Gross Margin %	73.8%	71.9%	74.2%
Adjusted EPS ($USD)	$0.05	-$0.02	$0.12
Adjusted EBITDA ($USD Millions)	$5.624	$2.877	$9.259

Operating Expenses

Metric ($USD Millions)	Q2 2024	Q1 2025	Q2 2025
Sales & Marketing	$19.698	$21.045	$23.804
Research & Development	$6.658	$6.091	$6.853
General & Administrative	$9.417	$9.458	$9.689
Total Operating Expenses	$35.773	$36.594	$40.346

Q2 2025 vs S&P Global Consensus

Metric	Q2 2025 Actual	Q2 2025 Consensus
Revenue ($USD Millions)	$56.662	$52.606*
Primary EPS ($USD)	$0.12	-$0.042*

Values retrieved from S&P Global.

Cash and Liquidity

Cash, cash equivalents, restricted cash, and investments rose by $7.8M in Q2 to $35.9M; Dec 31, 2024 balance was $39.5M .
Operational cash increased QoQ to $35.9M from $28.1M (+$7.8M) .

KPIs and Commercial Execution

KPI	Q2 2024	Q2 2025
Active HiPo Accounts	n/a	641 (+3% YoY)
HiPo Share of YTD Revenue Growth	n/a	~70% (vs 66% goal)
Avg HiPo Account Productivity YoY	n/a	+21%
Breast Programs (Active)	116	126 (+9% YoY)
Breast Procedures in Q2	n/a	280 (+17% YoY)
Extremities Surgeon Training YTD	n/a	67 (target 105 by YE)
OMF/H&N Surgeon Training YTD	n/a	41 (target 45 by YE)

Note: Segment revenue breakdown not disclosed; management reported double-digit growth across Extremities, OMF/H&N, and Breast .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue Growth	FY 2025	15%–17%	At least 17% or $219M	Raised
Gross Margin	FY 2025	73%–75% (incl. ~1% one-time BLA impact)	73%–75% (incl. ~1% one-time BLA impact)	Maintained
Net Cash Flow	FY 2025	Net cash flow positive	Net cash flow positive	Maintained

Management added color that BLA-related costs (incl. milestone PSU vesting) will impact Q3; ~2/3 of these are non-cash .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q4’24 and Q1’25)	Current Period (Q2’25)	Trend
Avance BLA status	FDA accepted BLA; PDUFA 9/5/2025 . Q1: mid-cycle meeting; clinical site and sponsor inspections completed .	Q2: late-cycle meeting, pre-licensing and BIMO sponsor inspections completed; expect September approval; 12 years biosimilar exclusivity anticipated .	Progressing; post-quarter, FDA extended PDUFA to 12/5/2025 (Major Amendment) .
Coverage & reimbursement	Not quantified in Q1 PR; expectation of improvement as evidence disseminates .	+~10M covered lives added in Q2; ~17M YTD; >55% of commercial lives covered; clinicians increasingly advocating to payers .	Improving; likely accelerates post-BLA .
Gross margin drivers	Q1 GM 71.9% due to higher product costs and write-offs .	Q2 GM 74.2%; YoY improvement driven by lower write-offs/shipping; product cost up on biologic transition; expect process-improvement upside post-BLA .	Recovery in Q2; transient BLA-related costs in Q3 .
Logistics (trunk stock)	n/a	Post-BLA trunk stock likely curtailed; supply mechanics to change for some customers; conservative H2 cadence until finalized .	Transition risk; mitigations being planned.
Commercial expansion & training	Broad-based growth; improving execution .	HiPo accounts drive growth; increased reps and training across Breast/Extremities/OMF-H&N; ramp profiles detailed .	Scaling footprint; productivity rising.
Seasonality & cadence	n/a	Extremities higher in summer; chronic nerve injury elective procedures skew to Q4; Breast slows in summer; OMF/H&N less seasonal .	Typical seasonality expected.

Management Commentary

CEO: “We are delighted with our second quarter 2025 results... Our strong revenue growth across the full range of our nerve repair solutions reflects the soundness of our market development strategies and strength and discipline of our commercial execution.”
CFO on margin/costs: “Product cost increased as a result of the transition of processing Avance Nerve Graft to our processing center and costs related to the additional steps and tests required as we approach the transition to processing as a biologic…We expect the cost…to decrease over time as we gain economies of scale…and once the BLA is approved, we can begin implementing a continuous improvement program.”
CEO on coverage momentum: “As this information is digested…you basically are able to make clear…that this is a therapy that should be covered… it builds on itself… we fully expect to get to nearly complete commercial coverage.”
CEO on BLA logistics: “It primarily involves trunk stock… post BLA, it’s very unlikely that that will be part of our repertoire… we’re trying to be prudent to make sure we don’t have any disruptions.”

Q&A Highlights

Growth durability and cadence: Underlying trends appear to accelerate despite tougher comps; management maintains conservative H2 outlook pending final FDA mechanics .
Seasonality: Extremities up in summer; elective chronic nerve procedures tilt to Q4; Breast slows in summer; OMF/H&N largely non-seasonal .
Coverage/Access: Clinician activism is rising; more surgeon/patient appeals expected; strong plans to engage national payers; >55% commercial lives covered .
BLA milestones & manufacturing: Remaining work around labeling and quality systems; post-approval continuous improvement and electronic systems to reduce inefficiency/yield better cost outcomes .
Margin outlook: Q3 impact from BLA PSU vesting (mostly non-cash); write-offs reduced; normalization expected by Q4 with process improvements into 2026 .

Estimates Context

Q2 2025: Revenue $56.662M vs $52.606M* consensus; Primary EPS $0.12 vs -$0.042* consensus; clear beat on both. Values retrieved from S&P Global.
FY 2025: Company guides ≥$219M revenue vs S&P Global revenue consensus ~$223.24M*; Street above guidance by ~$4.24M*, implying potential for either sustained outperformance or guidance conservatism. Values retrieved from S&P Global.
Forward cadence: FY25 EPS Normalized consensus ~$0.296*; continued execution, coverage gains, and post-BLA process improvements could support upward estimate revisions if near-term logistics are well managed. Values retrieved from S&P Global.

Key Takeaways for Investors

Broad-based strength and execution: Double-digit growth across all markets with HiPo accounts driving ~70% of YTD growth and rising productivity; adjusted EBITDA scaling to $9.3M .
Positive estimate surprise: Revenue and EPS materially beat S&P consensus; narrative supports continued momentum into H2, subject to BLA-related logistics and S&P Global*.
Guidance credibility: Raised FY revenue to ≥17% ($219M) while reiterating GM and net cash flow positive; balanced against expected Q3 one-time BLA cost effects .
Regulatory path: BLA milestones substantially completed in Q2; post-quarter PDUFA shifted to December 5, 2025, introducing timing risk but also reflecting FDA review of substantial new manufacturing data .
Margin trajectory: Q2 gross margin recovery to 74.2%; management targets post-BLA continuous improvement and economies of scale to lower product cost into 2026 .
Coverage expansion as growth flywheel: +~10M covered lives in Q2; ~17M YTD; >55% of commercial lives covered; clinician advocacy rising—expect payer access to continue improving .
Trading lens: Near-term stock catalysts include final BLA mechanics/labeling and any updates to trunk stock/logistics; medium-term thesis hinges on operational leverage, coverage expansion, and Avance exclusivity (12 years anticipated) post-BLA .

*Values retrieved from S&P Global.

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