ELUTIA INC. (ELUT)·Q2 2025 Earnings Summary

Executive Summary

• Mixed print: revenue grew sequentially to $6.26M but was roughly flat YoY; GAAP diluted EPS was -$0.26 as gross margin expanded materially to 48.8% (adjusted GM 62.4%) on BioEnvelope scaling and >80% cardiovascular margins .
• Versus S&P Global consensus, ELUT modestly missed on revenue ($6.26M vs $6.55M*) and EPS (-$0.26 vs -$0.17*); adjusted EBITDA was -$3.83M vs -$3.20M* (miss) as OpEx stepped up with growth investments and litigation costs .
• Commercial traction accelerated: EluPro revenue up 49% QoQ, 161 VAC-approved hospitals actively ordering, and Boston Scientific aiding adoption in 98 hospitals; EluPro now ~68% of BioEnvelope revenue .
• Management highlighted catalysts: BioEnvelope annualized run-rate “approaching $20M by year-end,” litigation settlements (97 of 110 resolved) reducing overhang, and NXT‑41 breast reconstruction biomatrix targeting base clearance in 2H26 and drug‑eluting version in 1H27 .

What Went Well and What Went Wrong

• What Went Well

  • EluPro adoption: 49% sequential growth; EluPro ~68% of BioEnvelope sales; VAC approvals at 161 and growing 12–15/month; BSC active in 98 hospitals. CEO: “we now believe BioEnvelope sales will be approaching a $20 million annualized run rate by year-end” .
  • Margin trajectory: Adjusted GM reached 62.4% (from 54.8% in Q1), supported by BioEnvelope scale and cardiovascular margins “over 80%” .
  • Litigation progress: 27 additional cases settled in Q2; 97 of 110 total now resolved, easing expense run-rate and M&A overhang .

• What Went Wrong

  • Modest top-line miss vs consensus with SimpliDerm softness: SimpliDerm fell to $2.0M (from $2.6M in Q2’24); total revenue $6.26M missed consensus $6.55M* .
  • Operating loss widened QoQ ($-9.88M vs $-7.92M) and adjusted EBITDA loss increased ($-3.83M vs $-3.27M in Q1) amid higher OpEx and litigation costs .
  • Cash declined to $8.5M at quarter-end, highlighting need for BD transactions and continued financing flexibility despite prior actions (SWK amendment, Ligand equity in lieu of cash) .

Financial Results

YoY/Sequential context (Q2 2025):

• Revenue: +3.9% QoQ vs Q1 2025 ($6.26M vs $6.03M) and ~flat YoY vs Q2 2024 ($6.29M) .
• Gross Margin: GAAP +8.1 pts QoQ and +4.3 pts YoY; Adjusted +7.6 pts QoQ and +4.4 pts YoY .

Segment revenue

KPI snapshot

Vs S&P Global consensus (Q2 2025)

*Values retrieved from S&P Global

Guidance Changes

Note: No formal revenue/EPS guidance provided. Management emphasized operational targets and pipeline timelines .

Earnings Call Themes & Trends

Management Commentary

• CEO on run-rate and access: “EluPro’s performance continues to exceed expectations, and we now believe BioEnvelope sales will be approaching a $20 million annualized run rate by year-end…VAC approvals…more than 160…Boston Scientific…expect to share more [BD] soon” .
• CEO on adoption drivers: “49% sequential growth…seven national GPO contracts…161 hospital systems actively ordering…average sales per EluPro customer 130% higher than for CanGaroo…Distributor-led growth ~33%” .
• CFO on margins: “Adjusted gross margin reaching 62.4% for Q2…largely based on efficiency…BioEnvelope scale…cardiovascular…over 80%” .
• CEO on pipeline: “NXT‑41x…base matrix approved in 2H26 and the antibiotic version in 1H27…address a $1.5B market” .

Q&A Highlights

• Bottlenecks and scaling: Inventory/production constraints have been addressed; bottleneck is now VAC throughput, with predictable ordering post-approval and goal of 100% service level .
• NXT‑41 regulatory path: Staggered approvals (base matrix first, then drug‑eluting) via the same combination-product pathway leveraged for EluPro; base is a fully engineered porcine matrix to reduce variability .
• Gross margin expansion: Management sees “substantial” upside from EluPro scaling and cardiovascular mix; SimpliDerm efficiency opportunities exist though smaller .
• Business development timing: Transactions are in process, with timing deliberately not specified to avoid “rushing” suboptimal outcomes .
• Clinical evidence: Real‑world registry aimed more at late‑2026 commercial and OUS regulatory support; scientific publications bolster VAC success now .

Estimates Context

• Q2 2025 actuals vs consensus: Revenue $6.26M vs $6.55M* (miss), GAAP diluted EPS -$0.26 vs -$0.17* (miss), adj. EBITDA -$3.83M vs -$3.20M* (miss) .
• Estimate base thin (two contributors for revenue and EPS), increasing the potential for variance and revision sensitivity. With EluPro scaling and cardiovascular contribution, margin estimates may drift higher; SimpliDerm softness and OpEx/litigation cadence may temper near-term EPS .
  *Values retrieved from S&P Global

Key Takeaways for Investors

• EluPro is scaling faster than legacy expectations; watch VAC approvals, BSC hospital count, and BioEnvelope mix for leading indicators of continued top-line acceleration .
• Margin inflection is underway: adj. GM at 62.4% with line-of-sight to further improvement given >80% cardiovascular margins and manufacturing insourcing; this is a key lever to narrow losses even at modest revenue growth .
• Litigation overhang is abating (97/110 settled), improving expense visibility and strategic optionality (potential BD/M&A) .
• Balance sheet/cash: Quarter-end cash $8.5M; monitor BD updates and financing flexibility (SWK/Ligand amendments) for liquidity runway .
• Pipeline optionality: NXT‑41 timelines (2H26/1H27) open a larger TAM; interim milestones (base matrix clearance, clinical/marketing data) could re-rate medium-term growth expectations .
• SimpliDerm is a swing factor (partnering vs push), while cardiovascular direct model offers immediate high‑margin contribution; segment execution mix will influence near-term EPS .
• Near-term trading implications: Despite a modest miss, the narrative remains adoption/margin-driven; catalysts include additional VAC wins, BSC penetration updates, litigation closure, and BD announcements .