LEMAITRE VASCULAR INC (LMAT)·Q1 2025 Earnings Summary

Executive Summary

• Q1 2025 delivered 12% reported growth and 13% organic growth, with revenue of $59.9M and gross margin of 69.2%; revenue beat Street by ~$2.3M while diluted EPS of $0.48 was modestly below consensus, with margin mix impacted by allografts . Revenue estimate $57.6M* vs actual $59.9M; EPS estimate $0.498* vs actual $0.48. Values retrieved from S&P Global.
• Full-year 2025 guidance raised for sales to $242–$249M (mid $245M, +12% reported, +13% organic), but gross margin trimmed to 69.6%, operating income midpoint reduced to $57.7M, and EPS midpoint lowered to $2.16; operating margin guided to 24% (from 25%) .
• Catalysts: Artegraft won its MDR CE Mark (European launch commencing), direct office expansion (Zurich, Portugal), and continued sales force build-out (164 reps, targeting 170 EOY) .
• Strategic optionality supported by $303M cash/securities and a $75M repurchase authorization; management has not repurchased shares to date .

What Went Well and What Went Wrong

What Went Well

• Broad-based growth: Record quarterly sales in grafts (+17%) and carotid shunts (+14%); EMEA +18%, Americas +11% . “Q1 sales were stronger than our February 27 guidance… We posted sales records in all 5 of our categories” — CEO George LeMaitre .
• Pricing execution lifted margins: ASP increases drove ~270 bps gross margin benefit; reduced scrap contributed ~85 bps, offset by product mix; gross margin 69.2% (+60 bps YoY) .
• Regulatory wins: Artegraft secured MDR CE Mark on April 29, enabling Europe launch; management counts 17 of 23 MDR CE Marks achieved to date .

What Went Wrong

• Mix headwind: Strong allograft performance (≈$1M above plan) and overall graft mix pressured gross margin vs guidance; operating margin came in at 21% for Q1 .
• OpEx intensity: Operating expenses rose 16% YoY, driven by salesforce expansion (164 reps; +27 YoY) and new offices (e.g., Switzerland), diluting operating margin sequentially vs Q4 .
• Tariffs: China import tariffs add ~$825K annual COGS; price increases in China (May 15) offset ~50%, but broader trade tensions remain a watch item .

Financial Results

Consolidated P&L vs prior quarters

Geography segment revenue

KPIs and Non-GAAP

Results vs Wall Street consensus (S&P Global)

Guidance Changes

Earnings Call Themes & Trends

Management Commentary

• “Q1 sales momentum… allows us to increase our 2025 reported ($245mm) and organic (+13%) sales guidance, up from prior guidance of $239mm and 10%. $303mm of cash also provides strategic optionality.” — Chairman/CEO George LeMaitre .
• “Average selling price increases improved the gross margin by approximately 270 basis points in Q1. Reduced scrap contributed an additional 85 basis points. The shift in product mix… negatively impacted the gross margin by 220 basis points.” — CFO Dorian LeBlanc .
• “Our list price increase was 8.1% blended in the U.S., and I think we got an 11%… 9% price increase and 4% unit increase [in Q1].” — CEO George LeMaitre .
• “We have amicably wound down our porcine patch distribution agreement with Elutia… This product exit will likely improve our organic growth rate and gross margin.” — CFO Dorian LeBlanc .
• “We believe the company is comparatively well-positioned [on tariffs]… We manufacture 100% of our products in the United States.” — CFO Dorian LeBlanc .

Q&A Highlights

• Guidance raise drivers: Beat in Q1, stronger-than-expected pricing discipline, more reps (170 targeted), Artegraft CE Mark, strong Europe; organic growth raised to 13% from 10% .
• Margins: Gross and operating margin came in below guidance due to graft/allograft mix; FY gross margin guide trimmed to 69.6% while operating margin midpoint to 24% amid salesforce/office investments .
• Tariffs: ~$825K annual China COGS impact incorporated into guidance; price increases to offset ~50%; limited exposure due to U.S.-only manufacturing .
• China & XenoSure: Working through provincial listings; expect most in Q4; material sales likely in 2026 .
• Capital deployment: $300M+ cash; pipeline of 22–23 targets in open vascular and adjacent cardiac; no repurchases executed yet under $75M program .

Estimates Context

• Q1 2025: Revenue beat consensus by ~$2.3M ($57.6M* est vs $59.9M actual), but EPS modestly below ($0.498* est vs $0.48 actual). Values retrieved from S&P Global.
• Q2 2025 setup: Company guides revenue $61.5–$63.5M (mid $62.5M) and EPS $0.55–$0.59 (mid $0.57); Street broadly similar (Revenue $62.52M*, EPS $0.566*), suggesting an in-line to slight beat setup if pricing and EMEA strength persist. Values retrieved from S&P Global.

Key Takeaways for Investors

• Revenue outperformance is driven by pricing power and commercial execution; watch for sustained ASP discipline and EMEA growth to support Q2 and FY guide .
• Margin trajectory hinges on product mix; allografts are strategic growth but below corporate margin—expect gradual improvement as Elutia distribution exits and H2 mix/comps help (implied H2 GM ~69.9%) .
• Guidance reset is prudent: sales raised, but profitability moderated to fund salesforce and international office expansion; near-term operating leverage resumes in H2 (op income growth implied ~14%) .
• Regulatory roadmap is a multi-year upside driver: Artegraft CE Mark unlocks Europe; RestoreFlow European approvals (Ireland or Germany) targeted 2025 with Dublin distribution facility planned .
• Tariff exposure appears manageable given U.S.-centric manufacturing and ability to reprice; China remains small (<1% revenue) with price actions underway .
• Capital optionality with $303M cash/securities and convert capacity positions LMAT for larger M&A; pipeline is active, but discipline remains paramount .
• Shareholder returns: dividend maintained at $0.20/share; buyback authorized but not utilized yet—monitor usage as valuation and M&A timing evolve .

Notes: All consensus values marked with * are from S&P Global and may update intra-quarter.