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LV

LEMAITRE VASCULAR INC (LMAT)·Q2 2025 Earnings Summary

Executive Summary

  • Q2 2025 delivered double‑digit growth and margin expansion: sales $64.23mm (+15%), gross margin 70.0% (+110 bps), operating income $16.10mm (+12%), diluted EPS $0.60 (+16%) .
  • Broad-based strength by product and region; catheters (+27%) and grafts (+19%) led growth; EMEA +23%, Americas +12%, APAC +12%. Price contributed +8% and units +7%; management flagged ~$0.8mm of end‑quarter catheter stocking tied to a packaging recall .
  • Guidance raised across the board: FY25 sales midpoint to $251mm (+15% organic), gross margin 69.7%, operating income $60.9mm (+17%), EPS $2.30 (+19%); Q3 guide midpoints: sales $62.2mm, EPS $0.57 .
  • Estimate context: Q2 revenue and EBITDA beat consensus; EPS beat by ~$0.034 (0.600 vs 0.566*)—Q1 had an EPS miss despite a revenue beat; Q4 2024 was roughly in line to slightly below on revenue/EPS*.

What Went Well and What Went Wrong

What Went Well

  • Strong top-line and margin execution: “Q2 was strong across the board, with sales up 15%, a 70% gross margin, and EPS up 16%” .
  • Biologics momentum and international expansion: Artegraft OUS launch “ahead of plan,” with FY25 OUS sales now expected to surpass $2mm; autograft approvals expanding across US, EU, UK, Australia, NZ, South Africa, Israel, Thailand, Malaysia .
  • Cash generation and balance sheet strength: Record cash from operations of $20.3mm; cash and securities ended at $319.5mm, up $16.9mm sequentially; dividend $0.20/share declared .

What Went Wrong

  • Temporary supply disruption and recall: Packaging-related catheter recall caused disruption; late-quarter stocking boosted sales by ~$0.8mm—management does not expect a repeat in Q3 .
  • OpEx inflation and mix pressure: Operating expenses rose 20% Y/Y on salesforce expansion and European go-direct build-outs; allografts carry margins below corporate average, contributing to mix drag in prior periods .
  • Tariff exposure in China: Implemented ~25% average price increase in China to offset tariff headwinds; inventory increased in international warehouses to buffer potential tariff changes .

Financial Results

Consolidated Results vs Prior Periods

MetricQ4 2024Q1 2025Q2 2025
Revenue ($USD mm)$55.72 $59.87 $64.23
Diluted EPS ($USD)$0.49 $0.48 $0.60
Gross Margin (%)69.3% 69.2% 70.0%
Operating Income ($USD mm)$12.85 $12.63 $16.14
Operating Margin (%)23% 21% 25%

Actual vs Wall Street Consensus (S&P Global)

MetricConsensusActualSurprise
Revenue ($USD mm)$62.52*$64.23+$1.71mm, +2.7%*
Diluted EPS ($USD)$0.566*$0.600+$0.034, +6.1%*
EBITDA ($USD mm)$17.89*$18.79+$0.90mm, +5.0%*

Values marked with * retrieved from S&P Global.

Segment (Geography) Breakdown

RegionQ4 2024 ($mm, %)Q1 2025 ($mm, %)Q2 2025 ($mm, %)
Americas$36.63, 66% $38.96, 65% $41.32, 64%
EMEA$15.28, 27% $16.96, 28% $18.84, 29%
APAC$3.81, 7% $3.95, 7% $4.07, 7%
Total$55.72, 100% $59.87, 100% $64.23, 100%

KPIs

KPIQ4 2024Q1 2025Q2 2025
Cash & Securities ($USD mm)$299.7 $302.5 $319.5
Cash from Operations ($USD mm)N/A$9.0 $20.3
Sales Reps / Managers (#)152 / 31 164 / 34 164 / 33
Dividend per Share ($USD)$0.20 $0.20 $0.20

Guidance Changes

MetricPeriodPrevious Guidance (May 1, 2025)Current Guidance (Aug 5, 2025)Change
Sales ($USD mm)FY 2025$245 mid ($242–$249) $251 mid ($248–$254) Raised
Organic Sales Growth (%)FY 2025+13% +15% Raised
Gross Margin (%)FY 202569.6% 69.7% Raised (slight)
Operating Income ($USD mm)FY 2025$57.7 mid ($55.1–$60.3) $60.9 mid ($58.8–$63.0) Raised
Operating Margin (mid)FY 202524% 24% Maintained
Diluted EPS ($USD)FY 2025$2.16 mid ($2.07–$2.24) $2.30 mid ($2.23–$2.37) Raised
Sales ($USD mm)Q3 2025N/A$62.2 mid ($61.2–$63.2) New quarterly guide
EPS ($USD)Q3 2025N/A$0.57 mid ($0.54–$0.59) New quarterly guide
Gross Margin (%)Q3 2025N/A69.7% New
Quarterly Dividend2025$0.20/share $0.20/share Maintained
Share Repurchase AuthorizationThrough Feb 17, 2026$75mm (authorized 2/18/25) $75mm (authorized 2/18/25) Maintained

Earnings Call Themes & Trends

TopicPrevious Mentions (Q4’24, Q1’25)Current Period (Q2’25)Trend
Pricing power and ASP disciplineQ1: 9% price, 4% unit; U.S. list +8.1% achieved ~11% price; blended guidance raised Price +8%, units +7%; sustainable cadence noted; tariff-driven price +25% in China Strength sustained; selective tariff pass-through
Biologics (Artegraft OUS)Q1: MDR CE mark; initial OUS sales $0.18mm; approvals pipeline (AU, CA, SG, KR) OUS ramp ahead of plan; FY25 OUS sales to surpass $2mm; Q2 OUS $0.42mm Accelerating adoption
RestoreFlow allograftsQ1: approvals targeted in Ireland/Germany; Dublin distribution planned; supply constraints acknowledged Expect at least one EU approval in 2025; Dublin facility opening; cardiac adoption +61% units; supply remains rate limiter Positive momentum; supply a gating factor
International go-direct expansionQ1: new Alpine RM, Zurich office; direct Portugal and planned Czechia First Portuguese and Czech direct hospital sales posted; EMEA +23% Direct model scaling
Tariffs and macroQ1: limited importer; China tariff impact ~$0.825mm/year; planned price increases 25% average price increase in China; inventory buildup OUS to buffer tariffs Managed impact; proactive pricing and inventory
Sales force expansionQ4: 152 reps; Q1: 164 reps, targeting ~170 YE Ended Q2 with 164 reps/33 managers; YE target ~165 vs 170 prior Plateau near-term; productivity strong

Management Commentary

  • “Q2 was strong across the board, with sales up 15%, a 70% gross margin, and EPS up 16%. As a result, we're increasing full year guidance for sales, gross margin, op income, and EPS.” — George LeMaitre, CEO .
  • “Our 15% organic growth consisting of 8% price growth and 7% unit growth was highlighted by the strong unit growth of ArteGraft, XenoSure, RestoreFlow and catheters.” — Dorian LeBlanc, CFO .
  • “International autograft [Artegraft] launch exceeded expectations in Q2… OUS sales should surpass $2.0mm in full year 2025.” — George LeMaitre .
  • “We posted a 70% gross margin… driven primarily by higher average selling prices, manufacturing efficiencies and positive product mix.” — Dorian LeBlanc .
  • “So far, only tariff driven price adjustment we've made is a 25% average increase in China.” — Dorian LeBlanc .

Q&A Highlights

  • Catheter recall impact: ~$0.8mm Q2 stocking related to packaging recall; not expected to repeat in Q3 .
  • Pricing sustainability: Management sees established cadence for 2025; annual January 1 price actions likely but not yet committed for 2026 .
  • Artegraft OUS ramp: FY25 OUS sales expected ~$2mm; sequential increase implies ~$0.7mm/quarter average in H2, though no specific quarterly guide given .
  • Seasonality and expense cadence: Q3 seasonally softer in Europe; OpEx lower in H2 vs H1 as launch and recruiting costs fade; MDR regulatory spend largely behind them .
  • RestoreFlow supply dynamics: European market ~ $80–$100mm at maturity; supply constrained; inventory build underway; Germany requires more paperwork per recovery center .

Estimates Context

  • Q2 2025: Revenue beat ($64.23mm vs $62.52mm*), EBITDA beat ($18.79mm vs $17.89mm*), EPS beat ($0.60 vs $0.566*)—driven by price discipline, product mix, and late-quarter catheter stocking benefit* .
  • Q1 2025: Revenue beat ($59.87mm vs $57.61mm*), EPS miss ($0.48 vs $0.498*) as lower gross margin vs guide and mix (allografts) weighed* .
  • Q4 2024: Slight revenue/EPS miss vs consensus*; underlying growth strong with GM expansion and double-digit category performance* .

Values marked with * retrieved from S&P Global.

Key Takeaways for Investors

  • Q2 was a clean beat with robust pricing and unit growth; guidance raised across revenue, margins, and EPS, supporting estimate revisions upward .
  • Biologics are the growth engine: Artegraft OUS ramp ahead of plan and RestoreFlow adoption accelerating (+61% cardiac units); supply is the principal constraint to allograft growth, not demand .
  • International strategy execution: EMEA +23% with go-direct expansion (Portugal, Czechia) and Dublin distribution center to support RestoreFlow EU rollout .
  • Tariff risk managed via pricing and inventory: 25% China price increase implemented; limited import exposure and niche market positioning reduce substitution risk .
  • Near-term cadence: Expect seasonal soft Q3 in Europe and lower H2 OpEx vs H1; FY25 operating margin guided to 24% despite salesforce investments .
  • Capital returns and optionality: Consistent $0.20 dividend; $75mm buyback authorization; $319.5mm cash/securities provide capacity for M&A in vascular/cardiac adjacencies .
  • Watch for catalysts: EU RestoreFlow approval (Ireland or Germany in 2025), Artegraft OUS expansion, China XenoSure peripheral filing in Q4 with potential 2026 approval .

Appendix: Additional Relevant Press Releases

  • Q2 results press release (Aug 5): full details, guidance, dividend, and non-GAAP reconciliations .
  • Q2 earnings announcement scheduling (July 8): logistics of call and timing .
  • Investor conferences participation (Aug 28): engagement with investors .