Nuwellis, Inc. (NUWE)·Q3 2025 Earnings Summary

Executive Summary

• Q3 2025 revenue was $2.22M, down 6% YoY but up 29% QoQ; against S&P Global consensus revenue of $2.78M, this was a miss of $0.56M (~20%) due to manufacturing underutilization costs recognized in COGS and lower international revenue tied to the wind-down of non-U.S. operations *. Values retrieved from S&P Global.
• Gross margin improved sequentially to 65.2% (vs. 55.5% in Q2), though below prior-year 70.0%; operating loss narrowed QoQ to $2.7M, while reported EPS turned positive ($0.56) driven by non-operating fair value gains on warrant liabilities, not core operations .
• Strategic milestones: first hospital-based outpatient Aquadex therapies under a new CMS code; U.S. launch of a 24-hour circuit and extended-length catheter; accelerated pediatric product development (Vivian) supported by NIH funding and new IP; and exit from international operations to focus on U.S. growth .
• Liquidity: cash and equivalents ended Q3 at $3.1M; the company raised $1.9M via ATM during the quarter and remains debt-free—near-term catalysts include outpatient adoption and device launches, offset by the revenue consensus miss .

What Went Well and What Went Wrong

What Went Well

• “Disciplined execution and meaningful progress toward building a more focused, U.S.-driven business… expanding how and where Aquadex therapy can be delivered” (John Erb) with first hospital-based outpatient therapies and launch of 24-hour circuit and extended-length catheter .
• Sequential revenue growth (+29% QoQ) from higher consumable utilization and increased U.S. console placements; all customer categories achieved YoY growth in circuit sales .
• Pediatric momentum with ULTRA-Peds registry (92% survival during treatment; 66% survival to discharge) and Vivian pediatric CRRT development anchored by NIH support and patents .

What Went Wrong

• Revenue declined 6% YoY and missed S&P Global consensus by ~$0.56M (~20%); gross margin fell vs. prior-year due to unfavorable manufacturing utilization recognized in Q3 COGS *. Values retrieved from S&P Global.
• Operating expenses increased 30% YoY (rebuilding U.S. sales force, sustaining engineering, quality systems), lifting operating loss to $2.7M vs. $1.5M a year ago .
• International wind-down reduced revenue YoY by ~$0.1M; prior quarter (Q2) faced sterilization vendor delays and product backorders, compressing revenue and margins—dragged near-term trajectory despite Q3 sequential rebound .

Financial Results

Values retrieved from S&P Global.

Segment/KPI notes:

• All customer categories showed YoY growth in circuit sales; Q3 sequential growth driven by higher consumable utilization and U.S. console placements (no numeric segment mix disclosed) .
• Raised $1.9M via ATM; remains debt-free .

Guidance Changes

Management did not issue numeric guidance; commentary highlighted outpatient adoption, product launches, and U.S.-focused execution .

Earnings Call Themes & Trends

Management Commentary

• “Our third quarter results reflect disciplined execution and meaningful progress toward building a more focused, U.S.-driven business… we are expanding how and where Aquadex therapy can be delivered to improve patient outcomes.” — John Erb, CEO .
• Strategy highlights: first hospital-based outpatient Aquadex therapies; launch of 24-hour circuit and extended-length catheter; manufacturing transition to KDI; exit international operations to focus on U.S. market growth .

Q&A Highlights

• The company did not publish a Q3 2025 earnings call transcript in the documents searched; no Q3 Q&A available [ListDocuments result].
• Context from prior Q1 Q&A: Critical Care decline was due to a one-time inventory build by a large customer in Q4’24; outpatient pipeline build involves site logistics (space, nursing resources) with treatments expected to ramp through 2H 2025 .

Estimates Context

• Revenue missed S&P Global consensus ($2.78M*) by ~$0.56M (~20%), driven by under-absorption/unfavorable manufacturing utilization (recognized in Q3 COGS) and $0.1M lower international revenue tied to the wind-down; sequential strength came from consumables utilization and U.S. consoles *. Values retrieved from S&P Global.
• EPS consensus was unavailable*; reported $0.56 EPS was supported by non-operating gains from the change in fair value of warrant liabilities, masking underlying operating loss .
• Implications: Coverage may lower near-term revenue estimates to reflect operational transitions (manufacturing, international exit) while monitoring outpatient adoption and product contributions (24-hour circuit) to gauge sequential improvement .

Key Takeaways for Investors

• Sequential execution: 29% QoQ revenue growth and gross margin recovery signal operational stabilization post-Q2 headwinds; monitor consumables/utilization and console placements as core drivers .
• Revenue miss vs. consensus underscores near-term transition costs (manufacturing underutilization, international wind-down); expect margin normalization as KDI transition scales and U.S. focus deepens .
• Outpatient catalyst: first hospital-based outpatient treatments and 24-hour circuit enable single-visit workflows; reimbursement uplift (CMS) strengthens economic viability—watch site ramp and clinic capacity .
• Pediatric momentum: ULTRA-Peds registry and Vivian development build differentiated pediatrics franchise; clinical evidence supports adoption and medium-term product roadmap .
• Balance sheet: $3.1M cash, debt-free; $1.9M ATM in Q3—liquidity adequate near term but continued cost discipline and commercialization progress are critical .
• Reported EPS positive due to fair value gains; underlying operations still loss-making—focus on operating loss trajectory and gross margin durability .
• U.S.-only strategy should simplify execution and reduce complexity; expect transient revenue impact from international exit offset by domestic growth initiatives .

*Values retrieved from S&P Global.