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Organogenesis Holdings Inc. (ORGO)·Q3 2025 Earnings Summary

Executive Summary

  • Record total revenue of $150.9M (+31% y/y; +49% q/q) materially above S&P Global consensus ($134.1M), driven by Advanced Wound Care (+31% y/y) and Surgical & Sports Medicine (+25% y/y); diluted EPS of $0.11 and Adjusted EBITDA of $30.1M signaled strong operating leverage .
  • 2025 guidance raised: net product revenue to $500–$525M (from $480–$510M), with higher ranges for GAAP net income, EBITDA, Adjusted net income, and Adjusted EBITDA; gross margin assumption maintained at ~74–76% .
  • Management framed CMS’ finalized 2026 payment reform (per cm methodology, recognition of PMA products) as a watershed industry shift likely to favor ORGO’s evidence-based portfolio (Apligraf, Affinity, NuShield), with margin and cash flow improvements expected despite lower market ASPs .
  • Near-term catalysts: 2025 guidance raise, revenue beat vs consensus, credit facility amendment providing access up to $75M, and an FDA meeting (Dec 12) to align on ReNu BLA strategy using combined Phase III efficacy analysis .

What Went Well and What Went Wrong

What Went Well

  • Sustained commercial execution: Advanced Wound Care revenue grew 31% y/y to $141.5M; Surgical & Sports Medicine grew 25% y/y to $9.0M; total revenue beat internal guidance ($130–$145M) and consensus .
  • Operating leverage and profitability: Operating income rose to $20.7M (vs $6.2M y/y), Adjusted EBITDA more than doubled to $30.1M (vs $13.4M y/y) .
  • Strategic positioning ahead of CMS reform: “We believe we are best positioned in the skin substitute market for 2026 and beyond” and “CMS has recognized the clinical differentiation of PMA products” .

What Went Wrong

  • Gross margin down modestly y/y (76% vs 77%) on product mix; non-GAAP opex up 14% y/y, reflecting SG&A and R&D increases and certain non-recurring write-downs ($0.9M) .
  • Nine-month view still shows pressure: net product revenue fell 5% y/y and Adjusted EBITDA fell to $14.0M for the nine months; cash and restricted cash declined to $64.4M from $136.2M at year-end 2024 .
  • ReNu second Phase III did not reach statistical significance on primary endpoint (though showed numerical improvement); BLA timing may slip by ~2 months depending on FDA dialogue .

Financial Results

P&L and Profitability (sequential: Q1 → Q2 → Q3 2025)

MetricQ1 2025Q2 2025Q3 2025
Total Revenue ($USD Millions)$86.693 $101.005 $150.864
Net Product Revenue ($USD Millions)$86.693 $100.779 $150.487
Gross Profit ($USD Millions)$62.970 $73.100 $114.200
Gross Profit Margin (%)73% 73% 76%
Operating Income ($USD Millions)$(26.746) $(12.576) $20.727
Net Income ($USD Millions)$(18.843) $(9.392) $21.567
Diluted EPS ($USD)$(0.17) $(0.10) $0.11
Adjusted EBITDA ($USD Millions)$(12.524) $(3.640) $30.119

Year-over-Year Comparison (Q3 2024 vs Q3 2025)

MetricQ3 2024Q3 2025
Total Revenue ($USD Millions)$115.177 $150.864
Gross Profit ($USD Millions)$88.400 $114.200
Gross Profit Margin (%)77% 76%
Net Income ($USD Millions)$12.331 $21.567
Diluted EPS ($USD)$0.09 $0.11
Adjusted EBITDA ($USD Millions)$13.410 $30.119

Segment Breakdown (AWC and Surgical & Sports)

Segment Net Product RevenueQ3 2024Q2 2025Q3 2025
Advanced Wound Care ($USD Millions)$107.953 $92.696 $141.451
Surgical & Sports Medicine ($USD Millions)$7.224 $8.083 $9.036
Total Net Product Revenue ($USD Millions)$115.177 $100.779 $150.487

KPIs and Balance Sheet Highlights

KPIQ3 2025
Cash, Cash Equivalents & Restricted Cash ($USD Millions)$64.372
Accounts Receivable, net ($USD Millions)$168.783
Total Assets ($USD Millions)$509.827
Total Liabilities ($USD Millions)$123.848
Preferred (Series A) Redeemable Convertible ($USD Millions)$130.851
No Outstanding Debt ObligationsYes

Non-GAAP notes: Adjusted EBITDA and adjusted net income exclude interest, tax, D&A, intangible amortization, stock-based comp, and infrequent items (e.g., write-down for asset held for sale, restructuring charges, prior impairments, FDA fee in guidance) .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Net Product Revenue ($USD Millions)FY 2025$480–$510 $500–$525 Raised
AWC Revenue ($USD Millions)FY 2025$450–$475 $470–$490 Raised
Surgical & Sports Revenue ($USD Millions)FY 2025$30–$35 $30–$35 Maintained
GAAP Net Income ($USD Millions)FY 2025$(6.4)–$16.4 $8.6–$25.4 Raised
EBITDA ($USD Millions)FY 2025$6.2–$37.0 $19.1–$41.9 Raised (low end)
Adjusted Net Income ($USD Millions)FY 2025$5.5–$28.3 $21.5–$38.4 Raised
Adjusted EBITDA ($USD Millions)FY 2025$31.1–$61.9 $45.5–$68.3 Raised
Gross Margin Assumption (%)FY 2025~74–76 ~74–76 Maintained
GAAP Opex ex-COGS (y/y)FY 2025Flat to +1% +1% to +2% Raised
Total Non-GAAP Opex (y/y)FY 2025+3% to +4% +3% to +5% Raised Slightly
FDA Fee (BLA filing)FY 2025$4.6M included $4.6M included Maintained

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1 2025)Previous Mentions (Q2 2025)Current Period (Q3 2025)Trend
CMS Payment Reform (PFS, LCDs)Navigating evolving reimbursement; confidence in positioning; 2025 guidance reaffirmed Proposed per-cm methodology, tiers by FDA class; advocacy for reform; HOPD unbundling benefits; margin impact; tightened guidance Finalized PFS for 2026; PMA recognition; ASPs to decline broadly, but ORGO sees margin/cash flow improvement; physician behavior beginning to shift Positive structural tailwind for ORGO
Product Performance (Apligraf, Affinity, NuShield, PuraPly)Portfolio diversity; strong brand equity Apligraf HOPD opportunity under reform; PuraPly priced below proposed rate; momentum into Q3 Apligraf only PMA product for both DFU/VLU; Q3 sales outperformed; mix drove 76% GM Improving utilization and positioning
ReNu (Knee OA)On track for BLA by end-2025 All patients completed second Ph III; top-line Sept; modular BLA path Second Ph III did not meet primary endpoint but improved numerically; RMAT designation; Dec 12 FDA meeting; ~2-month potential delay Still constructive; timeline modestly extended
Operating Discipline & LiquidityCash $110.5M; no debt Cash $73.7M; no debt; guidance narrowed; inventory effects on margin Cash $64.4M; amended revolver access up to $75M; operating income and Adj. EBITDA strength Liquidity facility expanded, profitability inflecting
Competitive Dynamics & ASPsPricing pressure noted Aggressive competitor pricing; late-Q4 discounting expected ASPs to decline market-wide in 2026; level playing field to favor clinical evidence Transition year; strategic advantage in 2026

Management Commentary

  • “We delivered sales results which exceeded the high end of our guidance… driven primarily by better than expected growth in sales of our advanced wound care products, which increased 31% year-over-year.”
  • “We are pleased CMS finalized skin substitute classifications based on FDA regulatory status… and has taken steps toward higher payment and expanded access for PMA products.”
  • “Baseline pain reduction at six months for ReNu was -6.9 for the second phase III study compared to -6.0 in the first… we believe these combined results support the potential approval of ReNu… We have a meeting scheduled for December 12th with the FDA.”
  • “Our profitability guidance for 2025 now assumes gross margins in the range of approximately 74%–76%… GAAP operating expenses, excluding cost of goods sold, up 1%–2% year-over-year.”

Q&A Highlights

  • Physician behavior and PFS: Administrative steps underway to shift to LCD-covered products; utilization changes expected following PFS implementation .
  • 2026 margin outlook: Despite lower ASPs, ORGO expects margin and cash flow improvement given PMA differentiation, HOPD reimbursement unbundling, and regaining share as financial incentives are leveled .
  • ASP levels: Final rate ~“$127 range” aligned with expectations; PMA reimbursement anticipated to separate upward over time .
  • ReNu timeline: Management guides to a potential ~2-month delay dependent on December FDA meeting but maintains constructive view on modular BLA filing .
  • Credit facility: Amended agreement provides access up to $75M of future borrowings to support working capital and growth .

Estimates Context

Metric (Q3 2025)S&P Global ConsensusS&P Reported ActualSurprise
Revenue ($USD Millions)$134.1*$150.864*+12.5%*
Primary EPS ($USD)$0.055*$0.1775*+223%*
EBITDA ($USD Millions)$17.4*$27.036*+55%*
Revenue – # of Estimates2*——
EPS – # of Estimates2*——
Target Price Consensus Mean ($USD)$7.5*$7.5*—

Notes: Values retrieved from S&P Global. Primary EPS may differ from diluted EPS reported in company documents (company diluted EPS was $0.11) .*

Implications: Results were meaningfully above consensus across revenue and EBITDA, and above S&P’s Primary EPS actual measure; estimate models likely to raise FY25 revenue/profitability and reflect improved mix and operating leverage.*

Key Takeaways for Investors

  • Q3 inflection: Strong sequential ramp (+49% q/q revenue) and y/y growth with operating income and Adjusted EBITDA expansion; supports near-term positive estimate revisions .
  • Structural tailwinds: CMS 2026 payment reform and LCD coverage should favor PMA-backed products (Apligraf) and ORGO’s evidence-based portfolio; expect share/margin gains as ASPs normalize .
  • Guidance credibility: Raised FY25 ranges across revenue and profitability, maintained gross margin assumption; watch SG&A/R&D discipline and non-GAAP opex creep (+3–5% y/y) .
  • Liquidity and execution: Cash $64.4M, no debt, plus $75M revolver access; supports working capital and potential product transitions/reintroductions (Dermagraft in 2027) .
  • ReNu optionality: Despite second Ph III not meeting primary endpoint, RMAT, robust safety, and combined efficacy analysis could underpin BLA; modest timeline risk (~2 months) .
  • Trading setup: Near-term narrative anchored on beat/raise and CMS tailwinds; monitor Q4 demand dynamics and competitive discounting as the market bridges to 2026 .
  • Watch list: Gross margin trajectory vs mix, accounts receivable growth (working capital intensity), and cadence of clinical data/publications for LCD submissions supporting Affinity/PuraPly AM coverage .

Appendix: Additional Q3 2025 Press Release

  • Earnings date announcement (Oct 1, 2025): Q3 results after market close on Nov 6; call details provided .