Sign in
OH

Organogenesis Holdings Inc. (ORGO)·Q4 2024 Earnings Summary

Executive Summary

  • Q4 2024 delivered net revenue of $126.7M, up 27% YoY, with diluted EPS of $0.04 and adjusted EBITDA of $18.2M; results exceeded the company’s prior Q4 revenue guidance range ($100–$125M) provided on the Q3 call, driven by stronger-than-expected demand late in the quarter as the LCD effective date was delayed .
  • Gross margin improved YoY to ~75% (vs. 72% in Q4 2023), while operating income swung to $10.2M from a loss in the prior-year quarter; Advanced Wound Care grew 27% and Surgical & Sports Medicine grew 24% YoY .
  • FY 2025 guidance introduced: net revenue $480–$535M; GAAP net income $9.5–$38.8M; adjusted EBITDA $43.6–$83.2M; management expects a challenging 1H25 with Q1 revenue of $85–$95M, then improved trends starting in Q3 as LCDs take effect on April 13, 2025 .
  • Balance sheet strengthened: $136.2M cash and no debt at year-end after preferred financing and debt repayment; regulatory catalysts include LCD implementation in April and ReNu Phase 3 topline in September 2025 with BLA submission by year-end 2025 .
  • Wall Street consensus estimates from S&P Global were unavailable due to data access limits; estimate comparisons are therefore not included (S&P Global consensus unavailable).

What Went Well and What Went Wrong

What Went Well

  • Revenue and profitability inflected: net revenue +27% YoY to $126.7M; operating income $10.2M vs. a loss last year; adjusted EBITDA rose to $18.2M from $7.5M, aided by late-quarter demand strength tied to the LCD timing .
  • Segment strength: Advanced Wound Care +27% YoY to $118.6M and Surgical & Sports Medicine +24% YoY to $8.1M, reflecting robust growth across the portfolio .
  • Balance sheet de-risked with $136.2M cash and no debt after paying down $66.6M; management underscored brand equity, commercial infrastructure and deep customer relationships as competitive advantages in a transitioning market: “strong brand equity… substantial competitive advantage” .

What Went Wrong

  • Near-term reimbursement uncertainty and customer behavior changes: delayed LCD effective dates (to Feb 12, then Apr 13) created ambiguity; customers paused and tested reimbursement, limiting stocking (short shelf life for living technologies) and pressuring early 2025 demand .
  • Operating costs elevated: Q4 operating expenses rose 17% YoY to $85.4M (SG&A +20% YoY), and FY 2024 incurred non-recurring impairment/write-downs ($18.8M and $4.0M), dampening full-year GAAP profitability .
  • Key product coverage gaps (e.g., PuraPly not currently on covered DFU/VLU list) necessitate RCTs; management expects interim analysis in Q4 and publication in Q1 2026 to support reconsideration by MACs, leaving some uncertainty in the interim .

Financial Results

Quarterly P&L Overview

MetricQ2 2024Q3 2024Q4 2024
Net Revenue ($USD Millions)$130.234 $115.177 $126.656
Gross Profit ($USD Millions)$101.036 $88.381 $95.605
Gross Margin %78% 77% 75%
Operating Income ($USD Millions)$(13.892) $6.242 $10.219
Net Income ($USD Millions)$(17.043) $12.331 $7.673
Diluted EPS ($USD)$(0.13) $0.09 $0.04
Adjusted EBITDA ($USD Millions)$15.649 $13.410 $18.177

Notes: CFO referenced Q4 gross margin at ~75.5% vs the 75% press release metric .

Q4 YoY Comparison (vs. Q4 2023)

MetricQ4 2023Q4 2024YoY Change
Net Revenue ($USD Millions)$99.651 $126.656 +27%
Gross Profit ($USD Millions)$71.882 $95.605 +33%
Gross Margin %72% 75% +300 bps
Operating Income ($USD Millions)$(1.269) $10.219 +$11.5M
Net Income ($USD Millions)$(0.568) $7.673 +$8.3M
Diluted EPS ($USD)$0.00 $0.04 +$0.04
Adjusted EBITDA ($USD Millions)$7.473 $18.177 +143%

Segment Revenue Breakdown

Segment Revenue ($USD Millions)Q2 2024Q3 2024Q4 2024
Advanced Wound Care$123.237 $107.953 $118.585
Surgical & Sports Medicine$6.997 $7.224 $8.071
Total Net Revenue$130.234 $115.177 $126.656

KPIs

KPIQ4 2024 Value
Cash, Cash Equivalents & Restricted Cash ($USD Millions)$136.2
Debt Outstanding ($USD Millions)$0 (no outstanding debt)
Adjusted Net Income ($USD Millions)$8.753
Weighted Avg Diluted Shares (Millions)132.162

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Net Revenue ($M)FY 2025N/A$480–$535 New
Advanced Wound Care Revenue ($M)FY 2025N/A$450–$500 New
Surgical & Sports Medicine Revenue ($M)FY 2025N/A$30–$35 New
GAAP Net Income ($M)FY 2025N/A$9.5–$38.8 New
Adjusted Net Income ($M)FY 2025N/A$15.3–$44.6 New
EBITDA ($M)FY 2025N/A$27.0–$66.6 New
Adjusted EBITDA ($M)FY 2025N/A$43.6–$83.2 New
Gross Margin (%)FY 2025N/A76–78 New
GAAP OpEx (YoY)FY 2025N/ADown 2% to flat New
Non-GAAP OpEx (YoY)FY 2025N/A+3% to +6% (excl. ~$3.3M amortization, $4.6M FDA fee) New
Capital Expenditure ($M)FY 2025N/A~$45 New
Interest & Other Income ($M)FY 2025N/A~$4 New
GAAP Tax Rate (%)FY 2025N/A~26 New
Non-GAAP Tax Rate (%)FY 2025N/A~27 New
Diluted Shares (Millions)FY 2025N/A~134 New
Net Revenue ($M)Q1 2025N/A$85–$95 New

Historical FY 2024 guidance evolution (context):

  • Net revenue raised from $445–$470 (Q2) to $455–$480 (Q3) .
  • AWC revenue raised ($415–$435 → $429–$452) ; SSM lowered ($30–$35 → $26–$28) .
  • GAAP net loss range improved ($(27)–$(12) → $(12.3)–$(0.6)) ; Adjusted EBITDA raised ($16–$35 → $31.7–$47.4) .

Earnings Call Themes & Trends

TopicPrevious Mentions (Q-2 and Q-1)Current Period (Q4 2024)Trend
Regulatory/LCDsEmphasis on complex market; working with policy-makers; near-term variability expected (Q2 PR) . Resolution “on the horizon” (Q3 PR) .LCD finalized with delayed effective dates (to Feb 12, then Apr 13); assumption LCDs will be implemented; expect disruption 1H25 and improvement starting Q3; 18 covered products include Apligraf, Dermagraft (DFU/VLU), Affinity/NuShield (DFU) while >200 non-covered .Near-term volatility intensifying; longer-term constructive as coverage narrows to efficacy-supported products.
ReNu BLA (knee OA)Advancing program; “major clinical milestones” (Q2 PR) .Phase 3 #2: DMC recommended proceeding; topline Sept 2025; BLA by end-2025; potential approval late-2026/early-2027 .Execution milestones achieved; clear regulatory timeline.
Product performanceAWC +12% YoY; SSM −3% YoY (Q2) . AWC +7%; SSM +1% (Q3) .AWC +27%; SSM +24% (Q4) .Acceleration across segments.
MarginsGross margin ~78% (Q2) . ~77% (Q3) .~75–75.5% (Q4) .Slight sequential moderation; stronger YoY vs. Q4 2023 (72%) .
Sales force/attritionNot highlighted in Q2/Q3 PRs.Some attrition, not significant; backfilled with strong talent .Stable.
Customer behavior & stockingNot highlighted in Q2/Q3 PRs.Customers pausing/testing reimbursement; living technologies limit stocking; market transition impacts 1H25 .Disruption until LCDs implemented.
PuraPly RCTs (non-covered DFU/VLU)—Interim analysis expected Q4; publication Q1 2026 to support reconsideration .Data-generation underway for coverage reconsideration.

Management Commentary

  • CEO on execution and market position: “strong momentum… customer demand in excess of what our guidance had assumed… Organogenesis’ strong brand equity, established commercial infrastructure and deep customer relationships… represent a substantial competitive advantage” .
  • CEO on LCDs and payment reform: pushing for value-based payment methodology (fixed $/cm²) to reduce Medicare Part B spend and improve access/outcomes .
  • CEO on ReNu: “on track for a BLA submission by the end of 2025… would be the only FDA-approved biologic intra-articular injection to improve pain symptoms related to symptomatic knee osteoarthritis” .
  • Press release tone: “2024 results exceeded expectations in a difficult environment… we will continue to focus on our customers while we collaborate with policy and law makers” .

Q&A Highlights

  • Competitive environment vs. customer behavior: competitive dynamics unchanged; customer buying behavior pausing/testing reimbursement amid LCD delays; stocking constrained for living technologies .
  • ReNu timeline post-submission: file BLA end-2025; expect FDA feedback Q4 2026 and potential approval late-2026/early-2027 .
  • Sales force: some attrition in Q4, not significant; backfills completed; execution remained strong .
  • PuraPly/non-covered products: substantial non-DFU/VLU utilization remains; PuraPly usage skewed higher to non-DFU indications; RCT/interim analysis Q4 and publication Q1 2026 for reconsideration .
  • LCD implementation assumption: management expects implementation in April rather than further delay; if not satisfactory, rescission more likely than additional delay to avoid market confusion .

Estimates Context

  • S&P Global consensus EPS/revenue/EBITDA estimates for Q4 2024 and FY 2024 were unavailable due to access limits, so estimate comparisons are not included (S&P Global consensus unavailable).
  • Company exceeded its own Q4 revenue guidance range ($100–$125M) issued on the Q3 call, delivering $126.7M; adjusted EBITDA surpassed the high end of guidance by >$2M .

Key Takeaways for Investors

  • Expect near-term volatility: management guides Q1 2025 revenue to $85–$95M with improvement starting in Q3 as LCDs take effect on April 13; set expectations for a soft 1H and stronger 2H .
  • Share-gain opportunity: LCDs narrow covered list (18 products, including Apligraf/Dermagraft/Affinity/NuShield), positioning Organogenesis to capture DFU/VLU market share as non-efficacy-backed products lose coverage .
  • Solid Q4 execution and margin profile: Q4 revenue +27% YoY, operating income $10.2M, gross margin ~75%, adjusted EBITDA $18.2M; signals resilience despite policy transitions .
  • Balance sheet optionality: $136.2M cash and no debt provide flexibility to invest through reimbursement transition and fund R&D/clinical programs (e.g., ReNu) .
  • ReNu as medium-term catalyst: Phase 3 topline Sept 2025, BLA by end-2025; potential approval late-2026/early-2027 opens a new pain management market segment .
  • Watch PuraPly coverage pathway: interim analysis Q4 and publication Q1 2026 aimed at MAC reconsideration; meanwhile, meaningful non-DFU/VLU usage persists .
  • Modeling details for 2025: GM 76–78%; GAAP OpEx down 2% to flat; non-GAAP OpEx +3–6%; capex ~$45M; diluted shares ~134M; informs near-term earnings power and cash deployment .

Appendix: Documents Read

  • Q4 2024 8-K 2.02 earnings press release and exhibits .
  • Q4 2024 earnings call transcript (prepared remarks and Q&A) –.
  • Prior quarters’ 8-K/press releases for trend analysis: Q3 2024 –; Q2 2024 –.
  • Other relevant press releases: Earnings announcement scheduling (Jan 27, 2025) .