Organogenesis (ORGO) Q1 2025 earnings summary

Executive summary

• Q1 2025 revenue was $86.7 million, down 21% year-over-year, mainly due to a 23% decline in Advanced Wound Care sales, while Surgical & Sports Medicine revenue grew 11%.

• Net loss widened to $21.6 million from $2.1 million last year, impacted by lower revenue and a $6.6 million asset write-down.

• Adjusted EBITDA loss was $12.5 million, down from a positive $2.6 million in Q1 2024.

• Results reflected disruption from uncertainty around delayed LCDs for skin substitutes, impacting customer demand and ordering patterns.

• Management reaffirmed 2025 financial guidance and remains confident in long-term growth opportunities.

Financial highlights

• Gross profit was $63 million (72.6–73% margin), down from $81.3 million (73.9–74% margin) last year.

• Operating expenses rose 5% to $89.7 million, mainly due to a $6.6 million asset write-down, with R&D expense down 17%.

• Operating loss widened to $26.7 million from $3.9 million last year.

• Cash and equivalents at quarter-end were $110–$110.5 million, with no outstanding debt and $125 million available under a revolving facility.

• Income tax benefit increased to $6.9 million, reflecting R&D tax credits and lower pre-tax income.

Outlook and guidance

• 2025 net revenue guidance reaffirmed at $480–$535 million (flat to +11% year-over-year).

• Advanced Wound Care revenue expected at $450–$500 million (down 1% to up 10%); Surgical & Sports Medicine at $30–$35 million (up 6% to 23%).

• GAAP net income guidance lowered to $4.7–$34 million; EBITDA guidance to $20–$59.6 million.

• Adjusted net income and adjusted EBITDA guidance unchanged; gross margin guidance raised to 78–79% for 2025.

• Q2 revenue expected at $100–$110 million, with stronger performance anticipated in the second half as market stabilizes.

• Management expects cash and credit availability to fund operations for at least 12 months.