Sanara MedTech (SMTI) Q1 2025 earnings summary

Executive summary

• Net revenue for Q1 2025 increased 26% year-over-year to $23.4 million, driven by strong performance in soft tissue repair and bone fusion products, with the Sanara Surgical segment leading growth.

• Gross profit rose 30% to $21.6 million, with gross margin improving to 92% from 90% due to lower manufacturing costs and favorable product mix.

• Adjusted EBITDA improved 111% year-over-year to $0.7 million, with Sanara Surgical segment-adjusted EBITDA at $2.7 million.

• Net loss widened to $3.5 million ($0.41 per share) from $1.8 million, primarily due to higher SG&A, R&D, and interest expenses, with most losses from the Tissue Health Plus segment.

• Cash at quarter-end was $20.7 million, supported by $12.25 million in new term loan borrowings, with liquidity expected to cover growth and investment needs for at least the next 12 months.

Financial highlights

• Soft tissue repair product sales grew 28% to $20.5 million; bone fusion products up 18% to $2.9 million.

• Operating expenses increased 30% to $23.7 million, mainly from higher SG&A and R&D investments.

• Net loss: $3.5 million in Q1 2025 (vs. $1.8 million prior year); net loss margin was (15.1)% in Q1 2025 versus (9.7)% in Q1 2024.

• Cash flow from operations was negative; investing activities used $5.2 million, mainly for BMI investment and THP platform development; financing activities provided $12.0 million.

• Cash at quarter-end was $20.7 million, with $42.8–$43.4 million in debt and $12.25 million available borrowing capacity.

Outlook and guidance

• Net revenue performance in Q1 was in line with expectations; continued net revenue growth and improved profitability expected for Sanara Surgical in 2025.

• Tissue Health Plus pilot program launch planned for Q2 2025, with $4–$5 million investment expected in Q2 and $7.5–$8.5 million for H1 2025, excluding CarePICS acquisition.

• Ongoing pursuit of financial partners to support THP strategy execution.

• No material impact from tariffs or inflation anticipated in 2025 as most products are US-manufactured.

• Focused on expanding hospital footprint, scaling BIASURGE®, and entering new specialties such as trauma and vascular surgery.