MiMedx Group Q4 2025 Earnings Call Transcript

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Provided by Quartr
February 25, 2026

Key Takeaways

  • Positive Sentiment: MiMedx reported record 2025 results — full‑year net sales of $419M (+20%), Q4 net sales of $118M (+27%), adjusted EBITDA ~$106M and a net cash balance near $148M, strengthening profitability and liquidity.
  • Negative Sentiment: The Medicare reimbursement reset (price cap ~$127/cm²) and WISeR prior‑auth implementation have caused near‑term disruption, lower ASPs and slower wound volumes; management guides 2026 revenue of $340–360M with adjusted EBITDA in the mid‑to‑high teens.
  • Positive Sentiment: The surgical franchise is a clear growth driver — surgical sales grew ~25% in Q4 and 20% for the year, supported by increased commercial resources, new launches like AMNIOFIX Thyroid Shield, and recently licensed complementary surgical products.
  • Positive Sentiment: Strong capital flexibility: the company holds substantial cash and the board authorized a $100M share repurchase program over two years while remaining open to disciplined M&A to accelerate strategy.
  • Positive Sentiment: Clinical evidence push: the EPIEFFECT randomized controlled trial is nearly fully enrolled with results and publications expected soon, and an RCT for CHORIOFIX is planned, reinforcing the company's evidence‑based positioning.
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Earnings Conference Call
MiMedx Group Q4 2025
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Operator

Good afternoon, and thank you for standing by. Welcome to the MIMEDX fourth quarter and full year 2025 operating and financial results conference call. At this time, all participants are in listen-only mode. The question and answer session will follow the formal presentation. As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Mr. Matt Notarianni, Head of Investor Relations for MIMEDX. Thank you, Matt. You may begin.

Matt Notarianni
Head of Investor Relations at MIMEDX

Thank you, Operator, good afternoon, everyone. Welcome to the MIMEDX fourth quarter and full year 2025 operating and financial results conference call. With me today, on today's call, are Chief Executive Officer, Joe Capper, and Chief Financial Officer, Doug Rice. As part of today's webcast, we are simultaneously displaying slides that you can follow. You can access the slides from the investor relations website at mimedx.com. Joe will kick us off with some opening remarks and a summary of our operating highlights, as well as a discussion of the market environment and our financial goals. Doug will provide a review of our financial results for the quarter and full year. Joe will conclude before we make ourselves available for your questions.

Matt Notarianni
Head of Investor Relations at MIMEDX

Before we begin, I would like to remind you that our comments today will include forward-looking statements, including statements regarding future sales, operating results and cash balance growth, future margins and expenses, our product portfolios, and expected market sizes for our products. These expectations are subject to risks and uncertainties, and actual results may differ materially from those anticipated due to many factors, including competition, access to customers, the reimbursement environment, unforeseen circumstances and delays. Additional factors that could impact outcomes and our results include those described in the Risk Factors section of our annual report on Form 10-K. Our comments today include non-GAAP financial measures, and we provide a reconciliation to the most comparable GAAP measures in our press release, which is available on our website at www.mimedx.com. With that, I'm now pleased to turn the call over to Joe Capper. Joe?

Joe Capper
CEO at MIMEDX

Thanks, Matt. Good afternoon, everyone. Thank you for joining us for today's call. In the fourth quarter of 2025, we once again exceeded our expectations, setting full-year record highs for revenue and adjusted EBITDA, which bolstered our net cash balance to nearly $150 million at year-end. We are incredibly pleased with these results, which were driven by excellent growth in our wound care and surgical businesses. Since that record quarter, we have quickly pivoted to adjust to the new reimbursement framework in the wound care market and remain laser focused on delivering continued outstanding performance in our surgical segment. As anticipated and previously communicated, the wound care market is experiencing disruption following the recalibration of the Medicare reimbursement rate for skin substitutes, which went into effect on January 1st.

Joe Capper
CEO at MIMEDX

As you know, we have long advocated for reform to the Medicare reimbursement system to curtail the runaway spend and inappropriate behavior. We firmly believe the steps that were taken will be a net positive for the industry and MIMEDX as the market resets. We flourished prior to the high ASP era and are well suited to compete and win in the new reimbursement environment. Our surgical business, which grew at 20% for the full year 2025, is benefiting from the investments we have been making. We expect this momentum will continue into the new year. I will touch on some of the highlights of the quarter, then circle back for a deeper dive on our strategic focus for the two businesses. For the fourth quarter, year-over-year net sales growth was an exceptional 27%, finishing at a record $118 million.

Joe Capper
CEO at MIMEDX

Both wound and surgical delivered during the quarter, each growing at or above 25%. Our adjusted gross profit margin was 86% in the quarter. Adjusted EBITDA was $29 million, or 25% of net sales. We continued to build cash, ending the year with $148 million in net cash, a sequential increase of $24 million in the quarter, which is also $63 million higher than where we started 2025. I am pleased to report that our EPIEFFECT randomized control trial is nearly fully enrolled, and we expect to see a final readout in a few months, with publications to follow. We have announced collaborations to commercialize complementary products in both of our businesses.

Joe Capper
CEO at MIMEDX

Finally, our board has authorized a share repurchase program, giving management the ability to deploy up to $100 million to buy back our stock over the next 2 years. Those of you who have been following the company for the last few years know that our strategic focus has prioritized the continued innovation and diversification of our product portfolio in both our wound care and surgical businesses. We also continue to seek opportunities to expand our footprint in numerous surgical specialties. Our intent has been to drive comparatively higher growth with our surgical-related products, to achieve a more balanced business mix and take advantage of what we believe is an incredibly large and growing opportunity for our surgical portfolio. I outlined this plan when I joined MIMEDX three years ago. Since then, we have achieved top-line compounded annual growth of 16%.

Joe Capper
CEO at MIMEDX

Clearly, we have executed on that plan. The results have been outstanding. Let's take a closer look at the wound care business, where there has naturally been a great deal of interest given recent events. To recap, the PFS and OPPS were implemented with a price cap of $127 per square centimeter. LCD implementation was once again abandoned. During these first few months of 2026, the market is in the process of adjusting to the pricing change in a variety of ways. In the states that are part of the WISeR model, claims processing has slowed to a trickle as providers adjust to the new prior auth requirements. Many providers are increasingly concerned with the number of audits and callbacks. Some products are being dumped in the market at very low prices, causing even more chaos.

Joe Capper
CEO at MIMEDX

Some providers have completely shut down their businesses. We remain positive about this business for several reasons. First and foremost, it is still a profit center for us despite the reduction in reimbursement. Second, we believe for a host of reasons, MIMEDX is in the most desirable, competitive position to flourish post the reimbursement changes. We are confident we will emerge as the clear market leader as more customary treatment practices return to the market. We are working closely with our customers to help them navigate these changes. We do believe it is likely CMS will eventually establish a basic requirement to prove efficacy for the products they reimburse, like in all other medical product categories. Speculation is that they may move to a National Coverage Determination in lieu of the LCDs, and the clinical effectiveness requirement will still be a well-powered, randomized controlled trial.

Joe Capper
CEO at MIMEDX

This should benefit MIMEDX, given our rich history of and commitment to funding robust clinical research as we bring new products to market. Our RCT for EPIEFFECT is near full enrollment and will read out soon. We've also committed to running an RCT for another new product, CHORIOFIX, a dual level chorion membrane allograft, which is in development. As announced a few months ago, we entered into a distribution agreement with RegenLab to commercialize their PRP system called RegenKit-Wound Gel. This provides clinicians with a proven alternative modality for treating chronic wounds, with provider economics that are potentially more favorable than skin substitutes. We are ramping up with this offering and the early feedback is very favorable. In summary, we remain optimistic about the wound care market despite the near term disruptions. It is still a profit contributor for MIMEDX, even at the lower reimbursement rates.

Joe Capper
CEO at MIMEDX

We continue to develop products which leverage our gold standard technology. We are providing reimbursement and other assistance as appropriate to help customers through this phase. We are adding complementary products, and we continue to invest in clinical research, which validates the safety and efficacy of our products. When the dust settles in the wound care market, companies which are committed to helping heal chronic and complex wounds, like MIMEDX, will benefit the most. Let's now pivot to our surgical business, which has been an outstanding performer, delivering 25% growth in Q4 and 20% full year growth, with contributions from the entire product portfolio.

Joe Capper
CEO at MIMEDX

As I stated on numerous occasions, our plan has been to expand our surgical footprint by investing in dedicated commercial resources, innovative products and meaningful scientific research to validate the clinical and economic benefits derived from the use of our best-in-class technology in a variety of procedures. At the outset of this year, we realigned our commercial team to dedicate more sales professionals to the surgical business, and we will continue to look for opportunities to augment this team even further. In terms of portfolio of expansion, we recently launched AMNIOFIX Thyroid Shield, a new variant of our AMNIOFIX product, to be used as a protective barrier during thyroidectomy surgery, which is a procedure involving partial or complete removal of the thyroid gland. This surgery carries inherent risk due to the proximity of the recurrent laryngeal nerve and the parathyroid glands, which can be vulnerable to injury.

Joe Capper
CEO at MIMEDX

Damage to the laryngeal nerve can result in significant complications, including loss of voice and an increased risk of aspirating food or fluid, which can in turn lead to serious respiratory complications, such as aspiration pneumonia, posing additional health risks and prolonging patient recovery. Equally important are the parathyroid glands, which play a critical role in maintaining calcium balance in the body. Under conditions of surgical stress, these glands can become temporarily dormant, leading to pathologically low serum calcium levels or hypocalcemia. While calcium levels may gradually recover, in some cases, they fail to normalize, necessitating lifelong calcium supplementation. Slow recovery of parathyroid function can also extend hospital stays, increase healthcare costs, and delay return to normal activity. Recent evidence highlights the efficacy of AMNIOFIX Thyroid Shield as a protective adjunct in thyroid surgery, significantly reducing or even eliminating postoperative complications.

Joe Capper
CEO at MIMEDX

In cases where the nerve injury does occur, use of AMNIOFIX Thyroid Shield appears to accelerate the restoration of normal vocal and swallowing functions. Additionally, the use of AMNIOFIX Thyroid Shield has been shown to minimize parathyroid gland damage during thyroidectomy. This pro-protective effect promotes a faster recovery of the parathyroid function and helps restore blood calcium levels to normal more rapidly. Such benefits not only improve patient outcomes, but also reduce the likelihood of extended hospitalizations. offering both clinical and economic advantages. In summary, AMNIOFIX Thyroid Shield represents a valuable innovation in thyroid surgery, providing critical protection for both the recurrent laryngeal nerve and parathyroid glands. To complement our organically developed portfolio, we also licensed commercial rights to three additional complementary and 510(k) clear products with surgical applications.

Joe Capper
CEO at MIMEDX

NovaForm Wound Matrix is a proprietary Bioglass and collagen-based wound dressing intended for use in the management of partial and full thickness and surgical wounds. This marks our first non-human derived sheet product in our portfolio. G4Derm Plus is a flowable peptide matrix engineered for rapid protective wound closure. The product forms a 3D scaffold that mimics the human extracellular matrix and serves as an antibacterial barrier that protects the wound and controls bioburden. Hydrelix Collagen Matrix, which is a sterile type 1 collagen powder formulated from hydrolyzed and modified bovine collagens. In addition to deploying more direct selling resources and expanding our product portfolio, we continue to view scientific research as a crucial element of our growth plan.

Joe Capper
CEO at MIMEDX

To that end, you may have seen the recently published article in the Journal of Inflammation, which found that our DHACAM and LHACAM allografts exhibited immunomodularity properties that correspond with the beneficial outcomes we observe in a clinical setting. This study marks another important contribution to our unmatched, comprehensive library of clinical and scientific research, which has positioned us favorably in the marketplace. Because our approach in the surgical market has been producing the desired results, we will continue to prioritize investment in commercial resources, innovation, and scientific research. As you have just heard, we have several new initiatives underway that we expect to be additive to our growth, and we remain incredibly optimistic about the future for MIMEDX. Before I turn the call over to Doug for a detailed financial review of the quarter, I want to share my thoughts on guidance and capital allocation.

Joe Capper
CEO at MIMEDX

In terms of guidance, our best current estimate for full year revenue is to be in the range of $340 million-$360 million. We expect quarterly revenue to be the lowest in Q1, with substantial increases in each successive quarter as the market adjusts, patients migrate to other care settings and share is redistributed. We anticipate full year adjusted EBITDA to be in the mid to high teens. We will update these expectations as necessary as the year progresses. Looking through to 2027, we expect to be back to posting double digit above market top line growth with the margin profile we have produced in recent years prior to any acquisitions. Speaking of which, we have been vocal over the past few years about our desire to deploy capital to acquire assets which would accelerate our strategic plan.

Joe Capper
CEO at MIMEDX

While M&A has been our top priority for use of capital, we have remained disciplined buyers, making only a few small investments. As a result, we find ourselves with a relatively high and growing cash balance. Therefore, the board of directors has authorized management to buy back up to $100 million in stock over the next two years. If we are unable to make accretive investments that meet our criteria, we will use capital to invest in our own stock, which we believe is woefully undervalued. With that, I'll turn the call over to Doug for a more detailed review of our financial results. Doug?

Doug Rice
CFO at MIMEDX

Thank you, Joe. Good afternoon to everyone on today's call. I'm pleased to review our results with you all today. As a reminder, and as Matt mentioned, many of the financial measures covered in today's call are on a non-GAAP basis, so please refer to our earnings release for further information regarding our non-GAAP reconciliations and disclosures. Moving on to the results. As Joe mentioned, our fourth quarter 2025 net sales of $118 million represented 27% growth compared to the prior year period. By product category, fourth quarter wound sales of $79 million increased 28% versus the prior year period, while surgical sales of $39 million were up 25%, reflecting strong results across both of our franchises.

Doug Rice
CFO at MIMEDX

The strong growth in wound was driven by strong uptake of two new products, EPIXPRESS and EMERGE, and the robust increase in surgical sales was driven by continued demand for AMNIOFIX, AMNIOEFFECT, and our particulate products, which all grew both on a year-over-year and sequential basis. Our fourth quarter 2025 GAAP gross profit was about $99 million, up $23 million compared to the prior year period. Our GAAP gross margin was 84% in the fourth quarter of 2025, compared to 82% last year. Excluding the incremental acquisition-related amortization expense in the quarter, our non-GAAP adjusted gross margin was 86%, up about 200 basis points compared to the fourth quarter of 2024. This increase was primarily a result of product mix.

Doug Rice
CFO at MIMEDX

Looking ahead to 2026, we expect our gross margin to be in the mid-to-upper 70s as a result of lower wound ASPs and, to a lesser extent, lower gross margins from new products. Turning to our operating expenses, GAAP sales and marketing expenses were $61 million, or 52% of net sales in the fourth quarter, compared to $48 million or 51% of net sales in the prior year period. The dollar increase was due to higher commissions expense. Here again, in 2026, we expect full year sales and marketing expenses to be between about half of net sales, reflecting a similar amount of relative commissions compared to 2025, as well as lower fixed costs.

Doug Rice
CFO at MIMEDX

GAAP general and administrative expenses, or G&A, were $12 million, or 10% of net sales in the fourth quarter, compared to $13 million, or 14% of net sales in the prior year period. We expect 2026 full year GAAP G&A to be flat on an absolute dollar basis compared to 2025. Our fourth quarter GAAP R&D expenses were $5 million, or 4% of net sales, up 33% compared to the prior year period. Our R&D expenses are primarily comprised of costs associated with our RCT efforts, as well as additional spend related to the development of future products in our pipeline. As Joe mentioned, we have nearly completed enrollment of the EPIEFFECT RCT and expect a full readout and publication later this year. We are now moving forward with an RCT for CHORIOFIX, our latest innovation out of R&D.

Doug Rice
CFO at MIMEDX

CHORIOFIX is a lyophilized human placental allograft that includes two layers of chorion with attached intermediate layer. We think about the full year 2026, we expect R&D expenses to be flat on an absolute dollar basis when compared to 2025. GAAP income tax expense for Q4 2025 was about $7 million, reflecting an effective tax rate of 30% in the quarter. Our full year 2025 effective tax rate was 27%. We continue to expect our long-term non-GAAP effective tax rate to be 25%. Our fourth quarter GAAP net income was $15 million, or $0.10 per share on a diluted basis, compared to GAAP net income of $7 million, or $0.05 per share in the prior year period.

Doug Rice
CFO at MIMEDX

Adjusted net income for the fourth quarter was $20 million, or $0.14 per share, compared to $11 million, or $0.07 per share in the prior year period. Fourth quarter adjusted EBITDA was $29 million or 25% of net sales, compared to $20 million or 21% of net sales in the prior year period. As Joe mentioned, our expectation for 2026 is to deliver an adjusted EBITDA margin in the mid to upper teens on a percentage basis. Turning to our liquidity, we continue to bolster our balance sheet and position the company to make growth investments. In the fourth quarter, the business generated $25 million in free cash flow, and our net cash position rose to $148 million.

Doug Rice
CFO at MIMEDX

The steady improvement in our balance sheet provides us with the ability to evaluate a range of organic and inorganic investments. We continue to evaluate numerous opportunities to grow the business and create shareholder value. Included with today's earnings release, we also announced the recent authorization of a share repurchase program, providing us with an avenue to opportunistically return capital to shareholders. While our top capital allocation priorities remain focused on both organic innovations and M&A, having this tool available to deploy periodically as conditions warrant, provides us with additional optionality for our cash balance. In summary, 2025 was a very strong year at MIMEDX, marked by record top and bottom line financial performance, which bolstered our already strong balance sheet.

Doug Rice
CFO at MIMEDX

Just to recap, on a full year basis, in 2025, we delivered $419 million in net sales, representing 20% growth compared to 2024, GAAP net income of $49 million, nearly $106 million in adjusted EBITDA, which represents an adjusted EBITDA margin of over 25%, and we increased our net cash balance by nearly 75%. We believe these results have afforded us the ability to continue to pursue attractive growth opportunities in surgical while we navigate near-term noise in the wound market. I will now turn the call back to Joe. Joe?

Joe Capper
CEO at MIMEDX

Thanks, Doug. As you have just heard, we had an outstanding 2025 and are well positioned to achieve continued above average market growth in our surgical business and to capitalize on the changes currently taking place in the wound care market. As I said in the past, our competitive advantages are many. We have a fully vertically integrated business, from product development to manufacturing to commercialization, including donor recovery. We have an excellent intellectual property portfolio. We have arguably the most comprehensive and effective commercial organization in our space, and over the past three years, we have dramatically improved our financial position, amassing a strong cash balance. This gives us optionality to deploy capital to accelerate our strategic plan and/or buy back our stock opportunistically.

Joe Capper
CEO at MIMEDX

In closing, I would like to once again thank the MIMEDX team for a tremendous close to 2025 and for your unwavering commitment to the many individuals we serve each and every day. Let's now shift over to Q&A and open up the call to questions. Operator, we are ready for our first question. Please proceed.

Operator

Thank you. We'll now be conducting a question and answer session. If you'd like to ask a question at this time, you may press star one from your telephone keypad, and a confirmation tone indicate your line is in the question queue. You may press star two if you'd like to withdraw your question from the queue. For participants that are using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment, please, for our first question. The first question comes from the line of David Turcotte with Citizens Bank. Please proceed with your questions.

David Turcotte
Equity Research Analyst at Citizens Bank

Hey, good evening. Thanks for the guidance in a tough environment and the longer-term outlook reiteration. I think that should be helpful. Joe, you know, you mentioned, you know, players, some of the players in the market may be, you know, lowering prices, maybe ceasing. I guess, I'm just curious, was that kind of what you anticipated? As we look at that guidance and realize it's kind of a flex, you know, that there's a lot in flex here, how comfortable are you that you've kind of captured at least, let's say, the low end of what could come?

Joe Capper
CEO at MIMEDX

Yeah, I would say that it is kind of what we anticipated happening once we knew what the final rules were going to look like. We had been hopeful that Medicare would have put a little bit more stringency around the guidelines, that didn't happen, right? Maybe it will over time. Unfortunately, we're still seeing a fair amount of, you know, above average discounting in the marketplace. Potentially, people clearing out product as they exit the market, who knows? There is some kind of what I'll refer to as dumping of very low-priced product below what we think is appropriate. Yeah, it's kind of what we expected.

Joe Capper
CEO at MIMEDX

It's complicated, I think, even further by things like implementation of the WISeR model in 4 or 5 states where they're requiring a pre-authorization, has really slowed down the insurance verification request process that we help patients work through, which has kind of just delayed uptick of normal volume. You always see kind of a slower January, slower February as the marketplace works its way through deductible season. You know, we typically get 40+% of our revenue in March, 40+% of our kind of Q1 revenue in March. I think this year, the whole thing is just a bit exacerbated by what's happened in the marketplace. Our team is working really hard to help our customers work through a variety of these issues.

Joe Capper
CEO at MIMEDX

You know, right out of the gate, customers were just in a wait-and-see mode. Candidly, I think a lot of folks were expecting the government to swing back around and increase the price, and that did not happen. I think folks waited a bit to see if that was plausible. You know, kind of we're in the market that we're in, and think most people are just trying to figure it out. We feel real good about it post the kind of market adjustment. As things reset, we'll get down to a new norm, and then we'll grow from there. I think, again, we'll start growing at a rate faster than the market because we did it prior to the run-up in ASPs.

Joe Capper
CEO at MIMEDX

You go back to, you know, early, late 2022 or early 2023, where we were growing at strong double digits, and it was really before we saw the huge proliferation of these high-priced products. I know when, you know, all else is equal and everyone's not competing just on price, our organization tends to do better.

David Turcotte
Equity Research Analyst at Citizens Bank

Great. Thank you for that. I imagine, you know, I know there were some sales force sort of issues related to some of the newer players out there, I'm just curious, you know, in terms of your outlook for this year, do you kind of expect, you know, a more normalized, you know, turnover rate? Or, I guess, your thoughts on the sales force you have and your ability to kind of maybe even increase that, given what's going on in the market?

Joe Capper
CEO at MIMEDX

Yeah, it's a good question. I think we saw some other manufacturers make operational expense changes, including to sales and marketing, ahead of this change. We made the conscious decision not to do that in any radical way, because we wanted to see how things shook out. We're trying to be as flexible as possible with our commercial organization. You know, again, let's wait and see how this thing settles out, see what kind of organization we need to maintain the level of reach and frequency adequate to achieve the growth objectives that we would like to see. You know, it's more of a let's work through this. I can tell you, the entire team is working really hard to try to adjust to the market and help our customers work their way through this.

David Turcotte
Equity Research Analyst at Citizens Bank

Thank you.

Joe Capper
CEO at MIMEDX

Thank you.

Operator

The next question is from the line of Chase Knickerbocker with Craig-Hallum Capital Group. Please proceed with your questions.

Chase Knickerbocker
Chase Knickerbocker
Senior Research Analyst at Craig-Hallum Capital Group

Good afternoon. Thanks for taking the questions. Joe, maybe just to start, you know, I'd love to kind of get a feel for what you've seen from a volume perspective in Q1 so far in the overall market in wound, kind of relative to Q4. Do you feel like you kind of have visibility kind of most of the way through February here as far as that kind of market stabilization point that you kind of just mentioned in the previous question? Just an overall kind of state of the market, I guess.

Joe Capper
CEO at MIMEDX

Yeah. Well, we saw a pretty significant drop-off as we went from Q4 to Q1, as anticipated. You know, I think we would have been foolish not to anticipate a fairly significant drop. You know, well, again, there's, I think, a little bit more kind of stagnation in the business right now simply because of the things like prior auths, et cetera, et cetera. We're seeing exceptional growth on the surgical side that continued into the new year, we think we'll have another good surgical growth quarter. You know, the wound care business is recovering. You know, it took a pretty significant shock. People are trying to adjust to it.

Joe Capper
CEO at MIMEDX

We launched our PRP product as an opportunity for people to bring in other modalities to treat chronic wounds, which is being, you know, widely accepted in the marketplace. We've just started rolling that out, so, you know, pretty optimistic that we'll work our way through this and, you know, we'll come out on the other side in great shape.

Chase Knickerbocker
Chase Knickerbocker
Senior Research Analyst at Craig-Hallum Capital Group

How are you seeing it kind of bifurcate by site of service? You know, have you seen any rotation into the HOPD? Is it too early to tell? Just any sort of sign of kind of volume, share gains, from you guys, or is just some of the noise on kind of the product dumping you mentioned kind of shielding some of that?

Joe Capper
CEO at MIMEDX

Yeah, it's way too early to start talking about market share changes just because we're all trying to see how big the market is, really. You got to remember, a fair amount of that market share or that volume that we saw last year and prior year was probably unnecessary overutilization. The market is resizing, and we know that several clinics, especially in the mobile care sector, have closed or stopped ordering skin subs altogether. If the market is reshaping, resizing, we haven't really seen significant increases in any care setting. I think, you know, volume is down pretty much across all care settings right now as the market works through this adjustment.

Chase Knickerbocker
Chase Knickerbocker
Senior Research Analyst at Craig-Hallum Capital Group

Just last for me, you know, kind of putting that all together, your guide assumes fairly meaningful, you know, sequential volume growth, at least from, you know, what I could pick up qualitatively from some of your comments. Can you just walk us through, kind of in the early stages of the year here with all, with all this noise, kind of where you're finding kind of the confidence, to anchor kind of expectations there, would be helpful for us to kind of anchor on our models. Thanks.

Joe Capper
CEO at MIMEDX

Yeah, I mean, the best color we could give you is we expect a sequential build as the year progresses, and I think it'll be pretty substantial as we go from Q1 to Q2 to Q3 and Q4. Again, we're rolling out some new products. We expect to see good, strong growth in the surgical business. Clearly, we'll see more growth in the back half of the year. I think it's going to take... We said this last year, Chase, we thought at least a couple quarters till this thing shakes out, resizes, and the dust kind of settles. We'll see who the players are that are still largely driving the industry and see if there's any other changes, like a National Coverage Determination, how that helps shape the industry.

Joe Capper
CEO at MIMEDX

It's, I think first couple of quarters are gonna be noisy, and we're gonna have to fight hard for everything we get.

Chase Knickerbocker
Chase Knickerbocker
Senior Research Analyst at Craig-Hallum Capital Group

Got it. Thanks, Joe.

Joe Capper
CEO at MIMEDX

Yep.

Operator

The next question comes from the line of Frank Takkinen with Lake Street Capital Markets. Please just use your questions.

Frank Takkinen
Senior Research Analyst at Lake Street Capital Markets

Great, thank you for taking the questions. I was hoping to follow up one on guidance. Any color you can provide on composition of revenue between wound and surgical as you look at the full year of 2026? Then as a second part of that, any color you can speak to on all of the revenue outside of Medicare wound and what that growth rate might look like specifically?

Joe Capper
CEO at MIMEDX

Yeah. Let me take a shot at it, Doug, and you can correct me if I'm wrong. I think at a high level, the split between... If you take out, I would say split between surgical and wound is probably somewhere close to 50/50 full year. Then maybe a little bit for international, a couple other parts of the business. If you... The private pay business will continue to grow at its normal rate. I don't think we've parsed that out in the past, but I would say think about it in terms of high growth in surgical business. Obviously, the wound care business is gonna compress. We'll pick up accelerated volume as we progress through the year, especially in the second half of the year, and obviously, the price is gonna level out.

Joe Capper
CEO at MIMEDX

Somewhere in the 50/50. Doug?

Doug Rice
CFO at MIMEDX

Yeah, it, I think it'll be 50/50-ish, particularly early in the year. We expect as the CMS logjam clears the way later in the year, we're gonna see more significant wound growth together with our newest product around our PRP offering as well. That should start to tip the balance a little bit more as we get through the year.

Joe Capper
CEO at MIMEDX

That's right. I think we did $140+ million in surgical business for 2025. If we continue to grow that at 20%, that business is up over $170 million. Add in a little bit for the new products that we're gonna distribute, apply to surgical market, few other things that are happening. You know, you're getting real close to $200 million of run rate revenue, especially as you exit the year. I mean, that's all pure play surgical. It's high growth. If you put a traditional surgical multiple on that piece of business of anywhere from what, you know, 5x, 6x, 7x revenue, it would imply that our stock is being burdened with the wound care business.

Joe Capper
CEO at MIMEDX

Not only are we getting no value from wound care, we're probably being ascribed negative value for the wound care business. If you just put that 5-6x multiple on the cert, on the $200 million in revenue, that's high-growth revenue, you're probably at a $7.50-$9 stock. You know, we have to get through this so the investor base gets more confidence in the fact that there's gonna be a wound care business, and the wound care business is gonna get back to a normal growth rate. That's why I said in my prepared remarks, we're looking through to 2027. We think 2027, we're back up over $400 million in revenue. We've got a mid-20% EBITDA margin, and the business is growing back at double digits.

Joe Capper
CEO at MIMEDX

We think, you know, this is gonna be a bit of a transition year, but we have to work our way through it. I think we're in much better shape than anybody else in the marketplace to weather the storm.

Frank Takkinen
Senior Research Analyst at Lake Street Capital Markets

That's great. Fantastic. Maybe on my, on my second one, wanted to ask a little bit more about surgical. What color can you provide on kind of commercial investments you're making there? Any data packages we should be looking out for in particular in surgical would be great to hear about?

Joe Capper
CEO at MIMEDX

We've been doing this for the last three years, gradually moving more dedicated sales resources into the surgical business. It's probably dedicated sales are up somewhere close to 50% over the last few years. I will continue to look for areas. It's still relatively small, we'll continue to look for areas to augment that. I don't wanna go too crazy in terms of transitioning people from wound to surgical, 'cause we do still have a very large wound care business that needs to be serviced properly, especially in a time when it's transitioning. Our patients need our help. You're absolutely right. We'll look for areas to continue to invest there. Clearly, we have more products in development. We talked about the ones we recently licensed. There's other opportunities in the marketplace as well.

Joe Capper
CEO at MIMEDX

That's a business that we're gonna continue to invest in.

Frank Takkinen
Senior Research Analyst at Lake Street Capital Markets

Got it. That's helpful. Thanks for taking the question.

Operator

Thank you. As a reminder that if you'd like to ask a question at this time, you may press star one from your telephone keypad. The next question is from the line of Bradley Bowers with Mizuho Securities. Please proceed with your questions.

Bradley Bowers
Bradley Bowers
Analyst at Mizuho Securities

Hey, thanks for taking the questions from Anthony and I. Maybe gonna zoom out here. You know, we've talked a lot about, you know, where we are in the quarter, you know, progress so far. Just wanted to kinda hear, you know, how informed the customer base is. I mean, I imagine ordering patterns have been kind of built up, you know, on the old system. You know, now that we have kind of this new rule in place, you know, maybe some of the hangover, you know, maybe at a mechanical level, I know that it's gonna be hard to predict the timing of this. Anything you can share with, you know. You shared some stuff on product dumping, but, you know, just some hangover from muscle memory and how that's affecting the business?

Joe Capper
CEO at MIMEDX

I think, you know, there's a lot of adjustments going on, right? I think Medicare put out more clarification on the fact that they tightened up their ability to pay for wasted product. We see people changing sizes of product, going from larger to smaller products. There's a, there's a ton of adjustment going on. Audits are way up, callbacks are way up. People are nervous. Again, I think there was a delay out of the gate as people were waiting for, you know, hoping, I guess, that there was gonna be more adjustments. A certain amount certainly there was a lot of uncertainty about LCDs, were the MACs gonna act as if the LCDs were in effect or not? We don't really see that.

Joe Capper
CEO at MIMEDX

Just kinda, you know, the best way I can describe it, Brad, is just a ton of noise, a ton of adjustments, you know, we're kicking and cing to get back to some level of normalcy. I think we'll get there, it's just. I know we'll get there. It's just how long will it take to get there? We have a team of folks out there that's fighting hard every single day to help our customers get there.

Bradley Bowers
Bradley Bowers
Analyst at Mizuho Securities

Got it. That's helpful. Maybe just keeping it, you know, on some of the, you know, the new pieces here, just the pipeline. It sounds like, you know, the R&D spending in the quarter and also commentary suggests that you know, the real traditional med tech pipeline here, you know, to the extent that you set in the paradigm for, you know, what new product should look like, you know, gathering data, you know, generating data, publishing that, you know, then getting the product to market, you know, should we expect it, you know, kind of a few product launches, you know, of this, you know, type of strategy, you know, a year? How do we think about, you know, the pipeline between wound and surgical? Thanks.

Joe Capper
CEO at MIMEDX

Yeah, I would say amniotic products will continue to develop internally, and you'll, you should see a couple products a year from us. As we launch product, we'll support it with good clinical data, and we'll continue to invest in that and support those products. That's kind of important point you brought up, right? Because at these lower price points, I can't imagine there's many manufacturers that can afford to support the development, innovation, R&D, et cetera, necessary to stay competitive in this space. That's why I keep coming back to, once we get through this transition period, we're gonna be one of the very few companies that have the capability and are as vertically integrated as we are to compete in this marketplace. You know, we'll see who survives.

Joe Capper
CEO at MIMEDX

We know we will, and we know we have a nice balance of business mix between our surgical and wound care business. Just, you know, we'll see how many competitors are left and how big that market is. We're very confident that we're gonna get our unfair share of the market.

Operator

Thank you. At this time, we've reached the end of our question and answer session. I'll turn the floor back to management for closing remarks.

Joe Capper
CEO at MIMEDX

Thanks, everybody. We really appreciate your continued interest in the company. We'll be back to talk to you in a few months. That concludes today's call.

Operator

Thank you. Today's call has concluded. You may now disconnect your lines at this time. We thank you for your participation. Have a wonderful day.

Analysts
    • Bradley Bowers
      Analyst at Mizuho Securities
    • Chase Knickerbocker
      Senior Research Analyst at Craig-Hallum Capital Group
    • David Turcotte
      Equity Research Analyst at Citizens Bank
    • Doug Rice
      CFO at MIMEDX
    • Frank Takkinen
      Senior Research Analyst at Lake Street Capital Markets
    • Joe Capper
      CEO at MIMEDX
    • Matt Notarianni
      Head of Investor Relations at MIMEDX
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