Organogenesis Q4 2025 Earnings Report

Organogenesis EPS Results

• Actual EPS: $0.31
• Consensus EPS: $0.21
• Beat/Miss: Beat by +$0.10
• One Year Ago EPS: N/A

Organogenesis Revenue Results

• Actual Revenue: $225.61 million
• Expected Revenue: $172.68 million
• Beat/Miss: Beat by +$52.93 million
• YoY Revenue Growth: N/A

Organogenesis Announcement Details

• Quarter: Q4 2025
• Date: 2/26/2026
• Time: After Market Closes
• Conference Call Date: Thursday, February 26, 2026
• Conference Call Time: 5:00PM ET

Organogenesis (NASDAQ:ORGO) Inc. operates as a regenerative medicine company focused on the development, manufacturing and commercialization of therapeutic solutions for wound care, surgical repair and sports medicine. The company’s product portfolio addresses a range of acute and chronic tissue repair needs, leveraging bioengineered skin substitutes, human placental-derived products and other allografts designed to promote healing and reduce scarring. Organogenesis markets its therapies to hospitals, outpatient clinics, wound care centers and other healthcare providers.

Key offerings include Apligraf, a living skin substitute for treatment of diabetic foot ulcers and venous leg ulcers; Dermagraft, a cryopreserved human fibroblast-derived dermal substitute; Grafix, a placental membrane allograft for complex and chronic wounds; and TheraSkin, a cryopreserved human skin allograft used in surgical and reconstructive procedures. These products are supported by clinical data demonstrating efficacy in accelerating wound closure and improving patient outcomes in both inpatient and outpatient settings.

Headquartered in Canton, Massachusetts, Organogenesis maintains manufacturing and distribution capabilities in North America with a network of clinical and commercial operations aimed at expanding access to advanced wound care and regenerative therapies. The company continues to invest in research and development to broaden its product pipeline and pursue collaborations that enhance its position in the global regenerative medicine market.

Organogenesis Q4 2025 Earnings Call Transcript

Key Takeaways

• Positive Sentiment: The company reported record Q4 net product revenue of $225.1 million (up 78% YoY) with advanced wound care sales up 83%, beating the high end of prior guidance and driving strong margins and operating income improvement.
• Negative Sentiment: For 2026 Organogenesis expects a 25%–38% decline in total net revenue YoY (Q1 ~50% decline) due to clinician confusion after CMS commentary on December 30, 2025, though management expects a recovery and positive adjusted EBITDA in H2 with high‑teens margins in Q4.
• Neutral Sentiment: Management views the recent CMS reimbursement reform as broadly favorable to PMA-classified products and a long‑term tailwind, but says December CMS actions created short‑term clinical confusion that temporarily reduced utilization of its PMA product.
• Neutral Sentiment: Balance sheet and strategic moves include $94.3 million in cash/restricted cash (down from $136.2M in 2024), no debt and a $75M revolver, plus capital investment in a new Smithfield, RI manufacturing/R&D center and a rolling BLA for ReNu expected to complete in H1 2026, which management calls transformational if approved.

Presentation

[Operator]

Welcome, ladies and gentlemen, to the Fourth Quarter and Full Year 2025 Earnings Conference Call for Organogenesis Holdings, Inc At this time, all participants have been placed in listen-only mode. Please note that this conference call is being recorded and that the recording will be available on the company's website for replay shortly. Before we begin, I would like to remind everyone that our remarks today may contain forward-looking statements that are based on the current expectations of management and involve inherent risks and uncertainties, that it could cause actual results to differ materially from those indicated, including the risks and uncertainties described in the company's filings with the Securities and Exchange Commission, including Item 1A, Risk Factors of the company's most recent annual report and its subsequently filed quarterly report.

[Operator]

You are cautioned not to place undue reliance upon any forward-looking statements, which speak only as of the date made. Although it may voluntarily do so from time to time, the company undertakes no commitment to update or revise the forward-looking statements, whether as a result of new information, further events, or otherwise, except as required by applicable security laws. This call will also include references to certain financial measures that are not calculated in accordance with generally accepted accounting principles or GAAP.

[Operator]

We generally refer to these as non-GAAP financial measures. Reconciliations of these non-GAAP financial measures to the most comparable measures calculated and presented in accordance with GAAP are available in the company's earnings release on the investor relations portion of our website. I would now like to turn the call over to Mr. Gary S. Gillheeney, Senior, Organogenesis Holdings, President, Chief Executive Officer, and Chair of the Board. Please go ahead.

[Gary S. Gillheeney, Senior, President, CEO, and Chair of the Board at Organogenesis]

Thank you, operator, and welcome everyone to Organogenesis Holdings' Fourth Quarter 2025 Earnings Conference Call. I'm joined on the call today by Dave Francisco, our Chief Financial Officer. Let me start with a brief agenda of what we're going to cover during our prepared remarks. I will begin with an overview of our fourth quarter revenue results and provide an update on key developments in recent months. Dave will then provide you with an in-depth review of our fourth quarter financial results, our balance sheet, and financial condition at quarter end, as well as our financial outlook for 2026, which we introduced in our press release this afternoon. I'll provide some closing comments before we open up the call for questions. Let's begin with a review of our revenue results in Q4.

[Gary S. Gillheeney, Senior, President, CEO, and Chair of the Board at Organogenesis]

We delivered record sales results, which exceeded the high end of the guidance range outlined on our third-quarter conference call, driven primarily by better-than-expected growth in sales of our advanced wound care products, which increased 83% year-over-year. Sales of our Surgical and Sports Medicine products declined 2% year-over-year, which was within the range of our guidance assumptions. The record revenue performance we delivered in the fourth quarter reflects our team's strong execution and commitment to our strategy to build upon our deep customer relationships in promoting access to existing and recently launched products. I want to acknowledge and thank our team for continuing to show up every day for our patients amidst a very challenging environment in 2025. 2025 was a significant year for the industry, with CMS enacting the most meaningful health policy changes in decades.

[Gary S. Gillheeney, Senior, President, CEO, and Chair of the Board at Organogenesis]

We continue to believe these changes are favorable to our portfolio and to our mission. CMS shifted reimbursement to support high-quality, evidence-backed PMA products while reducing payment for non-PMA products that have not undergone the most rigorous type of review, so that more patients have access to products that go beyond simple wound coverings. CMS has cited the clinical differentiation of PMA products and supports higher payment for the category to encourage innovation in the space. Their comments indicate that PMA products were never part of the problem and understand the higher development and manufacturing costs require sufficient reimbursement, not only to sustain the market availability of Apligraf and other high-value PMA products, but also to introduce new PMA products in the future.

[Gary S. Gillheeney, Senior, President, CEO, and Chair of the Board at Organogenesis]

As discussed on our earnings calls last year, Organogenesis has actively participated bringing about these changes, and we remain committed to working with CMS and other stakeholders to further expand access to life-saving technologies, as well as incentivize investment in innovation in the space and achieve long-term stability in the market. Unfortunately, withdrawal of LCD coverage policies for skin substitutes announced on December 24th, and comments regarding discarded product on December 30th, have resulted in clinical confusion and material disruption in the market. We do not believe these actions by CMS signal any step back from the original goals outlined to reform coverage and payment of skin substitutes. We believe the comments on December 30th regarding discarded products were intended to proactively address activity from certain competitors in the market that were attempting to exploit the new payment policies by focusing on larger-sized skin substitute products, specifically amniotic products.

[Gary S. Gillheeney, Senior, President, CEO, and Chair of the Board at Organogenesis]

Unfortunately, these comments have resulted in significant clinical confusion impacting utilization of our PMA-approved product in the first 2 months of 2026. We do not believe the agency's commentary on discarded products should apply to PMA products. CMS's commentary and actions in recent years have indicated that PMA products were never part of the fraud and abuse. CMS expressly stated in the final Medicare Physician Fee Schedule for calendar year 2026, announced on October 31st of 2025, that PMA products are clinically differentiated and deserve payment at a higher rate. We believe the significant clinician confusion, which is impacting utilization of our PMA-approved product, is a result of the agency's comments on December 30th and will be resolved in a way that's consistent with the policy CMS set by grouping products based on their FDA classification.

[Gary S. Gillheeney, Senior, President, CEO, and Chair of the Board at Organogenesis]

As discussed on our earnings call last year, this was a key focus of our feedback and policy recommendations to the agency. CMS has consistently indicated one of their goals in policy reform was to increase access to PMA products. While 2026 is off to a difficult start, I want to make it clear that I'm very optimistic about our future. We believe CMS's efforts to overhaul coverage and payment for our market represent a watershed moment for the industry. In the final Medicare Physician Fee Schedule for calendar year 2026, announced on October 31st, 2025, represents the most meaningful step forward towards payment reform in more than a decade.

[Gary S. Gillheeney, Senior, President, CEO, and Chair of the Board at Organogenesis]

I believe our overall position is very strong, and it is from this strong position that we are making capital investments that will support our company's future growth and continued leadership in the space. Our new manufacturing and R&D center in Smithfield, Rhode Island, is advancing well. This state-of-the-art facility, once completed, will allow us to scale manufacturing of Apligraf and PuraPly AM. Recommercialized Dermagraft, strengthening our portfolio with another clinically proven PMA product, and gives us the capacity to expand our product portfolio to treat burns with FortiShield and TransCyte, which is another PMA product. We are increasing our focus on clinical evidence by investing in trials and published studies, because science and evidence have always been core to our foundation. As coverage policies evolve, evidence will be the currency of credibility, and we intend to remain in the lead.

[Gary S. Gillheeney, Senior, President, CEO, and Chair of the Board at Organogenesis]

Looking beyond wound care, we are closer than ever to expanding our mission into entirely new markets with our ReNu program. Late last year, we initiated our rolling BLA submission, which we expect to complete in the first half of 2026. If approved by the FDA, ReNu represents a transformational opportunity, not just for Organogenesis, but for the millions of Americans living with knee osteoarthritis pain, particularly those whose only alternative today is a total knee replacement. We can change the treatment paradigm and improve the lives of these patients as part of our vision to be a force for meaningful change and set a higher expectation in healing and recovery.

[Gary S. Gillheeney, Senior, President, CEO, and Chair of the Board at Organogenesis]

With more than 40 years in regenerative medicine and a diverse evidence-based portfolio with technologies in each FDA category, we believe we are best positioned in the skin substitute market and will continue to be a leader in the space with highly innovative, highly efficacious products that deliver on our mission of advancing healing and recovery beyond our customers' expectations. With that, I'll turn it over to Dave.

[Dave Francisco, CFO at Organogenesis]

Thanks, Gary. I'll begin with a review of our fourth quarter financial results. Unless otherwise specified, all growth rates referenced during my prepared remarks are on a year-over-year basis. Net product revenue for the fourth quarter was $225.1 million, up 78% year-over-year and up 50% sequentially. As Gary mentioned, these results came in above the high end of expectations we provided on our Q3 call, which called for total revenue range of $162 million-$187 million. Our advanced wound care net product revenue for the fourth quarter was $217.2 million, up 83%. Net revenue from Surgical and Sports Medicine products for the fourth quarter was $7.9 million, down 2% year-over-year.

[Dave Francisco, CFO at Organogenesis]

Surgical and Sports Medicine product sales were up 12% for the full year 2025 period, fueled by continued strong growth in sales of our PuraPly family of products. Our total revenue results for the fourth quarter included $0.5 million of grant income related to the grant issued from the Rhode Island Life Science Hub, offsetting our employee-related costs in our Smithfield facility. This compares to no impact in the prior year period. Gross profit for the fourth quarter was $175.2 million, or 78% of net product revenue, compared to 75% last year. The change in gross profit was primarily due to a shift in product mix.

[Dave Francisco, CFO at Organogenesis]

Operating expenses for the fourth quarter were $162.3 million, compared to $116.4 million last year, an increase of $45.9 million or 39%. Excluding cost of goods sold of $49.9 million for the fourth quarter and $31.1 million last year, our non-GAAP operating expenses for the fourth quarter were $112.4 million, compared to $85.4 million last year, an increase of $27 million or 32%. The year-over-year change in operating expenses, excluding cost of goods sold, was driven by $26.3 million or 36% increase in SG&A expenses and a $1.9 million write-down of certain non-recurring expenses, offset partially by a $1.2 million or 11% decrease in research and development expenses.

[Dave Francisco, CFO at Organogenesis]

Operating income for the fourth quarter was $63.3 million, compared to operating income of $10.2 million last year, an increase of $53.1 million or 519%. Excluding non-cash amortization and certain non-recurring costs in both periods, our non-GAAP operating income was $75.9 million compared to $11.7 million last year, an increase of $64.2 million or 549% year-over-year. GAAP net income for the fourth quarter was $43.7 million compared to a net income of $7.7 million last year, an increase of $36 million. Net income to common for the fourth quarter was $31.5 million compared to a net income of $5.1 million last year.

[Dave Francisco, CFO at Organogenesis]

Net income to common includes the impact of the cumulative dividend, the non-cash accretion to redemption value of our convertible preferred stock, and undistributed earnings allocated to participating redeemable convertible preferred stock. Adjusted net income for the fourth quarter was $52.9 million compared to $8.8 million last year. Adjusted net income excludes after-tax impacts of intangible amortization, write-down of assets held for sale, disposal of construction in progress, FDA BLA fees for ReNu, PFS regulation-related charges, specifically non-recurring inventory write-down adjustments for excess and obsolete inventory, and upfront licensing costs resulting from the shift in product lines, and additional inventory write-downs related to one-time loss of a key distributor in a certain international location. We have included a detailed reconciliation of GAAP to non-GAAP adjusted income in our press release this afternoon.

[Dave Francisco, CFO at Organogenesis]

Adjusted EBITDA for the fourth quarter was $84.2 million or 37% of total revenue, compared to adjusted EBITDA of $18.2 million or 14% of total revenue last year. Turning to the balance sheet. As of December 31st, 2025, the company had $94.3 million in cash equivalents, and restricted cash with no outstanding debt obligations, compared to $136.2 million in cash equivalents, and restricted cash with no outstanding debt obligations as of December 31st, 2024. We believe that we are well capitalized with our cash on hand and other components of working capital, availability under our revolving credit facility of up to $75 million and net cash flows from product sales. Turning to our 2026 outlook, which we introduced in this afternoon's press release.

[Dave Francisco, CFO at Organogenesis]

As Gary mentioned earlier, last year, CMS announced the most meaningful health policy changes in decades, and we continue to believe these changes are advantageous to our portfolio and mission. As a leader in the industry, we expect to gain share in this new environment as we leverage the largest, most comprehensive portfolio across multiple FDA classifications. However, we are experiencing near-term challenges as we enter 2026, and the operating environment remains highly uncertain given clinician confusion surrounding CMS's comments on December 30th. As a result, we expect total net revenue to decline in the range of 25%-38% year-over-year for the full year 2026 period.

[Dave Francisco, CFO at Organogenesis]

We expect these challenges to impact our financial results in the first-half of 2026, with meaningful improvement in clinician confusion and the overall operating environment, together with the strength and breadth of our portfolio to result in substantial market share gains over the second half of 2026. Specifically, our current expectations assume first quarter revenue declines approximately 50% year-over-year, driven primarily by the significant clinician confusion and related impact on utilization of our PMA-approved product as a result of CMS's commentary on December 30th. We expect to drive strong sequential growth in the second quarter, resulting in first-half revenue declines of approximately 30%-35%.

[Dave Francisco, CFO at Organogenesis]

We expect to deliver strong sequential revenue growth in both the third and fourth quarter of 2026, which we expect will result in positive adjusted EBITDA, particularly in the fourth quarter, where we expect to drive high teens adjusted EBITDA margins. With that, I'll turn the call back over to Gary for closing remarks.

[Gary S. Gillheeney, Senior, President, CEO, and Chair of the Board at Organogenesis]

Thank you, Dave. 2025 was a challenging year, but we are proud of the team's commitment to our long-term growth strategies. Our team's strong execution resulted in total revenue and profitability for fiscal year 2025 that exceeded the high end of our initial financial guidance ranges we introduced in our fourth-quarter call last year. We also advanced our strategic priorities, most notably with our ReNu program in securing our new manufacturing facility in Rhode Island to support future growth. We expect continued strong execution and operational progress as we work through the challenging year this year.

[Gary S. Gillheeney, Senior, President, CEO, and Chair of the Board at Organogenesis]

While we expect the first-half of 2026 to be impacted as the skin substitute market adapts to sweeping changes from CMS to reform coverage and payment for skin substitutes, we expect to drive significant market share gains in the second half of 2026 and remain confident in the long-term opportunity for Organogenesis. After a period of transition in the market in 2026, we expect to return to normalized annual growth in 2025. We continue to believe we are well-positioned to win in the future. We expect to remain a leader in the space with highly innovative, highly efficacious products that deliver on our mission to provide integrated healing solutions that substantially improve outcomes while lowering the overall cost of care. I'll turn the call over to the operator to open the call up for questions.

[Operator]

Thank you. At this time, if you would like to ask a question, please signal by pressing star 11 on your telephone keypad. If you're using a speakerphone, please make sure you use your mute function is turned off to allow your signal to reach our equipment. One moment while we go for the first question. And our first question is coming from the line of Ryan Zimmerman of BTIG. Your line is open.

[Analyst at BTIG]

Hi, Gary, Dave, this is Izzy on for Ryan. Thanks for taking the questions. Just to start out, I wanted to focus on your fourth quarter results for advanced wound care. That 83% was definitely really strong and much stronger than you're anticipating. I was curious how much of that growth you believe is due to customers maybe pulling forward some of the inventory ahead of the January 1st reimbursement changes?

[Dave Francisco, CFO at Organogenesis]

Yeah, there's really not a tremendous amount of opportunity for that because obviously the products are going on to patients. We don't think there was a tremendous amount of that. What we didn't see at the back end of that was an increase in aggressive pricing tactics, which we assumed was going to happen. As you said, I mean, we beat our midpoint of our guidance by about $50 million. It was an amazing quarter for us. We were quite pleased.

[Analyst at BTIG]

Got it. That's helpful. As we start to think about 2026, can you help us kind of bridge the gap between what we saw in fourth quarter and the decline that you're forecasting for the rest of the year? I mean, how much is that purely mathematical with the reduced price of $127, or is that more of lower unit volumes due to the confusion that you're seeing in the market?

[Dave Francisco, CFO at Organogenesis]

We expect to gain share in 2026, so we're quite pleased with that. We think there's a couple of things that'll happen, is that we'll continue to see the competitive dynamics improve as we move through the year. In addition to that, obviously, we'd indicated that Q1 will be quite challenging based on the customer confusion, based on all of the elements that happened late in 2025. You know, obviously, the $127 is an element there. We'd planned for that. We expected that, so we felt that we could perform quite well with that. Also, with the LCD being pulled late last year, we figured that that would be something that we could overcome without any question.

[Dave Francisco, CFO at Organogenesis]

The last piece was, the comments that were made on December 30th, which really put some pressure on clinicians overall and really just has pulled back quite considerably. It's really that major factor that's happening there from that standpoint.

[Analyst at BTIG]

Got it. That's helpful. The last one for me, I know we are about two months into the quarter as of right now, I was curious if you're starting to see anything that's giving you confidence in those share gains as we move throughout the year. Are you seeing any of the smaller competitors maybe exiting the market, supply issues? If you can provide us on any color there, that'd be really helpful. Thanks for taking the questions.

[Dave Francisco, CFO at Organogenesis]

Yeah, sure. I, well, as I mentioned, we are seeing some aggressive pricing pressure in the quarter, which I think means that, you know, exactly what we anticipated might happen in the fourth quarter, you know, people trying to clear out their inventory and that type of thing. We are seeing some early signs of, you know, that potential change in the customer and, excuse me, competitive dynamics as we move forward. Yeah.

[Gary S. Gillheeney, Senior, President, CEO, and Chair of the Board at Organogenesis]

Just to follow up on, you know, with Dave's comment, that, you know, these issues that we see are transitory. We do think that the flood of low-cost products will not sustain throughout the year, which is one of the reasons the back half, we believe, will be better. We think the clinician confusion as it relates to, the comments on December 30th, you know, we're working our customers through that process and how to use our products, you know, with that issue. You know, we also think that, you know, there's just kind of a freeze in the market, that folks are just generally confused by the health policy changes, and they were sweeping.

[Gary S. Gillheeney, Senior, President, CEO, and Chair of the Board at Organogenesis]

You know, they basically have reduced the reimbursement for non-PMA products and shifted them to PMA products, and folks are trying to follow the reimbursement process and what does that mean for pricing and overall reimbursement? There's just a lot of information, and those types of issues are transitory, that we can work through. As Dave mentioned, $127 is something we contemplated and have no issues with. You know, we can grow nicely at $127. It's more the confusion that we have to work ourselves through.

[Analyst at BTIG]

Appreciate it. Thanks for taking the questions.

[Dave Francisco, CFO at Organogenesis]

Of course.

[Operator]

Thank you.

Participants

Executives

• Dave Francisco, CFO
• Gary S. Gillheeney, Senior, President, CEO, and Chair of the Board

Analysts

• Analyst at BTIG