Artivion Q2 Earnings Call Highlights

Key Points

• Artivion’s Q2 revenue rose 9% to $125.8 million on a constant-currency basis, driven by 12% growth in stent grafts and 18% growth in On-X valves. Adjusted EBITDA increased 7% to $26.4 million, though the margin fell to 21% due to higher R&D and Endospan-related costs.
• The company completed its Endospan acquisition and received FDA premarket approval for the AMDS Hybrid Prosthesis. Artivion is preparing for a full U.S. NEXUS aortic arch stent graft launch in January 2027, targeting an estimated $100 million market opportunity.
• Full-year 2026 guidance was maintained at 7%–11% adjusted constant-currency revenue growth and $92 million–$99 million in adjusted EBITDA. Free cash flow fell to negative $12 million as the company funded acquisition costs, manufacturing expansion and preparation for the NEXUS launch.

Artivion NYSE: AORT reported second-quarter 2026 revenue of $125.8 million, up 9% year over year on a constant-currency basis, as growth in stent grafts and On-X heart valves offset modest declines in BioGlue. Adjusted EBITDA rose about 7% to $26.4 million, while adjusted EBITDA margin declined roughly 90 basis points to 21% amid higher research and development spending and costs related to the Endospan acquisition.

Chief Executive Officer Pat Mackin said the quarter included two major strategic milestones: FDA premarket approval for the AMDS Hybrid Prosthesis in late June and the completion of Artivion’s acquisition of Endospan and its NEXUS aortic arch stent graft platform.

“Through the Q2 of 2026, we continue to execute on our strategy designed to drive long-term profitable growth through an expanding and clinically differentiated product portfolio,” Mackin said.

Stent Grafts and On-X Drive Growth

Stent graft revenue increased 12% on a constant-currency basis, accelerating from 10% growth in the first quarter despite what management described as a more difficult comparison period. Mackin said AMDS set sales improved from the first quarter and implant trends remained strong.

The AMDS PMA approval is expected to simplify adoption at new accounts by eliminating the institutional review board process that had been required under the product’s prior humanitarian device exemption. The third quarter will be the first full quarter in which AMDS is sold in the United States under its full PMA.

Management said some hospitals had faced friction around the initial approximately $100,000 investment required to stock AMDS sets. Mackin said the company spent the second quarter studying those barriers and developing programs to help accounts move through the adoption process. The PMA also expands Artivion’s ability to market clinical information beyond data included in the earlier HDE label, including data related to malperfusion outcomes.

On-X revenue rose 18% year over year on a constant-currency basis. Mackin attributed the performance to global market-share gains and growing use among younger patients following data that the company said support mechanical valves over bioprosthetic valves for patients under age 65. Management said it continues to focus on physician education, including outreach to cardiac surgeons and cardiologists.

• Stent graft revenue increased 12% year over year.
• On-X revenue increased 18%.
• Tissue processing revenue increased 1% to approximately $26 million.
• BioGlue revenue declined 2%, which management attributed partly to normal variability in distribution stocking orders.

Endospan Acquisition Supports 2027 NEXUS Launch

Artivion completed the Endospan acquisition during the second quarter, earlier than management had previously anticipated. The acquisition added the NEXUS aortic arch stent graft system, which is approved to treat chronic aortic dissections and represents an estimated $100 million U.S. market opportunity, according to the company.

Mackin said NEXUS is a platform rather than a single product and supports three additional PMA programs in development. Artivion plans to spend the remainder of 2026 building inventory, obtaining hospital value-analysis committee approvals, training surgeons and expanding a dedicated vascular commercial team ahead of a full U.S. launch planned for January 2027.

Management expects only inconsequential U.S. NEXUS revenue during 2026, though it may perform some ad hoc cases before the planned commercial rollout. Mackin said the target universe comprises roughly 150 centers, allowing the company to support the launch with a relatively small specialized vascular team working alongside its existing cardiac sales organization.

Artivion also continued enrollment in the ARTIZEN clinical trial for its Arcevo left subclavian artery product. The company has enrolled 30 patients in a non-randomized trial expected to enroll up to 132 patients at 30 U.S. and European centers. Management anticipates completing enrollment in mid-2027 and, assuming the trial meets its endpoints, expects potential FDA approval in 2029.

Margins, Cash Flow and Balance Sheet

Second-quarter gross margin was 64%, compared with 64.7% a year earlier. Chief Operating Officer and Chief Financial Officer Lance Berry said favorable pricing was offset by unfavorable geographic mix and higher early production-ramp costs at the company’s Austin facility.

Research and development expense rose to $9 million, or 7.2% of sales, from $7.1 million, or 6.3% of sales, in the prior-year period. The increase reflected investments in the NEXUS pipeline and the acquired Endospan operations.

Free cash flow was negative $12 million, compared with positive $11.7 million in the prior-year quarter. Berry said the result included $1.5 million in Endospan diligence and integration costs as well as a $10.2 million post-acquisition payment for contractually required Endospan transaction bonuses. The company also is investing in On-X manufacturing capacity and NEXUS launch preparation.

As of June 30, Artivion had $77.3 million in cash and $363 million in debt, net of $6.6 million of unamortized loan origination costs. Its net leverage ratio was 3.1, reflecting $150 million of borrowings used primarily to fund the Endospan acquisition. Berry noted that a $25 million AMDS PMA milestone payment was made in July and was not included in the quarter-end leverage calculation.

Guidance Maintained

Artivion reiterated its 2026 outlook for adjusted constant-currency revenue growth of 7% to 11%, equivalent to reported revenue of $480 million to $496 million. The forecast assumes foreign exchange will provide about a one-percentage-point tailwind to reported revenue.

The company also reaffirmed adjusted EBITDA guidance of $92 million to $99 million. That outlook includes an expected approximately $8 million of Endospan-related costs during 2026 for launch activities, commercial infrastructure, ongoing R&D and clinical spending.

Berry said a strong preservation-services quarter included about $2 million of revenue that largely reflected the timing of tissue releases that otherwise may have occurred in the third quarter. Management expects a difficult year-over-year comparison for preservation services in the third quarter before conditions normalize in the fourth quarter.

Looking to 2027, Berry said Artivion expects NEXUS to begin making meaningful revenue contributions following its planned January launch. Management expects the combined business to be EBITDA-neutral for 2027 as NEXUS revenue ramps and R&D and clinical spending move toward a targeted range of 7% to 8% of sales.

About Artivion (NYSE:AORT)

Artivion, Inc NYSE: AORT is a global medical technology company that develops, manufactures and markets implantable tissue products and surgical devices for cardiac and vascular surgery. The company’s portfolio includes biologic implants derived from human and animal tissue, such as allografts and xenografts, as well as synthetic scaffolds and surgical adhesives. These products are designed to repair, reinforce or replace damaged cardiovascular and thoracic tissues during procedures such as aortic repair, heart valve surgery and vascular reconstruction.

Originally founded in 1984 under the name CryoLife, the company rebranded as Artivion in early 2022 to reflect its broader mission in cardiovascular innovation.

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