AxoGen NASDAQ: AXGN reported first-quarter 2026 revenue of $61.5 million, up 26.6% year over year, as management pointed to broad-based growth across its target markets and continued adoption of its product algorithm led by Avance Nerve Graft. President and CEO Michael Dale said the company’s performance reinforced “the relevance of our market development strategies and the strength of our commercial execution,” adding that AxoGen believes it is well positioned to achieve its objectives for 2026.
Adjusted EBITDA was $5.7 million in the quarter, and the company ended March 31, 2026 with $103.6 million in cash equivalents, restricted cash and investments, according to CFO Lindsey Hartley. AxoGen also raised its full-year 2026 revenue outlook to at least $270 million, which implies growth of at least 20%.
Quarterly results and drivers of growth
Dale framed the quarter’s progress around six strategic priorities, starting with revenue growth and operating leverage. He attributed the quarter’s performance to “strong demand for Avance and continued adoption of our broader product algorithm across all three target markets,” and said salesforce productivity was ahead of plan. Dale also highlighted a meaningful increase in active surgeon count, which the company views as an indicator of broader adoption within institutions.
When asked about the apparent deceleration implied by the full-year growth guide versus first-quarter growth, Dale pointed to tougher comparisons later in the year and emphasized that results depend on continued execution each quarter. “Very, very confident about the future, very confident about the guidance we just raised, but mindful of the fact that each quarter is a productivity growth expectation that we need to continue to execute against,” he said.
Market development across extremities, OMF/head & neck, and breast
Dale said AxoGen delivered double-digit year-over-year growth in each of its three target markets during the first quarter:
- Extremities: Dale said the segment delivered strong double-digit growth, reflecting ongoing adoption across traumatic and chronic peripheral nerve injury cases.
- Oral maxillofacial (OMF) and head & neck: Management cited continued momentum, supported by investments in professional education and increased focus on head and neck procedures.
- Breast: Dale called breast AxoGen’s fastest-growing market in the quarter, citing momentum in ReSensation adoption and implant-based reconstruction volumes, as well as contributions from sales representatives added in summer 2025 as they ramped.
Dale reiterated AxoGen’s total addressable market framework introduced at its March 2025 Analyst Day, describing the company’s approach to estimating procedure volumes and discounting cases where its products would not be indicated. He said the company views these as “markets still in development” and emphasized that each market has different patient journeys, training dynamics, referral patterns and reimbursement environments.
Commercial build-out, account focus, and surgeon education
AxoGen ended the first quarter with 146 sales representatives across all markets, which Dale said reflected disciplined expansion in line with the full-year plan. He noted that representatives hired in 2025 were progressing toward independence and breakeven within the company’s targeted six-to-nine-month window.
In response to a question on sales force composition, Dale said AxoGen had 26 breast representatives and three regional sales directors, and 120 extremities representatives and 15 regional sales directors. He also noted four field-based market managers supporting OMF and head and neck, and a prostate effort supported by three clinical development managers and one director. Dale said the company could consider hiring ahead of plan depending on its ability to maintain “quality control logistically.”
On commercial execution, Dale said high-potential accounts represented 60% of total revenue in the first quarter and 48% of total revenue growth, which was below the company’s full-year target of 60% due to strong breast performance in accounts not always categorized as high-potential. He said active surgeon count in high-potential accounts increased by more than 70 during the quarter.
The company conducted four professional education programs in the quarter—two in breast, one in extremities, and one in OMF/head and neck—and reiterated full-year training targets across its markets. In response to a question on training conversion, Dale said the historical conversion rate in breast has been above 75%.
Avance BLA transition and payer coverage updates
Management also discussed progress tied to its standard-of-care objectives, including payer coverage and the FDA Biologics License Application (BLA) approval for Avance obtained in December 2025. Dale said the company has been re-engaging payers where prior objections were based on the perception that Avance was experimental.
Among the payer updates discussed:
- Cigna: Dale said Cigna extended explicit broad coverage for Avance for peripheral nerve repair in extremities and post-mastectomy breast reconstruction for approximately 16 million members. He quoted Cigna’s policy stating Avance is “considered medically necessary” in certain mastectomy or reconstruction procedures when nerves cannot be preserved.
- Elevance (Anthem): Dale said Elevance removed Avance from its experimental/investigational list but applied utilization management criteria limiting usage to 5–25 millimeter nerve gaps, aligned with the RECON pivotal trial. He said the company is working with surgeons to educate Elevance and address the criteria.
Rick, speaking on the call, said the company was surprised by Elevance’s gap-length criterion and called it “surgically inappropriate” to pre-authorize based on gap length because it is not known until the operating room. He said AxoGen has engaged with Elevance and expects an update “hopefully by the end of this year or early next year.”
Management said the raised 2026 guidance does not assume material benefit from additional payer coverage decisions beyond what is already known. Dale noted that coverage changes take time to flow through behavior and contracting. “We know it’s all going to be a net positive in a significant way, but it is not an event that happens immediately,” he said.
On coverage breadth, Rick said AxoGen’s BLA label is broad and the company expects payer criteria to remain broad, while staying engaged if denials arise. In another exchange, Rick said an Aetna coverage decision would bring coverage into the “mid-90s” percentage-wise, and he said the company expects something “by the end of June” based on historical update timing.
On the BLA product transition, Dale said AxoGen is “now selling a BLA-produced product,” adding there is no pricing change and “effectively, it’s business as usual.” He and other executives said the transition is largely invisible to customers and does not change hospital approval processes.
Margins, expenses, and updated 2026 outlook
Hartley reported gross profit of $46.2 million and gross margin of 75.2% in the first quarter, reflecting the company’s pre-biologic launch cost structure. She said incremental product cost pressure is expected beginning in the second quarter as biologic Avance enters the channel, and reaffirmed full-year gross margin guidance of 74% to 76%. In response to a question on quarterly cadence, Hartley said the company expects second-quarter gross margin to be at the lower end of that range due to transition pressures.
Operating expenses rose to $49.0 million from $36.6 million a year earlier. Hartley attributed the increase primarily to higher compensation costs, including stock-based compensation tied to certain performance stock units, as well as investments in sales and marketing. Research and development expense increased to $7.5 million, and general and administrative expense rose to $12.9 million.
Net loss was $19.6 million, or $0.38 per share, compared with a net loss of $3.8 million, or $0.08 per share, in the year-ago quarter. Hartley said results included a one-time loss of $16.8 million related to extinguishing the company’s debt facility in January. Adjusted net income was $4.1 million, or $0.07 per share, compared with an adjusted net loss of $0.9 million, or $0.02 per share, in the prior-year quarter.
Hartley also reviewed AxoGen’s capital actions, noting an upsized public offering in January that generated $133.3 million in net proceeds, with $69.7 million used to fully retire the term loan. She said the company now has “a clean capital structure and no debt obligations.” While the company experienced higher seasonal cash burn in the first quarter, Hartley reiterated that AxoGen expects to be free cash flow positive for full-year 2026.
For 2026, AxoGen raised guidance to at least 20% revenue growth, or at least $270 million in revenue, while maintaining gross margin guidance of 74% to 76% and reiterating expectations for full-year free cash flow positivity.
In closing remarks, Dale said the company’s first quarter reflected “disciplined execution of our strategic plan” as it works to make restoration of peripheral nerve function an expected standard of care.
About AxoGen NASDAQ: AXGN
AxoGen, Inc is a Florida-based medical technology company that develops and commercializes surgical solutions for peripheral nerve damage. Founded in 2002 and headquartered in Alachua, Florida, the company focuses on restoring nerve function and improving patient outcomes through innovative biologic and engineered products. AxoGen's offerings address a range of traumatic and iatrogenic injuries, offering alternatives to traditional nerve autografts.
The company's core product portfolio includes the Avance® Nerve Graft, a decellularized human nerve allograft designed to bridge nerve gaps without the need for a secondary harvest site, and the Axoguard® Nerve Connector and Protector devices, which facilitate nerve coaptation and protect repaired sites from surrounding scar tissue.
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