Artivion Q3 Earnings Call Highlights

Key Points

• Revenue grew 9% in constant currency to $123.8 million, led by stent grafts and On-X valves, but adjusted EBITDA fell about 8% to $22.5 million. Artivion narrowed its 2026 outlook to 8%–10% adjusted constant-currency revenue growth and $93 million–$98 million in adjusted EBITDA.
• Margins were pressured by unfavorable product mix and higher manufacturing costs as On-X and NEXUS production ramps; gross margin declined to 61.4% from 65.6%. Free cash flow was negative $17.6 million, including a $13.3 million AMDS approval-milestone payment.
• Artivion expects to launch its NEXUS aortic repair system in the U.S. in January 2027, while AMDS adoption is progressing despite hospital purchasing delays for its $100,000 starter sets. The company is also preparing surgeon training and building inventory for NEXUS.

Artivion NYSE: AORT reported 9% constant-currency revenue growth in the third quarter of 2026, while adjusted earnings declined as the medical device maker invested in manufacturing and prepared for the U.S. launch of its NEXUS aortic repair system.

Revenue rose to $123.8 million, with growth led by the company’s stent graft and On-X heart valve businesses. Adjusted EBITDA fell approximately 8% to $22.5 million from $24.6 million a year earlier. Artivion also narrowed its full-year revenue growth and adjusted EBITDA outlooks.

CEO Pat Mackin said U.S. implants of the company’s AMDS product increased from the second quarter following premarket approval, though sales of starter sets remained challenged by hospital purchasing processes. Meanwhile, the company expects to launch NEXUS commercially in the United States in January 2027.

Manufacturing investment weighs on margins

Stent graft revenue increased 12% on a constant-currency basis, matching the prior quarter’s growth rate, while On-X revenue rose 13%. Tissue processing revenue declined 0.3%, and BioGlue revenue edged up 0.1%.

PerClot contributed approximately 1 percentage point to overall revenue growth; excluding it, constant-currency growth was 8%. Artivion’s transitional manufacturing and supply agreement with Baxter is scheduled to expire in February 2027, with the final purchase expected in December 2026.

Gross margin fell to 61.4% from 65.6% a year earlier. COO and CFO Lance Berry attributed the decline to unfavorable product mix and higher costs at the On-X and NEXUS manufacturing facilities as production ramps. Adjusted EBITDA margin decreased approximately 350 basis points to 18.2%, reflecting those gross margin pressures and costs associated with the acquired Endospan business.

Berry said the company expects fourth-quarter gross margin to be more in line with its full-year average, supported by increasing production volumes and the absence of certain period charges recorded in the third quarter.

Free cash flow was negative $17.6 million, compared with positive $17.7 million a year earlier. The latest quarter included a $13.3 million operating cash outflow related to the AMDS approval milestone and about $2 million in Endospan integration expenses. Artivion ended September with $48.4 million in cash and $363.8 million in debt, net of unamortized loan origination costs.

AMDS purchasing hurdles and NEXUS launch

Mackin said AMDS starter sets require an upfront investment of $100,000, and that obtaining purchase orders has taken longer than expected even after value analysis committee approvals. He described the obstacles as administrative rather than clinical and said the company was working on programs to reduce the barriers.

“We continue to see the implants doing better in Q4 than Q3,” Mackin said, adding that the company was still bringing on new accounts. He did not provide a specific timetable for resolving the purchasing delays.

For NEXUS, Artivion is building inventory, expanding its U.S. sales team and preparing surgeon training. Mackin said the first training event is planned for December and that the launch will build throughout 2027 as surgeons schedule cases.

Unlike AMDS, NEXUS does not require hospitals to purchase an upfront starter set, Mackin said. He also said some early cases had proceeded without value analysis committee approval, although the company continues to pursue those approvals.

Outlook and clinical pipeline

Artivion narrowed its 2026 adjusted constant-currency revenue growth forecast to 8%–10%, representing reported revenue of $484 million to $492 million. It also narrowed its adjusted EBITDA outlook to $93 million–$98 million. The forecast assumes inconsequential U.S. NEXUS revenue in 2026.

Berry said the end of the PerClot agreement is expected to create a 2-percentage-point revenue growth headwind and a 4-percentage-point EBITDA growth headwind in 2027. He also expects foreign exchange to shift to at least a 1-percentage-point headwind in the fourth quarter after being neutral in the third.

In its clinical pipeline, Artivion has enrolled 56 patients in the ARTIZEN trial of its Arcevo LSA product and expects to complete enrollment in mid-2027. Mackin said results from the first 30 patients are scheduled to be presented at the AATS Aortic Symposium on November 19. Assuming the trial meets its endpoints after one year of follow-up, the company anticipates FDA approval in 2029.

About Artivion (NYSE:AORT)

Artivion, Inc NYSE: AORT is a medical device and biotechnology company focused on developing and commercializing products used in cardiac and vascular surgery. Its portfolio includes implantable devices, surgical sealants, and human tissue products designed to treat diseases of the heart, aorta, and peripheral blood vessels.

The company's products include On-X mechanical heart valves, aortic and vascular grafts, BioGlue surgical adhesive, and stent graft systems for aortic repair. Artivion also provides tissue preservation services and distributes cardiac and vascular allografts for use in reconstructive procedures.

Artivion was formerly known as CryoLife, a company founded in 1984, and adopted the Artivion name in 2021 to reflect its broader focus on aortic and cardiac care.

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