What MiMedx Group (MDXG) Said on Its Q3 Earnings Call

Key Points

• Third-quarter sales fell 45% to $62 million as wound care revenue plunged 71% following Medicare reimbursement changes, despite 9% growth in surgical revenue to $40 million.
• MiMedx returned to positive adjusted EBITDA of $2 million as cost reductions improved margins sequentially, but it still posted a $9 million GAAP net loss and lowered its full-year 2026 standalone sales outlook to $250 million–$260 million.
• The pending Sanara MedTech acquisition faces an extended FTC review; MiMedx expects the deal to significantly increase its surgical mix, add more than $20 million in annual cost synergies and support an adjusted EBITDA margin above 20% if completed.

MiMedx Group NASDAQ: MDXG reported third-quarter net sales of $62 million, down 45% from a year earlier, as continued disruption in the wound care market offset growth in its surgical business. The company said surgical revenue rose 9% year over year to $40 million, while wound care revenue declined 71% to $22 million following Medicare reimbursement changes that took effect at the beginning of 2026.

Chief Executive Officer Joe Capper said the quarter reflected the company’s strategic shift toward surgical products, while wound care continues to adjust to lower reimbursement levels, pricing pressure and reduced industry volumes. Surgical products accounted for approximately two-thirds of quarterly sales.

Surgical growth offsets part of wound care decline

MiMedx said surgical product volume increased in the mid-teens percentage range during the quarter, despite what Capper described as softer procedure volumes across the industry. Sales growth was broad-based across its surgical portfolio, including AMNIOFIX, AMNIOEFFECT, particulate products and recently launched G4Derm Plus.

Capper said reported surgical revenue growth was affected by two factors. Third-quarter 2025 revenue included nearly $1 million of opportunistic business-to-business placental tissue sales that did not recur this year, while rebate adjustments increased because of short-term promotional programs and certain accounts reaching program targets. Excluding those items, the company said surgical growth would have been in the mid-teens.

For the fourth quarter, MiMedx expects high-single-digit year-over-year surgical growth. Capper said the business should face less “noise” from rebates and prior-year business-to-business placental tissue sales in the fourth quarter.

Wound care remained under pressure from the new Medicare reimbursement framework. However, MiMedx reported that wound care center volume rose more than 20% year over year and 7% sequentially, as patients continued to migrate to wound care centers and hospital outpatient settings.

Capper said it remains difficult to forecast when wound care volumes and pricing will stabilize. He said the company believes it is in a strong relative position in wound care centers, but expects the conditions seen in 2026 to likely continue into 2027. The final Medicare fee schedules, typically published in November, are the next scheduled regulatory development, although management said it does not anticipate meaningful changes from the proposed schedules.

Margins improve sequentially as costs decline

Gross profit was $50 million, compared with $95 million in the prior-year quarter, while gross margin declined to 80% from 84%. The year-over-year margin decline reflected lower wound care pricing and unfavorable product mix. Still, gross margin improved approximately 11 percentage points sequentially from the second quarter, driven by lower production costs, improved manufacturing throughput and other operational efficiencies.

Chief Financial Officer Doug Rice said MiMedx expects fourth-quarter gross margin to remain near the third-quarter level. He added that longer-term margins will depend in part on product mix, while the company expects to exit the year with improved manufacturing efficiency.

Sales and marketing expense fell to $40 million from $54 million a year earlier, reflecting cost-reduction measures, lower compensation, travel and meeting expenses, lower wound-related commissions and improved bad-debt expense. General and administrative expense increased to $19 million from $15 million, primarily due to $6 million of incremental legal costs and costs tied to the pending Sanara MedTech transaction.

MiMedx recorded a GAAP net loss of $9 million, or $0.06 per share, compared with GAAP net income of $17 million, or $0.11 per share, in the prior-year period. Adjusted net loss was $1 million, or $0.01 per share, compared with adjusted net income of $23 million, or $0.15 per share, a year earlier.

Adjusted EBITDA was $2 million, or 3% of net sales, compared with $35 million, or 31% of sales, a year earlier. The result represented an approximately $10 million sequential improvement and a return to positive adjusted EBITDA after the company’s cost reductions. MiMedx expects modest sequential adjusted EBITDA growth in the fourth quarter.

Sanara acquisition faces extended review

MiMedx reiterated its commitment to acquiring Sanara MedTech, though the Federal Trade Commission issued a second request for information that extends the Hart-Scott-Rodino waiting period. Capper said interactions with the FTC have been positive but did not provide a closing timeline, saying the timing is outside the company’s control.

The company said Sanara generates more than $100 million in revenue from surgical procedures and that the combination would shift MiMedx’s revenue mix to approximately 75% surgical and 25% wound care. Management expects the combined company to produce run-rate revenue of close to $400 million in its first full year, with double-digit growth, more than $20 million in annualized cost synergies and an adjusted EBITDA margin above 20%.

Rice said the company still views the synergy and margin objectives as first-year targets, with the timing dependent on when the transaction closes. MiMedx has a commitment from Hayfin Capital for a six-year, $300 million first-lien senior secured term loan to help fund the cash portion of the deal. The company has begun incurring a ticking fee because of the extended closing timeline.

MiMedx ended the quarter with $121 million in net cash, up $2 million sequentially. During the quarter, it repaid the remaining $17 million principal balance on its Citizens Term Loan and ended the period with no borrowings under its term loan or revolving credit facilities.

Legal and product-development updates

The company said a U.S. District Court in the Northern District of Georgia vacated the Food and Drug Administration’s determination that AXIOFILL, MiMedx’s human placental-derived particulate product, should be classified as a biological product rather than a Section 361 product. The matter was remanded to the FDA for further consideration.

MiMedx also announced a $25 million settlement and licensing agreement with a party it alleged infringed its patent portfolio. The company said two other patent cases remain in litigation and that claim construction rulings in those cases were favorable to its arguments. It also said an effort by one defendant to invalidate asserted patents through an ex parte re-examination was unsuccessful, with the U.S. Patent and Trademark Office affirming the patents’ validity.

In product development, MiMedx said it has made substantial progress on two 510(k) submissions for surgical products and expects at least one clearance before year-end. The company also continues to fund randomized controlled trials for two recent product introductions.

For full-year 2026, MiMedx updated its standalone sales outlook to a range of $250 million to $260 million. The outlook excludes any potential contribution from the pending Sanara acquisition.

About MiMedx Group (NASDAQ:MDXG)

MiMedx Group, Inc NASDAQ: MDXG is a biotechnology company focused on developing and commercializing human placental tissue allografts for wound care and other medical applications. The company's products are derived from donated placental tissue and are processed using its proprietary PURION technology platform.

MiMedx's portfolio includes tissue-based products such as EPIFIX and EPICORD, which are used primarily by healthcare professionals in the management of chronic and acute wounds, including diabetic foot ulcers and other hard-to-heal wounds.

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