TransMedics Group NASDAQ: TMDX reported first-quarter 2026 revenue of $174 million, up about 21% year over year and 8% sequentially, as the company continued to expand adoption of its Organ Care System (OCS) platform and its National OCS Program (NOP) logistics model while increasing investment in a series of growth initiatives. President and CEO Waleed Hassanein said 2026 is “a critical and transformational year” as the company advances clinical programs in heart and lung, develops its next-generation Gen 3.0 platform, and broadens its organ preservation offering beyond warm perfusion.
Q1 results and cash position
Hassanein said TransMedics delivered “a solid quarter” despite “broader volatility” and what he described as a “transient negative impact” from the U.S. Transplant Modernization Act on organ procurement organization (OPO) performance and overall donor numbers. The company reported adjusted operating profit of approximately $18.1 million, or 10.4% of total revenue, and ended the quarter with $462 million in cash and cash equivalents.
CFO Gerardo Hernandez said growth was “led by strong liver performance, continued progress in heart, and increasing contribution from our integrated logistics platform.” He reported U.S. transplant revenue of approximately $167 million, up 20% year over year and 8% sequentially, and international revenue of approximately $5.6 million, up 39% year over year and 17% sequentially. By organ in the U.S., Hernandez said liver contributed about $139 million, heart about $26 million, and lung about $2 million.
Total product revenue was approximately $108 million, up 22% year over year and 8% sequentially, while service revenue was approximately $66 million, up 19% year over year and 9% sequentially. Transplant logistics services revenue was approximately $32 million, up from $26.1 million in the prior-year quarter and $28.6 million in the fourth quarter of 2025, according to Hassanein.
Margins and increased investment
Gross margin was approximately 58%, “broadly consistent with recent quarters” but down about 331 basis points year over year, Hernandez said. He attributed the year-over-year decline primarily to “increased internal supply chain activity to replenish inventory across our hubs” and to position inventory for the DENOVO and ENHANCE clinical programs, along with continued NOP investment and certain one-time items. Hernandez said he expected these factors to normalize in coming quarters and characterized Q1 as “more the floor rather than the ceiling” for gross margin.
Adjusted operating expenses were approximately $83 million, up about 42% year over year and 17% sequentially. Hernandez said adjusted R&D increased about 45% year over year, driven by development of the OCS Kidney program and the next-generation OCS platform, as well as product development activity in Mirandola, Italy, and headcount growth. Adjusted SG&A rose about 41% year over year, reflecting investment in the NOP network and IT, the initial impact of the company’s new headquarters in Somerville, and consulting and market research tied to international expansion.
On an adjusted basis, the company posted net income of approximately $11 million, or $0.30 per diluted share, and Hernandez said cash generation from operations “remained solid.”
CHOPS device positioned as additive and trial enabler
A central theme of the call was the company’s newly unveiled TransMedics Controlled Hypothermic Organ Preservation System (CHOPS), introduced at the ISHLT conference in April. Hassanein described CHOPS as “a true active cooling device” designed to provide a temperature range of four to 12 degrees Celsius and positioned it as a more controlled alternative to the “styrofoam boxes” commonly used in cold static storage.
TransMedics plans to use CHOPS as the control arm device in its ENHANCE Heart and DENOVO Lung clinical programs once an IDE supplement is approved. Hassanein said the company expects to file the IDE supplement “within the next few weeks” and expects approval and implementation in early Q3 2026. In parallel, he said TransMedics intends to file a 510(k) application to clear CHOPS for commercial use in the U.S.
In response to questions about potential cannibalization, Hassanein said CHOPS is “not cannibalizing anything” and is aimed at short-transport cases that currently rely on cold storage. He pointed specifically to donation-after-brain-death (DBD) hearts preserved for under four hours, saying the product is “additive to our market share” for short runs currently conducted with static cold storage. He also said TransMedics has not decided whether CHOPS will be rolled out for liver and kidney, adding that “CHOPS is specifically designed for the cardiothoracic platform.”
Hassanein also pushed back on concerns about using CHOPS as a trial control, arguing that it elevates standards by providing validated temperature control. He said CHOPS is intended to be an “FDA-registered and regulated” device and added that, by the time trial results are interpreted, CHOPS “will not be investigational,” referencing discussions with the FDA.
Clinical programs, donor volatility, and guidance
Hassanein said Q1 performance did not include contributions from ENHANCE and DENOVO “due to the enrollment timing.” During Q&A, he said ENHANCE Part A was “slightly ahead of schedule,” while the company maintained its “12-18 months timeframe” for ENHANCE Part B and DENOVO enrollment. He said DENOVO is “actively enrolling” and that enrollment could accelerate once CHOPS is introduced as a control-arm option.
On donor trends, Hassanein said overall deceased donor numbers were below expectations and below last year through Q1 and that April “continued.” He said TransMedics expected the decline to reverse but could not predict timing, describing the volatility as tied to dynamics surrounding the modernization effort.
TransMedics reiterated full-year 2026 revenue guidance of $727 million to $757 million, which Hassanein said implies 20% to 25% growth over 2025. He said the company may revisit guidance later in the year depending on visibility into ENHANCE and DENOVO enrollment and broader ecosystem dynamics. Hernandez said the company continues to view its long-term gross margin profile as “around the 60%” level, while acknowledging near-term pressure from investments.
Hernandez also said the company expects an adjusted operating margin “up to around 250 basis points” below 2025 levels, reflecting its planned 2026 investment ramp. He declined to provide more detail on margin phasing.
Expansion initiatives: CMS comments, Europe, and Gen 3.0 kidney
Management highlighted several longer-term initiatives underway in 2026 and beyond:
- U.S. transplant system modernization: Hassanein said TransMedics submitted comments in March 2026 on CMS proposed rulemaking, including advocating for allowing new entities with appropriate infrastructure to participate as multi-regional or national OPOs, supporting portable perfusion technologies, and allowing for-profit participation subject to performance metrics and disclosure requirements. He said that if CMS adopts that direction, TransMedics “fully intend[s] to submit bids” for donor service areas tied to decommissioned OPOs later this year or early next.
- NOP Europe buildout: Hassanein said the company is building infrastructure in Italy across four hubs, pursuing air and ground logistics tenders in regions of Italy, and engaging stakeholders in the Netherlands and Belgium to establish additional NOP hubs. He also said TransMedics entered a definitive agreement with European charter operator PAD Aviation to help create a dedicated European transplant air logistics network, noting PAD operates Embraer Phenom 300E aircraft, the same model used in the company’s U.S. fleet.
- OCS Kidney and Gen 3.0 platform: Hassanein described kidney as the company’s “next frontier,” and said TransMedics expects it to be the first organ to launch on its OCS Gen 3.0 technology platform. He said the company hopes to introduce a final design and “a potentially working device” at the American Transplant Congress in Boston in late June, and is targeting early 2027 for a U.S. IDE submission.
- Gen 3.0 upgrades for heart, lung, and liver: Hassanein said the company is developing Gen 3.0 upgrades for existing systems in parallel with kidney, with goals that include lower part counts, improved reliability, and less reliance on third-party suppliers.
Looking ahead, Hassanein said the company expects near-term financial results to reflect “necessary investments in people, infrastructure, and technology development,” but said TransMedics remains focused on long-term growth and broader organ utilization. “We’re not stopping here,” he said in closing remarks.
About TransMedics Group NASDAQ: TMDX
TransMedics Group, Inc is a medical device company headquartered in Andover, Massachusetts, that specializes in advanced organ preservation and transport systems for transplantation. The company's flagship technology, the Organ Care System (OCS), maintains donor organs in a near-physiologic, warm, beating state during transportation, with the aim of extending preservation times and improving post‐transplant outcomes. TransMedics' solutions address a critical need in transplantation by reducing ischemic injury and expanding the donor organ pool.
TransMedics currently markets two commercially available OCS platforms.
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