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01/10 17:04
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call revealed strong financial performance, especially in Med Tech, with a 26.1% revenue increase. The company raised guidance for Med Tech, driven by Mechanical Thrombectomy and NanoKnife, indicating confidence in future growth. Despite increased R&D and SG&A expenses, improved operating leverage and profitability were noted. Positive Q&A insights on sales force expansion and clinical trials further support optimism. However, management's reluctance to provide specific metrics for NanoKnife and trial timelines tempers enthusiasm slightly, leading to a positive but not strong positive sentiment.
Revenue Revenue increased 12.2% to $75.7 million year-over-year, driven by growth across both Med Tech and Med Device segments.
Med Tech Revenue Med Tech revenue was $35.3 million, a 26.1% increase year-over-year, driven by strong performance in platforms like Auryon, Mechanical Thrombectomy, and NanoKnife.
Med Device Revenue Med Device revenue was $40.4 million, an increase of 2.3% year-over-year, attributed to sustained performance in the segment.
Auryon Revenue Auryon platform contributed $16.5 million in revenue, growing 20.1% year-over-year, supported by increased customer base and international adoption following CE Mark approval.
Mechanical Thrombectomy Revenue Mechanical thrombectomy revenue increased 41.2% year-over-year to $11.3 million, with AngioVac revenue at $8 million (37.1% increase) and AlphaVac revenue at $3.3 million (52.3% increase).
NanoKnife Revenue NanoKnife revenue was $6.4 million, a 26.7% increase year-over-year, driven by expanded prostate indication and increased interest from urologists.
Gross Margin Gross margin for the first quarter of FY '26 was 55.3%, a 90 basis point increase year-over-year, driven by pricing initiatives, sales mix shift to higher-margin Med Tech products, and operating efficiencies.
Operating Expenses Total operating expenses were $52.5 million, down to 69.4% of sales compared to 74% of sales last year, reflecting improved operating leverage.
Adjusted Net Loss Adjusted net loss for the first quarter of FY '26 was $4.2 million, compared to $4.4 million in the first quarter of FY '25, showing improvement due to Med Tech revenue growth and expense management.
Adjusted EBITDA Adjusted EBITDA was $2.2 million, compared to an adjusted EBITDA loss of $152,000 in the first quarter of FY '25, reflecting improved profitability.
Auryon: Continued exceptional growth, growing well above market rates. Plans to expand into the coronary market and unlock new opportunities through the AMBITION BTK study.
Mechanical Thrombectomy: Achieved over 40% growth year-over-year. Strong customer growth for AlphaVac and AngioVac, with new hospitals approving products.
NanoKnife: Reported over 25% growth. Expanded prostate indication and upcoming CPT I code effective January 1. Launching an AARP ad campaign to increase awareness.
Med Tech Segment: Revenue grew 26%, marking the fourth consecutive quarter with over 20% growth. Expansion into hospital markets and international adoption following CE Mark approval.
Gross Margin: Improved to 55.3%, driven by pricing initiatives, sales mix shift to higher-margin products, and operational efficiencies.
Cash Utilization: Better than expected cash utilization in Q1. Expecting to be cash flow positive for the full fiscal year.
Strategic Transformation: Shifted product portfolio to compete in large, fast-growing markets. Focused on increasing Med Tech segment's revenue share, which grew from 41% to 47% year-over-year.
Tariff Expenses: The company incurred $1.7 million in tariff expenses in Q1, with an expected total of $4 million to $6 million for fiscal year 2026. These tariffs negatively impact gross margins by approximately 220 basis points.
Cash Utilization: The company experienced a significant cash utilization in Q1, reducing cash reserves from $55.9 million to $38.8 million. Although cash flow is expected to improve in subsequent quarters, this poses a short-term liquidity challenge.
Manufacturing Constraints: Labor constraints at the Queensbury facility necessitated the use of third-party manufacturing partners, which could introduce risks related to quality control and supply chain reliability.
Regulatory and Market Expansion Risks: The company is investing in regulatory expansion and market entry initiatives, such as the AMBITION BTK study and plans to enter the coronary market. These initiatives carry inherent risks, including regulatory approval delays and market adoption challenges.
R&D and SG&A Expenses: Increased spending on R&D and SG&A, particularly for expanding the Mechanical Thrombectomy sales force, could strain profitability if revenue growth does not meet expectations.
Dependence on Key Products: The company’s growth is heavily reliant on key products like Auryon, AlphaVac, and NanoKnife. Any disruption in these product lines, such as competitive pressures or technological obsolescence, could significantly impact financial performance.
Revenue Expectations: Net sales for fiscal 2026 are expected to be in the range of $308 million to $313 million, raised from the previously issued range of $305 million to $310 million. This represents growth of between 5% and 7% over fiscal 2025 revenue of $292.7 million.
Segment Revenue Growth: Med Tech net sales are expected to grow 14% to 16%, an increase from prior guidance of 12% to 15%. Med Device sales are expected to remain roughly flat.
Gross Margin: Gross margin for fiscal 2026 is expected to be in the range of 53.5% to 55.5%, inclusive of an estimated $4 million to $6 million of tariff impact for the full fiscal year.
Adjusted EBITDA: Adjusted EBITDA is now expected to be in the range of $6 million to $10 million, up from prior guidance of $3 million to $8 million.
Adjusted Loss Per Share: Adjusted loss per share is now expected to be in the range of $0.33 to $0.23, improving from prior guidance of a loss of $0.35 to $0.25.
Cash Flow: The company expects to be cash flow positive for the full fiscal year 2026, with specific quarterly patterns: approximately $3 million of cash usage in Q2, zero or positive cash generation in Q3, and significant cash generation in Q4.
The selected topic was not discussed during the call.
The earnings call highlights strong financial performance with revenue growth across multiple segments, improved gross margins, and positive cash flow. The raised guidance for fiscal 2026 and increased adjusted EBITDA outlook further support a positive sentiment. Although some risks were noted, such as competitive pressures and international expansion challenges, the overall outlook and strategic initiatives like the Auryon platform's international traction and positive CPT code changes suggest a favorable stock price movement.
The earnings call revealed strong financial performance, especially in Med Tech, with a 26.1% revenue increase. The company raised guidance for Med Tech, driven by Mechanical Thrombectomy and NanoKnife, indicating confidence in future growth. Despite increased R&D and SG&A expenses, improved operating leverage and profitability were noted. Positive Q&A insights on sales force expansion and clinical trials further support optimism. However, management's reluctance to provide specific metrics for NanoKnife and trial timelines tempers enthusiasm slightly, leading to a positive but not strong positive sentiment.
The earnings call indicates strong financial performance with revenue growth driven by Med Tech and Med Device segments. Positive developments include improved EBITDA and free cash flow, alongside optimistic guidance for Med Tech growth. Although tariffs impacted gross margin, the company is managing these effects. The Q&A reveals confidence in product approvals and growth, particularly for AlphaVac and AngioVac. Despite some ambiguity in management's responses, the overall sentiment is positive with expectations of continued growth, leading to a likely stock price increase of 2% to 8% over the next two weeks.
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