• Net Revenue (Q4 2024): $126.7 million, up 27% year-over-year.
• Advanced Wound Care Revenue (Q4 2024): $119 million, up 27% year-over-year.
• Surgical & Sports Medicine Revenue (Q4 2024): $8 million, up 24% year-over-year.
• Gross Profit (Q4 2024): $96 million, 75.5% of net revenue.
• Operating Expenses (Q4 2024): $85.4 million, up 17% year-over-year.
• Operating Income (Q4 2024): $10.2 million, compared to an operating loss of $1.3 million last year.
• GAAP Net Income (Q4 2024): $7.7 million, compared to a net loss of $0.6 million last year.
• Adjusted EBITDA (Q4 2024): $18.2 million, 14.4% of net revenue.
• Cash and Cash Equivalents (Dec 31, 2024): $136.2 million, with no outstanding debt obligations.
• 2025 Revenue Guidance: $480 million to $535 million, flat to 11% increase year-over-year.
• 2025 Advanced Wound Care Revenue Guidance: $450 million to $500 million, -1% to 10% change year-over-year.
• 2025 Surgical & Sports Medicine Revenue Guidance: $30 million to $35 million, 6% to 23% increase year-over-year.
• 2025 GAAP Net Income Guidance: $9.5 million to $38.8 million.
• 2025 Adjusted EBITDA Guidance: $43.6 million to $83.2 million.

• Warning! GuruFocus has detected 5 Warning Sign with ORGO.

Release Date: February 27, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Organogenesis Holdings Inc (NASDAQ:ORGO) reported a 27% increase in net revenue for the fourth quarter, exceeding the high end of their guidance range.
• The company achieved a gross profit margin of 75.5% in Q4, up from 72.1% the previous year.
• Operating income for the fourth quarter was $10.2 million, a significant improvement from an operating loss of $1.3 million in the previous year.
• Organogenesis Holdings Inc (NASDAQ:ORGO) ended the year with $136.2 million in cash and no outstanding debt obligations, reflecting a strong financial position.
• The company is on track for a BLA submission for its Renu product by the end of 2025, which could represent a transformational opportunity in the pain management market.

Negative Points

• The delay in the implementation of LCDs has created ambiguity and disruption in customer behavior, leading to a challenging operating environment in early 2025.
• The company anticipates a very competitive first half of 2025 due to the delayed LCD implementation, which may impact revenue and demand.
• There was some attrition in the salesforce during the quarter, although it was not significant.
• The company faces uncertainty regarding the conversion of products to those on the covered list, impacting revenue projections.
• PuraPly, a significant component of the Advanced Wound Care business, is not currently on the covered list, which could affect its usage and revenue.

Q & A Highlights

Q: Could you give us a feel for what you're seeing in the marketplace right now from competitors and the typical behavior you're seeing from doctors regarding inventory? A: David Francisco, CFO: We're not seeing a major change in the competitive environment; it's more about customer buying behavior. The delay in the LCD implementation has caused changes in buying behaviors. Customers often pause and test reimbursement during such changes. Some of our technologies have short shelf lives, so stocking isn't an option.

Q: Can you update us on the timeline for Renu after submission of your application? A: David Francisco, CFO: We expect to file the BLA submission at the end of 2025, hear from the FDA in Q4 2026, and potentially get approval by the end of 2026 or early 2027.

Q: Have you experienced any heightened levels of attrition in your salesforce, or has retention been stable? A: David Francisco, CFO: We did see some attrition, but it wasn't significant. We've backfilled those positions with good talent and feel confident about our current team.

Q: How is the progress on your RCTs for products not on the covered list? A: David Francisco, CFO: Our Pure Apply study is ongoing, with an interim analysis expected in Q4 and publication in Q1 2026. We aim to have it ready for reconsideration by the MACs by Q1 2026.

Q: Are you operating under the assumption that the LCDs will be implemented as written, and do you foresee any changes? A: Gary Gillheeney, CEO: We believe the LCDs will likely be implemented as planned. Delaying them again would cause significant market confusion, and CMS is aware of the current confusion and its impact on patient care.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.