ARTIVION, INC. Q1 FY2025 earnings call

Management Statement and Operational Highlights:

• Cybersecurity Incident: Near total return to normal operations, with On-X supply back to normal levels faster than anticipated and tissue backlog clearing progress, expecting full catch-up by end of Q3.
• Q1 Financials: Total constant currency revenue grew 4%, adjusted EBITDA grew 1%.
• AMDS Launch: Approximately 150 facilities actively seeking IRB and value analysis committee approvals, with positive response from surgeon community and sales force.
• Clinical Initiatives: On-X data shows mortality benefit for patients under 60 vs. bioprosthetic valves; NEXUS 30-day data from Endospan TRIOMPHE trial positive, on track for PMA approval in second half of 2026; AMDS on track for FDA approval mid-2026 with completed manufacturing quality management system module review and clinical module filed.

Segment Performance:

• Stent graft: Constant currency revenue grew 19% in Q1, a key component of growth strategy, with products focused on complex segments of the stent graft market and pipeline to bring proven products to U.S. and Japan.
• On-X: Constant currency revenue grew 11% year-over-year, with double-digit growth, and is considered the best aortic valve for patients under 65 due to clinical benefits.
• BioGlue: Constant currency revenue grew 9%, with growth in all major markets.
• Tissue processing: Declined 23% year-over-year on constant currency basis in Q1 due to cybersecurity incident, but on track to clear backlog by end of Q3, with expectation to grow mid-single digits for full year 2025.
• Geographic: Latin America delivered constant currency revenue growth of 26%, Asia Pacific 8%, EMEA 14%, and North America declined 6% in Q1.

Guidance:

• Raised full-year 2025 constant currency revenue guidance to 11%-14% (previously 10%-14%), with reported revenues expected in range of $423M-$435M.
• Adjusted EBITDA guidance $84M-$91M for full year 2025, representing 18%-28% growth over 2024.
• Q2 2025 revenue guidance in range of $107.5M-$109.5M, with expectation of acceleration in second half due to ramping AMDS HDE sales and easy comparables in Q4.

Risks:

• Residual impact of cybersecurity incident initially affected tissue and On-X supply.
• Currency exchange rate volatility could impact revenue guidance.
• Uncertainty in timing of insurance reimbursement for cyber incident costs.

Q: John McAulay asked about AMDS contribution and whether all 150 facilities seeking approval would be up and running by end of year.

A: Pat Mackin stated 100% hit rate on closed facilities so far, but timing varies by hospital.

Q: Frank Takkinen inquired about AMDS onboarding training and market opportunity.

A: Pat Mackin mentioned excellent training sessions and positive customer engagement, with market opportunity potentially larger due to mortality benefits.

Q: Suraj Kalia asked about NEXUS data relative to expectations and growth by segment.

A: Pat Mackin noted NEXUS 30-day data positive, consistent with expectations; Lance Berry discussed On-X and stent graft growth rates, expecting mid-teens for stent grafts and double-digit for On-X.

Q: Mike Matson asked about NEXUS approval timeline and Endospan acquisition.

A: Pat Mackin said NEXUS on track for PMA approval in second half of 2026, and Lance Berry discussed upfront cost of $135M for acquisition.

Q: Daniel Stauder inquired about FX impact and EBITDA guidance.

A: Lance Berry said current FX rates could provide upside but not revising assumptions, and EBITDA components remain as previously outlined.

Q: Jeffrey Cohen asked about APAC and LATAM growth.

A: Lance Berry mentioned solid growth in both regions, with APAC catching up on On-X supply through remainder of year.