Anika Therapeutics, Inc. Q2 FY2026 earnings call

Strategic Priority 1: Accelerate Sustainable Revenue Growth

• Delivered record commercial channel revenue growth of 17% year-over-year, driven by broad-based growth across international OA pain management and regenerative solutions businesses
• International OA pain management franchise (Singhal, Monavis) delivered sustained growth: 23% year-to-date growth for Singhal and 19% for Monavis, adding over $3 million in incremental revenue in H1 2026, following portfolio alignment completed over the prior 18 months
• Regenerative solutions growth remains solid: larger-sized Integrity products launched late 2025 exceeded initial adoption expectations, with post-market study enrollment on track to complete in coming quarters to support EU regulatory filing; Hyalafast continues to deliver double-digit international revenue growth
• OEM channel growth was driven by strong Monovisc demand from partner DePuy Synthes (J&J), with underlying demand trends remaining encouraging, while smaller legacy OEM programs collectively contribute meaningful shareholder value

Strategic Priority 2: Drive Operational Excellence & Discipline

• Gross margin expanded to 65% in Q2 2026, up from 51% year-over-year, marking the third consecutive quarter of gross margin above 60%, and the highest adjusted EBITDA ($7.1 million, 22% margin) since 2020
• Completed two key manufacturing capacity/upgrade projects in H1 2026: doubled throughput on the Monovisc and Singhal production line that was previously output-constrained, and upgraded the Orthovisc and non-orthopedic manufacturing line to improve yield, throughput, and efficiency
• Reduced adjusted operating expenses by 6% year-over-year, with G&A expenses (excluding one-time severance) declining 30%, driven by organizational streamlining and disciplined spending; R&D spending increased to $7.3 million (from $6.3 million year-over-year) to prioritize pipeline development
• Completed a $15 million share repurchase program in H1 2026, reducing diluted shares outstanding to ~13.3 million, the lowest level in over 15 years; stock-based compensation declined 28% year-over-year to reduce shareholder dilution
• Ended Q2 with $38.4 million in cash, no debt, and an amended credit facility that provides up to $100 million in total borrowing capacity for ample financial flexibility

Strategic Priority 3: Advance Hyaluronic Acid (HA) Innovation Pipeline

• Hyalofast: Ongoing PMA review with the FDA; the company is preparing a response to the agency's deficiency letter, expected to be completed in the coming weeks; co-primary clinical endpoints are the key focus of the review, which may impact approval timeline, but confidence in the long-term U.S. opportunity remains unchanged
• Syngal: Bioequivalence study enrollment remains on track for completion by the end of 2026; current focus is expanding CMC (chemistry, manufacturing, controls) capabilities to meet FDA drug manufacturing requirements for this combination product, which will be the final workstream ahead of NDA submission
• Early-stage pipeline: The regenerative suture and tape program continues to deliver encouraging early progress, demonstrating the versatility of the company's HIAF fiber platform for soft tissue repair applications

Total company revenue for Q2 2026 was $32.6 million, representing a 16% year-over-year increase. Year-to-date total revenue through the first half of 2026 was $62 million, up 14% year-over-year.

• Commercial Channel: Revenue grew 17% year-over-year to $13.9 million, contributing 42.6% of total Q2 2026 revenue. International commercial revenue reached a record $12.6 million, up 22% year-over-year. Within this segment: Singhal grew 32% year-over-year, Monavis grew 24% year-over-year, and together added $2 million in incremental profitable revenue in Q2. Integrity (regenerative solutions) saw year-to-date sales up 39%, with revenue just under $2 million for the second consecutive quarter, and international stocking orders up over 50% year-over-year. Hyalafast delivered double-digit international revenue growth.

• OEM Channel: Revenue grew 14% year-over-year, contributing 57.4% of total Q2 2026 revenue. Growth was driven by stronger-than-projected Monovisc unit volumes that offset lower-than-expected Orthovisc revenue, partially boosted by favorable order timing. Year-to-date OEM performance supports the raised full-year growth outlook, with quarterly variability expected due to customer ordering patterns.

• Full-year 2026 OEM channel revenue guidance was revised upward to 0% to 5% growth, from the prior expectation of a 5% decline to flat revenue
• Full-year 2026 commercial channel revenue guidance was narrowed to 12% to 18% growth, from the prior range of 10% to 20% growth, supported by sustained international OA growth and Integrity adoption
• Full-year 2026 total company revenue guidance was revised upward to 5% to 10% growth, from the prior range of 1% to 9% growth
• Full-year 2026 adjusted EBITDA margin guidance was revised sharply upward to 13% to 17%, from the prior expectation of 5% to 10%, reflecting broad operating leverage; second-half 2026 profitability is expected to be modestly lower than first-half results due to OEM order timing
• For 2027, ANACA adopted a new revenue guidance practice that only includes revenue from products that have already received regulatory approval/clearance, excluding previously implied U.S. Hyalofast revenue; despite this change, the company expects total 2027 revenue to grow 0% to 5% year-over-year

• Forward-looking statements regarding regulatory approval timelines, future revenue, and profitability are subject to inherent uncertainties, and actual results may differ materially from guidance; ANACA does not commit to updating forward-looking statements after the call
• OEM quarterly revenue can be volatile due to variable customer ordering patterns, creating sequential variability in results
• Pricing in the U.S. OEM OA market faces ongoing headwinds, with expected modest price erosion that must be offset by volume growth
• FDA review timelines for Hyalofast PMA approval are outside of ANACA's control, and review of co-primary clinical endpoints may impact the final approval timeline
• CMC development for Syngal as a drug combination product requires building a new regulatory-compliant manufacturing framework, which could introduce delays to NDA submission

Q: The raised full-year OEM guidance implies a meaningful sequential revenue decline in the second half of 2026. Is this driven by first-half order timing, or is it related to underlying pricing or volume trends? / A: Approximately $1 million to $2 million of Q2 2026 OEM revenue came from favorable order timing, which explains part of the expected sequential step-down. The other factor is a very strong fourth quarter 2025 that creates a difficult year-over-year comparison for Q4 2026. Overall, the guidance upgrade reflects stronger underlying U.S. end-market demand than previously expected, and full-year 2026 OEM revenue is now projected to grow year-over-year, a positive change from prior expectations of a decline.