Artivion, Inc. Q2 FY2025 earnings call

Management Statement and Operational Highlights:

• Strong business momentum continued with total constant currency revenue growth over 14% and adjusted EBITDA growth of 33% year-over-year.
• Made early progress with AMDS launch following FDA HDE approval, with encouraging reception to the launch and sequential revenue growth in Q2.
• Strengthened balance sheet by retiring convertible note due 2025.
• On-X sales were exceptional, up 24% YOY on constant currency; stent graft revenues up 22% YOY due to AMDS launch.
• BioGlue grew 4%, and tissue processing increased 3% despite cyber event impact, on track to clear backlog by end of Q3.
• Pipeline updates: FDA IDE approval for Arcevo LSA U.S. pivotal trial, on track for AMDS PMA approval mid-2026, and NEXUS on track for approval H2 2026 if Endospan acquired.

Segment Performance:

• On-X: Revenue increased 24% year-over-year on a constant currency basis.
• Stent graft: Grew 22% on a constant currency basis in the second quarter, driven by the U.S. AMDS launch.
• BioGlue: Grew 4% on a constant currency basis.
• Tissue processing: Increased 3% year-over-year on a constant currency basis, with progress being made to clear the backlog from the cybersecurity event by the end of the third quarter.

Guidance:

• Raised full-year 2025 constant currency revenue guidance to 12%-14% (previously 11%-14%), with reported revenues expected $435M-$443M.
• Raised adjusted EBITDA guidance to $86M-$91M, reflecting strong top line growth and expense management.
• Second half revenue growth expected 17% midpoint, driven by normalization of preservation services backlog and AMDS HDE revenues.

Risks:

• Cybersecurity event impact on tissue processing backlog.
• Uncertainties related to forward-looking statements, including risks detailed in SEC filings.

Q: Just really want to just focus in on the AMDS. Where are you in the process? And can you expand on cross-selling?

A: Lance mentioned metrics are larger this quarter but didn't give specifics. Pat corrected about the number of accounts and said cross-selling happens with trainings where surgeons learn AMDS and then start using On-X.

Q: BioGlue in China?

A: BioGlue launch in China is in the second half of 2025 as they go through provinces and hospital contracts.

Q: On guidance, how are dynamics impacting updated guidance?

A: Second quarter outperformance, currency moving towards flat impact, and building into second half guidance.

Q: Physician adoption and utilization of AMDS?

A: AMDS is a simple solution, surgeons are excited, and there's cross-selling to On-X.

Q: AMDS commercial team and expansion?

A: Team of 50+ reps in top centers, evaluating second phase of launch.

Q: Arcevo trial next steps?

A: Expect to enroll first patient before end of the year after contracting and IRBs.

Q: Adjusted EBITDA leverage and AMDS gross margin?

A: EBITDA margin from SG&A leverage and gross margin expansion from AMDS launch.

Q: On-X stability and guidance?

A: On-X has consistent growth, driven by factors like low INR, AMDS cross-selling, and new data, with strength contributing to raised guidance.

Q: On-X growth drivers and ARTIZEN trial?

A: On-X growth from implants, ARTIZEN trial is a simple solution, training not a huge lift.

Q: Pricing trends?

A: No significant price pressure, volume-driven with normal inflationary price benefit.

Q: On-X growth cross-selling and free cash flow?

A: New accounts contributing to On-X growth, free cash flow expected positive for full year.