Organogenesis Holdings Inc. Q1 FY2026 earnings call

Overview of revenue results - Revenue declined 58% Y/Y in Q1, driven by 63% decline in advanced wound care products sales; surgical and sports medicine products sales were flat. - Team performed well during skin substitute market disruption, expecting to gain share with largest portfolio. - Market disruption from CMS comments on December 30th caused clinician confusion and material disruption. ### Regulatory and clinical developments - On April 28th, completed BLA submission for Renu to treat symptomatic knee osteoarthritis. - On April 6th, completed randomized controlled trial showing PurePly AM plus standard of care had statistically significant wound closure at 12 weeks vs standard of care alone for non-healing diabetic foot ulcers. ### Restructuring - Completed restructuring in March with workforce reduction of 88 employees and closing of St. Petersburg, FL facility, expected to result in $14M annualized cost reductions.

In Q1, revenue declined 58% year over year. Advanced wound care products sales declined 63% year over year. Surgical and sports medicine products sales were flat year over year. Net product revenue for Q1 was $36.3 million. Advanced wound care net product revenue was $29.5 million. Surgical and sports medicine net product revenue was $6.8 million. Gross profit for Q1 was $10.5 million, or 29% of net product revenue. Excluding inventory write-down adjustments, non-GAAP gross profit was $14.8 million, or 41% of net product revenue. Operating expenses for Q1 were $106.1 million. Excluding cost of goods sold, non-GAAP operating expenses were $80.3 million. Operating loss for Q1 was $68.9 million. GAAP net loss for Q1 was $53.2 million. Net loss to common stockholders for Q1 was $56.2 million. Adjusted net loss for Q1 was $43.7 million. Adjusted EBITDA loss for Q1 was $48.2 million.

2026 revenue guidance - Now expects total net revenue for 2026 of $270M to $310M, a decline of 45% to 52% Y/Y, vs prior guidance range. - Sees more measured improvement in clinician confusion and operating environment. - First-half revenue decline expected to be ~52% to 49% Y/Y; second half revenue decline similar to first half. - Expect strong sequential revenue growth in third and fourth quarters, but low end of guidance range assumes prolonged recovery in market headwinds. ### Profitability expectations - Expects improved quarterly adjusted EBITDA performance sequentially and positive adjusted EBITDA generation in second half of 2026. - Adjusted operating expenses excluding cost of goods sold expected to be reduced ~25% Y/Y in 2026, including >30% Y/Y in second half, inclusive of ~$7M cost savings from restructuring in third and fourth quarters.

Market disruption - CMS's December 30th comments regarding product wastage caused clinician confusion and uncertainty, leading to some clinicians moving away from skin substitutes entirely, impacting revenue trends. ### Regulatory uncertainty - Uncertainty as to the timing of resolution of clarifying CMS's comments on discarded products, which increased since the fourth quarter earnings call, impacting revenue expectations. ### Technology and claim processing issues - Issues with WISER technology in states requiring preauthorization and a large MAC struggling to process claims in the first quarter, adding to market disruption and complexity.

Q: Could you unpack a little bit what you guys saw throughout the quarter and particularly what changed between the fourth quarter call in February and today in terms of volumes? What was better or worse than expected?

A: Saw a lot of disruption with change in reimbursement, level of complexity was more than past. Had two sites of care with complete changes in reimbursement model and changing reimbursement for each product. Also had WISER impact in first quarter with technology challenges in states requiring preauthorization and a large MAC struggling to process claims the entire first quarter. Contraction of market by about 63%, core brands excluding Applegraph brand down about 22%.

Q: What, if anything, or do you have any line of sight as to when we might get an update from CMS clarifying some of their comments around these wastage policies?

A: Don't have direct clarity on when CMS will update; still engaged with them, objective is to get them to exempt PMAs or come out with indication for use, no clarity on when they will change or bring clarity.

Q: What gives you confidence in that back half recovery?

A: Saw improvement month over month in first quarter and continued into April. Customer confusion should abate as year progresses and competition dynamics will be different, leading to sequential growth quarter over quarter as year progresses.