Strata Critical Medical, Inc. Q4 FY2025 earnings call

• Q4 organic growth 35% was well ahead of expectations, leading to full year results beating guidance. Raising 2026 revenue and adjusted EBITDA guidance. • Continued acquisitions of smaller businesses in expertise areas to accelerate growth and expand network. • Dr. Scott Silvestri as new chief medical officer, rolling out new capabilities. • Regulatory actions favorable for Strata, with rules incentivizing DCD donors. • Aircraft fleet: 30 dedicated/owned aircraft, part out one due to corrosion, expect to add 2 new aircraft in 2026. • New geographies customer wins expected in back half of 2026. • Disaggregate revenue across three business lines, report two segments logistics and clinical, shift to GAAP gross profit as segment profitability metric. • SG&A broken into seven categories. • P&L reflects continuing operations only.

Full year 2025 revenue and adjusted EBITDA of $197.1 million and $14.1 million, respectively, both beat the high end of guidance. In Q4 2025, revenue was $66.8 million. Logistics revenue was $49.2 million, up 35.3% organically. Clinical revenue was $17.6 million. Gross profit increased 90% to $14.4 million, gross margin 21.6%. Logistics gross profit $10.6 million, up 39.5%. Clinical gross profit $3.8 million. Adjusted EBITDA $7 million, margin 10.4%.

• Raising 2026 revenue guidance range to $260 to $275 million from $255 to $270 million previously. • Raising adjusted EBITDA guidance range to $29 to $33 million versus $28 to $32 million previously. • Reiterating free cash flow before aircraft and engine purchases guidance of $15 to $22 million. • Expect modest sequential revenue decline in Q1 2026 versus Q4 2025, adjusted EBITDA margins to decline ~100 basis points sequentially, then sequential improvement in Q2 and back half of year.

• Weather can cause temporary disruptions, like winter storms grounding northeast fleet. • Fuel price increases could impact customers as surcharges pass-through, but won't significantly impact Strata's cost structure. • Regulatory changes could have unforeseen impacts, though recent updates are positive. • Integration of acquisitions and new geographies may face challenges. • Fluctuations in organ donor numbers and NRP donors despite regulatory progress.

Q: Good morning. Congratulations on a strong quarter. My first question is around regulatory policy. Can you please remind us or give us an update on the continuous distribution policy?

A: Continuous distribution is still the goal for all organs. Lungs have transferred over. For hearts and livers, there was deprioritization earlier this year due to regulatory focus on other issues. New proposed rules from CMS and OPTN, but no timeline. Stakeholders aren't opposed, but some want to ensure readiness for logistically challenging process.

Q: If we break down this transplant value chain which part of the service has the highest value and margin, and what's the percentage of your customers using your full service portfolio?

A: Blended profit margins are similar. Transplant clinical business has slightly higher margins. ~40% of sequential logistics growth in Q4 was from legacy Keystone clinical customers. Next phase is to convert more clinical customers to contracted logistical customers and vice versa.

Q: First off for me, just on the acquisition pipeline, you know, as these opportunities become available, do you expect to be announcing them as they occur, and then As it applies to kind of the adjacent offerings, I would imagine there are also some acquisition candidates that you would have there, or is that more something that you would think about doing de novo like with the radiopharmaceuticals?

A: Plan to announce as we close on acquisitions. First focus on current product servicing to increase scale and footprint. On radiopharma, currently focused on core business, learning, not near-term acquisition.

Q: Hey, good quarter, Will. Could you just kind of reiterate, how many hubs are you operating out of in the United States now?

A: Air bases are in the teens. Plan to add at least one or two new bases in 2026. Bases mean owned/contracted aircraft available in location. Dedicated aircraft can float.

Q: Yeah, maybe a quick follow-up on radio pharmaceuticals. Are you mainly handling the radio therapeutics or radio imaging agent, and then are you mainly supporting the commercial product versus, you know, the clinical trials?

A: Best situated on clinical trial side with existing fleet, but could support commercial with cargo aircraft.

Q: How will AI impact the transplant market over time in our business in particular?

A: AI can make business more efficient, used for real-time error checking in organ transplant missions. Could make cost structure more efficient, allowing investment in differentiated people and assets.

Q: Can you just talk about the impact of weather that we saw that we're seeing in the first quarter?

A: Normally weather doesn't impact operations as flights get priority. First quarter unusual with severe weather closing airports, affecting flights, but case volumes surge after, offsetting impact.

Q: Can you just take that one on the macro events and the impact of higher oil prices on our business?

A: Fuel price increase results in higher costs for customers, surcharges pass-through above thresholds, won't significantly impact Strata's cost structure.