This post on X would be helpful for anyone interested in looking at flight data to help get a feel for potential upcoming revenue and margin performance. 4Q flights are up 16.2% over 3Q flights which seems promising. Here is the X post: x.com
25 Likes
It’s interesting to track but important to note that due to the maintenance of planes in Q3, more 3rd party flights were used in Q3.
So the increased # of flights suggests that NOP revenue generated by own flights will be higher than Q3 but it doesn’t say anything about NOP revenue from 3rd party flights, so I would be careful drawing too many conclusions from this data alone.
18 Likes
That’s my take as well. The problem last Q wasn’t in-house volumes. It was total volumes. If I remember right, TMDX facilitated 61% of Q3 flights vs 59% in Q2. If total volume trends had remained similar to 2022 and 2023, we would have likely seen a lower percentage of in-house flights and lower gross margins due to increased third-party flights. That’s not what happened.
To @Rubenslash’s point, we won’t necessarily know whether this in-house increase is a good thing until we know if total volumes have increased as well. The doesn’t mean increased in-house volumes aren’t relevant (and they certainly beat the alternative). We just don’t have the full context yet.
14 Likes
Good points, the OPTN data shows that national heart, lung, and liver transplants have been down over the past 12 weeks. Margins should improve in 4Q since TMDX is using more of its planes rather than paying for third-party planes, but I’m concerned that overall transplant volumes have gone down.
3 Likes
That was my concern as well. Management was clearly surprised by the decline last quarter. TMDX deserves a ton of credit for getting viable organs to clinics and surgeons who could use the volume. My question is did they somehow fill that gap so quickly they’ve reached the capacity cap for the current clinic/surgeon infrastructure?
Despite the same Q3/Q4 “vacations and holidays” warning, TMDX was able to increase total volumes in both 2022 and 2023. What if that was simply doctors/clinics willing to fit in a few more procedures rather than taking time off now that more organs were available? If that’s the case, the next step is clinics expanding the number of teams to take advantage of the extra organ capacity. TMDX has no control over that.
TMDX solved a pain point by filling gaps in clinic capacity due to a bottleneck in organ availability. What if TMDX has improved availability so quickly there is now the opposite bottleneck of not enough clinical teams to handle available volume during the second half of the year? I mean, it’s not as if there aren’t still plenty of recipients to match with any viable organ which comes available.
That’s obviously speculation, but it’s a theoretical scenario for TMDX which didn’t seem to be in play previously. It’s also one that might make a bit of sense if national transplant volumes over the past 12 weeks are still down from last year. That’s why I’m OK sitting this one out while waiting for a formal FY25 guide and an initial set of comments from the new CFO.
24 Likes