TMDX Q2 Earnings 2025

[FoolishJeff]

-Going into earnings I was looking for $162-170 million in revenue and a raise of $15-20 million to full year guidance.

-Revenue came in lighter than I hoped at $157.4 million but the important thing is they raised FY Guidance by $20 Million, which represents 35% at the mid-point. -Hopefully this leaves room for another raise next quarter and they can hit around 45% plus for the Full-Year
-Stock is up 6% AH

-Q2 eps came in way above estimates at $0.92 vs. $0.43 so they beat by 114%
-non-GAAP net income margins were 22.17% vs estimates of 11.5%
-Revenues were up 38% YoY but operating expenses were only up 5.6% YoY so this is why they crushed it on net income
-OCS 2.0 trials have been approved - big catalyst for this year and next.

Recent Highlights

• Total revenue of $157.4 million in the second quarter of 2025, a 38% increase compared to the second quarter of 2024
• Generated net income of $34.9 million or $0.92 per fully diluted share in the second quarter of 2025
• Received conditional Investigations Device Exemption (IDE) approval from the U.S. Food and Drug Administration to initiate the Next-Gen OCS™ Lung trial
• Launched first-in-class OCS NOP digital ecosystem, NOP ACCESS™, across major NOP™ transplant programs across the U.S.
• Raising full year 2025 revenue guidance to $585 million to $605 million

“We are proud to report another strong quarter, marked by profitable year-over-year revenue growth of 38%. Our consistent performance across all areas of the business reflects the successful execution of our strategy, the differentiated value our OCS and NOP platforms, and our unique leadership position in the transplant market,” said Waleed Hassanein, MD, President and Chief Executive Officer. “Looking ahead, we are confident in our strategy and remain laser focused on achieving and surpassing the target of 10,000 US NOP transplants in 2028, while ramping up investments to drive the next several waves of growth aimed at delivering significant top-and bottom-line growth for our business.”

2025 Financial Outlook

TransMedics is raising its full year 2025 revenue guidance to be in the range of $585 million to $605 million, which represents 35% growth at the midpoint compared to the company’s prior year revenue. TransMedics’ full year 2025 revenue guidance as reported on May 8, 2025 was previously in the range of $565 million to $585 million.

[GDavenport]

The growth continues at a nice pace. As discussed on other threads, additional surprise growth seems to be off the table. (Lower, steadier, for longer with continued seasonality).

Mentioned in the earnings call conversation were two competitors.

The answers were interesting.

The first involved a liver competitor with no network services or logistics (no name given).

The second involved a stationary alternative which cannot fly.

Regarding these the comments were very enlightening.

TDMX welcomes the competition to serve the mission. Agreeable and expected answer with no insights into impact, of course. (The tension in his voice was elevated in parts, however)

Give the call a listen for good color. Management was calm and centered as usual, Guidance is conservative. Thesis in place.

Currently my 7th position in the portfolio with ~4%

[DoctorRob]

My expectations going into today for TMDX were all met.

• Minimum 157M Revenue
• ~60% GM
• Improving cash flow
• Improving net income
• Expanding services/offerings planned in the coming quarters
• Increase in annual guidance
• Improving balance sheet

With my expectations all met, I am happy to continue to hold a smaller-level position. The biggest highlights today for me were the guidance increase and even more so the massive increase in net income translating to vastly improved earnings. If TMDX can continue to improve operating leverage with translation to shareholder equity while improving their balance sheet, even if revenue growth is not as rapid it makes the company more attractive to hold, in my opinion.

Also, a quick plug. If you haven’t watched @wpr101 's latest video on setting expectations prior to earnings, I highly recommend it.

[priestinacloset]

TMDX was near 140 just a month ago (though I am unsure why). Did well on earnings and is barely over 105. I echo statements here that it seems like surprise out performance is off the table in the future and it is a slow steady firm. Add in the seasonality and I do not see a path above the 120s

[5thhorseman]

Not sure if they have updated their targets since, but in the Nov 2023 Piper Sandler Conference management stated that they expect 30% EBIT business by end-2025. For Q2, 30% of $157.4M = $39.4M. Actual net income this quarter was $34.9M, so just $4.5M short with two quarters to go.

To value the company on a future PE basis, I had previously used the 2023 transplant totals (2300) to extrapolate their revenue to end-2028, when they aimed for 10K transplants, and came up with a $1.25B figure. Even with declining YoY increase in revenue, this is still very achievable, if not the floor for my expectations:

Revenue at end-2028 = $1274M
30% EBIT = $382M
Share growth of 2.1% per Q by end-2028 = 53.4M
EPS would be $7.16
Share price (assume PE of 25) = $179

From around $120 today to $179 at the end of 2028 (3.5 periods) is a CAGR of 12.1%.

Still considerable upside as management is now talking about a 20K transplant target.

[stewaj1]

A good analysis of TMDX by Jonah Lupton posted on X. https://x.com/JonahLupton/status/1951010584209527045

[FoolishJeff]

OCS Trial approved and the stock is up 8% today and 32% off the lows. Someone said they couldn’t see a path out of the 120s, well, we’re in the 130’s and I estimate the fair value somewhere around 160-170.

"The ENHANCE trial is a two-part clinical trial. Part A is designed to support prolonged heart perfusion using OCS™ Heart System. Part B is intended to demonstrate the superiority of OCS Heart perfusion in donation after brain death (DBD) cases when compared to DBD cases using static cold storage methods. Part B is intended to support the potential expansion of OCS Heart clinical indications to include DBD hearts that are not currently eligible for OCS perfusion and preservation. The trial’s total sample size, across both Part A and Part B, is expected to exceed 650 patients. TransMedics believes this would constitute the largest heart preservation for transplant trial ever, worldwide. Details of the OCS ENHANCE Heart trial will be made available on clinicaltrials.gov.

The recent FDA approvals to initiate our Next-Gen OCS ENHANCE Heart and DENOVO Lung trials mark key milestones in our ongoing commitment to transforming the standard of care and address the major clinical needs of the cardiothoracic transplant community," said Waleed Hassanein, MD, President and Chief Executive Officer. “We are thrilled to be in a position to initiate both trials in the fourth quarter of 2025 while we continue to work collaboratively with the FDA to address any remaining questions related to pre-clinical testing. As I have stated before, we hope these two trials will be major catalysts for clinical adoption for both heart and lung throughout 2026 and beyond.”

Full Release: TransMedics Receives FDA IDE Approval to Initiate Next-Generation OCS Heart Trial | TransMedics

[Fool4ZTribe]

Came across this note on TMDX:

Researchers at Vanderbilt University Medical Center, led by Dr. Aaron Williams, have developed a new method for recovering hearts from deceased organ donors after circulatory death (DCD).

The method, rapid recovery with extended ultra-oxygenated preservation (REUP), involves flushing the donor heart with a cold oxygenated preservation solution after death. This avoids the disadvantages of two existing preservation methods, both of which reanimate the heart, one that has ethical questions and another that is expensive.

How is this different? Traditional DCD heart methods face ethical and logistical challenges. Normothermic regional perfusion (NRP) restarts the donor’s circulation to revive the heart, which raises ethical concerns and is illegal in some regions. Direct procurement and perfusion (DPP), as used by Transmedic, keeps the heart beating outside the body but demands an expensive, complex device and a specialized team.

According to Dr. Aaron Williams, REUP is a simpler and more cost-effective method that avoids certain ethical concerns. To date, 20 patients have received hearts preserved using the REUP technique, all of which demonstrated normal function and no early rejection. These outcomes are comparable to those observed in patients who received hearts preserved by previous methods.

Obviously, this has potential to disrupt TMDX’ heart business - in fact Vanderbit transplant center - a high volume facility - has done no heart transplants using OCS since 2024.

Vinnie G

[FoolishJeff]

Thanks. Can you send the link to the article?

[Fool4ZTribe]

https://www.nejm.org/doi/full/10.1056/NEJMoa2500456

[AnalogKid70]

Does the Vanderbilt study say how long the hearts can be preserved prior to transplant? That is one of the major advantages of TMDX OCS system. The other advantage of TMDX is that they have the NOP organization that will go collect the organ for the the transplanting hospital. The Vanderbilt process (I assume) would require transplant hospital surgeons to go collect organs themselves. That is what normally happens now, but as more Dr’s get used to having organs collected and delivered for them, I think that is going to become more of a major advantage in favor of TMDX. Liver transplant surgeons have already made the transition. Heart and lung surgeons will follow in time IMO.

[AnalogKid70]

The CEO purchased almost $2M of shares in the last week. He has sold almost $20M of shares in the last year at prices between $130 and $170. FWIW. Sold higher, bought back lower.

[FoolishJeff]

Flights are also starting to pick up again, getting close to 40/day over the past couple of days. The seasonal weakness of July is likely past us.

[FoolishJeff]

Waleed sounds very bullish at the Morgan Stanley Healthcare conference. He is expecting to do 20-30K transplants by 2030:

“I think, listen, if you’re going to focus on every month-to-month variability, quarter-to-quarter variability in organ transplant, you should really – you should not hold TransMedic stock, seriously. It’s about looking at the long term, look at TransMedics at 20,000 or 30,000 organ under our wing in the United States alone and doubling that worldwide. That’s what we’re building in TransMedics. And yes, there will be seasonalities. There will be variabilities. There is a reason why TransMedics doesn’t announce the full penetration except at year-end because we know there’s variability, we’ve said that from day one. That’s number one.

Number two, we are still early. Yes, we’ve achieved significant success in a short period of time, but it’s still early. We got to allow the time for the health – the transplant market to digest the level of innovation that TransMedics has injected into it in the U.S. and watch what the potential is for OUS.

We’re very, very excited about where we are. And again, this is not just a word of mouth. My personal action in this quarter speaks for itself. And somebody asked me earlier today, “Waleed, why now?” Guys, I wanted to buy stock a lot earlier than now. But I was prohibited by corporate counsel because I made a 10b5-1 transaction last October, and I had to wait 6 months. Otherwise, I would trigger some bad thing.”

TransMedics Group, Inc. - 1732984

-Q3 is usually choppy but this is usually transient.

-Tracking flights is secondary measurement that doesn’t tell the whole story, still have 20% done by 3rd party

-TMDX is adding so much value - better financial management and timing for transplants

-Exciting note on logistics and its value-add:

Waleed Hassanein
Founder, President, CEO & Director

“We’re – I would say we’re in, I would say, the early phases of that journey. We’re very excited that we finally have a critical mass to be able to operate with a network effect in the United States. Now as Gerardo said, we are experimenting with double shifting the planes or portion of our planes to really maximize the utilization of our fixed assets before we invest in more fixed assets or more aircraft, which we know we have to do. The question is, do we buy 10 more or 5 more. And the double shifting will give us the answer to that.

What’s exciting about this is the success of the NOP logistics and NOP clinical services in the U.S. Now it’s catalyzing a lot of international interest that was dormant for a long time thinking that TransMedics is only selling medical technology. Today, when we see the success of TransMedics – that TransMedics is achieving in the United States and the ability to manage a turnkey service, we’re getting a lot of interest from international markets that – wanting us to replicate that in their local geographies.

Jonah had some commentary on it as well:

Jonah Lupton on X: “Not sure how many of you were able to listen to the $TMDX presentation today at the Morgan Stanley Global Healthcare Conference but this was possibly the most bullish I’ve ever heard Waleed sound https://t.co/gO2hgtI5qm He not only talked about the opportunity in the US over the” / X

[FoolishJeff]

Waleed also mentioned that 40% of Q3 transplants were done by ground so far, which means the flight data isn’t capturing a lot of the volume so it’s a very bullish statement.

[drew1618t]

Jeff,

I feel like you missed the important part of that statistic. That they are growing ground transport from less than to 20% closer to 40% of their total missions. Which will have a positive effect on their gross margin as they have a lower percent of revenue from air service. It will also make a recursive analysis that I did for last quarter harder to predict their revenue.

And as far as tracking the tails, it’s an interesting way for someone who doesn’t have much to do, but we are moving, as more and more people getting comfortable with how long organs could stay in OCS, we shifted ground transportation from 20% or lower to now approaching 40% of the total NOP missions. So yes, it’s a secondary measure, but it doesn’t tell the full story. Also, we still have 20% of the aviation requirement done by third party.

In conjunction with the CEO buying shares at $118 in August. I’m going to do a deep dive into the company, currently I’m leaning on taking a small position. Thanks Jeff for bringing the conference to my attention.

Side note:
All, please make a new thread when new information like this comes out. It should have its own space especially when its new information over a month after the original.

Drew