Sanara MedTech's 2025 Q2 Earnings Call: Navigating Contradictions in Margins, Strategy, and Operational Investments

Gross margin stability and leverage, strategic alternatives for THP, THP pilot launch and business development, operating expenses and strategic investments are the key contradictions discussed in Sanara MedTech's latest 2025Q2 earnings call.



Revenue Growth and Segment Performance:
- Sanara MedTech reported net revenue of $25.8 million for Q2 2025, representing 28% growth year-over-year.
- This growth was primarily driven by sales of soft tissue products, which increased 28% year-over-year to $22.7 million, fueled by CellerateRx Surgical and BIASURGE products, and significant contributions from bone fusion products, up 25% year-over-year to $3.1 million.

Operational Efficiency and Profitability:
- The Surgical segment generated segment adjusted EBITDA of $4.7 million, an increase of $3.3 million or 239%, and a net income of $500,000, an improvement of $2.7 million.
- This improvement was due to enhanced gross margins and operating leverage, resulting from strong sales growth and cost management in the segment.

Bone Fusion Product Traction:
- Sales of bone fusion products increased 25% year-over-year to $3.1 million, driven by growth across most products in the portfolio.
- The growth in this segment is attributed to increased demand and market penetration for these products.

Strategic Evaluation of THP:
- The company is actively managing expenses in the THP segment, with an expected investment of $5.5 million to $6.5 million for the second half of 2025.
- A strategic review process has been initiated to explore strategic alternatives for THP, aiming to maximize shareholder value and identify like-minded partners for future growth.