When Will AngioDynamics (ANGO) Achieve Sustainable Profitability?

AngioDynamics (ANGO), a key player in the medical technology (MedTech) sector, has navigated a complex landscape of margin pressures and growth opportunities over the past few years. As of fiscal 2025, the company faces headwinds from tariffs and inflationary costs but is simultaneously leveraging a robust product pipeline, strategic cost-saving initiatives, and market expansion to drive long-term profitability. This analysis evaluates the timeline for ANGO to achieve sustainable profitability, focusing on margin improvement and growth catalysts.

Financial Performance and Margin Trends

AngioDynamics' fiscal 2025 GAAP gross margin stood at 53.9%, a figure that includes a 56 basis point drag from tariffs. While this margin reflects resilience, it also underscores the challenges posed by external factors. The Med Tech segment, a core growth driver, reported a gross margin of 59.0% in Q4 2025 but faced a 510 basis point decline year-over-year due to tariffs, hardware depreciation, and product mix shifts. Conversely, the Med Device segment saw a modest improvement in gross margin to 47.6% in Q4 2025, though it still lagged behind prior-year performance due to inflationary pressures.

Notably, the company demonstrated margin recovery in Q2 2025, with a 30 basis point improvement in GAAP gross margin to 54.7% compared to Q1 2025. This was driven by the Med Tech segment's 120 basis point increase in gross margin, fueled by strong AngioVac sales. However, the fourth quarter of 2025 saw a 161 basis point decline in GAAP gross margin to 52.7%, primarily due to a $1.6 million tariff-related cost of goods sold impact. Excluding this, the gross margin would have been 54.7%, highlighting the potential for margin normalization as external pressures ease.

Growth Catalysts: Product Innovation and Strategic Efficiency

AngioDynamics' path to profitability hinges on its ability to capitalize on high-growth product platforms and operational efficiency. The company's MedTech segment, which includes the Auryon peripheral atherectomy platform, AlphaVac, AngioVac, and NanoKnife, has been a standout performer. For instance, Auryon sales grew by 19.7% in Q4 2025 and 20.1% in Q1 2026, driven by European market expansion and hospital-based adoption. Similarly, AlphaVac sales surged by 161.4% in Q3 2025, reflecting strong demand for thrombus management solutions.

The company's R&D investments, which account for approximately 10% of sales, are also critical. The NanoKnife irreversible electroporation platform, for example, received FDA 510(k) clearance for prostate tissue ablation in Q3 2025 and secured a CPT Category I code for pancreatic lesion treatment, effective January 1, 2027. These regulatory milestones are expected to enhance reimbursement pathways and adoption rates. Additionally, clinical trials like the AMBITION BTK RCT and NanoKnife PRESERVE study aim to validate the platforms' efficacy, further solidifying their market potential.

Cost-saving measures are another pillar of ANGO's strategy. The company has transitioned to outsourced manufacturing, which is projected to yield $15 million in annual savings by fiscal 2027. These initiatives, combined with operational efficiencies, contributed to adjusted EBITDA turning positive in Q4 2025 and Q1 2026. Management anticipates gross margin expansion in 2026, with a target range of 53.5% to 55.5%.

Path to Profitability: Analyst Projections and Management Guidance

Analysts project a sharp rebound in ANGO's earnings, with a 62.02% annual growth rate expected over the next few years. Despite a history of negative net profit margins and losses worsening at 1.3% annually over the past five years, the company's earnings are forecast to turn positive within three years. This optimism is tied to next-generation product launches and cost-saving measures.

Management has also revised its guidance for 2026 and 2027, with net sales projected to reach $305–$310 million in 2026, driven by 12–15% year-over-year growth in the MedTech segment. The company's focus on high-growth segments, coupled with its divestiture of non-core assets, positions it to achieve sustainable profitability by fiscal 2027.

Conclusion

AngioDynamics' journey toward sustainable profitability is a balancing act between mitigating margin pressures and accelerating growth. While tariffs and inflationary costs have constrained margins, the company's product innovation, R&D advancements, and cost-saving initiatives are creating a clear path forward. With adjusted EBITDA already positive and gross margins on track for expansion, ANGO appears poised to achieve profitability by fiscal 2027. Investors should monitor the execution of its strategic priorities, particularly the adoption of next-generation platforms like NanoKnife and Auryon, as well as the realization of cost savings.