MiMedx's Q3 2025 Earnings Call: Contradictions in Reimbursement Strategies, Pricing, and LCD Implementation Confidence Unveiled

Date of Call: October 29, 2025

Financials Results

• Revenue: $114M, up 35% YOY
• EPS: $0.11 per diluted share GAAP; $0.15 adjusted (vs $0.05 GAAP / $0.07 adjusted prior year)
• Gross Margin: 84% GAAP (vs 82% prior year); 88% non-GAAP adjusted (up ~540 bps YOY); full-year non-GAAP expected ~85%
• Operating Margin: 31% adjusted EBITDA margin (31% vs 22% prior year, +9 percentage points YOY)

Guidance:

• Full-year 2025 revenue growth raised from low-teens to mid-to-high teens.
• Full-year adjusted EBITDA margin expected at least in the mid-20s% of net sales.
• Full-year non-GAAP gross margin expected around 85%.
• Expect net cash balance > $150M by year-end; anticipate some early-2026 choppiness as reimbursement reforms are implemented.

Business Commentary:

* Revenue Growth and Product Innovation: - MiMedx Group, Inc. reported record revenue of $114 million for Q3 2025, up 35% year-over-year. - This growth was driven by strong performance across both the Wound and Surgical franchises and the introduction of new products like EPIEFFECT and HELIOGEN.

• Operating and Financial Performance:
• Adjusted EBITDA reached $35 million, representing 31% of net sales, marking a significant improvement compared to the prior year.

• The increase was primarily due to strong top line growth and effective expense management, resulting in a $23 million cash increase during the quarter.

• Strategic Focus and Product Expansion:

• The Surgical business grew by 26%, driven by the continued growth across the product portfolio and strategic collaborations with complementary solutions in the wound care market.

• The company's strategic focus on innovation and product diversification, including launching new products and conducting randomized controlled trials, has supported this strong performance.

• Cash and Financial Position:

• MiMedx ended Q3 with a net cash position of $124 million, a $23 million increase from the previous quarter, indicating strong cash generation capabilities.
• The improvement in cash flow allows the company to invest in growth opportunities and maintain flexibility for future strategic initiatives.

Sentiment Analysis:

Overall Tone: Positive

• Management: "our third quarter performance was outstanding... set new company highs for quarterly revenue, adjusted EBITDA... added $23 million of cash." Company raised full-year revenue growth and adjusted EBITDA margin guidance and stated: "I am incredibly bullish regarding the prospects for MiMedx."

Q&A:

• Question from Frank Takkinen (Lake Street Capital Markets): How should we think about contribution from wound versus surgical for the rest of the year and variables behind the Q4 guide?
  Response: Management: Expect continued surgical momentum and healthy wound growth into Q4, but Q4 comps are tougher due to last year's nadir.

• Question from Frank Takkinen (Lake Street Capital Markets): What are you doing to prepare for post-Jan 1 reimbursement reform and what outcome would be best for MiMedx?
  Response: Management: They prefer the proposed reforms (level playing field); are scenario-planning, expect to gain share, and may pursue strategic opportunities using their strong balance sheet.

• Question from Frank Takkinen (Lake Street Capital Markets): Cash ended at $142M and guidance is >$150M — how should we think about cash generation?
  Response: Management: Guidance refers to net cash >$150M; ~$18M remains drawn on the line so gross cash is higher (high-$160Ms); retaining borrowing capacity for opportunistic investments.

• Question from Chase Knickerbocker (Craig-Hallum Capital Group): Can you share wound volume in square centimeters growth (sequentially or YOY) as a guidepost?
  Response: Management: Declined to disclose sq cm volumes, citing product-mix effects and variability from new product launches; too many factors to provide a reliable number now.

• Question from Chase Knickerbocker (Craig-Hallum Capital Group): Any feedback from Hill or constituents on suggestions like pass-through or CPI adjustment?
  Response: Management: No definitive public feedback to share; engagement is ongoing via third-party advisers and direct communications with CMS/MACs but nothing conclusive.

• Question from Chase Knickerbocker (Craig-Hallum Capital Group): Regarding LCDs and EPIEFFECT, is your data sufficient and are MACs receptive to submissions?
  Response: Management: Confident in EPIEFFECT evidence—interim analysis completed and manuscript/presentation submitted—ready to apply for reimbursement, though LCD implementation/requirements remain uncertain.

• Question from Carl Byrnes (Northland Capital Markets): With cash buildup and reimbursement shakeup, are there compelling M&A or BD opportunities?
  Response: Management: Yes—actively evaluating acquisitions, leaning toward surgical assets and strategic fits; will use balance sheet opportunistically but remain disciplined.

• Question from Ross Osborn (Cantor Fitzgerald & Co.): Where is HELIOGEN adoption and what is the evidence-generation status?
  Response: Management: HELIOGEN adoption is increasing month-to-month/quarter-to-quarter, evidence generation is underway, and it is becoming a meaningful contributor to surgical growth.

• Question from Ross Osborn (Cantor Fitzgerald & Co.): Path forward for AXIOFILL following the September court ruling?
  Response: Management: Will resubmit arguments and likely have another hearing; AXIOFILL remains commercially stable/growing and HELIOGEN mitigates downside risk.

• Question from Anthony Petrone (Mizuho Securities USA LLC): Was there pull-forward demand in physician channel ahead of CMS rulings or pull-through in surgical volumes due to ACA/Medicaid dynamics?
  Response: Management: No pull-forward detected in wound or surgical; surgical uses are largely non-elective so not materially affected by such dynamics.

• Question from Anthony Petrone (Mizuho Securities USA LLC): Can you set expectations for per-square-centimeter pricing range or application limits under the final rule?
  Response: Management: Will not speculate on per-cm pricing or application limits; awaiting final rule (likely in November) and believes MiMedx will outperform under the new regime.

Contradiction Point 1

Reimbursement and Market Expectations

It involves differing opinions on the impact of reimbursement changes and market expectations post reform, which are crucial for understanding the company's strategic positioning and financial outlook.

How to expect wound versus surgical contributions for the remainder of the year? What preparations are in place for reform scenarios after January 1? - Frank Takkinen(Lake Street Capital Markets)

2025Q3: We expect strong uptake in the surgical suite and continued growth in the wound business. The surgical business is expected to continue growing, while the wound business, though facing tougher comps, will continue to grow at a healthy clip. - Douglas Rice(CFO)

What is the expected market impact of the reimbursement change? What is the expected market size for the skin sub if $125 sticks are assumed, covering both physician offices and HOPD? - Chase Richard Knickerbocker(Craig-Hallum)

2025Q2: We are confident in our ability to compete based on product efficacy and have a strong integrated business model. We expect to gain market share post-reform adjustments. - Joseph H. Capper(CEO)

Contradiction Point 2

Inventory Management and Pricing Strategy

It highlights differing views on the company's ability to manage inventory and pricing strategy in response to potential reimbursement changes, which could impact operational efficiency and financial performance.

How should we assess the contribution of wound versus surgical for the remainder of the year? How are you preparing for different reform options after January 1? - Frank Takkinen(Lake Street Capital Markets)

2025Q3: We are positioned to compete effectively under new rules, and several factors, including our competitive advantages and balance sheet, place us in a strong position. Our comments align with the best outcome for the industry, focusing on leveling the playing field and taking price variability out of the equation. - Joseph Capper(CEO)

What flexibility does CMS have during the comment period regarding the single fixed rate of $125.38? - Carl Edward Byrnes(Northland Capital Markets)

2025Q2: CMS has shown willingness to modify pricing based on input in the past. They have shown this on multiple occasions and they have. When new rules have been implemented in the past, they have been responsive to market forces. - Joseph H. Capper(CEO)

Contradiction Point 3

Growth Expectations and Market Dynamics

It involves differing perspectives on the growth expectations and market dynamics for the company's surgical and wound care businesses, which are crucial for investor projections.

How should we assess the contribution of wound versus surgical in the remaining guidance for the year? What steps are you taking to prepare for potential reforms after January 1? - Frank Takkinen (Lake Street Capital Markets)

2025Q3: We expect strong uptake in the surgical suite and continued growth in the wound business. - Douglas Rice(CFO)

What drove the strong surgical growth in the quarter, and how is HELIOGEN contributing to it? - Chase Knickerbocker (Craig-Hallum Capital Group)

2025Q1: Growth is across the portfolio, with better execution and existing product adoption. - Joseph Capper(CEO)

Contradiction Point 4

Reimbursement Changes and Strategic Positioning

It highlights varying levels of confidence in the company's ability to navigate and adapt to potential reimbursement changes, impacting strategic planning and investor confidence.

How should we assess the contribution of wound vs. surgical in the remaining guidance for the year? What steps are you taking to prepare for potential reforms after January 1? - Frank Takkinen (Lake Street Capital Markets)

2025Q3: We are positioned to compete effectively under new rules, and several factors, including our competitive advantages and balance sheet, place us in a strong position. - Joseph Capper(CEO)

How confident are you in reimbursement changes by mid-January 2026, and what specific CMS actions do you expect along with MIMEDX's strategic positioning? - Chase Knickerbocker (Craig-Hallum Capital Group)

2025Q1: We hope for reform but remain confident in growth. The surgical business has seen strong execution, with contributions from AMNIOEFFECT, HELIOGEN, and other products. - Joseph Capper(CEO)

Contradiction Point 5

LCD Implementation Confidence and Impact

It involves differing levels of confidence in the LCD implementation timeline and the expected impact on the company's growth and financials, which are crucial for investor expectations and strategic planning.

How confident are you that the data is sufficient for EPIEFFECT inclusion on LCD? - Chase Knickerbocker(Craig-Hallum)

2025Q3: We have completed necessary steps, including an interim analysis, manuscript submission, and presentation. We feel confident about the sufficiency of our data, but LCD specifics remain uncertain. - Joseph Capper(CEO)

Can you provide more details on the confidence in LCD implementation and how the benefits will be impacted by its phasing in this year? - Chase Knickerbocker(Craig-Hallum)

2024Q4: No further delays expected, confident in implementation. Major impact will be on gross margin from sales mix change, but higher volumes will cover fixed manufacturing costs. - Joseph Capper(CEO)