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Organogenesis Holdings Inc. Reports Fourth Quarter 2024 Financial Results

CANTON, Mass., Feb. 27, 2025 (GLOBE NEWSWIRE) -- Organogenesis Holdings Inc. (Nasdaq: ORGO), a leading regenerative medicine and tissue innovations company focused on empowering healing through the development, manufacturing, and sale of products for the advanced wound care, and surgical and sports medicine markets, today reported financial results for the fourth quarter and the year ended December听31, 2024.

Fourth Quarter 2024 Financial Results Summary:

• Net revenue of $126.7 million for the fourth quarter of 2024, an increase of $27.0 million compared to net revenue of $99.7 million for the fourth quarter of 2023. Net revenue for the fourth quarter of 2024 consists of:
  • Net revenue from Advanced Wound Care products of $118.6 million, an increase of 27% from the fourth quarter of 2023.
  • Net revenue from Surgical & Sports Medicine products of $8.1 million, an increase of 24% from the fourth quarter of 2023.
• Net income of $7.7 million for the fourth quarter of 2024, compared to net loss of $0.6 million for the fourth quarter of 2023, an increase in net income of $8.3 million.
• Adjusted EBITDA of $18.2 million for the fourth quarter of 2024, compared to Adjusted EBITDA of $7.5 million for the fourth quarter of 2023, an increase of $10.7 million.
• Adjusted net income of $8.8 million for the fourth quarter of 2024, compared to adjusted net income of $1.9 million for the fourth quarter of 2023, an increase of $6.8 million.

Fiscal Year 2024 Financial Results Summary:

• Net revenue of $482.0 million for the year ended December 31, 2024, an increase of $48.9 million compared to net revenue of $433.1 million for the year ended December 31, 2023. Net revenue for the year ended December 31, 2024 consists of:
  • Net revenue from Advanced Wound Care products of $453.6 million, an increase of 12% year over year.
  • Net revenue from Surgical & Sports Medicine products of $28.4 million, an increase of 3% year over year.
• Net income of $0.9 million for the year ended December 31, 2024, compared to net income of $4.9 million for the year ended December 31, 2023, a decrease of $4.0 million.
• Adjusted EBITDA of $49.8 million for the year ended December 31, 2024, compared to Adjusted EBITDA of $42.6 million for the year ended December 31, 2023, an increase of $7.2 million.
• Adjusted net income of $20.5 million for the year ended December 31, 2024, compared to adjusted net income of $12.7 million for the year ended December 31, 2023, an increase of $7.8 million.

鈥淥ur 2024 results exceeded expectations in a difficult environment, underscoring our strong execution, brand equity and the trust of our customers to help them navigate this complex market,鈥� said Gary S. Gillheeney, Sr., President, Chief Executive Officer and Chair of the Board for Organogenesis. 鈥淚n 2025, we will continue to focus on our customers while we collaborate with policy and law makers to craft a solution that addresses spending while ensuring access to safe and effective therapies for all patients.鈥�

Mr. Gillheeney, Sr. continued: 鈥淲e expect to meet a key strategic milestone in 2025 by delivering the ReNu BLA submission by the end of the year. We believe this is a transformational opportunity for Organogenesis in that, if approved, ReNu will potentially address an unmet clinical need for all patients suffering from knee OA. 鈥�

Fourth Quarter 2024 Financial Results:

Net revenue for the fourth quarter of 2024 was $126.7 million, compared to $99.7 million for the fourth quarter of 2023, an increase of $27.0 million, or 27%. The increase in net revenue was driven by an increase of $25.4 million, or 27%, in net revenue for Advanced Wound Care products, and an increase of $1.6 million, or 24%, in net revenue for Surgical & Sports Medicine products.

Gross profit for the fourth quarter of 2024 was $95.6 million, or 75% of net revenue, compared to $71.9 million, or 72% of net revenue for the fourth quarter of 2023, an increase of $23.7 million, or 33%.

Operating expenses for the fourth quarter of 2024 were $85.4 million compared to $73.2 million for the fourth quarter of 2023, an increase of $12.2 million, or 17%. R&D expense was $11.5 million for the fourth quarter of 2024, compared to $11.8 million for the fourth quarter of 2023, a decrease of $0.3 million, or 3%. Selling, general and administrative expenses were $73.9 million for the fourth quarter of 2024, compared to $61.4 million for the fourth quarter of 2023, an increase of $12.5 million, or 20%.

Operating income for the fourth quarter of 2024 was $10.2 million, compared to an operating loss of $1.3 million for the fourth quarter of 2023, an increase in operating income of $11.5 million, or 905%.

Total other expense, net, for the fourth quarter of 2024 was less than $0.1 million, compared to $0.5 million for the fourth quarter of 2023, a decrease of $0.5 million, or 95%.

Net income for the fourth quarter of 2024 was $7.7 million, or $0.05 per share, compared to a net loss of $0.6 million, or $0.00 per share, for the fourth quarter of 2023, an increase in net income of $8.3 million, or $0.05 per share.

Adjusted EBITDA was $18.2 million for the fourth quarter of 2024, compared to $7.5 million for the fourth quarter of 2023, an increase of $10.7 million, or 143%.

Adjusted net income was $8.8 million for the fourth quarter of 2024, compared to $1.9 million for the fourth quarter of 2023, an increase of $6.8 million, or 354%.

As of December听31, 2024, the Company had $136.2 million in cash, cash equivalents and restricted cash and no outstanding debt obligations, compared to $104.3 million in cash, cash equivalents and restricted cash and $66.2 million in net debt obligations as of December听31, 2023.

Fiscal Year 2024 Financial Results:

Net revenue for the year ended December听31, 2024 was $482.0 million, compared to $433.1 million for the year ended December听31, 2023, an increase of $48.9 million, or 11%. The increase in net revenue was driven by an increase of $48.1 million, or 12%, in net revenue for Advanced Wound Care products and an increase of $0.8 million, or 3%, in net revenue for Surgical & Sports Medicine products.

Gross profit for the year ended December听31, 2024 was $366.3 million, or 76% of net revenue, compared to $326.7 million, or 75% of net revenue for the year ended December听31, 2023, an increase of $39.6 million, or 12%.

Operating expenses for the year ended December听31, 2024 were $367.6 million compared to $314.1 million for the year ended December听31, 2023, an increase of $53.5 million or 17%. R&D expense was $50.3 million for the year ended December听31, 2024, compared to $44.4 million for the year ended December听31, 2023, an increase of $5.9 million, or 13%. Selling, general and administrative expenses were $294.5 million for the year ended December听31, 2024, compared to $269.8 million for the year ended December听31, 2023, an increase of $24.8 million, or 9%. For the year ended December听31, 2024, the Company recorded impairment and write down expenses of $18.8 million and $4.0 million, respectively.

Operating loss for the year ended December听31, 2024 was $1.3 million, compared to operating income of $12.5 million for the year ended December听31, 2023, a decrease in operating income of $13.8 million, or 110%.

Total other expense, net, for the year ended December听31, 2024, was $1.5 million, compared to $2.1 million for the year ended December听31, 2023, a decrease of $0.6 million, or 29%.

Net income for the year ended December听31, 2024 was $0.9 million, or $(0.01) per share, compared to net income of $4.9 million or $0.04 per share, for the year ended December听31, 2023, a decrease in net income of $4.0 million, or $(0.05) per share.

Adjusted EBITDA was $49.8 million for the year ended December听31, 2024, compared to $42.6 million for the year ended December听31, 2023, an increase of $7.2 million, or 17%.

Adjusted net income was $20.5 million for the year ended December听31, 2024, compared to $12.7 million for the year ended December听31, 2023, an increase in adjusted net income of $7.8 million, or 61%.

As of December听31, 2024, the Company had $136.2 million in cash, cash equivalents and restricted cash and no outstanding debt obligations, compared to $104.3 million in cash, cash equivalents and restricted cash and $66.2 million in net debt obligations as of December听31, 2023.

Fiscal Year 2025 Guidance:

For the year ending December听31, 2025, the Company expects:

• Net revenue between $480.0 million and $535.0 million, representing a range of roughly flat to an increase of approximately 11% year-over-year, as compared to net revenue of $482.0 million for the year ended December听31, 2024.
  • The 2025 net revenue guidance range assumes:
    • Net revenue from Advanced Wound Care products between $450.0 million and $500.0 million, a decrease of 1% to an increase of 10% year-over-year as compared to net revenue of $453.6 million for the year ended December听31, 2024.
    • Net revenue from Surgical & Sports Medicine products between $30.0 million and $35.0 million, an increase of 6% to 23% year-over-year as compared to net revenue of $28.4 million for the year ended December听31, 2024.
• Net income between $9.5 million and $38.8 million and adjusted net income between $15.3 million and $44.6 million.
• EBITDA between $27.0 million and $66.6 million and Adjusted EBITDA between $43.6 million and $83.2 million.

Fourth Quarter Earnings Conference Call:

Management will host a conference call at 5:00 p.m. Eastern Time today to discuss the results of the quarter and fiscal year, and to provide a corporate update with a question and answer session. Those who would like to participate may access the live webcast , or access the teleconference . The live webcast can also be accessed via the company鈥檚 website at investors.organogenesis.com. The webcast will be archived on the company website for approximately one year.

Non-GAAP Financial Measures

Our management uses financial measures that are not in accordance with generally accepted accounting principles in the United States, or GAAP, in addition to financial measures in accordance with GAAP to evaluate our operating results. These non-GAAP financial measures should be considered supplemental to, and not a substitute for, our reported financial results prepared in accordance with GAAP. Our management uses Adjusted EBITDA and Adjusted net income to evaluate our operating performance and trends and make planning decisions. Our management believes Adjusted EBITDA and Adjusted net income help identify underlying trends in our business that could otherwise be masked by the effect of the items that we exclude. Accordingly, we believe that Adjusted EBITDA and Adjusted net income provide useful information to investors and others in understanding and evaluating our operating results, enhancing the overall understanding of our past performance and prospects, and allowing for greater transparency with respect to key financial metrics used by our management in its financial and operational decision-making.

Adjusted EBITDA

Adjusted EBITDA consists of GAAP net income excluding: (i) interest expense, net, (ii) income tax expense, (iii) depreciation and amortization, (iv) amortization of intangible assets, (v) stock-based compensation expense, and (vi) additional infrequently occurring adjustments described in more detail below.

The following table presents a reconciliation of GAAP net income to non-GAAP EBITDA and non-GAAP Adjusted EBITDA, for the periods presented:

(1)听 Amounts reflect employee retention and benefits as well as other exit costs associated with our restructuring activities.

(2)听 Amount reflects the legal and consulting fees incurred related to the published and subsequently withdrawn 2023 local coverage determinations, or LCDs.

(3)听 Amount reflects the compensation expenses related to retention for those sales employees impacted by the published and subsequently withdrawn 2023 LCDs.

(4)听 Amount reflects the impairment of a purchased building and associated unfinished construction work.

(5)听 Amount reflects the write-down of costs previously capitalized as construction in progress in the development of internal-use software, that we determined have no future value.

(6)听 Amount reflects construction in progress terminated and disposed of at one of our Canton, Massachusetts facilities, resulting from our decision to move certain operations to the Smithfield Facility.

Adjusted net income

Adjusted net income is defined as GAAP net income (loss) plus (i) amortization of intangible assets and (ii) additional infrequently occurring adjustments described in more detail below, less the estimated tax on these adjustments.

The following table presents a reconciliation of GAAP net income (loss) to non-GAAP Adjusted net income, for the periods presented:

(1)听 Amounts reflect employee retention and benefits as well as other exit costs associated with our restructuring activities.

(2)听 Amount reflects the legal and consulting fees incurred related to the published and subsequently withdrawn 2023 LCDs.

(3)听 Amount reflects the compensation expenses related to retention for those sales employees impacted by the published and subsequently withdrawn 2023 LCDs.

(4)听 Amount reflects the impairment of a purchased building and associated unfinished construction work.

(5)听 Amount reflects the write-down of costs previously capitalized as construction in progress in the development of internal-use software, that we determined have no future value.

(6)听 Amount reflects construction in progress terminated and disposed of at one of our Canton, Massachusetts facilities, resulting from our decision to move certain operations to the Smithfield Facility.

Projected EBITDA and Adjusted EBITDA

The following table presents a reconciliation of projected GAAP net income (loss) to projected non-GAAP EBITDA and projected non-GAAP Adjusted EBITDA included in our guidance for the year ending December 31, 2025:

Note: Numbers may not foot or recalculate due to rounding.

Projected Adjusted Net Income (Loss)

The following table presents a reconciliation of projected GAAP net loss to projected non-GAAP adjusted net income included in our guidance for the year ending December听31, 2025:

Note: Numbers may not foot or recalculate due to rounding.

Forward-Looking Statements

This release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements relate to expectations or forecasts of future events. Forward-looking statements may be identified by the use of words such as 鈥渇orecast,鈥� 鈥渋ntend,鈥� 鈥渟eek,鈥� 鈥渢arget,鈥� 鈥渁nticipate,鈥� 鈥渂elieve,鈥� 鈥渆xpect,鈥� 鈥渆stimate,鈥� 鈥減lan,鈥� 鈥渙utlook,鈥� and 鈥減roject鈥� and other similar expressions that predict or indicate future events or trends or that are not statements of historical matters. Such forward-looking statements include statements relating to the Company鈥檚 expected revenue, net income (loss), Adjusted net income, EBITDA, and Adjusted EBITDA for fiscal 2024 and the breakdown of expected revenue in both its Advanced Wound Care and Surgical & Sports Medicine categories. Forward-looking statements with respect to the operations of the Company, strategies, prospects, and other aspects of the business of the Company are based on current expectations that are subject to known and unknown risks and uncertainties, which could cause actual results or outcomes to differ materially from expectations expressed or implied by such forward-looking statements. These factors include, but are not limited to: (1) the impact of any changes to the coverage and reimbursement levels for the Company鈥檚 products (including as a result of the recently proposed LCDs scheduled to take effect in April 2025); (2) the Company faces significant and continuing competition, which could adversely affect its business, results of operations and financial condition; (3) rapid technological change could cause the Company鈥檚 products to become obsolete and if the Company does not enhance its product offerings through its research and development efforts, it may be unable to effectively compete; (4) to be commercially successful, the Company must convince physicians that its products are safe and effective alternatives to existing treatments and that its products should be used in their procedures; (5) the Company鈥檚 ability to raise funds to expand its business; (6) the Company has incurred losses in the current period and prior periods and may incur losses in the future; (7) changes in applicable laws or regulations; (8) the possibility that the Company may be adversely affected by other economic, business, and/or competitive factors; (9) the Company鈥檚 ability to maintain production or obtain supply of its products in sufficient quantities to meet demand; (10) the impact of the suspension of commercialization of: (a) ReNu and NuCel in connection with the expiration of the FDA鈥檚 enforcement grace period for HCT/Ps on May 31, 2021 and (b) Dermagraft in the second quarter of 2022 pending transition of manufacturing to a new manufacturing facility or a third-party manufacturer; (11) whether the Company is able to obtain regulatory approval for and successfully commercialize ReNu; and (12) other risks and uncertainties described in the Company鈥檚 filings with the Securities and Exchange Commission, including Item 1A (Risk Factors) of the Company鈥檚 Form 10-K for the year ended December听31, 2024 and its subsequently filed periodic reports. You are cautioned not to place undue reliance upon any forward-looking statements, which speak only as of the date made. Although it may voluntarily do so from time to time, the Company undertakes no commitment to update or revise the forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable securities laws.

About Organogenesis Holdings Inc.
Organogenesis Holdings Inc. is a leading regenerative medicine company focused on the development, manufacture, and commercialization of solutions for the advanced wound care and surgical and sports medicine markets. Organogenesis offers a comprehensive portfolio of innovative regenerative products to address patient needs across the continuum of care. For more information, visit .