Organogenesis (ORGO) Q1 2026 Earnings Transcript

Motley Fool Transcribing, The Motley Fool

Fri, May 8, 2026 astatine 12:28 PM CDT 18 min read

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DATE

Thursday, May 7, 2026 astatine 5 p.m. ET

CALL PARTICIPANTS

• Chief Executive Officer — Gary S. Gillheeney

• Chief Financial Officer — David Francisco

Full Conference Call Transcript

Gary Gillheeney: Thank you, operator, and welcome, everyone, to Organogenesis Holdings First Quarter 2026 Earnings Conference Call. I'm joined connected the telephone contiguous by Dave Francisco, our Chief Financial Officer. Let maine commencement with a little docket of what we'll screen during our prepared remarks. I'll statesman with an overview of our archetypal 4th gross results and supply an update connected cardinal developments successful caller months. Dave volition past supply you with an in-depth reappraisal of our archetypal 4th fiscal results, our equilibrium expanse and fiscal information astatine 4th extremity arsenic good arsenic our fiscal outlook for 2026, which we updated successful our property merchandise this afternoon.

Then I volition supply you with immoderate closing comments earlier we unfastened the telephone up for questions. Beginning with a reappraisal of our gross results for Q1, our gross results bespeak the important challenges successful the operating situation outlined connected our 4th fourth telephone successful February. Net gross declined 58% year-over-year, driven by a 63% diminution successful income of our Advanced Wound Care products. Sales of our Surgical & Sports Medicine products were level year-over-year. And arsenic expected, the withdrawal of the LCD sum policies for tegument substitutes announced connected December 24 and comments regarding discarded products connected December 30, resulted successful clinicians' disorder and worldly disruption successful the marketplace during the archetypal quarter.

Our squad performed good during this play of unprecedented disruption successful the tegument substitute market. As a person successful the industry, we expect to summation stock successful this caller situation arsenic we leverage the largest, astir broad portfolio crossed aggregate FDA classifications. Despite the important diminution successful our merchandise gross successful the archetypal quarter, we judge we enhanced our marketplace stock presumption arsenic our portion measurement outperformed the declines that person been reported crossed the industry. This is encouraging successful isolation, but it's adjacent much awesome erstwhile viewed successful airy of the important interaction connected utilization of our PMA-approved merchandise implicit the archetypal 4 months of 2026 arsenic a effect of CMS' commentary connected December 30.

As discussed connected our 4th fourth call, we judge the comments connected December 30 regarding merchandise wastage were intended to proactively code enactment from definite competitors successful the marketplace that were attempting to exploit the caller outgo policies by focusing connected larger sized tegument substitute products, specifically amniotic products. The archetypal marketplace effect to these comments was important clinician disorder and uncertainty. Unfortunately, these marketplace headwinds person not abated. Rather, successful immoderate cases, it has resulted successful clinicians moving distant from tegument substitutes entirely. While CMS' December 30 commentary represents what we judge to beryllium a worldly but transient interaction connected 2026 gross trends, the harm to patients is some much terrible and enduring.