Earnings call transcript: Artivion Q2 2025 reports strong revenue growth

Artivion Inc. reported robust financial results for the second quarter of 2025, surpassing revenue expectations and achieving a significant earnings per share (EPS) turnaround. The company posted an EPS of $0.24, far exceeding the forecasted loss of $0.0033, with revenue reaching $113 million, a 14% increase year-over-year. Following the earnings announcement, Artivion’s stock saw a modest rise, closing at $32.7, up 1.33% from the previous close. According to InvestingPro data, the company’s year-to-date return stands at 14.38%, reflecting strong market confidence. The stock is currently trading near its 52-week high of $33.39.

Key Takeaways

• Artivion achieved a notable EPS turnaround, exceeding forecasts by a wide margin.
• Revenue grew 14% year-over-year, driven by strong product line performance.
• The company raised its full-year revenue guidance, anticipating 12-14% growth.
• Artivion’s stock price increased 1.33% in after-hours trading.
• The company is making strategic advances in product innovation and market expansion.

Company Performance

Artivion’s second-quarter performance demonstrated resilience and growth, with a 14% increase in total revenues compared to the previous year. The company’s strategic focus on expanding its product line and enhancing operational efficiencies contributed to these positive results. Artivion’s growth outpaced industry trends, particularly in the aortic disease intervention market.

Financial Highlights

• Revenue: $113 million, up 14% YoY
• EPS: $0.24, compared to a forecasted loss of $0.0033
• Adjusted EBITDA: $24.8 million, up 33% YoY
• Adjusted EBITDA margin: 21.9%, up 300 basis points

Earnings vs. Forecast

Artivion’s actual EPS of $0.24 significantly exceeded the forecasted loss of $0.0033, marking a surprise of 7372.73%. The revenue of $113 million also surpassed the expected $107.84 million by 4.78%. This performance reflects a substantial improvement over previous quarters, highlighting the company’s successful execution of its strategic initiatives.

Market Reaction

Following the earnings release, Artivion’s stock rose by 1.33% in after-hours trading, closing at $32.7. This movement places the stock near its 52-week high of $33.39, signaling positive investor sentiment. The stock’s performance aligns with the broader market trends, reflecting confidence in the company’s growth prospects.

Outlook & Guidance

Artivion has raised its full-year revenue guidance, now expecting a 12-14% growth in constant currency terms, with reported revenues projected between $435 and $443 million. The company anticipates adjusted EBITDA growth to reach $86-$91 million, with second-half revenue growth forecasted at 17%. Artivion is also focusing on launching new products and expanding its market presence.

Executive Commentary

CEO Pat Matkins emphasized the company’s growth trajectory, stating, "We’re growing double digits. We’re growing twice as fast on the bottom line." CFO Lance Berry added, "We expect to be free cash flow positive for the full year," highlighting the company’s financial stability and strategic direction.

Risks and Challenges

• Supply chain disruptions could impact production timelines.
• Market saturation in key regions may limit growth opportunities.
• Macroeconomic pressures, such as inflation, could affect profitability.
• Regulatory hurdles in new product launches could delay market entry.
• Currency fluctuations may impact international revenue.

Q&A

During the earnings call, analysts focused on the positive physician feedback regarding the AMDS device and the company’s cross-selling opportunities. Questions also addressed the continued growth potential of the On X valve and the lack of significant pricing pressures, reflecting confidence in Artivion’s market strategy.

Full transcript - Artivion Inc (AORT) Q2 2025:

Operator: Good day, ladies and gentlemen, and welcome to the Artyvian Second Quarter twenty twenty five Earnings Call. Our host for today’s call is Lane Morgan, Investor Relations, Gilmartin Group. At this time, all participants are in a listen only mode. Later, we will conduct a question and answer session. I would now like to turn the call over to your host.

Lane, you may begin.

Lane Morgan, Investor Relations, Gilmartin Group, Artyvian: Thanks, operator. Good afternoon, and thank you for joining the call today. Joining me today from Artyvian’s management team are Pat Matkins, CEO and Lance Berry, CFO. Before we begin, I’d like to make the following statements to comply with the safe harbor requirements of the Private Securities Litigation Reform Act of 1995. Comments made on this call that look forward in time involve risks and uncertainties and are forward looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.

The forward looking statements include statements made as to the company’s or management’s intentions, hopes, beliefs, expectations or predictions of the future. These forward looking statements are subject to a number of risks, uncertainties, estimates and assumptions that may cause actual results to differ materially from those forward looking statements from these forward looking statements. Additional information concerning certain risks and uncertainties that may impact these forward looking statements is contained from time to time in the company’s SEC filings and in the press release that was issued earlier today. You can also find a brief presentation with details highlighted on today’s call on the Investor Relations section of the Activision website. Now I’ll turn it over to our Activision CEO, Pat Nakkin.

Pat Matkins, CEO, Artyvian: Thanks, Lain, and good afternoon, everybody. I’m pleased to report that our strong business momentum continued through the second quarter as we delivered total constant currency revenue growth of over 14% and adjusted EBITDA growth of 33% year over year. Further, we made continued early progress with our ongoing AMD’s launch following FDA Humanitarian Device Exemption approval, or HDE approval, and we remain on track with each of our key clinical and pipeline initiatives aimed at expanding our addressable market. During the quarter, we also took steps to strengthen our balance sheet and meaningfully reduced our net leverage by retiring our convertible note due in 2025, which Lance will detail further. Our Q2 performance was enabled by continued growth across our product portfolio with exceptional strength in U.

S. On sales. From a product category standpoint, On X revenue increased 24% year over year on a constant currency basis as we continue to take market share globally with the only mechanical aortic heart valve that can be maintained at a low INR of 1.5 to two point zero. Based on the proven clinical results of the On aortic valve and the growing body of evidence supporting the use of mechanical valves in younger patients, we maintain our strong conviction that the On X is the best aortic valve in the market for patients under the age of 65 and will continue to take market share worldwide. Our U.

S. On X performance was particularly strong as we benefited from a continued growth in awareness and adoption of our On X valves, driven by positive new data and cross selling opportunities from our initial AMDS launch. This cross selling dynamic, in particular, has reinforced our conviction in our innovation driven multipronged growth strategy and further strengthened our confidence in both our near and long term outlooks for growth and profitability. To that end, stent graft revenues grew 22% on a constant currency basis in the second quarter compared to the same period last year, as The U. S.

AMD’s launch accelerated our growth rate. Our stent graft portfolio remains a key component of our growth strategy, and we are encouraged by our strong results, which are driven by our differentiated portfolio of products focused on the more complex segments of the stent graft market. Today, the products in our stent graft portfolio are sold primarily in Europe, where we leverage our existing direct sales infrastructure to create significant cross selling opportunities across our unique aortic product offerings. Our pipeline consists largely of bringing some of these proven products to The U. S.

And Japan, representing a significant growth opportunity. The first of these products is AMDS. As mentioned, we’re pleased with The ongoing US launch of AMDS following our recent HD approval in late ’twenty four. As a reminder, there are three steps that each center must complete before implanting an AMDS as part of the AMDS launch process. First, each hospital needs to receive a site wide ROV approval, except in the case of an emergency use.

Second, we need to have AMD’s approved by the Hospital Value Analysis Committee, or the VAC. And third, surgeons must be trained on this device. Reception to the launch has remained extremely encouraging, with more hospitals progressing through the IRB and VAC approval process. As expected, AMD’s revenue grew meaningfully on a sequential basis in Q2, reflecting strong early demand and revenue from initial stocking orders. Meanwhile, feedback from physicians already using the device has been overwhelmingly positive.

Overall, we’re encouraged by the early commercial traction of AMD’s as we begin to tap into what we estimate to be 150,000,000 annual market opportunity with limited competitive alternatives. In addition, BioGlue grew 4% on a constant currency basis compared to the same period last year, and we continue to see growth with the product in all of our major markets. Lastly, tissue processing, which has been the category most heavily impacted by last year’s cyber event, increased 3% year over year on a constant currency basis in Q2. As a reminder, a significant portion of our tissue revenues are our Synagaf pulmonary valve, for which demand outstrips supply every quarter, and therefore, we hold no inventory. Due to extended lead times for tissues that were in process or received during the period impacted by the cybersecurity event, there is a backlog of product that has not yet been released.

Since last quarter, we’ve continued to make progress in reducing the backlog and remain on track to clear it by the end of the third quarter. Looking ahead, we are confident that our tissue business can be a mid single digit grower for the full year of 2025 and over the long term. I’ll now turn to the pipeline. In July, we received investigational device exemption approval, or IDE approval, from the FDA to begin our U. S.

Pivotal trial for Arecibo LSA. This is our third generation frozen elephant trunk used to replace the entire aortic arch. The trial will evaluate the safety and effectiveness of Arecibo in the treatment of acute and chronic arch pathologies and will enroll one hundred and thirty two patients in up to 30 sites. We are optimistic that the trial will be successful, which is supported by the positive clinical results from our current generation frozen elephant trunk called Aveda Open Neo. We look forward to providing additional updates on future calls as we prepare to launch the trial by year end.

While the HD enables us to commercially distribute AMDS in The US prior to receipt of the PMA, we continue to focus on securing the PMA for AMDS. Last quarter, we were pleased to have been informed by the FDA that it completed its review of our manufacturing and quality management system modules. To date, we’ve already filed three of the four modules, and this keeps us on track for an FDA approval in mid-twenty twenty six. Lastly on our pipeline, assuming we acquire Endospan, NexSys remains on track for approval in the 2026. As I spoke about during the Q1 call, Endospan presented its late breaking thirty day data from the NEXUS US IDE trial at AETs in early May.

This is the first FDA trial for an endovascular treatment of chronic dissections in the aortic arch focused on patients at high risk for open surgery. The data indicated the trial would meet its protocol defined primary endpoints of a sixty three percent reduction in major adverse events relative to the comparators. In our conversations with physicians at ATS, surgeons were generally impressed with the thirty day result and were extremely positive. Surgeons were particularly pleased with the performance across stroke and renal endpoints, which was quite favorable compared to published data for alternative endovascular treatments. Overall, it was a great quarter.

We accelerated our top line growth rate for both On X and Stents to over 20%. We hit another significant milestone in our pipeline execution with our CYAD approval. We significantly improved our capital structure by eliminating approximately $100,000,000 of convertible debt. We’re excited about our progress to date in 2025 and are confident in our ability to deliver sustainable double digit revenue growth, drive EBITDA margin expansion and grow adjusted EBITDA at twice the rate of constant currency revenue growth. With that, I’ll now turn the call over to Lance.

Lance Berry, CFO, Artyvian: Thanks, Pat, and good afternoon, everyone. Before I begin, I’d like to remind you to please refer to our press release published earlier today for information regarding our non GAAP results, including a reconciliation of these results to our GAAP results. Additionally, all percentage changes discussed will be on a year over year basis and revenue growth rates will be in constant currency unless otherwise noted. Total revenues were $113,000,000 for the 2025, up over 14% compared to 2024. Meanwhile, EBITDA increased approximately 33% from $18,600,000 to $24,800,000 in the 2025.

Adjusted EBITDA margin was 21.9% in the 2025, an approximately 300 basis point improvement over the prior year driven by improvements in gross margin, leverage in SG and A and timing of R and D spend. From a product line perspective, On X revenues increased 24%, stent graft grew 22%, BioGlue grew 4%, and tissue processing revenues grew 3% in the 2025. On a regional basis, revenues in North America increased 18%, Asia Pacific increased 15%, EMEA increased 10%, and Latin America increased 7%, all compared to the 2024. Our as reported expenses included approximately $1,700,000 in Q2 associated with the twenty twenty four cybersecurity incident, which are excluded from adjusted EBITDA. While we have sought insurance reimbursement for some of these costs, the process will take some time.

We will exclude any insurance proceeds we receive from adjusted EBITDA as well. Gross margins were 64.7% in Q2 compared to 64.6 in the 2024. Non GAAP gross margins were 65.1% in Q2 twenty twenty five, reflecting a 50 basis point increase from 2024 due primarily to favorable mix from AMD’s HDE revenues in The U. S. And exceptional On X growth, particularly in The U.

S. General, administrative and marketing expenses in the second quarter were $57,700,000 compared to $49,300,000 in the 2024. Non GAAP general and administrative and marketing expenses $53,400,000 or 47.2% of sales in the second quarter compared to $47,300,000 or 48.2% of sales in the 2024, reflecting a 100 basis point improvement while funding our AMBS HDE launch costs. R and D expenses for the second quarter were $7,100,000 compared to $7,500,000 in the 2024, reflecting timing of clinical expenses. Interest expense net of interest income was $7,200,000 as compared to $8,000,000 in the prior year.

Other income and expense this quarter included foreign currency translation gains of approximately $4,500,000 Free cash flow was $11,700,000 in the 2025. As Pat mentioned, during the quarter, we took action to significantly deleverage our balance sheet by retiring our convertible senior notes due 2025. As we announced in May, we successfully completed exchange agreements to convert approximately $99,540,000 principal amount for an aggregate of 4,300,000.0 shares of common stock. Approximately $460,000 in aggregate principal amount remained outstanding as of June 30 and was settled with approximately 20,000 shares of common stock at maturity on July 1. Turning to cash and liquidity, we ended the quarter with approximately $53,500,000 in cash and $215,600,000 in debt, net of $4,900,000 of unamortized loan origination costs.

We do not anticipate the need to raise additional capital to fund our debt obligations, our investments in our channels or our pipeline in the foreseeable future. At the end of the second quarter, our net leverage ratio was 2.2, down from 4.1 in the prior year. And now for our outlook for the remainder of 2025. Given our momentum in the first half of the year, we are raising the midpoint of our full year 2025 revenue guidance and now expect constant currency growth between 1214% compared to the previous range of 11% to 14%. We expect reported revenues to be in the range of four thirty five million to $443,000,000 compared to our previous range of $423,000,000 to $435,000,000 reflecting greater confidence in our overall growth outlook and an adjustment to our foreign currency assumptions for the second half of the year.

This guidance range reflects our current estimate that full year 2025 currency impact will be approximately flat to 2024. Given our strong top line revenue growth and success with general expense management through the first half of the year, we are also raising the midpoint of our full year adjusted EBITDA guidance. We now expect adjusted EBITDA to be in the range of 86,000,000 to $91,000,000 compared to 84,000,000 to $91,000,000 for the full year 2025, representing a 21% to 28% growth over 2024 and approximately 200 basis points of adjusted EBITDA margin expansion at the midpoint of our ranges. This guidance reflects a second half revenue growth rate of 17% at the midpoint, a 2.5 percentage points higher than Q2, driven primarily by the expected normalization of our remaining preservation service backlog in Q3 and the continued sequential growth of AMD’s HDE revenues in The U. S.

With that, I will turn the call back to Pat for his closing comments.

Pat Matkins, CEO, Artyvian: Thanks, Lance. So to conclude, we’re very pleased with our second quarter performance, which we believe reflects the strength of our highly differentiated and highly defendable product portfolio. We continue to deliver meaningful top and bottom line growth, advance our robust pipeline and enhance our balance sheet. We remain confident in our ability to deliver double digit revenue growth at two times the growth of EBITDA as we expand our presence across markets with limited competition and leverage our existing global infrastructure and cross selling capabilities. More specifically, we expect future growth to be driven by the following key initiatives.

First, the AMD HTE launch. We’re in the middle of commercializing AMD in The US and starting to penetrate the $150,000,000 annual market opportunity. Second, On X heart valve data. We are marketing the JAK, which is the Journal of American College of Cardiology, clinical data showing a mortality benefit in patients 60 years of age compared to bioprosthetic or tissue valves. This is a new $100,000,000 annual market opportunity that we will be pursuing with the only mechanical aortic heart valve that can be maintained at an INR of 1.5 to two point zero.

Third, the NEXUS PMA positive thirty day data from Endospan’s TRIUMFTH trial. Endospan remains on track for PMA approval in the 2026. This data presented in May would, assuming if we exercise our option to acquire Endospan, bring us one step closer to being able to access the annual market opportunity of 150,000,000 And fourth, the Arecibo LSA IDE approval. We’re preparing to launch The US IDE trial for our third generation frozen elephant trunk for the treatment of acute and chronic dissections in the aorta. Finally, I want to thank all of our employees around the globe for their continued dedication to our mission of being a leading partner to surgeons focused on aortic disease.

With that, operator, please open the line for questions.

Operator: At this time, we will conduct the question and answer session. If you would like to ask a question, please press star, then the number one on your telephone keypad now, and you will be placed in the queue in the order received. Your first question comes from Bill Plavonic with Canaccord Genuity. Your line is open.

Bill Plavonic, Analyst, Canaccord Genuity: Great, thanks. Thanks for taking my question. Good evening. Just really want to just focus in on the AMDS. I think last quarter you had made the comment regarding 150 hospitals actively seeking IRB and back.

Kind of where are you in that process? Have you added more accounts? Because I think there’s 600 total. And are there other KPIs that you’re looking at? And then just secondly, I think really interestingly, talked about the cross selling.

I wonder if you could expand on that. What products are they picking up? What type of penetration rates are you seeing on those training sessions? Anything to help us kind of give us some color on how that may impact the rest of the business? Thanks.

Lance Berry, CFO, Artyvian: Bill, this is Lance. Maybe I’ll address the metrics question and let Pat talk about how things are going. So last quarter, we did give some non financial metrics to try and give everyone some feel for how the launch is going early on, particularly given that revenue was pretty minimal. I think we try to be clear with people to not initially expect us to continue to give that every quarter and we didn’t give it this quarter. I will say that our pipeline is continuing to build and those metrics had I given them would be larger this quarter than they were last quarter.

We’d probably leave it at that. And then I’ll let Pat talk about how the launch is going.

Pat Matkins, CEO, Artyvian: Yes. And also just a correction, there’s about 1,000 accounts that you mentioned 600. I think on previous calls, we’ve commented that about 75% of the volume is in the top 600 centers. But there’s about 1,000 accounts that do acute type As in The US. As far as your question about cross selling, we’re doing trainings every month where we bring up to 20 surgeons to these centers to learn.

It’s a one day program to learn how to implant the AMDS. And we’re obviously building relationships with those customers. Some are existing customers. Some are customers we haven’t they may buy BioGlue but may not buy our On X valve. And as they get to understand the AMD’s technology and then they understand the On X technology and the new data, we’ve literally had customers leave the AMD’s training and start using On X when they get back to their hospital.

So we thought there would be some cross selling benefit. It was a little more profound than I thought it would be as quickly as that.

Bill Plavonic, Analyst, Canaccord Genuity: Great. Thanks. And then if I can ask one more, I will. It’s just BioGlue in China. There wasn’t really any commentary on that.

Just wondering if you could give us an update there. And thanks again for taking my questions.

Pat Matkins, CEO, Artyvian: Yes. So when we talked about the launch of BioGlue, we said it was really a second half twenty twenty five. Given all hoops you have to jump through with the provinces and the hospital contracts, etcetera. So we should start seeing BioGlue in the second half of this year. So we really haven’t talked more about it than what we’ve previously put out.

Operator: Your next question comes from John MacCulley with Stifel. Line is open.

John MacCulley, Analyst, Stifel: Hi, Pat and Lance. Congrats on the strong 2Q performance. Just wanted to start off on guidance. There’s a few moving pieces. Just want to make sure I have this right.

There’s currencies moving towards flat impact for the year. There was 2Q outperformance, but you’re also feeling pretty strongly about 2Q twenty twenty five. Could you just talk through how all those dynamics are impacting the updated guidance?

Lance Berry, CFO, Artyvian: Yes. I think high level simple way to think about it is if you look at the second quarter, we had given people a midpoint expectation of 13% constant currency growth for second quarter. We came in at 14.5%. So obviously, above that. That was good underlying strength.

Our currency assumption also turned out to be conservative for the second quarter, which I’m sure people have seen that with the euro dollar in particular has done. And so that drove some of the outperformance in Q2 on an as reported top line revenue number. And then at this point, I think we needed to just acknowledge that currencies moved in a pretty positive way and go ahead and build a little bit of that into our guidance for the second half. So those are at a high level the moving pieces. But you can see we also moved up our full year expectation for constant currency revenue to 12% to 14%.

John MacCulley, Analyst, Stifel: Got it. That’s helpful. And I wanted to follow-up on AMDS. I know Bill just asked about it, but we’ve recently done some checks in that space and just wanted to get your sense on physician adoption and utilization. What we’ve heard is that once doctors get this in their hands, they’re not really feeling a sense of caution that it’s a new device.

They’re excited about it and they’re sort of immediately integrating it into their practices. Can you just talk about what you’re seeing from that dynamic? Are physicians steadily ramping? Are they adopting immediately? Any thoughts there would be helpful.

Thanks.

Pat Matkins, CEO, Artyvian: Yeah. So I think one of the and we’ve reiterated this on previous calls think one of the real advantages of AMD is it’s a simple, elegant solution to this problem. It solves a big clinical problem for patients, which is malperfusion. We were hearing case after case of patients coming in with malperfusion based bloods not flowing where it’s supposed to go, with legs not showing up on MRIs or CT scans, no blood flow. And then they put an MDS in and the patient’s got blood flow back to their legs.

So it’s an amazing device, but it’s super simple. We do a one day training. We want to make sure we’re very clear about people how to size it, how to implant it. But after that, it’s super simple. It’s easy.

I think that’s one of the real benefits, is that every aortic surgeon in The US or a surgeon that puts aortic valves in can use this device, and it can be effective for them. Unlike some technologies that are super complicated to use, this is not one of them. I think that’s going to be one of the real benefits of the product going forward.

John MacCulley, Analyst, Stifel: Thanks for taking the questions.

Operator: Your next question comes from Frank Tuchinen with Lake Street Capital. Your line is open.

Nelson, Analyst, Lake Street Capital: Hey, this is Nelson on for Frank, and thanks for taking the questions, and congrats on all the progress here. Obviously, we’ve talked in the past about ANDS and future launches kind of layering on to the existing Salesforce. Maybe just talk a bit more about that. I think the last I saw was the 55 person commercial team handling the ramps. And correct me if I’m wrong there, but I understand it’s still early innings, but any incremental targeted expansion that you’re looking at kind of now?

Or is that something you’d maybe take on with PMA approval?

Pat Matkins, CEO, Artyvian: Yes. So we’ve talked previously. I mean, we don’t really see a huge difference with the PMA approval other than not having to get an IRB. But I think the point you bring up is a good one. So I mentioned earlier on the first question, there’s about 1,000 centers that do AMD’s implant that can do an AMD’s.

They do acute type A dissection surgery. We’re pretty strong. Our team of 50 plus reps is pretty strong in the top 600 centers. We sell things in all 1,000, but the last 400 aren’t exactly a top focus for us. So that is something we’re evaluating maybe in the second phase of the launch, but we’re not going to get into specifics on this call.

We talk about that more when it happens down the road.

Nelson, Analyst, Lake Street Capital: Okay. Makes sense. Thank you. And then on Arecibo, maybe just walk us through kind of the next steps there with ID approval in hand. And I heard you say you expect to start that trial kind of by year end, but maybe just any additional color you can provide there on timelines or any

Bill Plavonic, Analyst, Canaccord Genuity: Yes.

Pat Matkins, CEO, Artyvian: So we we were super excited to get the approval. So we got FDA approval. Now it’s just like any clinical trial in the medical device space. We’ve got to get contracts with the hospital. We have to get an IRB with the hospital for the trial.

We’ve already got devices, sterile devices coming in. So it’s really just how long it takes us to get through the contracting and the IRBs at the hospitals. And we expect to enroll our first patient before the end of the year.

Nelson, Analyst, Lake Street Capital: Perfect. All right. Thanks again, guys. Congrats.

Operator: Your next question comes from Suraj Kalia with Oppenheimer. Your line is open.

Jacob, Analyst, Oppenheimer: Hey, Lance. This is Jacob on for Saraj. Thanks for taking the questions and congrats on the quarter. So just wanted to start off with your guide to adjusted EBITDA growing about twice as fast as the top line, which suggests a shift in mix. Could you help break down what’s driving that leverage?

And I guess more specifically, what’s the expected contribution from the MDS launch on gross margin expansion and how accretive do you see that being over time?

Lance Berry, CFO, Artyvian: Yes. So I think things are playing out the way we expected at the beginning of the year. We talked about the EBITDA margin kind of coming from both SG and A leverage, but also that we thought we could get about a point of gross margin expansion this year, primarily due to mix. And so far that’s we’re starting to see that play out. We had about 50 basis points of gross margin expansion this quarter early on in the launch.

So we do think that that can drive gross margin expansion going forward, which can be another enabler for EBITDA margin expansion. This year, we are making sure that we invest every dollar we need to in this launch to make sure it gets off to a great start. So it’s probably not quite as much drop through. But if you look in the outer years, I mean, this is an extremely high gross margin product that’s being sold through the exact same sales force. So we expect it to be a significant contributor to EBITDA in the future.

Jacob, Analyst, Oppenheimer: Yeah, I know. That’s very helpful. And then just on X. So it’s been a consistent growth driver for you the past few years. How stable is that business looking ahead?

And really on that note, can you provide any directional color on what’s embedded in the guide for On X and the stent graft portfolio?

Pat Matkins, CEO, Artyvian: Yeah, I’ll take the first part. Ever since we launched the Lil’ INR for the On X valve, which was when we acquired the company back in 2016, we’ve consistently grown that business double digits. I think the CAGR over the last seven or eight years is like 12% or 13%. I talked about on the last call that we’ve got a bunch of things going in our favor. We’ve got the only indication for low INR.

We’ve got the AMDS launch with the cross selling opportunities I just mentioned earlier. We’ve got the five year post approval data that shows an 87% reduction in major bleeding. And then there was a paper presented at STS in January showing if you get a mechanical valve under the age of 60, you have a mortality benefit versus a tissue valve. So we haven’t even started marketing that to cardiologists, and the business is growing over 20%. So we’re seeing an acceleration of On X based on all those factors.

And we’re not going to break out what we’re thinking for in the back half. We have the segments we report against. But it’s been obviously very robust.

Lance Berry, CFO, Artyvian: Yeah. And I think on the guidance thing, we’re not going to get into the nitty gritty on what’s the change. But at the beginning of the year, we laid out kind of our standard set of parameters of how we think about their different product lines growing longer term with kind of BioGlue and tissue is a mid single digit growth rate businesses and On X is a low double digit and stent grafts before taking into account AMDS in The U. S. Is kind of a mid teens business.

And then U. S. AMDS adding incremental growth over that. And then since then, we moved our midpoint up twice in both of the first and second quarter call. And I think I would just say definitely the On X performance in The US and the strength we’re seeing in that business is definitely a big contributing factor to our ability to raise the midpoint.

Operator: Your next question comes from Mike Matson with Needham. Your line is open.

Joseph, Analyst, Needham: Hey, guys. How are doing today? This is Joseph on for Mike. Maybe to just start off with On X. I mean, you guys called out stocking orders for AMDS.

I was curious if there was any kind of one timers that affected On X in the quarter. As you said, there was cross selling. You guys are seeing cross selling opportunities with AMDS and On X. So just wondering, yeah, if there’s any one timers in that On X or is this all data and awareness driven?

Pat Matkins, CEO, Artyvian: Yeah. So the biggest market and the fastest growing market is in The US. And we don’t do any bulk deals. We don’t do any individual sales. It’s all off consignment and use.

So the big chunk of that growth rate is coming off implants.

Joseph, Analyst, Needham: Okay. Okay, perfect. And then maybe just a quick one on the ARTISON trial. Appreciate the color you guys have given so far. I’m just curious maybe a little bit more on the trial.

What does follow-up time look like? Is there any idea on when data readouts could be in? I guess just given the complexity of the procedure, does it take a while to train surgeons who opt into this trial? Has training like that already happened with you with Artyvion?

Pat Matkins, CEO, Artyvian: Yeah. Once again, it’s a little bit like my comments on AMDS. One of our mantras at the company is to come up with simple, elegant solutions that improve outcomes. AMDS is kind of a poster of that. The Arecibo device, which is the trial called Artesyn, it’s the first frozen elephant trunk device that has a branched subclavian feature on it.

That’s going to make the procedure easier. So it’s important to note all the surgeons in this trial already perform frozen elephant trunk operations. They use a competitive device. We think ours will be easier to use, faster, and provide better outcomes. So we don’t think that is there’ll still be hands on training because they have to get familiar with our delivery system and the new device.

But it’s really not a huge training lift. So we expect this trial to ramp pretty quickly.

Joseph, Analyst, Needham: Okay. Thanks very much and congrats on the quarter. You guys are very strong.

Pat Matkins, CEO, Artyvian: Thanks.

Operator: Your next question comes from Destiny Hance with Ladenburg Thalmann. Your line is open.

Destiny Hance, Analyst, Ladenburg Thalmann: Hey. Thank you for taking the questions. Just one for us. I’m I’m sorry if I missed it, but curious. If you could talk about some pricing trends, and if you’re seeing any any changes in pricing and power there.

Lance Berry, CFO, Artyvian: Yeah. So, Destiny, I think your question was just an overall question about pricing environment and what we’re seeing. Is that correct?

Destiny Hance, Analyst, Ladenburg Thalmann: Yes, please.

Lance Berry, CFO, Artyvian: Yeah, I mean, we’ve talked about this before. I mean, the nature of our devices is they’re generally lifesaving and not super high volume from a individual line item in the hospital. And because of that, we typically have not seen price pressure and have really had an ability to drive modest inflationary type price increases consistently over time. And that continues to be the case. Now I know in previous years we’ve had some kind of exceptionally large price increases in individual products.

We don’t really have any of that going on at the moment. This is really more volume driven with just kind of normal inflationary price benefit.

Destiny Hance, Analyst, Ladenburg Thalmann: Great. Thank you. I appreciate it.

Operator: Your next question comes from Dan Stouter with Citizens JMP. Your line is open.

Lane Morgan, Investor Relations, Gilmartin Group, Artyvian0: Yes. Hey, Grace. Thanks for the questions. I just had a few quickly. So following up on the On X growth, it’s been talked a lot about, but just wanted to try to get a sense of how much

Lance Berry, CFO, Artyvian: of it was due to

Lane Morgan, Investor Relations, Gilmartin Group, Artyvian0: those cross selling benefits. It seems like the business is still really strong beyond that, but could you give us any color on how much of the quarter’s contribution was from new accounts from that halo effect of the MDS? And maybe if you have any metrics on higher utilization for On X that would be really helpful. Thank you.

Lance Berry, CFO, Artyvian: Yes. So we’re not going to get into the nitty gritty on utilization, but I will say definitely there was a meaningful uptick from new accounts. Now is that due to cross selling or due to the new data or a combination of both? Like that’s really hard to tease out. But it’s not just increased utilization in our existing customer base.

It is definitely also driven by new customers.

Lane Morgan, Investor Relations, Gilmartin Group, Artyvian0: Okay, that’s great. And then just one follow-up on free cash flow. Great improvement during the quarter. I just wanted to get a sense of how we should be thinking about it for the back ’25. Any cadence we should keep in mind?

And any more notable cash items that we should be thinking about for the rest of the year? Thanks.

Lance Berry, CFO, Artyvian: Yes. I will say timing of cash can make things fluctuate quarter to quarter. But what we’ve said consistently and we still say is that we expect to be positive for the full year. We did have a really good quarter this year. This quarter, which we needed to because some of that was catch up from Q1.

I would say year to date, we feel like we’re in a pretty good spot to deliver on our objective of being free cash flow positive for the full year.

Lane Morgan, Investor Relations, Gilmartin Group, Artyvian0: Great. Thanks for the questions and great quarter.

Pat Matkins, CEO, Artyvian: Thanks.

Operator: Mr. Mackin, there are no further questions at this time. I would like to turn the floor back over to management for closing remarks.

Pat Matkins, CEO, Artyvian: Well, thanks for attending. Again, we’re super excited about the quarter. We appreciate you all joining. We’ve got a lot of momentum. We’re growing double digits.

We’re growing twice as fast on the bottom line. We’re generating cash. We delevered, And we’ve got a lot of growth drivers we talked about and new clinical trials starting. So we’re super excited and look forward to reporting out again next quarter.

Operator: This concludes today’s call. Thank you for attending, and have a wonderful rest of your day.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.