Key Points
In its latest quarter, TransMedics reported solid gains in revenue and saw net income nearly triple from year-ago levels.
TransMedics increased its full-year 2025 sales outlook.
Co-founder/CEO Waleed Hassanein said that TransMedics remains on pace to achieve its long-term goals in the next several years.
Here's our initial take on TransMedics' (NASDAQ: TMDX) second-quarter financial report.
Key Metrics
| Metric |
Q2 2024 |
Q2 2025 |
Change |
vs. Expectations |
| Total revenue |
$114.3 million |
$157.4 million |
38% |
Beat |
| Earnings per share |
$0.35 |
$0.92 |
163% |
Beat |
| Gross margin |
61% |
61% |
unchanged |
n/a |
| Operating expenses |
$56.8 million |
$60 million |
6% |
n/a |
TransMedics Is Becoming a Profit-Making Machine
TransMedics reported second-quarter financial results that were considerably better than most investors had anticipated. On the sales front, gains of 38% to $157 million were healthily higher than projected, as the organ transplant specialist reported particularly strong gains in utilization of TransMedics' Organ Care System (OCS) for liver and heart transplant procedures. Gross margin stayed stable at 61%, reflecting disciplined cost controls in production of TransMedics' groundbreaking medical devices.
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Equally important, though, was the effort that TransMedics made to keep costs in check. Operating expenses were up just 6% in the quarter. That allowed profits to jump to nearly $35 million for the quarter, up from just over $12 million in the year-earlier period. The excellent financial performance has allowed TransMedics to accumulate a healthy cash hoard that now exceeds $400 million in value.
Investors were also pleased that TransMedics increased its guidance for the full 2025 year. The organ transplant specialist now expects its sales for the year to come in between $585 million and $605 million. That's up $20 million from its previous guidance range.
Immediate Market Reaction
Investors celebrated the news, and TransMedics stock was up more than 8% in after-hours trading 30 minutes after the release of its quarterly report. Most had expected solid performance from TransMedics, but the size of the company's growth came as a shock to many, particularly on its bottom line.
The move higher helped to offset some of the downward pressure that the stock has fought against over much of the past year. With shares still down roughly a third from their highs last summer, TransMedics has more room to recover if it can generate some positive momentum.
What to Watch
Co-founder/CEO Waleed Hassanein gave an optimistic view on TransMedics' long-term outlook, saying that the company remains on track to surpass its 10,000-transplant target during 2028. That's a bold goal, but with the company making strategic investments to support its expansion efforts, TransMedics looks like it could keep enjoying impressive growth for years to come.
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