TransMedics Group, Inc.

Good afternoon and welcome to the Transmedics third quarter 2025 earnings conference call. At this time, all participants are in the listen-only mode. We will be facilitating a question and answer session towards the end of today's call. As a reminder, this call is being recorded for replay purposes. If you require operator assistance, please press star and then zero. I would now like to turn the call over to Ms. Lane Morgan from Gilmartin Group for a few introductory remarks. Thank you.

Thank you. Earlier today, Transmedics released financial results for the quarter ended September 30th, 2025. A copy of the press release is available on the company's website. Before we begin, I would like to remind you that management will make statements during this call, including during the question and answer portion of the call, that include forward-looking statements within the meaning of federal securities laws. Any statements contained in this call that relate to expectations or predictions of future events, results, or performance are forward-looking statements. These four looking statements address various matters, including, among other things, future events, results, and performance, financial guidance, and projected expectations, potential market and business conditions, our examination of operating trends, the potential commercial opportunity for our products and services, the potential timing, outcome, and impact of new clinical programs, and our potential initiatives, opportunities, and plans in the U.S. and globally, including timing and expectations. These statements involve risks and uncertainties that could cause actual results or events to materially differ from those anticipated or implied by the forward-looking statements. Accordingly, you should not place undue reliance on these statements. Additional information regarding these risks and uncertainties appears under the heading Risk Factors of our Form 10Q filed with the Securities and Exchange Commission on July 30, 2025, and our subsequent SEC filings, which are available at www.sec.gov. and on our website at www.transmedics.com. You can also find the company's slide presentation with information on third quarter 2025 results on the investor relations section of the Transmedics website. Transmedics claims any intention or obligation, except as required by law, to update or revise any financial projections or forward-looking statements. This conference call contains time-sensitive information and is accurate only as of the live broadcast today, October 29th, 2025. And with that, I will now turn the call over to Wally Passanin, President and Chief Executive Officer.

Thank you so much, Lane. Good afternoon, everyone, and welcome to Transmedic's third quarter 2025 earnings call. Joining me today is Gerardo Hernandez, our Chief Financial Officer. Organ transplantation remains a key area of focus for policymakers in both the U.S. and around the world. In the U.S., the ongoing National Modernization Initiative is focused on growing transplant volumes while streamlining organ donation, coordination, and oversight processes. Internationally, efforts are similarly focused on maximizing utilization of donor organs for transplants, while also finding more efficient ways to manage organ procurements and improving post-transplant clinical outcomes. Globally, Transmedics is uniquely positioned as the ideal solution to address these initiatives through our differentiated OCS technology, NOP clinical and logistical services, and our proprietary transplant digital ecosystem. As we will outline today, we are seeing strong signals supporting this conviction. We are now laser-focused on capitalizing on our momentum worldwide to provide our unique solutions to promote organ transplantation and save more lives. We are extremely proud of our strong results achieved in Q3, despite the anticipated and typical transient seasonal slowdown seen in the U.S. national transplant volumes, as reported by UNOS OPTN data in Q3. Specifically, we're very encouraged by the year-over-year growth trend, which we strongly believe is a more relevant and meaningful performance metric, especially in a seasonal quarter like Q3. Let me share the summary of our results for 3Q 2025. Total revenue for 3Q 2025 was approximately $144 million, or exactly $143.8 million. representing approximately 32.2% growth year-over-year. We experienced year-over-year growth across all three organ segments, driven by higher overall utilization and center penetration of OCS NOP in the U.S. Specifically, we saw year-over-year growth of nearly 41% in liver, approximately 14% in heart, and approximately 5% in lung revenues in Q3. Our overall gross margins for 3Q was approximately 59%, representing 2.9% growth year over year. We delivered operating profit of approximately $23.3 million in 3Q, representing more than 16% of total revenue, up from 3.9 million or approximately 4% of total revenue in 3Q 2024. And finally, we have driven strong cash generation. We have significantly improved our billing processes and have maintained a healthy AR collections, which resulted in the addition of approximately $65.6 million of cash to our balance sheet as we ended 3Q with over $466.2 million in cash. Shifting now to transplant logistics infrastructure and performance. Transplant logistics service revenue for 3Q was $27.2 million, representing approximately 35% year-over-year growth. Throughout 3Q, we owned and operated 21 aircraft, before adding our 22nd aircraft in October, which we were targeting to end 2025 with 22 owned aircraft. In 3Q, we maintained coverage of approximately 78% of our NOPE missions requiring air transport, compared to approximately 61% in Q3 of 2024. Meanwhile, we have continued to add to our pilot crew, enabling us to experiment with double-shifting a portion of our fleet by year-end. We are pleased by our strong operational 3Q performance achieved despite the expected transient seasonality. We are confident that this seasonal impact is behind us as we have seen volume rebound in September and into early Q4. Moving now to update on our next-gen OCS enhanced heart and de novo lung clinical programs. We are thrilled to report that several U.S. heart and lung transplant centers are approaching the initiation of patient enrollment for the enhanced heart and de novo lung trials. We remain confident that the enrollment will start in Q4 2025. Meanwhile, our team is actively working to complete our responses to the remaining FDA questions and expect that all IDE conditions for both trials will be satisfied by early next year. We're very excited about initiating these two programs to demonstrate the potential positive clinical impact of our Gen 2 modification on heart and lung transplantation in the U.S. Importantly, we hope that these programs will catalyze significant OCS heart and OCS lung adoption in the U.S. in 2026 and beyond. Now, please allow me to discuss our effort to expand our Transmedics NOP model outside of the US, which represents a key mid-term growth driver for Transmedics. As I stated before, Transmedics US NOP success has been highly visible across the global transplant markets. This resulted in many international geographies engaging with Transmedics to explore the potential for replicating all or a portion of our NOP model and our integrated logistics platform to help them grow their transplant programs. Importantly, through these market engagements, we became very aware of their significant needs for a dedicated transplant logistics support for reasons similar to those we've seen and experienced in the US. To that end, in September, we were excited to announce our plans to launch our first OUS NOP program in Italy. We are now actively establishing up to four hubs to serve as launch points for that program, strategically covering both northern and southern Italy. We are also actively staffing up our Italian clinical support teams. Now, it is important to note that we are planning to start building an EU air and ground transplant logistics network similar to the one we have established in the US. However, appropriately sized to meet the European needs. Given our current knowledge of the Italian and European transplant logistics need, we see a significant opportunity for Transmedics to capitalize on by replicating our transplant logistics service in Europe. Please allow me to repeat. Given our current knowledge, we see a significant business opportunity and revenue generating opportunity by replicating our transplant logistics service in Europe. to meet the growing needs for a dedicated transplant network, logistics network in European countries. We expect the Italian NOP program to launch in the first half of 2026. We're also currently engaged with several other European countries and also engaged with regions outside of Europe to expand our program beyond Italy in the coming years. Stay tuned. This initiative will serve as an additional growth catalyst beginning as early as late 2026 and more meaningfully in 2027 and beyond. With that, let me turn to the here and now. We are laser focused on finishing out 2025 strong to round out another great year for our business and potentially grow the U.S. national transplant volumes for the third consecutive year in a row. We are continuing to drive adoption of our OCS NOP across all organs. We are expanding our OPO partnership to increase organ utilization for transplantation around the United States. Next week, we are hosting our annual transplant leadership forums in Boston with approximately 200 transplant leaders from all transplant market segments expected to participate. We are continuing to strengthen our clinical support staffing to meet the growing demand. And finally, we remain on track to begin double shifting of a portion of our aircraft fleet by year end to enhance operational efficiency. We are confident that all these activities will position us well to end the year strong and be in a good position for the expected ramp in adoption in 2026. Before I conclude, please allow me to provide a status update on our long-term growth initiatives and our planned new global headquarters and manufacturing facility. First, we are very pleased with the preclinical and product development progress of our OCS kidney program, which is underway and was announced publicly at the World Transplant Congress Scientific Conference in August. We expect to reveal the design of our OCS kidney device in early 2026 at the American Society of Transplant Surgeons Winter Symposium. Second, the development of our Gen 3 OCS platform is well underway with significant progress already made on many of the advanced technology platforms that will be encompassed in that next Gen 3 OCS platform. We expect to share more detail on Gen3 OCS platform in the second half of 2026. Third, as Gerardo will outline later, we are actively investing in critical business infrastructure systems to better position Transmedics to scale and grow with strong controls and efficiencies. Finally, We have narrowed down our selection for the new global headquarters of Transmedics to the city of Somerville, a northern suburb of Boston. We are in the final stages of lease negotiations for a state-of-the-art new building to combine all of our functions in one campus. And we expect to announce the location in early January, 2026. As you can see, we are not slowing down. and we are growing our technology platform and geographical outreach. As I have stated before, our near-term capital allocation strategy is a growth-oriented strategy. That said, while we expect operating margins to fluctuate somewhat as we deploy capital across these initiatives, we have a high degree of confidence in our long-term ability to deliver substantial top and bottom-line growth. Now let me conclude my remarks by commenting on our expectations for the remainder of 2025, which Gerardo will detail further. Based on our performance to date and our expectation to end the year strong, We are narrowing the range to raise the midpoint of our full year 2025 revenue guidance. We are now guiding to arrange between 595 to 605 million for full year 2025 revenue. This represents approximately 36% growth over the full year 2024 at the midpoint. With that, let me turn the call to Gerardo to cover the detailed financial results for the quarter.