TransMedics Group, Inc.

Good afternoon and welcome to Transmedic's second quarter 2026 earnings conference call. At this time, all participants are in a 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. I would now like to turn the call over to Hannah Jeffrey from the Gilmartin Group for a few introductory comments.

Thank you. Earlier today, Transmedics released financial results for the quarter ended June 30, 2026. 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 made during this call that can relate to future events, Results or performance, including expectations or predictions, are forward-looking statements. All forward-looking statements, including, without limitation, are examination of operating trends, the potential commercial opportunity for our products and services, the potential timing, benefits, or outcomes of new clinical programs, and our future financial expectations, which include expectations for growth in our organization, and guidance and or expectations for revenue, gross margins and operating expenses in 2026 and beyond are based upon our current estimates and various assumptions. These statements involve material risks and uncertainties that could cause actual results or events to materially differ from those anticipated or implied by these 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 10-K, filed with the Securities and Exchange Commission on February 24, 2026, our subsequent SEC filings, and the forward-looking statements included in today's earnings press release, which are available at www.sec.gov and our website at www.transmedics.com. Transmedics disclaims any intention or obligation, except as required by law, to update or revise any financial projections, expectations, predictions, or forward-looking statements, whether because of new information, future events or developments, or otherwise. This conference call contains time-sensitive information and is accurate only as of the live broadcast today, August 4, 2026. And with that, I will now turn the call over to Waleed Hassanein, President and Chief Executive Officer.

Thank you so much, Hannah. Good afternoon, everyone, and thank you for joining Transmedics' second quarter 2026 earnings call. With me today is Gerardo Hernandez, our Chief Financial Officer. Before reviewing our second quarter performance and future catalysts, I want to take a moment to reflect on what we've built at Transmedics and the unparalleled value we are delivering every day for organ transplant patients globally. Transmedics operates a first-in-class Thank you for joining us. Second is the National OCS Program or NOP, a dedicated national infrastructure for organ procurement, surgical and clinical services. Third is Transmedics Transplant Logistics Network, the first transplant-dedicated air and ground logistics network in the United States. And fourth, NOP Connect. The first digital ecosystem that is purpose-built to run the end-to-end transplant workflow with full transparency for every stakeholder involved. Each asset is hard to replicate on its own. Together, they form a substantial moat. And we're not stopping here. We are determined to keep widening that moat. Effective July 1, 2026, We began offering a new service, which is donor and recipient clinical screening coordination services, allowing transplant programs for the first time to run more of their workflow efficiently on the Transmedics platform. We continue to believe that This transmedics platform can support approximately 30,000 transplants by 2032, deriving more than $2 billion in top-line annual revenue with a healthy operating profile. Our capital allocation priority has always been and is unchanged and deliberate. We are focused on durable top-line growth ahead of near-term operating leverage. So alongside our second quarter results, I will spend a meaningful portion of today's call on exactly what we are funding over the next 18 to 24 months, the markets each investment unlocks, and the milestone you should hold us accountable to. Turning to the quarter, second quarter 2026 with the strongest in our history in both revenue and case volume. Here are the highlights. Total revenue of approximately $190 million, up approximately 21% year-over-year and approximately 9% sequentially. Transplant product revenue of $111 million, up approximately 16% year-over-year and approximately 3% sequentially. Service revenue of $79 million, up approximately 29% year-over-year and approximately 19% sequentially. Growth was led by liver, which was up approximately 28% year-over-year and approximately 7% sequentially. Heart also grew approximately 6% year-over-year and approximately 23% sequentially. And we expect heart to continue to accelerate in the fourth quarter and beyond as we unlock enhanced Part B. Transmedics Logistics delivered approximately $41 million. up approximately 39% year-over-year and approximately 30% sequentially. This growth is the clearest evidence yet that vertical integration of logistics is both a growth engine and a structural differentiator for transmedics. It is precisely why we are replicating this network outside of the United States. On average, we covered approximately 86% of NOP mission requiring air transport in the quarter, up from 82% in the first quarter. This resulted in improved operating efficiency. Taking share in this highly competitive transplant logistics market is the real cost efficiency to transplant centers relative to the other transplant logistics providers in the space. Adjusted income from operation of approximately $25.8 million or approximately 14% of revenue delivered while continuing to fund our growth initiative. We ended the quarter with approximately $473 million in cash and cash equivalent, giving us great confidence in our ability to self-fund our growth investment from the balance sheet and operations. and finally, on July 1st, 2026, we closed our strategic investment in pad aviation in Germany, the first step towards establishing Transmedics Aviation Europe and building a pan-European transplant logistics network modeled on our U.S. network that we discussed in the quarter. We will discuss the implication of this growth investment later on this call. In short, Second quarter strength was driven by strong growth across OCS case volume and clinical services, and it was achieved with minimal contribution from enhanced Part B or de novo, which we expect to begin contribute meaningfully late in the fourth quarter and definitely into 2027. Now, let me shift gears and address an important strategic topic. As we all know, our stock has been volatile since our last call as investors weigh our growth investment against We take this matter very seriously and I want to address it directly with data on both the size of the opportunities we're investing in and our track record of converting investment into significant results and significant shareholder value. As I mentioned earlier, our technology Service Infrastructure, Logistics Network, and Digital Platform well positions Transmedics to potentially surpass $2 billion in annual revenue with a strong operating profile at scale. Four initiatives underpin that path. Each has a defined market, a defined investment window, and a defined milestone. First, heart and lung growth to try to replicate the liver trajectory. Enhance Part B targets a U.S. heart segment where we hold no clinical indications today. This segment represents approximately 2,200 DBD heart transplanted annually in the U.S. with roughly four hours of preservation time. We designed Enhance Part B to serve that segment in two distinct ways. The first is using the OCS for its improved preservation capabilities and enhanced function ex vivo. Second is using CHOPS, a lower-cost technology alternative for transplant programs who may be focusing on controlling cost. De Novo is our focused effort to re-establish or frankly resurrect the lung perfusion market in the U.S. and broaden OCS lung adoption. Together, Enhance and De Novo gives transmedics access to a conservatively estimated 2,000 to 5,000 incremental U.S. heart and lung cases annually. This could materially expand our addressable U.S. opportunity from existing product line. As it relates to execution milestone, the IDE supplement incorporating TROPS, which is the Transmedics Controlled Hypothermic Organ Preservation System into the enhanced trial has been submitted and is currently under FDA review. We expect it to be approved by late Q3 or early fourth quarter, with the lung IDE to follow shortly thereafter. Second initiative is the kidney. This will enable us to access the largest transplant market segment in the U.S. and around the world. Let me give you the details. The U.S. performs more than 21,000 disease kidney transplants annually. In 2024, approximately 9,200 additional deceased donor kidneys were recovered and never transplanted, largely because of limitations of cold storage preservation. At any given time, approximately 100,000 patients sit on the U.S. kidney waiting list. More than 131,000 new ESRD cases are diagnosed each year. The estimated CMS cost of the waiting list alone is approximately $10 billion annually in the U.S. Simply stated, the demand for better donor kidney utilization is enormous and is a matter of national interest for CMS and for end-stage renal failure patients. Now let's shift gears to post-transplant outcomes in kidney transplants. Post-transplant outcomes are further constrained by delayed graft function, which occurs in 26 to 50% of U.S. kidney recipients, requiring the patients to go back on dialysis at a significant cost and morbidity. Ischemia and reperfusion preservation injuries are the primary cause of DGF post-kidney transplants. The estimated incremental cost is approximately $25,000 to $45,000 per DGF case in the U.S. To summarize, the kidney opportunity is massive and the clinical need is real and its associated costs are significant. Now let me explain how OCS Kidney could address these issues comprehensively. OCS Kidney is being designed as the first portable, normal thermic oxygenated perfusion system for kidney transplant. to significantly reduce ischemia reperfusion injury on the donor kidney. In addition, OCS Kidney is designed to include online functional assessment capabilities. We believe that OCS Kidney has the potential to significantly increase donor kidney utilization and significantly reduce the incidence of DGF post-transplantation, which will drive significant cost efficiencies to CMS. We're building OCS Kidney system on our next-gen which is Gen 3.0, which adds meaningful scale and operating leverage across the business. This is the single largest addressable segment available to us in organ transplantation in the U.S. and around the world. In terms of milestones, the development program is fully underway and we have begun pre-IDE discussions with FDA to define the best path for the IDE to work on it collaboratively with the agency. In fact, we had our first pre-IDE sub-meeting with the FDA this morning. We are targeting first clinical experience later in 2027, and the program is now entering engineering and manufacturing verification and validation to prepare for the first in human use. Global demand for OCS kidney is significant, and we are evaluating potential options to capitalize on OUS demand in parallel to our US IDE. The third initiative is international expansion to expand our total addressable market. As we've discussed, we are replicating the successful US NOP and logistics model in Europe, starting with Italy, where we have secured national reimbursement for machine perfusion and services that should take effect later this year or early 2027. were actively engaged in multiple regional transplant logistics tenders in Italy today, and the recent PAD aviation investment was the enabling step that makes us eligible to compete for these transplant logistics tenders across Italy and across Europe. We are also in discussions with several additional European countries on NLP and logistics. The opportunity in Europe leverages capabilities we've already built, materially expanding our addressable market, extends our life-saving impact to European transplant patients, and we view it as a meaningful growth catalyst for 2027 and beyond. Finally, building the technology platform to scale globally and drive significant operating leverage. That is NextGen or OCS Gen 3.0. Gen 3.0 is a complete redesign of the OCS platform, engineered from the ground up to deliver significant operating leverage and supply chain independence. In addition, it is designed to be highly autonomous and with cloud-based remote monitoring and control capability to enable scaling of clinical usage and to support operating capacity of 30,000 transplants and beyond globally by 2032. Now, let me conclude by review of our execution track record. Over the last four years, Transmedics has consistently outperformed growth expectations, with the few exceptions largely driven by seasonal softness while at greater scale. We have also consistently delivered strong bottom line performance. Despite our hyper-focus on top-line growth and deliberate deployment of capital to build our unparalleled platform, with that as a background, please let me state plainly for the record, Transmedics is and remains a growth-oriented business. Transmedics is and remains a growth-oriented business. We are funding these four growth initiatives over the next 18 to 24 months precisely because they are what carries us to approximately 30,000 plus transplants by 2032 and more than $2 billion in top-line revenue. Turning to guidance. Recognizing that we are early in Q3, which is a traditionally seasonally soft for transplant procedure volume, and early in the integration path for PAD aviation into our European operation, we are raising the low end of our full year 2026 revenue guidance to a range of $737 million to $757 million, representing 22% to 25% growth over 2025. Importantly, This guidance assumes no revenue contribution from pad aviation investment and no meaningful incremental revenue from enhanced Part B or de novo clinical programs. With that, let me turn the call over to Gerardo to review our second quarter financial results in detail.