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    ORGO
    Earnings call· Jun 2026(Q2 FY26)

    Organogenesis Holdings Q2 FY26 earnings call ORGO

    Aug 6, 2026 Source

    Executive summary

    Organogenesis Holdings Inc. Q2 FY26 — Strategic Restructuring Amidst Market Contraction

    Organogenesis navigated a challenging Q2 FY26 marked by significant year-over-year revenue contraction due to CMS policy changes in the skin substitute market. Despite this, the company demonstrated sequential revenue improvement and substantial market share gains in wound care unit volume. Management has implemented strategic cost reductions and is prioritizing its evidence-based portfolio and pipeline assets like Amnuvx, aiming for stabilization and future growth in a recalibrated market.

    Highlights

    5

    • Total revenue increased 18% quarter-over-quarter in Q2 FY26, showing sequential improvement from Q1.

    • Advanced Wound Care products sales increased 23% sequentially in Q2 FY26.

    • Wound care unit volume increased 30% quarter-over-quarter, indicating market share gains.

    • Restructuring efforts are expected to reduce annual operating expenses by more than $32 million.

    • FDA accepted the Biologic License Application for Amnuvx, setting a PDUFA target action date of April 24, 2027.

    Concerns

    5

    • Total revenue declined 58% year-over-year in Q2 FY26, reaching $42.8 million.

    • Advanced Wound Care net product revenue declined 61% year-over-year to $36.1 million.

    • GAAP net loss was $96.3 million in Q2 FY26, compared to $9.4 million last year, including a $30 million noncash tax expense.

    • Adjusted EBITDA loss was $34.4 million in Q2 FY26, compared to $3.6 million last year.

    • Full-year 2026 revenue guidance was lowered to $179 million to $215 million, reflecting a 62% to 68% year-over-year decline.

    Guidance & targets

    9
    CategoryTargetConfidence
    Total Net Revenue
    $179 million to $215 million
    high materiality
    Medium
    Advanced Wound Care Net Product Revenue
    $151 million to $183 million
    medium materiality
    Medium
    Surgical & Sports Medicine Net Product Revenue
    $26 million to $30 million
    medium materiality
    Medium
    Grant Income
    $1.9 million
    low materiality
    High
    Second Half Revenue Decline
    64% to 74% year-over-year
    high materiality
    Medium
    Adjusted EBITDA Loss Reduction (H2 vs H1)
    nearly 60% reduction (low end) to more than 90% reduction (high end)
    high materiality
    Medium
    Operating Expenses (excluding COGS) Reduction
    approximately 32% year-over-year
    medium materiality
    High
    Operating Expenses (excluding COGS) Reduction (H2)
    more than 40% year-over-year
    medium materiality
    High
    Dermagraft Launch
    mid-2028
    medium materiality
    Medium

    Segment performance

    2
    SegmentRevenueYoYQoQMargin
    Advanced Wound Care
    Primary driver of the overall revenue decline year-over-year, but showed strong sequential recovery and unit volume growth, indicating market share gains.
    Unit volume growth QoQ: +30%PuraPly AM RCT: 170 patients, statistically significant DFU wound closure at 12 weeksPuraPly AM Amputation Rate: 20% lower overall, 40% lower above/at knee for 11,000 patientsAffinity VLU Data: Statistically significant improvements in wound closure at 12 and 16 weeks
    		$36.1M-61%+23%—
    Surgical & Sports Medicine
    Experienced a year-over-year decline, contributing to the overall revenue decrease.
    		$6.7M-18%——

    Operational metrics

    23
    Grant Income
    $1.0Mvs $0.2M prior year
    Q2 FY26

    Income related to the grant issued by the Rhode Island Life Sciences Hub, offsetting employee-related costs.

    Non-GAAP Gross Profit
    $20.9M
    Q2 FY26

    Excludes $1.8 million of restructuring-related charges from cost of goods.

    Non-GAAP Operating Expenses (excluding COGS)
    $63.0Mdown 25% YoY vs $83.4M
    Q2 FY26

    Driven by a 27% decrease in SG&A expenses, partially offset by a 76% increase in R&D expenses.

    Non-GAAP Operating Loss
    $41.1Mvs $10.0M prior year
    Q2 FY26

    Excludes non-cash amortization and certain non-recurring costs.

    Adjusted Net Loss
    $89.0Mvs $7.5M prior year
    Q2 FY26

    Detailed reconciliation available in the press release.

    Adjusted EBITDA Loss
    $34.4Mvs $3.6M prior year
    Q2 FY26

    Reflects the impact of lower revenue and increased operating expenses.

    Cash, Cash Equivalents and Restricted Cash
    $46.8Mvs $94.3M as of Dec 31, 2025
    as of Jun 30, 2026

    Sufficient to fund operating expenses and capital expenditure requirements for at least the next 12 months.

    Restructuring Charges (COGS)
    $1.8M
    Q2 FY26

    Included in cost of goods sold.

    R&D Termination Costs
    $5.6M
    Q2 FY26

    Non-recurring costs associated with various R&D programs and vendors, included in R&D expenses.

    Workforce Reduction (June 2026)
    138
    June 2026

    Part of restructuring efforts to reduce cost structure.

    Annualized Cost Reductions (June 2026 Restructuring)
    $18.0M
    Annualized

    Expected cost savings from the June 2026 restructuring.

    Total Annualized Cost Reductions (Both Restructurings)
    $32.0M
    Annualized

    Combined expected annual operating expense reductions from March and June 2026 restructurings.

    Annualized Cost Reductions (March 2026 Restructuring)
    $13.4M
    Annualized

    Expected operating expense reductions from the March 2026 restructuring.

    ATM Agreement Offering Price
    $75.0M
    as of Aug 6, 2026

    Company entered into an At-The-Market (ATM) agreement to sell shares of common stock.

    Estimated Cost Savings (Q3 FY26)
    $7.0M
    Q3 FY26

    Related to March and June 2026 restructurings.

    Estimated Cost Savings (Q4 FY26)
    $9.0M
    Q4 FY26

    Related to March and June 2026 restructurings.

    Total Revenue Growth
    +18%QoQ
    Q2 FY26

    Reflects notable improvement in growth trends on a sequential basis.

    Advanced Wound Care Sales Growth
    +23%sequential
    Q2 FY26

    Sequential increase in sales of Advanced Wound Care products.

    Wound Care Unit Volume Growth
    +30%QoQ
    Q2 FY26

    Outperforming industry declines, indicating market share gains.

    Knee Osteoarthritis Patient Population
    30M+
    current

    Addressable market for Amnuvx, if approved, for symptomatic knee osteoarthritis.

    PuraPly AM DFU Study Patients
    170
    RCT

    Number of patients in the randomized controlled trial evaluating PuraPly AM for diabetic foot ulcers.

    PuraPly AM Amputation Study Patients
    11,000
    real-world

    Number of Medicare beneficiaries with DFU treated with PuraPly AM in a study showing reduced amputation rates.

    PuraPly AM Total Patients Studied
    23,000+
    cumulative

    Total number of patients studied across various PuraPly AM clinical and real-world evidence, reflecting primary and supporting data for CMS.

    Industry KPIs

    4
    MetricValueDetails
    Pipeline read out calendarAmnuvx PDUFA date set for April 24, 2027
    Regulatory approvals filingsAmnuvx BLA accepted
    Clinical trial efficacy safety dataPuraPly AM: Statistically significant DFU wound closure at 12 weeks
    Cumulative patients uptake since launch23,000+patients

    Risks & headwinds

    4
    Skin substitute market contraction due to CMS policy changesQ2 FY26 and ongoing into H2 FY26

    Total revenue declined 58% YoY in Q2 FY26; Advanced Wound Care sales declined 61% YoY.

    Mitigation: Strategic cost reductions, focus on evidence-based portfolio, market share gains, and expansion into new markets (Amnuvx).

    Slower pace of market recoveryH2 FY26

    Q2 FY26 revenue below expectations; full-year 2026 revenue guidance lowered to $179M-$215M (62%-68% YoY decline).

    Mitigation: Implemented two restructurings to reduce operating expenses by over $32M annually; commercial team positioned for market expansion as it recalibrates.

    Potential clawbacks for products without RCTsOngoing

    Clinicians are concerned about post-application audits and potential paybacks for products lacking evidence.

    Mitigation: Doubling down on wound care with evidence-based products (PuraPly AM, Affinity) and increasing focus on clinical evidence with new published studies.

    Dermagraft launch delayMid-2027 to mid-2028

    Launch delayed by approximately one year, from mid-2027 to mid-2028.

    Mitigation: Strategic decision to preserve cash by slowing down manufacturing build-out; product still expected to launch.

    What to watch in Q3 FY26

    4

    Sequential Total Revenue Growth

    Q3 FY26
    Current+18% QoQ in Q2 FY26
    TargetContinued modest sequential growth

    Why it matters

    Indicates the pace of market recovery and the effectiveness of the company's strategic adjustments.

    So our expectation is that the movement from here would be continued share gains, but more modest and obviously the growth on a sequential basis would be much more modest than what we'd anticipate or what we experienced in the first to the second quarter. So we see some modest growth into the third quarter with a little bit more strength in the fourth.

    Q&A highlights

    6

    What gives confidence that Medicare is stabilizing the skin substitute market beyond the OPPS proposal?

    Management sees month-over-month growth and clinicians becoming more comfortable with current coverage. CMS reinstating the $127.14 reimbursement rate and maintaining the tier structure (PMA, 510(k), 361) signals stability and the importance of evidence, leading to market share gains for Organogenesis.

    “CMS reinstated the $127.14 reimbursement rate. I think they did that with the intention of stabilizing the market and bringing consistency to the market. They also continue to identify the tiers where they recognize PMA products and 510(k) products and the 361.”

    asked by Iseult McMahon · answered by Gary Gillheeney

    2 min read5 chapters

    Detailed Narrative

    01

    Impact of CMS Policy Changes and Market Recovery

    Organogenesis experienced a significant 58% year-over-year decline in total revenue in Q2 FY26, primarily driven by a 61% decline in Advanced Wound Care sales. This contraction is attributed to sweeping changes by CMS in late 2025 to reform coverage and payment in the skin substitute market. While Q2 showed an 18% sequential improvement in total revenue and a 23% sequential increase in Advanced Wound Care sales, the pace of recovery has been slower than initially expected, leading to updated full-year guidance.

    02

    Strategic Response and Cost Reduction Initiatives

    In response to the prolonged market recovery, Organogenesis implemented strategic decisions to reduce its cost structure and better position for future success. This included two restructurings in 2026, resulting in a workforce reduction of 138 employees in June. These actions are expected to reduce annual operating expenses by over $32 million, with the March restructuring contributing $13.4 million and the June restructuring contributing $18 million on an annualized basis. The company aims to reduce operating expenses (excluding COGS) by approximately 32% year-over-year in FY26.

    03

    Focus on Clinical Evidence and Market Leadership

    The company is doubling down on wound care, emphasizing clinical evidence and its diverse, evidence-based portfolio. Management believes CMS's actions, such as holding payment rates steady and reinforcing differentiation of PMA products, promote market stabilization. Organogenesis is increasing its focus on new published studies, including compelling clinical results for PuraPly AM in diabetic foot ulcers (DFUs) and Affinity in venous leg ulcers (VLUs), to support expanded coverage and strengthen its market position.

    04

    Amnuvx Program Advancement

    Organogenesis is advancing its strategic initiative to expand into new markets with the Amnuvx program, previously known as ReNu. The FDA formally accepted the Biologic License Application (BLA) for Amnuvx, setting a PDUFA target action date of April 24, 2027. If approved, Amnuvx is expected to establish a new market category for a biologic product addressing symptomatic knee osteoarthritis, a market affecting over 30 million Americans. The company anticipates a significant ramp-up post-approval, with a temporary code initially and a permanent code expected by late 2027 or early 2028.

    05

    PuraPly AM and Affinity Clinical Data

    Compelling clinical results from an RCT evaluating PuraPly AM in 170 DFU patients showed statistically significant wound closure at 12 weeks. An additional publication demonstrated a 20% lower overall amputation rate and a 40% lower rate for above-knee amputations among Medicare beneficiaries treated with PuraPly AM versus standard of care, across nearly 11,000 patients. For Affinity, peer-reviewed results showed statistically significant improvements in wound closure at 12 and 16 weeks for complex VLUs, reinforcing its benefit in hard-to-heal wounds.

    AI-generated summary of the company’s earnings call. Not investment advice.