Surmodics (SRDX) Q2 2025 earnings summary

Executive summary

• Q2 FY2025 revenue was $28.1M, down 12% year-over-year, mainly due to lower SurVeil DCB sales and prior-year catch-up payments.

• Net loss for Q2 FY2025 was $(5.2)M, compared to net income of $0.2M in Q2 FY2024; Adjusted EBITDA was $1.9M, down from $4.8M.

• Gross margin declined to 47.8% in Q2 FY2025 from 60.8% in Q2 FY2024, mainly due to lower SurVeil DCB sales and production inefficiencies.

• Pending $627M acquisition by GTCR (BCE Parent, LLC) for $43.00 per share is delayed by FTC litigation, with $2.5M in Q2 merger-related charges.

• Commercial launch of Pounce XL Thrombectomy System and positive TRANSCEND trial results for SurVeil DCB highlighted operational progress.

Financial highlights

• Medical Device segment revenue fell 17% year-over-year in Q2 FY2025, primarily due to a 31% drop in product sales.

• In Vitro Diagnostics (IVD) segment revenue rose 3% in Q2 FY2025, with product sales up 4% year-over-year.

• Product gross profit dropped 35% year-over-year in Q2 FY2025; product gross margin fell to 47.8%.

• R&D expense decreased 18% year-over-year in Q2 FY2025, reflecting lower development and clinical costs.

• SG&A expense increased 15% year-over-year in Q2 FY2025, mainly due to merger-related costs.

Outlook and guidance

• FY2025 revenue expected at $114M–$117M, down 7%–10% from FY2024; no further SurVeil DCB license fee revenue post-Q2.

• FY2025 GAAP net loss guidance: $(1.60)–$(1.40) per share; Non-GAAP net loss: $(0.62)–$(0.42) per share.

• SurVeil DCB product revenue is expected to decline by $7M in FY2025 versus FY2024, with no offset from other product lines.

• Product gross profit and margin are expected to decline for the remainder of FY2025 due to lower SurVeil DCB sales and under-absorption.

• Existing cash, investments, and credit facility are expected to provide sufficient liquidity for FY2025.