AngioDynamics Q4 2026 Earnings Call | Medtech Software Sourcing Scales Active Device Margin

Good morning and welcome to the AngioDynamics fiscal year 2026 fourth quarter and full year earnings call. At this time all participants are in a listen-only mode. A question and answer session will follow the formal presentation. As a reminder, this conference call is being recorded. The news release detailing AngioDynamics' fiscal 2026 fourth quarter and full year results crossed the wire earlier this morning and is available on the company's website. This conference call is also being broadcast live over the internet at the investors section of the company website at www.angiodynamics.com. A webcast replay of the call will be available at the same site approximately 1 hour after the end of today's call. Before we begin, I'd like to caution listeners that during the course of this conference call, the company will make projections or forward-looking statements regarding future events, including statements about expected revenue, adjusted earnings, and gross margin for fiscal year 2027, as well as trends that may continue. Management encourages you to review the company's past and future filings with the SEC, including without limitation the company's forms 10-Q and 10-K, which identify specific factors that may cause the actual results or events to differ materially from those described in the forward-looking statements. The company will also discuss certain non-GAAP and pro forma financial measures during this call. Management uses these measures to establish operational goals and review operational performance and believes that these measures may assist investors in analyzing the underlying trends in the company's business over time. Investors should consider these non-GAAP and pro forma measures in addition to, not a substitute for or as superior to, financial reporting measures prepared in accordance with GAAP. A slide package offering insight into the company's financial results is also available in the investors section of the company's website under events and presentations. This presentation should be read in conjunction with the press release discussing the company's operating results and financial performance during this morning's conference call unless otherwise noted. All metrics and growth rates mentioned during today's call are on a pro forma basis which exclude the results of the dialysis and bioentry businesses that were divested in June 2023, the PICC and midline products that were also divested in February 2024, and the radio frequency and syntax support catheter products that we discontinued in February 2024. Also, unless otherwise noted, all comparisons will be the fourth fiscal quarter of 2026 versus the fourth fiscal quarter of 2025 and the full fiscal year 2026 versus the full fiscal year of 2025. Now I would like to turn the call over to Jim Clemer, AngioDynamics president and chief executive officer. Mr. Clemer,

Thanks, Jim, and good morning, everybody. As always, before I begin, I'd like to direct everyone to the presentation on our investor relations website summarizing the key items from our quarterly results. Unless otherwise noted, all metrics and growth rates mentioned during today's call are on a pro forma basis, which exclude the results of the dialysis and bioentry businesses that we divested in June 2023, the PICC and midline products that we divested in February 2024, and the radio frequency and syntax support catheter products that we discontinued also in February 2024. And unless otherwise noted, all comparisons will be the fourth fiscal quarter of 2026 versus the fourth fiscal quarter of 2025. Company topline revenue performance was strong again in the quarter. Revenue increased 8% to $86.6 million driven by growth across both our segments. MedTech revenue was $41.8 million, a 16.7% increase. For the fourth fiscal quarter, our MedTech platforms comprise 48% of our total revenue compared to 45% of total revenue a year ago, reflecting the ongoing shift in our business mix. Within our MedTech segment, our Auryon platform contributed $17.8 million in revenue, growing 14.4% compared to last year. Auryon has now delivered double-digit year-over-year growth for 20 consecutive quarters. This growth continues to be supported by our strategy to shift more of our atherectomy business towards the hospital side of care while we keep growing our customer base across both the hospital and OBL settings along with ongoing international adoption following our CE mark approval. Mechanical thrombectomy revenue which includes AngioVac and AlphaVac sales was $11.1 million, a decrease of 1.1% year-over-year. In the quarter, AlphaVac revenue was $4.2 million, a 38.4% year-over-year increase, continuing its strong trajectory, and AngioVac revenue was $6.9 million, a 15.8% year-over-year decrease. We are very encouraged by the catalysts ahead, including the IDE approvals for our AlphaVac return blood management system and our AngioVac right-sided infective endocarditis study. We're confident in the long-term opportunity for the combined portfolio. Mechanical thrombectomy remains an attractive market in its early stage with many competitors working to actively move patient care towards mechanical interventions from lytic-based therapies which can lead to lumpiness quarter to quarter. This is a crowded space for good reason and we have built the best portfolio illustrated by our 13.4% growth in the year and we believe mechanical thrombectomy will grow faster for us for the full fiscal year 2027. Total NanoKnife revenue was $11.8 million, an increase of 64.5% with probes growing 47% and capital sales growing 132.5%. Probe sales were primarily driven by demand for NanoKnife in prostate care, and we hit record procedure volumes during the quarter. As these systems are placed and new physicians and providers experience the improved patient outcomes our technology enables, we expect them to drive increased probe utilization going forward. I will note that capital sales are always lumpy quarter to quarter, so we would not expect capital to grow at this rate going forward. We continue to view disposables as the bellwether for this business. In the fourth quarter, our Med Device segment increased 1.1% year-over-year with revenue of $44.8 million. This business generates consistent cash and profitability allowing us to keep investing in the growth of our MedTech platforms. Now moving down the income statement, our gross margin for the fourth quarter of FY2026 was 54%, a 130 basis point increase from the fourth quarter of FY2025, driven primarily by the continued product mix shift towards our higher margin MedTech sales, partially offset by tariffs. Total operating expenses in the quarter were $57 million, representing 66% of sales compared to $48 million or 60% of sales last year. Turning to R&D, our research and development expense was $8.2 million or 9% of sales compared to $6.6 million or 8% of sales a year ago. And we remain committed to investing in R&D initiatives to support the long-term growth of our MedTech segment and are targeting approximately 10% of sales going forward. SG&A expense for the fourth quarter of FY2026 was $41.4 million representing 48% of sales compared to $36.7 million or 46% of sales a year ago. On a GAAP basis, our net loss for the fourth quarter was $11.4 million or a loss per share of $0.27 compared to a net loss of $6.1 million or a loss per share of $0.15 a year ago. Our adjusted net loss for the fourth quarter of FY2026 was $2.8 million or an adjusted loss per share of $0.07 compared to an adjusted net loss of $1.1 million or an adjusted loss per share of $0.03 in the fourth quarter of last year. Adjusted EBITDA in the fourth quarter of FY2026 was $3.3 million compared to adjusted EBITDA of $3.4 million in the fourth quarter of 2025. Touching briefly on tariffs, tariff expense of approximately $500,000 in the fourth quarter was in line with our expectations and compared to $1.6 million in the prior year quarter. Now turning to a quick review of the fiscal full year results. Revenue increased 9.4% to $320.2 million primarily driven by growth across our MedTech segment. MedTech revenue was $150 million, an 18.4% increase. Our Auryon platform contributed $66.9 million in revenue growing 17.7% compared to last year. Mechanical thrombectomy revenue which includes AngioVac and AlphaVac sales increased 13.4% to $45 million year-over-year. AlphaVac had a strong year with revenue of $15.5 million, a 44.1% year-over-year increase. And AngioVac revenue was $29.5 million, a 2.1% year-over-year increase growing for the full year. Total NanoKnife revenue was $33.1 million, up 35.2% with disposables up 28.7% and capital up 61.8% for the year. In fiscal 2026, our Med Device revenue was $170.2 million, an increase of 2.5%. Our gross margin for fiscal year 2026 was 54.6%, a 70 basis point increase from 53.9% in the prior year. For the full year, total gross margin saw an approximate 150 basis point negative impact from tariffs. Turning to operating expenses, total operating expenses for the full year were $214.8 million or 67% of sales compared to $197.8 million or 68% of sales a year ago. Our adjusted net loss for fiscal year 2026 was $10 million or an adjusted loss per share of $0.24 compared to an adjusted net loss of $10.2 million or an adjusted loss per share of $0.25 last year. On a GAAP basis, our total net loss for the full year was $36.7 million or a loss per share of $0.88 compared to a net loss of $34 million or a loss per share of $0.83 a year ago. Adjusted EBITDA for the full fiscal year 2026 was $13.2 million compared to $7.6 million in fiscal year 2025. This year-over-year improvement is largely attributable to our MedTech revenue growth and the success of our gross margin and operating efficiency initiatives. And we delivered it while absorbing tariff costs that were not in our business a year ago. For the full year, tariff expense was approximately $4.8 million compared to $1.6 million in the prior year. And this was in line with our expectations. That landed right within the $4 million to $6 million range we guided to at the start of the year, which I think speaks to our ability to forecast and manage these costs even in a dynamic environment. Turning to cash, in the fourth quarter, the company generated $17.5 million of cash from operations in line with our expectations. For the full fiscal year, the company generated $3.1 million of cash from operations. I want to put that full year number in context because it is inclusive of approximately $4.8 million of tariffs as well as the working capital and inventory actions we took during the year to proactively manage through the sterilization vendor maintenance shutdowns. The fact that we still generated cash from operations for the year while absorbing all of that really speaks to the underlying cash generation profile of our business model. We ended fiscal year 2026 with $53.9 million in cash and we maintain a strong debt-free balance sheet. Turning now to guidance for the fiscal year 2027. We anticipate net sales to be in the range of $336 to $341 million, representing growth of between 5% and 6.5% over fiscal 2026 revenue of $320.2 million. Within each of our businesses, we expect MedTech net sales to grow 12% to 15% year-over-year, and we expect Med Device sales to be roughly flat. For fiscal 2027, we expect gross margin to be in the range of 54% to 55%. We expect adjusted EBITDA to be in the range of $13 to $16 million. And finally, we expect adjusted loss per share in the range of $0.29 to $0.24. We expect the impact from tariffs to be broadly similar to fiscal 2026 based on our current view of the tariff situation. This remains dynamic and subject to change. Stepping back from the numbers, our fiscal 2027 outlook reflects our execution of the same playbook that allowed us to deliver the strength we saw in 2026. Compete in large, fast growing markets, take share with better technology backed by strong clinical data, invest for growth, and turn that growth into increasing profitability. Let me give you some color on how we're thinking about the MedTech portfolio in fiscal 2027. Starting with Auryon, we expect it to remain a solid grower in the mid-teens range as we continue to expand on the hospital site of care while growing across both the hospital and OBL settings and as international adoption builds. In mechanical thrombectomy, we expect AlphaVac to continue its strong trajectory and for AngioVac to return to growth against more normal comparisons. And at NanoKnife, we expect continued momentum in prostate with disposables as the primary driver and capital remaining lumpy from quarter to quarter as reimbursement and awareness continues to build. Underpinning all of this is our commitment to clinical data. We're not resting on the growth we've already built. We are prudently investing in high-quality clinical data across the portfolio to drive adoption and to expand the markets we can compete in. On the cardiovascular side, in addition to the AlphaVac return and PAVE studies we are currently running, we have formed a global cardiovascular medical advisory board of leading physicians to help guide our clinical and product strategy and we are expanding our ambition DTK study internationally. In interventional oncology, NanoKnife continues to build one of the strongest data engines in our space. From the 2-year durability data from Preserve through FDA approval of the IDE for our RELIEF feasibility study, which takes our technology into benign prostatic hyperplasia, one of the most common conditions in men's health. In addition, at the AUA conference in May, independent investigators from Weill Medical College of Cornell University presented results from an investigator-initiated study, radiation therapy and irreversible electroporation for intermediate risk prostate cancer, or ARY, which combines with reduced dose radiation therapy. Key findings from the presentation included 42 patients enrolled, a 100% negative biopsy rate at 12 months, 90% reduction in PSA from baseline at 3 months, rapid recovery of quality of life following treatment, and no grade 3 or higher adverse events. These fantastic results suggest that combining focal NanoKnife treatment with reduced radiation may offer a powerful new treatment paradigm and convinced the investigators to conduct a follow-on RCT IDE study. The common thread is that we are committed to generating high-quality data to expand indications and reach more patients over time. We are well aware of the broader environment for our industry right now. And what I would emphasize is that AngioDynamics is built to be a consistent performer through it. We see real demand for the procedures our platforms enable. We are positioned in markets that are growing and we have a clean debt-free balance sheet that gives us the flexibility to keep investing. And we intend to do all of it the way that we did this year. Investing for tomorrow while delivering improved profitability today. There's one thing fiscal 2026 demonstrated: that our business model can fund growth, absorb outside headwinds like tariffs, generate cash, and still expand profitability. We fully expect to keep delivering on that balance in fiscal 2027 as we drive sustained profitable growth and create value for our shareholders. With that, operator, let's open the line for questions.

Thank you. If you'd like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate you're locked in the question queue. You may press star two if you'd like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handsets before pressing the star keys. One moment, please poll for questions. Thank you. Our first question comes from the line of John Young with Canaccord Genuity. Please proceed with your question.

Hey Jim, thanks for taking the question and congratulations on the strong end of the fiscal year. Just a couple for me. Maybe first on NanoKnife if I can. The LCD going live as of January 5th. What change in urologist adoption or account additions have you seen so far? And what's the timeline to any expected benefit from this? And then maybe you can walk us through what the regional coverage to broader national coverage pathway looks like.

Yeah, thanks John. This is Steve. Appreciate the question. We were very excited about receiving that information from Palmetto. That's an important decision for us and it was a lot of work that our team put in to getting to that spot. As we said, going back to the time that we announced this, the CPT code going effective, we didn't expect that that was going to be by itself a hockey stick that would drive business going forward. But what we've seen since that CPT code went into effect in January of this year is consistent good anecdotes around adoption for the technology and seeing that payers are covering that code. Palmetto is a very important piece of that and making sure that we got now the first positive LCD out there is going to be an important element for us to grow on and continue to drive adoption. So I would say that what you've seen in our results are the early stages of good indications coming from those types of decisions. It's not the full amount yet and there's still work to do. We're going to follow the same playbook. We're going to talk to the other MACs and to the other regional decision makers to make sure that we're finishing the work to get consistent reimbursement across the country. But we like what we're seeing so far.

Got it. Thanks. And then on BPH, how large is the BPH opportunity for NanoKnife relative to prostate cancer? And then what's the timeline to first data?

So John, we're being cautious here and trying to understand how large this market can be. The feedback we've received from a lot of the physicians who've used NanoKnife to treat tumors is when they do the patient follow-ups, they're saying, 'Hey, by the way, the follow-up was terrific on the tumor, but you cured my BPH.' So we're hearing these anecdotes in the field. So it really inspired us to do this. As you know, John, the BPH market dwarfs the prostate market. We're being careful. That's why we launched the study. We think this is really important for us to learn more with the physicians, learn what we can do, and we'll be really transparent with you once we learn from this study, but there's a lot of interest in the product, a lot of interest in the space looking for really a good BPH opportunity for a company to solve. But we haven't yet sized the market or talked about that beyond that.

Got it. And then just one more quickly for me, just on mechanical thrombectomy. What are you seeing that led to the quarter declines in the business? Is this a slowdown in usage in active accounts or is it less than expected new account additions in the quarter? Just any additional color there would be helpful. Thank you again.

Thanks. Thanks. See you soon.

Thank you. As a reminder, if you'd like to join the question queue, please press star one on your telephone keypad. Our next question comes from the line of Frank Tachman with Lake Street Capital Markets. Please proceed with your question.

Great. Good morning, Jim and Steve. Thank you for taking the question. I was hoping to start with one on the guidance. Maybe if you could point us directionally in the cadencing of revenues. I think historically we've seen August step down quarter over quarter and then growth really throughout the year from that point with sometimes the third quarter being down a little bit from the second quarter. But any context on the cadencing would be helpful. And then if you could also overlay the cadencing of cash generation and cash generation expectations for the year, that'd be great. Thank you.

All right, Frank, thanks for the question. So we don't guide specifically quarterly, but the seasonality that you talked about I think is the right way to think about the business going forward. We typically see Q4 being our highest quarter in terms of both revenue and cash generation. Q1 is usually a step down from the previous Q4 in revenue. It's certainly also our highest use of cash quarter. That's typical for most businesses where Q1 is going to be the highest utilization of cash. We're no different. So expect that we'll have some cash usage here in Q1, with Q2 and Q3 being a sequential step up from where you saw Q1. Sometimes Q3 given our structure is down from Q2, it's usually a little bit less pronounced, and Q4 of course is going to be the highest generation quarter in terms of both revenue as well as cash. I would expect that to continue. Now some of the quarterly trends that you've seen in the middle of the year with Q2 and Q3, I expect those to continue to mitigate a little bit given the fact that we're in growth mode and then you have our MedTech products that are continuing to grow. So you may see some mitigation of some of that lumpiness within the year, but overall I would expect that you're going to see the same cadence that we've seen last year and the year before just based on some of the structural constructs of our fiscal year.

Okay, that's helpful. Then I wanted to ask one specific on NanoKnife. Heard the comments around capital can be lumpy, but they expect disposables to continue to trend positively. Could we read that as the $8.4 million in disposable revenue in NanoKnife being kind of a baseline level of disposable revenue to grow off of, or would the seasonality impact that number too?

Yeah. So, a little bit of both. I do think what you're seeing here is if you look at our results in NanoKnife disposables, you're seeing that increase in the adoption by urologists, you're seeing a little bit of a step up in terms of how we expect NanoKnife probes to continue to progress through the quarter. You may still see some of that seasonality with Q4 being our strongest quarter, Q1 being a little bit of a step down and following the same pattern that we just talked about, but I definitely expect that you're going to see NanoKnife probes coming from a little bit of a higher baseline than they had before because of all the really exciting growth that we've seen and the adoption from the urologists.

Okay, helpful. And then just last one for me, Jim, wanted to follow up on one of your previous answers on the mechanical thrombectomy business. You hinted towards some commercial changes that were made, new leadership structure and some new people coming in. Can you go a little bit deeper into that? Maybe how many new reps have you hired and what kind of commercial changes are you referring to?

Got it. That is helpful. Thank you for taking the questions.

Thank you. Our next question comes from the line of Ye with HC Wainwright. Please proceed with your question.

Hey, good morning. This is Katie on for Ye. I'm still stuck on the mechanical thrombectomy. With the lumpy growth, how would you characterize the competitive intensity from like Boston Scientific and Penumbra and Medtronic in atherectomies? Are you really starting to see any of that pricing pressure show up?

Perfect. Thank you guys so much.

Thank you. Our final question this morning comes from the line of Ireland Kimaci with Freedom Broker. Please proceed with your question.

Hi, thanks. Hi, thanks for taking the questions and congrats on the strong finish of the year. I actually want to start with NanoKnife now that Medicare coverage is in effect. What are you guys actually seeing on the ground? Has the conversation with physicians and hospitals started to shift? For example, from proving the clinical case to more practical things like logistics and capacity.

Thank you so much. And my last question is about the guidance. We can see that the adjusted EBITDA range implies that you're investing most of the gross profit back into the business even with the mix continuing to shift towards higher margin MedTech. I can see that a lot of that is clinical pipeline because you have APEX, ambition, and many more. Can you help us think about how that clinical spend stages over the next couple of years, whether fiscal 2027 is the peak investment year, and at what point the model starts to show the operating leverage?

Great question, I appreciate that. So, what we've historically said is that we're targeting about 10% of sales as our R&D spend going forward in the year. The clinical spend is within that 10%. So I wouldn't expect that you're going to see a significantly higher investment year in 2027, particularly when it comes to R&D and clinical spend above and beyond what we've guided to, which is expecting about 10% going forward. The question around growth and how it drops to the bottom line is a constant balancing act for us. We are in investment mode. We're continuing to invest in our business. It's very important for us to continue to invest in all three of the growth drivers within MedTech to continue to grow at the above market rates that we've been growing at. At the same time, we're balancing that with dropping some profit to the bottom line to prove that we can do both. You saw that this year with the EBITDA contribution that we gave at the end of the fiscal year. And then we're targeting growing about 20% from that elevated baseline from 2026 into 2027 while we're continuing to invest back in the business in terms of clinical trials, new product line introductions that Jim talked about, continuing to invest in our sales force and the feet on the street to drive those MedTech products going forward. So expect that balance to continue. Expect us to do both. Invest in our businesses, drive above market growth, as well as we continue to drop profit to the bottom line at a healthy pace. But it's going to be a balance of both of those things going forward. And then add to that the fact that we're proving that our business model can generate cash while we make those balancing decisions. Very good in terms of generating cash flow from operations last year and we're going to have positive cash flow going into 2027 as well.

Perfect. Very helpful. Thanks again.

Thank you. Ladies and gentlemen, that concludes our question and answer session. I'll turn the floor back to Mr. Clemmer for final comment.

Thank you. This concludes today's conference call. You may disconnect your lines at this time. Thank you for your participation.