TransMedics reports third quarter 2023 financial results

TransMedics Group, Inc. reported financial results for the quarter ended September 30, 2023.

Recent highlights 

• Net revenue of $66.4 million in the third quarter of 2023, a 159% increase compared to the third quarter of 2022, including $1.6 million non-recurring charter revenue
• Closed acquisition of Summit Aviation, enabling the addition of aviation service to NOP offering, driving $2.1 million incremental transplant related revenue in the third quarter

“The third quarter was a critical execution period for TMDX as we integrated a new business, expanded our NOP clinical support capacity, and launched a first-of-its kind business to expand our NOP product and service offering,” said Waleed Hassanein, MD, President and Chief Executive Officer. “We are pleased with our third quarter performance and we firmly believe that we are building a great foundation for further acceleration of our growth in 2024 and beyond.”

Third quarter 2023 financial results
Total revenue for the third quarter of 2023 was $66.4 million, a 159% increase compared to $25.7 million in the third quarter of 2022. The increase was due primarily to greater utilization of the company’s NOP across all three OCS products as well as the addition of logistics and aviation revenue. Revenue from the new, transplant related aviation and logistics offerings was $2.1 million. Additionally, total revenue includes $1.6 million in non-recurring revenue attributable to Summit Aviation’s charter business that TransMedics intends to exit in early 2024.

Gross margin for the third quarter of 2023 was 61%, compared to 71% in the third quarter of 2022, and compared to 70% in the second quarter of 2023. Gross margin for the third quarter was unfavorably impacted by transition initiatives following the Summit Aviation acquisition, and the expected inefficiencies inherent in the transition out of its legacy charter business and the launch of the new transplant aviation business. Total cost of revenue $2.3 million of non-transplant related costs that reduced gross margin by 200 basis points.

Operating expenses for the third quarter of 2023 were $69.0 million, compared to $23.7 million in the third quarter of 2022, and compared to $37.6 million in the second quarter of 2023. The increase in operating expense was driven primarily by an acquired in-process research and development charge of $27.2 million and an additional $2.0 million in non-recurring acquisition-related costs. In addition, TransMedics continued investing in personnel, NOP support, and the development of the company’s digital platform and next generation OCS. Third quarter operating expenses in 2023 also included $5.1 million of stock compensation expense compared to $2.7 million of stock compensation expense in the third quarter of 2022, and $4.9 million of stock compensation in the second quarter of 2023.

Net loss for the third quarter of 2023 was $25.4 million, compared to $7.4 million in the third quarter of 2022. The increase in net loss was driven primarily by $29.2 million in non-recurring acquisition-related costs.

Cash was $427.1 million as of September 30, 2023.

2023 financial outlook
TransMedics is updating its full year 2023 revenue guidance to be in the range of $222 million to $230 million, which represents 138% to 146% growth compared to the company’s prior year revenue. TransMedics’ prior 2023 revenue guidance was $180 million to $190 million.
MB Bureau