AngioDynamics Earnings Call Highlights Med Tech Momentum

Angiodynamics, Inc. ((ANGO)) has held its Q2 earnings call. Read on for the main highlights of the call.

AngioDynamics Earnings Call Signals Strong Momentum Despite Near-Term Headwinds

AngioDynamics’ latest earnings call struck an overall upbeat tone, with management emphasizing broad-based revenue growth, improving margins, better cash generation and a clear shift toward its higher-growth Med Tech portfolio. Double‑digit expansion in key platforms like Auryon, AlphaVac and NanoKnife, combined with margin expansion and a guidance raise, reinforced the sense that the company’s transformation is gaining traction. Executives acknowledged ongoing challenges — including tariffs, manufacturing transitions, uneven thrombectomy performance and continued net losses — but framed them as manageable costs of investing for durable growth.

Revenue Growth and a Shift Toward Higher-Margin Med Tech

Total pro forma revenue grew 8.8% year over year to $79.4 million in the second quarter of fiscal 2026, underscoring solid top-line momentum. The mix continues to tilt toward Med Tech, which rose 13% to $35.7 million and now represents 45% of total revenue, up from 43% a year ago. Med Device sales increased 5.6% to $43.8 million. For investors, this mix shift is important: Med Tech tends to carry higher growth and better margins, supporting both the company’s long-term strategic story and its short-term profitability improvements.

Auryon’s 18-Quarter Streak of Double-Digit Growth

Auryon once again proved to be a key growth engine, with revenue climbing 18.6% to $16.3 million and extending its remarkable run to 18 consecutive quarters of double‑digit growth. Management attributed the performance to deeper penetration in hospitals and office-based labs, along with growing international demand following CE Mark approval. This sustained momentum suggests Auryon remains a highly competitive asset in the peripheral vascular space and continues to anchor the Med Tech growth narrative.

NanoKnife Gains Traction with Record Prostate Procedures and New CPT Code

NanoKnife revenue jumped 22.2% year over year to $7.3 million, with probe sales up 14.4%, and the company posted a record quarter for prostate procedures. A key catalyst is the new procedural reimbursement (CPT) code that took effect on January 1, which management believes will be a multi‑quarter tailwind for adoption. International capital sales also contributed, including roughly $1.0 million from a distribution transaction in France. While payer implementation of the new code will take time and insurer policies remain a risk, the combination of strong clinical uptake and improving reimbursement visibility strengthens the long-term outlook for NanoKnife.

Mechanical Thrombectomy: AlphaVac Accelerates Amid Mixed Portfolio Performance

In mechanical thrombectomy, combined revenue increased a modest 3.9% to $11.0 million, masking divergent trends. AlphaVac stood out with 40.2% year‑over‑year growth to $3.5 million and sequential gains, while AngioVac declined 7.5% to $7.5 million, partly due to a tough comparison with the prior year’s Q2. Management highlighted three important regulatory wins: IDE approval for the APEX-Return study pairing AlphaVac with blood management for pulmonary embolism, IDE approval for the PAVE study using AngioVac in right‑sided infective endocarditis, and 510(k) clearance for a modified AlphaVac F18 85 system with expanded indications. These milestones expand the clinical and commercial opportunities across the thrombectomy portfolio, even as near‑term growth remains uneven.

Margin Expansion and Early Benefits from Manufacturing Initiatives

GAAP gross margin improved to 56.4% in the quarter, up 170 basis points from a year ago, driven by the mix shift toward higher-margin Med Tech products, manufacturing transfer savings and a favorable France channel transaction. Management noted that cost-savings efforts are running ahead of plan, especially as production moves to lower-cost locations. However, they also flagged that ongoing transitions, including the Costa Rica manufacturing ramp, could create structural underabsorption in the back half of the year, potentially capping further margin expansion in the near term.

Improving Profitability and Stronger Cash Generation

Profitability and cash flow metrics showed meaningful progress. Adjusted EBITDA nearly doubled to $5.9 million from $3.1 million a year earlier, while adjusted net loss narrowed sharply to just $0.1 million, translating to an adjusted loss per share of $0.10. Cash and cash equivalents increased to $41.6 million from $38.8 million as the company generated $4.7 million of cash during the quarter. Management reiterated confidence in being cash-flow positive for the full fiscal year 2026, signaling improving financial resilience even as the company remains in a net loss position.

Legal Win Removes Overhang and Potential Cash Outflow

AngioDynamics also secured a favorable legal outcome that helps de‑risk the balance sheet. The U.S. Court of Appeals affirmed a prior judgment invalidating patents held by C.R. Bard, closing long-running litigation. This decision eliminates the possibility of a $3 million payment that could have been required under the settlement agreement, freeing up capital and reducing legal uncertainty for shareholders.

Persistent Net Loss and Negative EPS Guidance

Despite the clear operational improvements, AngioDynamics remains in an adjusted net loss position, which is a key watchpoint for investors. The company reported an adjusted net loss of $0.1 million in the quarter, and full‑year guidance still calls for an adjusted loss per share between -$0.33 and -$0.23. This underscores that the business is still in a transition phase, investing heavily in growth and clinical evidence, and has not yet reached sustainable earnings profitability.

Tariffs and Manufacturing Transition Pose Near-Term Margin Headwinds

Tariffs and manufacturing dynamics are expected to weigh on margins in the near term. Management forecast tariff expenses of $4 million to $6 million for fiscal 2026, costs that are already embedded in the company’s margin outlook. In addition, as production shifts as part of the Costa Rica manufacturing transition, structural underabsorption could limit incremental margin gains in the second half. While these factors are manageable, they temper the pace of margin expansion just as demand and product mix are moving in the right direction.

Back-Half Investment Surge Likely to Press on EBITDA

The company is leaning into investments that may pressure near-term earnings but are intended to support long-term growth. Management expects adjusted EBITDA to be lower in the second half of the year as spending ramps in clinical data generation, R&D and sales expansion. R&D spend increased to roughly $7.8 million, or 9.8% of sales, compared to $6.4 million, or 8.8% of sales, a year ago. While Q3 EBITDA is not expected to turn negative, investors should anticipate softer profitability metrics in the coming quarters as these initiatives run through the income statement.

New NanoKnife CPT Code: Adoption Opportunity with Payer Risk

The new NanoKnife CPT code, effective January 1, is widely regarded by management as a pivotal catalyst for long-term adoption, especially in prostate cancer. However, they cautioned that it is still early days, and individual payer policies and coding implementation must catch up before the full benefit is realized. Insurer behavior and claim denials remain sources of uncertainty, suggesting that the ramp in procedure volumes will likely be gradual rather than immediate, and investors should view the CPT code as a multi‑quarter, not overnight, driver.

Reliance on One-Time Items Adds Noise to Near-Term Results

Quarterly results benefited from one‑off items that are unlikely to recur at the same level. The France distribution channel transaction contributed approximately $1.4 million to adjusted EBITDA and about $1.0 million in NanoKnife capital sales during the quarter. While these deals support short-term profitability and market access, they complicate the read‑through on underlying margin trends. Without similar transactions, recurring profitability improvements may appear more modest, a nuance investors should keep in mind when extrapolating current performance.

Guidance Signals Confidence in Growth and Cash Generation

Management raised fiscal 2026 guidance, signaling confidence in the growth trajectory despite known headwinds. Net sales are now expected to land between $312 million and $314 million, up from prior guidance of $308 million to $313 million and implying 6.6% to 7.3% growth over fiscal 2025. Med Tech is projected to grow 14% to 16%, reinforcing its role as the primary growth driver, while Med Device is now expected to increase 0% to 1%, slightly better than prior flat expectations. The company reaffirmed gross margin guidance of 53.5% to 55.5%, inclusive of $4 million to $6 million in tariffs, and lifted adjusted EBITDA expectations to $8 million to $10 million. Adjusted loss per share guidance remains negative, between -$0.33 and -$0.23, reflecting ongoing investment. Management warned that EBITDA will be lower in the back half as spending ramps but reiterated its expectation to be cash-flow positive for the full year, with a planned $3 million to $5 million cash use in Q3 followed by substantial cash generation in Q4.

In sum, AngioDynamics’ earnings call painted the picture of a company progressing steadily along a Med Tech-led growth path, with Auryon, AlphaVac and NanoKnife driving double-digit gains and supporting healthier margins. While tariffs, manufacturing transitions, reliance on some one-time items and persistent net losses temper the near-term story, upgraded guidance, regulatory wins and improving cash generation suggest that the longer-term thesis remains intact. For investors, the key questions ahead will be how quickly new reimbursement and clinical programs translate into sustainable profitability and whether the company can maintain its growth momentum as it invests heavily in its future.