What Management Said
Read the full Q4 2025 transcript ↗Earlier today, TransMedics released financial results for the quarter and full-year ended December 31st, 2025. These results were achieved despite external challenges earlier in the year that were designed to distract and disrupt our sustained and transformational growth. Total revenue for Q4 2025 was $160.8 million, representing approximately 32% growth year-over-year and approximately 12% sequential growth from Q3 2025. transplant revenue grew approximately 11% sequentially to $155 million, while OUS transplant revenue grew approximately 33% sequentially to $5 million.
Finally, we delivered an operating profit of approximately $21.3 million in Q4, representing approximately 13.2% of total revenue for fourth quarter, while making substantial investments to fuel our growth. Total revenue for the full-year 2025 was $605.5 million, representing approximately 37% growth year-over-year. We delivered operating profit of approximately $108.6 million, representing approximately 18% of total revenue for the full-year 2025. We are very pleased by our strong performance in Q4 and full-year 2025.
As we do every year, I would like to share full-year OCS transplant volumes and overall U.S. Here are the key highlights: For the 3rd consecutive year, we grew the total OCS transplant volume. As of February 22nd, 2026, our internal company and UNOS database records show that OCS was responsible for 5,139 transplants performed in the full-year 2025, up from 3,735 U.S. Importantly, for the third consecutive year, we saw growth in overall U.S.
What went well
- Q4 2025 total revenue was $160.8 million, representing approximately 32% growth year-over-year and approximately 12% sequential growth, described as a banner quarter that capped an outstanding year.
- Full-year 2025 revenue was $605.5 million, representing approximately 37% growth year-over-year, with operating profit of approximately $108.6 million (approximately 18% of revenue) and positive cash flow from operating activities.
- Q4 operating income was approximately $21 million, up 146% year-over-year, with operating margin expanding to 13% from 7% in Q4 2024; full-year operating margin expanded from 8.5% in 2024 to 18% in 2025.
- OCS was responsible for 5,139 U.S. transplants in 2025 (up from 3,735 in 2024), representing approximately 26% of the 19,833 total U.S. heart, lung, and liver transplants, up from 20% in 2024.
- The company ended the year with approximately $488.4 million in cash, up $22 million from September 30, 2025, driven by strong operating cash generation and disciplined working capital management.
What went wrong
- Heart and lung revenue came in lower than some expectations, with lung described as a rounding error and heart affected by trials getting going slower than expected, a wrapping-up cold perfusion trial, and a couple of centers pursuing organic activities.
- Total gross margin declined to approximately 58%, down 110 basis points year-over-year and 70 basis points sequentially, due to higher clinical service costs from NOP expansion, increased logistics discounts, higher freight, and year-end inventory-related charges.
- ENHANCE Part B enrollment faced a competitive obstacle, as the maker of the styrofoam cold static storage box refused to randomize its technology against OCS, requiring a workaround.
- Q4 operating income declined 9% sequentially, primarily driven by higher operating expenses associated with increased investments during the quarter.
Guidance Changes
| Metric | Period | Current guidance |
|---|---|---|
| Full-year revenue | FY2026 | guidance issued above street; reflects underlying liver/heart growth, clinical trial enrollment, and Italy in the back half |
| Operating margin vs prior year | FY2026 | approximately 250 basis points of contraction year-over-year, with almost 50% of incremental investment from ENHANCE/DENOVO completion, OCS Kidney development, and next-generation OCS 3.0 |
| Gross margin | FY2026 and beyond | around 60% long-term, with potential near-term volatility from international expansion |
Performance Breakdown
| Metric | YoY | Note |
|---|---|---|
| Q4 total revenue | approximately +32% | Q4 recovery from expected Q3 seasonality, fueled by growing OCS case volume and increased clinical adoption. |
| Full-year liver revenue | almost +49% | Strong liver execution and clinical leadership; OCS liver represented 4,197 transplants or 36% of U.S. liver volume, up from 26% in 2024. |
| Full-year heart revenue | almost +15% | Continued strength in heart; OCS heart represented 854 cases or approximately 18% of U.S. heart volume, modestly up from 17% in 2024. |
| Q4 logistics revenue | +32% | Continued expansion and strong utilization of the aviation fleet, with 22 owned aircraft and approximately 80% NOP air-transport mission coverage (up from 75% in Q4 2024). |
| Q4 net income | significant increase to $105 million | Strong operating performance plus an $83.8 million income tax benefit mainly related to the release of the valuation allowance on deferred tax assets. |
| Full-year operating margin | expanded from 8.5% to 18% | Operating leverage as revenue scaled, supported by strong cost management discipline, even as gross margin improved only modestly. |
Earnings Call Themes & Trends
| Topic | Previous mention | Current period | Trend |
|---|---|---|---|
| ENHANCE Part B competitive obstacle | — | The styrofoam cold static storage box maker refuses to randomize against OCS; TransMedics has a plan to bypass this with transplant programs taking control and an FDA-acceptable control arm. | — |
| Market expansion vs share taking | — | Since 2022, U.S. liver, heart, and lung volumes grew 25% with OCS NOP but would have declined approximately 1% without it, supporting management's view that it is expanding the overall market, not just taking share. | — |
| NOP Connect 2.0 digital ecosystem | Discussed on prior call as providing operational efficiencies | The vast majority of cases now flow through NOP Connect 2.0, showing efficiency in management and billing, described as TransMedics' second legacy after OCS, though still early days. | — |
| U.S. transplant system modernization | — | TransMedics supports CMS proposed language and Senator Wyden's bill to open the closed transplant system to more competition and transparency, viewing it as a win-win to play a bigger role while supporting existing OPOs. | — |
| OCS Liver registry publications | — | Aggregated thousands-of-cases registry publications showing statistical superiority in key liver outcomes are under review at high-impact journals, on top of 14-15 existing publications; timing cannot be commented on. | — |
Q&A Summary
Allen Gong (JPMorgan) asked about 2026 guidance philosophy given moving parts across liver/heart underlying growth, clinical trial enrollment, and Italy in the back half.
Waleed Hassanein said TransMedics takes guidance very seriously and factored in all opportunities and uncertainties to issue what it believes is realistic guidance, and will let execution and performance dictate whether to revisit it.
Josh Jennings (TD Cowen) asked about OCS Liver registry publications, potential cost-effectiveness data, and any new competitive headwinds in 2026.
Waleed Hassanein said health economic data is already published; what is coming is unequivocal statistical superiority data from the registry aggregating thousands of cases, with timing not disclosable due to journal review. He said TransMedics is not seeing competitive dynamics impacting its ability to execute in 2026.
A Canaccord Genuity representative (Zachary, for Bill) asked for more details on NOP Connect 2.0 and early operational efficiencies observed.
Waleed Hassanein said the vast majority of cases now come through NOP Connect 2.0, with efficiency seen in management and billing; these are early days, and the company will continue investing to expand the digital ecosystem, its second legacy after OCS.
Suraj Kalia (Oppenheimer) asked about the approximately 400 bps of liver share gained in Q4 and how to keep ENHANCE Part B moving if competitors interfere with the control arm.
Waleed Hassanein attributed the liver execution to OCS liver outcomes and clinical leadership. On Part B, he said TransMedics has completed the largest number of transplant trials in history, was somewhat prepared for the competitive reaction, and will execute Part B with the best protocol and a control arm, though it may take a few extra months.
Daniel Markowitz (Evercore ISI) asked for the breakout of the 2026 operating margin contraction and what gives confidence in returning to margin expansion in 2027-2028.
Gerardo Hernandez said almost 50% of incremental 2026 investment is driven by three transitory elements: completion of OCS ENHANCE and DENOVO, completion of OCS Kidney development, and continued development of OCS next-generation 3.0; once complete, spend should normalize and operating leverage should resume.
Chris Pasquale (Nephron Research) asked whether the slower-than-expected trials disrupted the lower-than-expected heart and lung segments at year-end.
Waleed Hassanein said lung is essentially a rounding error and most lung centers were awaiting FDA approval to start DENOVO; heart was affected by a wrapping-up cold perfusion trial and a couple of centers doing organic activities, all viewed as transient and expected to wash out as ENHANCE and DENOVO activate.
More on TransMedics Group, Inc.
Reported 2026-02-24 · figures from the TransMedics Group, Inc. Q4 2025 earnings call.
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