Organogenesis Holdings Inc.
For the period ended Sep 30, 2025. Filed Nov 6, 2025.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2025 · Filed Nov 6, 2025
ORGO$0.81-3.2%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-06-30; filed 2025-08-07.
0000950170-25-105048
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-09-30; filed 2025-11-06.
0001193125-25-269697
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 94 previous paragraphs and 101 current paragraphs.
59 unchanged; 33 reworded; 9 added; 2 removed; 0 previous and 0 current paragraphs rearranged.
Tables are not compared: 13 previous and 13 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (9)
Current report
ReNu
Current report
ReNu is a cryopreserved suspension derived from human amniotic membrane and cells derived from amniotic fluid. The initial target indication for ReNu is for the management of symptoms associated with knee osteoarthritis (“OA”). We are in the planning stages for clinical studies of ReNu to support the management of symptoms associated with hip OA, and we believe ReNu may have potential as a treatment for additional OA and tissue regeneration applications, which would need to be clinically evaluated further before any such approved uses. As used herein, p value is a measure of statistical significance. The lower the p value, the more likely it is that the results of a clinical trial or study are statistically significant rather than an experimental anomaly.
Current report
We completed a Phase 3 prospective, multicenter, double-blind, randomized, saline-controlled clinical trial to evaluate the efficacy of amniotic suspension allograft (“ASA”) in patients with knee OA, and completed topline analysis in the second quarter of 2024. We reported results consistent with the predefined requirements for study success: statistically significant reduction in knee pain (p=0.0177) and statistically significant maintenance of function (p<0.0001) at six months.
Current report
On September 25, 2025, we announced an update on our second Phase 3 Randomized Controlled Trial (RCT) of ReNu. This second Phase 3 trial was a prospective, multicenter, double-blind, randomized, saline-controlled, parallel group clinical trial to evaluate the efficacy of ASA in patients with symptomatic knee OA. Patients (n=594) were randomized to receive a single intra-articular(“IA”) injection of either saline control or ReNu. This second Phase 3 RCT of ReNu did not achieve statistical significance for its primary endpoint, despite the ReNu results demonstrating a numerical improvement in baseline pain reduction over the first Phase 3 trial. Baseline pain reduction at six months for ReNu was -6.9 for the second Phase 3 study compared to -6.0 in the first Phase 3 study. Additionally, the ReNu results continued to demonstrate a favorable safety profile.
Current report
The primary endpoint for the study was the difference between ReNu and Saline groups in the reduction in knee pain at six months assessed by the Western Ontario and McMaster Universities Arthritis Index (“WOMAC”) pain scale. The study data demonstrated a numerical improvement of -0.5 favoring ReNu (p=0.0393 one-sided p-value, compared to p=0.023 target threshold). The first Phase 3 trial achieved improvement of -0.7 favoring ReNu, which was statistically significant (p=0.0177, one sided p-value, compared to p=0.023 target threshold).
Current report
The Company has scheduled a meeting with the FDA for December 12, 2025 to discuss the BLA submission, including potentially using the combined efficacy analysis from both Phase 3 studies of ReNu to support a BLA approval.
Current report
Amounts reflect employee severance and benefits as well as other exit costs associated with the Company’s restructuring activities.
Current report
Income Tax Benefit
Current report
Income tax benefit increased by $3.5 million, or 57%, to $9.8 million in the nine months ended September 30, 2025, from $6.2 million in the nine months ended September 30, 2024. The increase in the income tax benefit is primarily attributable to a higher estimated effective tax rate for the nine months ended September 30, 2025 resulting from our research and development tax credits.
Removed paragraphs (2)
Previous report
Income Tax Benefit (Expense)
Previous report
The 2021 Credit Agreement required us to make consecutive quarterly installment payments equal to the following: (a) from September 30, 2021 through and including June 30, 2022, $0.5 million; (b) from September 30, 2022 through and including June 30, 2023, $0.9 million; (c) from September 30, 2023 through and including June 30, 2025, $1.4 million and (d) from September 30, 2025 and the last day of each quarter thereafter until August 6, 2026 (the “Term Loan Maturity Date”), $1.9 million. We prepaid the Term Loan Facility in November 2024, and amounts borrowed under the Term Loan Facility may not be re-borrowed.
Reworded paragraphs (33)
Previous wording
In the Advanced Wound Care market, we focus on the development and commercialization of advanced wound care products for the treatment of chronic and acute wounds in various treatment settings. We have a comprehensive portfolio of regenerative medicine products capable of supporting patients from early in the wound healing process through wound closure regardless of wound type. Our Advanced Wound Care products include Apligraf for the treatment of venous leg ulcers (“VLUs”) and diabetic foot ulcers (“DFUs”); Dermagraft for the treatment of DFUs (manufacturing and distribution currently suspended pending transition to a new manufacturing facility or engagement of a third-party manufacturer); PuraPly AM and PuraPly XT as antimicrobial barriers and native, cross-linked extracellular matrix (“ECM”) scaffold for a broad variety of wound types; CYGNUS Dual as a dual-layered amniotic membrane that promotes an optimal environment for wound healing; CYGNUS Matrix as a dehydrated placental allograft that promotes an optimal environment for wound healing; and VIA Matrix, Affinity, Novachor, and NuShield placental allografts to address a variety of wound sizes and types as a protective barrier and ECM scaffold. We have a highly trained and specialized direct wound care sales force paired with comprehensive customer support services.
Current wording
In the Advanced Wound Care market, we focus on the development and commercialization of advanced wound care products for the treatment of chronic and acute wounds in various treatment settings. We have a comprehensive portfolio of regenerative medicine products capable of supporting patients from early in the wound healing process through wound closure regardless of wound type. Our Advanced Wound Care products include Apligraf for the treatment of venous leg ulcers (“VLUs”) and diabetic foot ulcers (“DFUs”); Dermagraft for the treatment of DFUs (manufacturing and distribution currently suspended pending transition to our new manufacturing facility in Smithfield, RI); PuraPly AM and PuraPly XT as antimicrobial barriers and native, cross-linked extracellular matrix (“ECM”) scaffold for a broad variety of wound types; CYGNUS Dual as a dual-layered amniotic membrane that promotes an optimal environment for wound healing; CYGNUS Matrix as a dehydrated placental allograft that promotes an optimal environment for wound healing; VIA Matrix, Affinity, Novachor, and NuShield placental allografts to address a variety of wound sizes and types as a protective barrier and ECM scaffold, and SimpliMax as a dehydrated amnion allograft that provides a protective barrier and supports an optimal environment for inherent healing of a wide range of acute and chronic wounds. We have a highly trained and specialized direct wound care sales force paired with comprehensive customer support services.
Previous wording
In the Surgical & Sports Medicine market, we are leveraging our broad regenerative medicine capabilities to address chronic and acute surgical wounds and tendon and ligament injuries. Our Sports Medicine products include NuShield for surgical applications in targeted soft tissue repairs; and Affinity, Novachor, PuraPly MZ, PuraPly AM, and PuraPly SX for management of open wounds in the surgical setting. We currently sell these products through independent agencies and our direct sales force.
Current wording
In the Surgical & Sports Medicine market, we are leveraging our broad regenerative medicine capabilities to address chronic and acute surgical wounds and tendon and ligament injuries. Our Sports Medicine products include NuShield and Cygnus Matrix for surgical applications in targeted soft tissue repairs; and Affinity, Novachor, PuraPly MZ, PuraPly AM, and PuraPly SX for management of open wounds in the surgical setting. We currently sell these products through independent agencies and our direct sales force.
Previous wording
As previously disclosed, manufacturing of Dermagraft was suspended in the fourth quarter of 2021 and sales of Dermagraft were suspended in the second quarter of 2022. We currently plan to transition our Dermagraft manufacturing to our newly-leased biomanufacturing facility in Smithfield, Rhode Island, which we expect will begin in 2027, and will result in substantial long-term cost savings. We expect to resume sales of Dermagraft by the end of 2027. If there are significant delays in the build out of the Smithfield Facility or in approval of the facility for manufacturing of Dermagraft, it could have an adverse effect on our future consolidated net product revenue and results of operations.
Current wording
As previously disclosed, manufacturing of Dermagraft was suspended in the fourth quarter of 2021 and sales of Dermagraft were suspended in the second quarter of 2022. We currently plan to transition our Dermagraft manufacturing to our newly-leased biomanufacturing facility in Smithfield, Rhode Island, which we expect will begin in 2027, and will result in significant capacity and substantial long-term cost savings. We expect to resume sales of Dermagraft by the end of 2027. If there are significant delays in the build out of the Smithfield Facility or in FDA approval of the facility for manufacturing of Dermagraft, it could have an adverse effect on our future consolidated net product revenue and results of operations.
Previous wording
Local Coverage Determinations and Centers for Medicare & Medicaid Services (CMS) Proposed Rule
Current wording
Local Coverage Determinations and Centers for Medicare & Medicaid Services (CMS) Proposed and Final Rules
Previous wording
On April 25, 2024, seven Medicare Part A/B Administrative Contractors (“MACs”) published new proposed local coverage determinations (“LCDs”) for skin substitute grafts/cellular and tissue-based products (“CTPs”) for the treatment of DFUs and VLUs in the Medicare population. These LCDs were finalized by the MACs on November 14, 2024, and were originally set to become effective on February 12, 2025. However, on January 24, 2025, the MACs announced a delay in the implementation of the LCDs until April 13, 2025, and on April 10, 2025, the MACs announced another delay in the implementation of the LCDs until January 1, 2026. Under the new LCDs finalized in November 2024, should they take effect in their current form, a total of eighteen products would remain covered, including our Apligraf and Dermagraft products for DFUs and VLUs, and our Affinity and NuShield products for DFUs; however, more than 200 products would be classified as “non-covered,” including our PuraPly, PuraPly AM, PuraPly XT, Novachor, TransCyte, Dual and Matrix products for DFUs and VLUs. The LCDs as finalized apply only to DFU and VLU indications for skin substitute products; coverage for other indications would remain subject to case-by-case review of medical necessity by the MACs if the LCDs take effect. It is uncertain if there will be further delays in implementing the new LCDs and/or if the new LCDs will be revised or rescinded going forward. If implemented, the LCDs could materially impact utilization of these products, our business, and our revenue. Any future changes or other developments related to these or other LCDs also could affect utilization of our products, our business, and our revenue.
Current wording
On April 25, 2024, seven Medicare Part A/B Administrative Contractors (“MACs”) published new proposed local coverage determinations (“LCDs”) for skin substitute grafts/cellular and tissue-based products (“CTPs”) for the treatment of DFUs and VLUs in the Medicare population. These LCDs were finalized by the MACs on November 14, 2024, and were originally set to become effective on February 12, 2025. However, on January 24, 2025, the MACs announced a delay in the implementation of the LCDs until April 13, 2025, and on April 11, 2025, the MACs announced another delay in the implementation of the LCDs until January 1, 2026. Under the new LCDs, should they take effect in their current form, a total of approximately eighteen products would remain covered, including our Apligraf and Dermagraft products for DFUs and VLUs, and our Affinity and NuShield products for DFUs; however, more than 200 products would be classified as “non-covered,” including our PuraPly, PuraPly AM, PuraPly XT, Novachor, TransCyte, Dual and Matrix products for DFUs and VLUs. The new LCDs apply only to DFU and VLU indications for skin substitute products; coverage for other indications would remain subject to case-by-case review of medical reasonableness and necessity by the MACs if the LCDs take effect, though some MACs have denied claims outside of these indications. It is uncertain if there will be further delays in implementing the new LCDs and/or if the new LCDs will be revised or rescinded going forward. If implemented, the new LCDs could materially impact utilization of these products, our business, and our revenue. Any future changes or other developments related to these or other LCDs or coverage decisions also could affect utilization of our products, our business, and our revenue.
Previous wording
In July 2025, CMS issued proposed rules that announce and solicit comments on proposed policy changes for Medicare payments under the Physician Fee Schedule (“PFS”) and Hospital Outpatient Prospective Payment System (“OPPS”), and other Medicare Part B issues, effective on or after January 1, 2026. For calendar year 2026, CMS has proposed to pay for skin substitute products as incident-to supplies when they are used as part of a covered application procedure paid under the PFS in the non-facility setting or under the Medicare OPPS in the hospital outpatient department setting. CMS also proposed to align skin substitute categorization consistent with their FDA regulatory status, such as 361 HCT/Ps, PMAs and 510(k)s. CMS indicated that it believes grouping and paying for skin substitute products based on relevant product characteristics, consistent with their FDA regulatory status, recognizes the clinical and resource differences in product types and would incentivize competition to create more innovative products, while also resulting in significant savings to the Medicare Trust Fund. CMS proposed, for calendar year 2026, to use a single payment rate reflecting the highest average for these three categories of skin substitute products to ensure it is not underestimating the resources involved with furnishing these services. For future years, CMS intends to propose payment rates that differentiate between the three FDA regulatory categories. CMS is proposing to implement these policy changes in both the non-facility setting paid under the PFS and the hospital outpatient department setting paid under OPPS to remain consistent across these different sites of care. While we believe CMS’ proposed payment structure will curb abuse under the current system, and the resulting rapid escalation in Medicare spending, and ensure a much-needed consistent payment approach across sites of care, the changes could also materially impact utilization of our products, our business, and our revenue.
Current wording
On November 5, 2025, CMS released a final rule adopting policy changes for Medicare payments under the Physician Fee Schedule (“PFS”) and other Medicare Part B issues, effective on or after January 1, 2026. In July 2025, CMS issued a proposed rule that announces and solicits comments on proposed policy for changes for Medicare payments under the Hospital Outpatient Prospective Payment System (“OPPS”); a final rule is expected to be released in November 2025. For calendar year 2026, under the PFS final rule, CMS will pay for certain skin substitute products, at an initial payment rate of approximately $127.28 per square centimeter (prior to the application of the geographic adjustments), as incident-to supplies when they are used as part of a covered application procedure paid under the PFS in the non-facility setting. For calendar year 2026, under the proposed OPPS rule, CMS would apply a similar payment approach for skin substitute products used in the hospital outpatient department setting. Both the final PFS rule and the proposed OPPS rule CMS align skin substitute categorization consistent with their FDA regulatory status, including 361 HCT/Ps, PMAs and 510(k)s. CMS stated that grouping and paying for skin substitute products based on relevant product characteristics, consistent with their FDA regulatory status, recognizes the clinical and resource differences in product types and is intended to incentivize competition to create more innovative products, while also resulting in significant savings to the Medicare Trust Fund. For calendar year 2026, the final PFS rule and proposed OPPS rule provide for use of a single initial payment rate across these three categories, with CMS indicating that in future years, it intends to propose payment rates that differentiate between the three FDA regulatory categories. CMS is implementing these policy changes in the non-facility setting paid under the PFS and is proposing to implement these policy changes in the hospital outpatient department and ambulatory surgical center settings paid under OPPS to remain consistent across these different sites of care. While we believe CMS’ finalized PFS payment structure and proposed OPPS payment structure will curb abuse under the current system, and the resulting rapid escalation in Medicare spending, and ensure a much-needed consistent payment approach across sites of care, the changes could also materially impact utilization of our products, our business, our revenue and our profitability.
Previous wording
We derive our net product revenue from our portfolio of Advanced Wound Care and Surgical & Sports Medicine products. We primarily sell our Advanced Wound Care products through direct sales representatives who manage and maintain the sales relationships with hospitals, wound care centers, government facilities, ASCs and physician offices. We primarily sell our Surgical & Sports Medicine products through third party agencies. As of June 30, 2025, we had approximately 233 direct sales representatives and approximately 175 independent agencies.
Current wording
We derive our net product revenue from our portfolio of Advanced Wound Care and Surgical & Sports Medicine products. We primarily sell our Advanced Wound Care products through direct sales representatives who manage and maintain the sales relationships with hospitals, wound care centers, government facilities, ASCs and physician offices. We primarily sell our Surgical & Sports Medicine products through third party agencies. As of September 30, 2025, we had approximately 221 direct sales representatives and approximately 175 independent agencies.
Previous wording
Impairment and write-down of property relates to the pending sale of one of our buildings located on our Canton, Massachusetts campus that was adjusted to fair market value based on current market conditions. We recorded impairment and write-down of the property during the second quarter of 2024 and first and second quarter of 2025. Write-down of capitalized internal-use software costs consists of the development costs for certain modules of our ERP system that were determined to have no future value. We recorded this charge during the second quarter of 2024.
Current wording
Impairment and write-down of property relates to the pending sale of one of our buildings located on our Canton, Massachusetts campus that was adjusted to fair market value based on current market conditions. We recorded impairment and write-down of the property during the second quarter of 2024 and each quarter of 2025. Write-down of capitalized internal-use software costs consists of the development costs for certain modules of our ERP system that were determined to have no future value. We recorded this charge during the second quarter of 2024.
Previous wording
Our U.S. provision for income taxes relates to current tax expense associated with taxable income that could not be offset by net operating losses or research and development credits. The utilization of our remaining federal net operating losses is subject to an 80% taxable income limitation and for certain states we have no net operating losses remaining to offset state taxable income or the utilization of the remaining state net operating losses are subject to a limitation. We have also recorded a foreign provision for income taxes related to our wholly-owned subsidiary in Switzerland.
Current wording
Our U.S. provision for income taxes relates to a tax benefit associated with a pre-tax loss. We have also recorded a foreign provision for income taxes related to our wholly-owned subsidiary in Switzerland.
Previous wording
The following table presents a reconciliation of GAAP net loss to Non-GAAP EBITDA and Non-GAAP Adjusted EBITDA for each of the periods presented:
Current wording
The following table presents a reconciliation of GAAP net income (loss) to Non-GAAP EBITDA and Non-GAAP Adjusted EBITDA for each of the periods presented:
Previous wording
Comparison of Three and Six Months Ended June 30, 2025 and 2024
Current wording
Comparison of Three and Nine Months Ended September 30, 2025 and 2024
Previous wording
Net product revenue from our Advanced Wound Care products decreased by $30.5 million, or 25%, to $92.7 million in the three months ended June 30, 2025, from $123.2 million in the three months ended June 30, 2024. Net product revenue from our Advanced Wound Care products decreased by $54.5 million, or 24%, to $172.6 million in the six months ended June 30, 2025, from $227.1 million in the six months ended June 30, 2024. The decrease in Advanced Wound Care net product revenue was primarily attributable to increased ambiguity and disruption in customer behavior following the delayed implementation of the LCDs announced in January 2025.
Current wording
Net product revenue from our Advanced Wound Care products increased by $33.5 million, or 31%, to $141.5 million in the three months ended September 30, 2025, from $108.0 million in the three months ended September 30, 2024. The increase in Advanced Wound Care net product revenue was primarily attributable to introduction of newly licensed products and an increase in product sales of certain of our products to our existing and new customers. Net product revenue from our Advanced Wound Care products decreased by $21.0 million, or 6%, to $314.1 million in the nine months ended September 30, 2025, from $335.1 million in the nine months ended September 30, 2024. The decrease in Advanced Wound Care net product revenue was primarily attributable to increased ambiguity and disruption in customer behavior following the delayed implementation of the LCDs announced in January 2025, partially offset by introduction of newly licensed products and increase in product sales of certain of our products to our existing and new customers.
Previous wording
Net product revenue from our Surgical & Sports Medicine products increased by $1.1 million, or 16%, to $8.1 million in the three months ended June 30, 2025, from $7.0 million in the three months ended June 30, 2024. Net product revenue from our Surgical & Sports Medicine products increased by $1.7 million, or 13%, to $14.8 million in the six months ended June 30, 2025 from $13.1 million in the six months ended June 30, 2024. The increase in Surgical & Sports Medicine net product revenue was primarily due to an increase in certain customer buying patterns.
Current wording
Net product revenue from our Surgical & Sports Medicine products increased by $1.8 million, or 25%, to $9.0 million in the three months ended September 30, 2025, from $7.2 million in the three months ended September 30, 2024. Net product revenue from our Surgical & Sports Medicine products increased by $3.6 million, or 17%, to $23.9 million in the nine months ended September 30, 2025 from $20.3 million in the nine months ended September 30, 2024. The increase in Surgical & Sports Medicine net product revenue was primarily due to an increase in certain customer buying patterns.
Previous wording
Cost of goods sold decreased by $1.6 million, or 5%, to $27.6 million in the three months ended June 30, 2025, from $29.2 million in the three months ended June 30, 2024. Cost of goods sold decreased by $6.5 million, or 11%, to $51.4 million in the six months ended June 30, 2025, from $57.9 million in the six months ended June 30, 2024. The decrease in cost of goods sold was primarily due to a decrease in sales volume as well as a shift in product mix.
Current wording
Cost of goods sold increased by $9.5 million, or 35%, to $36.3 million in the three months ended September 30, 2025, from $26.8 million in the three months ended September 30, 2024. Cost of goods sold increased by $2.9 million, or 3%, to $87.6 million in the nine months ended September 30, 2025, from $84.7 million in the nine months ended September 30, 2024. The increase in cost of goods sold was primarily due to changes in sales volume as well as a shift in product mix.
Previous wording
Gross profit decreased by $27.9 million, or 28%, to $73.1 million in the three months ended June 30, 2025, from $101.0 million in the three months ended June 30, 2024. Gross profit decreased by $46.2 million, or 25%, to $136.1 million in the six months ended June 30, 2025, from $182.3 million in the six months ended June 30, 2024. Gross profit decreased as a percentage of revenue due to a shift in product mix.
Current wording
Gross profit increased by $25.9 million, or 29%, to $114.2 million in the three months ended September 30, 2025, from $88.4 million in the three months ended September 30, 2024. Gross profit decreased by $20.3 million, or 8%, to $250.4 million in the nine months ended September 30, 2025, from $270.7 million in the nine months ended September 30, 2024. The changes in gross profit were primarily due to changes in net product revenue. Gross profit decreased as a percentage of revenue due to a shift in product mix.
Previous wording
Research and development expenses decreased by $5.2 million, or 33%, to $10.4 million in the three months ended June 30, 2025, from $15.6 million in the three months ended June 30, 2024. Research and development expenses decreased by $7.4 million, or 26%, to $21.0 million in the six months ended June 30, 2025, from $28.4 million in the six months ended June 30, 2024. The decrease in research and development expenses was primarily due to a decrease in expenses associated with clinical research and trials.
Current wording
Research and development expenses increased by $2.9 million, or 28%, to $13.2 million in the three months ended September 30, 2025, from $10.3 million in the three months ended September 30, 2024. Research and development expenses decreased by $4.5 million, or 12%, to $34.3 million in the nine months ended September 30, 2025, from $38.7 million in the nine months ended September 30, 2024. The changes in research and development expenses were primarily due to changes in timing of expenses associated with clinical research and trials, primarily related to ReNu, and support of BLA efforts.
Previous wording
Selling, general and administrative expenses decreased by $2.5 million, or 2%, to $146.3 million in the six months ended June 30, 2025, from $148.9 million in the six months ended June 30, 2024. The decrease in selling, general and administrative expenses was primarily due to a $9.4 million decrease in commissions and royalty expense due to decreased sales. These decreases in expenses were partially offset by a $4.0 million increase in headcount-related expenses and facilities expense, a $1.3 million increase in marketing expenses, and a $1.1 million increase in the allowance for expected credit losses.
Current wording
Selling, general and administrative expenses increased by $7.9 million, or 11%, to $79.7 million in the three months ended September 30, 2025, from $71.8 million in the three months ended September 30, 2024. The increase in selling, general and administrative expenses was primarily due to a $8.4 million increase in commissions expense and allowance for expected credit losses due to increased sales, and an increase in headcount-related and restructuring expenses of $2.3 million. These increases in expenses were partially offset by a $3.5 million decrease in royalty and consulting expenses.
Previous wording
Selling, general and administrative expenses decreased by $2.7 million, or 4%, to $73.8 million in the three months ended June 30, 2025, from $76.5 million in the three months ended June 30, 2024. The decrease in selling, general and administrative expenses was primarily due to a $5.9 million decrease in commissions and royalty expense due to decreased sales. These decreases in expenses were partially offset by a $0.8 million increase in facilities expense, a $1.5 million increase in marketing expenses, and a $1.2 million increase in the allowance for expected credit losses.
Current wording
Selling, general and administrative expenses increased by $5.4 million, or 2%, to $226.1 million in the nine months ended September 30, 2025, from $220.7 million in the nine months ended September 30, 2024. The increase in selling, general and administrative expenses was primarily due to a $5.8 million increase in headcount-related, restructuring and facility expenses, and a $1.7 million increase in allowance for expected credit losses. These increases in expenses were partially offset by a $3.8 million decrease in royalty expense.
Previous wording
During the three and six months ended June 30, 2025, we recorded a $1.7 million and $8.3 million, respectively, write-down of costs to adjust certain assets held for sale to their fair market value. During the three and six months ended June 30, 2024, we recorded a $4.0 million write-down of costs related to internal-use software and an $18.8 million impairment of a purchased building and associated unfinished construction work. See Note 6, Property and Equipment, Net, to our condensed consolidated financial statements included in this Form 10-Q.
Current wording
During the three and nine months ended September 30, 2025, we recorded a $0.9 million and $9.2 million, respectively, write-down of costs to adjust certain assets held for sale to their fair market value. During the second quarter of 2024, we recorded a $4.0 million write-down of costs related to internal-use software and an $18.8 million impairment of a purchased building and associated unfinished construction work. See Note 6, Property and Equipment, Net, to our condensed consolidated financial statements included in this Form 10-Q.
Previous wording
Other income (expense) net, decreased by $1.4 million to $0.7 million in income in the three months ended June 30, 2025, from $0.6 million in expense in the three months ended June 30, 2024. Other income (expense), net, decreased by $2.8 million to $1.7 million in income in the six months ended June 30, 2025, from $1.1 million in expense in the six months ended June 30, 2024. The decrease resulted primarily from interest income generated from our interest-bearing sweep accounts offset by amortization of debt discount and debt issuance costs.
Current wording
Other income (expense), net, changed by $0.9 million to $0.4 million in income in the three months ended September 30, 2025, from $0.4 million in expense in the three months ended September 30, 2024. Other income (expense), net, changed by $3.7 million to $2.1 million in income in the nine months ended September 30, 2025, from $1.6 million in expense in the nine months ended September 30, 2024. The change resulted primarily from interest income generated from our interest-bearing sweep accounts offset by amortization of debt discount and debt issuance costs.
Previous wording
Income tax expense decreased by $4.9 million, or 198%, to a benefit of $2.4 million in the three months ended June 30, 2025, from expense of $2.5 million in the three months ended June 30, 2024. Income tax expense decreased by $9.6 million, or 3708%, to a benefit of $9.4 million in the six months ended June 30, 2025, from expense of $0.3 million in the six months ended June 30, 2024. The change in the income tax benefit (expense) is primarily attributable to a higher estimated effective tax rate for the twelve months ending December 31, 2025 resulting from an increase in expected pre-tax income in 2025 compared to 2024, partially offset by our research and development tax credits.
Current wording
Income tax benefit decreased by $6.1 million, or 94%, to $0.4 million in the three months ended September 30, 2025, from $6.5 million in the three months ended September 30, 2024. The decrease in the income tax benefit is primarily attributable to a change in estimated effective tax rate for the twelve months ended December 31, 2024 due to our research and development tax credits, as well changes in expected pre-tax income in 2024.
Previous wording
As of June 30, 2025, we had working capital of $189.1 million, which included $73.1 million in cash and cash equivalents. We expect that our cash on hand and other components of working capital as of June 30, 2025, plus net cash flows from product sales will be sufficient to fund our operating expenses, capital expenditure requirements and debt service payments for at least 12 months beyond the filing date of this Form 10-Q.
Current wording
As of September 30, 2025, we had working capital of $205.1 million, which included $63.7 million in cash and cash equivalents. We have $75.0 million available for future revolving borrowings under our Revolving Facility upon execution of the October 2025 Amendment (see Note 9, Long-Term Debt Obligations to our condensed consolidated financial statements included in this Form 10-Q). We expect that our cash on hand and other components of working capital as of September 30, 2025, availability under the Revolving Facility, plus net cash flows from product sales will be sufficient to fund our operating expenses, capital expenditure requirements and debt service payments for at least 12 months beyond the filing date of this Form 10-Q.
Previous wording
During the six months ended June 30, 2025, net cash used in operating activities was $52.8 million, resulting from our net loss of $28.2 million and net cash used in connection with changes in our operating assets and liabilities of $58.8 million, partially offset by non-cash charges of $34.3 million. Net cash used in changes in our operating assets and liabilities included an increase in inventory of $15.9 million, an increase in accounts receivable of $13.6 million, an increase in prepaid expenses and other current assets and other assets of $12.9 million, a decrease in accrued expenses and other current liabilities of $13.9 million, and a decrease in operating lease liabilities of $4.1 million, partially offset by an increase in accounts payable of $1.6 million.
Current wording
During the nine months ended September 30, 2025, net cash used in operating activities was $49.7 million, resulting from our net loss of $6.7 million and net cash used in connection with changes in our operating assets and liabilities of $88.7 million, partially offset by non-cash charges of $45.7 million. Changes in our operating assets and liabilities included an increase in accounts receivable of $64.3 million, an increase in inventory of $15.0 million, an increase in prepaid expenses and other current assets and other assets of $3.3 million, a decrease in operating lease liabilities of $6.3 million, and a decrease in accrued expenses and other current liabilities of $1.9 million, partially offset by an increase in accounts payable of $0.6 million and an increase in other liabilities of $1.5 million.
Previous wording
During the six months ended June 30, 2024, net cash used in operating activities was $5.4 million, resulting from our net loss of $19.1 million and net cash used in connection with changes in our operating assets and liabilities of $28.3 million, partially offset by net non-cash charges of $42.0 million. Changes in our operating assets and liabilities included an increase in inventory of $2.0 million, an increase in prepaid expenses and other current assets of $0.4 million, an increase in accounts receivable of $26.0 million, a decrease in operating lease liabilities of $5.9 million, and a decrease in accounts payable of $2.1 million, partially offset by an increase in accrued expenses and other current liabilities of $8.2 million, and an increase in other liabilities of $0.1 million.
Current wording
During the nine months ended September 30, 2024, net cash provided by operating activities was $3.3 million, resulting from our net loss of $6.8 million and net cash used in connection with changes in our operating assets and liabilities of $42.1 million, partially offset by net non-cash charges of $52.2 million. Changes in our operating assets and liabilities included an increase in accounts receivable of $23.0 million, an increase in inventory of $5.7 million, an increase in prepaid expenses and other current assets and other assets of $4.1 million, a decrease in operating lease liabilities of $9.3 million, and a decrease in accounts payable of $6.0 million, partially offset by an increase in accrued expenses and other current liabilities of $5.9 million, and an increase in other liabilities of $0.1 million.
Previous wording
During the six months ended June 30, 2025, we used $7.3 million of cash in investing activities consisting exclusively of capital expenditures.
Current wording
During the nine months ended September 30, 2025, we used $9.5 million of cash in investing activities consisting exclusively of capital expenditures.
Previous wording
During the six months ended June 30, 2024, we used $4.1 million of cash in investing activities consisting exclusively of capital expenditures.
Current wording
During the nine months ended September 30, 2024, we used $6.7 million of cash in investing activities consisting exclusively of capital expenditures.
Previous wording
During the six months ended June 30, 2025, net cash used in financing activities was $2.3 million. This consisted of principal payments on finance lease obligations of $0.6 million and net cash payments associated with our stock awards activities of $1.8 million.
Current wording
During the nine months ended September 30, 2025, net cash used in financing activities was $12.6 million. This consisted of payments for landlord assets under construction, net of tenant allowance of $10.0 million, principal payments on finance lease obligations of $0.9 million and net cash payments associated with our stock awards activities of $1.6 million.
Previous wording
During the six months ended June 30, 2024, net cash used in financing activities was $4.3 million. This consisted of the principal payment on our term loan of $2.8 million, principal payments on finance lease obligations of $0.5 million, and net cash payments associated with our stock awards activities of $1.0 million.
Current wording
During the nine months ended September 30, 2024, net cash used in financing activities was $6.0 million. This consisted of the principal payment on our term loan of $4.2 million, principal payments on finance lease obligations of $0.8 million, and net cash payments associated with our stock awards activities of $1.0 million.
Previous wording
In August 2021, we and our subsidiaries entered into a credit agreement with SVB and several other lenders (the “Lenders”), which we refer to as the 2021 Credit Agreement. The 2021 Credit Agreement, as amended, provides for a term loan facility not to exceed $75.0 million (the “Term Loan Facility”) and a revolving credit facility not to exceed $125.0 million (the “Revolving Facility”). In November 2024, we and the Lenders amended the 2021 Credit Agreement to allow for the issuance of the Convertible Preferred Stock, and to require the repayment of the Term Loan Facility within one business day of such issuance, among other terms (the “2024 Amendment”). In August 2025, we and the Lenders amended the 2021 Credit Agreement (the “2025 Amendment”) to provide that so long as there are no outstanding borrowings under the Revolving Facility, the Consolidated Fixed Charge Coverage Ratio (described below) covenant shall not be tested for the fiscal quarter ended June 30, 2025. Notwithstanding this testing accommodation for the quarter ended June 30, 2025, the covenant is deemed to be in effect for purposes of any transaction contemplated by the 2021 Credit Agreement that requires pro forma compliance with the Consolidated Fixed Charge Coverage Ratio or the financial covenants generally and would preclude us from any additional borrowing under the Revolving Facility unless waived or further amended. The 2025 Amendment further requires us, our subsidiary guarantors, the administrative agent and certain of the Lenders prior to September 30, 2025 to enter into an agreement to reset certain financial covenants or implement new financial covenants and implement other modifications to the 2021 Credit Agreement and related documents, on terms and conditions reasonably acceptable to the administrative agent and such Lenders. The Lenders shall have no further obligation to make revolving extensions of credit under the 2021 Credit Agreement until such an agreement has been executed, and our failure to enter into such an agreement shall constitute an event of default under the 2021 Credit Agreement. Notwithstanding this obligation, we have the right to terminate the 2021 Credit Agreement for our convenience prior to such date, and we expect that the cash on hand and other components of working capital as of June 30, 2025, plus net cash flows from product sales will be sufficient to fund our operating expenses, capital expenditure requirements and debt service payments for at least 12 months beyond the filing date of this Form 10-Q.
Current wording
In August 2021, we and our subsidiaries entered into a credit agreement with SVB and several other lenders (the “Lenders”), which we refer to as the 2021 Credit Agreement. The 2021 Credit Agreement, as amended, provides for a term loan facility not to exceed $75.0 million (the “Term Loan Facility”) and a revolving credit facility not to exceed $125.0 million (the “Revolving Facility”). In November 2024, we and the Lenders amended the 2021 Credit Agreement to allow for the issuance of the Convertible Preferred Stock, and to require the repayment of the Term Loan Facility within one business day of such issuance, among other terms (the “2024 Amendment”). In August 2025, we and the Lenders amended the 2021 Credit Agreement (the “2025 Amendment”) to provide that so long as there are no outstanding borrowings under the Revolving Facility, the Consolidated Fixed Charge Coverage Ratio (described below) covenant shall not be tested for the fiscal quarter ended June 30, 2025. Notwithstanding this testing accommodation for the quarter ended June 30, 2025, the covenant is deemed to be in effect for purposes of any transaction contemplated by the 2021 Credit Agreement that requires pro forma compliance with the Consolidated Fixed Charge Coverage Ratio or the financial covenants generally and would preclude us from any additional borrowing under the Revolving Facility unless waived or further amended. On October 31, 2025, the 2021 Credit Agreement was further amended (the “October 2025 Amendment”). The October 2025 Amendment reduced the Revolving Facility from $125,000 to $75,000, removed the Consolidated Fixed Charge Coverage Ratio covenant and added a minimum Consolidated Interest Coverage Ratio covenant of 3x, tested quarterly and a Consolidated Capital Expenditures covenant, which requires capital expenditures to be less than $50,000 during any 12-month period when loans under the Revolving Facility exceed $50,000. The Company paid an amendment fee of $113 in connection with the October 2025 Amendment.
Previous wording
Advances made under the 2021 Credit Agreement were either SOFR Loans or ABR Loans, at our option. For SOFR Loans, the interest rate was a per annum interest rate equal to the Adjusted Term SOFR plus an Applicable Margin between 2.00% to 3.25% based on the Total Net Leverage Ratio. For ABR Loans, the interest rate was equal to (1) the highest of (a) the Wall Street Journal Prime Rate, (b) the Federal Funds Rate plus 0.50% and (c) the Adjusted Term SOFR rate plus 1.0%, plus (2) an Applicable Margin between 1.00% to 2.25% based on the Total Net Leverage Ratio.
Current wording
Advances made under the 2021 Credit Agreement were either SOFR Loans or ABR Loans, at our option. For SOFR Loans, the interest rate was a per annum interest rate equal to the Adjusted Term SOFR plus an Applicable Margin between 2.00% to 3.25% based on the Total Net Leverage Ratio. For ABR Loans, the interest rate was equal to (1) the highest of (a) the Wall Street Journal Prime Rate, (b) the Federal Funds Rate plus 0.50% and (c) the Adjusted Term SOFR rate plus 1.0%, plus (2) an Applicable Margin between 1.00% to 2.25% based on the Total Net Leverage Ratio. We prepaid the Term Loan Facility in November 2024, and amounts borrowed under the Term Loan Facility may not be re-borrowed.
Previous wording
Under the 2021 Credit Agreement as amended by the 2024 Amendment, we are required to comply with certain financial covenants including the Consolidated Fixed Charge Coverage Ratio and Consolidated Total Net Leverage Ratio, tested quarterly. In addition, we are also required to make representations and warranties and comply with certain non-financial covenants that are customary in loan agreements of this type, including restrictions on the payment of dividends, repurchase of stock, incurrence of indebtedness, dispositions and acquisitions.
Current wording
Under the 2021 Credit Agreement, as amended, we are required to comply with certain financial covenants including the Consolidated Total Net Leverage Ratio, Consolidated Interest Coverage Ratio and Consolidated Capital Expenditures, tested quarterly. In addition, we are also required to make representations and warranties and comply with certain non-financial covenants that are customary in loan agreements of this type, including restrictions on the payment of dividends, repurchase of stock, incurrence of indebtedness, dispositions and acquisitions.
Previous wording
As of June 30, 2025 and December 31, 2024, we did not have outstanding borrowings under our Term Loan Facility or our Revolving Facility.
Current wording
As of September 30, 2025, we were in compliance with the covenants under the 2021 Credit Agreement, as amended. As of September 30, 2025 and December 31, 2024, we did not have outstanding borrowings under our Term Loan Facility or our Revolving Facility.
Previous wording
Our unaudited condensed consolidated financial statements have been prepared in accordance with GAAP. The preparation of unaudited condensed consolidated financial statements requires us to make estimates, assumptions and judgments that affect the reported amounts of assets, liabilities, and the disclosure at the date of the unaudited condensed consolidated financial statements, as well as revenue and expenses recorded during the reporting periods. Management bases its estimates, assumptions and judgments on historical experience and on various other factors that it believes to be reasonable under the circumstances. Different assumptions and judgments would change the estimates used in the preparation of our unaudited condensed consolidated financial statements, which, in turn, could materially change our results from those reported. Management evaluates its estimates, assumptions and judgments on an ongoing basis. Historically, our critical accounting estimates have not differed materially from actual results. However, if our assumptions change, we may need to revise our estimates, or take other corrective actions, either of which may also have a material adverse effect on our condensed consolidated statements of operations and comprehensive loss, liquidity and financial condition. See also our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, for information about these accounting policies as well as a description of our other significant accounting policies.
Current wording
Our unaudited condensed consolidated financial statements have been prepared in accordance with GAAP. The preparation of unaudited condensed consolidated financial statements requires us to make estimates, assumptions and judgments that affect the reported amounts of assets, liabilities, and the disclosure at the date of the unaudited condensed consolidated financial statements, as well as revenue and expenses recorded during the reporting periods. Management bases its estimates, assumptions and judgments on historical experience and on various other factors that it believes to be reasonable under the circumstances. Different assumptions and judgments would change the estimates used in the preparation of our unaudited condensed consolidated financial statements, which, in turn, could materially change our results from those reported. Management evaluates its estimates, assumptions and judgments on an ongoing basis. Historically, our critical accounting estimates have not differed materially from actual results. However, if our assumptions change, we may need to revise our estimates, or take other corrective actions, either of which may also have a material adverse effect on our condensed consolidated statements of operations and comprehensive income (loss), liquidity and financial condition. See also our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, for information about these accounting policies as well as a description of our other significant accounting policies.