LEMAITRE VASCULAR INC
For the period ended Sep 30, 2025. Filed Nov 7, 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 7, 2025
LMAT$80.89-3.1%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 2025-08-06.
0001437749-25-024936
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-09-30; filed 2025-11-07.
0001193125-25-270981
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 87 previous paragraphs and 120 current paragraphs.
52 unchanged; 35 reworded; 32 added; 0 removed; 0 previous and 1 current paragraphs rearranged.
Tables are not compared: 15 previous and 6 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 (32)
Current report
growing our direct sales force in North America, Europe, and APAC, including replacing distributors with our direct sales personnel;
Current report
increasing the average selling prices of our devices;
Current report
introducing our products into new territories upon receipt of regulatory approvals or registrations;
Current report
acquiring complementary products and the transition of distributor sales to LeMaitre;
Current report
updating existing products and introducing new products through research and development; and
Current report
consolidating product manufacturing into our Burlington, Massachusetts facilities.
Current report
Additionally, we provide cryopreservation services for our Restoreflow allografts primarily in the US, UK, and Canada. In October 2025, we received approval from the German authority on tissue banking to allow sale of these services in the German market.
Current report
In June 2020, we entered into an agreement with Artegraft to purchase the assets of their bovine graft business for $72.5 million plus additional payments of up to $17.5 million, contingent upon future unit sales.
Current report
During 2021, we made decisions to wind down the TRIVEX powered phlebectomy systems, remote endarterectomy devices, and surgical glue. These product lines totaled approximately $2.2 million in 2021 revenues.
Current report
During 2022, we made decisions to wind down the ProCol graft, AlboSure polyester patch, LeverEdge, and Latis graft cleaning catheter product lines. These products totaled approximately $0.7 million in 2022 revenues.
Current report
During 2024, we made the decision to wind down the PeriVu Angioscope product line. This product totaled approximately $0.9 million in 2024 revenues.
Current report
During 2025, we made the decision to end our cardiovascular porcine patch distribution agreement with Elutia. Previously, in April 2023, we had entered into an agreement with Elutia to become the exclusive U.S. distributor of their cardiovascular porcine patches. Under the agreement, we could distribute the products for three years with an option to acquire Elutia’s worldwide cardiovascular porcine patch business during the second and third years of the agreement. This product totaled approximately $1.8 million in 2025 revenues.
Current report
During 2025, we made the decision to wind down the CardioCel 3D and DuraSure product lines. These product lines totaled approximately $0.5 million in revenue for the nine months ended September 30, 2025.
Current report
In May 2022, we entered into a distribution transition agreement with our Korean distributor to sell products directly in Korea and dissolve the existing distribution arrangement. We have been selling direct-to-hospital in Korea since December 2022. The distribution termination fees totaled approximately $0.5 million.
Current report
In March 2023, we entered into a distribution transition agreement with our Thai distributor to sell products directly in Thailand and dissolve the existing distribution arrangement. We have been selling direct-to-hospital in Thailand since August 2023. The distribution termination fees totaled approximately $0.7 million.
Current report
In March 2025, we entered into a distribution transition agreement with our Portuguese distributor to sell products directly in Portugal and dissolve the existing distribution arrangement. We have been selling direct-to-hospitals in Portugal since May 2025. The distribution termination fees are expected to total approximately $0.2 million.
Current report
In June 2025, we entered into a distribution transition agreement with our Czech distributor to sell products directly in Czechia and dissolve the existing distribution arrangement. We have been selling direct-to-hospitals in Czechia since July 2025. The distribution termination fees are expected to total approximately $0.1 million.
Current report
In March 2022, we received FDA clearance to market PhasTIPP, a portable powered phlebotomy device used to remove varicose veins in the leg. The device was launched in the United States in April 2024.
Current report
In October 2019, we acquired the CardioCel and VascuCel biologic patch businesses from Anteris. The transfer to Burlington was substantially completed in 2023. In June 2023, the MDR CE mark application for these Burlington-produced devices was submitted, and we obtained approval in January 2025, allowing for distribution of these patches in the EU in 2025. We began distributing these Burlington-produced patches in the United States, Canada, and select APAC markets in 2024.
Current report
The Inflation Reduction Act ("IRA") was enacted into law on August 16, 2022. Included in the IRA was a provision to implement a 15% corporate alternative minimum tax on “adjusted financial statement income” for applicable corporations and a 1% excise tax on repurchases of stock. These provisions are effective for tax years beginning after December 31, 2022. We do not currently believe the IRA will have a material impact on our reported results, cash flows or financial position.
Current report
On July 4, 2025, President Donald Trump signed the One Big Beautiful Bill Act ("OBBBA") into law, which is considered the enactment date under GAAP. Key corporate tax provisions include the restoration of 100% bonus depreciation for qualifying assets, immediate expensing for domestic research and experimental expenditures, changes to Section 163(j) interest limitations, updates to GILTI and FDII rules, amendments to energy credits, and expanded Section 162(m) aggregation requirements.
Current report
During the third quarter of 2025, we implemented provisions of the OBBBA, fully recognizing the deduction of domestic research and experimental expenditures previously capitalized under Section 174 of the Internal Revenue Code. As a result of this implementation, we adjusted our deferred tax assets and deferred tax liabilities to reflect the change in tax treatment for these expenditures. The impact of these adjustments is reflected in our three- and nine-months ending September 30, 2025 tax provision and financial statements. We will continue to monitor future legislative developments and assess their impact on our tax position and financial reporting.
Current report
revenues generated by sales of our products and services;
Current report
payments associated with potential future quarterly cash dividends to our common stockholders;
Current report
future acquisition-related payments;
Current report
payments associated with income and other taxes;
Current report
costs associated with expanding our manufacturing, marketing, sales, and distribution efforts;
Current report
costs associated with our initiatives to sell direct-to-hospital in new countries;
Current report
costs of obtaining and maintaining FDA and other regulatory clearances;
Current report
costs associated with obtaining European MDR CE mark approvals;
Current report
the number, timing, and nature of acquisitions, divestitures, and other strategic transactions; and
Current report
potential future share repurchases.
Reworded paragraphs (35)
Previous wording
Our principal biologic offerings include vascular and cardiac patches as well as vascular and dialysis grafts. In Q2 2025, biologics represented 51% of our worldwide sales. We believe our biologic devices represent differentiated and, in many cases, growing product segments.
Current wording
Our principal biologic offerings include vascular and cardiac patches as well as vascular and dialysis grafts. In Q3 2025, biologics represented 54% of our worldwide sales. We believe our biologic devices represent differentiated and, in many cases, growing product segments.
Previous wording
We sell our products and services primarily through a direct sales force. Our worldwide headquarters is located in Burlington, Massachusetts, and we also have a North American sales office in Vaughan, Canada. Our European headquarters is located in Sulzbach, Germany, and we also have European sales offices in Milan, Italy; Madrid, Spain; Hereford, England; Dublin, Ireland; Maisons-Alfort, France; and Zurich, Switzerland. Our APAC headquarters is located in Singapore, and we also have APAC sales offices in Tokyo, Japan; Shanghai, China; Docklands, Australia; Seoul, Korea; and Bangkok, Thailand. During the quarter ended June 30, 2025, approximately 95% of our net sales were generated in territories in which we employ direct sales representatives. We sell our products in other countries through distributors. As of June 30, 2025, our sales force comprised 163 sales representatives and export managers in North America, Europe, and APAC.
Current wording
We sell our products and services primarily through a direct sales force. Our worldwide headquarters is located in Burlington, Massachusetts, and we also have a North American sales office in Vaughan, Canada. Our European headquarters is located in Sulzbach, Germany, and we also have European sales offices in Milan, Italy; Madrid, Spain; Hereford, England; Dublin, Ireland; Maisons-Alfort, France; and Zurich, Switzerland. Our APAC headquarters is located in Singapore, and we also have APAC sales offices in Tokyo, Japan; Shanghai, China; Docklands, Australia; Seoul, Korea; and Bangkok, Thailand. During the quarter ended September 30, 2025, approximately 95% of our net sales were generated in territories in which we employ direct sales representatives. We sell our products in other countries through distributors. As of September 30, 2025, our sales force comprised 152 sales representatives and export managers in North America, Europe, and APAC.
Previous wording
Separately, our regulatory efforts to maintain approvals in the EU and the United Kingdom (UK) have shown steady progress and success as the EU transitions from the Medical Device Directive (MDD) to the Medical Device Regulation (MDR) and the UK transitions to the United Kingdom Conformity Assessed (UKCA) marks. In 2024, we received MDR CE and UKCA marks allowing for the continued sale of 11 devices into the EU and UK. In January 2025, we received MDR CE and UKCA marks to market Burlington-manufactured CardioCel and VascuCel devices in the EU and UK. As of June 30, 2025, we have 19 MDR CE marks and UKCA approvals, and expect to hold 22 approvals by the end of 2025. Those 22 CE and UKCA marks will represent substantially all of our product offerings in the EU and UK. The European Commission has designated the end of 2028 as the final MDR CE mark transition deadline.
Current wording
Separately, our regulatory efforts to maintain approvals in the EU and the United Kingdom (UK) have shown steady progress and success as the EU transitions from the Medical Device Directive (MDD) to the Medical Device Regulation (MDR) and the UK transitions to the United Kingdom Conformity Assessed (UKCA) marks. In 2024, we received MDR CE and UKCA marks allowing for the continued sale of 11 devices into the EU and UK. In January 2025, we received MDR CE and UKCA marks to market Burlington-manufactured CardioCel and VascuCel devices in the EU and UK. As of October 31, 2025, we have 21 MDR CE marks and 18 UKCA approvals, and expect to hold 22 approvals by the end of 2025. Those 22 CE and UKCA marks will represent substantially all of our product offerings in the EU and UK. The European Commission has designated the end of 2028 as the final MDR CE mark transition deadline.
Previous wording
In February 2024, we began implementing a new enterprise resource planning, or ERP, system to replace our financial reporting and planning system. We expect that the new ERP system will be beneficial in a number of areas, including inventory management, pricing programs, financial operations, and real-time reporting. We have been preparing for this transition since 2022 and hired an experienced consulting team to assist in this transition. In the United States, we transitioned from our legacy ERP system to our newly implemented Microsoft Dynamics D365 system in February 2024. In February 2025, we implemented this new system in the UK. As of June 30, 2025, we have capitalized costs on our balance sheet of $4.9 million associated with this ERP system.
Current wording
In February 2024, we began implementing a new enterprise resource planning, or ERP, system to replace our financial reporting and planning system. We expect that the new ERP system will be beneficial in a number of areas, including inventory management, pricing programs, financial operations, and real-time reporting. We have been preparing for this transition since 2022 and hired an experienced consulting team to assist in this transition. In the United States, we transitioned from our legacy ERP system to our newly implemented Microsoft Dynamics D365 system in February 2024. In February 2025, we implemented this new system in the UK. As of September 30, 2025, we have capitalized costs on our balance sheet of $4.8 million associated with this ERP system.
Previous wording
Fluctuations in the exchange rates between the U.S. dollar and foreign currencies, primarily the Euro, affect our financial results. For the six months ended June 30, 2025, approximately 43% of our sales took place outside of the United States, largely in currencies other than the U.S. dollar. We expect foreign currencies will represent a significant percentage of future sales. Selling, marketing, and administrative costs related to these sales are also denominated in foreign currencies, thereby partially mitigating our bottom-line exposure to exchange rate fluctuations. If there is an increase in the rate at which a foreign currency is exchanged for U.S. dollars, it will require less of the foreign currency to equal a specified amount of U.S. dollars than before the rate increase. In such cases we will record more revenue in U.S. dollars than we would have if the exchange rate had not changed. For the six months ended June 30, 2025, we estimate that the effects of changes in foreign exchange rates increased our reported sales by approximately $0.3 million, as compared to rates in effect for the six months ended June 30, 2024.
Current wording
Fluctuations in the exchange rates between the U.S. dollar and foreign currencies, primarily the Euro, affect our financial results. For the nine months ended September 30, 2025, approximately 43% of our sales took place outside of the United States, largely in currencies other than the U.S. dollar. We expect foreign currencies will represent a significant percentage of future sales. Selling, marketing, and administrative costs related to these sales are also denominated in foreign currencies, thereby partially mitigating our bottom-line exposure to exchange rate fluctuations. If there is an increase in the rate at which a foreign currency is exchanged for U.S. dollars, it will require less of the foreign currency to equal a specified amount of U.S. dollars than before the rate increase. In such cases we will record more revenue in U.S. dollars than we would have if the exchange rate had not changed. For the nine months ended September 30, 2025, we estimate that the effects of changes in foreign exchange rates increased our reported sales by approximately $1.2 million, as compared to rates in effect for the nine months ended September 30, 2024.
Previous wording
Comparison of the three- and six-month periods ended June 30, 2025, to the three- and six-month periods ended June 30, 2024:
Current wording
Comparison of the three- and nine-month periods ended September 30, 2025, to the three- and nine-month periods ended September 30, 2024:
Previous wording
Net sales. Net sales increased by $8.4 million, or 15%, to $64.2 million for the three months ended June 30, 2025, compared to $55.8 million for the three months ended June 30, 2024. The increase was driven primarily by higher average selling prices, higher unit volumes shipped to customers, and additional sales representatives. Graft sales increased $3.6 million, catheter sales increased $1.6 million, valvulotome sales increased $1.3 million, and shunt sales increased $0.8 million. We estimate that the weaker U.S. dollar increased net sales by $1.0 million during the three months ended June 30, 2025, as compared to the three months ended June 30, 2024.
Current wording
Net sales. Net sales increased by $6.2 million, or 11%, to $61.0 million for the three months ended September 30, 2025, compared to $54.8 million for the three months ended September 30, 2024. The increase was driven primarily by higher average selling prices, higher unit volumes shipped to customers, and additional sales representatives. Graft sales increased $4.2 million, shunt sales increased $1.0 million, and valvulotome sales increased $0.9 million. We estimate that the weaker U.S. dollar increased net sales by $1.0 million during the three months ended September 30, 2025, as compared to the three months ended September 30, 2024.
Previous wording
Net sales increased by $14.8 million, or 14%, to $124.1 million for the six months ended June 30, 2025, compared to $109.3 million for the six months ended June 30, 2024. The increase was driven primarily by higher average selling prices, higher unit volumes shipped to customers, and additional sales representatives. Graft sales increased $6.7 million, valvulotome and catheter sales increased $2.0 million each, patch sales increased $1.7 million, and shunt sales increased $1.5 million. We estimate that the weaker U.S. dollar increased net sales by $0.3 million during the six months ended June 30, 2025, as compared to the six months ended June 30, 2024.
Current wording
Net sales increased by $21.0 million, or 13%, to $185.1 million for the nine months ended September 30, 2025, compared to $164.1 million for the nine months ended September 30, 2024. The increase was driven primarily by higher average selling prices, higher unit volumes shipped to customers, and additional sales representatives. Graft sales increased $11.0 million, valvulotome sales increased $2.9 million, shunt sales increased $2.5 million, catheter sales increased $2.3 million, and patch sales increased $1.7 million. We estimate that the weaker U.S. dollar increased net sales by $1.2 million during the nine months ended September 30, 2025, as compared to the nine months ended September 30, 2024.
Previous wording
Direct-to-hospital net sales were 94% and 95% of our total net sales for the six months ended June 30, 2025 and 2024, respectively.
Current wording
Direct-to-hospital net sales were 95% of our total net sales for both the nine months ended September 30, 2025 and 2024, respectively.
Previous wording
Net sales by geography. Net sales in the Americas increased $4.4 million, or 12%, for the three months ended June 30, 2025, as compared to the three months ended June 30, 2024. The increase was driven primarily by increased sales of grafts of $2.9 million, catheters of $0.7 million, and valvulotomes of $0.6 million.
Current wording
Net sales by geography. Net sales in the Americas increased $3.4 million, or 10%, for the three months ended September 30, 2025, as compared to the three months ended September 30, 2024. The increase was driven primarily by increased sales of grafts of $3.0 million, valvulotomes of $0.7 million, and shunts of $0.3 million.
Previous wording
Net sales in the Americas increased $8.1 million, or 11%, for the six months ended June 30, 2025, as compared to the six months ended June 30, 2024. The increase was driven primarily by increased sales of grafts of $4.6 million, valvulotomes of $1.3 million, catheters of $0.7 million, and patches and clips of $0.4 million each.
Current wording
Net sales in the Americas increased $11.5 million, or 11%, for the nine months ended September 30, 2025, as compared to the nine months ended September 30, 2024. The increase was driven primarily by increased sales of grafts of $7.6 million, valvulotomes of $2.0 million, and catheters of $0.8 million.
Previous wording
Europe, Middle East, and Africa, or EMEA, net sales increased $3.5 million, or 23%, for the three months ended June 30, 2025, as compared to the three months ended June 30, 2024. The increase was driven primarily by increased sales of catheters of $1.0 million, patches and shunts of $0.7 million each, and valvulotomes of $0.6 million.
Current wording
Europe, Middle East, and Africa, or EMEA, net sales increased $2.6 million, or 18%, for the three months ended September 30, 2025, as compared to the three months ended September 30, 2024. The increase was driven primarily by increased sales of grafts of $1.1 million, shunts of $0.6 million, and patches of $0.4 million each.
Previous wording
EMEA net sales increased $6.1 million, or 21%, for the six months ended June 30, 2025, as compared to the six months ended June 30, 2024. The increase was driven primarily by increased sales of grafts of $1.9 million, catheters of $1.4 million, shunts of $1.2 million, and patches of $1.1 million.
Current wording
EMEA net sales increased $8.7 million, or 20%, for the nine months ended September 30, 2025, as compared to the nine months ended September 30, 2024. The increase was driven primarily by increased sales of grafts of $3.1 million, catheters of $1.8 million, shunts of $1.7 million, and patches of $1.5 million.
Previous wording
APAC net sales increased $0.4 million, or 12%, for the three months ended June 30, 2025, as compared to the three months ended June 30, 2024. The increase was driven primarily by increased sales of grafts and patches of $0.2 million each.
Current wording
APAC net sales increased $0.2 million, or 5%, for the three months ended September 30, 2025, as compared to the three months ended September 30, 2024. The increase was driven primarily by increased sales of grafts and shunts of $0.1 million each.
Previous wording
APAC net sales increased $0.5 million, or 7%, for the six months ended June 30, 2025, as compared to the six months ended June 30, 2024. The increase was driven primarily by increased sales of grafts, patches, and valvulotomes of $0.2 million each, offset by decreased sales of catheters of $0.1 million.
Current wording
APAC net sales increased $0.7 million, or 6%, for the nine months ended September 30, 2025, as compared to the nine months ended September 30, 2024. The increase was driven primarily by increased sales of grafts and patches of $0.3 million each, valvulotomes and shunts of $0.2 million each, offset by decreased sales of catheters of $0.3 million.
Previous wording
Gross profit increased $6.5 million, or 17%, to $45.0 million for the three months ended June 30, 2025, as compared to $38.5 million for the three months ended June 30, 2024, and gross margin increased by 110 basis points to 70.0% in the period, as compared to 68.9% for the three months ended June 30, 2024. The increase in gross profit was driven primarily by increased sales, particularly from grafts, catheters, and valvulotomes. The increase in gross margin was driven primarily by greater manufacturing efficiencies, sales price increases, and favorable product mix, including decreased sales of comparatively lower margin porcine patches due to the decision to end our distribution agreement with Elutia. The increase was partially offset by increased shipping and warehousing costs.
Current wording
Gross profit increased $8.8 million, or 24%, to $46.0 million for the three months ended September 30, 2025, as compared to $37.2 million for the three months ended September 30, 2024, and gross margin increased by 750 basis points to 75.3% in the period, as compared to 67.8% for the three months ended September 30, 2024. The increase in gross profit was driven primarily by increased sales, particularly from grafts, shunts, and valvulotomes, and the receipt of the ERC. The increase in gross margin was driven primarily by the ERC, greater manufacturing efficiencies, sales price increases, and favorable product mix, including decreased sales of comparatively lower margin porcine patches due to the decision to end our distribution agreement with Elutia. The increase was partially offset by increased shipping and warehousing costs. The ERC received in the quarter had a favorable impact of $2.7 million, or 444 basis points, to the gross margin.
Previous wording
Gross profit increased $11.3 million, or 15%, to $86.4 million for the six months ended June 30, 2025, as compared to $75.1 million for the six months ended June 30, 2024, and gross margin increased by 90 basis points to 69.6% in the period, as compared to 68.7% for the six months ended June 30, 2024. The increase in gross profit was driven primarily by increased sales, particularly from grafts, catheters, and valvulotomes. The increase in gross margin was driven primarily by greater manufacturing efficiencies, sales price increases, and decreased scrap and excess and obsolescence charges, partially offset by increased shipping and warehousing costs and unfavorable product mix, including increased sales of our comparatively lower margin allograft preservation services.
Current wording
Gross profit increased $20.0 million, or 18%, to $132.3 million for the nine months ended September 30, 2025, as compared to $112.3 million for the nine months ended September 30, 2024, and gross margin increased by 310 basis points to 71.5% in the period, as compared to 68.4% for the nine months ended September 30, 2024. The increase in gross profit was driven primarily by increased sales, particularly from grafts, shunts, and valvulotomes, and the receipt of the ERP. The increase in gross margin was driven primarily by the ERC, greater manufacturing efficiencies, sales price increases, and decreased scrap, partially offset by increased shipping and warehousing costs and unfavorable product mix, including increased sales of our comparatively lower margin allograft preservation services, ovine grafts, and polyester grafts. The ERC received in 2025 had a favorable impact of $2.7 million, or 147 basis points, to the gross margin.
Previous wording
Sales and marketing*.* For the three months ended June 30, 2025, sales and marketing expenses increased 36% to $14.9 million. The increase was driven primarily by higher sales representative headcount and wage increases, which resulted in increased compensation and related expenses of $2.8 million. Additionally, travel and training expenses increased $0.6 million and professional fees and outside services expenses increased $0.5 million. Sales force headcount was 163 as of June 30, 2025, a 10% increase from June 30, 2024. As a percentage of sales, sales and marketing expenses increased to 23% for the three months ended June 30, 2025, up from 20% for the three months ended June 30, 2024.
Current wording
Sales and marketing. For the three months ended September 30, 2025, sales and marketing expenses increased 4% to $11.9 million. The increase was driven primarily by higher sales representative headcount and wage increases, which resulted in increased compensation and related expenses of $1.6 million, which was partially offset by the ERC. Additionally, travel and training expenses decreased $0.3 million and professional fees and outside services expenses increased $0.1 million. Sales force headcount was 152 as of September 30, 2025, a 4% increase from September 30, 2024. The ERC received in the quarter had a favorable impact of $0.8 million. As a percentage of sales, sales and marketing expenses decreased to 20% for the three months ended September 30, 2025, down from 21% for the three months ended September 30, 2024.
Previous wording
For the six months ended June 30, 2025, sales and marketing expenses increased 28% to $29.1 million. The increase was driven primarily by higher sales representative headcount and wage increases, which resulted in increased compensation and related expenses of $4.3 million. Additionally, professional fees and outside services expenses increased $1.0 million and travel and training expenses increased $0.9 million. As a percentage of sales, sales and marketing expenses increased to 23% for the six months ended June 30, 2025, up from 21% for the six months ended June 30, 2024.
Current wording
For the nine months ended September 30, 2025, sales and marketing expenses increased 20% to $41.0 million. The increase was driven primarily by higher sales representative headcount and wage increases, which resulted in increased compensation and related expenses of $5.9 million, which was partially offset by the ERC. Additionally, professional fees and outside services expenses increased $0.9 million and travel and training expenses increased $0.6 million. The ERC received in 2025 had a favorable impact of $0.8 million. As a percentage of sales, sales and marketing expenses increased to 22% for the nine months ended September 30, 2025, up from 21% for the nine months ended September 30, 2024.
Previous wording
General and administrative. For the three months ended June 30, 2025, general and administrative expenses increased 18% to $10.4 million. The increase was driven primarily by higher headcount and wage increases, which resulted in increased compensation and related expenses of $1.2 million. Additionally, travel and training expenses increased $0.2 million. As a percentage of sales, general and administrative expenses remained consistent at 16% for the three months ended June 30, 2025 and 2024, respectively.
Current wording
General and administrative. For the three months ended September 30, 2025, general and administrative expenses increased 20% to $10.8 million. The increase was driven primarily by higher headcount and wage increases, which resulted in increased compensation and related expenses of $1.3 million, which was partially offset by the ERC. The ERC received in the quarter had a favorable impact of $0.3 million, offset by fees due to our third party consultant of $0.7 million. As a percentage of sales, general and administrative expenses increased to 18% for the three months ended September 30, 2025, up from 16% for the three months ended September 30, 2024.
Previous wording
For the six months ended June 30, 2025, general and administrative expenses increased 17% to $20.9 million. The increase was driven primarily by higher headcount and wage increases, which resulted in increased compensation and related expenses of $2.4 million. Additionally, facilities expenses increased $0.6 million and travel and training expenses increased $0.2 million. As a percentage of sales, general and administrative expenses increased to 17% for the six months ended June 30, 2025, up from 16% for the six months ended June 30, 2024.
Current wording
For the nine months ended September 30, 2025, general and administrative expenses increased 18% to $31.6 million. The increase was driven primarily by higher headcount and wage increases, which resulted in increased compensation and related expenses of $3.7 million, which was partially offset by the ERC. Additionally, facilities expenses increased $0.8 million and travel and training expenses increased $0.2 million. The ERC received in 2025 had a favorable impact of $0.3 million, offset by fees due to our third party consultant of $0.7 million. As a percentage of sales, general and administrative expenses increased to 17% for the nine months ended September 30, 2025, up from 16% for the nine months ended September 30, 2024.
Previous wording
Research and development. For the three months ended June 30, 2025, research and development expenses decreased 17% to $3.5 million. The decrease was driven primarily by lower third-party service fees, which resulted in decreased professional fees and outside services expenses related to MDR related activities of $0.9 million, partially offset by increased facilities expenses of $0.1 million. As a percentage of sales, research and development expenses decreased to 6% for the three months ended June 30, 2025, down from 8% for the three months ended June 30, 2024.
Current wording
Research and development. For the three months ended September 30, 2025, research and development expenses decreased 19% to $3.0 million. The decrease was driven primarily by lower third-party service fees, which resulted in decreased professional fees and outside services expenses related to MDR related activities of $0.3 million, as well as decreased compensation and related expenses of $0.1 million and the ERC received in the quarter. The ERC received in the quarter has a favorable impact of $0.3 million. As a percentage of sales, research and development expenses decreased to 5% for the three months ended September 30, 2025, down from 7% for the three months ended September 30, 2024.
Previous wording
For the six months ended June 30, 2025, research and development expenses decreased 9% to $7.6 million. The decrease was driven primarily by lower third-party service fees, which resulted in decreased professional fees and outside services expenses related to MDR related activities of $1.3 million, partially offset by increased compensation and related expenses of $0.3 million and facilities expenses of $0.2 million. As a percentage of sales, research and development expenses decreased to 6% for the six months ended June 30, 2025, down from 8% for the six months ended June 30, 2024.
Current wording
For the nine months ended September 30, 2025, research and development expenses decreased 12% to $10.6 million. The decrease was driven primarily by lower third-party service fees, which resulted in decreased professional fees and outside services expenses related to MDR related activities of $1.6 million, partially offset by increased facilities expenses of $0.3 million and compensation and related expenses of $0.1 million and the ERC received in 2025. The ERC received in 2025 had a favorable impact of $0.3 million. As a percentage of sales, research and development expenses decreased to 6% for the nine months ended September 30, 2025, down from 7% for the nine months ended September 30, 2024.
Previous wording
***Income tax expense.***We recorded a tax provision of $4.3 million on pre-tax income of $18.1 million for the three months ended June 30, 2025, compared to a $3.7 million tax provision on pre-tax income of $15.5 million for the three months ended June 30, 2024. We recorded a tax provision of $7.5 million on pre-tax income of $32.3 million for the six months ended June 30, 2025, compared to a tax provision of $6.6 million on pre-tax income of $28.3 million for the six months ended June 30, 2024. Our effective income tax rate was 23.7% and 23.3% for the three- and six-month periods ended June 30, 2025. Our tax expense for the current period is based on an estimated annual effective tax rate of 23.8%, adjusted in the applicable quarterly periods for discrete stock option exercises and other discrete items. Our income tax expense for the current period varies from the statutory rate mainly due to the generation of federal and state tax credits, permanent items, different statutory rates from our foreign entities, and a discrete item for stock option exercises.
Current wording
Income tax expense. We recorded a tax provision of $5.2 million on pre-tax income of $22.6 million for the three months ended September 30, 2025, compared to a $3.4 million tax provision on pre-tax income of $14.6 million for the three months ended September 30, 2024. We recorded a tax provision of $12.7 million on pre-tax income of $54.9 million for the nine months ended September 30, 2025, compared to a tax provision of $10.0 million on pre-tax income of $42.9 million for the nine months ended September 30, 2024. Our effective income tax rate was 23.0% and 23.2% for the three- and nine-month periods ended September 30, 2025. Our tax expense for the current period is based on an estimated annual effective tax rate of 23.9%, adjusted in the applicable quarterly periods for discrete stock option exercises and other discrete items. Our income tax expense for the current period varies from the statutory rate mainly due to the generation of federal and state tax credits, permanent items, different statutory rates from our foreign entities, and a discrete item for stock option exercises.
Previous wording
Our effective income tax rate was 23.7% and 23.3% for the three- and six-month periods ended June 30, 2024. Our 2024 provision was based on the estimated annual effective tax rate of 24.3%, adjusted in the applicable quarterly period for discrete stock option exercises and other discrete items. Our income tax expense for the three- and six-month periods ended June 30, 2024 varied from the statutory rate mainly due to the generation of federal and state tax credits, permanent items, different statutory rates from our foreign entities, and a discrete item for stock option exercises.
Current wording
Our effective income tax rate was 23.4% and 23.3% for the three- and nine-month periods ended September 30, 2024. Our 2024 provision was based on the estimated annual effective tax rate of 24.1%, adjusted in the applicable quarterly period for discrete stock option exercises and other discrete items. Our income tax expense for the three- and nine-month periods ended September 30, 2024 varied from the statutory rate mainly due to the generation of federal and state tax credits, permanent items, different statutory rates from our foreign entities, and a discrete item for stock option exercises.
Previous wording
As of June 30, 2025, our cash and cash equivalents were $27.2 million, as compared to $25.6 million as of December 31, 2024. We had $292.3 million in short-term marketable securities as of June 30, 2025, and $274.1 million as of December 31, 2024. Our cash and cash equivalents are liquid investments with maturities of 90 days or less at the date of purchase and consist primarily of operating bank accounts. Our short-term marketable securities consist of a U.S. government money market fund investing mainly in high-quality, short-term securities that are issued or guaranteed by the U.S. government or by U.S. government agencies and instrumentalities, and a short-duration bond fund. As of June 30, 2025, our short-term marketable securities reflected an unrealized loss of $0.7 million as a result of increasing market interest rates.
Current wording
As of September 30, 2025, our cash and cash equivalents were $25.5 million, as compared to $25.6 million as of December 31, 2024. We had $317.6 million in short-term marketable securities as of September 30, 2025, and $274.1 million as of December 31, 2024. Our cash and cash equivalents are liquid investments with maturities of 90 days or less at the date of purchase and consist primarily of operating bank accounts. Our short-term marketable securities consist of a U.S. government money market fund investing mainly in high-quality, short-term securities that are issued or guaranteed by the U.S. government or by U.S. government agencies and instrumentalities, and a short-duration bond fund. As of September 30, 2025, our short-term marketable securities reflected an unrealized loss of $0.6 million as a result of increasing market interest rates.
Previous wording
The Convertible Notes will mature on February 1, 2030, unless earlier repurchased, redeemed or converted. The proceeds from the issuance of the Convertible Notes were approximately $167.7 million, net of debt issuance costs totaling $4.8 million. The Convertible Notes bear interest at a rate of 2.50% per year, and interest is payable semiannually in arrears on August 1 and February 1 of each year. The initial conversion rate is 8.3521 shares of common stock per $1,000 principal amount of the Convertible Notes, which represents an initial conversion price of approximately $119.73 per share of common stock and a premium of approximately 30% over the closing price of our common stock on December 16, 2024. In connection with the payment by us on May 29, 2025 of a quarterly cash dividend of $0.20 per share (an increase from the quarterly dividend amount of $0.16 per share as of the time of issuance of the Convertible Notes), the conversion rate of the Convertible Notes was increased to 8.3602 shares of common stock per $1,000 principal amount of the Convertible Notes, which represents a conversion price of approximately $119.61 per share of common stock. A similar adjustment to the conversion rate will be made upon payment of the quarterly cash dividend of $0.20 on September 4, 2025, and upon payment of subsequent quarterly dividends in excess of $0.16 per share. The conversion rate and conversion price are subject to customary adjustments upon the occurrence of certain events as described in the Indenture.
Current wording
The Convertible Notes will mature on February 1, 2030, unless earlier repurchased, redeemed or converted. The proceeds from the issuance of the Convertible Notes were approximately $167.7 million, net of debt issuance costs totaling $4.8 million. The Convertible Notes bear interest at a rate of 2.50% per year, and interest is payable semiannually in arrears on August 1 and February 1 of each year. For the three- and nine-months ended September 30, 2025, we made $2.7 million in interest payments. We did not make any interest payments for the three- and nine-months ended September 30, 2024. The initial conversion rate is 8.3521 shares of common stock per $1,000 principal amount of the Convertible Notes, which represents an initial conversion price of approximately $119.73 per share of common stock and a premium of approximately 30% over the closing price of our common stock on December 16, 2024. In connection with the payment by us on September 4, 2025 of a quarterly cash dividend of $0.20 per share (an increase from the quarterly dividend amount of $0.16 per share as of the time of issuance of the Convertible Notes), the conversion rate of the Convertible Notes was increased to 8.3637 shares of common stock per $1,000 principal amount of the Convertible Notes, which represents a conversion price of approximately $119.56 per share of common stock. A similar adjustment to the conversion rate will be made upon payment of the quarterly cash dividend of $0.20 on December 4, 2025, and upon payment of subsequent quarterly dividends in excess of $0.16 per share. The conversion rate and conversion price are subject to customary adjustments upon the occurrence of certain events as described in the Indenture.
Previous wording
We recognized operating income of $28.8 million for the six months ended June 30, 2025, compared to $26.3 million for the six months ended June 30, 2024. We expect to fund any increased costs and expenditures from our existing cash and cash equivalents, though our future capital requirements depend on numerous factors. These factors include, but are not limited to, the following:
Current wording
We recognized operating income of $49.1 million for the nine months ended September 30, 2025, compared to $39.4 million for the nine months ended September 30, 2024. We expect to fund any increased costs and expenditures from our existing cash and cash equivalents, though our future capital requirements depend on numerous factors. These factors include, but are not limited to, the following:
Previous wording
Net cash provided by operating activities. Net cash provided by operating activities was $29.3 million for the six months ended June 30, 2025, consisting of $24.8 million in net income, adjustments for non-cash or non-operating items of $12.9 million (including primarily depreciation and amortization of $5.2 million, stock-based compensation of $4.0 million, interest and debt offering expense of $2.6 million, and provision for inventory write-offs and credit losses of $1.4 million), and a net use of working capital of $8.3 million. The net cash used for working capital was driven by an increase in accounts receivable of $5.3 million, an increase in inventory and other deferred costs of $3.5 million, and payments of accounts payable and other liabilities of $1.3 million. These cash uses were offset by a decrease in prepaid expenses and other assets of $1.7 million.
Current wording
Net cash provided by operating activities. Net cash provided by operating activities was $58.1 million for the nine months ended September 30, 2025, consisting of $42.2 million in net income, adjustments for non-cash or non-operating items of $16.5 million (including primarily depreciation and amortization of $7.8 million, stock-based compensation of $5.7 million, amortization of issuance costs on convertible senior notes of $0.7 million, and provision for inventory write-offs and credit losses of $2.3 million), and a net use of working capital of $0.5 million. The net cash used for working capital was driven by an increase in accounts receivable of $1.4 million and an increase in inventory and other deferred costs of $6.8 million. These cash uses were offset by an increase in accounts payable of $5.3 million, a decrease in prepaid expenses and other assets of $1.6 million, and an increase in accrued interest of $0.7 million.
Previous wording
Net cash provided by operating activities was $14.7 million for the six months ended June 30, 2024, consisting of $21.7 million in net income, adjustments for non-cash or non-operating items of $10.4 million (including primarily depreciation and amortization of $4.8 million, stock-based compensation of $3.2 million, provisions for inventory write-offs and credit losses of $1.7 million, and foreign currency effect on net income of $0.7 million), and a net use of working capital of $17.4 million. The net cash used for working capital was driven by an increase in accounts receivable of $6.5 million, an increase in inventory and other deferred costs of $7.3 million, and payments of accounts payable and other liabilities of $4.3 million. These cash uses were offset by a decrease in prepaid expenses and other assets of $0.7 million.
Current wording
Net cash provided by operating activities was $28.9 million for the nine months ended September 30, 2024, consisting of $32.9 million in net income, adjustments for non-cash or non-operating items of $14.9 million (including primarily depreciation and amortization of $7.2 million, stock-based compensation of $4.8 million, provisions for inventory write-offs and credit losses of $2.6 million, and foreign currency effect on net income of $0.2 million), and a net use of working capital of $18.8 million. The net cash used for working capital was driven by an increase in accounts receivable of $7.4 million, an increase in inventory and other deferred costs of $8.9 million, and payments of accounts payable and other liabilities of $2.5 million. These cash uses were offset by a decrease in prepaid expenses and other assets of $0.1 million.
Previous wording
Net cash used in investing activities. Net cash used in investing activities was $20.7 million for the six months ended June 30, 2025, consisting of purchases of marketable securities of $17.8 million, expenditures on property and equipment of $2.7 million, and payments related to acquisitions of $0.1 million.
Current wording
Net cash used in investing activities. Net cash used in investing activities was $48.1 million for the nine months ended September 30, 2025, consisting of purchases of marketable securities of $43.0 million, expenditures on property and equipment of $5.0 million, and payments related to acquisitions of $0.1 million.
Previous wording
Net cash used in investing activities was $13.4 million for the six months ended June 30, 2024, consisting of purchases of marketable securities of $10.1 million and expenditures on property and equipment of $3.2 million.
Current wording
Net cash used in investing activities was $26.2 million for the nine months ended September 30, 2024, consisting of expenditures on property and equipment of $4.9 million and purchases of marketable securities of $21.3 million.
Previous wording
***Net cash used in financing activities.***Net cash used in financing activities was $8.0 million for the six months ended June 30, 2025, consisting primarily of dividend payments of $9.0 million and deferred payments for acquisitions of $1.4 million. This use of cash was offset by stock option exercises of $2.5 million, net of shares repurchased used to pay employee payroll taxes.
Current wording
Net cash used in financing activities. Net cash used in financing activities was $11.0 million for the nine months ended September 30, 2025, consisting primarily of dividend payments of $13.6 million and deferred payments for acquisitions of $1.4 million. This use of cash was offset by stock option exercises of $4.1 million, net of shares repurchased used to pay employee payroll taxes.
Previous wording
Net cash used in financing activities was $2.8 million for the six months ended June 30, 2024, consisting of proceeds from stock option exercises of $4.4 million, net of shares repurchased used to pay employee payroll taxes. This proceed of cash was offset by dividend payments of $7.2 million.
Current wording
Net cash used in financing activities was $6.0 million for the nine months ended September 30, 2024, consisting primarily of dividend payments of $10.8 million. This use of cash was offset by stock option exercises of $4.8 million, net of shares repurchased used to pay employee payroll taxes.
Previous wording
On July 30, 2025, our Board of Directors approved a quarterly cash dividend on our common stock of $0.20 per share payable on September 4, 2025, to stockholders of record at the close of business on August 21, 2025.
Current wording
On October 27, 2025, our Board of Directors approved a quarterly cash dividend on its common stock of $0.20 per share payable on December 4, 2025, to stockholders of record at the close of business on November 20, 2025.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations