Transplant system to enable greater utilization of donor organs to meet the growing demand for more and better organ transplantation. But first, let me highlight our 2Q performance, which represents a new high watermark for both clinical cases and revenue. Our performance has also demonstrated a significant operating leverage potential of the TransMedics business, even as we continue to invest across several growth initiatives. We are already ramping up our investments to drive the next several waves of growth that would deliver substantially more top and bottom line growth for TransMedics.
Total revenue for 2Q twenty twenty five was $157,400,000 representing approximately 38% growth year over year and approximately 10% sequential growth from 1Q twenty twenty five. We experienced sequential growth across all three organ segments driven by higher overall utilization and center penetration of OCS NOP in The U. Our overall gross margin for 2Q was steady at 61.4% similar to Q1. Meanwhile, we delivered operating profit of approximately $36,600,000 in 2Q, representing more than 23% of total revenue and up from $27,400,000 or 19% of total revenue in 1Q twenty twenty five.
We hope these results cement our commitment to profitable growth and cash generation. In fact, our pipeline strategy of adding the OCS kidney platform is designed to position us to achieve at least over 20,000 annual U. Strong transplant volume growth combined with the positive impact of our ongoing strategic investments drove solid performance across both product and service lines, along with continued margin expansion and improved profitability. Transplant revenue was approximately $152,000,000 up 40% year over year and 10% sequentially.
| Metric | Period | Current guidance |
|---|---|---|
| Full-year revenue | FY2025 | raised to $585M-$605M, approximately 35% growth over 2024 at the midpoint |
| Gross margin | Coming years | approximately 60% |
| Operating margin expansion vs prior year | FY2025 | at least 650 basis points increase, driven mainly by operating leverage on operating expenses, with potential upside |
| Operating margin target | FY2028 | at or approaching 30% operating margin, path may not be linear |
| Clinical trial revenue contribution | FY2025 | no substantial growth assumed from clinical trials in 2025; enough organic growth to meet guidance |
| Metric | YoY | Note |
|---|---|---|
| Total revenue | approximately +38% | Higher overall utilization and center penetration of OCS NOP in the U.S. across all three organ segments, a new high watermark for case volume. |
| U.S. transplant revenue | +40% | Increasing organ utilization in liver ($116M) and OCS adoption across liver and heart ($32M), plus lung ($4M). |
| Service revenue | +44% | Primarily logistics revenue, which grew 56% year-over-year and 14% sequentially on continued aviation fleet expansion and utilization. |
| Operating income | +192% | Strong transplant volume growth and operating leverage, with operating expenses up only 6% year-over-year against revenue up approximately 38%. |
| Net income | +186% | Strong operating performance; EPS of $1.03 and diluted EPS of $0.92. |
| Gross margin | +78 bps to ~61.4% | A 431 basis point improvement in service margin from higher fleet utilization and logistics cost efficiencies, with product margin flat versus 2024. |
| Topic | Previous mention | Current period | Trend |
|---|---|---|---|
| Next-gen OCS ENHANCE Heart and DENOVO Lung trials | — | Lung IDE approved with clinical trial design untouched (remaining questions focused on preclinical testing); both trials expected to start before year-end, both arms using NOP service for blinding, with full design to be posted on clinicaltrials.gov in late August/early September. | — |
| U.S. transplant system modernization | — | Federal agencies and Congress driving a national initiative to modernize the U.S. transplant system; management sees no headwinds, expects some misunderstanding from OPO stakeholders, and is over-communicating that its goal is collaboration, not replacement. | — |
| DCD donation and New York Times expose | — | No hesitation, concern, or pullback seen in DCD donation; management said the incidents were known in the field for about two years and were sensationalized; DCD utilization unchanged at 50%-55%. | — |
| Competition (Organox) | — | Organox's in-flight approval is viewed as unwarranted noise; management said the device is designed for a back-to-base model, is too large and lacks battery capability to fly, and does not change competitive dynamics. | — |
| 10,000 transplant target and OCS Kidney | — | Laser-focused on achieving and surpassing 10,000 U.S. NOP transplants in 2028, with the OCS Kidney platform positioning the company for at least over 20,000 annual U.S. transplants in subsequent years. | — |