MiMedx Group (NASDAQ:MDXG) announced impressive results for the fourth quarter and full year of 2025, surpassing internal expectations through significant growth in its wound care and surgical segments. During the earnings call, executives highlighted the challenges arising from changes in Medicare reimbursement for skin substitutes that took effect on January 1, 2026, while also outlining their financial outlook for the upcoming year.
Record Revenue and Profitability in 2025
Chief Executive Officer Joe Capper reported record highs for full-year revenue and adjusted EBITDA, which contributed to a net cash balance nearing $150 million by year-end. In the fourth quarter, MiMedx generated net sales of $118 million, reflecting a robust 27% increase compared to the same period the previous year. Both the wound care and surgical segments achieved growth rates of 25% or more.
The company’s gross margin for the fourth quarter stood at 84%, an improvement from 82% a year earlier. Excluding acquisition-related expenses, the adjusted gross margin reached 86%, driven mainly by a favorable product mix. Adjusted EBITDA for the quarter was recorded at $29 million, representing 25% of net sales. Additionally, MiMedx reported generating $25 million in free cash flow during the fourth quarter and an increase of $63 million over the course of 2025.
Challenges in the Wound Care Market
Capper noted that the wound care market is currently facing significant disruptions following the recalibration of Medicare reimbursement rates for skin substitutes. This adjustment has led to slowed claims processing in states participating in the WISeR model due to new prior authorization requirements. Other challenges include increased audits, product dumping at reduced prices, and some providers shutting down operations.
During the question-and-answer session, Capper indicated that the company expects substantial disruption to continue from the fourth quarter into the first quarter of 2026. He acknowledged a “pretty significant drop-off” in revenue moving from Q4 to Q1, especially as January and February are typically slower months due to the deductible season. Historically, MiMedx sees over 40% of its revenue in March of any given year. Despite the near-term challenges, Capper expressed confidence that wound care will remain a profitable sector for MiMedx, even amid lower reimbursement rates. He believes the company is well-positioned to thrive as the market recalibrates.
Clinical Developments and Product Innovations
Capper provided updates on clinical trials, noting that MiMedx’s EPIEFFECT randomized controlled trial is nearing full enrollment, with results expected in “a few months.” The company also plans to conduct a randomized controlled trial for CHORIOFIX, a dual-layer chorion membrane allograft currently in development. Rice, another executive, stated that management anticipates a full readout and publication of trial results later in 2026.
Additionally, MiMedx has entered a distribution agreement with RegenLab to commercialize RegenKit-Wound Gel, a PRP system designed to offer an alternative treatment for chronic wounds. Capper highlighted positive early feedback regarding the acceptance of this product among providers.
The surgical segment also displayed strong momentum, with growth of 20% for the full year and 25% in the fourth quarter. Capper mentioned the realignment of the commercial team to focus more on surgical sales and plans to expand the team further. The company launched AMNIOFIX Thyroid Shield, designed to protect patients during thyroidectomy surgeries, which addresses risks associated with the procedure.
MiMedx has licensed commercial rights to three additional 510(k)-cleared products including NovaForm Wound Matrix, G4Derm Plus, and Hydrelix Collagen Matrix. Notably, NovaForm is the company’s first non-human derived sheet product, and ongoing investments in research continue to produce positive clinical outcomes.
Financial Projections for 2026
Looking ahead, Capper shared MiMedx’s revenue guidance for 2026, estimating full-year results between $340 million and $360 million. The company expects the lowest quarterly revenue to occur in Q1, with significant increases anticipated in subsequent quarters as the market stabilizes. Full-year adjusted EBITDA is projected to be in the mid-to-high teens. Expected gross margins for 2026 are anticipated to be in the mid-to-upper 70s, largely due to lower average selling prices for wound care products and reduced margins from new product introductions.
Capper also discussed a longer-term outlook, indicating a return to “double-digit above-market” growth by 2027, combined with the margin profile established in recent years. On the topic of capital allocation, both Capper and Rice emphasized that mergers and acquisitions remain a priority. The board has authorized a share repurchase program of up to $100 million over the next two years as a strategic option if suitable investment opportunities do not arise.
MiMedx Group, Inc. is dedicated to the development, manufacture, and marketing of regenerative biomaterial products derived from human placental tissues. The company’s mission focuses on harnessing the extracellular matrix and growth factors within amniotic and chorionic membranes, aimed at supporting wound healing and surgical applications. Its product line includes amnion and chorion allografts, branded as EpiFix® and AmnioFix®, which are designed for treating both acute and chronic wounds, including diabetic foot ulcers and surgical site repairs.
