Q1 2025 TransMedics Group Inc Earnings Call

Speaker Change: [music].

Operator: Good afternoon, and welcome to TransMedics First Quarter 2025 Earnings Conference Call. At this time, all participants are in a listen-only mode. We will be facilitating a question-and-answer session towards the end of today's call. As a reminder, this call is being recorded for replay purposes.

Good afternoon, and welcome to transmit X first quarter 2025 earnings conference call.

At this time all participants are in a listen only mode.

We will be facilitating a question and answer session towards the end of today's call as.

Speaker Change: As a reminder, this call is being recorded for replay purposes, I would now like to turn the call over to Lane Morgan from the Gilmartin group and a few for a few introductory comments. Please go ahead.

Lane Morgan: I would now like to turn the call over to Lane Morgan from the Gilmartin Group for a few introductory comments. Please go ahead. Thanks, Operator.

Speaker Change: Thanks, Operator, Burlington age cause medical released financial results for the quarter ended March 31st 2025, a copy of the press release is available on the company's website before we begin I would like to remind you that management will make statements. During this call, including during the question and answer portion of the call include forward looking statements within the meaning.

Lane Morgan: Earlier today, TransMedics released financial results for the quarter-ended March 31, 2025. A copy of the press release is available on the company's website.

Lane Morgan: Before we begin, I would like to remind you that management will make statements during this call, including during the question or question and answer portion of the call, that include forward-looking statements within the meaning of federal security laws. Any statements contained in this call that relate to expectations or predictions of future events, results, or performance are forward-looking statements. All forward-looking statements, including without limitation, future results and events, including financial guidance and projected estimates, our examination of operating trends, the potential commercial opportunity for our products and services, the potential timing, outcome, and value of new clinical programs, the potential impact of tariffs on our business, our expectations for growth and opportunities in our operations, and financial guidance and or expectations, including revenue, gross margin, and operating expenses in 2025 and beyond, are based upon our current estimates and various assumptions.

Speaker Change: The federal security laws any statements contained in this call that relate to expectations or predictions predictions of future events results or performance are forward looking statements.

Speaker Change: All forward looking statements, including without limitation future results and events, including financial guidance and projected estimate our examination of operating trends the potential commercial opportunity for our products and services the potential timing outcome and value of new clinical programs.

Speaker Change: The potential impact of tariffs on our business, our expectations for growth and opportunities in our operation and financial guidance and our expectation, including revenue gross margin and operating trends operating expenses in 2025 and beyond are based upon our current estimates and various assumptions. These statements include material.

Lane Morgan: These statements include material risks and uncertainties that could cause actual results or events to materially differ from those anticipated or implied by these forward-looking statements. Accordingly, you should not place undue reliance on these statements.

Speaker Change: Risks and uncertainties that could cause actual results or events to materially differ from those anticipated or implied by these forward looking statements. Accordingly, you should not place undue reliance on these statements.

Lane Morgan: Additional information regarding these risks and uncertainties appears under the heading risk factors of a Form 10-K filed with the Securities and Exchange Commission on February 27, 2025, our subsequent SEC filings, and the forward-looking statements including today's earnings press release, which are available at www.sec.gov and on our website at www.transmedics.com. TransMedics exclaims any intention or obligation, except as required by law, to update or revise any financial projections or forward-looking statements, whether because of new information, future events, or otherwise.

Speaker Change: Additional information regarding these risks and uncertainties appears under the heading risk factors of our form 10.

Speaker Change: <unk> K filed with the Securities and Exchange Commission on February 27, 2025, our subsequent SEC filings and the forward looking statements included in today's earnings press release, which are available at Www Dot FCC daca and on our website at www dot trends medics Dot com.

Speaker Change: Cosmetics disclaims any intention or obligation, except as required by law to update or revise any financial projections or forward looking statements, whether because of new information future events or otherwise. This conference call contains time sensitive information and is accurate only as of the live broadcast today may eight 2025, and with that I'll now turn the call over.

Lane Morgan: This conference call contains time-sensitive information and is accurate only as of the live broadcast today, May 8, 2025.

Waleed Hassanein: And with that, I will now turn the call over to Waleed Hassanein, President and Chief Executive Officer. Thank you so much, Lane. Good afternoon, everyone.

Speaker Change: Waleed, Hassanein, President and Chief Executive Officer.

Speaker Change: Thank you so much good afternoon, everyone.

Waleed Hassanein: and welcome to TransMedics first quarter 2025 earnings call.

Speaker Change: And welcome to <unk> first quarter 2025 earnings call.

Waleed Hassanein: Joining me today is Gerardo Hernandez, our Chief Financial Officer. As we discussed previously, we view 2025 as an important year for TransMedics, mainly to transition and shift into our second year of growth for TransMedics OCS NOP platform. Despite external distractions in January, we remained laser focused throughout Q1 on our business fundamentals, operational execution, and our unwavering support for our clinical transplant partners and users. In doing so, we continue to be successful in expanding the utilization of available donor organs for transplantation and increased OCS NLP adoption. all resulting in our core mission of delivering what we believe to be the best possible clinical outcomes and the most cost-efficient therapy for our transplant recipients.

hardo Hernandez: Joining me today is hard to Hernandez, our chief Financial Officer.

hardo Hernandez: As we discussed previously we viewed 2025 as an important year for cosmetics, mainly to transition and shift into our second year of growth for transmit X O T. S. N O P platform.

hardo Hernandez: Despite external distractions in January we remained laser focused throughout Q1 on our business fundamentals operational execution and our unwavering support for our clinical transplant partners and users.

hardo Hernandez: In doing so we continue to be successful in expanding the utilization of available donor organs for transplantation and increased Ocs N O P adoption.

hardo Hernandez: All resulting in our core mission of delivering what we believe to be the best possible clinical outcomes and the most cost efficient therapy for our transplant recipients.

Waleed Hassanein: The results speak for themselves. Our 1Q performance demonstrates that the strength of our business fundamentals, the effectiveness of our strategy, and the unrivaled value of our business model. Importantly, our ability to execute at a very high level despite unexpected external pressures is a testament to the strong support of the transplant clinical community to TransMedics' mission and the resilience of our incredible team.

hardo Hernandez: The results speak for themselves.

hardo Hernandez: Our <unk> performance demonstrates that the strength of our business fundamentals the effectiveness of our strategy and unrivaled value of our business model importantly.

hardo Hernandez: Importantly, our ability to execute at a very high level. Despite unexpected external pressures is it is a testament to the strong support of the transplant clinical community to transmit it's Michele and the resilience of our incredible team.

Waleed Hassanein: Now let me proceed to discuss our business performance throughout the first quarter of the year, which was our strongest quarter to date in the history of TransMedics. Here are the key operational highlights for OneCube. Total revenue for 1Q 2025 was $143.5 million, representing approximately 48% growth year over year, and approximately 18% sequential growth from 4Q 2024. Growth was driven primarily by higher overall utilization and center penetration of OCS and OP in the US for liver and heart transplants. And that happens across both DVD and DCD organs. This enables us to achieve a new high watermark for overall case volume in 1Q2025.

hardo Hernandez: Now let me proceed to discuss our business performance drove the first quarter of the year, which was our strongest quarter to date in the history of <unk>.

hardo Hernandez: Here are the key operational highlights for <unk> <unk>.

hardo Hernandez: Total revenue for <unk>, 2025 was $143 $5 billion, representing approximately 48% growth year over year and approximately 18% sequential growth from for Q2 thousand 24.

hardo Hernandez: Growth was driven primarily by high higher overall utilization and center penetration of Ocs N O P. In the U S for liver and heart transplants and that happens happen across both DVD and DCD organs.

hardo Hernandez: This enabled us to achieve a new high watermark for overall case volume in <unk> 2025.

Waleed Hassanein: Meanwhile, TransMedics Transplant Services revenue for 1Q was approximately $55.3 million, up from $35.5 million in Q1-24 and up from $46.7 million in Q4-24, representing approximately 56% year-over-year and 18.5% sequential growth. Our overall gross margins for 1Q improved to 61.5%, up from 59% in 4Q24. Finally, we delivered operating profit of $27.4 million in 1Q, representing approximately 19% of total revenue and up from $8.6 million or 7% of total revenue in 4Q 2024.

hardo Hernandez: Meanwhile, <unk> transplant services revenue for <unk> was approximately $55 $3 million up from $35 5 million in Q1, 'twenty four and up from $46 7 million in Q4, 24, representing approximately 56% year over year and 18, 5% sequential.

hardo Hernandez: Growth.

hardo Hernandez: Our overall gross margins for <unk> improved to 61, 5% up from 59% in <unk> 24.

hardo Hernandez: Finally, we delivered operating profit of $27 $4 million in <unk>, representing approximately 18% and I am sorry, 19% of total revenue and up from $8 6 million or 7% of total revenue in <unk> 'twenty 'twenty four.

Waleed Hassanein: Shifting now to TransMedics Transplant Logistics Infrastructure and Performance for the quarter. TransMed Logistics Services revenue for 1Q was $26.1 million, representing approximately 80% year-over-year and 20% sequential growth. Throughout 1Q, our daily average aircraft availability was approximately 15.4, up from 14 in 4Q24. Given that we reached a critical mass of owned aircraft capacity, we will retire the reporting of this metric going forward. Throughout the first quarter, we were able to cover 78% of our NOP missions requiring air transport compared to 75% in Q4 of 2024. As we've discussed previously, we are now focusing our effort in 2025 on efficiently operating our fleet by double shifting a portion of our planes to the extent possible before investing in additional aircraft to the fleet.

hardo Hernandez: Shifting now to transplant ex Trans Pac logistics infrastructure and performance for the quarter.

hardo Hernandez: Transplant logistics services revenue for <unk> was $26 1 million.

hardo Hernandez: Representing approximately 80% year over year, and 20% sequential growth.

hardo Hernandez: Throughout <unk>, our daily average aircraft availability was approximately 15 points 15.4 up from 14 in <unk> 24.

hardo Hernandez: Given that we reached a critical mass of owned aircraft capacity, we will retire the reporting of this metric going forward.

hardo Hernandez: Throughout the first quarter, we were able to cover 78% of our MLP missions, requiring air transport compared to 75% in Q4 of 2024.

hardo Hernandez: As we've discussed previously we are now focusing our effort in 2020 five efficiently operating our fleet by double shifting a portion of our planes to the extent possible before investing in additional aircraft to the fleet.

Waleed Hassanein: We will be opportunistic, however, in adding one or more aircraft in 2025 to reach our stated goal of 22 owned aircraft before year end.

hardo Hernandez: We will be opportunistic, however, and adding one or more aircrafts in 'twenty 'twenty five to reach our stated goal of 22 owned aircraft before year end.

Waleed Hassanein: Overall, we are very pleased with our strong performance in 1Q. We are focused on maintaining this momentum throughout 2025.

hardo Hernandez: Overall, we are very pleased with our strong performance in <unk>, we are focused on maintaining this momentum throughout 'twenty 2025.

Waleed Hassanein: In addition, we're planning to launch two new heart and lung clinical programs later in the year to further catalyze our growth in 26 and beyond. Our 1Q performance underscores the unique attributes of TransMedics business. TransMedics not only TransMedics is not only a top-line grower, but also an increasingly profitable business capable of generating significant bottom-line leverage. We remain confident that this is just the beginning, and we believe we are well positioned to deliver sustainable, long-term financial results as we gain more efficiency of scale and continue to drive leverage throughout the operation.

hardo Hernandez: In addition, we are planning to launch two new heart and lung clinical programs later in the year to further catalyze our growth in 26 and beyond.

hardo Hernandez: Our <unk> performance underscores the unique attributes of transplant X business.

hardo Hernandez: <unk> not only.

Cosmetics is not only a top line grower, but also an increasingly profitable business capable of generating significant bottom line leverage.

hardo Hernandez: We remain confident that this is just the beginning and we believe we are we are well positioned to deliver sustainable long term financial results as we gain more efficiency of scale and continue to drive leverage throughout the operation.

Waleed Hassanein: Moving now to provide a quick status update on our next gen OCS heart and OCS lung clinical program. We filed both OCS lung and heart IDEs and are actively discussing the final details with FDA. Based on our interactions, we feel we are on track to initiate both programs in H2 2025, as we communicated earlier in the year. However, the precise launch time of the Next Gen Lung and Heart Clinical Programs is still fluid and depends on the exact timing of the FDA approval, followed by the Center's IRB process. As we highlighted at our ISHLT symposium in April of this year and previously at our Investor Day in December of 24, we are planning to run a relatively large-sized trial aimed at building the next generation of level one clinical evidence that is unrivaled in our industry.

hardo Hernandez: Moving now to provide a quick status update on our Nextgen, Ocs heart and Ocs lung clinical programs.

hardo Hernandez: We filed both Ocs lung and heart I D Es.

hardo Hernandez: And are actively discussing the final details with F D. A.

hardo Hernandez: Based on our interactions we feel we are on track to initiate both programs in age to 2025 as we communicated earlier in the year. However.

hardo Hernandez: However that precise launch time of the next Gen. Langdon heart clinical programs is still fluid and depends on the exact timing of the FDA approval, followed by the centers IRB processes.

hardo Hernandez: As we highlighted at our ice a troche symposium in April of this year and previously at our Investor Day in December of 'twenty. Four we are planning to run a relatively large sized trials aimed at building. The next generation of level one clinical evidence that is unrivaled in our industry.

Waleed Hassanein: As stated above, we see these new clinical programs as potential major growth catalysts for TransMedics 26 and beyond, and we are not counting on these on these two clinical programs to contribute materially to our financial results in 2025.

hardo Hernandez: As stated above we see these new clinical programs as potential major growth catalyst for transmit X 26, and beyond and we are not counting on these on these two clinical programs to contribute materially to our financial results in 2025.

hardo Hernandez: Yes.

Waleed Hassanein: Now, I'd like to address the potential impact of geopolitical, macroeconomic and tariff policies on transmedics business in 2025. Let me start with the import that with the impact of tariffs that may have negatively impacted many device companies. I want to remind all of you that TransMedics is and will continue to be a proud U.S. manufacturer of the OCS technology platform. Importantly, we also are focused on vertically integrating most of the critical technology blocks to minimize supply chain risks on our business. Based on what we know today, we believe that the currently proposed tariffs will have a minimal impact on our business.

hardo Hernandez: Now I'd like to address the potential impact of geopolitical macroeconomic and tariff policies on <unk> business and 2025.

hardo Hernandez: Let me start with the import that with the impact of tariffs that may have negatively impacted many device companies.

hardo Hernandez: I want to remind all of you that trends medics is and will continue to be a proud U S manufacturer of the Ocs technology platform.

hardo Hernandez: Importantly, we also are focused on vertically integrating most of the critical technology blocks to minimize supply chain risks on our business.

hardo Hernandez: Based on what we know today, we believe that the currently proposed tariffs will have a minimal impact on our business.

Waleed Hassanein: That said, this is a fluid environment and may change and may change should policies change.

hardo Hernandez: That said.

hardo Hernandez: This is a fluid environment and may change and May change should policies change.

Waleed Hassanein: Additionally, we are leaning forward and have announced publicly our strategic plan to open a disposable design center of excellence and a new manufacturing facility in the premier biomedical device district of Mirandola, Italy. This district is renowned for its deep expertise in polycarbonate injection molding and disposable perfusion technology. We expect this plan to give transmedics several key strategic advantages. First, it enables us to leverage the unique talent to rapidly integrate many of the key disposable critical components for OCS perfusion circuit. Second, provide an alternate disposable manufacturing source to ensure business continuity to our Andover facilities. And finally, to provide us maximum flexibility in supplying OCS product, OUS, while reducing the potential impact of tariffs on our international business.

hardo Hernandez: Additionally, we are leaning forward and have announced publicly our strategic plan to open a disposable design center of excellence and a new manufacturing facility in the Premier Biomedical device district of Miranda like Italy.

hardo Hernandez: This district is renowned for its deep expertise in polycarbonate injection molding and disposable perfusion technologies.

hardo Hernandez: We expect this plan to give transmit at several key strategic advantages.

hardo Hernandez: It enables us to leverage the unique talent to rapidly integrate many of the key disposable critical components for Ocs perfusion circuit.

hardo Hernandez: Second provide an alternate disposable manufacturing source to ensure business continuity to our Andover facility and.

hardo Hernandez: And finally to provide us maximum flexibility and supplying ocs product all U S, while reducing the potential impact of tariffs on our international business.

Waleed Hassanein: Now let me share our perspective on the impact of potential economic downturn on organ transplantation in general and our business in specific. Our experience over the past two decades reinforces our belief that organ transplantation is a life-saving procedure that is largely insulated from economic cycles. This is due to two important facts. One, The best clinical outcomes associated with the transplant procedure and the highly cost-effective and the highly cost-effectiveness of the therapy for payers managing very expensive chronic disease conditions that lead to organ failure.

hardo Hernandez: Now, let me share our perspective on the impact of potential economic downturn on Oregon transplantation in general in our business and specific.

hardo Hernandez: Our experience over the past two decades reinforces our belief that organ transplantation.

hardo Hernandez: Is a lifesaving procedure that is largely insulated from economic cycles.

hardo Hernandez: This is due to two important facts one.

hardo Hernandez: The best clinical outcomes associated with.

hardo Hernandez: The transplant procedure and the highly cost effective.

hardo Hernandez: And the highly cost effectiveness.

hardo Hernandez: Of the therapy for payers, managing very expensive chronic disease conditions that lead to organ failure.

Waleed Hassanein: Let me now conclude my remarks by discussing our expectation for the remainder of 2025. As seen in our 1Q results, we began the year with a very strong performance. We are confident. that we can maintain this momentum for the overall 2025 annual performance. However, we may experience some level of variability or quarterly seasonality that could impact performance quarter to quarter as we've experienced last As a result of our strong 1Q performance and the full year considerations I just outlined, we are raising our full year 2025 revenue guidance to between $565 and $585 million, representing approximately 28 to 32 percent growth over full year 2024.

hardo Hernandez: Let me now conclude my remarks by discussing our expectation for the remainder of 2025.

hardo Hernandez: As seen in our <unk> results, we began the year with a very strong performance.

hardo Hernandez: We are confident.

hardo Hernandez: That we can maintain this momentum for the overall 2025 annual performance.

hardo Hernandez: However, we may experience some level of variability or quarterly seasonality that could impact performance quarter to quarter as we've experienced last year.

hardo Hernandez: As a result of our strong <unk> performance and the full year considerations I just outlined we are raising our full year 'twenty twenty-five revenue guidance to between 565 and $585 million, representing approximately 28% to 32% growth.

hardo Hernandez: Over a full year 'twenty 'twenty four with that let me turn the call to her order to cover the detailed financial results for the quarter Corrado.

Gerardo Hernandez: With that, let me turn the call to Gerardo to cover the detailed financial results for the quarter. Gerardo? Thank you, Waleed. Good afternoon, everybody. I'm pleased to be here to work with TransMedic's Strong First Query Results. As Waleed mentioned, Q1 2025 was a strong start to the year, reflecting our disciplined execution, continued commercial momentum, and the positive impact of our strategic investment. We saw solid performance across both product and service lines and positive sequential margin expansion and profitability gains. U.S. transplant revenue was $139 million, up 51% year-over-year and 19% sequentially. By organ, liver contributed with $109 million, heart with $26 million, and lung with $4 million.

Corrado: Thank you Woody.

Speaker Change: Good afternoon everybody.

Speaker Change: I'm pleased to be here to walk through <unk> strong first quarter results.

Speaker Change: Well you've mentioned Q1 2025 was a strong start to the year, reflecting our disciplined execution continued commercial momentum and the positive impact of our strategic investments.

Speaker Change: We saw solid performance across both product and service lines and positive sequential margin expansion and profitability gains.

Speaker Change: U S transplant revenue West, Colombia, up 39 million or 51% year over year or 19% sequentially.

Speaker Change: By Oregon Liberty contributed we hold around 9 million heart with 26 million along with $4 million.

Gerardo Hernandez: OUS revenue was $4 million, down 1% from Q1 of 2024, and up 4% sequentially. All U.S. revenue by organ was $3.5 million in hard, $0.4 million in long, and $0.1 million in labor. Product revenue for the first quarter reached $88 million, up 44% year-over-year growth, and 18% sequentially. Growth was driven by increased organ utilization in liver and continued OCS adoption across both liver and heart. Service revenue came in at $55 million, reflecting 56 year-over-year growth and 18% sequential increase. The primary driver was logistics, which grew 80% year-over-year and 20% sequentially, fueled by the continued expansion and utilization of our aviation fleet.

Speaker Change: O U S revenue was 4 million band, 1% from Q1 of 2024 and up 4% sequentially.

Speaker Change: Our U S revenue by Oregon was $3 5 million Leonhard Cedar point 4 million in lung and Ctrip on 1 million and labor.

Speaker Change: Product revenue for the first quarter reached 88 million up 444% year over year growth and 18% sequentially.

Speaker Change: Growth was driven by decreased organ utilization and lever and continued ocs adoption across both libre and hot.

Speaker Change: Service revenue came came in at 55 million, reflecting 56 year over year growth and 80% sequential increase.

The primary driver was logistics, which grew 80% year over year and 20% sequentially fueled by the continued expansion and utilization of our aviation fleet.

Gerardo Hernandez: Total gross margin for the quarter was approximately 61 percent, representing a decrease of 45 basis points when compared to Q1 of 2024 and a sequential improvement of 226 basis points. The 45 basis points decline was driven by a higher proportion of service revenue, which carries a lower margin profile, partly offset by improvement in product gross margin. The sequential 226 basis point improvement was primarily driven by a recovering product margin, which increased 359 basis points driven by the absence of Q4 related charges. for inventory-related charges and better cost absorption. Compared to Q1 of 2024, product gross margin improved 448 basis points given by cost efficiencies and the absence of not recurring inventory charges.

Speaker Change: Total gross margin for the quarter was approximately 61% representing a decrease of 45 basis points when compared to Q1, 'twenty 'twenty four and a sequential improvement of 226 basis points.

Speaker Change: The 45 basis point decline was driven by a higher proportion of service revenue, which carries a lower margin profile, partially offset by improvement in product gross margin.

Speaker Change: The sequential 200 up 26 basis point improvement was primarily driven by a recovering product margin, which increased 359 basis points driven by the absence of Q4 related charges.

Speaker Change: Two for inventory related charges and better cost absorption.

Speaker Change: Compared to Q1 of 2020 for probably gross margin improved 448 basis points, driven by cost efficiencies and the absence of nonrecurring inventory charges.

Gerardo Hernandez: Service gross margin declined 632 basis points versus Q1 of 2024, primarily driven by the higher proportion of aviation business. However, sequentially, service gross margin remains stable and we continue opportunities for margin expansion through operational efficiency. Total operating expenses for the first quarter of 2025 were approximately $61 million, up 28% year over year. The growth was primarily driven by a 51% increase in R&D as we continue to invest in our innovation pipeline, and a 21% increase in SG&A, reflecting investment to strengthen our NOP and command center, along with non-recurring legal and consulting expenses tied to internal processes reviews conducted in Q1 of 2025.

Speaker Change: Services gross margin declined 632 basis points versus Q1 of 2024, primarily driven by the higher proportion of aviation business. However, sequentially said with the gross margin remained stable and we continue opportunities for margin expansion through operational efficiencies.

Speaker Change: Total operating expenses for the first quarter of 2025 were 60 were approximate 61 million up 28% year over year. The growth was primarily driven by a 51% increase in R&D as we continue to invest in our innovation pipeline and a 21% decrease in <unk>.

Speaker Change: CNA, reflecting investment to strengthen our MLP anchorman center, along with nonrecurring legal and consulting expenses tied to internal processes reviews conducted in Q1 2025.

Gerardo Hernandez: Sequentially, total operating expenses declined 4%, lastly due to lower SG&A, following one-time expenses recorded in Q4 of 2024 and timing of spend, partially offset by the non-recurring legal and consulting expenses I mentioned before. R&D grew 4% sequentially, consistent with our ongoing investment plan. Operating income for the quarter was $27.4 million of 121% year-over-year and more than tripled sequentially. operating margin expanded to 19.1% compared to 12.8% in prior year. Net income for the quarter was $25.7 million, representing a $111 year-on-year increase and 275% sequentially. These results demonstrate that our business model can scale efficiently, drive meaningful financial improvement, and position the company for sustained momentum in 2025 and beyond.

Speaker Change: Sequentially total operating expenses declined 4% largely due to lower SG&A. Following one time expenses recorded in Q4, 2024 and timing of spin, partially offset by the nonrecurring legal and consulting expenses I mentioned before.

Speaker Change: R&D grew 4% sequentially consistent with our ongoing investment plan.

Speaker Change: Operating income for the quarter was 27 4 million of hung around 21% year over year and more than tripling sequentially.

Speaker Change: Operating margin expanded to 19, 1% compared to 12, 8% in prior year.

Speaker Change: Net income for the quarter was $25 7 million, representing a homeowner an 11 year on year increase and to call. It a 75% sequentially.

Speaker Change: These results demonstrate that our business model can scale efficiently drive meaningful financial improvement and position the company for sustained momentum in 2025 and beyond.

Gerardo Hernandez: We ended the quarter with $310 million in cash, down $26.5 million from December 31st of 2024. During Q1, we invested approximately $24 million in the purchase of two additional aircrafts, and we remain on track to purchase one more this year to reach our target of 22 owned jets by the end of 2025. Earnings per share were $0.76 and diluted earnings per share were $0.70 for the first quarter of 2025. In summary, we are off to a strong start. We feel confident in our momentum and remain focused on execution to continue to grow the number of transplants, advance key projects and programs, and deliver strong results through the rest of the year.

Speaker Change: We ended the quarter with $310 million of cash down $26 5 million from December 31, 2024. During Q1, we invested approximately $24 million in the purchase of two additional aircrafts.

Speaker Change: We remain on track to purchase one or more of these year to reach our target of 22, one debt by the end of 2025.

Speaker Change: Earnings per share were 76 cents.

Speaker Change: Diluted earnings per share were <unk> 70 cents for the first quarter of 2025.

Speaker Change: In summary, we are off to a strong start we feel confident in normal main theme and remain focused on execution to continue to grow the number of transplant, a bank's key projects and programs and deliver strong results through the rest of the year.

Gerardo Hernandez: Looking ahead, based on the strength of the business, as Waleed mentioned before, we are raising our full year revenue guidance to a range of $565 million to $585 million, up from our prior range of $530 million to $552 million. This reflects approximately 30% growth over 2024 at the midpoint of the guidance. Growth is expected to continue to be fueled by the expansion of total transplant volume. the increased OCS adoption and continued momentum across our service platform. We continue to expect some quarterly variability in terms of transplant volume growth. However, we are confident in our updated full-year guidance.

Speaker Change: Looking ahead based on the strength of the business as well he mentioned as we've mentioned before we are raising our full year revenue guidance to a range of 565 million to 585 million op from a prior range of 530 million to $552 million.

Speaker Change: These reflect approximately 30% growth over 2024 at the midpoint of the guidance.

Speaker Change: <unk> is expected to continue to be fueled by the expansion of product transplant volumes.

Speaker Change: The increase ocs adoption and continued momentum across our service platform.

Speaker Change: We continue to expect some quarterly variability in terms of transplant volume growth. However, we are confident updated full year guidance.

Gerardo Hernandez: In terms of gross margin, we continue to expect expansion across both product and service gross margins, driven by benefits of scale and operational efficiencies. However, the increasing proportion of service revenue, which operates at a lower margin, will moderate the overall gross margin expansion in 2025. In aviation, we are expecting scheduled maintenance activity to increase in the second half of the year, ramping in Q3 and more significantly in Q4. While this may introduce some quarterly noise, it does not change our expectation for modest gross margin expansion. In terms of capital allocation, we will remain focused on R&D and targeted investment that advance our pipeline, strengthen product development, and enhance logistics efficiency and process simplification.

Speaker Change: In terms of gross margin, we continue to expect expansion across both product and services gross margin driven by benefits of scale and operational efficiencies. However, the increasing proportion of service revenue, which operates at a lower margin will moderate the overall gross margin expansion in 2025.

Speaker Change: In aviation, we are expecting scheduled maintenance activity to increase in the second half of the year ramping in Q3 and more significantly in Q4, while these may introduce some quarterly noise. He does not change our expectation for modest gross margin expansion.

Speaker Change: In terms of capital allocation, we will remain focused on R&D and targeted investment of a buzzword pipeline strength in product development and enhanced logistics efficiency and process simplification, we are balancing strategy growth with financial discipline to drive sustainable long term profitability.

Gerardo Hernandez: We are balancing strategic growth with financial discipline to drive sustainable long-term profitability. Finally, with strong expected top line performance, continued efficiency, continued efficiency gains, and spend discipline, we now expect to deliver at least 400 basis points of improvement in operating margin in 2025 versus 2024. While quarterly variability is expected, we are confident in the full-year step-up, driven largely by gaining leverage across operating expense base. I'm encouraged by a strong start to the year and the discipline execution across the organization. While there is more work to do, the momentum we are seeing across the business, combined with clear growth drivers, give us conviction in our ability to deliver sustainable growth and continued margin expansion.

Speaker Change: Finally, with stronger expected top line performance continued efficiency the continued efficiency gains and spend discipline, we now expect to deliver at least 400 basis points of.

Speaker Change: Improvement in operating margin in 2025 versus 2024.

Speaker Change: While quarterly variability as expected we are confident in the full year step up driven largely by gaining leverage across our operating expense base.

Speaker Change: I'm encouraged by a strong start to the year and the disciplined execution across the organization. While there is more work to do the momentum we're seeing across the business combined with clear growth drivers give us conviction in our ability to deliver sustainable growth and continued margin expansion and with that I'll turn the call over to Walid for growth.

Waleed Hassanein: And with that, I'll turn the call over to Waleed for closing remarks. Thank you, Gerardo. As I said before, we're very pleased by our strong start of the year and performance in Q1 that we expect to carry this forward for the remainder of the year. As we stated before, our 1Q results demonstrate the unique and unrivaled attributes of TransMedics business. We remain confident that this is only the beginning and we are well positioned to continue to drive profitable growth while generating leverage to drive strong, sustainable financial results.

Walid: <unk> remarks.

Walid: Thank you Rocco.

Speaker Change: As I said before we're very pleased by our strong start of the year in performance in Q1.

Speaker Change: That we expect to carry this forward for the remainder of the year.

Speaker Change: As we've stated before our <unk> result, demonstrate they need an unrivaled attributes of transmitting business.

Speaker Change: We remain confident that this is only the beginning and we are well positioned to continue to drive profitable growth, while generating leverage to drive strong sustainable financial results.

Waleed Hassanein: In conclusion, we are humbled and proud of the strong clinical users' support for TransMedics and the resilience of our wonderful team. We remain committed to delivering the highest quality OCS NOP products and services to expand access to our life-saving transplant technology.

Speaker Change: In conclusion, we are humbled and proud of the strong clinical users support for transmit X and the resilience of our wonderful team.

Speaker Change: We remain committed to delivering the highest quality Ocs N O P products and services to expand access to our life saving transplant technology with that I will now turn the call to the operator for Q&A operator.

Operator: With that, I will now turn the call to the operator for Q&A. Operator? We will now begin the question and answer session. To ask a question, you may press star, then 1 on your touchtone phone. If you are using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star then 2.

Speaker Change: We will now begin the question and answer session to ask a question you May Press Star then one on your Touchtone phone.

Speaker Change: If youre using a speakerphone please pick up your handset before pressing the keys.

Speaker Change: At any time. Your question has been addressed and you would like to withdraw your question. Please press Star then two.

Speaker Change: The first question comes from Allen Gong from J P. Morgan. Please go ahead.

Alan Gong: The first question comes from Alan Gong from J.P. Morgan. Please go ahead. Hi, team. Thanks for the question. Congrats on, you know, just what's really a really strong quarter. You know, I guess starting with where I think it looks like a lot of the upside came from in liver, you know, it's kind of funny when you know, one of your main competitors in that space, actually had some news announced today as well. But how should we think about, you know, the main drivers of your growth and liver, we know that you're seeing, you know, more morning adoption continue to grow up in DCD.

Allen Gong: Hi, Dan Thanks for the question Congrats on just what's really a really strong quarter I guess, starting with where I think it looks like a lot of the upside came from the liver.

Allen Gong: So it's kind of funny, we you know one of your main competitors in that space.

Allen Gong: Actually had some news announced today as well, but how should we think about the main drivers of your growth in liver, we know that youre seeing more morning adoption continue to growth in D. C D. But if you could just break down the drivers of that outperformance in liver and what youre seeing so far in April as well.

Waleed Hassanein: But if you could just break down the drivers of that outperformance in liver and what you're seeing so far in April as well.

Allen Gong: Yeah.

Waleed Hassanein: Thank you, Ellen, for the question. I cannot comment on the news that came out today from the other technology out there. I can only comment on our dynamic, as you'd expect me to do. We're extremely confident in our liver platform. We're seeing growth across the verticals, DBD, DCD. We're seeing more utilization of deceased donors across both DBD and DCD. We're gaining share. We're gaining momentum. Again, it's early in the year, but we are bullish about our ability to continue to execute and continue to deliver the results we're delivering because we are convinced that we have the best, I repeat again, the best platform for liver preservation.

Speaker Change: Thank you Alan for the question.

Speaker Change: I cannot comment on the news that came out today from the from the.

Speaker Change: Other technology out there I can only comment on our dynamic.

Speaker Change: As you would expect me to do.

Speaker Change: We're extremely confident in our liver platform.

Speaker Change: We're seeing growth across.

Speaker Change: The verticals D. B D D C D. We're growing we're seeing more utilization.

Speaker Change: Of deceased donors across both DVD and DCD, where we're gaining share we're gaining momentum.

Speaker Change: Again, it's early in the year, but we are we are bullish about our ability to continue to execute.

Speaker Change: And continuing to deliver that adults were delivering because we are we are convinced that we have the best I repeat again, the best platform for liver preservation, all the pseudo competitors out there cannot deliver the value that the ocs can deliver and liver transplantation.

Waleed Hassanein: All the Sudu competitors out there cannot deliver the value that the OCS can deliver in liver transplantation. and the upcoming publications will prove it unequivocally based on data and evidence, not just based on opinion.

Speaker Change: And the upcoming publications will prove it unequivocally based on data and evidence not just based on opinions.

Waleed Hassanein: Got it. And then just a quick follow up, just curious what you're seeing so far in April, you know, you raised the guide by more than the beat, but still, you know, given the performance in the quarter looks like there could be some room for upside if you carry some of that momentum forward. So just curious about what you're seeing so far in April. Thank you very much. Thanks, Alan. I think you and others know that we take guidance very seriously. Q1 results speak for themselves. It's still early in the year, and we wanted to make sure that we also are putting guidance that can be achieved and factor in some potential headwinds coming up in Q2 or Q3 or Q4.

Speaker Change: Got it and then to say a quick follow up just curious what youre seeing so far in April you raised the guide by more than the B, but still you know given the outperformance in the quarter. It looks like there could be some room for upside if you carry some of that momentum forward. So just curious about what youre seeing is Florida.

Speaker Change: Thank you very much.

Speaker Change: Alan.

Speaker Change: Thank you and I and others know that we are we take guidance very seriously.

Speaker Change: Q1 results speak for themselves. It is still early in the year.

Speaker Change: And we wanted to make sure that we also are putting guidance that Ken.

Speaker Change: That can be achieved and factor in some potential headwinds coming up in Q2 or Q3 or Q4.

Waleed Hassanein: So we feel very strongly that the momentum we experienced in Q1 will continue for the full year results, but we expect some variability between quarters, potential seasonality as we've seen last year. That's why the guidance accommodated for all that. Based on April results, we feel confident in the guidance range we put out in front of the community.

Speaker Change: So we feel very strongly that the momentum we experienced in Q1 will continue for the full year results, but we expect some variability between quarters potential seasonality as we've seen last year, that's why the guidance accommodated for all of that.

Speaker Change: You know based on our based on April results, we feel confident in the guidance range, we put out in front of me of the community.

Gerardo Hernandez: Gerardo, would you care to comment on that? No, I feel we have plenty of tailwinds, not only in product sales, but also in service revenue. We have, our adoption has increased consistently, we saw adoption increasing in Q4, we saw adoption increasing in Q1, as Waleed mentioned, it's not only the adoption, but it's organ utilization, it's a penetration of organs in different centers, it's our adoption. So plenty of tailwinds.

Speaker Change: Would you care to comment on that.

Speaker Change: No.

Speaker Change: Plenty of.

Speaker Change: The tailwind not only broke sales, but also even in.

Speaker Change: <unk> service revenue.

Speaker Change: We have <unk> auction has increased consistently we saw adoption increasing in Q4.

Speaker Change: Adoption increase in Q in Q1 as well he mentioned, it's not only the adoption, but its Oregon utilization.

Speaker Change: Penetration of Oregon's in different data centers, it's a power.

Speaker Change: Option so.

Speaker Change: Plenty of.

Speaker Change: Plenty of tail winds.

Speaker Change: Yeah.

Matthew O'brien: The next question comes from Matthew O'Brien from Piper Sandler, please go ahead. Hi, this is Sam on for Matt. Thank you for taking our question. I guess first we want to touch on, you know, your next, your two next-gen products for the heart and lung. We know that you can generate product revenue when these trials are ongoing, but can you talk a little bit about the service revenues and how you anticipate product and service margins could be impacted during these trials? Thank you for the questions.

Speaker Change: The next question comes from Matthew O'brien from Piper Sandler. Please go ahead.

Speaker Change: Hi, This is Sam on for Matt. Thank you for taking our question I guess first I wanted to touch fine.

Speaker Change: Yeah Your next to.

Speaker Change: Your next Gen products for the heart and lung.

Speaker Change: We know that you can generate products revenue.

Speaker Change: When he's trials are ongoing but can you talk a little bit about the service revenues and how you anticipate product and service margins could be impacted during these trials.

Speaker Change: Thank you for the questions.

Waleed Hassanein: I'd like to comment only on the product revenue at the moment until we have all the trial design completed and approved by FDA. We know we have a high degree of confidence that we will be incurring product revenue. We expect to incur service revenue, certainly on the OCS arm, but we have to stay silent on what should we expect on service revenue on the control arm. That remains to be an area of discussion, so I do not like to comment on it just yet. But we certainly feel very confident that we will be incurring product revenue throughout the heart and lung clinical program.

Speaker Change: I'd like to comment only on the product revenue.

Speaker Change: The moment until we have all the.

Speaker Change: That trial design completed and approved by FDA. We know we have high degree of confidence that we will be incurring product revenue.

Speaker Change: We expect to incur service revenue certainly in the Ocs arm.

Speaker Change: But we have to stay silent on what should we expect on service revenue on the control arm that's remains to be.

Speaker Change: An area of discussion so I do not like to comment on it just yet, but we certainly feel very confident that we'll be incurring product revenue throughout the heart and lung clinical programs.

Matthew O'brien: Okay, perfect. Thank you.

Speaker Change: Okay perfect. Thank you and then just wanted to touch on liver again, obviously it continues to do really well in the U S. There are a couple of our competitors are anticipated to enter the market. Later this year. So just what kind of gives you that confidence.

Waleed Hassanein: And then we just want to touch on labor again. Obviously, it continues to do really well in the US. There are a couple of competitors anticipated to enter the market later this year. So just what kind of gives you that confidence and your guidance and any impact, if any, that you anticipate in the second half of this year? As I stated earlier, The community needs to step back and understand why is the liver doing so well for us. There is a good reason for that. The good reason is TransMedics and OCS liver platform is delivering the best results in the history of liver transplantation.

Speaker Change: In your guidance any impact if any do you anticipate in the second half of this year.

Speaker Change: As I stated earlier.

The community needs to step back and understand why is the liver doing so well for us.

Speaker Change: There is a good reason for that.

Speaker Change: The good reason is transmit aches and ocs liver platform is delivering the best results in the history of liver transplantation.

Waleed Hassanein: And we're doing that while providing the most convenient, the most cost efficient way of delivering the liver transplantation at the Transplant Institute. This is why the market is adopting our platform. Anybody could claim that they have a potential competing technology. They need to prove it. We stand by our product. We stand by our data. And as I said, this is all going to be coming out to light very soon in major publication in peer-reviewed journal that highlights all the value that I just outlined. That's why the liver program is doing well. And that's why we expect the liver program to continue to do well.

Speaker Change: And we're doing that while providing the most convenient than most.

Speaker Change: Ah cost.

Speaker Change: Cost efficient way of delivering their liver transplantation at the transplant Institute.

Speaker Change: This is why the market is adopting our platform.

Speaker Change: Anybody could claim that they have.

Speaker Change: A potential comp competing technology, they need to prove it.

Speaker Change: We stand by our product we stand by our data and as I said this is all going to be coming.

Speaker Change: Coming out to the two light very soon and major publication in peer reviewed journal that highlights all the value that I just outlined.

Speaker Change: That's why the liver program is doing well and that's why we expect the liver program to continue to do well and I'm going to go on a limb and say transmit X is not just stopping at where we are transmitted is working very hard to ensure that the ocs liver platform is the next standard of care in DVD and DCD liver.

Waleed Hassanein: And I'm going to go on a limb and say TransMedics is not just stopping at where we are. TransMedics is working very hard to ensure that the OCS liver platform is the next standard of care in DBD and DCD liver transplantation in the United States and around the world. Anybody could claim anything. We have the evidence to and we are not stopping. We are continuing to push innovation, clinical programs, data to ensure that this leadership position of our liver platform will continue to lead from the front.

Speaker Change: Mentation, Indiana added states and around the world anybody could claim anything we have the evidence to support us and we are not stopping we are continuing to push.

Speaker Change: Innovation.

Speaker Change: Our clinical programs data to ensure that this leadership position of our liver platform. We continue to lead from the front.

Waleed Hassanein: All right, thank you.

Speaker Change: Great. Thank you.

Bill Plovanic: The next question comes from Bill Plovanic from Canaccord. Please go ahead. Great, thanks. Good evening. Thanks for taking my question. So as we look at the quarter, I mean, liver was fantastic, and we've talked about that already. We did see receivables go up pretty significantly from the fourth quarter. Just any commentary there. And then on the guidance, basically, it assumes flatline the rest of the year. You did make some commentary about the trials. Do you still think that the clinical trials will add 2% to 5% to the numbers this year, or have you pulled that out and are basically saying it's next year?

Bill: The next question comes from Bill <unk>.

Speaker Change: <unk> from Canaccord. Please go ahead.

Bill: Great. Thanks, Good evening, Thanks for taking my question.

Speaker Change: So as we look at the quarter I mean liver was fantastic and we've talked about that already.

Speaker Change: We did see receivables go up pretty significantly from the fourth quarter, just any commentary there and then on the guidance.

Speaker Change: Murdo you basically it assumes flat line the rest of the year you did make some commentary about the trials.

Speaker Change: Do you still think that the clinical trials will add 2% to 5% to the numbers. This year or have you pulled that out and they're basically saying it's next year.

Speaker Change: Okay.

Waleed Hassanein: Let me start with the last part, Bill. We've always stated that the clinical trials for this year will be a very, very small contributor. We estimated it to be between 2% and 5%. We think it's still within that range, maybe towards the lower end of that range.

Bill: Let me start with the last part Bill.

Bill: We've always stated that the clinical trials for this year will have will be a very very small contributor we estimated to be between two and 5%. We think it's still within that range, maybe towards the lower end of that range.

Gerardo Hernandez: But really, what we have always stated that these clinical programs are the catalyst for 26 and beyond, and I'll let Gerardo specifically address the AR question. Hi, Bill. Yes, the incase of receivables basically is really related to the timing of billing. We had a couple of elements that affected Q1, and the billing that we had to do through the quarter actually was done later in the quarter. So we delayed that process, and what I can tell you is that now we're well in, let's say, recovering the receivables, and we're in good position to go back to our original plan.

Bill: But really what we what we have always stated that these clinical programs are the catalysts for 26 and beyond and I'll, let her to specifically address the.

Bill: Our question.

Speaker Change: Hi, Bill Yes, the increase in receivables was basically is really related to the timing of billing.

Speaker Change: We had a couple of elements that affected Q1.

Speaker Change: On the billing that we have to go through the quarter actually was done later in the quarter. So.

Speaker Change: We delayed that process on but what I can tell you is that now we didn't win that.

Speaker Change: The recovery in the receivables and we're in good position to go back.

Speaker Change: The original plan, we are expecting to end the year more or less in somewhere around our 45 to 60.

Gerardo Hernandez: We are expecting to end the year more or less in somewhere around our 45 to 60-day DSO, and we should see recovery already in Q2.

Speaker Change: The DSO.

Speaker Change: Although we should see recovery already in Q2.

Waleed Hassanein: And I would like, Bill, if you allow me to just add one additional commentary to Gerardo's points. As we've stated before, we are transitioning our entire NOP platform to be managed completely through our new NOP digital ecosystem. Part of that transition is a full automated billing mechanism that will significantly reduce that time between the completion of the case and the bill being generated. And that's coming in the second half of the year. That will help achieve the goal stated by Gerardo.

Speaker Change: Yeah.

Speaker Change: Well if you allow me to just add one additional commentary to her Adam's point.

Speaker Change: As we stated.

Speaker Change: Before we are transitioning our entire N O P platform to be managed complete a through our new MLP.

Speaker Change: Our digital ecosystem part of that transition is a full automated billing mechanism that will significantly reduce that time between the completion of the case and the bill being generated and that's coming in the second half of the year that will help achieve the goal as stated by her art.

Bill Plovanic: Okay.

Waleed Hassanein: And I just want to, just to go back to the first question on the guidance, Waleed, you know, you did that 143 and change in the first quarter. It's basically flatlining for the year. Is that how we should think of the second quarter to be very similar to the first quarter? Or is it like last year where it kind of went up a little and then kind of, you know, the back half of the year slowed down a lot? I mean, how should we just think about the second quarter?

Speaker Change: Okay and I just wanted to just to go back to the first question on the guidance will lead you did that 143 and change in the first quarter is basically flat line for the year is that how we should think of the second quarter to be very similar to the first quarter or is it like last year, where it kind of went up a little and then kind of the back half of the year slowed.

Speaker Change: I mean, how should we just think about the second quarter here.

Speaker Change: Okay.

Waleed Hassanein: I really think, Bill, we can't comment in the second quarter, given that we're already close to the mid of second quarter. But, you know, from a high level expectation, we always expect to do better. You know, that's not a secret, but we also expect some seasonality. Maybe it will hit in Q2, maybe it will hit in Q3. So that's why the guidance is structured the way it's structured. But we're trying to reflect in the guidance the way we see how the business is operating. But based on the early signals in Q2, we expect to see a little bit of modest improvement over Q1.

Speaker Change: I really I really think bill we we can't comment at in the second quarter given that we are already close to the mid of second quarter, but.

Speaker Change: You know from a high level expectation, we expect yes.

Speaker Change: We are we always expect to do better.

Speaker Change: Now that's not a secret, but we also expect some.

Speaker Change: Some seasonality maybe it will hit in Q2, maybe it will hit in Q3.

Speaker Change: So that's why the guidance is structured.

Speaker Change: <unk> structured.

Speaker Change: <unk>.

Speaker Change: But where we're trying to reflect in the guidance the way we see how the business is operating but based on early signals in Q2, we expect to see a little bit of modest.

Speaker Change: Improvement over Q1.

Bill Plovanic: But we still have some weeks to go.

Speaker Change: But we still have some weeks to go.

Bill Plovanic: Thanks for taking my question.

Speaker Change: Thanks for taking my questions.

Justin Wang: The next question comes from Justin Wang from Morgan Stanley. Please go ahead. Hey, thanks for taking our questions. I'm stepping in for Patrick here. I was wondering if you could talk a little bit more on the durability of OCS and NOP pricing. I understand that it adds solid value to transplant centers and payers, but do you think that competitive entries and a more cost-sensitive CMS could pressure your pricing here? Thank you so much.

Speaker Change: The next question comes from Justin Wang from Morgan Stanley. Please go ahead.

Justin Wang: Hey, Thanks for taking our question so I'm stepping in for Patrick here I was wondering if you can talk a little bit more on the durability of ocs, an NLP pricing I understand that or add solid value to transplant centers and payers, but do you think that competitive entries in a more.

Speaker Change: Cost sensitive CMS could pressure your pricing here. Thank you so much.

Waleed Hassanein: Justin, thank you for the question. I think as I've stated before, the question is not about pricing. The question should be about value. We priced our technology based on the significant value that the OCS delivers to the transplant center, to the payer, and to the patient. In fact, we believe that we're leaving some value on the table because it's always been our culture not to gouge the market. We're there to be their long-term partner. We're there to be the next standard of care for organ transplant in the long term. Unfortunately, because of our value, any How do I state this, any potential competitor is just taking a 20% discount from our price and saying I'm cheaper than TransMedics.

Speaker Change: Justin Thank you for the question.

Justin Wang: As I've stated before.

Speaker Change: The question is not about pricing.

Speaker Change: The question should be about value.

Speaker Change: We priced our technology based on the significant value that the ocs delivers to the transplant center to the Payor and to the patient in fact, we believe that we're leaving we're leaving some.

Speaker Change: Value on the table, because it's always been our culture not to gouge, the market, where there to be their long term partner, where there to be the next standard of care for organ transplant and the long term.

Speaker Change: Unfortunately.

Speaker Change: Because of our value any.

Speaker Change:

Speaker Change: How do I state this.

Speaker Change: Any potential competitor.

Speaker Change: Is just taking a 20% discount from our price and seeing them cheaper than transparent people need to step back and say what is your value. Most of these competitors specifically in the liver.

Waleed Hassanein: People need to step back and say, what is your value? Most of these competitors, specifically in the liver, we should ask, what is your value? What are you delivering? You should be at zero or near zero from a price standpoint because you're not delivering much value. What is the value of a machine perfusion that the liver has to be preserved on ice for six or eight hours before you perfuse it? So where is the value of machine perfusion? You've just killed the value of machine perfusion. And why do you do that? Because the technology is not capable of being portable, even if it is has wings to it.

Speaker Change: We should ask what is your value.

Speaker Change: What are your delivery you should be at zero or near zero from a price standpoint, because you're not delivering much value. What is the value of our machine perfusion that deliver has to be preserved on I four six or eight hours before your perfusion. So what is the value of machine perfusion, you've just killed the value of machine perfusion and why do you do that because the technologies.

Speaker Change: Capable of being portable even if it is.

Speaker Change: It has wings to it it's not delivering duffy geologic perfusion and value of preservation and assessment that the ocs is delivering so based on this based on these facts and based on the significant economical.

Waleed Hassanein: It's not delivering the physiologic perfusion and value of preservation and assessment that the OCS is delivering. So, based on this, based on these facts, and based on the significant economical efficiency that is gained throughout the paradigm of organ transplantation from reducing the waitlist time to improving the post transplant complication rate to increasing the survivability of the recipient with the originally transplanted organ and significantly reducing the re-transplant rate, we are delivering significant cost efficiency to payers to transplant programs and certainly the best quality of life and the best life expectancy for the patient. Based on that, we think CMS will continue to reimburse for OCS and commercial payers, not just CMS, because we're delivering significant economic value to these payers.

Speaker Change: Efficiency that has gained throughout the paradigm of organ transplantation from reducing the weight less time to improving the post transplant complication.

Speaker Change: Great to increasing the survivability of the recipient with the originally transplanted, Oregon and significantly reducing the REIT transplant, great. We are delivering significant cost efficiency to payers to transplant programs and certainly the best quality of life and best life expectancy for the patient based on that we.

Speaker Change: Think CMS.

Speaker Change: We'll continue to reimburse for ocs on and and commercial payers not just CMS that because we're delivering significant economic value to these payers.

Waleed Hassanein: And again, the data speaks for itself.

Speaker Change: And again the data speaks for itself.

Justin Wang: Thank you so much.

Speaker Change: Thank you so much.

Chris Pasquale: The next question comes from Chris Pasquale from Nefron Research. Please go ahead. Thanks. I wanted to ask a couple of questions about margins. The updated guidance for four points of full year operating margin expansion represents great progress, but you actually delivered more than seven points here in OneQ. So was there any spending that got pushed out of OneQ and is going to come later in the year to drive that dynamic? Or are there other margin headwinds that you're contemplating with that outlook?

Speaker Change: The next question comes from Chris Pasquale from Nephron Research. Please go ahead.

Speaker Change: Thanks.

Speaker Change: Couple of questions on margins the updated guidance for four points of full year operating margin expansion represents great progress, which actually delivered more than seven points here in <unk>. So was there any spending they got pushed out of <unk> and is going to come later in the year to drive that dynamic or are there other margin headwinds.

Speaker Change: That you are contemplating with that outlook.

Gerardo Hernandez: Hi, Chris. No, the majority, as I mentioned, the vast majority of the operating margin increase is going to be driven by gaining in operating leverage in operating expenses. So basically, what is happening most of the or a large part of our investment is planned for later in the year. And that's what basically is going to balance out. So that's why we're comfortable on the full year 400 basis points, at least that's what I mentioned at Okay, that's helpful.

Speaker Change: No. The majority as I mentioned, the vast majority of the operating margin increase he is going to be driven by gains in operating leverage in operating expenses. So basically what is happening in most of the or a large spider photo.

Speaker Change: This investment is planned for later in the year and Thats, what basically is going to balance out. So that's why we're comfortable with the full year.

Speaker Change: 400 basis points at least that's what I mentioned at least.

Speaker Change: Okay. That's helpful. And then on gross margin nice results this quarter on the product side of the business. The service gross margin was similar to what we saw in <unk>. We have no service revenue improves sequentially, what's the real gating item to get that service gross margin higher you've got basically the fleet of claims.

Gerardo Hernandez: And then on gross margin, nice result this quarter on the product side of the business. The service gross margin was similar to what we saw in 4Q even though service revenue improved sequentially. What's the real gating item to get that service gross margin higher? You've got basically the fleet of planes that you would like to have. Is it just a matter of really increasing the utilization of those assets? Or is there something else that sort of triggers a change in the profitability of that piece of the business? No, that's exactly what you mentioned. doing the utilization of the assets.

Speaker Change: He would like to have.

Speaker Change: Is it just a matter of really increasing the utilization of those assets or is there something else that sort of triggers a change in the profitability of that piece of the business.

Speaker Change: That's exactly what you mentioned.

Speaker Change: Due to the utilization of the assets, let me give you a couple of examples in Q1 last year.

Gerardo Hernandez: Let me give you a couple of examples. In Q1 last year, I mean, just to share, in Q1 last year, we owned 14 planes. The average operating aircraft per day was nine. And we were servicing only 49% of NOP missions. Today, we own 21 planes. We have around 16 average operational aircraft in Q1, and we are serving 78%. So what I'm trying to say here is there is plenty of room to continue to utilize or fix assets. And as much as we continue to do so, we will be able to expand the margins. That's why we are exploring the double shifting project.

Speaker Change: Just to share in Q1 last year.

Speaker Change: We own 40 planes. The average operating aircraft per day was nine and we were servicing only 49% for mlps.

Speaker Change: Emissions today beyond 'twenty, one black planes, we have around 60 16 avid as operational aircraft in Q1, and we are 70, 78%.

Speaker Change: So.

Speaker Change: What I'm trying to say here is there is plenty of room to continue to utilize our fixed assets.

Speaker Change: And as long as we as much as we continue to do so we will be able to expand the margins. That's why we are exploring the double shifting project. That's why we are exploring.

Gerardo Hernandez: That's why we are exploring other elements within the logistics team to improve the efficiency of the fleet. But it's basically volume. It's basically volume. Okay, thank you.

Speaker Change: The other element within the logistics team too.

Speaker Change: Improve the efficiency of the fleet, but it's basically volume, it's basically volume Chris.

Speaker Change: Okay. Thank you.

Suraj Kalia: The next question comes from Suraj Kalia from Oppenheimer. Please go ahead. Waleed, Gerardo, congrats on a fantastic quarter. So Waleed, thank you for giving all the details. On the external disturbance you referenced in your remark, Waleed, there was probably not one surgeon or hospital administrator who had not heard of the allegations and there was fear this could lead to softness. Yes, the math implies you guys actually picked up shares. So, you know, maybe if you can help us understand, you know, how new stores, same-stores sales shaped up in the quarter. Did you see pockets of softness?

Speaker Change: The next question comes from Suraj Kalia from Alpine High Mer. Please go ahead.

Suraj Kalia: While each jurado, congrats on a fantastic quarter.

Speaker Change: So while east.

Speaker Change: Thank you for giving all the details.

Speaker Change: The external disturbance you referenced in your remark Walid.

Speaker Change: There was probably not one search in a hospital administrator, who had not heard of the allegations and there was fear this could lead to softness.

Speaker Change: Yet the math implies you guys actually picked up share. So maybe if you can help us understand.

Speaker Change: How new stores same stores.

Speaker Change: <unk> picked up in the quarter did you see pockets of softness how you'll overcame if any.

Waleed Hassanein: How you overcame, if any, the disturbance, as you mentioned, external disturbance that you mentioned. Thank you, Suraj.

Speaker Change: The disturbance as you mentioned.

Speaker Change: External disturbance that you mentioned.

Suraj Kalia: Thank you Suraj.

Waleed Hassanein: If you allow me to correct you, I didn't say disturbance. I said distraction. And frankly, it's a nuisance distraction. I think the results speak very loudly that the clinical transplant community voted with their action, not with their word. We reached out to every user of the OCS platform and non-user in the United States across all three platforms. When this garbage came out in January, and we've made our points clear, and the results shows their position. So we look at these results with a high degree of pride and humility, and we are continuing to laser focus on our users, servicing our users' need, and making sure that we're there for them as they have been there for us throughout Q1.

Speaker Change: If you allow me to correct you I didn't say disturbance I said distraction.

Suraj Kalia: And frankly, it's a new nuisance distraction I think the results.

Suraj Kalia: Speak very loudly.

Suraj Kalia: That.

Suraj Kalia: The clinical transplant community.

Suraj Kalia: I voted.

Suraj Kalia: With their action not with their word.

Suraj Kalia: We.

Suraj Kalia: <unk> reached out to every user of the Ocs platform and non user in the United States across all three platforms.

Suraj Kalia: When this garbage came out in January.

Suraj Kalia: And we've made our points clear and the results.

Suraj Kalia: Shows the the there their position. So we look at these results with a high degree of pride and humility and.

Suraj Kalia: We are continuing to laser focus on our users servicing our users' need that and making sure that.

Suraj Kalia: <unk>.

Suraj Kalia: We're there for them as they have been there for us throughout Q1 and again.

Waleed Hassanein: And again, we're doing this because we're delivering significant value to the transplant community across all three platforms. And we're looking forward to the next phase this year, later this year when we get the heart and lung programs kicking to start getting momentum in the cardiothoracic aspect of this. We did not see any softness. The opposite is true. And, you know, again, now the focus of our entire team is to making sure that we are here and and have the capacity to meet the demand that demand is continuing to grow day over day, week over week, month over month.

Suraj Kalia: We're doing this because we're delivering significant value to the transplant community across all three platforms.

Suraj Kalia: And we're looking forward to the next next phase. This year later this year, when we get the heart and lung programs kicking too to start getting momentum in the cardio thoracic.

Suraj Kalia: Aspect of this.

Suraj Kalia: We did not see any softness the opposite is true.

Suraj Kalia: And.

Suraj Kalia: Again, I know the focus of our entire team is to making sure that we are here and have the capacity to meet the demand that demand is continuing to grow day over day week over week month over month.

Suraj Kalia: Fair enough. And Waleed, one of the other things, obviously, is OCS economics, almost every discussion that comes up, right? And in one of our recent events, you know, some of the physicians said, hey, it would really help hospitals because they are not billing properly. And the point was raised, it would really help if TransMedics develops a reimbursement team that can help us understand reimbursement, you know, and guide us through the process, because where you'll have stepped, and it seems like it's helped the site. So walk us through if that is on the, you know, on the docket in terms of just helping transplant sites walk through, you know, the reimbursement steps.

Speaker Change: Fair enough and one of the other thing obviously is ocs economics.

Suraj Kalia: Any discussion that comes up right.

Suraj Kalia: And then one for recent events.

Suraj Kalia: Some of the physicians said hey.

Suraj Kalia: It would really help hospitals, because theyre not billing properly and the point was raised it would really help the medics develops a reimbursement team that can help us understand reimbursement.

Suraj Kalia: Through the process because they're you'll have stepped in it seems like its helped our site. So walk us through if that is on the.

Suraj Kalia: On the docket in terms of helping transplant sites you walk through that.

Suraj Kalia: Reimbursement steps gentlemen, congrats again and thank you for taking my questions. Thank you suraj.

Waleed Hassanein: Gentlemen, congrats again, and thank you for taking my question. Thank you, Suraj. Suraj, unfortunately, that tells me that that that particular view comes from a new user or a new partner to TransMedics OCS. TransMedics has always had a reimbursement experts, both full-time internal and external, that work and help all transplant programs in the United States and in Europe do the market access and billing work. In fact, we are the only entity, only technology that formed the National Transplant Administration Working Group assembled from leading transplant programs that are highly utilizing OCS and have secured additional reimbursement from commercial payers to help other transplant programs in the U.S.

Suraj Kalia: Suraj.

Suraj Kalia: Unfortunately.

Suraj Kalia: That tells me that.

Suraj Kalia: That particular view comes from a new user or a new.

Suraj Kalia: Our partner to transmit ex Ocs transmitter has always had a reimbursement experts both full time internal and external that work and help all transplant programs in the United States.

Suraj Kalia: And in Europe.

Suraj Kalia: Uh huh.

Suraj Kalia: Do the market access and billing work in fact, we are the only entity only technology that form the national transplant administration working group.

Suraj Kalia: Symbol from leading transplant programs that are highly utilizing ocs with Sig and have secured additional reimbursement from commercial payers to help other transplant programs in the U S. Achieve the same results completely unpaid completely independent of transmit X. So it's a great idea.

Waleed Hassanein: achieve the same results, completely unpaid, completely independent of TransMedics. So it's a great idea. We agree with that view for sure. And we have been implementing that. And again, our results and our growth could not be achieved, could not have been achieved without making headway on the proper billing, as you outlined. Next question operator, the next question comes from David Rescott from Baird. Please go ahead. Oh, great. Thanks for taking the questions and congrats on the really strong quarter here. Waleed, I wanted to follow up on some of your comments already on just the way you're thinking about the rest of the year in the guide.

Suraj Kalia: We agree with that view for sure and we have been implementing that and again it. It is the our results and our growth.

Suraj Kalia: Could not be achieved could not have been achieved without making headway on on.

Speaker Change: The proper billing as you outlined.

Speaker Change: Next question operator. The next question comes from David <unk> from Baird. Please go ahead.

David: Oh, great. Thanks for taking the questions and congrats on the really strong quarter here.

David: I wanted to follow up on.

David: Some of your comments already on just the way Youre thinking about the rest of the year and the guide I know historically you've.

David Rescott: I know, you know, historically, you've called out just the unknowns around whether or not Q2 or Q3 sees more seasonality. I mean, I think if you look at the past two years, you know, Q2 was a seasonally stronger quarter, Q3 was a seasonally weaker quarter. And so if we were to pretty much take that, you know, mid-single-digit market growth that's played out in liver and heart the past two years, it puts you, you know, around $150 million or so in Q2. So I guess my question is, at this point, is there anything in your mind that leads you to believe that what we've seen the past two years, meaning stronger Q2, kind of weaker Q3 on a seasonality basis, would not play out again this year?

David: Called out just the unknowns around whether or not Q2 or Q3 sees more seasonality and I think if you look at the past two years. You know Q2 was a seasonally stronger quarter Q3 was a seasonally weaker quarter and so if we were to pretty much take that.

David: Mid single digit market growth, that's played out in liver and heart the past two years that puts you around.

Speaker Change: Around $158 million or so in Q2. So I guess my question is at this point is there anything in your mind that lead you to believe that what we've seen in the past two years, meaning stronger Q2 kind of weaker Q3 on the seasonality basis would not play out again this year.

Waleed Hassanein: At this point, David, thank you for the question. At this point, you perfectly outlined it's either Q2 or Q3. And yes, the odds are looking at Q3 just because of the summer vacations, but we are also living in very volatile times. So one has to be prudent and, you know, but if not nothing, if we're just looking at the past two years, I agree with you. The Q2 should be an uptick from Q1 and Q3 is probably the higher probability where we see a little bit of a slowdown because of the summer vacation, impact of summer vacation on the overall transplant volume.

Speaker Change: At this point David Thank you for the question at this point.

Speaker Change: You perfectly outlined it's either Q2 or Q3 and yes.

Speaker Change: The odds are looking at Q3, just because of the summer vacations.

Speaker Change: But we are also living in very.

Speaker Change: Volatile times, so one has to be prudent and and.

Speaker Change: But if not nothing.

Speaker Change: If we just look looking at the past two years I agree with you that Q2 should be an uptick from Q1 and Q3 is probably the higher probability where we see a little bit of a.

Speaker Change:

Speaker Change: The slowdown because of the summer vacation impact on summer vacation on the overall transplant volume.

Waleed Hassanein: But we don't see any more tangible evidence that points us in one direction over the other at this point. Okay, great. And then, you know, on the two clinical trials, liver, sorry, lung and heart, you know, I understand, you know, the value to hospitals or physicians in participating in that trial. You know, when you think about the potential for on the heart side, you know, accounts to be interested in doing a heart transplant as a part of this trial versus doing a heart transplant and not a part of the trial, you know, how do you think about the potential for the, you know, revenue coming in for heart patients to be incremental or something on top of the growth that you already, you know, would have as opposed to it maybe cannibalizing some of the underlying heart transplants that you likely were going to capture in the future at some point as well.

Speaker Change: But we we don't see any.

Speaker Change: Any more tangible.

Speaker Change: Evidenced that points us in one direction or the other at this point.

Speaker Change: Okay, Great and then.

Speaker Change: On the two clinical trials liver, sorry, it long and hard.

Speaker Change: I understand.

Speaker Change: The the value to <unk>.

Speaker Change: Hospitals or physicians in participating.

Speaker Change: In that trial, when you think about the.

Speaker Change: The potential for on the heart side accounts to be interested in doing a heart transplant as a part of this trial versus doing a heart transplant and not a part of the trial, how do you think about the potential for the.

Speaker Change: Revenue coming in for art patients to be incremental or something on top of the growth that you already.

Speaker Change: Have as opposed to what may be cannibalizing some of the underlying heart transplants that you'd likely we're going to capture in the future at some point as well. Thank you.

Waleed Hassanein: Thank you. Excellent question, David. I think we need to, you know, point out that we have two segments of the heart trial. One that is focusing on our current indication and one much larger that is focused on a brand new indication that we currently don't have. And that cannot be cannibalized since we don't have that indication in the U.S. anyway. And that's the indication that happens to be a 750 patient trial versus the current indication segment of the trial is only 200. So we do not see this as cannibalization. We see this as an advancement on both trials.

Speaker Change: Excellent question, David I think we need to.

Speaker Change: Point out that we have two segments of the heart trial, one that is focusing on our current indication and one much larger that is focused on a brand new indication that we currently don't have and that is that cannot be cannibalized. Since we don't have that indication in the U S anyway, and that's that.

Speaker Change: Indication that happens to be 750 patient trial.

Speaker Change: Versus the current indication segment of the trials only 200, so we do not see this as cannibalization we see this as an advancement we earn on both trials, but I just wanted to be gift, giving you the black and White answer is there is a 750 patient trial that is in an indication. We currently do not have in the U S.

Waleed Hassanein: But I just wanted to be giving you the black and white answer is, you know, there's a 750 patient trial that is in an indication we currently do not have in the U.S. So we're looking forward to the start of these trials and hopefully the results will validate our view that this is not going to be cannibalizing. This is going to be additive because the significant advancements that users will see with the next-gen technology and solutions that we are deploying as a part of these programs. All right, perfect. Thanks, and congrats again.

Speaker Change: So we're looking forward to the startup of these trials and hopefully the results will will validate our view that this is not going to be cannibalizing. This is going to be additive because the significant advancements that we had that users will see with that the next gen technology and solutions that we are deploying as a part of these programs.

Speaker Change: Yeah.

Speaker Change: Alright, perfect, Thanks, and congrats again.

Mike Matson: The next question comes from Mike Matson from Needham & Company. Please go ahead. Yeah, thanks. I'm just, you know, curious on the decision to open the facility in Mirandola, Italy. I mean, you don't have a lot of international business, at least right now. I mean, I understand you're growing so fast, you probably need to add capacity somewhere, but you know, why there versus, you know, somewhere in the US or elsewhere.

Speaker Change: The next question comes from Mike Matson from Needham and company. Please go ahead.

Mike Matson: Yeah. Thanks.

Mike Matson: Just curious on the decision to open that facility in.

Mike Matson: Italy.

Mike Matson: I mean, you don't have a lot of international business at least right now.

Mike Matson: I understand you're growing so fast they probably need to add capacity somewhere, but why there versus somewhere in the U S or elsewhere.

Waleed Hassanein: Mike, I can speak more granular other than saying that Mirandola Italy happens to be the Mecca for cardiopulmonary or perfusion technologies and plastics innovation. Every major perfusion technology company, whether in the dialysis, in the cardiopulmonary bypass, or ECMO company on the planet, has a major R&D and manufacturing headquarter in Mirandola Italy. Guess what? Our main revenue generating product is a perfusion disposable unit that is made of polycarbonate and polyurethane and it has the same components that has significant engineering and design and manufacturing talent that exists in Mirandola Italy. So that's one of the main reasons why I have to leave it at that.

Mike Matson: Mike.

Mike Matson: I can I can speak more granular other than saying that mirandola, Italy happens to be the Mecca for cardiopulmonary or perfusion technology and plastics innovation every major perfusion technology company, whether in the dialysis and the cardiopulmonary.

Mike Matson: Bypass or ecmo.

Mike Matson: Company on the planet has a major R&D and manufacturing our headquarter in Mirandola, Italy.

Mike Matson: Guess, what our main revenue generating product is a car as a perfusion.

Mike Matson: Disposable unit that is made of polycarbonate and polyurethane and it has the same components that has significant.

Mike Matson: Engineering and design and manufacturing talent that exists in Mirandola, Italy. So that's one of the main reasons why and I have to leave it at that the second is we are we as we grow and we're growing very rapidly we need to start thinking about business continuity and given that we're putting that in.

Waleed Hassanein: The second is as we grow and we're growing very rapidly, we need to start thinking about business continuity and given that we're putting that infrastructure in Mirandola for R&D, it made perfect sense for us to add the manufacturing component to it, given the talent that exists in that region, specifically on the vertically integrating key technology blocks that requires that talent that doesn't exist in the U.S. and frankly, it doesn't exist in the U.S. as much as it is available in abundance with significant expertise in Mirandola Italy. Okay, got it.

Mike Matson: Infrastructure in Mirandola for R&D, It made perfect sense for us to <unk>.

Mike Matson: Add the manufacturing component to it given the talent that exists in that region.

Mike Matson: Specifically on the vertically integrating key technology blocks that requires that talent that doesn't exist in the U S and frankly, it's it doesn't exist in the U S as much as it is available.

Mike Matson: Available in abundance with with significant expertise and Miranda lately.

Speaker Change: Okay got it so it sounds like you're probably.

Waleed Hassanein: So it sounds like you're probably, you know, bringing something in-house that you were, you know, having made in that kind of region to begin with, and just deciding to kind of do it yourselves now. Is that fair? That's fair. Okay. All right.

Speaker Change: Bring bringing something in house that you're having made in that kind of region to begin with and just society.

Speaker Change: Kind of do it yourself now is that fair.

Speaker Change: That's fair, Okay, Alright, and then just one on from a policy perspective, I know, there's there's little carpet headlines out of TCE, but.

Mike Matson: And then just one on, you know, from a policy perspective, I know there's constant headlines out of D.C., but, you know, I know there's some effort underway to kind of revamp the transplant policy at the federal level. So, you know, I was just wondering if there were any updates there, if you're hearing anything about, you know, the way things could potentially move. Thanks. Mike, we are, we're not aware of anything imminent, you know, but we're keeping our eyes and ears wide open and, and, you know, We are actively engaged with many of the policymakers and the decision makers that are involved in that particular topic.

Speaker Change: I know, there's some effort underway to kind of revamped the transplant policy at the federal level. So I was just wondering if there were any updates there if you're hearing anything about.

Speaker Change: The way things could potentially move.

Speaker Change: Yes.

Speaker Change: Yeah.

Speaker Change: Mike We are we're not aware of anything eminent.

Speaker Change: No.

Speaker Change: <unk>.

Speaker Change: But we're keeping our eyes and ears.

Speaker Change: Wide open and.

Speaker Change:

Speaker Change: We are we are actively engaged with the <unk>.

Speaker Change: Many of the policymakers and the decision makers that are involved in that particular topic. So I'll leave it at that.

Operator: So I'll leave it at that. Okay, thank you. As a reminder, if you have a question, please press star 1.

Speaker Change: <unk>.

Speaker Change: Okay. Thank you.

Speaker Change: As a reminder, if you have a question. Please press star one. The next question comes from Josh Jennings from TD Cowen. Please go ahead.

Josh Jennings: The next question comes from Josh Jennings from TD Cowen. Please go ahead. All right, good afternoon. Strong Quarter.

Speaker Change: Hi, good afternoon.

Speaker Change: <unk>.

Speaker Change: Strong quarter I was hoping to talk about ask about the clinical trials.

Waleed Hassanein: I was hoping to ask about the clinical trials, Waleed, at ISHLT. At the symposium, you obviously presented some high-level details on the lung and heart trials. First on the lung trial, maybe you can just help us report back on the enthusiasm or buzz that was generated within the lung transplant surgery community and the impetus or desire to get involved in this clinical program. Thanks, Josh. I think the buzz was pretty loud, and it's not just in the lung. I think the buzz with the heart was as loud as the lung, if not louder. So, we were, you know, it was unfortunate that we could not declare the two IDEs approved by the time of the ICT, but the buzz was loud.

Speaker Change: We'll eat at ice digital T U.

Speaker Change: Thanks, Tom.

Speaker Change: At the symposium.

Speaker Change: Lucy presented some high level details on the lung and heart trials first on the lung trial, maybe you can just help US Herzberg report back on the enthusiasm of Buzz that was generated within the lung transplant surgeon community and.

Speaker Change: The impetus were desire to to get involved in this clinical program.

Speaker Change: Thanks, Josh.

Speaker Change: I think the buzz was pretty loud and its not just in the lung I think buzzword the heart was as loud as long if not louder. So.

Speaker Change: We are.

Speaker Change: It was unfortunate that.

Speaker Change: That we could not do.

Speaker Change: Declare the two.

Speaker Change: <unk> is approved by the time of the IC Trophy, but the.

Speaker Change: The buzzwords loud and what I'd tell you.

Waleed Hassanein: And what I tell you, you know, from our perspective, not just in the U.S., but as you've seen in our symposium, the buzz even OUS is becoming louder and saying why we need access to these innovations in Europe and Australia. So, our team is working hard since the ICT trying to kind of harness that momentum.

Speaker Change: No.

Speaker Change: So from our perspective, not just in the U S, but as you've seen in our symposium the bus even all U S is becoming louder and saying why we need access to to these innovations in Europe and Australia. So.

Speaker Change: Our team is working hard since the IC trophy trying trying to kind of garner harness that that momentum.

Waleed Hassanein: First things first, we need to get FDA approval in hand and move forward to executing our plans in the U.S. and definitely try to capitalize on the momentum and interest generated OUS as well. understood.

Speaker Change: First first things first we need to we need to get the FDA approval in hand, and move forward to executing our plans in the U S and definitely try to capitalize on the momentum.

Speaker Change: And interest generated O U S as well.

Speaker Change: Understood and maybe on the on the Harp program.

Waleed Hassanein: And maybe on the heart program, there was a question kind of supposing from the surgeon just about the risks of designed the trial for superiority in low risk and low risk DBD trial, lower risk, you know, head to head against standard of care practice. Maybe you can just talk about your confidence level on OCS delivering superiority over standard of care. Thanks a lot. Josh, I think, you know, again, we don't want to comment, you know, from our perspective. That's why we designed the trial. That's why we are going to generate that first level one evidence head-to-head to standard of care.

Speaker Change: A question trying to support them from the surgeons just about.

Speaker Change: So the risk of.

Speaker Change: Designing the trial for superiority and low risk and Louis DVD trial lower risk.

Speaker Change: Yes.

Speaker Change: Head to head against standard of care practice, maybe you can just talk about your confidence level on an ocs.

Speaker Change: Delivering superiority over standard of care. Thanks, a lot.

Speaker Change: Josh I think again, we we we don't want to comment.

Speaker Change: From a from a from our perspective, that's why we designed the trial. That's why we are going to generate that first level one evidence.

Speaker Change: Head to head to standard of care no other technology in the field.

Waleed Hassanein: No other technology in the field from cold storage to cold perfusion to cold controlled cold storage. have done that with the only technology that is gonna put that question to the test. And it's a very high bar, the test of a level one FDA pivotal PMA trial. And we let the data speak for itself. I appreciate that and looking forward to tracking along.

Speaker Change: From cold storage to called perfusion to called controlled cold storage.

Speaker Change: <unk> done that with the only technology that is going to put it put that question to the test and it's a very high bar that test of a level one FDA pivotal PMA trial.

Speaker Change: And we'll let the data speak for itself.

Speaker Change: I appreciate that and looking forward to tracking along.

Josh Jennings: Thank you, Josh.

Speaker Change: Thank you Josh.

Waleed Hassanein: This concludes our question and answer session. I would like to turn the conference back over to Waleed Hassanein for closing remarks. Thank you, operator. Thank you all for your time this evening, and we're looking forward to meeting again in a few weeks and months here. Have a wonderful evening, everybody.

Speaker Change: This concludes our question and answer session I would like to turn the conference back over to Waleed Hassanein for closing remarks.

Speaker Change: Thank you operator, thank you all for your time this evening and we're looking forward to meeting again in Q and few weeks or months here have a wonderful evening everybody.

Operator: The conference is now concluded. Thank you for attending today's presentation.

Speaker Change: The conference has now concluded. Thank you for attending today's presentation you may now disconnect.

Operator: You may now disconnect.