TransMedics Group (NASDAQ:TMDX) reported fourth-quarter and full-year 2025 results that management described as the company’s strongest operational performance to date, following what it characterized as a seasonally softer third quarter in U.S. transplant activity. On the call, executives emphasized continued adoption of the company’s Organ Care System (OCS) and its National OCS Program (NOP) services, as well as a slate of clinical and geographic initiatives expected to shape 2026.
Fourth-quarter results and profitability
For the fourth quarter of 2025, TransMedics reported total revenue of $160.8 million, representing approximately 32% year-over-year growth and about 12% sequential growth from the third quarter. U.S. transplant revenue increased approximately 11% sequentially to $155 million, while international transplant revenue rose about 33% sequentially to roughly $5 million.
Product revenue for the quarter was $100 million, up 34% year-over-year and 15% sequentially, while service revenue was $60 million, up 29% year-over-year and 8% sequentially. Hernandez said logistics revenue was a key driver, rising 32% year-over-year and 5% sequentially.
Gross margin for the quarter was approximately 58%, down 110 basis points year-over-year and 70 basis points sequentially. Management attributed the year-over-year decline primarily to higher clinical service costs tied to NOP expansion, increased logistics discounts, and higher freight expenses; the sequential decline was linked to inventory-related charges from year-end procedures and higher freight costs from expedited shipments.
Operating expenses totaled $72 million, up 14% year-over-year and 18% sequentially, driven by increased R&D and selective SG&A investments, including IT infrastructure expansion. Operating income was about $21 million, up 146% year-over-year and down 9% sequentially, with the sequential decline tied to higher investment-driven operating expenses. Operating margin expanded to about 13% versus 7% in the prior-year quarter.
Net income for the quarter was $105 million, which included an $83.8 million income tax benefit primarily related to the release of a valuation allowance on deferred tax assets. Earnings per share were $3.08, with diluted EPS of $2.62.
Full-year 2025 growth and cash position
For full-year 2025, TransMedics reported total revenue of $605.5 million, representing approximately 37% year-over-year growth. Operating profit was approximately $108.6 million, or about 18% of revenue for the year. The company ended 2025 with about $488.4 million in cash and cash equivalents.
Hernandez said U.S. transplant revenue reached approximately $585 million, reflecting 38.6% growth year-over-year, while international transplant revenue was $16.7 million, up 9.3%. By category, product revenue was $372 million and service revenue was $233 million. By organ, liver revenue reached $461 million, heart revenue $126 million, and lung approximately $15 million; “school revenue” for the year was cited at $4 million.
Full-year gross margin was 59.9%, up from 59.4% in 2024, which management attributed to logistics efficiencies and scale benefits, partially shared with customers via logistics discounts. Operating expenses were $254 million, up 13% year-over-year, including a 23% increase in R&D investment. Operating margin expanded to 18% from 8.5% in 2024.
Net profit for 2025 was $490 million compared to approximately $36 million in 2024, benefiting from operating performance and the fourth-quarter tax benefit related to deferred tax assets. Earnings per share were $5.60, and diluted EPS was $4.87.
OCS volumes and adoption trends
CEO Waleed Hassanein highlighted TransMedics’ internal data and UNOS database records indicating 5,139 total U.S. OCS transplants were performed in full-year 2025, up from 3,735 in 2024. He said OCS transplants represented about 26% of the total 19,833 U.S. heart, lung, and liver transplants in 2025, up from 20% in 2024.
Hassanein also pointed to growth in overall U.S. liver, heart, and lung transplant volumes for a third consecutive year, with 19,833 transplants in 2025 compared with 18,894 in 2024. He stated that since 2022, U.S. national transplant volumes for the three organs grew 25% including OCS NOP volume, and would have declined by approximately 1% over the same period without OCS case volume.
Management provided adoption metrics by organ for 2025:
- Liver: 4,197 OCS liver transplants, representing 36% of overall U.S. liver transplant volume, up from 26% in 2024.
- Heart: 854 OCS heart cases, approximately 18% of overall U.S. heart transplant volume, modestly up from 17% in 2024.
- Lung: 88 OCS lung cases, about 2% of overall lung transplant volume.
On logistics, the company reported transplant logistics service revenue of about $28.6 million in the fourth quarter, up from $21.7 million in the year-ago period. TransMedics said it owned and operated 22 aircraft during the quarter and covered about 80% of NOP missions requiring air transport, compared with 75% in the same period of 2024.
2026 catalysts and revenue guidance
Management outlined several initiatives for 2026, including the OCS Enhanced Heart Program (with two parts aimed at expanding time and distance limits for donor hearts and potentially demonstrating superiority versus cold static storage), a U.S. de novo lung clinical program, launching the NOP model in parts of Europe (with Italy described as actively launching), and continued development of an OCS kidney program intended to be the first organ on a next-generation OCS Gen 3.0 platform. The kidney development program is expected to run through 2026 with the goal of being ready for an FDA trial by early 2027.
Hassanein and Hernandez also cited potential operational challenges that could affect timing, including building European logistics infrastructure, lung trial accrual depending on adoption, and competitive dynamics affecting the cold storage arm of Enhanced Heart Part B. In Q&A, Hassanein said a manufacturer of a static cold storage box using phase-changing elements was “refusing to randomize their technology” against OCS, and that transplant programs would need to “take control of the trial,” with TransMedics supporting an FDA-acceptable control arm.
For 2026, the company guided to total revenue between $727 million and $757 million, representing approximately 20% to 25% growth over 2025. Hernandez said the company expects seasonal dynamics in U.S. transplant activity similar to prior years and anticipates long-term gross margins around 60%, though near-term pressure could occur from international expansion and investments ahead of growth.
Regarding profitability, Hernandez said operating margins in 2026 are expected to be up to approximately 250 basis points below 2025 full-year levels due to investment timing and scale, while reiterating an expectation that operating margins could approach 30% by 2028 as spending normalizes and the business continues to scale.
About TransMedics Group (NASDAQ:TMDX)
TransMedics Group, Inc is a medical device company headquartered in Andover, Massachusetts, that specializes in advanced organ preservation and transport systems for transplantation. The company’s flagship technology, the Organ Care System (OCS), maintains donor organs in a near-physiologic, warm, beating state during transportation, with the aim of extending preservation times and improving post‐transplant outcomes. TransMedics’ solutions address a critical need in transplantation by reducing ischemic injury and expanding the donor organ pool.
TransMedics currently markets two commercially available OCS platforms.
