Snapshot
TransMedics Group, Inc. reported $174M of revenue in Q1 2026, up 21.2% year over year, with diluted EPS of $0.20 and an operating margin of 7.6%.
- Revenue
- $174M
- YoY growth
- +21.2%
- Diluted EPS
- $0.20
- Operating margin
- 7.6%
What management said
- •To accomplish this, we've been deliberate, yet aggressive in our strategic investment in growth initiatives.
- •We believe that 2026 is a critical and transformational year that stands to cement TransMedics' near, mid, and long-term growth trajectories and global market position.
- •Our OCS Kidney platform will enable us to access the largest segment of the global transplant market, which is kidney transplantation.
- •We strongly believe that once regulatory approvals are in hand, OCS Kidney will derive significant growth for our abdominal franchise.
- •As you can see from our ongoing growth initiatives, our focus remains on long-term value creation with continued investment across each pillar of our growth strategy.
- •We are committed to executing our plan to drive significant growth for TransMedics and for the global transplant markets broadly.
- •As I've stated repeatedly, I truly believe that TransMedics remain in the early innings of our long-term growth opportunity.
- •Total revenue for 1Q 2026 was $174 million, representing approximately 21% growth year-over-year and approximately 8% sequential growth from 4Q 2025.
- •transplant product revenue grew by 22% year-over-year and approximately 7% sequentially to $102 million, while OUS transplant revenue grew approximately 39% year-over-year and approximately 17% sequentially to $6 million.
- •We delivered adjusted operating profit of approximately $18.1 million in Q1, representing approximately 10.4% of total revenue in 1Q, while continuing to make significant investment to fuel our growth.
- •Importantly, we ended 1Q with $462 million of cash and cash equivalents while making substantial investments in the growth initiatives above.
- •fleet and improving efficiency and capacity by double-shifting a portion of the fleet to meet the growing clinical demand.
What went well
- •Total revenue for Q1 2026 was approximately $174 million, representing approximately 21% growth year-over-year and approximately 8% sequential growth from Q4 2025, described by management as a strong start to the year.
- •U.S. transplant product revenue grew 22% year-over-year and approximately 7% sequentially to $102 million, while OUS/international transplant revenue grew approximately 39% year-over-year and approximately 17% sequentially.
- •TransMedics delivered adjusted operating profit of approximately $18.1 million, representing approximately 10.4% of total revenue, while continuing to make significant investments to fuel growth.
- •Transplant logistics services revenue was approximately $32 million, up approximately 22% year-over-year from $26.1 million and approximately 12% sequentially from $28.6 million, with coverage maintained at approximately 82% of NOP missions requiring air transport.
- •Results were achieved without any contribution from the ENHANCE and DENOVO clinical programs due to enrollment timing, and the company ended the quarter with approximately $462 million in cash.
What went wrong
- •Gross margin declined approximately 331 basis points year-over-year to approximately 58%, driven by increased internal supply chain activity to replenish and position inventory for the DENOVO and ENHANCE programs, continued NOP network investment, and certain one-time items.
- •Adjusted operating expenses rose approximately 42% year-over-year (and 17% sequentially) to approximately $83 million, with adjusted R&D up approximately 45% and adjusted SG&A up approximately 41%, compressing adjusted operating margin to approximately 10%.
- •The transient negative impact of the U.S. Transplant Modernization Act on OPO performance pushed overall deceased donor numbers below expectation and below last year throughout Q1, continuing into April.
- •Competitive reaction to the clinical programs had previously delayed ENHANCE Part B and DENOVO enrollment, requiring the introduction of the CHOPS control arm and an IDE supplement filing.
Guidance changes
| Metric | Period | Previous | Current | Change |
|---|---|---|---|---|
| Full-year revenue | FY2026 | $727M-$757M (20%-25% growth) | $727M-$757M (20%-25% growth, reiterated) | |
| Long-term gross margin | Long-term | around 60% | around 60% | |
| Adjusted operating margin vs prior year | FY2026 | up to ~250 basis points below 2025 | up to ~250 basis points below 2025 adjusted level | |
| U.S. aircraft fleet | FY2026 | — | 22 operational aircraft maintained throughout 2026 |
Performance breakdown
| Metric | YoY change | Reason |
|---|---|---|
| Total revenue | approximately +21% | Growth led by strong liver performance, continued progress in heart, and increasing contribution from the integrated logistics platform. |
| U.S. transplant revenue | approximately +20% | Driven by increased transplant volume across liver (approximately $139M), heart (approximately $26M), and lung (approximately $2M). |
| International revenue | approximately +39% | Primarily driven by heart, with smaller contribution from lung, as the company builds its international presence. |
| Service revenue | approximately +19% | Growth driven primarily by logistics revenue, supported by increased utilization of the TransMedics aviation fleet. |
| Adjusted R&D expense | approximately +45% | Driven by continued development of the OCS Kidney program and next-generation OCS platform, plus product development activity in Mirandola, Italy, and headcount growth. |
| Gross margin | down approximately 331 bps to ~58% | Increased internal supply chain activity to replenish and position inventory for DENOVO and ENHANCE, continued NOP investment, and one-time items. |
Earnings call themes & trends
| Topic | Previous mention | Current period | Trend |
|---|---|---|---|
| CHOPS (Controlled Hypothermic Organ Preservation System) | Not yet unveiled | Unveiled at ISHLT in April; FDA-registered active cooling device (4-12 degrees Celsius) to serve as the control arm for ENHANCE and DENOVO, with IDE supplement to be filed within weeks and a 510 application planned for commercial use. | |
| ENHANCE Heart and DENOVO Lung programs | Enrollment delayed by competitive dynamics | ENHANCE Part A enrolling slightly ahead of schedule; Part B and DENOVO to accelerate once CHOPS control arm is approved and implemented in early Q3 2026; 12-18 month enrollment timeframe maintained. | |
| U.S. Transplant Modernization Act / CMS rulemaking | — | TransMedics submitted detailed comments in March 2026 advocating for new entities to become multi-regional or national OPOs, and intends to submit bids for decommissioned OPO donor service areas later this year or early next. | |
| International / NOP Europe expansion | Italy NOP launch planned | Building infrastructure and staffing across four hubs in Northern and Southern Italy; agreement announced to invest in PAD Aviation to support a dedicated European organ transplant logistics network. | |
| Non-GAAP financial measures | Not reported | Introduced adjusted R&D, SG&A, operating expenses, income from operations, net income, diluted EPS, and operating margin to provide transparency as the company incurs discrete strategic, corporate development, HQ relocation, and ERP implementation expenses. |
Q&A summary
Bill Plovanic (Canaccord Genuity) asked about the CHOPS strategy, whether it cannibalizes existing uses, the 10,000 organ target, and CHOPS for liver and kidney.
Waleed Hassanein said CHOPS is not cannibalizing anything; it targets DBD hearts with roughly two hours of preservation currently going to static cold storage, making it additive to market share. The strategy was to develop a better control arm than standard styrofoam boxes. The focus is heart and lungs; no decision yet on liver and kidney, and kidney cold static preservation is viewed as a target for machine perfusion transformation.
Allen Gong (JPMorgan) asked what TransMedics is seeing in Q2 regarding OPO disruption from the Modernization Act and how to think about Q2 growth.
Waleed Hassanein said deceased donor numbers have been below expectation and below last year through Q1 and into April, consistent with predicted volatility as OPOs register displeasure with the transformation. He expressed confidence it will reverse and bounce back to baseline with some acceleration, though the timing is unknown.
Matthew Mardula (William Blair) asked for the operating margin guidance and whether margin growth is second-half weighted with front-loaded investments.
Gerardo Hernandez reiterated expecting up to around 250 basis points below the 2025 adjusted operating margin, but declined to provide phasing details given the investment plan still needs to materialize.
Chris Pasquale (Nephron Research) asked whether including CHOPS as a second investigational arm complicates interpretation and whether a harder control arm reduces the margin of improvement OCS can show.
Waleed Hassanein said there is no well-established cold storage other than ice and that unsubstantiated temperature claims have not materialized; CHOPS will not be investigational by the time results are interpreted, per the FDA-agreed plan. He is not worried about raising the bar, expects OCS to prove its value, and noted the FDA called the approach a creative and elegant solution.
Daniel Markowitz (Evercore ISI) asked about energy/fuel price exposure, ability to pass along surcharges, and guidance impact.
Waleed Hassanein said TransMedics operates in a competitive logistics market with mechanisms to recover costs; he could not share specifics on an open mic but assured fuel is a small component of operating flight hour cost, the network provides maximum operating leverage, and fuel prices are monitored by hub with flexibility to float the fleet.
Thomas Stephan (Stifel) asked what gives confidence the rest-of-year growth rate will remain stable or accelerate to hit the 20%-25% full-year guidance given Q1 grew a bit over 20% versus higher prior growth.
Gerardo Hernandez cited the phasing and history of U.S. transplant volume strengthening through the year, no expected change to global volume beyond potential Modernization Act disruption, and continued OCS adoption. Waleed Hassanein added that TransMedics maintained and grew market share in Q1 despite low donor numbers, giving organic confidence to meet the range.