Breaking Down TransMedics Group, Inc. (TMDX) Financial Health: Key Insights for Investors

You're looking at TransMedics Group, Inc. (TMDX) because you see the massive potential in their Organ Care System (OCS), which is fundamentally changing organ transplant logistics, but you need to know if the financials support the hype. The short answer is yes: the company is on a clear path to profitability and exceptional growth, but we need to talk about the valuation. Management recently raised their full-year 2025 revenue guidance to a range of $595 million to $605 million, representing a solid 36% growth at the midpoint over the last year, fueled by the continued expansion of their National OCS Program (NOP) across the US. In the third quarter of 2025 alone, they delivered $143.8 million in total revenue and generated a net income of $24.3 million, which is a defintely strong performance. Still, the market is laser-focused on top-line growth, so when Q3 revenue slightly missed analyst consensus, the stock saw a brief pullback, reminding us that even a high-growth medical technology stock isn't immune to near-term volatility.

Revenue Analysis

You need a clear picture of where TransMedics Group, Inc. (TMDX)'s explosive growth is coming from, and the answer is simple: their unique vertical integration strategy, the National OCS Program (NOP). The company is on track to deliver full-year 2025 revenue between $595 million to $605 million, an impressive approximately 36% growth at the midpoint over the prior year. That's a serious acceleration from their 2024 revenue of $441.54 million. The near-term opportunity is clearly in the U.S. transplant market.

The core of the business is the Organ Care System (OCS), a portable organ perfusion system that keeps donor organs viable longer, but the revenue split shows a critical trend: services are growing faster. In the third quarter of 2025 (Q3 2025), total revenue was $143.8 million. Here's the quick math on how that revenue breaks down:

• Product Revenue: $88 million (The OCS devices and disposables).
• Service Revenue: $56 million (The National OCS Program, including logistics and clinical services).

This service segment, which includes the logistics and aviation fleet expansion for organ transport, is a key differentiator. The National OCS Program (NOP) is essentially a full-service solution, and its related service revenue is the engine fueled by the continued expansion and utilization of their aviation fleet. That's a smart, high-margin way to control the entire transplant process.

When you drill down into the clinical segments, the revenue contribution is heavily skewed. The company's focus on the National OCS Program for Liver and Heart transplantation is paying off big time. In Q3 2025, the breakdown by organ shows where the real financial power lies:

The Liver segment is the dominant force, driving over three-quarters of the revenue, with Heart as a strong secondary growth driver. What this estimate hides, however, is the regional concentration: U.S. transplant revenue was $139 million in Q3 2025, while Outside U.S. (OUS) revenue was only $3.6 million. The company's recent strategic collaboration with Mercedes-Benz Group AG to deploy a dedicated organ transportation fleet in Italy signals a serious, defintely intentional push for international expansion, which could be the next wave of growth. Still, for now, this is a U.S. story driven by the OCS and NOP platforms. You can read more about the full picture in Breaking Down TransMedics Group, Inc. (TMDX) Financial Health: Key Insights for Investors.

Profitability Metrics

You need to know if TransMedics Group, Inc. (TMDX) is a profitable growth story or just a revenue play. The answer is clear: the company has decisively crossed the profitability threshold, delivering strong margins that validate its unique National OCS Program (NOP) business model. This shift from unprofitability to solid margins is the most important financial story here.

Looking at the trailing twelve months (TTM) data ending September 30, 2025, the margins are impressive. The company's Gross Profit Margin stands at a healthy 60.28%. This shows their Organ Care System (OCS) technology and logistics services have significant pricing power and a manageable cost of goods sold. Here's the quick math on the TTM performance:

• Gross Profit Margin: 60.28% ($341.41 million Gross Profit on $566.4 million Revenue).
• Operating Profit Margin: 16.94% ($95.95 million Operating Income on $566.4 million Revenue).
• Net Profit Margin: 16.20% ($91.77 million Net Income on $566.4 million Revenue).

The TTM Operating Margin of 16.94% is the real signal. It means for every dollar of revenue, TransMedics Group, Inc. is keeping about 17 cents after paying for production costs and core operating expenses (like R&D and SG&A). This is a defintely strong performance for a company still in a high-growth phase.

Operational Efficiency and Margin Trends

The trend in profitability is one of the most compelling reasons to pay attention. TransMedics Group, Inc. has successfully transitioned from an unprofitable operation-where the operating margin was deeply negative at -42.7% in Q3 2023-to a business with a TTM operating margin of nearly 17% in just two years. This is a phenomenal turnaround driven by the rapid scaling of the NOP, which integrates the OCS technology with proprietary logistics, including an owned fleet of aircraft.

In the most recent quarter, Q3 2025, the Gross Margin was 59%, a notable increase from 56% in Q3 2024. This margin expansion, even as operating expenses grew to $61.3 million (up from $56.9 million in Q3 2024) due to increased R&D and growth investments, highlights efficient cost management relative to the surging top line. The company is spending to grow, but the revenue growth is outstripping the cost increase, which is exactly what you want to see. You can read more about the company's strategy in their Mission Statement, Vision, & Core Values of TransMedics Group, Inc. (TMDX).

Peer Comparison: Where TransMedics Group, Inc. Stands

When you compare TransMedics Group, Inc.'s profitability to the broader Medical Devices & Instruments industry, their TTM Gross Margin of 60.28% is significantly above the industry median of 47.3%. This suggests the OCS technology and the integrated service model provide a strong competitive moat and pricing power.

However, against high-end medical device peers, the story is nuanced. Companies like Intuitive Surgical and Edwards Lifesciences, which operate with massive scale and highly specialized technology, command higher gross margins, sometimes reaching 66% to 79%. This is the long-term target for TransMedics Group, Inc. as they continue to scale. Here is a quick look at how the Gross Margin compares:

What this comparison hides is the blended nature of TransMedics Group, Inc.'s revenue-it includes product sales (OCS) and high-touch logistics services (NOP), which can carry lower margins than pure product sales. Their ability to achieve a 16.20% Net Profit Margin on a TTM basis demonstrates that their vertical integration strategy is working, translating strong top-line growth into bottom-line profit.

Debt vs. Equity Structure

You're looking at TransMedics Group, Inc. (TMDX) and seeing explosive revenue growth, but you need to know how they're funding that expansion-is it smart debt or risky leverage? The quick answer is that TransMedics is using a moderate, but elevated, amount of debt to fuel its capital-intensive National OCS Program (NOP), but its strong liquidity makes the debt manageable for now.

As of the third quarter of 2025, TransMedics Group, Inc. carries total debt of approximately $511.7 million against a total shareholder equity of about $355.2 million. This translates to a Debt-to-Equity (D/E) ratio of roughly 1.43. Here's the quick math: for every dollar of shareholder capital, the company has taken on $1.43 in total liabilities. This is a deliberate strategy to fund the expansion of their dedicated organ logistics network, which includes buying and operating their own fleet of aircraft.

That 1.43 D/E ratio is the number to focus on. It's higher than the median for the Surgical and Medical Instruments and Apparatus industry, which typically sits around 0.70. A higher ratio isn't defintely a red flag for a high-growth medical technology company, but it means their growth is more reliant on creditor financing than on pure equity. They are balancing the capital structure, but they are leaning into debt to accelerate their market dominance.

• Total Debt: Approximately $511.7 million.
• Total Equity: Approximately $355.2 million.
• Debt-to-Equity Ratio: 1.43 (Higher than industry median of 0.70).

The vast majority of this debt is long-term. The current portion of long-term debt-the amount due within the next year-is a very small $5.0 million as of Q3 2025. This indicates minimal near-term debt maturity risk. The core of their financing comes from the issuance of $400 million in Convertible Senior Notes due in 2028, which carry a very low cash interest rate of just 1.50% per year. This is smart financing: cheap debt that can convert to equity later, reducing the cash burden now while funding their biggest capital expenditure-the NOP fleet expansion.

Since that 2023 convertible note issuance, TransMedics Group, Inc. has not announced any new significant debt issuances or refinancing activity in 2025. Their focus has been on operational cash generation, which has been strong, allowing them to end Q2 2025 with an impressive $400 million in cash. This cash position provides a substantial cushion against their debt obligations. The company is strategically using debt to buy assets (aircraft, logistics infrastructure) that directly support their high-margin service revenue, effectively trading a manageable debt cost for accelerated market capture. For a deeper dive into who is buying into this strategy, check out Exploring TransMedics Group, Inc. (TMDX) Investor Profile: Who's Buying and Why?

Liquidity and Solvency

You're looking at TransMedics Group, Inc. (TMDX) to understand its short-term financial strength, and the takeaway is clear: the company's liquidity position is defintely exceptional, backed by a massive cash reserve and highly favorable working capital metrics. This is a business that can easily cover its near-term obligations, and then some.

As of the most recent reporting periods, TransMedics Group, Inc. boasts a Current Ratio of 7.69 and a Quick Ratio (acid-test ratio) of 7.13. For context, a ratio above 1.0 is generally considered healthy, so these figures are outstanding, signaling a deep buffer of liquid assets against short-term liabilities. The Quick Ratio, which strips out inventory-often the least liquid current asset-is almost identical to the Current Ratio, which tells you that most of their current assets are highly liquid, like cash and accounts receivable.

Here's the quick math on their immediate cash position, which is the most conservative measure of liquidity:

• Current Ratio: 7.69 (Current Assets / Current Liabilities)
• Quick Ratio: 7.13 (Quick Assets / Current Liabilities)
• Cash Ratio (TTM): 5.85 (Cash & Equivalents / Current Liabilities)

A Cash Ratio of 5.85 means TransMedics Group, Inc. could pay off all its current liabilities nearly six times over using only the cash it has on hand. That's a powerful statement about their financial flexibility.

Working Capital and Cash Flow Trends

The strength in liquidity is a direct result of effective working capital management and robust cash generation. The company's management has cited meaningful improvements in their billing cycle and healthy collections, which has led to a reduction in their accounts receivable balance. This focus on process efficiency means they are converting sales into cash faster, which is the core of strong working capital trends.

Looking at the cash flow statements through the first three quarters of 2025, the trend is a significant cash build:

• Q1 2025 Cash: $310.1 million (as of March 31, 2025)
• Q2 2025 Cash: $400.6 million (as of June 30, 2025)
• Q3 2025 Cash: $466.2 million (as of September 30, 2025)

The company added over $156 million in cash and equivalents over the first nine months of the year. This large increase is primarily driven by strong cash flow from operations, which is supported by their high revenue guidance for FY 2025 of $595 million to $605 million. The cash flow from investing activities (CFI) is likely negative due to continued investment in their National OCS Program (NOP), which includes expanding their aviation fleet-they owned 21 aircraft as of September 30, 2025. Cash flow from financing activities (CFF) has not been a major source of funds, given the strong operational performance.

Liquidity Concerns and Strengths

The primary strength is the sheer size of the cash balance and the high liquidity ratios, which effectively eliminate any near-term liquidity concerns. The company has the capital to fund its aggressive growth strategy, including the launch of next-gen clinical programs and international expansion, without needing external financing. The only potential caveat, as some analysts note, is that an unusually strong quarter of Free Cash Flow (FCF), like the one seen in Q2, might not be sustainable if the company aggressively rebuilds inventory or normalizes capital expenditures (capex). Still, the overall cash position remains massive and acts as a significant moat. You can read more about the company's full financial picture here: Breaking Down TransMedics Group, Inc. (TMDX) Financial Health: Key Insights for Investors.

Valuation Analysis

You're looking at TransMedics Group, Inc. (TMDX) and wondering if the market has gotten ahead of itself, especially after the strong run-up this year. The quick answer is that while the stock is defintely not cheap by traditional metrics, its valuation reflects aggressive growth expectations, not a current bargain.

As a high-growth medical technology company, TransMedics Group, Inc. (TMDX) trades at a premium. For the 2025 fiscal year, the estimated Price-to-Earnings (P/E) ratio sits at about 45.22, based on consensus earnings estimates. This is a significant drop from the 2024 actual P/E of 115.91, but it's still a lofty figure, signaling that investors are pricing in substantial future earnings growth. The trailing twelve months (TTM) P/E is currently around 45.81 to 46.92 as of November 2025.

The Enterprise Value-to-EBITDA (EV/EBITDA) ratio, which accounts for debt and cash, is also high, currently sitting at approximately 34.23 to 36.50 (TTM as of September-November 2025). For context, the industry median is much lower, suggesting TransMedics Group, Inc. (TMDX) is valued as a market leader with a strong competitive moat, largely due to its Organ Care System (OCS) platform. The Price-to-Book (P/B) ratio is also elevated, ranging from 11.46 to 12.42, which is typical for an asset-light, high-margin technology company.

Here's the quick math on the key ratios:

• P/E Ratio (2025 Est.): 45.22
• P/B Ratio (Current): 11.46
• EV/EBITDA (Current TTM): 34.23

The market is paying a premium for innovation and execution. You need to believe in the company's Mission Statement, Vision, & Core Values of TransMedics Group, Inc. (TMDX) to justify this price.

Stock Momentum and Analyst Outlook

The stock price trend over the last 12 months shows a powerful upward trajectory. The stock was trading near $66.50 in January 2025 and has climbed to approximately $127.38 to $128.02 by mid-November 2025. That's a near-doubling in price, which is why the valuation multiples look stretched. The 50-day moving average, around $119.16, confirms the recent upward momentum.

The analyst community has a clear consensus: a Moderate Buy rating. This is based on a collective view of thirteen analysts, with eight assigning a Buy rating and five a Hold rating, and importantly, zero Sell ratings. The average 1-year price target is in the range of $130.73 to $143.42.

What this estimate hides is the high volatility; the stock's beta is around 2.05, meaning it moves significantly more than the broader market. Also, TransMedics Group, Inc. (TMDX) is a growth stock and does not pay a dividend, so the dividend yield and payout ratios are 0.00%.

For a quick summary of the consensus:

The takeaway is simple: TransMedics Group, Inc. (TMDX) is priced for perfection. The valuation is high, but the analyst support and recent stock performance suggest the market believes the company can deliver the earnings growth necessary to bring those forward multiples down.

Risk Factors

You're looking at TransMedics Group, Inc. (TMDX) after a great run, and honestly, the Q3 2025 numbers look strong-revenue hit $143.8 million, and net income was $24.3 million. But a seasoned analyst knows that exceptional growth always comes with exceptional risk. The core issue here is that the market is pricing TMDX for near-perfection, so any stumble could be costly. Your job is to map those risks to potential actions.

The biggest near-term risk isn't internal; it's the Regulatory and Competitive Landscape. TMDX operates in a highly regulated, life-and-death space, and that means the government is a major variable. Plus, the competition is heating up, especially in the liver segment, which drove a large portion of the company's past revenue.

• Regulatory Scrutiny: The evolving regulatory environment for organ procurement, particularly for Donation after Circulatory Death (DCD) protocols, poses a material risk. Changes here could slow the adoption of the Organ Care System (OCS) or increase compliance costs.
• Competitive Pressure: While the OCS is the only device approved by the FDA for multiple organs, competitors like OrganOx, with its Metra device for liver perfusion, are raising capital and expanding. Liver revenue is a huge component of TMDX's business, so this is a defintely a segment to watch.
• Alternative Protocols: The growing use of Normothermic Regional Perfusion (NRP) as an alternative method for organ preservation, especially in heart transplants, could limit the total addressable market (TAM) for OCS.

On the operational and financial side, the risks are less about solvency and more about sustaining the growth premium. The stock's Beta, a measure of volatility, is high at around 3.29, and its Price-to-Earnings (P/E) ratio of approximately 44.4x is noticeably higher than the US Medical Equipment industry average of 27.1x. This is a growth stock priced for high expectations.

Here's the quick math on the growth deceleration risk: While the full-year 2025 revenue guidance was raised to a range of $595 million to $605 million (a 36% growth at the midpoint), the year-over-year quarterly revenue growth rate is slowing down. This deceleration is expected as the National OCS Program (NOP) matures, but a faster-than-anticipated slowdown could cause a sharp correction in the stock price given the premium valuation.

The core operational risk centers on the capital-intensive nature of the NOP logistics infrastructure. TransMedics is mitigating this by owning and controlling its aviation fleet, which included 22 aircraft as of October 29, 2025. This vertical integration is a powerful moat, but it also introduces production and logistics risks, which were the main risk category disclosed in recent filings.

Mitigation is all about execution. TransMedics is addressing the competitive and market saturation risk by investing heavily in R&D, with operating expenses rising to $61.3 million in Q3 2025, partly driven by increased R&D. They're also pursuing next-generation OCS clinical programs, like the OCS ENHANCE Heart trial, and expanding globally through strategic partnerships, such as the one with Mercedes-Benz Group AG in Italy. These actions are designed to expand the TAM and maintain the technological lead. For a deeper dive into the company's valuation, read our full analysis: Breaking Down TransMedics Group, Inc. (TMDX) Financial Health: Key Insights for Investors.

Next Step: Portfolio Manager: Model a 15% revenue growth deceleration scenario for 2026 to stress-test the current valuation by the end of next week.

Growth Opportunities

You want to know where TransMedics Group, Inc. (TMDX) goes from here, and the answer is simple: the company is transitioning from a medical device maker to an integrated, high-growth service powerhouse. This shift, centered on their proprietary technology and logistics, is the core driver of their financial trajectory. They are defintely not a one-trick pony anymore.

For the 2025 fiscal year, TransMedics Group, Inc. has raised its full-year revenue guidance to a range of $595 million to $605 million, reflecting a projected 36% growth at the midpoint over the prior year. This isn't just organic growth; it's a structural change driven by the National OCS Program (NOP), their comprehensive, turnkey service for organ procurement and delivery. Here's the quick math: higher utilization of the Organ Care System (OCS) for liver and heart procedures, plus the expansion of their dedicated aviation fleet-now standing at 22 owned aircraft as of late October 2025-is accelerating top-line performance.

Key Growth Drivers: Service, Innovation, and Scale

The company's growth is fueled by three clear, near-term catalysts, moving beyond just selling a device to owning the entire transplant logistics chain. The integrated model is sticky.

• National OCS Program (NOP) Expansion: This service-based model bundles the OCS technology, specialized clinical staff, and air transport logistics, creating high barriers to entry for competitors. The NOP is driving adoption, particularly in the liver and heart segments, and is expected to surpass 10,000 U.S. transplants by 2028.
• Next-Generation OCS Platforms: Product innovation is a continuous engine. The company is advancing its next-generation OCS for Heart and OCS for Lung, with clinical programs anticipated to launch before the end of 2025. While these won't materially impact 2025 revenue, they are positioned as major growth catalysts for 2026 and beyond, plus a new OCS Kidney platform is in the pipeline.
• International Market Penetration: TransMedics Group, Inc. is aggressively pursuing global expansion, starting with Europe. A strategic collaboration with Mercedes-Benz Group AG was announced in Q3 2025 to deploy a dedicated fleet of vehicles for organ transportation across Italy, signaling a serious push into international markets.

Competitive Advantages and Earnings Outlook

TransMedics Group, Inc. maintains a significant competitive moat. They hold a first-mover advantage and hundreds of patents protecting their proprietary Organ Care System (OCS), which uses warm perfusion (a dynamic approach to organ preservation) instead of the traditional, inferior cold storage method. This technology, combined with the logistical network of the NOP, creates high switching costs for transplant centers. It's hard to rip out and replace an entire clinical and logistical workflow once it's in place.

The financial results for Q3 2025 already show improving profitability, with net income reaching $24.3 million, or $0.66 per diluted share, and a gross margin of 59%. Management is focused on scaling efficiently, which should continue to support bottom-line growth. For a deeper dive into the company's long-term vision, you can review the Mission Statement, Vision, & Core Values of TransMedics Group, Inc. (TMDX).

Here is a summary of the latest 2025 financial outlook and key drivers:

The next concrete step for you is to monitor the launch timelines for the next-generation OCS Heart and Lung clinical programs, as their progress will shape the 2026 revenue and earnings estimates. Finance: factor a 20% revenue growth floor for 2026, supported by these new programs and international expansion.