Axogen Raises Sales Outlook as Breast Growth Reshapes Mix
The nerve-repair company lifted its 2026 revenue floor by $9 million to $279 million.
Axogen Inc. (AXGN) reported a 23.1% increase in second-quarter revenue to $69.7 million, as rapid growth in its Breast business shifted its sales mix and weighed on profitability.
The quarter extended Axogen’s double-digit expansion, though revenue growth slowed from 26.6% in the first quarter. Sales rose 13.4% sequentially from $61.5 million and stood 16.4% above the fourth-quarter level.
The peripheral nerve-repair company posted a GAAP net loss of $1.5 million, or $0.03 a share, compared with net income of $0.6 million, or $0.01 a share, a year earlier. The loss narrowed from $19.6 million, or $0.38 a share, in the first quarter. Adjusted net income increased to $7.3 million from $5.7 million a year earlier, while adjusted diluted earnings held at $0.12 a share.
Breast revenue grew more than 50% from a year earlier, while Extremities accounted for less than half of total sales for the first time. The resulting product mix was the primary reason gross margin fell to 72.7%, down from 74.2% a year earlier and 75.2% in the first quarter.
Higher spending added to the margin pressure. Operating expenses rose 30.9% to $52.8 million, outpacing revenue growth, as sales and marketing, research and development, and general and administrative costs all increased. Adjusted EBITDA declined to $8.4 million from $9.3 million, and its margin narrowed to 12.1% from 16.3%, though EBITDA improved sequentially from $5.7 million.
Axogen now expects 2026 revenue growth of at least 24%, or sales of at least $279 million, compared with its previous forecast of at least 20% and $270 million. The company lowered its gross-margin expectation to at least 73% from a range of 74% to 76%, while maintaining its forecast for positive full-year free cash flow.
Cash generation improved ahead of that target. First-half free cash flow turned positive at $4.1 million from negative $7.2 million a year earlier, while cash, restricted cash and investments increased sequentially to $113.4 million at June 30.
Commercial payer coverage for Avance reached about 86% of covered U.S. lives, up from more than 65% at the end of 2025. Axogen also disclosed a minority investment in Trace Biosciences to support development of intraoperative nerve-visualization technology, as it pursued additional applications beyond its established repair markets.