Organogenesis Scales Back Its Second-Half Recovery Forecast

The Tip Desk · October 18, 2026 · 3 min read

The regenerative medicine company forecasts 2026 revenue of $179.0 million to $215.0 million, with a deeper second-half contraction than previously projected.

Organogenesis Holdings Inc. (ORGO), a regenerative medicine company, cut its second-half revenue outlook. The company said its recovery from a significant market contraction had proceeded more slowly than expected.

The reduced forecast marked a retreat from the recovery the company had anticipated when the year began. In February, Organogenesis had said sweeping Medicare coverage and payment changes for skin substitutes would affect the first half, while predicting significant market-share gains in the second half. In August, Chief Executive Officer Gary S. Gillheeney, Sr. said the company had seen measured improvement in business trends and was expanding its market share, but acknowledged that the recovery had fallen short of its expectations.

Second-quarter net product revenue was $42.8 million, against $36.3 million in the first quarter. That sequential improvement did not change the scale of the year-over-year contraction. Advanced Wound Care remained the dominant business, generating $36.1 million, while Surgical & Sports Medicine contributed $6.7 million. The decline in total product revenue from a year earlier reflected the fall in Advanced Wound Care sales.

Profitability showed a clearer sequential improvement. Gross margin recovered to 45% from 29% in the first quarter, with gross profit totaling $19.1 million. Adjusted EBITDA remained negative, but the loss narrowed to $34.4 million from $48.2 million in the preceding quarter. Those measures showed an improvement from the opening quarter even though the business continued to operate at a loss and the annual revenue outlook weakened.

Operating expenses totaled $94.7 million in the quarter. Selling, general and administrative expenses accounted for $54.0 million, while research and development spending was $18.3 million. The company also recorded a $5.1 million restructuring charge and $5.6 million in costs associated with terminating various research programs and vendors. Organogenesis identified employee severance, benefits and other exit costs among its restructuring activities; its adjusted earnings measures excluded the restructuring and program-termination charges.

The improvement in adjusted EBITDA did not carry through to the reported bottom line. Organogenesis posted a net loss of $96.3 million, or a loss of $0.77 a share. Its operating loss was $51.0 million, and the quarter included $45.4 million of income tax expense. The tax expense was included in reported net loss but excluded from the company's calculation of adjusted EBITDA, helping distinguish the two measures' different pictures of the quarter.

Cash, cash equivalents and restricted cash stood at $46.8 million at June 30, compared with $94.3 million at the end of December. The company reported no outstanding debt obligations. The lower cash balance accompanied a period that included operating losses, construction spending and finance lease repayments.

For the six months ended June 30, operating activities used $10.5 million of cash. Accounts receivable supplied $119.5 million through working-capital changes during that period. Financing activities used another $32.7 million, including $19.5 million for construction of landlord assets, net of tenant allowances. Those first-half cash movements extended beyond the losses recorded in the income statement.

The revised full-year revenue guidance stands at $179.0 million to $215.0 million. Organogenesis expects revenue to improve sequentially in both the third and fourth quarters, but says the pace will be more measured than its earlier forecast assumed.

For the second half, the company now forecasts a year-over-year revenue decline of approximately 64% to 74%, against its previous expectation of a 45% to 52% decline. The revised outlook therefore anticipates a deeper second-half contraction despite the sequential recovery the company still expects.