MiMedx Hits Record Highs, Braces for Medicare Reimbursement Shock

MARIETTA, GA – February 25, 2026 – MiMedx Group, Inc. (Nasdaq: MDXG) today announced a landmark year of financial performance for 2025, posting record revenue and profitability driven by the robust adoption of its innovative wound care and surgical products. However, the celebratory tone was tempered by a cautious outlook for 2026, as the company prepares to navigate a seismic shift in Medicare reimbursement policy that is set to reshape the advanced wound care market.

In a dual-pronged announcement reflecting both current strength and future challenges, the healing solutions pioneer revealed a staggering 27% year-over-year net sales growth for the fourth quarter of 2025, reaching $118 million. For the full year, sales climbed 20% to $419 million. This performance culminated in a fourth-quarter GAAP net income of $15 million and a strong cash position. Underscoring its confidence in its long-term strategy, the company also unveiled a new $100 million share repurchase authorization.

A Banner Year Fueled by Innovation

The impressive 2025 results were not confined to a single segment. MiMedx reported exceptional commercial execution across its portfolio, with both its Wound and Surgical divisions posting strong double-digit growth. The Wound segment grew 28% in the fourth quarter, while the Surgical segment expanded by 25%, marking its sixth consecutive quarter of sequential sales growth.

Company leadership attributed this momentum directly to the successful launch and market penetration of new products. In wound care, the introduction of EPIXPRESS® and the contribution from EMERGE™ were highlighted as key growth drivers. For the full year, these products, along with CELERA™, more than compensated for pricing pressures on older products. In the surgical space, sustained momentum for AMNIOFIX® and AMNIOEFFECT®, coupled with strong performance from the company's particulate portfolio including HELIOGEN®, fueled a 21% annual sales increase.

“MIMEDX delivered a record year of revenue and profitability in 2025, with fourth quarter results that included net sales growth of 27% year-over-year, net income of $15 million, an Adjusted EBITDA margin of 25% of net sales, and robust free cash flow,” said Joseph H. Capper, MIMEDX Chief Executive Officer. He praised the “exceptional commercial execution” and noted the company is “keenly focused on the untapped clinical opportunities for our current and future products.”

The company's financial health appeared solid across the board. Gross profit for 2025 rose to $346 million from $289 million in the prior year. Its cash and cash equivalents swelled to $166 million by year-end, a significant increase from $104 million at the end of 2024, providing substantial flexibility for strategic initiatives.

Navigating the Reimbursement Revolution

Despite the record-breaking performance, MiMedx's 2026 forecast signals a period of significant adjustment. The company projects net sales in the range of $340 to $360 million, a notable decrease from the $419 million achieved in 2025. The primary cause of this anticipated downturn is a sweeping overhaul of Medicare reimbursement for skin substitutes, which took effect on January 1, 2026.

The Centers for Medicare & Medicaid Services (CMS) has fundamentally altered how it pays for many advanced wound care products. Previously, many skin substitutes were reimbursed based on an Average Sales Price (ASP) methodology. The new policy reclassifies a substantial portion of these products, including some within MiMedx's portfolio, as “incident-to supplies.” These will now be paid at a standardized flat rate of approximately $127 per square centimeter, regardless of their original cost.

This policy change is designed to curb what CMS identified as dramatic and unsustainable growth in Medicare Part B spending on these products, which had ballooned from around $252 million in 2019 to over $10 billion by 2024. The agency aims to reduce its spending by nearly 90%, or an estimated $19.6 billion, in 2026 alone by implementing this site-neutral payment model and demanding more rigorous documentation of medical necessity and clinical efficacy from providers.

While CMS recently withdrew a set of new, stricter Local Coverage Determinations (LCDs) that would have further tightened usage criteria, the fundamental payment policy change remains firmly in place. This new financial reality forces a difficult calculus on both manufacturers and healthcare providers, creating intense pressure to demonstrate cost-effectiveness.

Mr. Capper acknowledged these impending headwinds directly. “The short-term disruptions caused by Medicare reimbursement changes in the Wound market will likely have an impact on our 2026 revenue,” he stated. However, he expressed confidence that once the market adapts, MiMedx is positioned to thrive. “Once demand patterns normalize, we expect to gain significant volume over time.”

A Confident Bet on Long-Term Strategy

In the face of this market uncertainty, MiMedx’s Board of Directors authorized a substantial $100 million share repurchase program. This move is a powerful signal of management's belief in the company's intrinsic value and its ability to weather the storm. The program gives the company the flexibility to buy back its common stock over the next two years, a decision that reflects a balanced approach to capital allocation while maintaining focus on strategic priorities.

The company's strategy for navigating 2026 relies on the diversification of its revenue streams. Management is banking on continued strength in areas unaffected by the Medicare wound care changes to provide a financial cushion. “We believe the clear momentum we have across the rest of our business — Surgical, international and Wound commercial pay — will provide continued profitability and cash flow,” Capper concluded, emphasizing the goal is to “maintain our leadership position over both the short- and long-term.”

This strategy is underpinned by the company’s long-term vision. Beyond the immediate turbulence of 2026, MiMedx is holding to its goal of achieving annual net sales growth in the low double-digits with an Adjusted EBITDA margin above 20%. The focus remains on leveraging its pipeline of “best-in-class portfolio of evidence-based, differentiated products” to expand its footprint in various clinical settings and solidify its role as a leader in the global market for healing solutions.