Sanara MedTech's Surgical Pivot Delivers Q1 Profitability

FORT WORTH, TX – May 11, 2026 – Sanara MedTech Inc. (Nasdaq: SMTI) today announced impressive first-quarter financial results, showcasing a significant 19% increase in net revenue and a successful return to GAAP net profitability. The strong performance, detailed in the company's Q1 2026 report, serves as powerful validation for its recent strategic realignment to focus exclusively on the high-growth surgical market.

For the quarter ending March 31, 2026, the medical technology company posted net revenue of $27.8 million, a substantial jump from $23.4 million in the same period last year. More notably, Sanara reported net income from continuing operations of $0.4 million, or $0.04 per diluted share. This marks a significant turnaround from the first quarter of 2025, which saw a net loss of $0.6 million, or $0.07 per diluted share. The results exceeded expectations, particularly given that the first quarter is historically a slower sales period and was further hampered by a weather-related shipping disruption in January.

A Strategy of Surgical Precision

The impressive quarterly results represent the first full period since Sanara MedTech sharpened its corporate strategy, classifying its Tissue Health Plus (THP) segment as a discontinued operation in late 2025 to become a pure-play surgical company. The move was designed to concentrate resources and capital on its most promising and consistently growing business segment.

“The first quarter of 2026 is the first full quarter in which the Company was entirely focused on the surgical market, and the results reflected strong execution,” commented Seth Yon, President and Chief Executive Officer of Sanara, in the company's official press release. He highlighted the achievement of GAAP net profitability as “a reflection of the strength of our sharpened focus and enhanced financial model.”

The financial metrics underscore the success of this pivot. Gross profit climbed 20% to $25.9 million, with the gross margin ticking up to an impressive 93% of net revenue. Adjusted EBITDA, a non-GAAP measure of core profitability, surged by 58% to $4.3 million. This performance suggests that shedding the THP segment has not only removed a financial drag but has also allowed the core surgical business to operate more efficiently and profitably.

Product Performance and Market Dynamics

Driving the top-line growth was the company's soft tissue repair product line, which saw sales increase by 21% to $24.9 million. This segment, featuring key products like CellerateRX® Surgical Powder and BIASURGE® Advanced Surgical Solution, is capitalizing on a favorable market environment. The global surgical wound care market is on a growth trajectory, projected to expand from $7.40 billion in 2025 to $13.90 billion by 2036, as hospitals increasingly adopt advanced solutions to reduce surgical site infections and improve patient outcomes.

Sanara's BIASURGE®, a no-rinse antimicrobial irrigation solution, recently gained significant market access through an Innovative Technology contract with Vizient, a major healthcare group purchasing organization. This agreement, which became effective at the start of 2026, provides thousands of healthcare facilities with pre-negotiated access to the product, likely accelerating its adoption.

CellerateRX®, a hydrolyzed collagen powder backed by over 30 published studies, continues to demonstrate its clinical and economic value. A recent health economic study validated its cost-effectiveness in managing wounds in high-risk spinal surgery patients, a key factor for hospital procurement decisions.

In contrast, the company's bone fusion product segment experienced a slight 2% decrease in sales, totaling $2.9 million. While the company did not elaborate on the decrease, the complex nature of the bone fusion market can be subject to fluctuating demand and intense competition. The robust growth in the larger soft tissue repair segment, however, more than compensated for this minor dip, demonstrating the strength of Sanara's diversified surgical portfolio.

Expanding the Operational Footprint

Behind the financial success is a concerted effort to expand the company's commercial reach. Sanara has been strengthening its direct sales force, growing the team to 43 representatives. This investment is paying dividends, with a reported meaningful growth in surgeon users compared to the prior year.

The company’s distribution network has also seen significant expansion. As of the quarter's end, Sanara's products were contracted or approved for sale in over 4,000 hospitals and ambulatory surgery centers (ASCs) across the United States. With products actively sold in over 1,400 of those facilities through a network of more than 450 distributors, the company has built a solid foundation for continued market penetration.

This expanding footprint gives the company confidence in its future performance. Sanara reaffirmed its full-year 2026 guidance, projecting net revenue to land between $116 million and $121 million, which would represent annual growth of 13% to 17%.

Investing in the Future Pipeline

While celebrating a successful quarter, Sanara MedTech is also looking ahead, signaling a renewed commitment to innovation. The company's capital allocation strategy now prioritizes strategic investments in research and development to build out its product pipeline. Although R&D expenses were slightly lower in the first quarter at $0.8 million, management expects annual R&D spending to normalize in the range of 5% to 7% of sales, indicating a planned ramp-up in investment throughout the year.

A tangible example of this forward-looking strategy is the planned U.S. market launch of OsStic BioAdhesive in the first quarter of 2027. Developed in partnership with Biomimetic Innovations, the product is being positioned as a first-of-its-kind bioadhesive for advanced fixation, representing a key new technology platform for the company. This focus on bringing novel products to market is central to Sanara's mission of improving clinical outcomes while reducing overall healthcare costs.