10-Q: AngioDynamics Q2 2026: Revenue Up, Net Loss Narrows

AngioDynamics reports increased Q2 2026 net sales and improved gross margin, significantly reducing its net loss compared to the prior year.

Summary

• Net sales for the three months ended November 30, 2025, increased 9.0% to $79.4 million from $72.8 million in the prior year.
• Net sales for the six months ended November 30, 2025, increased 10.6% to $155.1 million from $140.3 million in the prior year.
• The Med Tech segment's net sales grew 13.0% for the three months and 19.1% for the six months, driven by Auryon, thrombus management, and NanoKnife products.
• The Med Device segment's net sales grew 6.0% for the three months and 4.2% for the six months, primarily from Core, Ports, and Venous products, partially offset by softness in Oncology.
• Gross margin improved to 56.4% for the three months (up 160 bps) and 55.8% for the six months (up 120 bps).
• Net loss for the three months ended November 30, 2025, decreased by $4.4 million to $6.4 million, from $10.7 million in the prior year.
• Net loss for the six months ended November 30, 2025, decreased by $6.3 million to $17.3 million, from $23.5 million in the prior year.
• Loss per share decreased to $0.15 for the three months and $0.42 for the six months, from $0.26 and $0.58, respectively.
• Cash and cash equivalents were $41.6 million as of November 30, 2025, a decrease from $55.9 million at May 31, 2025.
• Cash used in operating activities was $11.3 million for the six months ended November 30, 2025, an improvement from $15.8 million in the prior year period.

Sentiment

Score: 7

Explanation: The company demonstrated strong revenue growth and a significant reduction in net losses, indicating positive operational improvements. However, it continues to operate at a net loss and faces ongoing macroeconomic headwinds and product liability claims. The upcoming CEO transition introduces an element of uncertainty.

Positives

• Net sales increased by 9.0% to $79.4 million for the three months and 10.6% to $155.1 million for the six months ended November 30, 2025, compared to the prior year.
• Gross margin improved by 160 basis points to 56.4% for the three months and 120 basis points to 55.8% for the six months, indicating enhanced profitability.
• The Med Tech segment demonstrated strong growth, with net sales increasing 13.0% for the three months and 19.1% for the six months, driven by Auryon, thrombus management, and NanoKnife products.
• Net loss significantly decreased by $4.4 million for the three-month period and $6.3 million for the six-month period, showing progress towards profitability.
• Loss per share improved from $0.26 to $0.15 for the three months and from $0.58 to $0.42 for the six months.
• Cash used in operating activities decreased to $11.3 million for the six months ended November 30, 2025, from $15.8 million in the prior year period.
• The Federal Circuit affirmed the District Court's finding of patent invalidity in a C.R. Bard, Inc. litigation on December 15, 2025, in favor of AngioDynamics, resolving a long-standing legal matter.

Negatives

• The company continues to report a net loss of $6.4 million for the three months and $17.3 million for the six months ended November 30, 2025.
• Cash and cash equivalents decreased by $14.3 million to $41.6 million over the six-month period.
• Working capital was unfavorably impacted by a $7.5 million decrease in accounts payable, accrued liabilities, and other liabilities, along with increases in accounts receivable, inventory, and prepaid expenses.
• Tariffs negatively impacted gross margin by $1.3 million for the three months and $3.0 million for the six months.
• Inflation and other operations costs negatively impacted gross margin by $0.5 million for the three months and $0.9 million for the six months.
• Softness in the Oncology product lines partially offset growth in the Med Device segment.
• Research and development expenses increased by $1.3 million for the three months and $1.5 million for the six months, primarily due to project timing and clinical trial spend.
• Sales and marketing expenses increased by $1.1 million for the three months and $3.6 million for the six months, driven by compensation, consulting, and marketing activities.

Risks

• Ability to develop existing and new products.
• Technological advances and patents attained by competitors.
• Infringement of AngioDynamics' technology or assertions that AngioDynamics' technology infringes the technology of third parties.
• Ability to effectively compete against competitors that have substantially greater resources.
• Future actions by the FDA or other regulatory agencies.
• Domestic and foreign health care reforms and government regulations.
• Results of pending or future clinical trials.
• Overall economic conditions, including inflation, tariffs, labor shortages, and supply chain challenges (cost and availability of raw materials).
• Results of ongoing litigation, including approximately 268 product liability claims involving port products.
• Challenges with respect to third-party distributors or joint venture partners or collaborators.
• Effects of product recalls and product liability claims.
• Changes in key personnel, including the upcoming CEO retirement.
• Ability to execute on strategic initiatives.
• Effects of economic, credit, and capital market conditions.
• General market conditions and market acceptance of products.
• Foreign currency exchange rate fluctuations, particularly impacting sales and gross margin when the U.S. Dollar strengthens.
• Effects on pricing from group purchasing organizations and competition.
• Ability to obtain regulatory clearances or approval of its products.
• Ability to integrate acquired businesses.
• The company maintains a full valuation allowance on its U.S. deferred tax assets, indicating it has not yet attained a sustained level of profitability.

Future Outlook

The company expects its businesses to grow in both sales and profitability by expanding geographically, penetrating new markets, introducing new products, and increasing its international presence. It intends to continue investments in research and development activities and selective business development opportunities to provide growth. However, the current macroeconomic environment, including inflation, tariffs, labor shortages, and supply chain challenges, is expected to continue impacting the business.

Management Comments

• "Our execution strategy is built on innovative R&D, clinical and regulatory pathway expansion and customer centric sales performance."
• "We expect our businesses to grow in both sales and profitability by expanding geographically, penetrating new markets, introducing new products and increasing our presence internationally."
• "The current macroeconomic environment continues to impact our business and may continue to pose future risks."
• "Management continues to evaluate the Company's liquidity position, communicate with and monitor the actions of our customers and suppliers, and review our near-term financial performance."
• "We believe that our current cash balance, together with cash generated from operations and the Revolving Facility will provide sufficient liquidity to meet our anticipated needs for capital for at least the next 12 months."

Industry Context

AngioDynamics' financial performance is influenced by evolving market dynamics in the medical technology sector, including the emergence of value-based purchasing by healthcare providers, ongoing consolidation among healthcare providers, the increasing role of consumers in health care decision-making, and the impact of an aging population. The company's growth is also affected by broader industry trends such as competitor mergers for scale, changes in the regulatory environment for medical devices, and fluctuations in the global economy.

Management Changes

Corporate Governance

Legal Proceedings

• The company is defending approximately 268 product liability claims involving its port products, which are consolidated for pretrial proceedings in the United States District Court for the Southern District of California.
• A settlement agreement was entered into with Becton, Dickinson and Company (BD) on March 31, 2024, to resolve ongoing patent litigations. This involved a one-time lump sum payment of $7.0 million (partially paid) and six minimum annual payments of $2.5 million, with potential additional payments based on port product sales.
• On December 15, 2025, the Federal Circuit affirmed the District Court's finding of patent invalidity in the March 10, 2015 Bard litigation, in favor of AngioDynamics, meaning no additional contingent payments are due as a result of this specific affirmance, though annual payments to BD continue per the settlement.

Stakeholder Impact

• **Shareholders**: Potential positive impact from improved financial performance (reduced net loss, revenue growth), but ongoing net losses and macroeconomic risks remain. The upcoming CEO retirement introduces leadership uncertainty. The share repurchase program could benefit shareholders.
• **Employees**: The restructuring plan involves plant closures and termination benefits, impacting some employees. Share-based compensation plans continue to incentivize employees. The CEO retirement will lead to a leadership transition.
• **Customers**: Continued product development and expansion of treatment options aim to improve patient outcomes and quality of life. A backlog of $0.4 million primarily impacted sales of Core products.
• **Suppliers**: The company notes ongoing supply chain challenges and inflation, which continue to impact its business.
• **Creditors**: The company has a $25.0 million secured revolving credit facility, but no amounts were outstanding as of November 30, 2025, indicating a healthy debt position and liquidity.

Next Steps

• Complete restructuring activities associated with the modified plan by the end of fiscal year 2026.
• Conduct a comprehensive search for a new Chief Executive Officer, assisted by a leading executive search firm, to oversee the CEO transition process.
• Continue to assess the level of the valuation allowance required for deferred tax assets.
• Adopt ASU 2023-09 (Income Taxes) for the fiscal year 2026 Annual Report on Form 10-K.
• Adopt ASU 2025-05 (Financial Instruments-Credit Losses) for the fiscal year 2027.
• Adopt ASU 2024-03 (Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures) for the fiscal year 2028.
• Adopt ASU 2025-11 (Interim Reporting) for the fiscal year 2029.

Key Dates

Recommendation

While AngioDynamics demonstrated strong revenue growth and a significant reduction in net losses, indicating operational improvements, it continues to operate at a net loss. The macroeconomic environment, including inflation and tariffs, remains a headwind. The upcoming CEO transition introduces an element of uncertainty. The positive legal outcome regarding patent invalidity is favorable, but ongoing product liability claims present a risk. The company's liquidity appears sufficient for the next 12 months, but sustained profitability is yet to be achieved. Given the mixed signals of improving performance against persistent challenges and leadership change, a 'Hold' recommendation is appropriate for investors to observe the execution of strategic initiatives and the impact of the new CEO.

Keywords

Medical Technology, Med Tech, Med Device, AngioDynamics, ANGO, SEC Filing, 10-Q, Quarterly Report, Financial Results, Revenue Growth, Gross Margin, Net Loss, Auryon, NanoKnife, Thrombus Management, Vascular Access, Oncology, Peripheral Vascular Disease, Corporate Governance, Risk Factors, Litigation, Product Liability, Restructuring, CEO Retirement