Thanks, everyone, for joining. My name is John Young. I am one of Canaccord's Senior Med Tech Analysts, and we are thrilled to host AngioDynamics. With us today is CEO Jim Clemmer and CFO Stephen Trowbridge. We saw a very strong close to fiscal 2026 when you guys reported earnings in mid-July, and the fiscal 2027 guide was ahead of expectations. Maybe we could just dive in with this fireside chat. Just setting the stage, Angio has been in the midst of a transformation, moving from a company that mostly made catheters, which is part of the legacy Med Device business, but now has embraced higher- growth areas of MedTech. FY 2026 was your seventh consecutive quarter of double-digit MedTech growth, with full-year MedTech up 18% and the segment now 47% of total company revenue.
As you step back, what inflected in 2026, and how durable is this mix shift towards the higher- growth, higher- margin MedTech business?
John, thank you for the invitation to the conference. AngioDynamics has been on a run where we have decided to change our company purposely to get out of markets that we thought were slow growth, small, we couldn't win in, and enter markets that were larger TAMs, faster growing, and science and technology made a difference. That our product could separate ourselves from others and win faster growth and high- growth markets. From there, Steve for the-
Yeah, I think you asked two questions. You said what inflected in 2026, and then how durable is the growth as it goes forward. Jim was describing our transformation, and we started this a handful of years ago, where we really put a marker, and we said we are going to be focusing on our MedTech products. It is that focus that is really paying off. I wouldn't say that any one specific thing inflected for us in 2026. What we saw was continued growth coming from all three of our MedTech platforms, particularly Auryon, mechanical thrombectomy, and then NanoKnife. We are really pleased with what we saw at NanoKnife for the full year.
When you put that growth together with the discipline that we have on the operating side, we were able to drop additional EBITDA to the bottom line, prove that the business model can generate positive cash going forward, and now have the whole P&L working together as we get a little bit more critical mass within MedTech. The question about how durable is the growth. If you look at our MedTech growth over the last five years, the CAGR is over 25% in MedTech, and so we were pleased with getting to about 19% last year with much larger numbers in MedTech than when we started. When we started this transformation, about 17% of our overall revenue base was coming from MedTech.
This fiscal year, which started on June 1st for us, we're going to cross over that threshold, and it's going to become the majority of our revenue base. That growth is going to be sustainable. We expect to continue to see double-digit growth within MedTech driving the overall results.
Great. Yeah. So maybe just double-clicking on that, you did grab the guide, the MedTech growth to 12%-15% growth for the initial guidance range that you gave. Maybe you could just walk us through how we should think of the contribution to that growth across all three of the platforms that encompass MedTech today.
Yeah. As I mentioned, we hit 19% last year, and I think the way to think about MedTech is in that mid-teens, 15%-20% is a good way to think about the growth. We guided 12%-15%. There's a number of moving pieces, right? We talked about the three different contributors within our MedTech business with the PAD business for Auryon, mechanical thrombectomy with AngioVac and AlphaVac, and then our urology-based NanoKnife oncology business. All three of those things are somewhat independent. I would say they're not necessarily synergistic to each other, but that's why we think we can see the growth going forward. So Auryon has been a great grower for us. When we bought that company five years ago, there was zero revenue in the U.S. We did about $68 million at the end of last year.
Was growing kind of high to high double digits, around 19%, 20%. We said think of Auryon as about a mid-teens grower, about 15%. It's been outpacing that a little bit the last couple of years, but I think that's a good way to think about it going forward. Mechanical thrombectomy, lower base, but last year AlphaVac grew 44%. We expect that to continue to actually accelerate, so we think as we continue to take procedures within PE, that could be probably our fastest-growing product. Then you had NanoKnife last year. We were really excited to see the growth both in terms of capital and disposables. We've guided people to not expect capital to be a smooth growth driver. That's a little bit lumpier working with hospital capital budgets. But it's a good harbinger of continued procedure growth and procedure pro growth.
Thinking about pro growth for NanoKnife in that double-digit range, greater than 15% is the right way to think about it.
Okay, great. Maybe just on margin guidance too, initial guidance for gross margin was set to 54%, 55%, and $13 million- $16 million of adjusted EBITDA, and I know you noted that tariff headwind should be similar-
Yeah.
To last year too. How should investors think about the pace of margin expansion, especially what the Costa Rica manufacturing's transition fully annualizes this year?
Yeah. There's a number of moving pieces within gross margin, as I'm sure everybody here is familiar with. Tariffs are one of them. Tariff environment has changed from the last time we guided when we came out, and that was just a few months ago. There's some impacts there. The overall gross margin story for AngioDynamics is to see gross margin expansion coming from this mix shift that we talked about. As a larger portion of our revenue base is being made up of that MedTech segment, that's going to drive margins. We break out our margin profile on a segment basis . MedTech is in the mid-60s. Our Med Device is in the mid-40s. As you continue to see that mix shift, that's going to drive gross margin accretion. We've seen that over the last five years as we've been on this trajectory.
Now some of that benefit, of course, has been a little bit muted by tariffs, the inflationary environment. I do expect tariffs, as we said when we came out with our guidance, to be roughly the same impact of what we saw last year. It was about a $5 million impact. We guided to around $4 million based upon the regime that was existing at the time. You may see a slight uptick there given the change from the 10% global tariffs to 15% now, maybe another $500,000 or so, but it's not meaningful. So it should be relatively consistent from a tariff impact year-over-year. Then, as you mentioned, we've got our manufacturing move, which is to get the higher labor content products that were being made in our Queensbury facility now coming out of our manufacturing partner down in Costa Rica.
It was a move we made a few years ago primarily to drive capacity. It was a tight labor market. We couldn't get enough people in our Queensbury manufacturing facility. So we're excited, and we're pleased with the performance that we're seeing now from that third party. We're just about done with that manufacturing transfer. Gross margin overall, it's a long way to talk about it, but there's a lot of moving pieces here. I do expect gross margin to kind of where we exited FY 2026 to be a good starting off point, and then you're going to want to see gross margin accretion from there with that mix shift.
I know tariff refunds have been a popular topic the past month or so. Have you guys gotten any refunds, or is that contemplated into the guidance?
Refunds are not contemplated in the guidance, right? When we talk about seeing a tariff impact similar to last year, I am just talking about the new tariff costs. I do expect that we are going to see refunds from what we paid last year. We will be transparent as those come through, and we have started to see some of that. I saw about $1 million so far come in in our Q1. It is hard to predict exactly when we are going to get that, but we will be transparent, and that from a reported basis, will make it a little noisy quarter to quarter in terms of both gross margin and that EBITDA contribution you were talking about. But we definitely will be transparent and let you know what we are seeing.
Great. Maybe we will just dive into the different parts of the MedTech business, starting first with Auryon. It is the 20th consecutive quarter of double-digit growth. It was up 14% in FQ4. What is driving that consistency, and where do you see the shift today in the OBL- to- hospital mix? Maybe also remind us what the ASP benefit is as you continue to shift that mix?
Yeah, we think Auryon is indicative of the whole AngioDynamics change and transformation to a growth company. We entered the Auryon market when we decided to divest smaller growth, slower markets we were in and to invest in the cardiovascular platform as we saw it. So we treat cardiovascular disease in the venous system, veins and arteries. PAD is what we treat with Auryon. We entered this market. We were the sixth player in the market, and we entered there with zero revenue. Today we did $68 million in the area, we just reported May 31. Zero to $68 million in five years. Taking share from much larger global companies because our product is that much better. It uses energy to break up calcium and plaque in the diseased artery, flushes it out, patient goes home safe. The caregiver has a great platform.
The hospital or the OBL is pleased with the results. Really, John, this is indicative of what we can do with all of the platforms we have focused on. We are proud of the growth here, but also we see it as an enabler for other things beyond that. We will see another year of growth here and other things beyond.
Yeah, I think the main driver for Auryon's durable growth has been the versatility of the product line. We talked about this a while ago, that what really attracted us when we were looking to buy this product five years ago was the fact that it was equally effective both above the knee and below the knee. It's the only product that you can see that is effective above the knee, below the knee, and in in-stent restenosis. We've seen that play out. So just about half of our procedures are above the knee since we launched it and about half below the knee. So there's still continued market share for us to take as we move forward. We're not just relegated to an area like just above the knee, and then you can kind of hit the wall pretty soon.
We think that there's going to be a continued market share shift in Auryon for the next handful of years.
And maybe just continue on that pathway too, AMBITION BTK still enrolling, and expanding internationally. What's the timeline to meaningful data for that trial? Again, maybe just how you frame the below-the-knee opportunity today relative to the above-the-knee base.
Yeah. In terms of AMBITION BTK, that's not a 2027 thing where I would expect to see data coming out of that. It was very important for us to start this trial. It's a comprehensive, scientifically rigorous trial that a lot of our physicians are applauding us for running into because it's a study that competitors hadn't been willing to run before. What we're doing is we're comparing Auryon with balloon angioplasty to balloon angioplasty alone, particularly below the knee. We feel very comfortable about the results that we're going to get. Now, there's two elements to this trial. There's an RCT as well as a registry. The RCT's going to be important for some of the scientific rigor, but I think there's going to be a lot of really good data coming out of that registry, more of the real-world activity. So we've expanded it internationally.
It's something that we're going to continue to focus on both in the domestic markets as well as the international markets. Not going to be an FY 2027 thing before you're going to get that data, but it's indicative of the data generation foundation that we know is important to continue to drive growth in atherectomy.
Yeah. What's really important for us is the fact that today we're taking share, as you know, in the space. It's a $500 million-$600 million U.S. market. We're taking share from everybody there. What AMBITION BTK will do, we believe expand that TAM to $600 million-$900 million. By the way, at Auryon, we're the only player that can actually do the market expansion to solve that need. To us, it's really important to keep, as you said earlier, durability, but the growth continuing for a long time to come. We think it's a great enabler for us, a radiologic TAM that we can serve really well.
You guys have spoken about the application of this technology for the coronaries. Maybe just any update there for investors of how you're thinking of that still?
Yeah, great.
Yeah. I love the question because it really illustrates the platform nature of the technology of Auryon. I am going to talk about that in a second, but I just want to reiterate that all three of the growth drivers that we have in MedTech have this similar platform element to them, where you can take the existing technology and, without a lot of product development, but more with data generation and indication expansion, move into larger total addressable markets. It gives us that opportunity to extend the growth profile kind of beyond that medium term. When you talk about Auryon and coronary, we are really excited about the opportunity of taking this unique laser mechanism of action, laser-based technology into the coronary. It is a comprehensive trial. It is probably going to be a PMA. We have talked about it as being about a four-year study or so.
It is an opportunity for us to talk to physicians that are in the hospital setting here in the U.S. as well as in the international markets. They are telling us that they have used it, they know it works. It is a good opportunity for us to take that technology, prove it out in a new total addressable market, which the coronary market for atherectomy is actually larger than the PAD market for atherectomy. We talked about the durability of Auryon growth in the short term. We are really excited about that. We are going to continue to drive that growth, and then you have got the opportunity to drop on this additional indication in the coronary to keep that growth momentum going.
Have you guys started discussions with the FDA to get an IDE or just any?
We are definitely in discussions, and we are doing all the work that you would expect, given the track record we have had of getting approvals.
Mmh.
Clearing through the underbrush and getting through some of the thorny issues. We'll give you some more information when we've got actual approvals, but we're pleased with the progress of conversations we're having with the FDA to get there.
Great. I think we'll move to mechanical thrombectomy, which was a really strong spot for the company this fiscal year, but it did decline sequentially by about $500,000 in fiscal Q4. What drove that deceleration? Is it timing, competition, execution? I think there's a lot of questions because we've seen Inari also struggle now post-acquisition by Stryker. Is this a problem with the actual landscape of mechanical thrombectomy? I think it'd be helpful to hear from you guys.
We think it's still a really good platform to be in, as those of you that may know. The TAM potential is about $3 billion. We agree with Inari on the number there, and it's only about 15% or so realized at this point. Each of the three of us are working to expand that TAM every day to catheter-based interventions like ours and theirs. We did a sales leadership change in February. As you know, in our fiscal year, in our fourth quarter, we did that on purpose as we get ready to expand the company going forward. We added 20 new reps to the sales division. We're so bullish on the opportunity we have in front of us and results we'll have the APEX-Return study. We believe in APEX-Return on the market early next calendar year or so. The market's great.
The PE market is vital. It's large, and we're taking share from the number one and number two players in the space. We're pleased with it. We always want to have a better quarter, but you saw we grew 44% last year, and I'll pick it.
And maybe we could just touch on the sales force. I know you added to the sales force. There was also some restructuring or changes in sales force management there. Maybe you could just tell us what changed, what drove that change. And then also, how do you expect those 20 new reps the productivity curve?
Yeah.
Were they experienced reps from Inari or other places that quickly could hit their stride, or is this the usual six to nine months when you think of their productivity, essentially in MedTech?
Yeah. We were able to take the leading manager we had in our Auryon group, who had been hugely successful growing Auryon above market rates, and bring her in as the leader now for the main sales force. She's terrific. We believe in her, and what she's been able to do now is attract, when we have new openings, we're getting experienced people from the other companies you mentioned. We think it shrinks our time to efficiency because we've got folks who now understand the market, competitive dynamics, and have relationships with physicians. So what typically is a six- to nine-month window to efficiency that we measure, we're going to bring that in. I think we can bring an efficiency window by getting more experienced reps. Sales reps are simple people. They're pretty smart.
They go somewhere if they think they could have more fun selling the product and make more money. I think our product stands on its own and gives them kind of a beacon to be attracted to and join us.
You asked about what really drove that change. I think it's just the typical lifecycle management of a growth product and where you are, right? The leadership that we had before did a really good job kind of getting us from zero to where we ended up getting to. At times, it takes just a different skill set to then drive it beyond that. We're always looking at how do we maximize the opportunity in all of the products that we have. At any given point in your life cycle, it may just require a little bit of a different skill set.
There's a pretty rich pipeline for this platform technology as well. You mentioned APEX-Return, so it sounds like next year we could have that clearance for that product. The other one you have currently is PAVE, so that's the right heart program for infective endocarditis. Just any update on PAVE and when we could see an indication from that too?
Yeah, those are two very important trials for us. In and of themselves, those aren't the kind of trials that are going to be the platform expansion, the same way that we talked about taking Auryon into coronary. Getting the blood return, which is the APEX-Return, we think it's important to just get over the objection, right, as we're driving our PE cases. We think we got the best product on the market when it comes to PE and AlphaVac, and that product is designed to limit blood loss up front. That being said, the market's been conditioned to look for a blood return solution. We want to get over that objection. That's what APEX-Return is looking to do. With PAVE, that's really supportive of the foundation of AngioVac on the right side, and that's kind of where it's playing today.
A little bit more of a niche market than the PE, but it's important for us to continue to drive that foundation. We see that as the first step to get us into what is a platform TAM expansion opportunity, taking AngioVac potentially into the left-sided interventions. So there's a difference there that we're keeping our eye on. Happy with the progress we're seeing both in terms of APEX-Return and PAVE and how they help support foundationally the current uses of those technologies, and then with that eye towards the next platform expansion opportunities in mechanical thrombectomy.
Great. Then maybe we will turn to NanoKnife, which was the rock star really in the last quarter, 64% growth. Really riding that tailwind of all the work you have done in prostate data and reimbursement. When we look at the 47% growth in disposables in Q4, how much of that was procedure growth versus end-of-year stocking?
We track our procedure growth every quarter, and we do it every month internally. You have seen our cadence the last couple of quarters, John, for really great procedural growth. It is driving volume there. These are not the kind of products people put on the shelf because they are expensive.
They are not going to stock a lot on the shelves. We have had increased urologist interest in our product. More urologists are being trained by us to use this device to treat men with intermediate- risk prostate cancer. More men, we just got our label, as you know, 18 months ago. First time we could talk about it. There is about 150,000 men diagnosed annually just in the U.S. that need a device like this to be treated with intermediate-risk prostate cancer. The device is being well-received by the patients, the men, and you are seeing that uplift end of year, though a little bit of sales- rep conquest as they learn. There is real great growth in the procedures we measure.
Great. Then Palmetto, you received a pretty favorable LCD from that Medicare administrative contractor covering NanoKnife for prostate and liver, and that went effective July 5. Maybe just talk to us about what you have seen so far with that effective strategy, and how you are going to be going to the other MACs, and kind of continuing to just generate positive LCDs to cover this.
Yeah. As you mentioned, it went into effect July 5th, so I do not know that I have seen much since it went into effect. But the fact that we were able to get to that positive LCD, I think, is a very important illustration of the strategy that we have had with NanoKnife. We were able to run reimbursement work in parallel with the registration work that we were doing. It is just over two years ago that we got the specific indication for NanoKnife in prostate cancer. This January is when the CPT code became permanent.
We had a permanent CPT code go into effect. We always said, "Hey, we do not think that in and of itself is going to be a light switch to get us to up the growth curve." It is a necessary step. Reimbursement is really kind of the most important piece that we have now.
We want it to be predictable. We want it to go across the country. The news around Palmetto, I think, is just a testament to the team that we have, in that we were able to go in there, show them the data that we have, both in the U.S. and generated internationally. It is a significant amount of data for NanoKnife in treating prostate patients. We were able to bring in KOLs. We were able to create the playbook to get to that positive LCD for the intermediate-risk patients. You are right. It is going to be a playbook that we are going to use as we go across the country and start to see these dominoes fall. It is not mission accomplished. There is a lot of work left to do to kind of finish this patchwork quilt of going through reimbursement to get coverage everywhere.
But everything that we have seen since that code went into effect in January has been positive for us so far. We like the trajectory that we are on, love the growth that we are seeing, both in terms of capital as well as disposables. Capital will be lumpy. We have always said, "Do not expect that to be as smooth." But it is a good indication when you get new systems out there and people are buying it, that it is going to drive additional volume going forward.
The other recent news on the NanoKnife front was BPH. You guys announced the RELIEF study. So what should investors look for in 2027 in terms of the study enrollment, timing, any milestones we should think of for this year?
Yes. We talked about a pilot study in BPH, and that's the third example of this platform opportunity of taking the current technology and going into another large total addressable market. You talked about we had three really important news items around NanoKnife coming out. We talked about Palmetto being one. You hit on the BPH IDE. I just want to mention, too, that we also put out the two-year follow-up data from our PRESERVE study with the patients who were treated with NanoKnife for prostate cancer, showing zero additional recurrence within the intended ablation zone after two years. So, really good cancer control. What we're hearing from our physicians who are treating patients is, "Hey, we love what we're getting with NanoKnife. You're avoiding the quality- of- life side effects. We like what we're seeing with cancer control.
Oh, by the way, you're also treating their BPH." So what does that mean for a business model? We want to find that out. That's why we're going to run the pilot study. We're going to try to figure that out. I don't know that I would look again as something that's going to be a meaningful driver in 2027.
Mmh.
But it's another opportunity to take the current technology, do a study, expand the indication, and see, in that kind of medium- term beyond perspective, the opportunity to continue to drive sustained growth.
Got it. Jim, you announced your intention to retire. I know the company's been actively searching for a replacement, so maybe you could just share any updates on the CEO search.
Sure. I've been lucky to work in this industry for 35 years, almost 10 years here at AngioDynamics, so I will retire by the end of this calendar year. We're working with our board to make sure we do a really great, comprehensive search to find the right leader for our company going forward. I took the company so far. We're doing really well today, as you've seen. We're accomplishing the goals we set out. We're growing faster than the markets in the areas we're in. We're showing the world we can do this while investing our own capital back in the business. Now we're showing we can grow capital, grow EBITDA, kept in a cash- flow- positive manner this year. Our shareholders and win and grow in fast- growth markets. Hopefully, growth professionals will look to us.
I'm sure we're going to get a really great leader to be the next person to take us even higher.
Great, and then maybe just to close out the conversation, as we think of fiscal year 2027 for you guys, what should two or three things that investors should look for in terms of important milestones for AngioDynamics for this year?
Yeah. Continued execution, I think, is number one. Look for continued growth coming from all three of our growth drivers within the MedTech business, probably driven by AlphaVac from a percentage perspective. Watch us continue to balance what Jim said about investing for growth in the top line, continuing to invest in R&D, to continuing to add sales resources as we feel appropriate. Then balancing dropping some additional profit to the bottom line. If you look over the last couple of years, we've been really pleased with the EBITDA generation trajectory that we're on. I expect that to continue, and you see some growth in EBITDA. Then doing it while we're generating positive cash flow, currently sitting here with a balance sheet with zero debt and in a very dynamic market, chewing through things like tariffs that keep changing for us.
Great. Thanks so much, Jim and Steve, for being here today. Appreciate it.
Appreciate it, John. Thank you.