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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2025

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 001-38891

TransMedics Group, Inc.

(Exact name of registrant as specified in its charter)

     Massachusetts

     83-2181531

     (State or other jurisdiction of
incorporation or organization)

     (I.R.S. Employer
Identification Number)

     200 Minuteman Road
Andover, Massachusetts

     01810

     (Address of principal executive offices)

     (Zip code)

(978) 552-0900

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, No Par Value	TMDX	The Nasdaq Global Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of July 25, 2025, the registrant had 34,090,356 shares of common stock, no par value per share, outstanding.

FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains forward-looking statements, which reflect our current views with respect to, among other things, our operations and financial performance. All statements other than statements of historical facts contained in this Quarterly Report on Form 10-Q, including statements regarding our future results of operations and financial position, business strategy and plans and our objectives for future operations, are forward-looking statements. The words “believe,” “may,” “will,” “estimate,” “continue,” “anticipate,” “intend,” “expect,” “should,” “could,” “target,” “predict,” “seek” and similar expressions are intended to identify forward-looking statements. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our financial condition, results of operations, business strategy, short- and long-term business operations and objectives, and financial needs. These forward-looking statements are subject to a number of risks, uncertainties and assumptions, including those described or referenced in the section titled “Risk Factors,” which could cause actual results to differ materially. Moreover, we operate in a very competitive and rapidly changing environment and new risks emerge from time to time. It is not possible for our management to predict all risks, nor can we assess the impact of all factors or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in, or implied by, any forward-looking statements we may make. In light of these risks, uncertainties and assumptions, the forward-looking events and circumstances discussed in this Quarterly Report on Form 10-Q may not occur and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements.

The forward-looking statements included in this Quarterly Report on Form 10-Q are made only as of the date of this report and should not be relied upon as predictions of future events. Factors or events that could cause our actual results to differ may emerge from time to time, and we are not able to predict all of them. We undertake no obligation to update any forward-looking statement, whether as a result of new information, future developments, or otherwise, except as may be required by applicable law.

Some of the key factors that could cause actual results to differ include:

•

the fluctuation of our financial results from quarter to quarter;

•

our ability to attract, train and retain key personnel;

•

our existing and any future indebtedness, including our ability to comply with affirmative and negative covenants under our credit agreements to which we will remain subject until maturity;

•

our ability to sustain profitability;

•

our need to raise additional funding and our ability to obtain it on favorable terms, or at all;

•

our ability to use net operating losses and research and development credit carryforwards;

•

that we have identified a material weakness in our internal control over financial reporting, and that we may identify additional material weaknesses in the future;

•

our dependence on the success of the Organ Care System, or OCSTM;

•

our ability to expand access to the OCS through our National OCS Program, or NOPTM;

•

our ability to improve the OCS platform, including by developing the next generation of the OCS products or expanding into new indications;

•

our ability to scale our manufacturing and sterilization capabilities to meet increasing demand for our products;

•

the rate and degree of market acceptance of the OCS;

•

our ability to educate patients, surgeons, transplant centers and private and public payors on the benefits offered by the OCS;

•

our dependence on a limited number of customers for a significant portion of our revenue;

•

our ability to maintain regulatory approvals or clearances for our OCS products in the United States, the European Union and other select jurisdictions worldwide;

•

our ability to adequately respond to the Food and Drug Administration, or FDA, or other competent authorities, follow-up inquiries in a timely manner;

•

the impact of healthcare policy changes, including recently enacted or potential future legislation reforming the U.S. healthcare system or the FDA;

•

the performance of our third-party suppliers and manufacturers;

•

our use of third parties to transport donor organs and medical personnel for our NOP and our ability to maintain and grow our transplant logistics capabilities to support our NOP to reduce dependence on third party transportation, including by means of attracting, training and retaining pilots, and the acquisition, maintenance or replacement of fixed-wing aircraft for our aviation transportation services or other acquisitions, joint ventures or strategic investments;

•

our ability to maintain Federal Aviation Administration, or FAA, or other regulatory licenses or approvals for our aircraft transportation services;

•

price increases of the components of our products and maintenance, parts and fuel for our aircraft;

•

the timing or results of post-approval studies and any clinical trials for the OCS;

•

our manufacturing, sales, marketing and clinical support capabilities and strategy;

•

attacks against our information technology infrastructure;

•

the economic, political and other risks associated with our foreign operations;

•

our ability to protect, defend, maintain and enforce our intellectual property rights relating to the OCS and avoid allegations that our products or services infringe, misappropriate or otherwise violate the intellectual property rights of third parties;

•

the pricing of the OCS, as well as the reimbursement coverage for the OCS in the United States and internationally;

•

regulatory developments in the United States, European Union and other jurisdictions;

•

the extent and success of competing products or procedures that are or may become available;

•

our ability to service our 1.50% convertible senior notes, due 2028, or the Notes;

•

the impact of any product recalls or improper use of our products; and

•

our estimates regarding revenue, expenses and needs for additional financing.

TransMedics Group, Inc.

Table of Contents


		Page
	PART I—FINANCIAL INFORMATION

Item 1.	Financial Statements (Unaudited)	1
	Condensed Consolidated Balance Sheets	1
	Condensed Consolidated Statements of Operations	2
	Condensed Consolidated Statements of Comprehensive Income	3
	Condensed Consolidated Statements of Stockholders’ Equity	4
	Condensed Consolidated Statements of Cash Flows	5
	Notes to Unaudited Condensed Consolidated Financial Statements	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	19
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	32
Item 4.	Controls and Procedures	32

	PART II—OTHER INFORMATION

Item 1.	Legal Proceedings	34
Item 1A.	Risk Factors	34
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	34
Item 5.	Other Information	34
Item 6.	Exhibits	35
Signatures		36

iii

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements (Unaudited)

TRANSMEDICS GROUP, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except share amounts)

(Unaudited)


	June 30,			December 31,
	2025			2024
Assets
Current assets:
Cash	$	400,575		$	336,650
Accounts receivable		104,851			97,722
Inventory		38,868			46,554
Prepaid expenses and other current assets		13,835			16,290
Total current assets		558,129			497,216
Property, plant and equipment, net		312,255			285,970
Operating lease right-of-use assets		5,818			6,481
Restricted cash		500			500
Goodwill		11,549			11,549
Acquired intangible assets, net		2,050			2,152
Other non-current assets		221			208
Total assets	$	890,522		$	804,076
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable	$	9,539		$	10,292
Accrued expenses and other current liabilities		42,490			45,152
Deferred revenue		1,570			1,742
Operating lease liabilities		3,021			2,727
Total current liabilities		56,620			59,913
Convertible senior notes, net		451,364			449,939
Long-term debt, net		59,525			59,372
Operating lease liabilities, net of current portion		4,912			6,249
Total liabilities		572,421			575,473
Commitments and contingencies (Note 10)
Stockholders' equity:
Preferred stock, no par value; 25,000,000 shares authorized; no shares issued or outstanding		—			—
Common stock, no par value; 150,000,000 shares authorized; 34,039,710 shares and 33,617,972 shares issued and outstanding as of June 30, 2025 and December 31, 2024, respectively		725,655			697,208
Accumulated other comprehensive income (loss)		98			(364	)
Accumulated deficit		(407,652	)		(468,241	)
Total stockholders' equity		318,101			228,603
Total liabilities and stockholders' equity	$	890,522		$	804,076

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

TRANSMEDICS GROUP, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except share and per share amounts)

(Unaudited)


	Three Months Ended June 30,						Six Months Ended June 30,
	2025			2024			2025			2024
Revenue:
Net product revenue	$	96,100		$	71,732		$	184,334		$	133,057
Service revenue		61,270			42,573			116,573			78,098
Total revenue		157,370			114,305			300,907			211,155
Cost of revenue:
Cost of net product revenue		19,421			14,470			35,733			28,554
Cost of service revenue		41,360			30,574			80,357			53,378
Total cost of revenue		60,781			45,044			116,090			81,932
Gross profit		96,589			69,261			184,817			129,223
Operating expenses:
Research, development and clinical trials		15,934			13,858			33,094			25,238
Selling, general and administrative		44,088			42,895			87,713			79,056
Total operating expenses		60,022			56,753			120,807			104,294
Income from operations		36,567			12,508			64,010			24,929
Other income (expense):
Interest expense		(3,476	)		(3,623	)		(6,937	)		(7,221	)
Interest income and other income (expense), net		3,091			3,268			5,785			6,838
Total other expense, net		(385	)		(355	)		(1,152	)		(383	)
Income before income taxes		36,182			12,153			62,858			24,546
(Provision) benefit for income taxes		(1,275	)		41			(2,269	)		(155	)
Net income	$	34,907		$	12,194		$	60,589		$	24,391
Net income per share:
Basic	$	1.03		$	0.37		$	1.79		$	0.74
Diluted	$	0.92		$	0.35		$	1.62		$	0.70
Weighted average common shares outstanding:
Basic		33,912,669			33,119,514			33,817,664			32,939,852
Diluted		40,558,953			35,288,308			40,238,501			34,983,603

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

TRANSMEDICS GROUP, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In thousands)

(Unaudited)


	Three Months Ended June 30,					Six Months Ended June 30,
	2025		2024			2025		2024
Net income	$	34,907	$	12,194		$	60,589	$	24,391
Other comprehensive income (loss):
Foreign currency translation adjustment		425		(55	)		462		(38	)
Total other comprehensive income (loss)		425		(55	)		462		(38	)
Comprehensive income	$	35,332	$	12,139		$	61,051	$	24,353

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

TRANSMEDICS GROUP, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(In thousands, except share amounts)

(Unaudited)


						Accumulated
						Other
						Comprehen-						Total
	Common Stock					sive Income			Accumulated			Stockholders'
	Shares			Amount		(Loss)			Deficit			Equity
Balances at December 31, 2024		33,617,972		$	697,208	$	(364	)	$	(468,241	)	$	228,603
Issuance of common stock upon the exercise of common stock options		77,101			1,742		—			—			1,742
Issuance of common stock in connection with employee stock purchase plan		24,268			1,286		—			—			1,286
Restricted common stock forfeitures		(2,880	)		—		—			—			—
Vesting of restricted stock units		111,419			—		—			—			—
Stock-based compensation expense		—			8,958		—			—			8,958
Foreign currency translation adjustment		—			—		37			—			37
Net income		—			—		—			25,682			25,682
Balances at March 31, 2025		33,827,880			709,194		(327	)		(442,559	)		266,308
Issuance of common stock upon the exercise of common stock options		192,937			7,089		—			—			7,089
Vesting of restricted stock units		18,893			—		—			—			—
Stock-based compensation expense		—			9,372		—			—			9,372
Foreign currency translation adjustment		—			—		425			—			425
Net income		—			—		—			34,907			34,907
Balances at June 30, 2025		34,039,710		$	725,655	$	98		$	(407,652	)	$	318,101


					Accumulated
					Other						Total
	Common Stock				Comprehen-			Accumulated			Stockholders'
	Shares		Amount		sive Loss			Deficit			Equity
Balances at December 31, 2023		32,670,803	$	641,106	$	(199	)	$	(503,705	)	$	137,202
Issuance of common stock upon the exercise of common stock options		113,023		2,547		—			—			2,547
Issuance of common stock in connection with employee stock purchase plan		9,506		638		—			—			638
Vesting of restricted stock units		58,044		—		—			—			—
Stock-based compensation expense		—		6,870		—			—			6,870
Foreign currency translation adjustment		—		—		17			—			17
Net income		—		—		—			12,197			12,197
Balances at March 31, 2024		32,851,376		651,161		(182	)		(491,508	)		159,471
Issuance of common stock upon the exercise of common stock options		433,398		10,641		—			—			10,641
Vesting of restricted stock units		17,772		—		—			—			—
Issuance of common stock in connection with exercise of warrants		11,735		—		—			—			—
Stock-based compensation expense		—		7,643		—			—			7,643
Foreign currency translation adjustment		—		—		(55	)		—			(55	)
Net income		—		—		—			12,194			12,194
Balances at June 30, 2024		33,314,281	$	669,445	$	(237	)	$	(479,314	)	$	189,894

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

TRANSMEDICS GROUP, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)


	Six Months Ended June 30,
	2025			2024
Cash flows from operating activities:
Net income	$	60,589		$	24,391
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization expense		12,868			8,901
Stock-based compensation expense		18,330			14,513
Non-cash interest expense and end of term accretion expense		1,578			1,547
Non-cash lease expense		997			650
Unrealized foreign currency transaction (gains) losses		(1,473	)		200
Loss on disposal of fixed assets		80			—
Changes in operating assets and liabilities
Accounts receivable		(6,616	)		(17,650	)
Inventory		5,717			(7,932	)
Prepaid expenses and other current assets		1,081			(3,217	)
Other non-current assets		(4	)		(24	)
Accounts payable		(410	)		1,778
Accrued expenses and other current liabilities		(2,413	)		630
Deferred revenue		(192	)		(504	)
Operating lease liabilities		(1,378	)		(1,000	)
Net cash provided by operating activities		88,754			22,283
Cash flows from investing activities:
Purchases of property, plant and equipment		(36,113	)		(67,935	)
Net cash used in investing activities		(36,113	)		(67,935	)
Cash flows from financing activities:
Proceeds from issuance of common stock upon exercise of stock options		8,831			13,188
Proceeds from issuance of common stock in connection with employee stock purchase plan		1,286			638
Net cash provided by financing activities		10,117			13,826
Effect of exchange rate changes on cash and restricted cash		1,167			(235	)
Net increase (decrease) in cash and restricted cash		63,925			(32,061	)
Cash and restricted cash, beginning of period		337,150			395,312
Cash and restricted cash, end of period	$	401,075		$	363,251
Supplemental disclosure of non-cash activities:
Transfers of inventory to property, plant and equipment	$	2,251		$	3,381
Purchases of property, plant and equipment included in accounts payable and accrued expenses	$	1,240		$	1,540
Operating lease liabilities arising from obtaining right-of-use assets	$	324		$	—
Reconciliation of cash and restricted cash:
Cash	$	400,575		$	362,751
Restricted cash		500			500
Total cash and restricted cash shown in the statement of cash flows	$	401,075		$	363,251

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

TRANSMEDICS GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

1. Nature of the Business and Basis of Presentation

TransMedics Group, Inc. (“TransMedics Group” and, together with its consolidated subsidiaries, the “Company”) was incorporated in the Commonwealth of Massachusetts in October 2018. TransMedics, Inc. (“TransMedics”), an operating company and wholly owned subsidiary of TransMedics Group, was incorporated in the State of Delaware in August 1998. The Company is a medical technology company transforming organ transplant therapy for end-stage organ failure patients across multiple disease states. The Company developed the Organ Care System (“OCS”) to replace a decades-old standard of care. The OCS represents a paradigm shift that transforms organ preservation for transplantation from a static state to a dynamic environment that enables new capabilities, including organ optimization and assessment. The Company’s OCS technology replicates many aspects of the organ’s natural living and functioning environment outside of the human body. The Company also developed its National OCS Program (“NOP”), an innovative turnkey solution to provide outsourced organ procurement, OCS perfusion management and transplant logistics services, to provide transplant programs in the United States with a more efficient process to procure donor organs with the OCS. The Company's logistics services include aviation transportation, ground transportation and other coordination activity.

The accompanying condensed consolidated financial statements have been prepared on the basis of continuity of operations, realization of assets and the satisfaction of liabilities and commitments in the ordinary course of business. The Company believes that its existing cash of $400.6 million as of June 30, 2025 will be sufficient to fund its operations, capital expenditures, and debt service payments for at least the next 12 months following the filing of this Quarterly Report on Form 10-Q. If the Company needs to seek additional funding through equity financings, debt financings or strategic alliances, the Company may not be able to obtain financing on acceptable terms, or at all, and the terms of any financing may adversely affect the holdings or the rights of the Company’s shareholders. If the Company is unable to obtain funding when needed, the Company will be required to delay, reduce or eliminate some or all of its research and development programs, product expansion or commercialization efforts, or the Company may be unable to continue operations.

The Company is subject to risks and uncertainties common to companies in the medical device industry and of similar size, including, but not limited to, development by competitors of new technological innovations, dependence on key personnel, protection of proprietary technology, compliance with government regulations, uncertainty of market acceptance of products, and the need to obtain additional financing to fund operations. Products currently under development will require additional research and development efforts, including additional clinical testing and regulatory approval, prior to commercialization. These efforts require additional capital, adequate personnel, infrastructure and extensive compliance-reporting capabilities. The Company’s research and development may not be successfully completed, adequate protection for the Company’s technology may not be obtained, the Company may not obtain necessary government regulatory approval on its expected timeline, or at all, and approved products may not prove commercially viable. The Company operates in an environment of rapid change in technology and competition.

The Company’s condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”). Any reference in these notes to applicable guidance is meant to refer to the authoritative GAAP as found in the Accounting Standards Codification (“ASC”) and Accounting Standards Update (“ASU”) of the Financial Accounting Standards Board (“FASB”). The accompanying condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation.

2. Summary of Significant Accounting Policies

Unaudited Interim Financial Information

The accompanying unaudited interim financial statements and related notes have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) for interim financial statements. Certain information and footnote disclosures normally included in the financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. These condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and the notes thereto for the year ended December 31, 2024 included in the Company’s Annual Report on Form 10-K filed with the SEC. In the opinion of management, all adjustments, consisting only of normal recurring adjustments necessary for a fair statement of the Company’s financial position as of June 30, 2025 and results of operations for the three and six months ended June 30, 2025 and 2024 and cash flows for the six months ended June 30, 2025 and 2024, have been made. The Company’s results of operations for the three and six months ended June 30, 2025 are not necessarily indicative of the results of operations that may be expected for the year ending December 31, 2025.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the reporting periods. Significant estimates and assumptions reflected in these unaudited condensed consolidated financial statements include, but are not limited to, revenue recognition, the valuation of inventory, the valuation of assets acquired and liabilities assumed in business combinations, including acquired intangible assets and the resulting goodwill, the valuation of stock-based awards, and income taxes. The Company bases its estimates on historical experience, known trends and other market-specific or other relevant factors that it believes to be reasonable under the circumstances. On an ongoing basis, management evaluates its estimates as there are changes in circumstances, facts and experience. Changes in estimates are recorded in the period in which they become known. As of the date of issuance of these unaudited condensed consolidated financial statements, the Company is not aware of any specific event or circumstance that would require the Company to update estimates, judgments or revise the carrying value of any assets or liabilities. Actual results may differ from those estimates or assumptions.

Risk of Concentrations of Credit, Significant Customers and Significant Suppliers

Financial instruments that potentially expose the Company to concentrations of credit risk consist primarily of cash and accounts receivable. The Company does not believe that it is subject to unusual credit risk beyond the normal credit risk associated with commercial banking relationships. As of June 30, 2025 and December 31, 2024, the Company had no allowance for credit losses. Significant customers are those that accounted for 10% or more of the Company’s revenue or accounts receivable. For the three and six months ended June 30, 2025 and 2024, no customer accounted for more than 10% of revenue. As of June 30, 2025 and December 31, 2024, no customer accounted for more than 10% of accounts receivable.

Certain of the components and subassemblies included in the Company’s products are obtained from a sole source, a single source or a limited group of suppliers, as are sterilization services. Although the Company seeks to reduce dependence on those limited sources of suppliers, manufacturers and service providers, the partial or complete loss of certain of these sources could have a material adverse effect on the Company’s operating results, financial condition and cash flows and damage its customer relationships.

Fair Value Measurements

Certain assets and liabilities are carried at fair value under GAAP. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. Financial assets and liabilities carried at fair value are to be classified and disclosed in one of the following three levels of the fair value hierarchy, of which the first two are considered observable and the last is considered unobservable:

•

Level 1—Quoted prices in active markets for identical assets or liabilities.

•

Level 2—Observable inputs (other than Level 1 quoted prices), such as quoted prices in active markets for similar assets or liabilities, quoted prices in markets that are not active for identical or similar assets or liabilities, or other inputs that are observable or can be corroborated by observable market data.

•

Level 3—Unobservable inputs that are supported by little or no market activity and that are significant to determining the fair value of the assets or liabilities, including pricing models, discounted cash flow methodologies and similar techniques.

The carrying values of the Company’s accounts receivable, accounts payable and accrued expenses approximate their fair values due to the short-term nature of these assets and liabilities. The carrying value of the Company’s long-term debt approximates its fair value (a level 2 measurement) at each balance sheet date due to its variable interest rate, which approximates a market interest rate. The Company's 1.50% convertible senior notes due 2028 (the “Notes”) are carried at the face value less unamortized debt discount and issuance costs on the accompanying condensed consolidated balance sheets, and the fair value of the Notes is presented at each reporting period for disclosure purposes only (see Note 7).

Spare Parts Inventory

Spare parts are used in aviation operations and are generally not for sale. Spare parts inventory is comprised of repairable and expendable spare aircraft parts, which are valued at the lower of cost or net realizable value, using the specific identification method. Storage costs and miscellaneous materials and supplies costs related to inventory or to support flight equipment are expensed as incurred. As of June 30, 2025 and December 31, 2024, spare parts inventory of $3.9 million and $4.0 million, respectively, is included within prepaid expenses and other current assets on the accompanying condensed consolidated balance sheets. The Company determines, based on the evidence that exists, whether or not it is appropriate to maintain a reserve for excess and obsolete spare parts inventory. The reserve is based on historical experience related to the disposal of inventory due to damage, physical deterioration, obsolescence, or other causes. As of June 30, 2025 and December 31, 2024, the Company had no allowance for spare parts excess and obsolescence.

Foreign Currency Translation

The functional currency of each of the Company’s foreign subsidiaries is the currency of the local country. Assets and liabilities of the Company’s foreign subsidiaries are translated into U.S. dollars using the period-end exchange rates, and income and expense items are translated into U.S. dollars using average exchange rates in effect during each period. The effects of these foreign currency translation adjustments are included in accumulated other comprehensive income (loss), a separate component of stockholders’ equity.

The Company also incurs transaction gains and losses resulting from intercompany transactions as well as transactions with customers or vendors denominated in currencies other than the functional currency of the legal entity in which the transaction is recorded. Realized and unrealized foreign currency transaction gains (losses) are included in the condensed consolidated statements of operations as a component of other income (expense). Realized and unrealized gains totaled $0.6 million and $1.0 million for the three and six months ended June 30, 2025, respectively, and realized and unrealized losses totaled $0.2 million and $0.4 million for the three and six months ended June 30, 2024, respectively.

Recently Issued Accounting Pronouncements

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which requires public entities, on an annual basis, to provide disclosure of specific categories in their tax rate reconciliations, as well as disclosure of income taxes paid disaggregated by jurisdiction. ASU 2023-09 is effective for the Company for the full fiscal year ending December 31, 2025. The Company is currently assessing the impact of the adoption of this guidance.

In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40) to improve financial reporting by requiring that public business entities disclose additional information about specific expense categories in the notes to financial statements at interim and annual reporting periods. ASU 2024-03 is effective for annual periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027, with early adoption permitted. ASU 2023-09 allows for adoption using either a prospective or retrospective method. The Company is currently assessing the impact of the adoption of this guidance on its consolidated financial statements.

3. Inventory

Inventory consisted of the following (in thousands):


	June 30,		December 31,
	2025		2024
Raw materials	$	19,157	$	28,027
Work-in-process		3,880		3,274
Finished goods		15,831		15,253
	$	38,868	$	46,554

4. Property, Plant and Equipment, Net

Property, plant and equipment, net consisted of the following (in thousands):


	June 30,			December 31,
	2025			2024
Transplant aircraft	$	280,805		$	252,090
Transplant aircraft equipment		3,100			—
Flight school aircraft		3,717			3,717
OCS Consoles		21,698			19,193
Manufacturing equipment		11,218			10,496
Computer equipment and software		4,053			3,979
Internal-use software		7,320			—
Laboratory equipment		3,128			2,904
Office, trade show and training equipment		4,968			4,698
Leasehold improvements		23,531			22,949
Construction-in-progress		2,494			6,658
		366,032			326,684
Less: Accumulated depreciation and amortization		(53,777	)		(40,714	)
	$	312,255		$	285,970

The expected useful life of transplant aircraft equipment is 10 years and the expected useful life of internal-use software is five years. Substantially all of the Company's tangible property, plant and equipment are held in the United States.

During the three and six months ended June 30, 2025, total depreciation and amortization expense was $6.7 million and $12.8 million, respectively. During the three and six months ended June 30, 2024, total depreciation and amortization expense was $4.5 million and $8.8 million, respectively.

The Company capitalized costs associated with the development of internal-use software of $2.2 million and $4.0 million in the three and six months ended June 30, 2025, respectively, and $0.5 million in the three and six months ended June 30, 2024. The Company recorded amortization expense of $0.4 million during the three and six months ended June 30, 2025, related to internal-use software placed into service in the three months ended June 30, 2025. The net book value of internal-use software was $8.0 million and $4.4 million as of June 30, 2025 and December 31, 2024, respectively, of which $1.1 million and $4.4 million was included in construction-in-progress as of those respective dates.

5. Goodwill and Intangible Assets

The carrying amount of goodwill was $11.5 million as of June 30, 2025 and December 31, 2024, and related to the Company’s 2023 acquisition of Summit Aviation, Inc. and Northside Property Group, LLC (together "Summit"). Goodwill is not amortized, but instead is reviewed for impairment at least annually or more frequently when events and circumstances occur indicating that the recorded goodwill may be impaired. To date, the Company has had no impairments to goodwill.

Acquired intangible assets consisted of the following (in thousands):


			June 30, 2025
	Weighted Average Useful Life		Gross Amount		Accumulated Amortization		Carrying Value
	(in years)
Customer relationship		12	$	2,320	$	363	$	1,957
Other		12		110		17		93
			$	2,430	$	380	$	2,050


			December 31, 2024
	Weighted Average Useful Life		Gross Amount		Accumulated Amortization		Carrying Value
	(in years)
Customer relationship		12	$	2,320	$	265	$	2,055
Other		12		110		13		97
			$	2,430	$	278	$	2,152

Amortization expense is recorded within selling, general and administrative expense. Amortization expense was $0.1 million for each of the three and six months ended June 30, 2025 and 2024. Future amortization expense of the intangible assets as of June 30, 2025 is expected to be as follows (in thousands):


Year Ending December 31,
2025 (six months)	$	101
2026		203
2027		203
2028		203
2029		203
Thereafter		1,137
	$	2,050

6. Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities consisted of the following (in thousands):


	June 30,		December 31,
	2025		2024
Accrued payroll and related expenses	$	17,022	$	22,523
Accrued transportation costs		3,136		3,818
Accrued research, development and clinical trials expenses		5,058		4,179
Accrued third-party surgeon costs		3,050		2,546
Accrued professional fees		2,015		2,445
Accrued other		12,209		9,641
	$	42,490	$	45,152

7. Long-Term Debt and Financing Arrangements

Convertible Senior Notes

The Notes consisted of the following (in thousands):


	June 30,			December 31,
	2025			2024
Principal amount of convertible senior notes	$	459,996		$	459,996
Less: Current portion of convertible senior notes		—			—
Convertible senior notes, net of current portion		459,996			459,996
Debt discount, net of accretion		(8,632	)		(10,057	)
Convertible senior notes, net of discount and current portion	$	451,364		$	449,939

As of June 30, 2025, the estimated fair value of the Notes was $724.8 million. The fair value was determined based on the quoted price of the last trade of the Notes prior to the end of the reporting period in an inactive market, which is considered as Level 2 in the fair value hierarchy.

On May 11, 2023, the Company issued $460.0 million aggregate principal amount of the Notes, in a private placement to qualified institutional buyers pursuant to Rule 144A under the Securities Act, pursuant to an indenture dated May 11, 2023, by and between the Company and U.S. Bank Trust Company, National Association (the “Indenture”).

The initial conversion price of the Notes is approximately $94.00 per share of common stock, which represents a premium of approximately 32.5% over the closing price of the Company’s common stock on May 8, 2023. The Notes will mature on June 1, 2028, unless earlier repurchased, redeemed or converted. The Company used $52.1 million of the proceeds from the sale of the Notes to fund the cost of entering into capped call transactions, described below. The proceeds from the issuance of the Notes were approximately $393.3 million, net of capped call transaction costs of $52.1 million and initial purchaser discounts and other debt issuance costs totaling $14.6 million.

The Notes bear interest at a rate of 1.50% per year and interest is payable semiannually in arrears on June 1 and December 1 of each year. The initial conversion rate is 10.6388 shares of common stock per $1,000 principal amount of the Notes, which represents an initial conversion price of approximately $94.00 per share of common stock. The conversion rate and conversion price are subject to customary adjustments upon the occurrence of certain events as described in the Indenture.

Before March 1, 2028, noteholders have the right to convert their Notes only upon the occurrence of certain events, including certain corporate events, and during the five business days immediately after any ten consecutive trading days in which the trading price per $1,000 principal amount of Notes is less than ninety-eight percent (98%) of the as converted value. Additionally, the noteholder can convert their Notes during any calendar quarter (and only during such calendar quarter), commencing after the calendar quarter ending on September 30, 2023 but before March 1, 2028, provided the last reported sale price of the common stock for at least 20 trading days is greater than or equal to 130% of the conversion price during the 30 consecutive trading days ending on the last trading day of a calendar quarter. From and after March 1, 2028, noteholders may convert their Notes at any time at their election until the close of business on the second scheduled trading day immediately before the maturity date. The Company has the right to elect to settle conversions either in cash, shares or in a combination of cash and shares of its common stock.

Prior to June 8, 2026, the Notes will not be redeemable. On or after June 8, 2026, the Company may redeem for cash all or any portion of the Notes (subject to the partial redemption limitation set forth in the Indenture), at its option, if the last reported sale price of the Company’s common stock has been at least 130% of the conversion price then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period (including the last trading day of such period) ending on, and including, the trading day immediately preceding the date on which the Company provides notice of redemption. In addition, calling any Note for redemption will constitute a “Make-Whole Fundamental Change” (as defined in the Indenture) with respect to that Note, in which case the conversion rate applicable to the conversion of that Note will be increased in certain circumstances if it is converted after it is called for redemption.

During the three and six months ended June 30, 2025, the Company recognized $2.4 million and $4.9 million, respectively, in interest expense related to the 1.50% cash coupon of the Notes and amortization of debt issuance costs. During the three and six months ended June 30, 2024, the Company recognized $2.4 million and $4.8 million, respectively, in interest expense related to the 1.50% cash coupon of the Notes and amortization of debt issuance costs. During each of the three and six months ended June 30, 2025 and 2024, the effective interest rate on the outstanding Notes was approximately 2.1%.

A conditional conversion feature of the Notes was triggered on June 30, 2025, as the last reported sale price of the Company's common stock was greater than or equal to 130% of the conversion price of the Notes for at least 20 trading days during the period of 30 consecutive trading days ending on and including the last trading day of the quarter ended June 30, 2025, and the Notes therefore became convertible at the noteholders’ election in the calendar quarter ended September 30, 2025 (and only during this calendar quarter). If this condition or another conversion condition is met in the future, the Notes may again become convertible, otherwise the Notes will be convertible at the noteholders’ election from March 1, 2028 through the close of business on the second scheduled trading day immediately before the maturity date.

Capped Call Transactions

In connection with the offering of the Notes, the Company entered into privately negotiated capped call transactions (the “Capped Calls”) with certain financial institution counterparties (the “Option Counterparties”). The Capped Calls are generally intended to reduce or offset the potential dilution to the common stock upon any conversion of the Notes with such reduction or offset, as the case may be, subject to a cap based on the cap price. For accounting purposes, the Capped Calls are separate transactions, and not part of the terms of the Notes. The Capped Calls are recorded in stockholders’ equity and are not accounted for as derivatives. The cost of $52.1 million incurred to purchase the Capped Calls was recorded as a reduction to common stock on the accompanying condensed consolidated balance sheets.

Each of the Capped Calls has an initial strike price of approximately $94.00 per share, subject to certain adjustments, which corresponds to the initial conversion price of the Notes. The Capped Calls have an initial cap price of $141.88 per share, subject to certain adjustments. The Capped Calls cover, subject to anti-dilution adjustments, approximately 4,893,848 shares of the Company’s common stock, which is the same number of shares of the Company’s common stock initially underlying the Notes. The Capped Calls are subject to automatic exercise over a 40 trading day period commencing on April 3, 2028, subject to earlier termination under certain circumstances.

Long-term debt

Long-term debt consisted of the following (in thousands):


	June 30,			December 31,
	2025			2024
Principal amount of long-term debt	$	60,000		$	60,000
Less: Current portion of long-term debt		—			—
Long-term debt, net of current portion		60,000			60,000
Debt discount, net of accretion		(475	)		(628	)
Long-term debt, net of discount and current portion	$	59,525		$	59,372

In July 2022, the Company entered into a credit agreement with Canadian Imperial Bank of Commerce (“CIBC”), as amended by the First Amendment to Credit Agreement, dated as of May 8, 2023, by and among the Company and CIBC, the Second Amendment to Credit Agreement, dated as of June 23, 2023, by and among the Company and CIBC and the Third Amendment to Credit Agreement, dated as of November 9, 2023, by and among the Company and CIBC (as amended, the “CIBC Credit Agreement”), pursuant to which the Company borrowed $60.0 million.

Borrowings under the CIBC Credit Agreement bear interest at an annual rate equal to either, at the Company’s option, (i) the secured overnight financing rate for an interest period selected by the Company, subject to a minimum of 1.50%, plus 2.0% or (ii) 1.0% plus the higher of a) the prime rate subject to a minimum of 4.0% or b) the Federal Funds Effective Rate, plus 0.5%. The Company is obligated to repay the outstanding borrowings in equal monthly installments commencing in July 2026 until the maturity date in July 2027. At the Company’s option, the Company may prepay outstanding borrowings under the CIBC Credit Agreement, without a prepayment fee.

All obligations under the CIBC Credit Agreement are guaranteed by the Company and each of its material subsidiaries. All obligations of the Company and each guarantor are secured by substantially all of the Company’s and each guarantor’s assets, including their intellectual property, subject to certain exceptions. Under the CIBC Credit Agreement, the Company has agreed to customary representations and warranties, events of default and certain affirmative and negative covenants to which it will remain subject until maturity. The financial covenants include, among other covenants, (x) a requirement to maintain a minimum liquidity amount of the greater of either (i) the consolidated adjusted EBITDA loss (or gain), as defined, for the trailing four month period (only if EBITDA is negative) and (ii) $10.0 million, and (y) a requirement to maintain total net revenue of at least 75% of the level set forth in the total revenue plan presented to CIBC. The obligations under the CIBC Credit Agreement are subject to acceleration upon the occurrence of specified events of default, including payment default, change in control, bankruptcy, insolvency, certain defaults under other material debt, certain events with respect to governmental approvals (if such events could cause a material adverse change in the Company’s business), failure to comply with certain covenants and a material adverse change in the Company’s business, operations or financial condition. As of June 30, 2025, the Company was in compliance with all financial covenants of the CIBC Credit Agreement. During the continuance of an event of default, the interest rate per annum will be equal to the rate that would have otherwise been applicable at the time of the event of default plus 2.0%. If an event of default (other than certain events of bankruptcy or insolvency) occurs and is continuing, CIBC may declare all or any portion of the outstanding principal amount of the borrowings plus accrued and unpaid interest to be due and payable. Upon the occurrence of certain events of bankruptcy or insolvency, all of the outstanding principal amount of the borrowings plus accrued and unpaid interest will automatically become due and payable. In addition, the Company may be required to prepay outstanding borrowings, subject to certain exceptions, with portions of net cash proceeds of certain asset sales and certain casualty and condemnation events.

During the three and six months ended June 30, 2025, the Company recognized $1.0 million and $2.1 million, respectively, in interest expense related to the CIBC borrowings. During the three and six months ended June 30, 2024, the Company recognized $1.2 million and $2.4 million, respectively, in interest expense related to the CIBC borrowings. During each of the three and six months ended June 30, 2025, the weighted average effective interest rate on outstanding borrowings under the CIBC Credit Agreement was approximately 6.8%. During the three and six months ended June 30, 2024, the weighted average effective interest rate on outstanding borrowings under the CIBC Credit Agreement was approximately 7.9% and 7.8%, respectively. The stated interest rate applicable to borrowings under the CIBC Credit Agreement was 6.3% in June 2025.

8. Stock-Based Compensation

2019 Stock Incentive Plan

The 2019 Stock Incentive Plan (the “2019 Plan”) provides for the grant of incentive stock options, nonqualified stock options, stock appreciation rights, restricted stock, restricted stock units (“RSUs”), unrestricted stock, unrestricted stock units, and other stock-based awards to employees, directors, and consultants of the Company and its subsidiaries. The number of shares of common stock of TransMedics Group initially available for issuance under the 2019 Plan was 3,428,571 shares, plus the number of shares underlying awards under the previously outstanding 2014 Stock Incentive Plan (the “2014 Plan”), not to exceed 1,595,189 shares, that expire or are terminated, surrendered, or cancelled without the delivery of shares, are forfeited to or repurchased by TransMedics Group or otherwise become available again for grant. Since the effectiveness of the Company’s 2019 Plan in April 2019, no awards have been made or will be made under the 2014 Plan.

Shares withheld in payment of the exercise or purchase price of an award or in satisfaction of tax withholding requirements, and the shares covered by a stock appreciation right for which any portion is settled in stock, will reduce the number of shares available for issuance under the 2019 Plan. In addition, the number of shares available for issuance under the 2019 Plan (i) will not be increased by any shares delivered under the 2019 Plan that are subsequently repurchased using proceeds directly attributable to stock option exercises and (ii) will not be reduced by any awards that are settled in cash or that expire, become unexercisable, terminate or are forfeited to or repurchased by TransMedics Group without the issuance of stock under the 2019 Plan. On May 25, 2023, the shareholders of the Company approved the Amended and Restated TransMedics Group, Inc. 2019 Stock Incentive Plan (the “Amended Plan”) to among other things, (i) increase the number of shares of the Company’s common stock available for issuance thereunder by 1,000,000 shares, (ii) prohibit the payment of dividend or dividend equivalents on a current basis with respect to unvested awards, (iii) extend the expiration date of the Amended Plan until June 1, 2033 and (iv) increase the annual limits on non-employee director compensation. As of June 30, 2025, 427,182 shares of common stock were available for issuance under the Amended Plan.

2021 Inducement Plan

In August 2021, the Company’s board of directors approved the TransMedics Group, Inc. Inducement Plan (the “Inducement Plan”). Pursuant to the terms of the Inducement Plan, the Company may grant nonqualified stock options, stock appreciation rights, restricted stock, unrestricted stock, RSUs and performance awards to individuals who were not previously employees or directors of the Company or individuals returning to employment after a bona fide period of non-employment with the Company. A total of 1,000,000 shares of the Company’s common stock were initially available for issuance under the Inducement Plan. On November 2, 2023, the Company's Board of Directors approved an increase of 500,000 to shares available under the Inducement Plan. As of June 30, 2025, 440,515 shares of common stock remained available for issuance under the Inducement Plan.

2019 Employee Stock Purchase Plan

Pursuant to the Company’s 2019 Employee Stock Purchase Plan (the “2019 ESPP”), certain employees of the Company are eligible to purchase common stock of the Company at a reduced price during offering periods. The 2019 ESPP permits participants to purchase common stock using funds contributed through payroll deductions, subject to the limitations set forth in the Internal Revenue Code, at a purchase price of 85% of the lower of the closing price of the Company’s common stock on the first trading day of the offering period or the closing price on the applicable purchase date, which is the final trading day of the applicable offering period. A total of 371,142 shares of TransMedics Group common stock were initially reserved for issuance under the 2019 ESPP. During the six months ended June 30, 2025, 24,268 shares of common stock were issued under the 2019 ESPP and as of June 30, 2025, 208,988 shares of common stock remained available for issuance under the 2019 ESPP.

Stock Option Activity

During the six months ended June 30, 2025, the Company granted options under the 2019 Plan and the Inducement Plan with service-based vesting for the purchase of an aggregate of 296,672 shares of common stock with a weighted average grant-date fair value of $50.24 per share.

Restricted Stock Unit Activity

During the six months ended June 30, 2025, the Company granted 349,262 RSUs under the 2019 Plan and the Inducement Plan with service-based vesting conditions and a weighted average grant-date fair value of $78.46 per share.

Stock-Based Compensation

The Company recorded stock-based compensation expense in the following expense categories of its condensed consolidated statements of operations (in thousands):


	Three Months Ended June 30,				Six Months Ended June 30,
	2025		2024		2025		2024
Cost of revenue	$	360	$	376	$	660	$	740
Research, development and clinical trials expenses		1,189		1,123		2,505		2,001
Selling, general and administrative expenses		7,823		6,144		15,165		11,772
	$	9,372	$	7,643	$	18,330	$	14,513

As of June 30, 2025, total unrecognized compensation cost related to unvested share-based awards was $75.9 million, which is expected to be recognized over a weighted average period of 2.4 years.

9. Net Income (Loss) per Share

Basic net income (loss) per common share is computed by dividing the net income (loss) by the weighted average number of shares of common stock outstanding for the period. Diluted net income (loss) per common share is computed by dividing net income (loss) by the weighted average number of shares of common stock outstanding for the period, including potential dilutive common shares assuming the dilutive effect of outstanding stock awards, using the treasury stock method, and outstanding convertible notes, using the if-converted method.

A reconciliation of the numerators and the denominators of the basic and dilutive net income per common share computations are as follows (in thousands, except share and per share amounts):


	Three Months Ended June 30,				Six Months Ended June 30,
	2025		2024		2025		2024
Numerator:
Net income	$	34,907	$	12,194	$	60,589	$	24,391
Add: Interest expense, net of tax, attributable to assumed conversion of convertible senior notes		2,354		—		4,699		—
Net income, diluted	$	37,261	$	12,194	$	65,288	$	24,391

Denominator:
Weighted average basic common shares outstanding		33,912,669		33,119,514		33,817,664		32,939,852
Effect of dilutive securities:
Convertible senior notes		4,893,805		—		4,893,805		—
Options to purchase common stock		1,489,855		1,938,145		1,346,155		1,855,745
Restricted stock units		246,718		214,037		172,880		170,417
Warrants to purchase common stock		—		2,576		—		6,978
Restricted stock awards		626		5,497		315		6,341
Employee stock purchase plan		15,280		8,539		7,682		4,270
Weighted average dilutive common shares outstanding		40,558,953		35,288,308		40,238,501		34,983,603
Net income per share:
Basic	$	1.03	$	0.37	$	1.79	$	0.74
Diluted	$	0.92	$	0.35	$	1.62	$	0.70

The Company excluded the following potential common shares, presented based on weighted average shares outstanding, from the computation of diluted net income per share because including them would have had an anti-dilutive effect:


	Three Months Ended June 30,				Six Months Ended June 30,
	2025		2024		2025		2024
Convertible senior notes		—		4,893,848		—		4,893,848
Options to purchase common stock		609,891		360,228		754,178		468,916
Employee stock purchase plan		—		—		18,900		12,207
Restricted stock units		17,700		9,522		92,034		5,439
Restricted stock awards		—		—		2,053		—
		627,591		5,263,598		867,165		5,380,410

10. Commitments and Contingencies

Operating Leases

There have been no material changes to the Company’s leases during the six months ended June 30, 2025. For additional information, please read Note 12 Leases, to the consolidated financial statements in the Company’s Form 10-K for the year ended December 31, 2024.

401(k) Savings Plan

The Company has a defined-contribution savings plan under Section 401(k) of the Internal Revenue Code. This plan covers substantially all employees who meet minimum age and service requirements and allows participants to defer a portion of their compensation on a pre-tax basis. Company contributions to the plan may be made at the discretion of the board of directors. Effective January 1, 2023, the Company instituted an employer matching program for the plan pursuant to which the Company will match 100% of the first 3% of each participating employee’s eligible compensation contributed to the plan and 50% of up to an additional 2% each participating employee’s eligible compensation contributed to the plan. For the three and six months ended June 30, 2025, the Company recorded expense of $0.9 million and $2.0 million, respectively, related to these matching contributions. For the three and six months ended June 30, 2024, the Company recorded expense of $1.0 million and $1.6 million, respectively, related to these matching contributions.

Indemnification Agreements

In the ordinary course of business, the Company may provide indemnification of varying scope and terms to customers, vendors, lessors, business partners, and other parties with respect to certain matters including, but not limited to, losses arising out of breach of such agreements, negligence or willful misconduct, or from intellectual property infringement claims made by third parties. In addition, the Company has entered into indemnification agreements with members of its board of directors and executive officers that will require the Company, among other things, to indemnify them against certain liabilities that may arise by reason of their status or services as directors or officers.

The maximum potential amount of future payments the Company could be required to make under these indemnification agreements is, in many cases, unlimited. To date, the Company has not incurred any material costs as a result of such indemnifications. The Company is not currently aware of any indemnification claims and had not accrued any liabilities related to such obligations in its condensed consolidated financial statements as of June 30, 2025 and December 31, 2024.

Unconditional Purchase Commitment

In January 2021, the Company entered into an unconditional $9.5 million purchase commitment, in the ordinary course of business, for goods with specified annual minimum quantities to be purchased through December 2029. The contract is not cancellable without penalty. The remaining purchase commitment as of June 30, 2025 was $5.0 million.

Legal Proceedings

On February 14, 2025, a class action captioned Jewik v. TransMedics Group, Inc., et al., Case No. 1:25-cv-10385, was filed against the Company and certain of its current and former officers in the United States District Court for the District of Massachusetts. The complaint purports to assert claims pursuant to Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, as amended, and SEC Rule 10b-5 promulgated thereunder, on behalf of a putative class of investors who purchased or otherwise acquired the Company’s shares between February 28, 2023 and January 10, 2025 (the “Class Period”). Plaintiff seeks to recover unspecified damages allegedly caused by purported misstatements and omissions contained in certain risk disclosures set forth in the Company’s 2022 and 2023 Annual Reports. The complaint alleges the disclosures at issue were false or misleading, because they failed to describe what plaintiff alleges were coercive business and marketing tactics, anticompetitive conduct and fraudulent billing activities on the part of the Company. The complaint claims these alleged statements and omissions operated to artificially inflate the price paid for the Company’s common stock during the Class Period. On April 2, 2025, another purported stockholder filed a putative class action lawsuit against the Company and certain of its current and former officers, also in the United States District Court for the District of Massachusetts (Collins v. TransMedics Group, Inc., et al., Case No. 1:25-cv-10778). The Collins complaint alleged claims substantially similar to those alleged in the Jewik action and also sought unspecified damages. On May 22, 2025, the court consolidated the Jewik and Collins actions and appointed the Peace Officers’ Annuity and Benefit Fund of Georgia and Oguzhan Altun as lead plaintiffs (the “Lead Plaintiff”). Lead Plaintiff’s consolidated amended complaint is due August 8, 2025.

At each reporting date, the Company evaluates whether or not a potential loss amount or a potential range of loss is probable and reasonably estimable under the provisions of the authoritative guidance that addresses accounting for contingencies. At this time, the Company is unable to predict the outcome of the class action litigation or reasonably estimate a range of possible losses. The Company expenses as incurred the costs related to such legal proceedings.

11. Revenue and Segment Information

Disaggregated Revenue

The Company disaggregates revenue from contracts with customers related to OCS transplant by organ type and geographical area as it believes this presentation best depicts how the nature, amount, timing and uncertainty of the Company’s revenue and cash flows are affected by economic factors, as shown below (in thousands):


	Three Months Ended June 30,				Six Months Ended June 30,
	2025		2024		2025		2024
OCS transplant revenue by country by organ(1)(2):
United States
Lung total revenue	$	4,154	$	4,243	$	7,790	$	8,949
Heart total revenue		32,171		27,173		58,437		47,397
Liver total revenue		115,862		77,039		224,577		143,965
Total United States OCS transplant revenue		152,187		108,455		290,804		200,311
All other countries
Lung revenue		421		448		796		1,408
Heart revenue		3,495		4,268		7,045		7,399
Liver revenue		244		—		384		—
Total all other countries OCS transplant revenue		4,160		4,716		8,225		8,807
Total OCS transplant revenue	$	156,347	$	113,171	$	299,029	$	209,118

(1)

Revenue by country is categorized based on the location of the end customer. Total OCS transplant revenue includes product and service revenue.

(2)

Service revenue unrelated to OCS transplant, which was $1.0 million and $1.9 million for the three and six months ended June 30, 2025, respectively, and $1.1 million and $2.0 million for the three and six months ended June 30, 2024, respectively, is not included in this table.

Payments to Customers

In connection with its clinical trials, the Company makes payments to customers for reimbursement of clinical trial materials and customer’s costs incurred to execute specific clinical trial protocols related to the Company’s OCS products, which are recorded as a reduction of revenue. The Company records the reduction of revenue and a corresponding accrual for

its estimate of the payments in the same period as the revenue is recognized. The Company updates its accrual estimates as information related to these payments is received with a corresponding adjustment to revenue. For each of the three and six months ended June 30, 2025 and 2024, the net impact of adjustments to revenue for such payments was insignificant.

The Company also makes payments to customers to obtain information related to post-approval studies or existing standard-of-care protocols unrelated to the Company's OCS products and records such payments as operating expenses. For the three and six months ended June 30, 2025, the Company recorded $1.7 million and $3.0 million, respectively, of operating expense related to these costs. For the three and six months ended June 30, 2024, the Company recorded $1.2 million and $2.7 million, respectively, of operating expense related to these costs.

Segment Information

The Company manages its operations as a single segment for the purposes of assessing performance and making operating decisions. Operating segments are defined as components of an enterprise for which separate financial information is regularly evaluated by the Company’s chief operating decision maker, or decision-making group (the “CODM”), in deciding how to allocate resources and assess performance. The CODM of the Company is the Chief Executive Officer. The CODM assesses performance and allocates resources based on the Company’s consolidated statements of operations and the Company’s operations are managed on a consolidated basis to decide where to allocate and invest additional resources within the business to continue growth. The CODM also utilizes the consolidated balance sheet for resource allocation and segment asset information is not provided to the CODM to allocate resources.

As a single reportable segment entity, the Company’s segment performance measure is net income (loss). Significant segment expenses, as provided to the CODM, are presented below (in thousands):


	Three Months Ended June 30,				Six Months Ended June 30,
	2025		2024		2025		2024
Total revenue	$	157,370	$	114,305	$	300,907	$	211,155
Less:
Cost of net product revenue		19,421		14,470		35,733		28,554
Cost of service revenue		41,360		30,574		80,357		53,378
Research, development and clinical trials:
Personnel related (including stock-based compensation expense)		5,964		5,478		12,216		10,742
Laboratory supplies and research materials		5,206		3,933		10,162

TransMedics Group, Inc. 10-Q