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Item 7. Management’s Discussion and Analysis

2026-02-24 compared with 2025-02-27 · 315 added, 307 removed, 1171 unchanged (35% of the section changed)

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We have also developed our 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.

Since 2023, we have offered logistics services through our NOP, including aviation transportation, ground transportation, and other coordination activity.

Our transplant logistics services include aviation transportation, ground transportation, and other coordination activity.

We believe the use of the OCS combined with the NOP has the potential to significantly increase the number of organ transplants and improve post-transplant outcomes

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Prior to 2024, we had incurred significant annual operating losses since inception and we have only recently achieved profitability.

Our ability to generate revenue sufficient to achieve sustained profitability will depend on the continued commercial sales of our OCS products and NOP services.

Our ability to generate revenue sufficient to achieve sustained profitability will depend on the continued commercial sales of our products and services.

We generated total revenue of $605.5 million and had net income of $190.3 million for the year ended December 31, 2025.

We generated total revenue of $241.6 million and incurred a net loss of $25.0 million for the year ended December 31, 2023.

We generated total revenue of $441.5 million and had net income of $35.5 million for the year ended December 31, 2024.

As of December 31, 2025, we had an accumulated deficit of $278.0 million.

We expect our operating and capital expenditures will continue to increase as we focus on growing commercial sales of our products in both the United States and select non-U.S.

markets, including growing our commercial team, which will pursue increasing commercial sales of our OCS products;

growing our NOP, including by maintaining and growing our logistics capabilities, including hiring, training and retaining pilots to scale our aviation transportation operations, to support our NOP and reduce dependence on third party transportation, including by means of the acquisition, maintenance or replacement of fixed-wing aircraft or other acquisitions, joint ventures or strategic investments;

scaling our manufacturing and sterilization operations;

developing the next generation OCS;

continuing research, development and clinical trial efforts;

seeking regulatory clearance for new products and product enhancements, including additional indications or other organs, in both the United States and select non-U.S.

and operating as a public company.

Because of the numerous risks and uncertainties associated with product development, commercialization and regulations of our industry, we are unable to accurately predict the timing or amount of increased expenses or if we will be able to maintain profitability.

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If we are unable to raise capital or enter into such agreements as, and when, needed, we will have to delay, scale back or discontinue the further development and commercialization efforts of one or more of our products, or may be forced to terminate our operations.

The United Network for Organ Sharing, or UNOS, operated the OPTN under a sole-vendor federal contract from 1986 until 2024.

In March 2023, the U.S.

Department of Health and Human Services’ Health Resources and Services Administration, or HRSA, announced initiatives designed to improve the OPTN, including its intent to solicit contract proposals to manage the OPTN, which is currently operated by the United Network for Organ Sharing, or UNOS, under a contract that expired in March 2024.

Department of Health and Human Services’ Health Resources and Services Administration, or HRSA, announced initiatives designed to improve the OPTN, including its intent to solicit contract proposals to manage the OPTN under a multi-vendor model following the expiration of the sole-vendor contract between UNOS and HRSA on March 29, 2024.

Additionally, in September 2023, the Securing the U.S.

Organ Procurement and Transplantation Network Act was signed into law and expressly authorizes HRSA to award multiple grants, contracts or cooperative agreements to support the operation of the OPTN and specifies that the OPTN shall be operated through awards that are distinct from awards made to support the organization tasked with supporting the networks’ board of directors.

In September 2024, HRSA began awarding contracts aimed at supporting these initiatives.

The impact that the HRSA initiatives and the U.S.

Organ Procurement and Transplantation Network Act was signed into law.

This legislation expressly authorizes HRSA to award multiple grants, contracts or cooperative agreements to support the operation of the OPTN.

It also specifies that the awards to operate the OPTN shall be distinct from awards to support the networks’ board of directors.

In September 2024, HRSA began awarding contracts aimed at supporting the multi-vendor model.

HRSA has consistently exercised options to extend the contract for UNOS to operate OPTN, albeit in a more limited capacity, since March 2024.

Most recently, in December 2025, HRSA and UNOS reached a new agreement that took effect on December 30, 2025.

This contract allows HRSA to extend UNOS’ work for up to 12 months, until December 29, 2026, structured as four optional three-month periods.

The new agreement reflects a shift of several former UNOS functions, including patient safety, reporting and tracking of donor-derived transmission events, and committee support, to HRSA or other contractors.

HRSA continues to implement efforts to improve and modernize the OPTN, including enhancements to patient data on organ procurement, expanded transparency through a publicly accessible data dashboard for allocation out of sequence (AOOS) events, expanded outreach and financial support for living organ donors, and a new OPTN fee collection process whereby HRSA directly collects and distributes patient registration fees under authorities originally granted by the 2025 Full-Year Continuing Appropriations and Extensions Act and extended by the 2026 Continuing Appropriations, Agriculture, Legislative Branch, Military Construction and Veterans Affairs, and Extensions Act.

The impact that HRSA's initiatives and the U.S.

Organ Procurement and Transplantation Network Act may have on our business, including on our NOP, is uncertain at this time.

Economic Impacts

Inflation, changes in trade policies, and the imposition of duties and tariffs have and could continue to adversely impact the price or availability of raw materials, the components of our products as well as shipping and transportation costs.

For example, the global economy has experienced extreme volatility and disruptions, including significant volatility in commodity, other material and labor costs, declines in consumer confidence, declines in economic growth, supply chain interruptions, uncertainty about economic stability and record inflation globally.

Inflation, changes in trade policies, and the imposition of or changes in the amount of duties and tariffs have and could continue to adversely impact the price or availability of raw materials, the components of our products as well as shipping and transportation costs.

For example, tariffs related to a small portion of components that we import moderately increased our cost of revenue in 2025.

The global economy has experienced extreme volatility and disruptions, including significant volatility in commodity, other material and labor costs, declines in consumer confidence, declines in economic growth, supply chain interruptions, uncertainty about economic stability and record inflation globally.

Unfavorable economic conditions have and could continue to result in a variety of risks to our business, including impacts on demand and pricing for our products and pricing and availability of raw materials and components for our products, which could make it difficult to forecast our inventory needs and financial results.

Components of Our Results of Operations

Key Components of Our Results of Operations

We generate net product revenue primarily from sales of our single-use, organ-specific disposable sets used on our organ-specific OCS Consoles.

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We also generate service revenue by providing outsourced organ procurement, OCS perfusion management and transplant logistics services under our NOP in the United States.

With the acquisition of Summit in August 2023, the purchase of fixed-wing transplant aircraft and the addition of a logistics team, we anticipate increased service revenue from our logistics services.

Prior to our acquisition in 2023, Summit derived its revenue primarily from charter flight services.

To a lesser extent, Summit also derived revenue from providing flight school training, managing aircraft and other related services.

As part of the Summit integration, we transitioned Summit's charter flight and aircraft management customers to third parties.

We do not anticipate generating revenue from charter flights or aircraft management and related services.

We are continuing to offer flight school training services.

During the years ended December 31, 2024 and 2023 service revenue of $4.4 million and $4.9 million, respectively, was from Summit's legacy operations, unrelated to the NOP and organ transplant.

With the acquisition of Summit in August 2023, the purchase of fixed-wing transplant aircraft and the addition of a logistics team, we have increased service revenue from our transplant logistics services.

All of our OCS transplant-related revenue has been generated by sales to transplant centers and Organ Procurement Organizations, not-for-profit organizations responsible for recovering organs from deceased donors for transplantation, in the United States, Europe and Asia-Pacific, or, in some cases, to distributors selling to transplant centers in select countries.

Substantially all of our customer contracts have multiple-performance obligations that contain promises consisting of OCS Perfusion Sets and OCS Solutions and may also contain promises for organ procurement, OCS perfusion management or transplant logistics services under our NOP, and OCS Console, whether sold or loaned to the customer.

Through December 31, 2024, all of our sales outside of the United States have been commercial sales (unrelated to any clinical trials).

Our sales in the EU are dependent on obtaining and maintaining the CE mark certifications for each of our OCS products.

Through December 31, 2025, our sales outside of the United States have been commercial sales (unrelated to any clinical trials).

Sales in the EU are dependent on obtaining and maintaining the CE mark certifications for each of our OCS products.

As required by the MDR, we received recertification of the CE mark in September 2022 for each of the OCS Heart and OCS Lung systems, which includes the OCS Console, the OCS disposables, and the OCS solution additives.

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sales if national healthcare systems begin to reimburse transplant centers for the use of the OCS, if transplant centers utilize the OCS in more transplant cases and if more transplant centers adopt the OCS in their programs.

While we expect our revenue to increase over the long term, revenue from sales may fluctuate from quarter to quarter as the timing of organ transplant procedures is generally unpredictable, and we have observed periodic fluctuations in the availability of donor organs, which impacts the volume of transplants.

Cost of Revenue, Gross Profit and Gross Margin

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Included in the cost of OCS disposable sets are the costs of our OCS Lung, OCS Heart and OCS Liver Solutions.

Cost of service revenue primarily consists of labor and overhead that directly support organ procurement and OCS perfusion management services and transportation and logistics costs, including labor costs for pilots, aircraft depreciation, aircraft costs, fuel, crew travel, maintenance and third-party flight costs and ground transportation that support organ delivery.

For the years ended December 31, 2024 and 2023, cost of service revenue also included approximately $3.1 million and $4.4 million, respectively, of costs related to Summit's legacy operations, unrelated to the NOP and organ transplant.

Cost of service revenue primarily consists of labor and overhead that directly support organ procurement and OCS perfusion management services and transportation and transplant logistics costs, including labor costs for pilots, aircraft depreciation, aircraft costs, fuel, crew travel, maintenance and third-party flight costs and ground transportation that support organ delivery.

Gross profit is the amount by which revenue exceeds cost of revenue in each reporting period and gross margin is gross profit divided by revenue.

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Research, Development and Clinical Trials Expenses

Research, development and clinical trials expenses consist primarily of costs incurred for our research activities, product development, hardware and software engineering, clinical trials to continue to develop clinical evidence of our products’ safety and effectiveness, regulatory expenses, testing, consultant services and other costs associated with our OCS technology platform and OCS products, which include:

• employee-related expenses, including salaries, related benefits and stock-based compensation expense for employees engaged in research, hardware and software development, regulatory and clinical trial functions, and recruiting and temporary service fees related to such personnel;

• expenses incurred in connection with the clinical trials of our products, including under agreements with third parties, such as consultants, contractors and data management organizations;

• the cost of maintaining and improving our product designs, including the testing of materials and parts used in our products;

• laboratory supplies and research materials;

• facilities, depreciation and other expenses, which include direct and allocated expenses for rent and maintenance of facilities and insurance.

Research, development and clinical trials expenses consist of costs incurred for research activities, product development, hardware and software engineering and clinical trial activities, including salaries and related costs, including stock-based compensation, facilities costs, laboratory supplies, depreciation, testing, regulatory, data management and consulting costs.

We expense research, development and clinical trials costs as incurred.

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Selling, general and administrative expenses also include direct and allocated facility-related costs, costs to support the NOP, promotional activities, marketing, conferences and trade show costs as well as professional fees for legal, patent, consulting, investor and public relations, accounting and audit services and amortization of sales and marketing-related intangible assets.

We expect that our selling, general and administrative expenses will increase over the long term as we increase our headcount to support the expected continued sales growth of our OCS products and our NOP.

We expect that our selling, general and administrative expenses will increase over the long term as we increase our headcount and infrastructure to support the expected continued sales growth of our OCS products and our NOP.

Other Income (Expense)

Interest Expense

Interest expense consists of interest expense associated with outstanding borrowings under our loan agreements as well as the amortization of debt discounts associated with such agreements.

Interest expense consists of interest expense associated with outstanding borrowings under our loan agreement and our Notes as well as the amortization of debt discounts associated with such agreements.

In July 2022, we entered into a credit agreement with Canadian Imperial Bank of Commerce, or CIBC, under which we borrowed $60.0 million.

At that time, we repaid the remaining $35.0 million of principal that had been outstanding under our prior credit agreement with OrbiMed Royalty Opportunities II, LP, or OrbiMed.

In May 2023, we issued and sold $460.0 million in aggregate principal amount of our 1.50% convertible senior notes, due 2028.

In May 2023, we issued and sold $460.0 million in aggregate principal amount of our Notes.

Interest Income and Other Income (Expense), Net

Interest income and other income (expense), net includes interest income, realized and unrealized foreign currency transaction gains and losses and other non-operating income and expense items unrelated to our core operations.

Interest income consists of interest earned on our invested cash balances.

Interest income consists of interest earned on our cash balances.

Foreign currency transaction gains and losses result 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.

Our (provision) benefit for income taxes is based on taxable income (loss), applicable income tax rates, net research and development tax credits, net operating loss carryforwards, changes in valuation allowance estimates and deferred income taxes.

During the fourth quarter of 2025, we concluded that it was more likely than not that we will realize substantially all of our net U.S.

federal and state deferred tax assets and accordingly, recognized a benefit to income tax expense of $103.3 million related to the release of our valuation allowance.

We relied primarily on cumulative income over the preceding twelve quarters, recent operating profits and, to a lesser extent, expected future profits in our assessment to release the valuation allowance.

We maintained a valuation allowance of $0.9 million on certain state tax attributes as we considered it more-likely-than-not that these tax attributes would expire before realization.

As a result of the release of our valuation allowance we expect our income tax rate will increase in the future.

To the extent allowed, we intend to use our available net operating loss carryforwards and tax credits to reduce cash tax payment obligations.

Results of Operations

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Total OCS transplant revenue

We also had service revenue unrelated to OCS transplant of $4.4 million and $4.9 million for the years ended December 31, 2024 and 2023, respectively.

We also had service revenue unrelated to OCS transplant of $4.1 million, $4.4 million and $4.9 million for the years ended December 31, 2025, 2024 and 2023, respectively.

Revenue from customers in the United States related to OCS transplant was $584.7 million in the year ended December 31, 2025 and increased by $162.8 million compared to the year ended December 31, 2024, primarily due to higher sales volumes of our OCS Liver and OCS Heart disposable sets.

Revenue for each organ in the table above includes net product revenue from sales of disposable sets as well as service revenue for organ procurement, OCS perfusion management and transplant logistics services under the NOP in the United States.

Establishing the NOP, which launched in late 2021, has allowed us to broaden our customer base and increase utilization of the OCS in organ transplantation.

Substantially all of our customers in the United States now participate in the NOP.

By adding logistics to our NOP offering in late 2023, we have been able to further increase product and service revenue.

Revenue from customers outside the United States was $16.7 million and $15.3 million in the years ended December 31, 2025 and 2024, respectively.

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Overall gross margin was 60% and 59% for the years ended December 31, 2025 and 2024, respectively.

The decrease in gross margin from 2023 to 2024 was driven primarily by an increase in service revenue, which has a lower gross margin than product revenue.

Gross margin from net product revenue was 79% and 77% for the years ended December 31, 2024 and 2023, respectively.

The increase in product gross margin was primarily as a result of increased sales volume and increased sales of higher margin OCS disposable sets.

Gross margin from net product revenue was 79% for each of the years ended December 31, 2025 and 2024.

Gross margin from service revenue was 29% and 28% for the years ended December 31, 2025 and 2024, respectively, and consisted primarily of organ procurement, OCS perfusion management and transplant logistics services under our NOP.

The decrease in service gross margin was primarily due to investments in our NOP network, including aviation-related expenditures, to prepare for future growth.

Service revenue gross margin for the year ended December 31, 2023, included the introduction of transportation and logistics services and the integration of Summit.

Operating Expenses

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Total research, development and clinical trials expenses increased by $13.1 million from $56.0 million in the year ended December 31, 2024 to $69.1 million in the year ended December 31, 2025.

Personnel related costs increased by $6.4 million primarily due to increased headcount to support development efforts for our next generation OCS and overall compensation increases.

Personnel related costs increased by $3.8 million primarily due to increased headcount to support development efforts for our next generation OCS program and overall compensation increases.

Personnel related costs included stock-based compensation expense of $4.7 million and $4.2 million for the years ended December 31, 2025 and 2024, respectively.

Consulting and third-party services costs increased by $7.1 million due to development efforts by our external development consultants for our next generation OCS, other product development and digital tools.

Laboratory supplies and research materials costs increased by $3.6 million from the year ended December 31, 2024 to the year ended December 31, 2025 primarily due to our increased need for supplies and materials used for development of our next generation OCS.

Facility related and other costs increased by $0.9 million from the year ended December 31, 2023 to the year ended December 31, 2024 due primarily to the increased costs of supporting a larger group of research and development personnel and their development efforts.

Clinical trial costs decreased by $0.6 million due to the timing of clinical trials.

Acquired In-Process Research and Development Expenses

IPR&D in 2023 was related to the acquisition of certain assets related to lung and heart perfusion technology from Bridge to Life Ltd.

and its subsidiary Tevosol, Inc., together BTL.

Consulting and third-party services costs increased by $2.6 million due to development efforts by our external development consultants for our next generation OCS program and other product development, including our kidney transport system.

Clinical trial costs increased by $1.0 million due primarily to the initiation of clinical trial-related activities for our ENHANCE and DENOVO clinical trials.

Facility related and other costs increased by $2.2 million from the year ended December 31, 2024 to the year ended December 31, 2025 due primarily to increased cost of supporting a larger group of research and development personnel.

Selling, General and Administrative Expenses

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Total selling, general and administrative

Total selling, general and administrative expenses increased by $49.1 million from $119.6 million in the year ended December 31, 2023 to $168.6 million in the year ended December 31, 2024 due primarily to increases in personnel related costs, and facility related and other costs.

Personnel related costs increased by $36.8 million primarily due to the continued expansion of our team to support the growth in our business.

Stock-based compensation expense increased by $11.0 million, due primarily to additional grants to new and existing employees and the modification of stock awards pursuant to the transition agreement with our former Chief Financial Officer.

Facility related and other costs increased by $11.3 million due primarily to increased costs associated with post-approval studies and information technology infrastructure costs, and depreciation and amortization expense due to the growth in our business.

Professional and consultant fees increased by $0.9 million due primarily to increased fees in 2024 related to information technology and other enterprise solutions costs to support the growth in our business.

Professional and consultant fees in the year ended December 31, 2023 included transaction costs of $2.0 million related to our Summit acquisition.

Total selling, general and administrative expenses increased by $16.6 million from $168.6 million in the year ended December 31, 2024 to $185.2 million in the year ended December 31, 2025.

Personnel related costs increased by $5.0 million primarily due to an increase in stock-based compensation expense of $3.2 million and increases in contractor and recruiting costs to support the growth of our organization, partially offset by a decrease in personnel costs due to less time spent supporting marketing, finance and administrative activities.

Personnel related costs included stock-based compensation expense of $30.8 million and $27.6 million for the years ending December 31, 2025 and 2024, respectively.

Professional and consultant fees increased by $7.6 million due primarily to increased audit and tax-related fees and legal costs related to patents as well as increased professional and legal fees related to an independent review of business practices following allegations raised in a short seller report released in January 2025.

We also incurred higher consulting services related to general business initiatives to support our growth.

Facility related and other costs increased by $9.4 million due primarily to increased depreciation and amortization and information technology infrastructure costs as well as increases in non-income based state taxes.

These increases were partially offset by a decrease in NOP support costs of $5.5 million due primarily to less activity supporting selling, general and administrative functions.

Other Income (Expense)

Interest Expense

Interest expense was $14.4 million and $10.8 million for the years ending December 31, 2024 and 2023, respectively.

The increase was due primarily to interest expense on the $460.0 million principal amount of the Notes, which were issued in May 2023.

Interest expense was $13.8 million and $14.4 million for the years ending December 31, 2025 and 2024, respectively, and consisted of interest expense on the $460.0 million principal amount of the Notes that carry a 1.5% interest rate and interest expense on the $60.0 million principal amount of the CIBC loan that carries a variable interest rate, which was 5.7% as of December 31, 2025.

Interest Income and Other Income (Expense), Net

Interest income and other income (expense), net for the years ended December 31, 2024 and 2023 included interest income of $13.4 million and $12.5 million, respectively, from interest earned on invested cash balances.

Other income (expense), net included $0.7 million of realized and unrealized foreign currency transactions losses for the year ended December 31, 2024, and $0.3 million of realized and unrealized foreign currency transactions gains during the year ended December 31, 2023.

Interest income and other income (expense), net for the years ended December 31, 2025 and 2024 included interest income of $11.4 million and $13.4 million, respectively, from interest earned on cash balances.

The decrease in interest income was primarily due to lower yields on our cash balances.

Interest income and other income (expense), net also included $1.0 million of realized and unrealized foreign currency transactions gains for the year ended December 31, 2025, and $0.7 million of realized and unrealized foreign currency transactions losses during the year ended December 31, 2024.

(Provision) Benefit for Income Taxes

Income taxes for the years ended December 31, 2024 and 2023 included a tax provision of $0.3 million and less than $0.1 million, respectively, related to state and foreign income taxes.

For the year ended December 31, 2023, we also recorded a tax benefit of $1.7 million for the release of a portion of our valuation allowance related to the net deferred tax liabilities recorded in purchase accounting.

As part of the allocation of the purchase price of Summit, we recorded deferred tax liabilities for the differences between the fair value recognized in purchase accounting and the tax basis of property, plant and equipment and intangible assets.

The net deferred tax liability is a source of income to support the recognition of a portion of our existing deferred tax assets.

Therefore, we released the same amount of our valuation allowance.

We maintain a valuation allowance on our overall net deferred tax asset as we deem it more likely than not that the net deferred tax asset will not be realized.

We had an income tax benefit of $82.8 million for 2025, as compared to a provision for income tax of $0.3 million in 2024.

Our effective tax rate was (77.0%) and 0.9% for 2025 and 2024, respectively.

Our effective tax rate for 2025 differs from the U.S.

federal statutory income tax rate of 21.0% primarily due to the release of a U.S.

valuation allowance.

In the fourth quarter of 2025, we concluded that it is more likely than not that substantially all of our U.S.

deferred tax assets are realizable, resulting in a valuation allowance release of $103.3 million.

Our effective tax rate for 2024 differs from the U.S.

federal statutory income tax rate of 21.0% primarily due to excess stock compensation deductions, partially offset by state and federal income taxes for the portion of our taxable income that was not offset by operating loss and tax credit carryforwards, and the impact from the change in valuation allowance.

Comparison of the Years Ended December 31, 2024 and 2023

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Liquidity and Capital Resources

Prior to 2024, we had incurred significant annual operating losses since inception and we may continue to incur losses in the future.

Prior to 2024, we had incurred significant annual operating losses since inception and we may incur losses in the future.

To date, we have funded our operations primarily with proceeds from borrowings under loan agreements, proceeds from the issuance of our Notes, proceeds from the sale of common stock in our public offerings and revenue from commercial sales of our OCS products and NOP services and from sales of our OCS products for use in clinical trials.

On May 11, 2023, we 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.

The total net proceeds from the sale of the Notes, after deducting debt issuance costs of $14.6 million, and purchases of Capped Calls of $52.1 million, were $393.3 million.

At December 31, 2025, our principal source of liquidity was cash of $488.4 million

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Net cash provided by (used in) operating activities

Net cash provided by (used in) investing activities

Net cash used in investing activities

Net cash provided by financing activities

Effect of exchange rate changes on cash, cash equivalents and

Effect of exchange rate changes on cash and

restricted cash

Net increase (decrease) in cash, cash equivalents and restricted cash

Net increase (decrease) in cash and restricted cash

Operating Activities

During the year ended December 31, 2025, operating activities provided $192.8 million of cash, primarily resulting from our net income of $190.3 million and net cash provided by changes in our operating assets and liabilities of $18.4 million, partially offset by net non-cash income of $15.8 million.

Net non-cash income included the change in deferred taxes of $83.5 million related primarily to the release of the deferred tax asset valuation allowance, partially offset by net non-cash charges.

Net cash provided by changes in our operating assets and liabilities for the year ended December 31, 2025 consisted primarily of a decrease in accounts receivable of $14.0 million and a net increase in accounts payable and accrued expenses and other current liabilities of $17.7 million, partially offset by an increase in inventory of $7.7 million and an increase in prepaid expenses and other current assets of $3.8 million.

During the year ended December 31, 2024, operating activities provided $48.8 million of cash, primarily resulting from our net income of $35.5 million and net non-cash charges of $58.3 million, partially offset by net cash used by changes in our operating assets and liabilities of $45.0 million.

Net cash used by changes in our operating assets and liabilities for the year ended December 31, 2024 consisted primarily of an increase in accounts receivable of $34.3 million, an increase in inventory of $8.4 million and an increase in prepaid expenses and other current assets of $6.3 million, partially offset by an increase in accounts payable and accrued expenses and other current liabilities of $6.5 million .

During the year ended December 31, 2023, operating activities used $13.0 million of cash, primarily resulting from our net loss of $25.0 million and net cash used by changes in our operating assets and liabilities of $44.3 million, partially offset by net non-cash charges of $56.3 million, which included an IPR&D charge of $27.2 million.

Net cash used by changes in our operating assets and liabilities for the year ended December 31, 2023 consisted primarily of an increase in accounts receivable of $33.8 million, an increase in inventory of $28.1 million and an increase in prepaid expenses and other current assets of $2.1 million, partially offset by an increase in accounts payable and accrued expenses and other current liabilities of $21.2 million.

Changes in accounts receivable, inventory, prepaid expenses and other current assets, accounts payable, and accrued expenses and other current liabilities in each reporting period are generally due to growth in our business and timing of invoices and payments.

Investing Activities

During the year ended December 31, 2024, net cash used in investing activities of $129.3 million consisted primarily of purchases of property, plant and equipment of $129.7 million, including an increase of $110.2 million in transplant aircraft.

During the year ended December 31, 2023, net cash used in investing activities of $194.0 million consisted of purchases of property, plant and equipment of $151.8 million, including $141.9 million of transplant-related aircraft purchases, the purchase of IPR&D assets from BTL for $27.2 million and the purchase of Summit for $14.9 million, net of cash received.

During the year ended December 31, 2025, net cash used in investing activities of $59.3 million consisted of purchases of property, plant and equipment, primarily related to the purchase of transplant aircraft.

During the year ended December 31, 2024, net cash used in investing activities of $129.3 million consisted of purchases of property, plant and equipment of $129.7 million, primarily related to the purchase of transplant aircraft.

Financing Activities

During the year ended December 31, 2025, net cash provided by financing activities of $16.9 million consisted of proceeds from the issuance of common stock upon exercise of stock options of $13.7 million and proceeds from the issuance of common stock in connection with the 2019 Employee Stock Purchase Plan of $3.2 million.

During the year ended December 31, 2023, net cash provided by financing activities of $400.4 million consisted of net proceeds from the issuance of our Notes of $445.4 million, partially offset by payments of $52.1 million for associated capped calls, proceeds from the issuance of common stock upon exercise of stock options of $6.2 million and proceeds from the issuance of common stock in connection with the 2019 Employee Stock Purchase Plan of $1.0 million.

During the year ended December 31, 2024, net cash provided by financing activities of $22.9 million consisted of proceeds from the issuance of common stock upon exercise of stock options of $20.8 million and proceeds from the issuance of common stock in connection with the 2019 Employee Stock Purchase Plan of $2.1 million.

For a discussion of our cash flows for the year ended December 31, 2023, see Item 7.

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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.

A conditional conversion feature of the Notes was triggered on June 30, 2024 and again on September 30, 2024, as the last reported sale price of our 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 each of the quarters ended June 30, 2024 and September 30, 2024, respectively, and the Notes therefore became convertible at the noteholders’ election in the immediately following calendar quarters ended September 30, 2024 and December 31, 2024, respectively.

A conditional conversion feature of the Notes was triggered on December 31, 2025, as the last reported sale price of our 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 December 31, 2025, and the Notes therefore became convertible at the noteholders’ election in the calendar quarter ending March 31, 2026 (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.

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Borrowings under the CIBC Credit Agreement bear interest at an annual rate equal to either, at our option, (i) the secured overnight financing rate for an interest period selected by us, 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%.

At our option, we may prepay borrowings outstanding under the CIBC Credit Agreement, without a prepayment fee.

We are obligated to repay the outstanding principal amount in equal monthly installments commencing in July 2026 with the remaining balance due on the maturity date in July 2027.

At our option, we may prepay the outstanding principal amount under the CIBC Credit Agreement, without a prepayment fee.

All obligations under the CIBC Credit Agreement are guaranteed by us and each of our material subsidiaries.

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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, we 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.

In addition, we may be required to prepay the outstanding principal amount, subject to certain exceptions, with portions of net cash proceeds of certain asset sales and certain casualty and condemnation events.

Funding Requirements

As we continue to pursue and increase commercial sales of our OCS products, we expect our costs and expenses to increase in the future, particularly as we expand our commercial team, grow our NOP, scale our manufacturing and sterilization operations, continue research, development and clinical trial efforts, seek regulatory approval for new products and product enhancements, including new indications, both in the United States and in select non-U.S.

markets, and seek greater control of air and ground transport for our NOP.

For example, if the demand for our products exceeds our existing manufacturing and sterilization capacity, our ability to fulfill orders would be limited until we have sufficiently expanded such operations.

As we continue to pursue and increase commercial sales of our OCS products, we expect our costs and expenses to increase in the future, particularly as we expand our commercial team, grow our NOP, scale our manufacturing and sterilization operations, continue research, development and clinical trial efforts, including expanding our research and development and manufacturing capabilities in Italy, seek regulatory approval for the next generation OCS, new products and product enhancements, including new indications, both in the United States and in select non-U.S.

markets, establish and relocate to a new long-term global headquarters, and seek greater control of air and ground transport for our NOP.

If the demand for our products exceeds our existing manufacturing and sterilization capacity, our ability to fulfill orders would be limited until we have sufficiently expanded such operations.

The timing and amount of our operating and capital expenditures will depend on many factors, including:

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• the costs and expenses of expanding our U.S.

sales and marketing infrastructure and our manufacturing operations;

sales, marketing and logistics infrastructure and our manufacturing operations;

• the extent to which our OCS products are adopted by the transplant community;

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• the degree of success we experience in commercializing our OCS products for additional indications;

• the costs, timing and outcomes of post-approval studies or any future clinical studies and regulatory reviews, including to seek and obtain approvals for new indications for our OCS products;

• the costs, timing and outcomes of pre- and post-approval studies or any future clinical studies and regulatory reviews, including to seek and obtain approvals for new indications for our OCS products;

• the emergence of competing or complementary technologies or procedures;

• the number and types of future products we develop and commercialize;

• the cost of development of the next generation OCS;

• the costs associated with maintaining and improving our commercial operations, including the NOP;

• the costs associated with maintaining and growing our logistics capabilities, 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;

• the cost of constructing research and development and manufacturing facilities in Italy;

• the cost and timing of development of the next generation OCS;

• the costs associated with maintaining, improving and expanding our commercial operations, including the NOP globally;

• the costs associated with maintaining and growing our transplant logistics capabilities, 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;

• the costs of preparing, filing and prosecuting patent applications and maintaining, enforcing and defending intellectual property-related claims;

• the level of our selling, general and administrative expenses;

• the costs related to establishing and relocating to a new long-term global headquarters to accommodate the growing scale and complexity of our business.

We believe that our existing cash will enable us to fund our operating expenses, capital expenditure requirements, and debt service payments for at least 12 months following the filing of our annual report on Form 10-K.

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Our contractual obligations include amounts payable as principal and interest payments under the CIBC Credit Agreement.

As of December 31, 2024, our outstanding principal balance was $60.0 million, which is repayable in equal monthly installments starting in July 2026 until its maturity in July 2027.

We estimate we will pay $3.9 million in interest payments during 2025.

Our estimate of payments is based on an assumed rate of 6.4%, which was the interest rate in effect at December 31, 2024.

As of December 31, 2025, our outstanding principal balance was $60.0 million, which is repayable in equal monthly installments starting in July 2026 with the remaining balance due on the maturity date in July 2027.

We estimate we will pay $10.0 million in principal payments and $3.4 million in interest payments during 2026.

Our estimate of interest payments is based on an assumed rate of 5.7%, which was the interest rate in effect at December 31, 2025.

On May 11, 2023, we issued $460.0 million aggregate principal amount of the Notes.

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As of December 31, 2025, we had fixed lease payment obligations of $7.8 million, of which $3.7 million is payable during 2026.

We also lease facilities under short-term leases, for which we expect to pay approximately $1.5 million in 2025 under existing leases.

We intend to acquire additional fixed-wing aircraft as we scale our fleet of aircraft.

During the year ended December 31, 2024, we acquired eight transplant-related fixed-wing aircraft with an aggregate purchase price of $109.6 million and we plan to acquire additional aircraft in 2025, including two aircraft purchased in January 2025 and February 2025 with an aggregate purchase price of $28.4 million.

On January 8, 2026, we entered into a lease agreement for space in Somerville, Massachusetts to eventually replace our existing headquarters in Andover, Massachusetts.

Base rent begins to accrue in the first quarter of 2028 and the initial lease term expires 192 months from the date base rent begins to accrue, unless earlier terminated.

The annual base rent under this lease will initially be $23.9 million and will be subject to a 2% annual increase during the first three years of the initial lease term and a 3% annual increase for each year thereafter during the remainder of the initial lease term.

On January 8, 2026, we acquired two parcels adjacent to the leased premises in Somerville, Massachusetts for a purchase price of $15.0 million for each property.

In July 2025, we purchased two parcels of land in Mirandola, Italy.

We plan to construct research and development and manufacturing facilities but have not yet entered into constructions contracts.

We may acquire additional fixed-wing aircraft to enhance our logistics capabilities and support international expansion.

During the year ended December 31, 2025, we acquired 3 transplant-related fixed-wing aircraft with an aggregate purchase price of $42.9 million.

In January 2021, we 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.

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Quantitative and Qualitati ve Disclosures About Market Risk.

We are exposed to changes in interest rates and foreign currency exchange rates because we finance certain operations through variable rate debt instruments and denominate our transactions in a variety of foreign currencies.

We are exposed to changes in interest rates and foreign currency exchange rates because we finance certain operations through variable rate debt instruments and denominate transactions in a variety of foreign currencies.

Changes in these rates may have an impact on future cash flow and earnings.

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Foreign currency transaction gains (losses) are included in the consolidated statements of operations as a component of other income (expense).

We recognized foreign currency transaction losses of $0.7 million during the year ended December 31, 2024.

We recognized foreign currency transaction gains of $1.0 million during the year ended December 31, 2025.

Foreign currency translation exposure results from the translation of the financial statements of our subsidiaries whose functional currency is not the U.S.

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The effects of these foreign currency translation adjustments are included in accumulated other comprehensive income (loss), a separate component of stockholders’ equity on our consolidated balance sheets.

We recorded a foreign currency translation loss of $0.2 million during the year ended December 31, 2024.

We recorded a foreign currency translation gain of $0.5 million during the year ended December 31, 2025.

For the year ended December 31, 2025, 2% of our revenue and 3% of our operating costs and expenses were generated by subsidiaries whose functional currency is not the U.S.

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Borrowings under the CIBC Credit Agreement bear interest at an annual rate equal to either, at our option, (i) the secured overnight financing rate for an interest period selected by us, subject to a minimum of 1.5%, 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%.

As of December 31, 2024 borrowings outstanding under the CIBC Credit Agreement totaled $60.0 million and the interest rate applicable to such borrowings was 6.4%.

As of December 31, 2025 the outstanding principal under the CIBC Credit Agreement totaled $60.0 million and the interest rate applicable to such borrowings was 5.7%.

An immediate 10% change in the Federal Funds Effective Rate would not have a material impact on our debt-related obligations, financial position or results of operations.

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In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025 in conformity with accounting principles generally accepted in the United States of America.

Also in our opinion, the Company did not maintain, in all material respects, effective internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO because a material weakness in internal control over financial reporting existed as of that date as the Company did not design and maintain effective controls to verify that inventory movements are appropriately recorded in the interim financial statements.

Also in our opinion, the Company did not maintain, in all material respects, effective internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO because a material weakness in internal control over financial reporting existed as of that date as the Company did not design and maintain effective controls over inventory movement within its manufacturing network.

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the annual or interim financial statements will not be prevented or detected on a timely basis.

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A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

A company’s internal control over financial reporting includes those policies and procedures that

(i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;

A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of

the assets of the company;

(ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company;

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Revenue Recognition

As described in Note 2 to the consolidated financial statements, the Company recorded $441.5 million in total revenue for the year ended December 31, 2024.

The Company generates product revenue, from sales of its single-use, organ-specific disposable sets (i.e., its organ-specific OCS Perfusion Sets sold together with its organ-specific OCS Solutions) used on its organ-specific OCS Consoles, each being a component of the Company’s Organ Care System (OCS) products, and service revenue, by providing outsourced organ procurement, OCS perfusion management and transplant logistics services under the Company’s National OCS Program.

As described in Note 2 to the consolidated financial statements, the Company recorded $605.5 million in total revenues for the year ended December 31, 2025.

The Company generates product revenue from sales of its single-use, organ-specific disposable sets (i.e., its organ-specific OCS Perfusion Sets sold together with its organ-specific OCS Solutions) used on its organ-specific OCS Consoles, each being a component of the Company’s Organ Care System (OCS) products, and service revenue, by providing outsourced organ retrieval, OCS organ management and logistics services under the Company’s National OCS Program.

Substantially all of the Company’s customer contracts have multiple-performance obligations.

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Control is transferred for the OCS products typically only after the product has arrived at the customer site and, in addition for OCS Consoles, the training and equipment set-up have been completed by the Company.

Additionally, under the National OCS program, service deliverables available to customers include organ procurement, OCS perfusion management, and transplant logistics services which are distinct performance obligations and are recognized as service revenue when the services occur.

The principal considerations for our determination that performing procedures relating to revenue recognition is a critical audit matter are the high degree of auditor effort in performing procedures and in evaluating audit evidence related to management’s determination of the point in time when control of the OCS product or products is transferred to the customer or services are performed and revenue is recognized.

Additionally, under the National OCS program, service deliverables available to customers include organ retrieval, OCS organ management, and transportation logistics which are distinct performance obligations and are recognized as service revenue when the services occur.

The principal considerations for our determination that performing procedures relating to revenue recognition is a critical audit matter are a high degree of auditor effort in performing procedures and in evaluating audit evidence related to management’s determination of the point in time when control of the OCS product or products is transferred to the customer or services are performed and revenue is recognized.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements.

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Operating lease right-of-use assets

Deferred tax assets

Restricted cash

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Accrued expenses and other current liabilities

Current portion of long-term debt

Deferred revenue

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150,000,000 shares authorized;

shares and 32,670,803 shares issued and outstanding as of

December 31, 2024 and 2023, respectively

Accumulated other comprehensive loss

shares and 33,617,972 shares issued and outstanding as of December 31,

2025 and 2024, respectively

Accumulated other comprehensive income (loss)

Accumulated deficit

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Foreign currency translation adjustment

Unrealized gains on marketable securities,

net of tax of $ 0

Total other comprehensive income (loss)

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Balances at December 31, 2022

Issuance of common stock in public

offering, net of discounts and

issuance costs of $ 676

Issuance of common stock upon the

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purchase plan

Issuance of restricted common stock

Restricted common stock forfeitures

Issuance of common stock in

connection with exercise of warrants

Stock-based compensation expense

Foreign currency translation

Unrealized gains on marketable

Balances at December 31, 2022

Issuance of common stock upon the

exercise of common stock options

Issuance of common stock in

connection with employee stock

purchase plan

Stock-based compensation expense

Purchases of capped calls related to

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Restricted common stock forfeitures

Foreign currency

translation adjustment

Foreign currency translation adjustment

Balances at December 31, 2023

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Issuance of restricted common stock

Net issuance of common stock upon

vesting of restricted stock units

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Stock-based compensation expense

Foreign currency

translation adjustment

Foreign currency translation adjustment

Balances at December 31, 2024

Issuance of common stock upon the

exercise of common stock options

Issuance of common stock in connection

with employee stock purchase plan

Issuance of restricted common stock

Restricted common stock forfeitures

Net issuance of common stock upon

vesting of restricted stock units

Stock-based compensation expense

Foreign currency translation adjustment

Balances at December 31, 2025

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

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Deferred taxes

Loss on extinguishment of debt

Loss on sale of marketable securities

Non-cash interest expense and end of term accretion expense

Non-cash lease expense

Net amortization of premiums on marketable securities

Unrealized foreign currency transaction (gains) losses

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Purchase of in-process research and development assets

Purchases of marketable securities

Proceeds from sales and maturities of marketable securities

Net cash provided by (used in) investing activities

Net cash used in investing activities

Cash flows from financing activities:

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Purchases of capped calls related to convertible senior notes

Proceeds from issuance of long-term debt, net of issuance costs

Repayments of long-term debt

Proceeds from issuance of common stock in public offering, net

of underwriting discounts and commissions and issuance costs paid

Proceeds from issuance of common stock upon exercise of stock options

Proceeds from issuance of common stock upon exercise of warrants

Proceeds from issuance of common stock in connection with employee

stock purchase plan

Tax withholding payments related to net settlement of restricted stock units

Net cash provided by financing activities

Effect of exchange rate changes on cash, cash equivalents and restricted cash

Net increase (decrease) in cash, cash equivalents and restricted cash

Cash, cash equivalents and restricted cash, beginning of period

Cash, cash equivalents and restricted cash, end of period

Effect of exchange rate changes on cash and restricted cash

Net increase (decrease) in cash and restricted cash

Cash and restricted cash, beginning of period

Cash and restricted cash, end of period

Supplemental disclosure of cash flow information:

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Conversion of convertible senior notes into common stock

Reconciliation of cash and restricted cash:

Restricted cash

Total cash and restricted cash shown in the statement of cash flows

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

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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.

On August 16, 2023, the Company acquired Summit Aviation, Inc.

and Northside Property Group, LLC (together “Summit”).

Summit was a charter flight operator based in Bozeman, Montana.

The acquisition enabled TransMedics to add aviation transportation services to its NOP and become a comprehensive national provider of donor organ procurement and delivery in the United States.

The Company's transplant logistics services include aviation transportation, ground transportation and other coordination activity.

The accompanying 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.

Prior to 2024, the Company had incurred recurring annual losses since inception.

During the years ended December 31, 2025 and 2024, the Company generated net income of $ 190.3 million and $ 35.5 million, respectively.

As of December 31, 2025, the Company had an accumulated deficit of $ 278.0 million.

The Company generated net income of $ 35.5 million for the year ended December 31, 2024.

The Company believes that its existing cash of $ 488.4 million as of December 31, 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 Annual Report on Form 10-K.

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The Company operates in an environment of rapid change in technology and competition.

In addition, the Company is subject to risks and uncertainties related to its aviation transportation services, including, but not limited to, compliance with FAA regulations, pilot availability and operational disruptions.

The Company’s consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”).

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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 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, and the valuation of stock-based awards.

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.

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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 December 31, 2024 and 2023 , 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 years ended December 31, 2025, 2024 and 2023 no customer accounted for more than 10 % of revenue.

For the year ended December 31, 2022, one customer accounted for 14 % of revenue.

As of December 31, 2025 and 2024 , no customer accounted for more than 10 % of accounts receivable.

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Related to this separate cash balance, the Company classified $ 0.5 million as restricted cash (non-current) on its consolidated balance sheets as of December 31, 2025 and 2024 .

Cash, cash equivalents and restricted cash on the consolidated statements of cash flows includes $ 0.5 million of restricted cash in each of the years presented.

Accounts Receivable

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The Company provides reserves against accounts receivable for estimated credit losses, if any, that may result from a customer’s inability to pay based on the composition of its accounts receivable, current economic conditions and historical credit loss activity.

Amounts deemed uncollectible are charged or

written-off against the reserve.

Amounts deemed uncollectible are charged or written-off against the reserve.

As of December 31, 2025 and 2024 , the Company had no allowance for credit losses.

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Storage costs and miscellaneous materials and supplies costs related to inventory or to support flight equipment are expensed as incurred.

As of December 31, 2024, spare parts inventory of $ 4.0 million is included within prepaid expenses and other current assets on the accompanying consolidated balance sheets.

The Company had no spare parts inventory as of December 31, 2023.

As of December 31, 2025 and 2024, spare parts inventory of $ 4.7 million and $ 4.0 million, respectively, is included within prepaid expenses and other current assets on the accompanying 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 December 31, 2024, the Company had no allowance for spare parts excess and obsolescence.

As of December 31, 2025 and 2024 , the Company had no allowance for spare parts excess and obsolescence.

Business Combinations

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On August 2, 2023 , the Company acquired certain assets related to lung and heart perfusion technology from Bridge to Life Ltd.

and its subsidiary Tevosol, Inc., together (“BTL”).

The Company intends to further develop these technologies to expand its product offerings and indications for organ transplantation.

The Company accounted for the purchase of BTL as an asset acquisition as substantially all of the fair value of gross assets acquired were concentrated on a single set of identifiable activities consisting of lung and heart perfusion technology, referred to as the in-process research and development (“IPR&D”) asset.

and its subsidiary Tevosol, Inc., together (“BTL”) to further develop these technologies to expand its product offerings and indications for organ transplantation.

Due to the stage of development of the IPR&D asset at the date of acquisition, it was not yet probable that there was future economic benefit from this asset.

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Transplant aircraft

Transplant aircraft equipment

Flight school aircraft

Manufacturing equipment

Internal-use software

Computer equipment and software

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Impairment of Long-Lived Assets

Long-lived assets consist primarily of property, plant and equipment, right-of-use assets and intangible assets with finite lives.

Long-lived assets consist of property, plant and equipment, right-of-use assets and intangible assets with finite lives.

Long-lived assets to be held and used are tested for recoverability whenever events or changes in business circumstances indicate that the carrying amount of the assets may not be fully recoverable.

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Capitalization ceases upon completion of all substantial testing performed to ensure the product is ready for its intended use.

The Company capitalized costs associated with the development of internal-use software during the year ended December 31, 2024 (see Note 5).

The Company capitalized costs associated with the development of internal-use software during the years ended December 31, 2025 and 2024 (see Note 4).

The Company accounts for leases under ASC Topic 842, Leases (“ASC 842”).

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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 consolidated balance sheets, and the fair value of the convertible senior notes is presented at each reporting period for disclosure purposes only (see Note 8).

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 consolidated balance sheets, and the fair value of the Notes is presented at each reporting period for disclosure purposes only (see Note 7).

Segment Information

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Research, Development and Clinical Trials Costs

Research, development and clinical trials expenses consist of costs incurred for research activities, product development, hardware and software engineering and clinical trial activities, including salaries and bonuses, stock-based compensation, employee benefits, facilities costs, laboratory supplies, depreciation, testing, regulatory, data management and consulting costs.

Research, development and clinical trials costs are expensed as incurred.

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The fair value of restricted common stock awards is measured based on the difference between market value of the Company’s common stock on date of grant and the purchase price (if any).

The Company measures compensation expense for restricted common stock units based on the fair value on the date of grant using the market value of the Company’s common stock.

Generally, the Company issues awards with only service-based vesting conditions.

The Company measures compensation expense for restricted stock units based on the fair value on the date of grant using the market value of the Company’s common stock.

Generally, the Company issues stock-based awards with only service-based vesting conditions.

Compensation expense for those awards is recognized over the vesting period of the respective award using the straight-line method.

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Comprehensive income (loss) includes net income (loss) as well as other changes in stockholders’ equity that result from transactions and economic events other than those with stockholders.

The Company’s only elements of other comprehensive income (loss) are foreign currency translation adjustments and unrealized gains (losses) on marketable securities.

As of December 31, 2024, accumulated other comprehensive income (loss) on the consolidated balance sheets consists only of foreign currency translation adjustments.

The Company’s only elements of other comprehensive income (loss) are foreign currency translation adjustments.

Net Income (Loss) per Share

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Recently Adopted Accounting Pronouncements

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures , which requires public entities to disclose information about their reportable segments’ significant expenses and other segment items on an interim and annual basis.

Public entities with a single reportable segment are required to apply the disclosure requirements in ASU 2023-07, as well as all existing segment disclosures and reconciliation requirements in ASC 280 on an interim and annual basis.

ASU 2023-07 is effective for fiscal years beginning after December 15, 2023, and for interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted.

The Company adopted this guidance as of January 1, 2024 , and the adoption did no t have a material impact on its consolidated financial statements.

Recently Issued Accounting Pronouncements

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740):

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ASU 2023-09 is effective for fiscal years beginning after December 15, 2024, with early adoption permitted.

The Company is currently assessing the impact of the adoption of this guidance on its consolidated financial statements.

The Company adopted ASU 2023-09 for the year ended December 31, 2025, and applied the new disclosure requirements prospectively to the current annual period.

Prior period disclosures have not been adjusted to reflect the new disclosure requirements.

Recently Issued Accounting Pronouncements

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.

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The Company is currently assessing the impact of the adoption of this guidance on its consolidated financial statements.

Acquisition of Summit

On August 16, 2023 , the Company acquired Summit pursuant to the terms of an equity purchase agreement.

Summit was a charter flight operator based in Bozeman, Montana.

The acquisition enabled TransMedics to add aviation transportation services to its NOP and become a comprehensive national provider of donor organ procurement and delivery in the United States.

The acquisition was accounted for as a purchase of a business under ASC Topic 805, Business Combinations .

Under the acquisition method of accounting, the assets and liabilities were recorded as of the acquisition date, at their respective fair values.

The preliminary purchase consideration of $ 14.9 million reflected an upfront cash payment of $ 18.0 million, net of cash acquired and working capital adjustments.

In 2024, the Company recorded a final working capital adjustment of $ 0.4 million to the purchase price and goodwill.

The Company’s consolidated financial statements as of December 31, 2024 reflect the final allocation of the purchase price to the assets and liabilities assumed based on fair value as of the date of the acquisition.

The following tables summarize the final allocation of the purchase price (in thousands):

Assets Acquired and Liabilities Assumed:

Accounts receivable

Other current assets

Property, plant and equipment

Right-of-use asset

Intangible assets

Total assets acquired

Accounts payable and other current liabilities

Deferred tax liabilities

Operating lease liabilities

Total allocation of purchase price consideration,

net of cash acquired

Property, plant and equipment consisted primarily of flight school aircraft and construction-in-progress related to a commercial aircraft hangar that Summit was in the process of constructing at the date of acquisition.

Flight school aircraft were valued using market comparisons adjusted for aircraft-specific condition.

The fair value of construction-in-progress approximated its cost.

Intangible assets consisted primarily of a customer relationship asset of $ 2.3 million related to flight school revenue and was valued using the multi-period excess earnings method, a form of the income approach.

Significant assumptions and estimates utilized in this model include the revenue growth rate, contract renewal probability and the discount rate.

Intangible assets are being amortized on a straight-line basis to selling, general and administrative over their estimated useful lives of 12 years as of the acquisition date.

Goodwill was recognized for the excess purchase price over the fair value of the net assets acquired.

Goodwill is primarily attributable to the workforce of the acquired business (which is not eligible for separate recognition as an identifiable intangible asset) and anticipated synergies between Summit’s existing business processes and the NOP.

Goodwill from the acquisition is included within the Company’s one reporting unit and is included in the Company’s enterprise-level annual review for impairment.

Goodwill resulting from the acquisition is no t deductible for tax purposes.

Deferred tax liabilities relate to the differences between the fair value recognized in purchase accounting and the tax basis of property, plant and equipment and intangible assets.

The net deferred tax liability is a source of income to support the recognition of a portion of existing deferred tax assets.

Therefore, the Company recorded a tax benefit of $ 1.7 million in 2023 for the release of a portion of its valuation allowance related to the net deferred tax liabilities recorded in purchase accounting.

In July 2025, the FASB issued ASU 2025-05, Financial Instruments—Credit Losses (Topic 326) to introduce a practical expedient to calculating current expected credit loss by assuming that the current conditions as of the balance sheet date will not change for the remaining life of the asset.

This expedient can only be applied to current accounts receivable and current contract assets.

ASU 2025-05 is effective for annual reporting periods beginning after December 15, 2025 and interim periods within those annual periods, and this update is applied prospectively.

Early adoption is permitted in both interim and annual periods in which financials have not been issued.

The Company is currently assessing the impact of the adoption of this guidance on its consolidated financial statements.

In September 2025, the FASB issued ASU 2025-06, Intangibles – Goodwill and Other – Internal-Use Software (Subtopic 350-40):

Targeted Improvements to the Accounting for Internal-Use Software, which removes all references to software development project stages and requires entities to start capitalizing software costs when both of the following occur:

(i) management has authorized and committed to funding the software project and (ii) it is probable that the project will be completed and the software will be used to perform the function intended.

The amendments in ASU 2025-06 are effective for fiscal years beginning after December 15, 2027, and interim periods within those fiscal years, with early adoption permitted as of the beginning of a fiscal year.

The amendments can be applied prospectively, retrospectively, or via a modified prospective transition method.

The Company is currently assessing the impact of the adoption of this guidance on its consolidated financial statements.

In December 2025, the FASB issued ASU 2025-10, Government Grants (Topic 832):

Accounting for Government Grants Received by Business Entities.

ASU 2025-10 establishes authoritative guidance for accounting for government grants received by business entities, clarifies the appropriate accounting, in an effort to reduce diversity in practice, and increase consistency of application across business entities.

ASU 2025-10 is effective for annual reporting periods beginning after December 15, 2028, and interim reporting periods within those annual reporting periods.

Adoption of this guidance can be applied via a modified prospective approach, a modified retrospective approach, or a retrospective approach.

Early adoption is permitted.

The Company is currently assessing the impact of the adoption of this guidance on its consolidated financial statements.

Inventory consisted of the following (in thousands):

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The Company recorded an immaterial out-of-period adjustment in the fourth quarter of 2024 to reduce inventory by $ 2.1 million due to inventory-related transactions not being recorded timely and accurately.

This adjustment is immaterial to both the current and prior periods.

This adjustment was immaterial for the years ended December 31, 2024 and December 31, 2023.

Property, Plant and Equipment, Net

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Transplant aircraft

Transplant aircraft equipment

Flight school aircraft

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Computer equipment and software

Internal-use software

Laboratory equipment

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During the years ended December 31, 2025, 2024 and 2023, total depreciation and amortization expense was $ 27.0 million, $ 19.6 million and $ 8.1 million, respectively.

Construction-in-progress as of December 31, 2024 primarily relates to capitalized internal-use software that has not yet been placed in service.

Construction-in-progress as of December 31, 2023 primarily related to construction of a commercial aircraft hangar at Bozeman Yellowstone International Airport in Bozeman, Montana.

The aircraft hangar was placed in service in June 2024 and is included in leasehold improvements as of December 31, 2024.

The Company capitalized costs associated with the development of internal-use software of $ 4.4 million in the year ended December 31, 2024, included in construction-in-progress.

The Company did no t have capitalized costs for internal-use software in the years ended December 31, 2023 and 2022.

Construction-in-progress as of December 31, 2025 primarily related to the in-process construction of manufacturing equipment.

Construction-in-progress as of December 31, 2024 primarily related to capitalized internal-use software that had not yet been placed in service.

The Company capitalized costs associated with the development of internal-use software of $ 8.1 million and $ 4.4 million in the years ended December 31, 2025 and 2024, respectively.

The Company recorded amortization expense of $ 1.3 million during the year ended December 31, 2025 related to internal-use software.

The Company did not record amortization expense during the year ended December 31, 2024 as no internal-use software assets had been placed into service in 2024.

The net book value of internal-use software was $ 11.2 million and $ 4.4 million as of December 31, 2025 and 2024, respectively, of which $ 0.1 million and $ 4.4 million was included in construction-in-progress as of those respective dates.

The Company did no t have capitalized costs for internal-use software in the year ended December 31, 2023.

Substantially all of the Company's property, plant and equipment are held in the United States.

Land consists of two parcels in Mirandola, Italy.

Goodwill and Intangible Assets

The carrying amount of goodwill was $ 11.5 million and $ 12.0 million as of December 31, 2024 and 2023, respectively, and related to the Company’s acquisition of Summit.

The decrease in goodwill from the year ended December 31, 2023 was due to final working capital adjustments to the purchase price of Summit.

The carrying amount of goodwill was $ 11.5 million as of December 31, 2025 and 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.

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Amortization expense is recorded within selling, general and administrative expense.

Amortization expense for the years ended December 31, 2024 and 2023 was $ 0.2 million and $ 0.1 million, respectively.

Amortization expense for the years ended December 31, 2025, 2024 and 2023 was $ 0.2 million, $ 0.2 million and $ 0.1 million, respectively.

Future amortization expense of the intangible assets as of December 31, 2025, is expected to be as follows (in thousands):

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Accrued research, development and clinical trials expenses

Accrued third-party surgeon costs

Accrued professional fees

Accrued other

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Convertible Senior Notes

Convertible senior notes consisted of the following (in thousands):

The Notes consisted of the following (in thousands):

Principal amount of convertible senior notes

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A conditional conversion feature of the Notes was triggered on June 30, 2024 and again on September 30, 2024, 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 each of the quarters ended June 30, 2024 and September 30, 2024, respectively, and the Notes therefore became convertible at the noteholders’ election in the immediately following calendar quarters ended September 30, 2024 and December 31, 2024, respectively.

A conditional conversion feature of the Notes was triggered on December 31, 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 December 31, 2025, and the Notes therefore became convertible at the noteholders’ election in the calendar quarter ending March 31, 2026 (and only during this calendar quarter).

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The debt discount is reflected as a reduction of the carrying value of the Notes on the Company’s consolidated balance sheets and is being accreted to interest expense over the term of the Notes using the effective interest method.

During the years ended December 31, 2024 and 2023, the Company recognized $ 9.7 million and $ 6.2 million, respectively, in interest expense related to the 1.50 % cash coupon of the Notes and amortization of the debt issuance costs.

During the years ended December 31, 2025, 2024 and 2023, the Company recognized $ 9.8 million, $ 9.7 million and $ 6.2 million, respectively, in interest expense related to the 1.50 % cash coupon of the Notes and amortization of the debt issuance costs.

During the years ended December 31, 2025, 2024 and 2023, the effective interest rate on the outstanding Notes was approximately 2.1 % .

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Long-term debt, net of discount and current portion

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 “First Amendment”), the Second Amendment to Credit Agreement, dated as of June 23, 2023, by and among the Company, and CIBC (the “Second Amendment”), the Third Amendment to Credit Agreement, dated as of November 9, 2023, by and among the Company, and CIBC (the “Third Amendment”) (as amended, the “CIBC Credit Agreement”), pursuant to which the Company borrowed $ 60.0 million.

In connection with the CIBC Credit Agreement, the Company repaid all amounts due under its previously outstanding credit agreement and recorded a loss on extinguishment of debt of $ 0.6 million during 2022, which amount was classified as other expense in the consolidated statements of operations.

On May 8, 2023, the Company entered into the First Amendment, which among other items, allowed for the issuance of the Notes and capped call transactions.

On June 23, 2023, the Company entered into the Second Amendment, which among other items, permits the Company to make acquisitions of equity or assets of another entity, subject to the conditions under the Second Amendment, including acquisitions, without further consent of CIBC, up to a maximum amount of $ 50.0 million for the cash payable in connection with an individual acquisition and a maximum amount in aggregate of $ 150.0 million for the total cash consideration payable for all acquisitions made by the Company on or after June 23, 2023.

The definition of consolidated adjusted EBITDA was also amended by the Second Amendment to add a provision for the pro forma effect of any acquisitions that occur during the period.

Additionally, pursuant to the Second Amendment, the parties agreed to extend the start of the principal repayment period to July 31, 2026, on which date the Company is obligated to begin repayment of the term loans in equal monthly installments until the maturity date in July 2027.

On November 9, 2023, the Company entered into the Third Amendment, which, among other items, permits the Company to make acquisitions of equity or assets of another entity, subject to the conditions under the Third Amendment, without further consent of CIBC, for cash consideration in a maximum aggregate amount of $ 300.0 million for all such acquisitions made by the Company on or after November 9, 2023.

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, 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 %.

At the Company’s option, the Company may prepay borrowings outstanding under the CIBC Credit Agreement, without a prepayment fee.

The Company is obligated to repay the outstanding principal amount in equal monthly installments commencing in July 2026 with the remaining balance due on the maturity date in July 2027 .

At the Company’s option, the Company may prepay the outstanding principal amount under the CIBC Credit Agreement, without a prepayment fee.

In connection with entering into the CIBC Credit Agreement, the Company paid upfront fees and other costs of $ 1.5 million, which were recorded by the Company as a debt discount.

The debt discount is reflected as a reduction of the carrying value of long-term debt on the Company’s consolidated balance sheets and is being accreted to interest expense over the term of the CIBC Credit Agreement using the effective interest method.

The debt discount is reflected as a reduction of the carrying value of long-term debt and is being accreted to interest expense over the term of the debt using the effective interest method.

All obligations under the CIBC Credit Agreement are guaranteed by the Company and each of its material subsidiaries.

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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) 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 .

As discussed above, the definition of consolidated adjusted EBITDA was amended to include the pro forma effect of acquisitions.

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.

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As of December 31, 2025, the stated interest rate applicable to borrowings under the CIBC Credit Agreement was 5.7 % .

During the years ended December 31, 2024, 2023 and 2022, the Company recognized $ 4.7 million, $ 4.6 million and $ 3.7 million, respectively, in interest expense related to the stated interest rate on outstanding borrowings and amortization of the debt issuance costs.

During the years ended December 31, 2025, 2024 and 2023, the Company recognized $ 4.0 million, $ 4.7 million and $ 4.6 million, respectively, in interest expense related to the variable interest rate on borrowings and amortization of the debt issuance costs.

During the years ended December 31, 2025, 2024 and 2023, the weighted average effective interest rate on outstanding borrowings under the CIBC Credit Agreement was approximately 6.8 % , 7.7 % and 7.7 % , respectively.

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In April 2024, warrants for the purchase of 14,440 shares of common stock at an exercise price of $ 17.47 per share were exercised in a cashless exercise resulting in the issuance of 11,735 shares of common stock.

In November 2022, warrants were exercised to purchase 50,000 shares of common stock at an exercise price of $ 8.75 per share for total proceeds of $ 0.4 million.

As of December 31, 2024 , the Company had no outstanding warrants.

As of December 31, 2025 and 2024, the Company had no outstanding warrants.

Stock-Based Compensation

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As of December 31, 2025, 429,145 shares of common stock remained available for issuance under the Inducement Plan.

Awards granted under the 2019 Plan and Inducement Plan vest over periods determined by the board of directors and expire no longer than ten years from the date of the grant.

Awards granted under the Amended 2019 Plan and Inducement Plan vest over periods determined by the board of directors and expire no longer than ten years from the date of the grant.

The exercise price for stock options granted is not less than the fair value of common shares based on quoted market prices.

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Unvested restricted common stock as of December 31, 2025

The aggregate fair value of restricted stock that vested during the years ended December 31, 2024 and 2023 was $ 1.4 million and $ 1.7 million, respectively.

There was no restricted stock vesting during the year ended December 31, 2022.

The aggregate fair value of restricted stock that vested during the years ended December 31, 2025, 2024 and 2023 was $ 0.2 million, $ 1.4 million and $ 1.7 million, respectively.

The Company granted restricted common stock during the years ended December 31, 2025, 2024 and 2023 with a weighted average grant-date fair value of $ 129.35 , $ 156.00 and $ 72.75 per share, respectively.

Restricted Common Stock Units

The following table summarizes the Company's restricted common stock unit activity since December 31, 2023:

Restricted Stock Units

The following table summarizes the Company's restricted stock unit activity since December 31, 2024:

Weighted Average Grant Date Fair Value

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Unvested restricted stock units as of December 31, 2025

The aggregate fair value of restricted stock units that vested during the year ended December 31, 2024 was $ 11.3 million.

There was no restricted stock units vesting during the years ended December 31, 2023 and 2022.

The Company granted restricted common stock units during the years ended December 31, 2024 and 2023 with a weighted average grant-date fair value of $ 89.60 and $ 63.74 per share, respectively.

The Company did no t grant restricted common stock units during the year ended December 31, 2022.

The aggregate fair value of restricted stock units that vested during the years ended December 31, 2025 and 2024 was $ 14.2 million and $ 11.3 million, respectively.

There was no restricted stock units vesting during the year ended December 31, 2023.

The Company granted restricted stock units during the years ended December 31, 2025, 2024 and 2023 with a weighted average grant-date fair value of $ 82.99 , $ 89.60 and $ 63.74 per share, respectively.

Stock-Based Compensation

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Selling, general and administrative expenses

The Company recognized income tax benefits related to stock-based compensation expense of $ 8.9 million as a component in calculating its income tax benefit for the year ended December 31, 2025.

The Company did no t record income tax benefits related to stock-based compensation expense for the years ended December 31, 2024 and 2023 due to the full valuation allowance against deferred tax assets.

As of December 31, 2025, total unrecognized compensation cost related to unvested share-based awards was $ 63.1 million, which is expected to be recognized over a weighted-average period of 2.2 years.

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Income tax expense (benefit)

The Company recorded a deferred tax benefit of $ 1.7 million for the release of a portion of its valuation allowance related to the net deferred tax liabilities recorded in purchase accounting during the year ended December 31, 2023.

As part of the allocation of the purchase price of Summit, the Company recorded deferred tax liabilities for the differences between the fair value recognized in purchase accounting and the tax basis of property, plant and equipment and intangible assets.

The net deferred tax liability is a source of income to support the recognition of a portion of its existing deferred tax assets.

Therefore, the Company released the same amount of its valuation allowance.

The Company maintains a valuation allowance on its overall net deferred tax asset as it deems it more likely than not that the net deferred tax asset will not be realized.

A reconciliation of the U.S.

federal statutory income tax rate to the Company’s effective income tax rate is as follows:

The Company adopted ASU 2023-09 on a prospective basis beginning with the year ended December 31, 2025.

The following table presents required disclosure pursuant to ASU 2023-09 and reconciles the U.S.

federal statutory income tax amount and rate to the Company's effective amount and rate for the year ended December 31, 2025 (dollar amounts in thousands):

Year Ended December 31, 2025

Federal statutory income tax rate

State and local income tax, net of federal (national)

income tax effect(1)

Effect of changes in tax laws or rates enacted in the current period

Federal tax credits

Changes in federal valuation allowance

Nontaxable or nondeductible items

Permanent differences

Executive compensation

Federal net operating loss adjustments

Tax attribute true up

Stock-based compensation expense

Other adjustments

Effective income tax rate

(1) State income tax expense is impacted primarily by the release of the state valuation allowance of $ 31.5 million, partially offset by the impact of the 382 assessment on the Company's Massachusetts net operating loss carryforwards and Massachusetts research and development tax credits, totaling $ 12.1 million.

The One Big Beautiful Bill Act (“OBBBA”) was signed into law on July 4, 2025, which, among other provisions, permanently repeals the requirement to capitalize domestic research expenditures for federal income tax purposes for taxable years beginning after December 31, 2024, and allows for the accelerated deduction of any remaining unamortized domestic research expenditures over one or two years.

Foreign research expenditures are still required to be capitalized and amortized ratably over 15

The OBBBA also allows the option to claim 100% accelerated depreciation deductions on qualified property.

In accordance with ASC 740, the impacts of the OBBBA are reflected in the Company’s income tax benefit for the year ended December 31, 2025.

The following table presents the required disclosures prior to adoption of ASU 2023-09 and reconciles the U.S.

federal statutory income tax rate to the effective income tax rate for the years ended December 31, 2024 and 2023:

Year Ended December 31,

Federal statutory income tax rate

State taxes, net of federal benefit

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Net deferred tax assets

As of December 31, 2024, the Company had federal net operating loss carryforwards of $ 404.1 million, which may be available to offset future taxable income, of which $ 204.6 million of the total net operating loss carryforwards expire at various dates between 2025 and 2037 , while the remaining $ 199.5 million do not expire but are limited in their usage to an annual deduction equal to 80 % of annual taxable income.

As of December 31, 2025, the Company had federal net operating loss carryforwards of $ 370.9 million, which may be available to offset future taxable income, of which $ 74.0 million expire at various dates between 2030 and 2037 , while the remaining $ 296.9 million do not expire but are limited in their usage to an annual deduction equal to 80 % of taxable income.

As of December 31, 2025, the Company had state net operating loss carryforwards of $ 261.6 million, which may be available to offset future taxable income and expire at various dates between 2030 and 2045 .

As of December 31, 2024, the Company also had U.S.

As of December 31, 2025, the Company had U.S.

federal and state research and development tax credit carryforwards of $ 7.3 million and $ 4.0 million, respectively, which may be available to offset future tax liabilities and expire at various dates between 2026 and 2045 .

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Utilization of the U.S.

federal and state net operating loss carryforwards and research and development tax credit carryforwards may be subject to a substantial annual limitation under Sections 382 and 383 of the Internal Revenue Code of 1986, and corresponding provisions of state law, due to ownership changes that have occurred previously or that could occur in the future.

federal and state net operating loss carryforwards and research and development tax credit carryforwards may be subject to limitation under Sections 382 and 383 of the Internal Revenue Code of 1986, and corresponding provisions of state law, due to ownership changes that have occurred previously.

Future ownership changes could result in additional limitations.

These ownership changes may limit the amount of carryforwards that can be utilized annually to offset future taxable income or tax liabilities.

In general, an ownership change, as defined by Section 382, results from transactions increasing the ownership of certain stockholders or public groups in the stock of a corporation by more than 50% over a three-year period.

The Company has not conducted a study to assess whether a change of control has occurred or whether there have been multiple changes of control since inception due to the significant complexity and cost associated with such a study.

If the Company has experienced a change of control, as defined by Section 382, at any time since inception, utilization of the net operating loss carryforwards or research and development tax credit carryforwards would be subject to an annual limitation under Section 382, which is determined by first multiplying the value of the Company’s stock at the time of the ownership change by the applicable long-term tax-exempt rate, and then could be subject to additional adjustments, as required.

Any limitation may result in expiration of a portion of the net operating loss carryforwards or research and development tax credit carryforwards before utilization.

Further, until a study is completed by the Company and any limitation is known, no amounts are being presented as an uncertain tax position.

As required by ASC 740, management of the Company has evaluated the positive and negative evidence bearing upon the realizability of its deferred tax assets, which are comprised principally of net operating loss carryforwards.

Management has determined that it is more likely than not that the Company will not recognize the benefits of federal and state deferred tax assets and, as a result, a valuation allowance has been recorded.

As of December 31, 2024 and 2023 , the Company had no accrued interest or penalties related to uncertain tax positions and no amounts had been recognized in the Company’s consolidated statements of operations.

The Company's policy is to record any interest or penalties related to income taxes as part of the income tax provision.

The Company generated research credits for the tax years ending after December 31, 2001 but has not conducted a study to document qualified activities.

This study may result in an adjustment to the Company's research and development carryforwards;

however, until a study is completed and any adjustment is known, no amounts are being presented as an unrecognized tax benefit for the year ended December 31, 2024.

A full valuation allowance has been provided against the Company's research and development credits and, if an adjustment is required, this adjustment would be offset by an adjustment to the deferred tax asset established for the research credit carryforward and the valuation allowance.

The Company files income tax returns as prescribed by the tax laws of the jurisdictions in which it operates.

In the normal course of business, the Company is subject to examination by federal and state jurisdictions, where applicable.

There are currently no pending federal or state tax examinations.

The Company has open tax years subject to examination from fiscal year 2021 to present.

To the extent that the Company has carryforward attributes, the tax years in which the attribute was generated may still be adjusted upon examination by federal, state or local tax authorities if they either have been or will be used in the future.

Changes in the valuation allowance for deferred tax assets during the year ended December 31, 2024 related primarily to current year federal and state net operating losses generated, capitalized research and development costs, and federal and state research and development tax credits generated, partially offset by an increase in deferred tax liabilities related to depreciation expense.

During 2025, the Company completed a 382 assessment and determined that the Company underwent multiple ownership changes since inception.

Net operating loss carryforwards and development tax credit carryforwards were limited by these changes.

The Company recorded a reduction to its gross U.S.

deferred tax assets of $ 44.7 million during the year ended December 31, 2025 relating to these limitations, with a corresponding decrease to its valuation allowance.

As required by ASC 740, management evaluated positive and negative evidence when assessing the realizability of its deferred tax assets, which are comprised principally of net operating loss carryforwards.

During the fourth quarter of 2025, the Company concluded that it is more likely than not that the Company will realize substantially all its net U.S.

Federal and state deferred tax assets and accordingly, recognized a benefit to income tax expense of $ 103.3 million related to the release of its valuation allowance against deferred tax assets.

Management relied primarily on cumulative income over the preceding twelve quarters, recent operating profits and, to a lesser extent, expected future profits in its assessment to release the valuation allowance.

A valuation allowance of $ 0.9 million was maintained on certain state tax attributes as it was considered more-likely-than-not that these tax attributes would expire before realization.

As of December 31, 2024, the Company had a full valuation allowance against its U.S.

federal and state deferred tax assets.

Changes in the valuation allowance for deferred tax assets during the year ended December 31, 2025 related to the valuation allowance release described above.

Changes in the valuation allowance for deferred tax assets during the year ended December 31, 2024 related primarily to federal and state net operating losses generated, capitalized research and development costs, and federal and state research and development tax credits generated, partially offset by an increase in deferred tax liabilities related to depreciation expense.

Changes in the valuation allowance for deferred tax assets during the year ended December 31, 2023 related primarily to current year federal and state net operating losses generated, acquired IPR&D and capitalized research and development costs.

Changes in the valuation allowance for deferred tax assets during the year ended December 31, 2022 related primarily to the capitalization of research and development costs required under Section 174 and current year federal and state net operating losses generated, partially offset by a decrease in deferred tax assets related to state net operating loss carryforwards due to a change in the state effective tax rate.

The changes in the valuation allowance were as follows (in thousands):

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Valuation allowance as of end of year

As of December 31, 2025 and 2024 , the Company had no uncertain tax positions and no accrued interest or penalties related to uncertain tax positions.

The Company's policy is to record any interest or penalties related to income taxes as part of the income tax provision.

The Company files income tax returns as prescribed by the tax laws of the jurisdictions in which it operates.

In the normal course of business, the Company is subject to examination by federal and state jurisdictions, where applicable.

There are currently no pending federal or state tax examinations.

The Company has open tax years subject to examination in the United States from fiscal year 2022 to present.

Income taxes paid (net of refunds received) for the year ended December 31, 2025 were as follows (in thousands):

Year Ended December 31, 2025

Aggregated state and local jurisdictions

Disaggregated state and local jurisdictions:

During the years ended December 31, 2024 and 2023, income taxes paid were not material.

The Company leases its office, laboratory and manufacturing space under two noncancelable leases that expire in December 2027 and include a lease incentive, fixed payment escalations, and rent holidays.

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In June 2023, the Company amended one of its lease agreements to add space through the remainder of the lease term and under the existing terms of the lease.

In connection with the acquisition of Summit, the Company acquired a 20-year operating lease with one 10-year renewal option, for space at the Bozeman Yellowstone International Airport in Bozeman, Montana where the Company constructed a commercial aircraft hangar (see Note 3).

In June 2024, the Company entered into a lease for office and hangar space in Dallas, Texas that expires June 30, 2027 , subject to certain early termination provisions.

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The Company recorded a right-of-use asset and related lease liability of $ 1.5 million in the third quarter of 2024, upon commencement of the lease.

The Company also leases office space for its NOP and hangar space for its aircraft at various locations in the United States under short-term leases.

The Company also leases office space for its NOP and hangar space for its aircraft at various locations in the U.S.

under both short-term and long-term leases, and leases space for distribution and commercial operations in Europe.

The components of the Company’s lease expense under ASC 842 are as follows (in thousands):

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The weighted-average remaining lease term as of December 31, 2025 and 2024 was 2.8 years and 3.7 years, respectively.

The weighted-average discount rate as of December 31, 2024 and 2023 was 6.9 % .

The weighted-average discount rate as of December 31, 2025 and 2024 was 6.8 % and 6.9 % , respectively.

Because the interest rate implicit in the leases was not readily determinable, the Company’s estimated incremental borrowing rate was used to calculate the present value of the leases.

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Total operating lease liabilities

In January 2026, the Company entered into a new lease agreement and purchased land in Somerville, Massachusetts to eventually replace its existing headquarters in Andover, Massachusetts (see Note 16).

Commitments and Contingencies

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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 annual compensation on a pre-tax basis.

Effective January 1, 2023, the Company instituted an employer matching program for the 401(k) 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 years ended December 31, 2024 and 2023, the Company recorded expense of $ 3.3 million and $ 1.4 million, respectively, related to these matching contributions.

Prior to 2023, the Company had no t made any contributions to the plan.

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 years ended December 31, 2025, 2024 and 2023, the Company recorded expense of $ 3.9 million, $ 3.3 million and $ 1.4 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 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.

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.

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Legal Proceedings

On February 14, 2025, a class action captioned Merly Jewik v.

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 in the United States District Court for the District of Massachusetts.

The complaint purports to assert claims against the Company and certain of its current and former officers pursuant to Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, as amended, and 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 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.

1:25-cv-10385, was filed against the Company and certain of its current and former officers in the U.S.

District Court for the District of Massachusetts.

The complaint purported to assert claims pursuant to Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 (the “Exchange Act”), as amended, and SEC Rule 10b-5 promulgated thereunder, seeking unspecified damages 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”).

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 U.S.

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 Plaintiffs”).

On August 8, 2025, Lead Plaintiffs filed a consolidated amended complaint.

Like the earlier-filed complaints, the amended complaint purports to assert claims pursuant to Sections 10(b) and 20(a) of the Exchange Act and Rule 10b-5, on behalf of a putative class of investors who purchased or otherwise acquired the Company’s shares during the Class Period.

Lead Plaintiffs seek unspecified damages allegedly caused by purported misstatements and omissions contained in our 2022 Annual Report, certain earnings calls, and other public statements.

The amended complaint claims these alleged statements and omissions operated to artificially inflate the price paid for our common stock during the Class Period.

On October 7, 2025, defendants filed a motion to dismiss the amended complaint for failure to state a claim.

Lead Plaintiffs’ filed their response to the motion on November 21, 2025, and defendants’ filed a reply in further support of their motion on December 22, 2025.

The Company cannot anticipate when the court will rule on that motion.

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.

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Total OCS transplant revenue includes product and service revenue.

(2) Service revenue unrelated to OCS transplant, which was $ 4.4 million and $ 4.9 million for the years ended December 31, 2024 and 2023, is not included in this table.

(2) Service revenue unrelated to OCS transplant, which was $ 4.1 million, $ 4.4 million and $ 4.9 million for the years ended December 31, 2025, 2024 and 2023 , 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 in the same period as the revenue is recognized and records a corresponding accrual for its estimate of the payments.

The Company updates its clinical trial accrual estimates as information related to clinical trial payments is received with a corresponding adjustment to 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.

The reconciliation of gross product revenue to net product revenue for these certain payments is shown below (in thousands):

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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 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.

21 unchanged sentences

Net income (loss)

(1) Other segment items include interest income, interest expense, foreign currency exchange gains and losses and income taxes.

(1) Other segment items include interest income, interest expense, foreign currency exchange gains and losses and income taxes, including an income tax benefit of $ 82.8 million for the year ended December 31, 2025.

See the consolidated financial statements for other financial information regarding the Company’s operating segment.

5 unchanged sentences

Net income (loss)

Interest expense, net of tax, attributable

to assumed conversion of convertible senior

Net income (loss), diluted

Weighted average basic common shares

Effect of dilutive securities:

Convertible senior notes

Options to purchase common stock

19 unchanged sentences

The Company paid Dr.

Amira Hassanein $ 0.5 million in total compensation in the year ended December 31, 2024 and $ 0.4 million in total compensation in each of the years ended December 31, 2023 and 2022, for her services as an employee.

Amira Hassanein $ 0.8 million, $ 0.5 million and $ 0.4 million in total compensation in the years ended December 31, 2025, 2024 and 2023 , respectively, for her services as an employee.

Subsequent Events

In separate transactions in January 2025 and February 2025, the Company acquired two fixed-wing aircraft from two separate sellers for a total purchase price of $ 28.4 million.

The Company plans to utilize these aircraft as part of the NOP's aviation transportation services.

On January 8, 2026, the Company entered into a lease agreement (the “Lease”) with BioMed Realty (the “Landlord”) for the lease of approximately 498,286 square feet of space in Somerville, Massachusetts for the Company’s principal executive offices and for research and development, laboratory, manufacturing and assembly, vivarium, office and related uses (the “Premises”) to ultimately replace its existing headquarters in Andover, Massachusetts.

Base rent begins to accrue on the latter of:

(a) January 1, 2028 , and (b) the date that is twenty-four ( 24 ) months after term commencement date (but in no event later than February 1, 2028).

The Lease will expire one hundred ninety-two ( 192 ) months from date base rent begins to accrue, unless earlier terminated (the “Initial Term”).

The Lease includes a one-time purchase option, which may be exercised by the Company within a defined time period.

The annual base rent under the Lease will initially be approximately $ 23.9 million.

Base rent will increase by 2 % annually during the first three years of the Initial Term and by 3 % annually for each year thereafter during the remainder of the Initial Term.

The Company will also be responsible for a pro rata share of the payment of additional rent to cover the Company’s share of the annual operating and tax expenses for the Premises, with the Company’s share estimated to be approximately 100 %.

The Company holds two consecutive options to extend the Initial Term for additional periods of ten years each, exercisable by written notice delivered not less than 18 months prior to the expiration of the then-current term and subject to customary conditions, including that no default then exists.

The Company also holds an option to extend the Lease term for a period of six months , exercisable by written notice delivered not less than 18 months prior to the expiration of the then-current term and subject to customary conditions, including that no default then exists.

The Company has delivered a security deposit to the Landlord in the form of a letter of credit for approximately $ 18.0 million, which may be drawn down by the Landlord to be applied for certain purposes upon the Company’s breach of certain provisions under the Lease.

The Lease also contains customary provisions allowing the Landlord to terminate the Lease if the Company fails to remedy a breach of any of its obligations within specified time periods, or upon bankruptcy or insolvency of the Company.

On January 8, 2026, the Company acquired two parcels adjacent to the Premises in Somerville, Massachusetts from BRE-BMR Assembly Innovation I LLC and BRE-BMR Middlesex LLC, respectively.

The purchase price was $ 15.0 million for each property, plus related costs, title company expenses, and tax payments.

Changes in and Disagreements with Accou ntants on Accounting and Financial Disclosure.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 7. Management’s Discussion and Analysis