MiMedx Group, Inc. reported financial results for the third quarter of 2026, showing a significant decrease in net sales compared to the prior year period. Net sales for the three months ended September 30, 2026, were $62.3 million, a 45% decrease from $113.7 million in the same period in 2025. The company attributes this decline to a year-over-year decrease in Wound sales of 71%, which was driven by Medicare reimbursement changes that took effect on January 1, 2026. Despite the overall drop, the company's Surgical franchise delivered mid-teens volume growth and reported sales of $62.3 million, a 9% increase over the prior year. Surgical products now represent nearly two-thirds of the company's net sales.
Gross profit for the third quarter of 2026 was $49.7 million, resulting in a gross margin of 80%. This represents a decline from the prior year's margin of 84% and last quarter's margin of 69%. The company attributes the margin decline to unfavorable product mix and the impact of Medicare reimbursement rules on Wound product prices. However, management noted a sequential improvement in gross margin due to cost reduction initiatives and manufacturing efficiencies.
Operating expenses for the quarter were $58.3 million, driven by lower expenses from a cost reduction initiative announced in April and lower commissions on lower sales. These were partially offset by $6 million in incremental legal and strategic expenses related to ongoing litigation and the proposed acquisition of Sanara MedTech. Research and development expenses were $2.8 million. The company reported a net loss of $8.7 million for the quarter, compared to net income of $16.7 million in the prior year. This resulted in a return to positive Adjusted EBITDA, a significant improvement from the previous quarter.
As of September 30, 2026, the company held $120.8 million in cash and cash equivalents, a decrease from $166.1 million as of December 31, 2025. During the quarter, the company repaid the remaining $17 million balance of its term loan, ending the period with no debt outstanding. The company also announced a favorable federal court ruling regarding the regulatory classification of its AXIOFILL product and entered into a patent license agreement with a competitor, receiving a $5 million payment and agreeing to receive four additional installments of $5 million annually.
MiMedx provided financial outlook for 2026, expecting net sales to be between $250 million and $260 million. The company anticipates Adjusted EBITDA for the fourth quarter to be sequentially higher than the third quarter and expects to achieve annual net sales growth in the low double digits with an adjusted EBITDA margin above 20% in the longer term.
