Surmodics, Inc. SRDX delivered adjusted earnings per share (EPS) of 6 cents in the third quarter of fiscal 2025 against the year‑ago quarter’s adjusted loss per share of 27 cents and the Zacks Consensus Estimate of a loss of 21 cents per share. GAAP loss per share for the quarter was 37 cents, narrower than the year‑earlier loss of 53 cents per share.

Surmodics registered revenues of $29.6 million in the fiscal third quarter, down 2.6% year over year. The figure topped the Zacks Consensus Estimate by 4.3%. Total revenues included $0.0 million of SurVeil drug‑coated balloon (DCB) license fee revenues compared with $1.1 million in the third quarter of fiscal 2024. The decrease was due to the completion of the TRANSCEND clinical trial in the second quarter of fiscal 2025. Total revenues, excluding SurVeil DCB license fee revenues, increased 1% to $29.6 million from $29.2 million in the third quarter of fiscal 2024. Total revenues in the third quarter of fiscal 2025 were also unfavorably impacted by a $1.7 million decrease in SurVeil DCB product sales revenues year over year, due to lower demand for commercial shipments from Abbott, Surmodics’ exclusive distribution partner for the product. The decrease was partially offset by continued growth of the Pounce thrombectomy device platform revenues. Shares of this company gained nearly 8.5% at the end of yesterday’s trading.

Surmodics operates via two reportable segments — Medical Device and In Vitro Diagnostics (IVD). In the reported quarter, sales in the Medical Device segment were $22.2 million, down 4.9% from the year‑ago quarter. This figure compares to our Medical Device fiscal third‑quarter revenue projection of $21.6 million. In the quarter under review, IVD sales improved 5.7% year over year to $7.4 million, driven by growth across all product lines. This figure compares to our IVD fiscal third‑quarter revenue projection of $6.6 million. The company also derives revenues from three primary sources — Product sales, Royalties and license fees, and Research, development and other fees. In the quarter under review, Product sales were $16.8 million, down 4.6% from the prior‑year quarter. This figure compares to our fiscal third‑quarter revenue projection of $16 million. Royalties and license fees revenues totaled $9.7 million, down 7.7% from the prior‑year quarter. This figure compares to our fiscal third‑quarter revenue projection of $9.9 million. Research, development and other revenues were $3.1 million, up 35.7% year over year. This figure compares to our fiscal third‑quarter revenue projection of $2.4 million.

In the quarter under review, Surmodics’ gross profit decreased 4.1% year over year to $20.9 million. The gross margin contracted 116 basis points to 70.9%. We had projected a gross margin of 73.1% for the fiscal third quarter. Selling, general & administrative expenses increased 6.8% year over year to $17.8 million. Research and development expenses declined 22.4% year over year to $7.6 million. Adjusted operating expenses of $25.3 million declined 4.1% year over year. Adjusted operating loss totaled $4.3 million compared with the prior‑year quarter’s adjusted operating loss of $4.5 million.

Surmodics exited third‑quarter fiscal 2025 with cash and cash equivalents of $26.3 million compared with $29.2 million at the fiscal second‑quarter end. Total long‑term debt at the end of third‑quarter fiscal 2025 was $29.67 million compared with $29.63 million at the fiscal second‑quarter end. Cumulative net cash used in operating activities at the end of third‑quarter fiscal 2025 was $5.5 million compared with $3.4 million a year ago.

Surmodics has revised its outlook for fiscal 2025. The company now expects fiscal 2025 total revenues in the range of $116.5 million‑$118.5 million (reflecting a decrease of 8‑6% over the comparable fiscal 2024 period), up from the prior outlook of $114 million‑$117 million (reflecting a decrease of 10‑7% over the comparable fiscal 2024 period). The Zacks Consensus Estimate is pegged at $116.3 million. Excluding SurVeil DCB license fee revenue, Surmodics now expects fiscal 2025 total revenues in the range of $115 million‑$117 million (representing a decrease of 5‑3% compared to fiscal 2024), up from the previous expectations of $112.5 million‑$115.5 million (reflecting a decrease of 7‑5% over the comparable fiscal 2024 period). SRDX continues to expect SurVeil DCB license fee revenues to decrease $3.6 million in fiscal 2025, with no further recognition of SurVeil DCB license fee revenue subsequent to March 31, 2025. The company expects SurVeil DCB product revenues to decrease $7.5 million in fiscal 2025, primarily due to lower demand for commercial shipments from Abbott. Adjusted loss per share for fiscal 2025 is now projected to be in the range of 35‑20 cents, narrower than the prior outlook of 62‑42 cents. The Zacks Consensus Estimate is pegged at a loss of 57 cents.

Surmodics exited the third quarter of fiscal 2025 with a dismal top‑line performance and lower revenues from the Medical Device segment. The company registered lower revenues from Product sales and Royalties and license fees, which were discouraging. The gross margin contraction also does not bode well for the stock. On a positive note, Surmodics exited the fiscal third quarter with better‑than‑expected results and encouraging bottom‑line results. Robust IVD sales and Research, development and other revenues were encouraging. The continued growth in sales of the Pounce Thrombectomy Platform and continued growth in customer utilization of its Serene hydrophilic coating during the quarter looked promising. Management stated that SRDX expanded the pipeline of device applications evaluating its Preside hydrophilic coatings to include all core vascular segments of neuro, coronary, peripheral and structural heart during the quarter. The company also saw its first customer begin early commercialization of a device coated with this technology, following the receipt of FDA 510(k) clearance. In April, Surmodics announced the commercial release of the Pounce XL Thrombectomy System. Also, in April, the company announced the publication of the TRANSCEND clinical trial’s favorable outcome. These raise our optimism about the stock.

SRDX currently carries a Zacks Rank #4 (Sell). Some better‑ranked stocks in the broader medical space that have announced quarterly results are GE HealthCare Technologies Inc. GEHC, West Pharmaceutical Services, Inc. WST and Boston Scientific Corporation BSX. GE HealthCare, carrying a Zacks Rank #2 (Buy), reported second‑quarter 2025 adjusted EPS of $1.06, beating the Zacks Consensus Estimate by 16.5%. Revenues of $5.01 billion outpaced the consensus mark by 0.7%. GE HealthCare has a long‑term estimated growth rate of 5.8%. GEHC’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 12.5%. West Pharmaceutical reported second‑quarter 2025 adjusted EPS of $1.84, beating the Zacks Consensus Estimate by 21.9%. Revenues of $766.5 million surpassed the Zacks Consensus Estimate by 5.4%. It currently flaunts a Zacks Rank #1. West Pharmaceutical has a long‑term estimated growth rate of 8.4%. WST’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 16.8%. Boston Scientific reported second‑quarter 2025 adjusted EPS of 75 cents, beating the Zacks Consensus Estimate by 4.2%. Revenues of $5.06 billion surpassed the Zacks Consensus Estimate by 3.5%. It currently carries a Zacks Rank #2. Boston Scientific has a long‑term estimated growth rate of 14%. BSX’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 8.1%. This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

SRDX Stock Up Following Q3 Earnings Beat, Gross Margin Contracts

Surmodics, Inc. (SRDX) beat expectations in fiscal Q3 2025, reporting an adjusted EPS of 6 cents versus a projected loss, and revenue of $29.6 million. Gross margin contracted to 70.9%, but shares rose 8.5% on the news. The company revised its fiscal 2025 revenue guidance upward and narrowed its projected loss per share. Key product lines include the Pounce thrombectomy platform and Serene hydrophilic coating, while lower demand for SurVeil DCB from Abbott weighed on sales.