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DATE

Thursday, Oct. 8, 2026

CALL PARTICIPANTS

• President and Chief Executive Officer - James C. Clemmer
• Executive Vice President and Chief Financial Officer - Stephen A. Trowbridge

TAKEAWAYS

• Net Sales -- $80.9 million, representing 6.9% year-over-year growth driven by strength in the medtech segment.
• Med Tech Segment Revenue -- $39.9 million, reflecting a 13.2% increase and now comprising 49% of total company revenue.
• Auryon Revenue -- $18.9 million, growing 14.7% year over year and marking the platform's 21st consecutive quarter of double-digit growth.
• Mechanical Thrombectomy Revenue -- $12.0 million, an increase of 6.7% compared to the prior year quarter.
• AlphaVac Revenue -- $4.5 million, representing 37.4% year-over-year growth and 6.4% sequential expansion.
• AngioVac Revenue -- $7.5 million, reflecting a 5.9% year-over-year decline despite achieving 9.1% sequential growth.
• NanoKnife Revenue -- $8.3 million, an increase of 29% year over year driven by demand for prostate procedures.
• NanoKnife Probes and Capital -- Probe sales grew 24.1% while capital equipment sales rose 53.5% compared to the prior year.
• Med Device Segment Revenue -- $41.0 million, representing a 1.4% increase and providing consistent cash flow for medtech investments.
• Gross Margin -- 59.4% on a GAAP basis, a 410 basis point increase primarily due to favorable pricing and product mix.
• Adjusted Gross Margin -- 57.8%, excluding a $1.2 million benefit from tariff refunds received during the quarter.
• GAAP Net Loss -- $7.1 million, or $0.17 per share, compared to a net loss of $10.9 million in the prior year quarter.
• Adjusted Net Loss -- $1.8 million, or $0.04 per share, showing improvement from the $4.2 million adjusted loss last year.
• Adjusted EBITDA -- $5.0 million, more than doubling from $2.2 million in the first quarter of the prior year.
• R&D Expense -- $8.0 million, or 9.9% of sales, as the company maintains a target research and development spend of approximately 10%.
• Operating Cash Flow -- Used $15.3 million during the quarter, in line with management's seasonal expectations for incentive and sales compensation.
• Cash Balance -- $34.0 million as of Aug. 31, 2026, with the company maintaining a debt-free balance sheet.
• Full-Year Revenue Guidance -- $336 million to $341 million, representing projected growth of 5% to 6.5%.
• Full-Year Med Tech Growth Guidance -- 12% to 15%, with the segment expected to comprise the majority of total revenue this fiscal year.
• Full-Year Adjusted EBITDA Guidance -- $13 million to $16 million, reiterated by management.
• Full-Year Adjusted EPS Guidance -- Expected loss in the range of $0.29 to $0.24 per share.
• Full-Year Gross Margin Guidance -- 54% to 55%, with management expecting margins to be lower in the second half of the year.
• NanoKnife BPH Market Opportunity -- $1.9 billion, representing the estimated total addressable market following the FDA approval of the RELIEF study.

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RISKS

• Stephen A. Trowbridge stated, "capital sales are always lumpy quarter to quarter, so we would not expect capital to grow at this rate going forward," noting the inherent variability in equipment placement timelines.
• Stephen A. Trowbridge warned that macroeconomic pressures could impact future financial results, stating the "impact from tariffs... remains dynamic and clearly subject to change."
• James C. Clemmer acknowledged temporary headwinds in the mechanical thrombectomy portfolio, stating, "AngioVac is working through a tougher comp right now but the underlying demand for the product remains strong."

SUMMARY

AngioDynamics, Inc. (ANGO -20.86%) reported first quarter financial results highlighted by double-digit revenue growth in its medtech segment, which now accounts for 49% of total sales. The company announced a leadership transition with Eric Honroth set to succeed James C. Clemmer as President and Chief Executive Officer on Nov. 2, 2026. Management reiterated its full-year guidance for fiscal 2027 and confirmed expectations for generating positive operating cash flow for the full year. The results included a significant expansion of the GAAP gross margin and the 21st consecutive quarter of double-digit growth for the Auryon peripheral atherectomy platform.

• James C. Clemmer announced the appointment of Eric Honroth as the next President and Chief Executive Officer, stating, "Eric brings more than 20 years of leadership experience in medical devices and life sciences."
• The company received FDA approval for its RELIEF study, an Investigational Device Exemption trial evaluating NanoKnife for the treatment of benign prostatic hyperplasia.
• Management reported record procedure volumes in prostate care for the NanoKnife platform, supported by expanding reimbursement coverage.
• Enrollment is progressing in the AlphaReturn blood management system and the AMBITION BTK clinical studies to support long-term adoption.
• Stephen A. Trowbridge noted that the medtech segment is on track to comprise the majority of overall revenue during the current fiscal year.
• The Auryon platform is gaining market share in both hospital and office-based laboratory settings following international adoption and CE Mark approval.

INDUSTRY GLOSSARY

• Atherectomy: A minimally invasive surgical procedure used to remove plaque from a blood vessel.
• BPH: Benign Prostatic Hyperplasia, a common condition involving an enlarged prostate gland.
• BTK: Below-The-Knee, referring to medical conditions or procedures located in the lower leg.
• CPT: Current Procedural Terminology, a standardized code set used to report medical procedures for reimbursement.
• IDE: Investigational Device Exemption, an FDA allowance for a device to be used in a clinical study.
• IRE: Irreversible Electroporation, a technology that uses non-thermal electrical pulses to treat soft tissue.
• MAC: Medicare Administrative Contractor, a private insurer that processes Medicare claims for specific geographic regions.
• OBL: Office-Based Laboratory, a specialized clinical setting for performing procedures outside of a traditional hospital.
• Thrombectomy: The surgical or mechanical removal of a blood clot from a blood vessel.

Full Conference Call Transcript

Operator: Good morning and welcome to the AngioDynamics Fiscal Year 27 First Quarter Earnings Call. At this time, all participants are in a listen-only mode. Question and answer session will follow the formal presentation. As a reminder, this conference is being recorded. The news release detailing AngioDynamics fiscal 27 first quarter results was issued earlier this morning and is available on the company's website. This conference call is also being broadcast live over the Internet at the Investors section of the company's website at www.angiodynamics.com. A webcast replay of the call will be available at the same site approximately 1 hour after the end of today's call.

Before we begin, I would like to caution listeners that during the course of this conference call, the company will make projections or forward-looking statements regarding future events, including statements about expected revenue, adjusted earnings and gross margin for the fiscal year to this 2027, as well as trends that may continue. Management encourages you to review the company's past and future filings with the SEC including without limitation, the company's forms 10 q and 10 which identify specific factors that may cause the actual results or events to differ materially from those described in the forward-looking statements. The company will also discuss certain non GAAP financial measures during this call.

Management uses these measures to establish operational goals and review operational performance. And believes that these measures may assist investors in analyzing the underlying trends in the company's business over time. Investors should consider these non GAAP measures in addition to, not a substitute for, or as superior to financial reporting measures prepared in accordance with GAAP. A slide package offering insight to the company's financial results is also available in the Investors section of the company's website under Events and Presentations. This presentation should be read in conjunction with the press release discussing the company's operating results and financial performance during this morning's conference call.

Unless otherwise noted, all comparisons will be the first fiscal quarter of 2 thousand 27 versus the first fiscal quarter of 2 thousand 26. Now I would like to turn the call over to Jim Clemmer, AngioDynamics President and Chief Executive Officer. Mister Clemmer?

James C. Clemmer: Thank you, operator. Good morning, everyone. And thank you for joining us for AngioDynamics' fiscal 27 first quarter earnings call. Joining me today is Steve Trowbridge, AngioDynamics' executive vice president and chief financial officer. Before I get into our results, I want to start with an important update. Our board has completed a comprehensive search for my successor. I am pleased to share that Eric Honer will be joining us as President and Chief Executive Officer effective November 2. Eric brings more than 20 years of leadership experience in medical devices and life sciences. He most recently served as global president life science at Getinge.

And before that, he led Getinge's $1.2 billion North American business where he accelerated growth delivered sustained revenue gains, and strengthened operational performance. His career spans the cardiovascular endovascular, urology, and oncology markets. With senior leadership roles. At Abbott Vascular, Becton Dickinson, CareFusion, and Boston Scientific. That combination is exactly what our board was looking for. Someone who is driven real growth and profitability in large, complex organizations, And who knows our markets firsthand? I am confident that he is the right person to build upon the foundation that we have put in place and I will remain closely involved to make sure that we have a smooth transition.

I want to thank our board our search committee, and everyone across this organization who helped to make this happen. Now moving on to results. We grew total revenue by approximately 7% led by strength in our medtech segment, which grew more than 13%. that is clear evidence that the strategy guiding our transformation over the past several years keeps paying off. As a result, MedTech now represents approximately 49% of our total revenue. And that mix shift is only gaining momentum as we move through the year. Starting with Auryon, which remains 1 of the most consistent growth engines in this business, This quarter marked our 20-first consecutive quarter of double digit year over year growth.

We are taking share across both the hospital and office based laboratory settings. With international adoption building as well. We are also advancing enrollment. In our ambition BTK study, which we believe will support the long term clinical case for AURYON below the knee. Turning to mechanical thrombectomy. We are also growing above market in this business. And the reason is simple. We have the most versatile product on the market. And a commercial team that is executing at a high level. And we are taking share from our competitors. AlphaVac is building real momentum as more hospitals continue to adopt it. In addition, we are really pleased with the progression of our AlphaReturn blood management system IDE trial.

To further strengthen our position AngioVac is working through a tougher comp right now but the underlying demand for the product remains strong. And we expect it to return. To more normal growth as the year progresses. Finally, NanoKnife continues to fundamentally change the landscape of men's health care by improving outcomes and preserving quality of life. Through an innovative procedure for men with intermediate risk prostate cancer. Reimbursement progress remains a key driver including the positive MAC coverage decision that we received last quarter. And we are now working with additional regions with the goal of building towards consistent nationwide coverage. Physician interest, and procedure volumes in prostate care remain strong.

We also received FDA approval for our relief study, which is evaluating NanoKnife for the treatment of BPH. A condition affecting millions of men. And a market opportunity we estimate at approximately $1.9 billion an important step in expanding where this technology help patients. Our med device segment grew approximately 1% This business remains a steady, reliable performer providing the consistent cash flow that funds our investment. In med tech platforms. Before I turn things over to Steve, I really want to thank our team. The work happening across the company is reflected in this quarter's results and is driving future growth ahead. We compete in large, fast growing markets, and we are positioned to win.

Looking ahead, we have real catalyst in front of us. Continued progress in alpha return, expanding reimbursement coverage for NanoKnife, and ongoing enrollment our AMBITION BTK study each of which will create new opportunities. This all comes back to patients first. We believe people living some of society's most challenging diseases deserve trusted solutions deliver real care and better outcomes. When we deliver on that, we deliver value for everyone we serve. From patients and physicians, for our shareholders. Now I will turn it over to Steve to review the financials for the quarter.

Stephen A. Trowbridge: Thanks, Jim, and good morning, everybody. As always, before I begin, I would like to direct everyone to the presentation on our investor relations website summarizing the key items from our quarterly results. Unless otherwise noted, all comparisons will be the first fiscal quarter of 27, versus the first fiscal quarter of 26. Company top line revenue performance was strong again in the quarter, Revenue increased 6.9% to $80.9 million driven by growth across our medtech segments. MedTech revenue was $39.9 million a 13.2% increase. For the first fiscal quarter, our medtech platforms comprised 49% of our total revenue. Compared to 47% of total revenue a year ago, reflecting the ongoing shift in our business mix.

We remain on track for our med tech segment to comprise a majority of our overall revenue base, during this fiscal year. Within our med tech segment, our Auryon platform contributed $18.9 million in revenue growing 14.7% compared to last year. Aureon has now delivered double digit year over year growth for 21 consecutive quarters. This above market growth continues to be supported by our strategy to shift more of our atherectomy business towards the hospital side of care while we keep growing our customer base across both the hospital and OBL settings, along with ongoing international adoption following our CE Mark approval. We are confident in the long term opportunity for our mechanical thrombectomy portfolio.

Combined AngioVac and AlphaVac sales were $12 million, an increase of 6.7% year over year. In the quarter, AlphaVac continued its strong trajectory generating revenue of $4.5 million representing a 37.4% year over year increase as well as growth of 6.4% sequentially. We are also pleased with the trajectory of AngioVac, which generated revenue of $7.5 million while this represented a 5.9% year over year decrease, AngioVac grew 9.1% sequentially. On the clinical front, we are encouraged by the ongoing progress in our AlphaReturn and AngioVac right sided infective endocarditis IDE studies. Both of which are seeing strong enrollment. Turning to NanoKnife. Total revenue was $8.3 million an increase of 29% with probes growing 24.1% and capital sales growing 53.5%.

Probe sales are primarily driven by demand for NanoKnife in prostate care and we hit record procedure volumes during the quarter. Additionally, as systems are placed and new physicians and providers experience the improved patient outcomes our technology enables, we expect them to drive continued increases in probe utilization going forward. I will note that capital sales are always lumpy quarter to quarter, so we would not expect capital to grow at this rate going forward. Continue to view disposables as the bellwether for this business.

In the first quarter, our Med Device segment increased 1.4% year over year with revenue of $41 million This business generates consistent cash and profitability, allowing us to continue to invest in the growth of our med tech platforms. Now moving down the income statement. Our gross margin for the first quarter of FY 2027 was 59.4%, a 410 basis point increase from the first quarter of FY 26. Driven primarily by favorable pricing and the ongoing revenue mix shift towards medtech, which is partially offset by the manufacturing transition and global inflation, all of which were in line with the company's expectations. Gross margin also benefited from tariff refunds received during the quarter.

Absent that benefit, margin would have been 57.8%. We expect gross margin to be higher in the first half of fiscal 2020 than in the second half, and we remain on track for full year gross margins to be within our guided range of 54% to 55%. Total operating expenses, which include R&D, SG&A, amortization, and nonrecurring items, in the quarter were $55.3 million representing 68.4% of sales compared to $52.5 million or 69.4% of sales last year. Turning to R&D. Our research and development expense was $8 million or 9.9% of sales, compared to $6.4 million or 8.5% of sales a year ago.

We remain committed to investing in R&D initiatives to support the long term growth of our medtech segment and we are targeting approximately 10% of sales going forward. SG&A expense for the first quarter of FY 27 was $42.5 million representing 52.5% of sales, compared to $40.7 million or 53.7% of sales a year ago. On a GAAP basis, our net loss for the first quarter was $7.1 million or a loss per share of $0.17 compared to a net loss of $10.9 million or a loss per share of $0.26 a year ago.

Our adjusted net loss for the first quarter of FY 2020 was $1.8 million or an adjusted loss per share of $0.04 compared to an adjusted net loss of $4.2 million or an adjusted loss per share of $0.10 in the first quarter of last year. Adjusted EBITDA in the first quarter of FY 27 was 5 million compared to adjusted EBITDA of $2.2 million in the first quarter of 26. Touching briefly on tariffs, Tariff related expenses were $900 thousand during the quarter, compared to $1.7 million for the prior year quarter, This is in line with our expectations.

Additionally, we did receive $1.2 million of tariff refunds during the quarter, resulting in a net tariff benefit of about $400 thousand Turning to cash. In the first quarter, the company used $15.3 million of cash from operations, and in line with our expectations. We ended the quarter with $34 million in cash, and we maintain a strong debt free balance sheet. We also remain on track to generate positive cash flow from operations for the full fiscal year.

Turning to guidance for fiscal 27, we continue to anticipate net sales to be in the range of $336 million to $341 million representing growth of between 5% to 6.5% over 2020 revenue of $320.2 million Within each of our businesses, we expect MedTech net sales to grow 12% to 15% year over year, and we expect MedDevice sales to be roughly flat. For fiscal 2027, we expect gross margin to be in the range of 54% to 55%, We expect adjusted EBITDA to be in the range of $13 million to $16 million And finally, we expect adjusted loss per share in the range of $0.29 to $0.24.

We expect the impact from tariffs to be broadly similar to fiscal 26 based on our current view of the tariff situation, but this remains dynamic and clearly subject to change. So with that, I will turn it back to Jim.

James C. Clemmer: Thanks, Steve. Before we close, I would like to say a word about our leadership transition. Leading AngioDynamics has been the privilege of my career. And I am incredibly proud of what our team has built together over the past 10 years. Together, we set a clear direction built a strategy to transform this company, and created a robust product portfolio that competes and wins in large important markets. It has not been easy but this team has done it. And I am very confident. That our strength will carry forward. I have full confidence in Eric, and in our organization's ability to keep executing at a high level through this transition.

With that, operator, let's open the line for questions.

Operator: Thank you. You may press *2 if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the * keys. Our first question comes from the line of Frank Takkinen with Lake Street Capital Markets. Please proceed with your question.

Frank Takkinen: Great. Great. Congrats on the progress in the new CEO appointment. On NanoKnife, I would like to follow-up on, how you guys think about once the equipment is placed, in the time line to really scaling to a higher utilization rate? Obviously, fiscal Q4 had a really nice placement. Quarter, and then you had a nice placement quarter in fiscal Q1 again. How should we think about when these systems might start to really contribute to the disposables business and that ramp up expectation?

Stephen A. Trowbridge: Hey, good morning, Frank. This is Steve. Thanks for the question. So I think capital placement is a good way to think about driving NanoKnife, but we think that the better way to think about it is disposable growth. Yeah. As we have talked about before, we have got a number of different placement models with NanoKnife, particularly in the prostate space. We are continuing to sell systems. We are also placing systems during the quarter, getting them in the hands of urologists. As we have said in the past, we do not want access to capital to be a governor on whether or not a urologist chooses NanoKnife for their practice.

We have been very pleased with the pace of capital sales that we have seen over the course of the last 6, 8 quarters as we have talked about. You are right. Q4 was a very strong capital quarter. Q1 was another strong capital sales quarter. We think that the right way to look at this business is the disposable sales. And we have been really pleased with the trajectory of the disposable sale growth that we have seen sequentially as well as year over year. So yes, utilization is a good way to think about it, but utilization is gonna be variable from system to system depending upon where we place it.

If it is going into a system that has had experience with NanoKnife in the past, As Jim talked about, there is variability in the pace of adoption based upon reimbursement in that particular area. We have been very pleased with the with what we have seen since we got the CPT 1 code and certainly with the Palmetto MAC decision that we talked about last quarter. So all of that is trending in the right direction. We think they are all showing very healthy signs for NanoKnife, starting with capital sales, but more importantly, looking at those disposable sales.

Frank Takkinen: Very helpful. Maybe on mechanical thrombectomy, I know we have talked about in the past of some of the commercial enhancements you guys have implemented. Over the last few quarters. Maybe an update on some of those and whether or not those were kind of drivers in the quarter or if we are still waiting for some of the new heads to start contributing and we could see that as a second half contribution in the mechanical thrombectomy business.

Stephen A. Trowbridge: Frank, we expect mechanical thrombectomy to continue to grow. As we have talked about coming into this year, we are really excited about the combined AngioVacAlphaVac business together. We think AngioVac is a little bit more niche right now. We expect that to be kind of in the single digit growth, and we expect Alphavac to really be driving that growth. Definitely seeing the contributions from some of those changes that we made in the commercial organization. I expect those to continue. We are also just seeing continued enthusiasm for physicians who have got their hands on our product.

As Jim said in the past, we really believe we have got the best product out there, And the more that we can get that product in the hands of physicians, they are going to choose Alphavac for PE. They are gonna choose AngioVac for those cases where AngioVac is the right product line. So yeah, I expect to see continued benefits coming from all of the changes we are making in the commercial organization. But as we continue to just get more products in the hands of physicians, we expect that to also be a catalyst for growth. We mentioned in the prepared remarks, we are really excited about the pace of our, AlphaReturn IDE enrollment.

To add blood return as another option to this product line. So the continued development of the products, the line extensions, getting more people time, in the sales organization, just getting more products in the hands of physicians are all going to continue to contribute to that growth over the course of this. Very helpful.

Frank Takkinen: And then if I could just squeeze 1 more in. Maybe related to cash usage. Obviously, fiscal Q1 is your highest cash usage quarter of the year. However, I think if you look back at last year, you used a little bit less cash on a little bit less revenue. And this year, a little more revenue, but a little more cash usage. Maybe talk about some of the moving pieces related to that, and then maybe how we should think about cash generation through the end of the year. Thanks.

Stephen A. Trowbridge: Yeah. In general, I would not say that there was a very big difference in this quarter versus where we have been historically. Q1 is always the largest utilization of cash quarter for us. That comes from things like incentive compensation, sales compensation that gets paid in the quarter, tariffs or something to do that is been added the last 2 years. So in general, you should think of cash utilization as being pretty consistent historically. So what that means is expect Q1 to be the largest utilization. Expect Q2 and 3 to not have that level of utilization Sometimes we generate a little bit of cash. Maybe it is, you know, flat.

Q2 and Q3, within Q4 being the largest generation of quarter moving forward. I would expect that same cadence to continue this year. And then as we mentioned, we expect to be generating positive cash flow for from operations for this full fiscal year.

Frank Takkinen: Perfect. Thank you for taking the questions. Congrats again.

Stephen A. Trowbridge: Thanks, Frank.

Operator: Thank you. Our next question comes from the line of John Young with Canaccord Genuity. Please proceed with your question.

John Young: Hey, Jim and Steve. Congratulations on the quarter. And, Jim, congratulations again on past 10 years, best wishes for your retirement. I also wanted to talk about the mechanical thrombectomy business with you guys. Any color just on the number of new accounts that you opened on the quarter? And how we should think about growth in this quarter from new accounts versus existing accounts? And have you been able to take any advantage of some of the disruptions that continue to occur in this space?

James C. Clemmer: Yes. Hi, John. Good question. So we measure new business through different angles here in this space. Through new competitive conversions, through doctors who have come online to use it, how they go up, kind of the same store sales approach. We measure how many hospitals put us through their value analysis process and get us into stock as well. On the shelf next to maybe competitive products. So each of those are trending in the right direction. The Salesforce additions we talked to you about we made earlier this year, The people are now trained up to speed, and they are contributing to each of those things. So we have more doctors coming on using our device.

More doctors using it in the same accounts, then more people who have it in stock on the shelves. So we are really pleased. We measure each of those very carefully. And building up to what we hope will be the AlphaReturn project getting, on label early next calendar year. As Steve mentioned earlier, we are pleased with the pace of enrollment. And we expect that to come on. That will just take down 1 more hurdle that some in the marketplace have for us. But, managing our company, John. We watch the market really carefully. We have got good competitors in the space, as you know. And there is been disruption at those competitors that we cannot control.

We watch. We wanna make sure we are the best angio that we can be. We continually build upon how we make our company better, we bring to the physicians as a value prop better, And, we will monitor the disruption other places. We think we are gonna win on our game as well. Irrespective of our competitors. Okay.

John Young: that is great to hear. And then just on NanoKnife disposal in the quarter, down 20% from the last, May quarter sequentially. Is that heightened seasonality of just a larger base of business now? Was there stocking in the last fiscal quarter? And maybe how did the results compared to your internal expectations And can you just talk about any differences you are seeing in the business on the disposal side between sell in and sell through? Thank you.

Stephen A. Trowbridge: Yes, John. Thanks for the question. We are really excited about the trajectory we are seeing with NanoKnife. And this business is a little more mature than some of the other growth businesses. So there is seasonality. that you are going to see. Q4 for us is always our highest quarter. it is pretty typical in the med device business. You see that. So we were not expecting that we were gonna see growth off of where we ended Q4. And with your question to was there stocking, and the throughput, I do not think that is a material piece that we are seeing here. there is always gonna be fluctuations in terms selling and using.

In a growth business, we wanna be selling ahead of the curve. We wanna make sure that products are on the shelf for physicians so that they can use it when those patients come in. We track the procedure volume every month, and we have been seeing consistent records that we are setting in terms of prostate procedures every month. Q1, we had larger procedure volume than what we saw in Q4. So you see those procedures up ticking. I think that is the right way to think about the business. So there is gonna be a little bit of seasonality.

Q4 being the highest quarter, usually Q1 a little bit down from Q4 Usually Q2 is a step up from Q1 with Q3 being our softest quarter because structurally that includes December, January, and February. So it is kind of a tough structural quarter there. Put that aside, we are really excited about what we are seeing with NanoKnife, continued procedure growth new physicians that are coming on adopting this technology, physicians that have already adopted continuing to lean in and use it more Good decisions that we are seeing on the reimbursement front.

Of course, it is not mission accomplished there yet. there is a lot of work for us to do to continue to make sure that there is consistent, reliable reimbursement across the country. But what we have seen so far have all been very positive. Okay. Great. And then just 1 more if I could. I understand the gross margins in the quarter benefit from tariffs. But even on the adjusted basis that you called out, what drove beyond that? Are there any other 1 time versus just lasting benefits that you are seeing? And is Costa Rica fully contributing at this point and basing into the guidance? Thanks. Yeah.

So gross margin, we are pleased with what we saw in Q1. You mentioned the tariffs. I do think the right way to think about gross margin is to probably take out that tariff refund that we saw in the quarter. We expect to continue to get more tariff refunds going forward. I just do not know when they are going to come in. So that 57.8% as opposed to the 59%, I think that is the right way to think about it as a baseline.

You know, 1 of the things that we talked about historically is we do have a little bit of a structural impact on gross margin, where the 55% to 56% But really to get to your question, yeah, the underlying gross margin trajectory is very strong. We are seeing the benefit from price that we talked about particularly in the device business. And then that mix shift. So as the med tech higher margin products become a larger portion of our overall revenue base, we are seeing that continue to build in and drive gross margins. The benefit of Costa Rica is in what we are seeing.

We have talked about the fact that we were able to accelerate some of those cost savings over the course of the last 6 quarters or so. So you have seen that kind of starting to get into the base, and that can be a nice catalyst as we continue to move forward. So we like what we are seeing in gross margin. Definitely, it. it is it is all part of the strategy that we put in place. The long term driver is gonna be that mix shift that we are seeing a benefit from. You have got noise with tariffs. You got noise with some of the rising cost environment.

But as you eliminate that, that gross margin accretion story is really taking hold.

John Young: Thanks again.

Operator: Thank you. Our next question comes from the line of Yi Chen with H.C. Wainwright. Please proceed with your question.

Katie: Hi. Good morning. This is Katie on for Yi. Looking at relief, what does that program need to demonstrate for you to commit to a larger BPH program? Symptom improvement, durability, What are you guys looking for? And if it meets that threshold, would the next stage fit within your existing R&D spending framework? Or require a step up?

Stephen A. Trowbridge: Yeah. In terms of relief and using NanoKnife to treat BPH, we are excited about that opportunity. 1 of the things that we have always talked about is the fact that our med tech product portfolio is made up of 3 legs to a stool there, and every 1 of those legs is a platform opportunity. We are really excited about the opportunity to take AngioVac and AlphaVac to go into PE and then maybe take AngioVac onto the left side where we think we have got a right to win and can really address an unmet clinical need.

We are excited about AURYON and how it works in the peripheral, and we have talked about taking the steps to now take AURYON and go into a coronary space. NanoKnife and BPH is that potential platform opportunity for us. We are still in the early stages. Think it is important for us to do the work to understand how does NanoKnife impact the tissue when it comes to BPH. Durability that you mentioned is going to be a question for us. I do not think our pilot study is going to answer the durability, but it is something that we are going to continue to be focused on. As we build out the business case here.

So relief is really an opportunity for us to do the early stage work, take NanoKnife, start to build out that business case of moving that longer term platform opportunity into BPH. Great, thank you. Sorry, just to answer your question on the R&D, we have talked about targeting around 10% of sales for R&D going forward, and that is inclusive of the growth that we expect to see, particularly driven by the 10% target that we have for R&D going forward. Thank you.

Operator: Thank you. Our next question comes from the line of Iryna Kanetskaya with Freedom Broker. Please proceed with your question.

Analyst: Hi. Thanks for taking my question. And congrats on a strong start to the year. Jim, congrats on the retirement and on everything you have built over the 10 years and welcome to Eric. I wanted to ask about 2 things, if that is okay.

James C. Clemmer: Sure. First, on AURYON, as more peripheral case move into office based labs, has that changed how you go to market? I am also curious whether those customers behave differently from hospital accounts. Are they more price sensitive, or do they tend to be more loyal once they adopt it is a great question. So, I will remind you, we launched Auryon in the marketplace in September of 2020. If you look back, that was 6 months after the COVID interruption and all of our lives were affected. So launching AURYON then required us to spend most of our initial launch with the office based lab customers. Because many hospitals were kind of closed for business for new products.

They had to deal with the pandemic challenges they had internally. So we got a lot of experience out of the gate building our business around the office-based lab customer, learn what is important to them, and how we grew that business very rapidly. So we understand that marketplace. A lot of the clinical needs are the same in the hospital or in the OBLs. Economically, it is a little different story. So a couple years ago when the hospitals more or less reopened for business again, we talked to you about our shift and our intention to have our sales reps focus on that business And you have seen what we have done since then.

Seeing a really great growth in the hospital business. So over time, what you should expect from us is a good balance between both. Both are important to us. Different economics in both. We understand both. Clinically, again, we win in both. And we are taking share from the other 5 players in this space. In both of those settings due to what Auryon brings, scientifically, clinically, how it works, the safety, effectiveness, The only product that can do in-stent restenosis treatment work above the knee and below the knee. So we are really, really versatile for our customers. And that is really important.

To office based labs, and especially when they have economic challenges, space challenges, and cannot have a lot of other products on the shelf. And we are finding also some of those correlate in the hospital as well. So great question. Continue to follow us. You will see growth continue in both of those, care settings.

Analyst: Thank you so much. And second question on NanoKnife for prostate. Could you give us a sense of who is adopting it as well right now? Is it mostly academic urology centers with an IRE champion or are you starting to see community urologists coming on board? And also related to that, when a site buys the generator, but takes a while to reach steady procedure volume, what is usually holding it back? Thank you.

Stephen A. Trowbridge: Yeah. So starting on the first question, what is driving NanoKnife results these days is prostate. So it is urologists, and it is choosing NanoKnife to treat prostate. Prostate is by far the highest, organ that is being treated. That flipped maybe a handful of quarters ago. And there is a difference between when we used to be focused on the hepatobiliary side, for pancreatic cancer, liver cancer, and what we are seeing with physicians who are treating prostate cancer. The prostate cancer treatment is not something that is concentrated in the university settings.

It is something that is being done in a lot of those regional hospitals and the other hospital setting. it is 1 of the reasons why we think it is a better business opportunity for us. there is an opportunity for us to get more systems out there to have more physicians doing it as opposed to being concentrated in some of those university settings. So we are seeing that through the prostate movement. that is what is driving NanoKnife as we go forward. And that is where our focus is gonna be. We wanna continue to drive NanoKnife utilization, particularly in the United States, in prostate. Now in international markets, it is a little bit more balanced.

We are seeing growth within prostate, but then there is also a lot of growth in utilization coming from folks who, you know, had done some of those liver and pancreatic treatments. NanoKnife is a great technology. there is opportunities for us, in almost any solid tumor basis, But you think about our strategy, we are focusing primarily US on prostate and then supporting the use of NanoKnife as we as we think globally. And so, you know, we are excited about what we are seeing there. that is where the growth is coming from. On your question about, you know, what stops someone from really getting up utilization, it is a little bit specific to each individual physician.

You know, for folks who are buying the system, that is a great sign that they are very committed to NanoKnife as part of their practice. You know, 1 of the things we have also talked about particularly in that urology setting, is making sure that we have got alternative placement models we can get capital into the hands of physicians so they can start doing those procedures. Think what we are seeing is it is a it is a lot of, factors that go into physicians who are building up their business, start getting access to the capital, starts with what is best for the patient. Right?

And then they are choosing NanoKnife because they know that NanoKnife can avoid quality of life side effects and get to really good outcomes for their patients. Last quarter, we talked about putting out our 2 year follow-up data coming out of PRESERVE. Being really excited about the fact that there were zero additional incidents of recurrence coming out of PRESERVE. So we know it is good for patients They can get access to the capital. They can treat their patients, and then get reimbursement. that is why we have talked a lot about the work that we have done on reimbursement to provide that foundation for physicians.

So all those things working together are what helps drive a physician to really build their practice, and we like what we are seeing. Thank you so much, and congrats again. Thank you.

Operator: Thank you. Ladies and gentlemen, that concludes our question and answer session. I will turn the floor back to Mr. Clemmer for final comments.

James C. Clemmer: Thank you again for joining our call. We are really pleased with the start of our fiscal year for AngioDynamics What you heard here today is not an accident, and it is not random. it is a well planned idea that we could transform our company starting with our portfolio, changes we started to make 5 and 6 years ago. We were deliberate. We were intentional. We also tried to be very transparent with you on our journey. You can see what we have today. So today, we have a company built upon the strength of a medical device platform that gives us the capital and the strength in the background.

To invest in our med tech platform that will be the growth engine for years to come. Today, we showed, I think, that our products are winning in each of the markets that we serve. Winning against really good companies and good competitors. But we are winning because we are getting confidence in the physicians that choose to use us. To treat the patients they serve. The outcomes stand alone. So we have got a really great company. We have got new people who have joined us, brought their talents to our company. And their ambition driven by their belief. In what our mission is. I am excited to welcome Eric to our company.

And hopefully, you will stay with our journey. We will continue to deliver great results. Thank you again for all of my teammates at our company. Talk to you soon.

Operator: Thank you. This concludes today's conference call. You may disconnect your lines at this time. Thank you for your participation.