Medical device company LeMaitre Vascular (NASDAQ: LMAT) beat Wall Street’s revenue expectations in Q1 CY2025, with sales up 12% year on year to $59.87 million. The company expects next quarter’s revenue to be around $62.5 million, close to analysts’ estimates. Its GAAP profit of $0.48 per share was 4.6% below analysts’ consensus estimates.
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LeMaitre (LMAT) Q1 CY2025 Highlights:
- Revenue: $59.87 million vs analyst estimates of $57.75 million (12% year-on-year growth, 3.7% beat)
- EPS (GAAP): $0.48 vs analyst expectations of $0.50 (4.6% miss)
- Adjusted EBITDA: $16.78 million vs analyst estimates of $15.57 million (28% margin, 7.8% beat)
- The company lifted its revenue guidance for the full year to $245.5 million at the midpoint from $239.1 million, a 2.7% increase
- EPS (GAAP) guidance for the full year is $2.16 at the midpoint, missing analyst estimates by 3.5%
- Operating Margin: 21.1%, down from 22.2% in the same quarter last year
- Free Cash Flow Margin: 12.8%, up from 6.9% in the same quarter last year
- Organic Revenue rose 13% year on year (11% in the same quarter last year)
- Market Capitalization: $1.88 billion
StockStory’s Take
LeMaitre’s first quarter results were driven by broad-based sales growth across all product categories and geographies, fueled by strong demand for vascular grafts and carotid shunts. Management attributed the outperformance to price increases, expansion of the direct sales force, and new international offices. CEO George LeMaitre emphasized, “Growth was led by grafts up 17% and carotid shunts up 14%,” and noted record sales in every major product category.
Looking ahead, management raised full-year revenue guidance, citing sustained sales momentum, the launch of new international offices, and recently secured regulatory approvals. While the company expects to benefit from a growing sales organization and upcoming product launches, management was cautious about potential margin headwinds from product mix and tariffs. CFO Dorian LeBlanc stated that moving away from the Elutia patch distribution agreement should improve organic growth and margins in the coming quarters.
Key Insights from Management’s Remarks
LeMaitre’s management identified several operational and market drivers behind the quarter’s results and discussed strategic moves to sustain momentum.
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Direct Sales Force Expansion: The company increased its on-payroll sales representatives to 164, aiming for 170 by year-end. Management highlighted that direct sales are their primary growth engine, with new hires expected to support continued market penetration.
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International Office Openings: New sales offices in Switzerland, Portugal, and soon the Czech Republic are expected to streamline distribution and improve sales in these regions. The Zurich office, for example, is designed to reduce customs complexity for Swiss hospitals, and direct offices have historically led to higher sales performance.
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Autograft Regulatory Progress: The company received a Medical Device Regulation (MDR) CE mark for its Artegraft product, enabling a European launch. Artegraft, previously the company’s largest U.S. product, is now positioned for growth internationally, with additional approvals anticipated in Australia, Canada, Singapore, and Korea.
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Product Mix and Margin Impact: A shift toward higher sales in the graft category, which carries a lower gross margin than other products, contributed to a slight year-on-year decrease in operating margin. Management explained that price increases and reduced inventory scrap partially offset this impact.
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Elutia Patch Exit: LeMaitre exited its distribution agreement with Elutia to focus on its own biologics. This move is expected to improve organic growth rates and gross margins, as the discontinued product had been declining and carried lower margins than proprietary offerings.
Drivers of Future Performance
Management expects continued revenue growth, supported by an expanded sales force, new product approvals, and a broader international presence. However, product mix, tariffs, and competitive dynamics may create margin variability in upcoming quarters.
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Sales Force Investments: The addition of new sales representatives and managers is anticipated to drive higher revenues, with management indicating that new hires reach productivity levels comparable to veteran employees more quickly than in previous years.
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Tariff and Trade Risks: While LeMaitre manufactures all products in the United States, potential retaliatory tariffs remain a risk for international sales. Management believes they can mitigate much of the impact through price increases and low substitution risk due to niche product offerings.
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Product Launches and Regulatory Approvals: New product launches, such as the European rollout of Artegraft and expected approvals for RestoreFlow allografts in Ireland or Germany, are likely to support revenue growth and help offset potential margin headwinds from product mix changes.
Top Analyst Questions
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Suraj Kalia (Oppenheimer): Asked what gives management confidence to raise guidance given global uncertainties such as tariffs. CEO George LeMaitre cited stronger-than-expected Q1 results, effective price increases, and the positive impact of exiting the Elutia distribution.
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Rick Wise (Stifel): Inquired about the sustainability of price and volume growth. Management explained that Q1 saw a 9% price increase and 4% unit growth, but cautioned that future quarters may not maintain the same pace.
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Michael Saccone (Jefferies): Sought clarification on margin pressures. Management attributed margin contraction to higher sales in grafts, which have lower corporate-average margins, and highlighted that product mix shifts were a primary factor.
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Frank Tarkinen (Lake Street): Questioned when the expanded sales force would contribute to operating leverage. CFO Dorian LeBlanc noted that new reps ramp up productivity faster than in the past, and sales ramp and margin improvement are expected in the second half of the year.
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Brett Fishbin (KeyBanc): Asked about the impact of tariffs and the rationale for discontinuing the Elutia agreement. Management confirmed that expected tariff costs and mitigation strategies are factored into guidance, and explained that exiting Elutia removes a declining product and should support organic growth.
Catalysts in Upcoming Quarters
In the coming quarters, the StockStory team will be monitoring (1) the impact of new direct sales offices and additional sales hires on revenue growth, (2) the European launch and adoption of Artegraft following regulatory approval, and (3) progress toward RestoreFlow allograft approvals in key European markets. Additionally, we will track management’s ability to navigate product mix challenges and tariff risks while maintaining or expanding margins.
LeMaitre currently trades at a forward P/E ratio of 35.9×. Is the company at an inflection point that warrants a buy or sell? See for yourself in our free research report.
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