Breaking Down Surmodics, Inc. (SRDX) Financial Health: Key Insights for Investors

You're looking at Surmodics, Inc. (SRDX) right now and the financial picture is more complex than a simple revenue number, especially with the pending acquisition drama. The headline for fiscal year 2025 is a revenue guidance range of $116.5 million to $118.5 million, but that masks a critical internal shift: the company is still navigating a GAAP net loss expected between $(1.70) and $(1.55) per diluted share for the full year, even as their core product line is surging. That's the real story. For instance, in the third quarter alone, the Pounce Thrombectomy Platform sales grew a massive 35% year-over-year, showing strong market adoption for their mechanical clot removal technology. Still, the entire investment thesis is overshadowed by the proposed $43.00 per share acquisition by GTCR LLC, which the U.S. Federal Trade Commission (FTC) has been actively trying to block, adding a huge layer of regulatory risk (a non-financial risk, but a defintely material one) to the valuation.

Revenue Analysis

You need to know where Surmodics, Inc. (SRDX) makes its money, especially with the company's pending acquisition by GTCR. The direct takeaway is that while the company's total revenue for fiscal year (FY) 2025 is projected to decline, the growth in its proprietary products like the Pounce™ Thrombectomy Platform is defintely a bright spot that offsets a major headwind.

For the full fiscal year ending September 30, 2025, Surmodics is guiding for total revenue to fall between $116.5 million and $118.5 million. This projection represents a year-over-year decrease of 6% to 8% compared to fiscal year 2024. However, if you strip out the volatile SurVeil™ drug-coated balloon (DCB) license fee revenue, the expected revenue range is still a decrease, but a smaller one: $115.0 million to $117.0 million, down only 3% to 5% year-over-year. That's the quick math on the overall trend.

Surmodics operates primarily through two segments: Medical Device and In Vitro Diagnostics (IVD). The Medical Device segment is the largest contributor, covering a range of products from performance coating technologies to vascular intervention devices. The IVD segment focuses on chemical and biological components for diagnostic tests and microarrays.

• Medical Device: Largest segment, includes coatings, royalties, and devices.
• In Vitro Diagnostics (IVD): Provides components for immunoassay tests.

The most significant change in the revenue mix is the decline in the SurVeil DCB stream. In the third quarter of FY2025, total revenue of $29.6 million was down 3% year-over-year, largely due to a $2.8 million drop in SurVeil DCB license fee revenue and a $1.7 million decrease in product sales from its distribution partner, Abbott. That's a huge headwind.

Still, the underlying business is showing strength. The Pounce Thrombectomy Platform, a key proprietary device, saw sales growth of 35% year-over-year in the third quarter of FY2025, a strong sign of market adoption. Also, performance coating royalties, driven by the Serene™ hydrophilic coating, were up 14% to $9.4 million in the first quarter of FY2025. The IVD segment also delivered a solid 6% year-over-year revenue increase in Q3 2025. You can see the shift in focus from the license-based SurVeil revenue to the growing Pounce product sales.

Here's a snapshot of the segment dynamics from the third quarter of fiscal 2025:

What this estimate hides is the potential for the Pounce XL Thrombectomy System, which began full commercialization in Q3 2025, to accelerate growth further. For more on the risks and opportunities, check out the full post: Breaking Down Surmodics, Inc. (SRDX) Financial Health: Key Insights for Investors. Finance: track Q4 2025 actual results against the guidance range immediately upon release.

Profitability Metrics

You're looking for a clear picture of Surmodics, Inc. (SRDX)'s financial performance, and the data shows a company with high gross margins but still facing a bottom-line challenge as it invests in its product pipeline. The Trailing Twelve Months (TTM) profitability figures, which give us the most current view as of the third quarter of fiscal year 2025 (Q3 2025), highlight this dynamic: a strong core product margin is being eroded by significant operating expenses.

For the TTM period, Surmodics, Inc. reported a robust Gross Margin of 76.22%, which is a sign of excellent product economics and pricing power in the medical device and in vitro diagnostics (IVD) space. However, the Operating Margin for the same period was -1.2%, and the Net Profit Margin was a loss of -14.59%. This tells you the company's core business of selling products and licensing technology is highly profitable at the cost-of-goods level, but the heavy spending on research, development, and administrative costs is pushing the company into a net loss position.

Margin Trends and Operational Efficiency

The profitability trend for Surmodics, Inc. is currently a mixed bag, showing strong growth in new products but headwinds in legacy revenue streams. In Q3 of fiscal year 2025, the overall product gross margin was 48.8%, a contraction from 51.9% in the prior-year period. This decrease was primarily driven by the SurVeil™ drug-coated balloon (DCB) product, which saw a decline in gross profit due to production inefficiencies and under-absorption from below-scale production.

Here's the quick math on the near-term operational shift: the decline in SurVeil DCB revenue was a $2.8 million year-over-year headwind in Q3 2025, but this was offset by a 35% year-over-year growth in sales of the Pounce™ Thrombectomy Platform. The Pounce platform is a clear growth engine, and its increasing sales are partially mitigating the SurVeil-related margin pressure, leading to an overall operating expense decrease of $1.0 million in Q3 2025, excluding product costs.

Surmodics, Inc. is defintely focused on managing expenses, like the $2.2 million year-over-year decrease in Research and Development (R&D) expense in Q3 2025, which included a $1.1 million refund from the TRANSCEND clinical trials. Still, the pending acquisition by GTCR has introduced significant merger-related charges, totaling $5.3 million in Q3 2025 alone, which is a one-time drag on net income.

• Gross Margin: Strong, but facing short-term contraction from SurVeil DCB product issues.
• Operating Margin: Negative, reflecting high R&D and Selling, General & Administrative (SG&A) costs.
• Net Margin: Deeply negative at -14.59% (TTM), exacerbated by merger-related charges.

Industry Comparison and Actionable Insight

When you compare Surmodics, Inc.'s TTM margins to the Medical - Products industry averages, the picture clarifies the company's current stage of development. The industry average TTM Gross Margin is 57.23%, significantly lower than Surmodics, Inc.'s 76.22%. This is a great sign for the long-term value of their intellectual property and product design. However, the industry average TTM Operating Margin is a healthy 13.84%, and the Net Profit Margin is 7.56%.

The gap between Surmodics, Inc.'s high gross margin and negative operating/net margins is the cost of scaling a new product portfolio. The company is spending heavily to commercialize products like the Pounce XL Thrombectomy System and expand its Preside™ hydrophilic coatings, which are essential for future revenue but expensive now. For the full fiscal year 2025, the company is guiding for total revenue between $116.5 million and $118.5 million. This guidance shows a revenue decrease of 8% to 6% compared to fiscal 2024, primarily due to the SurVeil DCB product sales decrease of approximately $7.5 million.

The key takeaway is that Surmodics, Inc. has the profitability profile of a growth-focused technology company, not a mature medical device firm. The core product economics are superior to the industry average, but the company isn't yet converting that gross profit into net income. You can find more on the company's long-term goals here: Mission Statement, Vision, & Core Values of Surmodics, Inc. (SRDX).

Action: Monitor the Pounce Thrombectomy Platform sales growth in Q4 2025 and beyond. If Pounce's growth rate accelerates and SurVeil's drag stabilizes, the Operating Margin should start to narrow the gap with the industry average. That's the pivot point.

Debt vs. Equity Structure

You're looking at Surmodics, Inc. (SRDX)'s balance sheet to see how they fund their operations, and the clear takeaway is that the company has historically used a very conservative capital structure, prioritizing equity over debt. This is a common, prudent approach in the high-risk, high-reward medical device development space.

As of November 2025, the picture is complicated by the pending acquisition by GTCR, but the company's recent financial health showed a low reliance on external borrowing. For instance, the Debt-to-Equity (D/E) ratio-which tells you how much debt a company uses to finance its assets relative to the value of shareholders' equity-stood at approximately 0.27 on November 10, 2025.

Here's the quick math for the D/E ratio, based on the most recent figures: Total Debt of about $29.666 million divided by Shareholder Equity of approximately $111.309 million.

• Debt-to-Equity Ratio: 0.27 (November 2025).
• Industry Median: The median D/E ratio for the Surgical and Medical Instruments and Apparatus industry is closer to 0.70.

Surmodics, Inc.'s ratio is significantly lower than the industry median, putting it in the top 10% of its sector for low leverage. This low ratio suggests strong financial stability and a low bankruptcy risk, which is also reflected in the company's strong Altman Z-Score of 7.5. A low D/E ratio means the company is largely funding its growth and operations with shareholder capital, not borrowed money. It's a safe balance sheet.

To be fair, a conservative structure can also mean slower growth, but for a company focused on high-stakes product development, stability is defintely a plus. You can read more about the company's long-term strategy here: Mission Statement, Vision, & Core Values of Surmodics, Inc. (SRDX).

Financing and The GTCR Acquisition

The company's debt profile in fiscal year 2025 was straightforward, primarily consisting of a term loan and a revolving credit facility. As of June 30, 2025, Surmodics, Inc. reported $29.666 million in net long-term debt. The outstanding borrowings were broken down as follows: $25.0 million on the term loan facility and $5.0 million on the revolving credit facility.

However, the most critical recent action is the completion of the merger with GTCR. On November 19, 2025, Surmodics, Inc. completed a merger which resulted in the full repayment and termination of its Credit Agreement with Mid-Cap Funding IV Trust and MidCap Financial Trust. This action, along with the termination of a $25 million interest rate swap, fundamentally changes the company's debt structure moving forward. The acquisition, valued at approximately $627 million, was financed through a combination of committed equity from GTCR and committed debt financing, effectively replacing the old debt with the new private equity structure.

The immediate action for investors is to recognize that the company's public debt profile is now moot, as the merger has been completed and the old debt facilities have been terminated. The financial focus shifts to the performance of the new private entity under GTCR's ownership, which will be financed with a new mix of committed equity and debt.

Liquidity and Solvency

You want to know if Surmodics, Inc. (SRDX) has the cash on hand to cover its near-term obligations, and the quick answer is yes, absolutely. The company's liquidity position is defintely strong, largely due to high current asset levels relative to what they owe in the next twelve months.

As of a recent 2025 period, Surmodics, Inc. reported a Current Ratio of approximately 3.91 and a Quick Ratio (acid-test ratio) of about 3.10. Here's the quick math: A Current Ratio near 4.0 means the company holds roughly four times the current assets (cash, receivables, inventory) needed to cover its current liabilities. The Quick Ratio, which strips out inventory-often the least liquid current asset-still sits well above the safe 1.0 threshold, confirming an excellent ability to meet short-term debt obligations using only its most liquid assets.

Working capital trends also look healthy, though they reflect the nature of a medical device business with significant research and development (R&D) and inventory. Based on the Q3 2025 data, the company's current liabilities were around $20 million, which, when compared to current assets, results in substantial positive working capital, estimated near $58.2 million. This cushion gives management flexibility to fund operations and strategic initiatives like the Pounce™ Thrombectomy Platform expansion.

The cash flow statement paints a picture of improving, yet volatile, operational cash generation. While the Trailing Twelve Months (TTM) Operating Cash Flow (OCF) ending June 30, 2025, was a slight negative at approximately -$1.88 million, the quarterly results show recent positive momentum:

• Q1 Fiscal 2025 OCF: $7.9 million cash provided by operating activities.
• Q3 Fiscal 2025 OCF: $1.4 million cash provided by operating activities.

This positive OCF in two of the first three quarters of FY2025 is a good sign, signaling that core activities are starting to generate cash, a necessary step for long-term self-sufficiency. Investing Cash Flow is consistently negative, which is expected and good for a growth-focused company, as it reflects capital expenditures (CapEx) like the $0.5 million spent in Q3 2025 on property, plant, and equipment. Financing Cash Flow activity is dominated by managing its debt structure, which includes $5.0 million in outstanding borrowings on its revolving credit facility and a $25.0 million term loan as of June 30, 2025.

The primary liquidity strength is the high Current and Quick Ratios, but the biggest near-term liquidity factor is the pending acquisition by GTCR, which, if completed, would see shareholders receive $43.00 per share in cash. This transaction, expected to close in 2025, essentially eliminates any immediate liquidity concerns for investors, though the company's underlying operational cash flow remains critical for the private entity's future. You can dive deeper into the full picture in the rest of this post: Breaking Down Surmodics, Inc. (SRDX) Financial Health: Key Insights for Investors.

Valuation Analysis

The question of whether Surmodics, Inc. (SRDX) is overvalued or undervalued is currently overshadowed by a definitive corporate action: the company completed its merger with an affiliate of GTCR LLC on November 19, 2025, and is initiating a delisting from Nasdaq. The stock price is now trading at or near the acquisition price, making traditional valuation less relevant for new investors.

Still, looking at the fundamentals leading up to the merger, the stock's valuation metrics suggested a premium price, which is common for a company undergoing an acquisition. The stock closed recently around $42.98, which is right at the analyst consensus price target of $43.00. The consensus rating from analysts is a mixed 'Reduce' or 'Hold,' with a split of 1 Buy, 2 Hold, and 2 Sell ratings, reflecting the uncertainty and high valuation before the final merger news.

You're not investing in future earnings growth here; you're trading on a merger price.

Key Valuation Multiples (Fiscal Year 2025)

For a medical device company like Surmodics, Inc., which has been investing heavily in R&D and product commercialization, profitability ratios often look stretched. This is defintely the case here, but the multiples are high even for a growth company.

• Price-to-Earnings (P/E) Ratio: The P/E ratio is negative, sitting around -34.84 (TTM) as of November 2025, because the company reported a GAAP loss. A negative P/E means the company is currently unprofitable, so the ratio is not useful for comparison.
• Price-to-Book (P/B) Ratio: The P/B ratio is high at approximately 5.34 as of November 2025. This suggests the market is valuing the company's equity at over five times its book value, reflecting high expectations for its intangible assets like intellectual property and its Pounce Thrombectomy Platform.
• Enterprise Value-to-EBITDA (EV/EBITDA) Ratio: This ratio is extremely high at 55.89 (TTM) as of November 17, 2025, based on a TTM EBITDA of $7.02 million. Anything over 10x is often considered high, so this multiple strongly indicated a premium valuation or an impending event like the acquisition.

Here's the quick math: the high P/B and EV/EBITDA ratios, combined with negative earnings, pointed to a stock priced for a high-growth future or a takeout-and the takeout is exactly what happened.

Stock Price and Dividend Snapshot

Over the last 12 months, the stock price for Surmodics, Inc. increased by 7.46%, with a massive surge of 48.61% in the month leading up to the merger news. This rapid appreciation was driven by the favorable court ruling regarding the GTCR acquisition, pushing the price from a 52-week low of $25.87 toward the 52-week high of $43.00.

Regarding shareholder returns, Surmodics, Inc. does not currently pay a dividend. The dividend yield and payout ratio are both 0.00%. The company has historically prioritized reinvesting its capital into its medical device and in vitro diagnostics segments, which aligns with its focus on clinical development and commercialization of products like the Pounce Thrombectomy Platform. You can review the company's long-term strategic focus by reading their Mission Statement, Vision, & Core Values of Surmodics, Inc. (SRDX).

Risk Factors

You need to look past the stock's recent volatility-a high beta of 2.02 tells you the price swings are defintely significant-and focus on the core business risks, especially now that the GTCR acquisition is nearing completion. The biggest near-term risk for Surmodics, Inc. (SRDX) is the operational disruption and financial strain caused by the pending merger, while the long-term challenge remains the successful commercialization of its proprietary medical devices against a backdrop of declining revenue from its key license.

Honesty, the merger-related uncertainty has been the primary headwind all year. The company's fiscal 2025 financial guidance anticipates approximately $16.0 million in merger-related charges, which is a massive jump from $3.7 million in fiscal 2024. This cost is a direct hit to the bottom line, contributing to the projected GAAP net loss of $(1.70) to $(1.55) per diluted share for the year.

Operational and Financial Headwinds

The company is navigating a tough financial period, even setting aside the merger costs. Surmodics is currently unprofitable, reporting a negative earnings per share (EPS) of -1.24 and a negative net margin of -14.59% as of November 2025. This lack of profitability is a structural issue that needs to be addressed by its core product sales.

The revenue picture for the 2025 fiscal year is also challenging. Management updated the guidance, expecting total revenue to range from $116.5 million to $118.5 million, which represents a decrease of 8% to 6% compared to fiscal 2024. Here's the quick math on the biggest revenue drag: the company anticipates a $3.6 million drop in SurVeil drug-coated balloon (DCB) license fee income post-March 31, 2025, because the TRANSCEND pivotal clinical trial concluded. Plus, product revenue from SurVeil DCB is projected to decline by about $7 million due to decreased demand from its sole distribution partner, Abbott.

The good news is the Pounce Thrombectomy Platform is showing growth, which is a key mitigation strategy. You need to watch its growth trajectory closely to see if it can offset the SurVeil DCB decline.

• Expect GAAP Net Loss: $(1.70) to $(1.55) per diluted share.
• Projected Revenue Decline: 8% to 6% for fiscal 2025.
• Merger Charges: $16.0 million in fiscal 2025.

External and Strategic Vulnerabilities

The medical device industry is inherently risky. Surmodics, Inc. faces the standard external pressures of intense competition and evolving regulatory requirements, especially with new product approvals. A major strategic risk is the reliance on third-party partners and licensees, like Abbott, to successfully develop and market products incorporating Surmodics' technologies. If a partner fails to execute, Surmodics' revenue and market reach suffer immediately.

The company's focus on vascular intervention products, like the SurVeil DCB and Sundance DCB, means it must successfully navigate the complex regulatory pathways for drug-device combination products. Any delay in commercialization or unexpected post-market surveillance issues could be devastating. Still, the company's strong gross margin of 44.46% indicates some efficiency in production costs, which is a positive sign of operational health.

To get a full picture of the company's financial standing and the context for these risks, you should read the full analysis at Breaking Down Surmodics, Inc. (SRDX) Financial Health: Key Insights for Investors.

Growth Opportunities

You're looking at Surmodics, Inc. (SRDX) right now and the growth story is less about incremental shifts and more about a massive, near-term structural change: the impending acquisition by GTCR. This $627 million deal, which a federal court cleared in November 2025, is set to fundamentally redefine the company's future by pairing its proprietary coating technology with a private equity firm focused on aggressive market expansion. Still, even before the deal closes, the organic growth drivers are clear and centered on their next-generation medical devices.

The company's strategic growth is anchored in two core areas: high-growth product innovation and its market-leading coating technologies. The Medical Device segment is the primary engine, deriving the majority of revenue from its advanced coatings and vascular intervention devices. The key is translating their deep technological expertise into commercial success in high-value procedures like thrombectomy.

Here's the quick math on their 2025 financial outlook, based on the most recent guidance. What this estimate hides is the potential acceleration under new ownership, which is a major factor for investors right now.

The total revenue is projected to be between $116.5 million and $118.5 million, even with a headwind from lower SurVeil™ drug-coated balloon (DCB) license revenue, which is expected to decrease by around $7.5 million in fiscal 2025 due to lower demand from their partner, Abbott.

Key Growth Drivers and Product Innovations

The Pounce™ Thrombectomy Platform is the most compelling organic growth story. This device, which removes clots without aspiration or thrombolysis, saw sales growth of 35% year-over-year in the third quarter of fiscal 2025. The commercial release of the Pounce XL Thrombectomy System in April 2025 expanded its use to larger vessels like the iliac and femoral arteries, which defintely broadens the addressable market.

The coatings business is another quiet powerhouse. Their Medical Device performance coating royalties and license fee revenue increased 14% to $9.4 million in the first quarter of fiscal 2025, largely driven by the adoption of their Serene™ hydrophilic coating. This core technology is a significant competitive advantage, as the company is a market leader in the outsourced hydrophilic coating market for devices like catheters and guidewires.

Growth is coming from these specific areas:

• Accelerated adoption of the Pounce Thrombectomy Platform.
• Expansion of the Preside™ hydrophilic coatings into all core vascular segments.
• Continued growth in the In Vitro Diagnostics (IVD) segment, which saw a 6% revenue increase in Q3 2025.
• Superior clinical data for SurVeil DCB, which was shown to be non-inferior to a leading competitor while using a substantially lower drug dose.

Strategic Initiatives and Competitive Edge

The single biggest strategic initiative is the GTCR acquisition, which is expected to close promptly in November 2025. This move is less about a partnership and more about a transition to a private entity with a clear mandate for accelerated growth and market consolidation. The Federal Trade Commission (FTC) had argued that this deal would give the combined entity control over more than 50% of the outsourced hydrophilic coating market, which underscores the technical dominance Surmodics has in that space. That's a huge competitive moat.

Their competitive advantage rests on proprietary surface modification and drug-delivery coating technologies-they are a technology licensor as much as a device developer. This dual business model insulates them somewhat from the volatility of a single product launch. For a deeper dive into the ownership structure and institutional interest, you should read Exploring Surmodics, Inc. (SRDX) Investor Profile: Who's Buying and Why?. The bottom line is their coatings are a high-barrier-to-entry business, and the Pounce platform is proving to be a highly differentiated product in a growing vascular intervention market.