Artivion just completed the most consequential quarter in its modern history, and the equity is still trading below where it sat before the company announced the deal. The second quarter of 2026 delivered $125.8 million of revenue, an 11% headline increase year over year, and management simultaneously closed the $178 million Endospan acquisition while winning the U.S. FDA premarket approval, the formal authorization to begin commercial sales, for its AMDS Hybrid Prosthesis, a device designed to treat a specific complication of aortic arch repair. With those two milestones now in the rearview mirror, Artivion owns what it describes as the only globally complete three-pronged aortic arch portfolio: ARCEVO LSA, AMDS, and the newly acquired NEXUS family of stent graft systems. The single load-bearing observation of this report is that the second quarter print proves the underlying business is absorbing a transformative deal without stalling, even as the reported bottom line is dominated by acquisition noise.
The mechanism is straightforward to walk through. The aortic stent graft line, the largest revenue category at $46.4 million, grew 16% on a GAAP basis and 12% on a constant currency basis, meaning the company isolates the underlying volume and price growth by stripping out the impact of foreign exchange rate movements. On-X mechanical heart valves, Artivion's $30.5 million surgical franchise, grew 19% reported and 18% in constant currency. Together those two product families account for the bulk of the quarter's growth. The non-GAAP adjusted EBITDA figure, which is earnings before interest, taxes, depreciation, amortization, and a list of one-time items, came in at $26.4 million, up 7% year over year, even after the company booked roughly $15.5 million of business development, integration, and severance expense tied to Endospan, plus a $1.7 million cybersecurity incident charge. Strip those one-time items out, and the underlying business generated enough cash profit to keep the equity story intact. We see the trade as a thesis on whether the aortic arch platform can compound revenue at a high single-digit to low double-digit pace over the next two years while the company works down the integration and contingent consideration tail.
The single load-bearing risk is the leverage profile. Total principal debt outstanding is approximately $370.0 million as of June 30, 2026, up from $220.0 million at year-end 2025, because the company drew an additional $150.0 million under a new delayed draw term loan facility to fund Endospan. The balance sheet also carries $96.5 million of contingent consideration liability, the projected amount the company may owe Endospan's former securityholders if revenue milestones are hit, plus up to $200.0 million of additional contingent earnout, which is a payment that is triggered only if the acquired business meets specified revenue targets, on top of that. Free cash flow turned negative at minus $12.0 million for the quarter and minus $18.9 million for the half, with the year-on-year swing driven by the integration and one-time costs rather than a deterioration in the underlying business. The falsifiable clock is the next two earnings prints plus a Q4 2026 read on full-year guidance, which sits at $480 to $496 million of revenue and $92 to $99 million of adjusted EBITDA. If Q3 constant currency growth holds above 8% and adjusted EBITDA margin, the percentage of revenue that flows through to adjusted EBITDA, stays above 20%, the thesis is intact. If either metric rolls over, the leverage becomes a heavier weight.