The following discussion and analysis of the Company’s financial condition and results of operations should be read in conjunction with our condensed consolidated financial statements and the related notes thereto appearing elsewhere in this report and our consolidated financial statements for the year ended December 31, 2025, included in our 2025 Annual Report on Form 10-K. All dollar amounts in the discussion and analysis, unless noted otherwise, are presented in thousands. Unless the context otherwise requires, all references in this report to “Axogen,” the “Company,” “we,” “us” and “our” refer to Axogen, Inc., and its wholly owned subsidiaries Axogen Corporation, Axogen Processing Corporation, Axogen Europe GmbH and Axogen Germany GmbH. Overview We are the leading company focused specifically on the science, development and commercialization of technologies for peripheral nerve regeneration and repair. We are passionate about providing the opportunity to restore nerve function and quality of life for patients with peripheral nerve injuries. We provide innovative, clinically proven and economically effective repair solutions for surgeons and healthcare providers. Peripheral nerves provide the pathways for both motor and sensory signals throughout the body. Every day people suffer traumatic injuries or undergo surgical procedures that impact the function of their peripheral nerves. Physical damage to a peripheral nerve or the inability to properly reconnect peripheral nerves can result in the loss of muscle or organ function, the loss of sensory feeling, or the initiation of pain. Product Portfolio Our platform for peripheral nerve repair features a comprehensive portfolio of products, including: •Avance® (acellular nerve allograft-arwx), an FDA-approved acellular nerve scaffold for the treatment of adult and pediatric patients aged one month or older with sensory, mixed, and motor peripheral nerve discontinuities (“Avance”); •Avance® Nerve Graft, a biologically active off-the-shelf processed human nerve allograft for bridging severed peripheral nerves without the comorbidities associated with a second surgical site (“Avance Nerve Graft”); •Axoguard Nerve Connector®, a porcine (pig) submucosa extracellular matrix (“ECM”) coaptation aid for tensionless repair of severed peripheral nerves (“Axoguard Nerve Connector”); •Axoguard Nerve Protector®, a porcine submucosa ECM product used to wrap and protect damaged peripheral nerves and reinforce the nerve reconstruction while minimizing soft tissue attachments (“Axoguard Nerve Protector”); •Axoguard HA+ Nerve Protector™, a porcine submucosa ECM base layer coated with a proprietary hyaluronate-alginate gel, a next-generation technology designed to enhance nerve gliding and provide short- and long-term protection for peripheral nerve injuries (“Axoguard HA+ Nerve Protector”); •Axoguard Nerve Cap®, a porcine submucosa ECM product used to protect a peripheral nerve end and separate the nerve from the surrounding environment to reduce the development of symptomatic or painful neuroma (“Axoguard Nerve Cap”); and •Avive+ Soft Tissue Matrix™, a multi-layer amniotic membrane allograft used to protect and separate tissues in the surgical bed during the critical phase of tissue healing (“Avive+ Soft Tissue Matrix”). On December 3, 2025, the FDA approved the Biologics License Application for Avance. Continued approval depends on verification and description of clinical benefits in confirmatory studies. While we offer nerve repair products in the U.S., Canada, Germany, the United Kingdom, Spain and several other countries, we derive substantially all of our revenues from sales of our nerve repair products to customers in the U.S. Our strategy remains focused on deepening our presence in high-potential accounts, specifically Level 1 trauma centers and academic-affiliated hospitals with a high number of trained microsurgeons. We will drive growth in these accounts through 17 Table of Contents Axogen, Inc. Management’s Discussion and Analysis of Financial Condition and Results of Operations - Continued (in thousands, except share and per share amounts) targeted expansion of nerve repair indications and driving deeper adoption of our nerve repair algorithm across multiple surgical specialties. Business Outlook We are subject to risks and exposures from the evolving macroeconomic environment, including financial market volatility, geopolitical tensions and escalating trade disputes with U.S. trading partners. While our direct exposure to current tariffs is limited, risk lies in the potential for these disputes to cause a broader trade war, resulting in general economic instability and uncertainty that could cause our net revenue to fluctuate. We are actively assessing steps to mitigate potential adverse effects; however, if these measures are not effective in addressing wider economic disruption, our business, financial condition, results of operations and liquidity could be materially adversely affected. Summary of Operational and Business Highlights •Revenues were $69,731 for the quarter ended June 30, 2026, an increase of $13,069 or 23.1% compared to the quarter ended June 30, 2025. •Gross profit was $50,674 for the quarter ended June 30, 2026, an increase of $8,656 or 20.6% compared to the quarter ended June 30, 2025. •Year-to-date revenue growth through the second quarter of 2026 was broad-based, across all markets, which includes Extremities, Oral Maxillofacial & Head and Neck, and Breast, driven by 20% plus year-over-year account productivity, expanding sales force coverage, and improving commercial insurance coverage and payment. •Publication of REPOSE, a prospective, randomized clinical study evaluating Axoguard Nerve Cap for symptomatic neuroma management, providing Level 1 evidence supporting nerve end protection and demonstrating favorable outcomes in pain burden, medication utilization, and recovery-related measures. •Initiation of Nerve-RESTORE, a prospective, randomized, assessor-blinded study comparing Avance Nerve Graft to sural nerve autograft in mixed and motor nerve reconstruction, designed to generate Level 1 evidence in support of broader adoption of nerve repair globally. •Acquired a minority ownership stake in Trace Biosciences, including a limited right of first refusal, to support development of its nerve-specific imaging technology. 18 Table of Contents Axogen, Inc. Management’s Discussion and Analysis of Financial Condition and Results of Operations - Continued (in thousands, except share and per share amounts) Results of Operations Comparison of the Three Months Ended June 30, 2026 and 2025 The following table sets forth, for the periods presented, our results of operations expressed as dollar amounts and percentage of total revenue: Three Months Ended June 30, 2026 June 30, 2025 (dollars in thousands) Amount % of Revenue Amount % of Revenue Revenues $ 69,731 100.0 % $ 56,662 100.0 % Cost of goods sold 19,057 27.3 14,644 25.8 Gross profit 50,674 72.7 42,018 74.2 Costs and expenses Sales and marketing 30,827 44.2 23,804 42.0 Research and development 8,589 12.3 6,853 12.1 General and administrative 13,414 19.3 9,689 17.1 Total costs and expenses 52,830 75.8 40,346 71.2 (Loss) income from operations (2,156) (3.1) 1,672 3.0 Other income (expense) Investment income 786 1.1 225 0.4 Interest expense (1) — (1,977) (3.5) Change in fair value of debt derivative liabilities — — 480 0.9 Other (expense) income, net (145) (0.2) 179 0.3 Total other income (expense), net 640 0.9 (1,093) (1.9) Net (loss) income $ (1,516) (2.2) % $ 579 1.0 % Revenues Revenues for the three months ended June 30, 2026 increased $13,069, or 23.1%, to $69,731, as compared to $56,662 for the three months ended June 30, 2025. The increase in revenues was primarily driven by an increase in unit volume and the impact of changes in price. Gross Profit Gross profit for the three months ended June 30, 2026 increased $8,656, or 20.6%, to $50,674, as compared to $42,018 for the three months ended June 30, 2025. Gross margin as a percentage of revenues was 72.7% and 74.2% for the three months ended June 30, 2026 and 2025, respectively. Compared to the three months ended June 30, 2025, margins on products sold declined primarily due to higher product costs, partially offset by lower inventory write-offs. Elevated product costs were largely attributable to increased sales of higher-cost biologic Avance product commencing in April 2026 and increased demand of long Avance products, primarily driven by growth in breast Resensation® procedures. 19 Table of Contents Axogen, Inc. Management’s Discussion and Analysis of Financial Condition and Results of Operations - Continued (in thousands, except share and per share amounts) Costs and Expenses Following is a summary of the change in costs and expenses for the three months ended June 30, 2026: (dollars in thousands) Total costs and expenses Sales and marketing Research and development General and administrative For the three months ended June 30, 2025 $ 40,346 $ 23,804 $ 6,853 $ 9,689 Change from: Compensation costs (1) 6,446 3,670 427 2,349 Stock-based compensation expenses (2) 3,098 689 766 1,643 Research and development project costs (3) 1,108 — 1,108 — Marketing program costs 489 489 — — Travel costs 457 417 97 (57) Professional services fees and expenses (706) 274 (882) (98) Occupancy related costs (45) (25) 5 (25) Other costs and expenses 1,637 1,509 215 (87) Total change 12,484 7,023 1,736 3,725 For the three months ended June 30, 2026 $ 52,830 $ 30,827 $ 8,589 $ 13,414 Percentage change 30.9 % 29.5 % 25.3 % 38.4 % __________ (1)Primarily due to higher salaries, employee benefits, sales commissions, incentive compensation and payroll taxes, due to higher headcount and sales volumes. (2)Primarily due to anticipated above target achievement for certain PSU awards due to sales growth. (3)Clinical trial costs and expenses represented approximately 53% and 47% of total research and development costs and expenses for the three months ended June 30, 2026 and 2025, respectively. Product development costs and expenses represented approximately 47% and 53% of total research and development costs and expenses for the three months ended June 30, 2026 and 2025, respectively. Other Income (Expense), Net Other income, net, for the three months ended June 30, 2026 increased $1,733, or 158.6%, to $640, as compared to Other expense, net, of $1,093 for the three months ended June 30, 2025. The increase in total other income, net, was primarily due to a decrease of $1,976 in interest expense and an increase of investment income of $561, partially offset by decreases of $480 from the change in fair value of the debt derivative liabilities and $324 from other income. Income Taxes We had no material income tax expense or benefit during the three months ended June 30, 2026 and 2025 due to the incurrence of fiscal year net operating losses in both periods, the benefits of which have a full valuation allowance. 20 Table of Contents Axogen, Inc. Management’s Discussion and Analysis of Financial Condition and Results of Operations - Continued (in thousands, except share and per share amounts) Comparison of the Six Months Ended June 30, 2026 and 2025 The following table sets forth, for the periods presented, our results of operations expressed as dollar amounts and percentage of total revenue: Six Months Ended June 30, 2026 June 30, 2025 (dollars in thousands) Amount % of Revenue Amount % of Revenue Revenues $ 131,188 100.0 % $ 105,222 100.0 % Cost of goods sold 34,325 26.2 28,271 26.9 Gross profit 96,863 73.8 76,951 73.1 Costs and expenses Sales and marketing 59,460 45.3 44,849 42.6 Research and development 16,106 12.3 12,944 12.3 General and administrative 26,285 20.0 19,147 18.2 Total costs and expenses 101,851 77.6 76,940 73.1 (Loss) income from operations (4,988) (3.8) 11 — Other income (expense) Investment income 1,554 1.1 497 0.5 Interest expense (695) (0.5) (4,227) (4.0) Loss on extinguishment of debt (16,849) (12.8) — — Change in fair value of debt derivative liabilities — — 322 0.3 Other (expense) income, net (122) (0.1) 142 0.1 Total other expense, net (16,112) (12.3) (3,266) (3.1) Net loss $ (21,100) (16.1) % $ (3,255) (3.1) % Revenues Revenues for the six months ended June 30, 2026 increased $25,966, or 24.7%, to $131,188, as compared to $105,222 for the six months ended June 30, 2025. The increase in revenues was primarily driven by an increase in unit volume and the impact of changes in price. Gross Profit Gross profit for the six months ended June 30, 2026 increased $19,912, or 25.9%, to $96,863, as compared to $76,951 for the six months ended June 30, 2025. Gross margin as a percentage of revenues was 73.8% and 73.1% for the six months ended June 30, 2026 and 2025, respectively. Higher margins on products sold were driven by lower inventory write-offs partially offset by the impact of higher product costs. 21 Table of Contents Axogen, Inc. Management’s Discussion and Analysis of Financial Condition and Results of Operations - Continued (in thousands, except share and per share amounts) Costs and Expenses Following is a summary of the change in costs and expenses for the six months ended June 30, 2026: (dollars in thousands) Total costs and expenses Sales and marketing Research and development General and administrative For the six months ended June 30, 2025 $ 76,940 $ 44,849 $ 12,944 $ 19,147 Change from: Compensation costs (1) 14,522 8,884 1,049 4,589 Stock-based compensation expenses (2) 6,103 1,663 1,465 2,975 Research and development project costs (3) 1,943 — 1,943 — Marketing program costs 1,121 1,121 — — Travel costs 1,044 819 262 (37) Professional services fees and expenses (2,103) 259 (1,774) (588) Occupancy related costs (69) 54 (51) (72) Other costs and expenses 2,350 1,811 268 271 Total change 24,911 14,611 3,162 7,138 For the six months ended June 30, 2026 $ 101,851 $ 59,460 $ 16,106 $ 26,285 Percentage change 32.4 % 32.6 % 24.4 % 37.3 % __________ (1)Primarily due to higher salaries, employee benefits, sales commissions, incentive compensation and payroll taxes, due to higher headcount and sales volumes. (2)Primarily due to anticipated above target achievement for certain PSU awards due to sales growth. (3)Clinical trial costs and expenses represented approximately 55% and 44% of total research and development costs and expenses for the six months ended June 30, 2026 and 2025, respectively. Product development costs and expenses represented approximately 45% and 56% of total research and development costs and expenses for the six months ended June 30, 2026 and 2025, respectively. Other Expense, Net Other expense, net, for the six months ended June 30, 2026 increased $12,846, or 393.3%, to $16,112, as compared to $3,266 for the six months ended June 30, 2025. The increase in total other expense, net, was due to loss on the extinguishment of debt of $16,849, and decreases of $322 from the change in fair value of the debt derivative liabilities and $264 from other income. These increases were partially offset by a decrease of $3,532 in interest expense and an increase of $1,057 in investment income. Income Taxes We had no material income tax expense or benefit during the six months ended June 30, 2026 and 2025 due to the incurrence of net operating losses in both periods, the benefits of which have a full valuation allowance. From time to time, we receive notices of examination of prior tax filings from federal and state authorities. During the six months ended June 30, 2026, the IRS completed examining our 2021 federal income tax return with no material findings. Critical Accounting Estimates In preparing our financial statements in accordance with generally accepted accounting principles, there are certain accounting policies, which may require substantial judgment or estimation in their application. We believe our accounting policies for Inventories, Derivative Instruments and Stock-based Compensation, as well as the others set forth in Note 2 - Summary of Significant Accounting Policies in the Notes to the Consolidated Financial Statements in our 2025 Annual Report on Form 10-K, are critical to understanding our results of operations and financial condition. See Critical Accounting Estimates in our 2025 Annual Report on Form 10-K. Actual results could differ from our estimates and assumptions, and any such differences could be material to our results of operations and financial condition. During the quarter covered by this report, there have been no material changes to the accounting estimates and assumptions previously disclosed. 22 Table of Contents Axogen, Inc. Management’s Discussion and Analysis of Financial Condition and Results of Operations - Continued (in thousands, except share and per share amounts) Liquidity and Capital Resources As of June 30, 2026, our principal sources of liquidity were our cash and cash equivalents and investments totaling $111,412. Our cash equivalents are comprised of money market mutual funds and our investments primarily consist of U.S. treasuries and corporate bonds. Our cash and cash equivalents and investments increased $69,884 to $111,412 from $41,528 at December 31, 2025. The increase was primarily as a result of net proceeds from the Offering of $133,252 and the release of $2,000 of restricted cash under the contractual terms of a lease agreement. These increases were partially offset by cash used for early payoff and termination of the Credit Facility of $69,707, payment of employee tax withholdings for shares withheld from vested stock awards and payment of annual bonuses during the first quarter of 2026. On June 30, 2026 and December 31, 2025, our current assets exceeded our current liabilities by $170,002 and $96,866, respectively, and we had a current ratios of 6.6x and 5.1x, respectively. Based on current estimates, we believe that our existing cash and cash equivalents and investments, as well as cash provided by sales of our products, will allow us to fund our operations through at least the next twelve months from the date of issuance of the accompanying financial statements. Cash Flow Information The following table presents a summary of cash flows from operating, investing and financing activities for the periods presented: Six Months Ended (in thousands) June 30, 2026 June 30, 2025 Net cash provided by (used in): Operating activities $ 8,786 $ (5,449) Investing activities (15,464) (5,608) Financing activities 63,702 3,539 Net increase (decrease) in cash and cash equivalents, and restricted cash $ 57,024 $ (7,518) Net Cash Provided by (Used in) Operating Activities Net cash provided by operating activities was $8,786 during the six months ended June 30, 2026 as compared to net cash used in operating activities of $5,449 during the six months ended June 30, 2025. The increase in net cash provided by operating activities of $14,235, or 261.2%, was primarily due to a net favorable change in non-cash charges and working capital accounts of $24,484 and $8,108, respectively, offset by an increase in net loss of $17,845. Net Cash Used in Investing Activities Net cash used in investing activities was $15,464 and $5,608 for the six months ended June 30, 2026 and 2025, respectively, an increase of $9,856 primarily as a result of an increase in the purchase of investments of $10,913 and an increase in the purchase of property and equipment of $2,704, partially offset by the sale of $8,000 of investments during the six months ended June 30, 2026, compared to the sale of $4,000 of investments during the six months ended June 30, 2025. Net Cash Provided by Financing Activities Net cash provided by financing activities was $63,702 and $3,539 for the six months ended June 30, 2026 and 2025, respectively, an increase of $60,163 primarily as a result of net proceeds from the Offering, the exercise of stock options and ESPP purchases, partially offset by cash used for early payoff and termination of the Credit Facility and payment of employee tax withholding on vested stock awards in exchange for shares withheld. Sources of Capital Our expected future capital requirements may depend on many factors including expanding our customer base and sales force and timing and extent of spending in obtaining regulatory approval and introduction of new products. Additional sources of liquidity available to us include issuance of additional equity securities through public or private equity offerings, debt financings or from other sources. The sale of additional equity may result in dilution to our shareholders. Should additional capital not become available to us as needed, we may be required to take certain actions, such as slowing sales and marketing expansion, delaying regulatory approvals, or reducing headcount. 23 Table of Contents Axogen, Inc. Management’s Discussion and Analysis of Financial Condition and Results of Operations - Continued (in thousands, except share and per share amounts) Uses of Capital On July 28, 2026, we invested $7,000 in Trace Biosciences, a privately held biotechnology company. We funded this investment with cash on hand. Contractual Obligations and Commitments (in thousands) 2026 2027-2028 2029-2030 Thereafter Total Operating and finance lease obligations (1) $ 2,112 $ 7,156 $ 7,258 $ 12,793 $ 29,319 Purchase obligations (2) — 3,000 3,000 1,500 7,500 Total $ 2,112 $ 10,156 $ 10,258 $ 14,293 $ 36,819 __________ (1)See Note 7 - Leases in the Notes to the Condensed Consolidated Financial Statements in this Form 10-Q. (2)Purchase obligations include agreements to purchase goods or services that are enforceable, legally binding and specify all significant terms, including fixed or minimum quantities to be purchased; fixed, minimum or variable price provisions; and the approximate timing of the transaction. 24 Table of Contents Axogen, Inc.