Avita Medical Q2 2026 Earnings Report

Avita Medical EPS Results

• Actual EPS: -$0.25
• Consensus EPS: -$0.29
• Beat/Miss: Beat by +$0.04
• One Year Ago EPS: N/A

Avita Medical Revenue Results

• Actual Revenue: $21.70 million
• Expected Revenue: $20.25 million
• Beat/Miss: Beat by +$1.45 million
• YoY Revenue Growth: N/A

Avita Medical Announcement Details

• Quarter: Q2 2026
• Date: 8/6/2026
• Time: After Market Closes
• Conference Call Date: Thursday, August 6, 2026
• Conference Call Time: 4:30PM ET

Avita Medical (NASDAQ:RCEL), Inc. (NASDAQ: RCEL) is a regenerative medicine company focused on the development and commercialization of cell‐based therapies for acute and chronic wounds. Its flagship technology, the ReCell® Autologous Cell Harvesting Device, enables clinicians to create a suspension of a patient’s own skin cells at the point of care. The system is designed to accelerate wound healing, minimize donor‐site requirements and reduce scarring for patients suffering from burns, traumatic wounds and a variety of surgical and reconstructive procedures.

Founded in 2009 and headquartered in Carlsbad, California, Avita Medical has secured regulatory clearances in key markets, including CE mark approval in the European Union and 510(k) clearance from the U.S. Food and Drug Administration for acute thermal burn wounds. The company has since expanded its clinical indications and market access efforts into regions such as Australia, China and other parts of Asia. Avita collaborates with leading burn centers, academic institutions and investigator‐initiated trials to explore additional applications—ranging from chronic diabetic ulcers to vitiligo and hair restoration.

Under the leadership of President and Chief Executive Officer Michael Perry, Avita Medical has emphasized the integration of its proprietary cell‐harvesting technology into standard burn and wound care protocols. The company maintains a global commercial infrastructure to support physician training, clinical research, and post‐market surveillance. Its strategic priorities include broadening clinical adoption of ReCell, pursuing new regulatory approvals and fostering partnerships to extend its regenerative platform into adjacent markets.

Avita Medical Q2 2026 Earnings Call Transcript

Key Takeaways

• Positive Sentiment: Second-quarter revenue rose 18% year over year to $21.7 million, marking the first quarter above $20 million; management raised 2026 revenue guidance to $86–$89 million, or 20%–24% growth.
• Positive Sentiment: U.S. RECELL revenue increased 13% sequentially to $18.5 million, while total RECELL volume exceeded 2,600 units; adoption of RECELL GO mini is expanding into smaller wounds, with 77% of year-to-date procedures involving wounds of 500 square centimeters or less.
• Positive Sentiment: Cohealyx revenue grew 16% sequentially to $1.7 million, supported by approximately 55 active hospital value-analysis reviews, while PermeaDerm generated $600,000 and is being positioned as a lower-cost wound temporizer alternative to allograft.
• Positive Sentiment: Management expects to reach cash-flow breakeven and begin generating cash in the fourth quarter of 2026, helped by revenue growth, gross margins above 81%, disciplined operating expenses, and improved cash collections; quarterly net cash use fell to approximately $3.2 million.
• Neutral Sentiment: Beginning in January 2027, new nationally published CPT codes are expected to replace the current eight-code RECELL reimbursement structure with four standardized codes; AVITA is educating providers, while final CMS payment rules remain pending.

Presentation

[Operator]

Day. Thank you for standing by. Welcome to the AVITA Medical, Inc. second quarter 2026 earnings conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during the session, you will need to press star one one on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star one one again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Ben Atkins, Vice President of Investor Relations and Corporate Communications. Please go ahead.

[Ben Atkins, VP of Investor Relations and Corporate Communications at AVITA Medical]

Thank you, operator. Welcome to AVITA Medical's second quarter 2026 earnings call. Joining me on today's call are Cary Vance, President and Chief Executive Officer, and David O'Toole, Chief Financial Officer. Today's earnings release and presentation are available on our website at www.avitamedical.com under the investor relations section. Before we begin, I would like to remind you that this call includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are neither promises nor guarantees and involve known and unknown risks and uncertainties that could cause actual results to differ materially from any expectations expressed or implied by the forward-looking statements. Please review our most recent filings with the SEC for comprehensive descriptions of the risk factors. Any forward-looking statements provided during this call are based on management's expectations as of today. I will now turn the call over to Cary.

[Cary Vance, President and CEO at AVITA Medical]

Good afternoon in the U.S. and good morning in Australia. Thank you for joining us. As you saw in our press release today, we delivered strong revenue growth in the second quarter of $21.7 million, up 18% year-over-year and 13% sequentially. As AVITA continues to expand in the U.S. and build its presence in key international markets, our results reflect the growing utility of our acute wound care portfolio, led by RECELL and supported by Cohealyx and PermeaDerm. In the U.S., RECELL generated $18.5 million in revenue during the second quarter, growing approximately 13% sequentially from the prior quarter. This growth reflected physician utilization following physician reimbursement stabilization, together with increasing adoption of RECELL GO mini, which continues expanding use in smaller wounds. I'll add a little more color on RECELL later in my remarks. Internationally, revenue from RECELL increased approximately 26% sequentially over the first quarter.

[Cary Vance, President and CEO at AVITA Medical]

We continue to commercialize RECELL GO following regulatory authorizations in Europe, the U.K., Australia, and New Zealand. As adoption builds, clinicians are also beginning to share their early clinical experience. During the quarter, the British Burn Association annual meeting featured the first U.K. clinical experience with RECELL GO, reporting successful treatment of 17 patients while highlighting improved operating room workflow. While international revenue remains a smaller contributor today, these milestones continue building the foundation for long-term growth alongside our large U.S. opportunity. Cohealyx generated $1.7 million, representing approximately 16% sequential growth. We're encouraged by the steady progress we're seeing as hospitals complete their value analysis committee, or VAC reviews, and begin incorporating Cohealyx into clinical practice. We continue to maintain a healthy pipeline of approximately 55 active VAC reviews, with 10-15 reviews typically completed each quarter, driving a steady increase in ordering accounts.

[Cary Vance, President and CEO at AVITA Medical]

The interim Cohealyx-I clinical data presented earlier this year supports those dynamics by providing hospitals and surgeons with comparative clinical evidence. The study demonstrated substantial faster time to skin graft readiness compared with leading dermal matrices. Later this year, we expect to submit the complete six-month follow-up data set for publication, providing additional evidence of long-term durability. PermeaDerm generated $600,000 in revenue during the quarter. Commercial adoption remains in its early stages. We are encouraged by the initial response following our recent positioning of PermeaDerm as a wound temporizer, providing clinicians with an alternative to allograft to temporarily stabilize and protect the wound before definitive closure. To further support that positioning, we expect results from our PermeaDerm I clinical study later this year. As a reminder, this post-market study evaluated PermeaDerm as a clinically comparable, lower-cost alternative to allograft. Today, 25 hospitals have experience using all three AVITA products.

[Cary Vance, President and CEO at AVITA Medical]

Some are already regularly incorporating the full portfolio into clinical practice, while others are still evaluating where each product best fits within their treatment pathway. That is what we would expect at this stage of adoption of our new products, and it gives us confidence in the opportunity to grow utilization of our full portfolio within our accounts. Since becoming CEO last October, my objective has been straightforward: to build a business that consistently delivers growth quarter-over-quarter, year-over-year through disciplined commercial execution. Looking back over the first half of 2026, I believe we have demonstrated that objective in action. We have delivered consecutive quarters of sequential growth, broadened adoption across our portfolio, and we continue to improve the financial profile of the company. That progress gives us greater confidence in where the business is headed, and today we are updating our outlook accordingly.

[Cary Vance, President and CEO at AVITA Medical]

First, we are raising our full year 2026 revenue guidance to a range of $86 million-$89 million, representing growth of 20%-24% over 2025. Second, we are introducing new guidance to achieve cash flow breakeven and begin generating cash during the fourth quarter of 2026. Reaching that milestone is an important step in AVITA Medical's evolution. It reflects not only stronger revenue growth, but also the operating discipline and cash generation that David will discuss in more detail.

[David O'Toole, CFO at AVITA Medical]

Thank you, Cary. Good afternoon, and in Australia, good morning. I will use my prepared remarks to look at how our strong commercial performance is flowing through the business, particularly across operating leverage, cash generation, and our path to cash flow breakeven. Turning to the financials on slide four, let me start with revenue. As Cary indicated, revenue increased approximately 18% year-over-year and 13% sequentially from the first quarter to $21.7 million, crossing over $20 million in revenue for a quarter for the first time in our company history. With this sequential revenue growth for the second quarter and $41 million in revenue for the first six months of 2026, we are increasing our revenue guidance for 2026 from $80 million-$85 million to now $86 million-$89 million.

[David O'Toole, CFO at AVITA Medical]

This will represent growth for this year from the $71.6 million in revenue in 2025 in a range of approximately 20%-24%. Turning to gross margin. Gross margin increased to 81.9% compared to 81.2% in the prior year quarter, and remained above 81% year-to-date despite continued growth in our newer products. As we've discussed previously, while changes in product mix modestly impact reported gross margin percentage, Cohealyx and PermeaDerm contribute incremental gross profit without a proportional increase in operating expenses. RECELL gross margin remains strong at approximately 86%. RECELL growth provides a tailwind for reported gross margin that offsets the impact of product mix as Cohealyx and PermeaDerm become a larger part of the business. Looking at operating expenses. Operating expenses were $24.6 million, essentially no change to the first quarter, and approximately 6% lower than in the same period in 2025.

[David O'Toole, CFO at AVITA Medical]

Importantly, this demonstrates the benefit of the commercial operating structure we established during the second quarter of 2025, capable of supporting continued commercial growth without requiring a corresponding increase in operating expenses. Looking ahead for the rest of 2026, we continue to identify opportunities to further reduce operating expenses while continuing to support our commercial priorities. This quarter, operating loss and net loss improved to $6.9 million and $7.7 million respectively, compared to $11.1 million and $9.9 million respectively in the same period last year. The second quarter operating and net loss showed significant improvements from the quarterly losses we have generated in the past. Turning to cash, which remains one of our highest priorities. As we discussed during our first quarter call, we expected cash use to improve significantly during the second quarter as seasonal payments normalized, collections improved, and revenue continued to scale. That's exactly what happened.

[David O'Toole, CFO at AVITA Medical]

Net cash use improved to approximately $3.2 million during the quarter, representing a major improvement from the first quarter and from the quarterly cash burn each quarter last year. We ended the quarter with approximately $11.1 million in cash equivalent, and market securities. As I look at the trajectory of our numbers indicated in the green boxes on this slide, I see a financial model performing as expected and in alignment with our growing revenue. As Cary mentioned earlier, we are also introducing new guidance for our cash flow outlook. That confidence of reaching cash flow breakeven is supported by three financial trends that are now working together, illustrated here on slide five. First, revenue continues to scale. We've now delivered two consecutive quarters of meaningful sequential growth, 9.7% and 13% respectively, and we've raised our full year revenue guidance.

[David O'Toole, CFO at AVITA Medical]

Second, we've maintained high gross margin above 81% while growing our portfolio over multiple quarters. Third, we've maintained disciplined control of operating expenses and optimized our cash conversion cycle. Essentially, we are spending less money to run the business and collecting cash faster from our operations. Taken together, those trends give us increasing confidence that AVITA is approaching an important financial inflection point. As the business continues to scale, we expect a further reduction in cash use during the third quarter before achieving cash flow breakeven and beginning to generate cash during the fourth quarter of 2026. Turning to slide six, our updated outlook reinforces our confidence that the balance sheet remains aligned with the next phase of the company's growth and funded through this transition to cash generation.

[David O'Toole, CFO at AVITA Medical]

We continue to operate well within the requirements of our credit facility, which was intentionally structured to support the business through this stage of commercial expansion. As revenue continues to build, the Perceptive debt facility also provides access to an additional $10 million tranche once trailing 12-month revenue reaches $85 million, providing additional financial flexibility as we transition towards cash generation. In summary, we're delivering commercial growth, maintaining strong gross margin, exercising control of operating expenses, and significantly reducing our use of cash. Together, those trends support our confidence in the increased revenue forecast we share today and our path towards cash generation. Today's results also reflect strong execution across the organization. Commercial, operations, and corporate teams have worked together exceptionally well to scale the business while maintaining financial discipline. I'd like to thank everyone across AVITA for their commitment and execution during the first half of the year.

[David O'Toole, CFO at AVITA Medical]

With that, I'll hand the call back to Cary.

[Cary Vance, President and CEO at AVITA Medical]

Thanks, David. Before we open the line for questions, I'd like to spend a few minutes on RECELL. It's the foundation of our business, and we continue to see encouraging progress in both physician utilization and the reimbursement framework that will support future growth. Following the transition of reimbursement across all seven Medicare Administrative Contractors, or MACs, physician utilization of RECELL continued to strengthen during the second quarter. Total U.S. RECELL volume increased more than 10% sequentially this quarter to over 2,600 units. We're also seeing a growth driver emerge through RECELL GO mini. As you can see on the right-hand side of the slide, 77% of RECELL GO mini procedures year-to-date were performed in wounds of 500 square centimeters or less. That's exactly what we designed RECELL GO mini to do, to expand RECELL into smaller burn and trauma wounds.

[Cary Vance, President and CEO at AVITA Medical]

We also view the increased volume in the second quarter as an encouraging indicator of the underlying physician demand for RECELL when reimbursement is stable and predictable. To that end, we are now entering the final stages of the transition to new category 1 CPT codes for skin cell suspension autograft, or SCSA, the procedure term for RECELL. As a reminder, beginning January 1st, 2027, the new category 1 CPT code family for SCSA will replace today's multi-code structure. The current eight-code structure separates harvest, preparation, and application. This will be replaced by a simplified four-code family based on anatomic location and wound size. In July, within its proposed 2027 Medicare payment updates, the Centers for Medicare and Medicaid Services, or CMS, proposed nationally published Physician Relative Value Units, or RVUs, for the new SCSA codes. We expect CMS to finalize the rule later this year.

[Cary Vance, President and CEO at AVITA Medical]

If adopted as proposed, from this coming January, physician reimbursement would transition from today's regional MAC contractor price methodology to a nationally published RVU framework, improving transparency and consistency for providers. Over time, we expect this to simplify reimbursement discussions, allowing our commercial team and customers to focus less on coding complexity and more on clinical adoption and patient care. As I step back and look at the quarter, I'm incredibly encouraged by what we're seeing in our numbers. RECELL utilization is growing. Cohealyx, and behind it PermeaDerm are gaining traction. Revenue continues to grow quarter after quarter, and we have a clear path to cash flow breakeven by year-end. Those aren't isolated achievements. They're evidence that the business is operating the way we intended it to. As we look to the remainder of 2026, we'll continue executing with the same discipline that has brought us to this point.

[Cary Vance, President and CEO at AVITA Medical]

Our priorities are clear. Continue expanding RECELL utilization, continue growing adoption of Cohealyx and PermeaDerm, and continue executing with commercial and financial discipline. As we continue to do those things effectively, we believe AVITA is well-positioned to create long-term value for shareholders while helping more patients benefit from our technologies. Thank you for joining us today and for your continued support. Operator, we're now happy to take questions.

[Operator]

As a reminder, to ask a question, please press star 11 on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again. Please stand by while we compile the Q&A roster. Our first question comes from Frank Takkinen with Lake Street Capital Markets. Your line is open.

[Frank Takkinen, Analyst at Lake Street Capital Markets]

Great. Thank you for taking the questions. Congratulations on a really solid quarter. I was hoping to ask two questions. I'll ask them both up front and then hop back in queue. To start on guidance, maybe walk through the key pieces behind the guidance increase. I heard the comments about RECELL GO mini doing well and recovery, maybe kind of parsing out which contributed more. Secondly, as you think about reimbursement in 2027, how much of a challenge has the previous structure been? Meaning, maybe what portion of cases or adoption by site has been hung up because of the previous structure, and maybe what are those new economics due to that? Thank you.

[Cary Vance, President and CEO at AVITA Medical]

Thanks, Frank. Thanks for joining today. First of all, regarding guidance, it's fairly straightforward and simple. We're on a growth trajectory, and when we set guidance at the beginning of the year, there were some things that we knew and some things that we didn't. We set a pretty responsible guidance based on the trajectory we thought we would follow, and we're on a higher trajectory. That's very clear to us now. I think we have eyes on the rest of the year. All of our customers, we've become very predictable in our forecasting, we feel it's appropriate to raise it at this time to something that we believe we'll achieve.

[Cary Vance, President and CEO at AVITA Medical]

Second, from a reimbursement standpoint, if you just take the numbers part aside, the biggest problem last year was confusion, and the amount of time that it took from our salespeople and our customers to try and get a handle on if they were going to get paid, what they were going to get paid, and when. We've resolved that as kind of a placeholder, because that's what it was meant to be, through the MACs, over time, by account. What this will do is it will simplify the codes, but it will also make it absolute nationwide. As I said in my prepared remarks, it will move us from these clarifying, more complex discussions with our customers to focus more on the clinical and economic benefits of the products.

[Cary Vance, President and CEO at AVITA Medical]

That'll be very helpful to the efficiency and effectiveness of our sales team and I think our uptake on RECELL, which is still very under-penetrated in the market.

[Operator]

Thank you. Our next question comes from Ryan Zimmerman with U.S. Bancorp BTIG, your line is open.

[Analyst at U.S. Bancorp BTIG]

Hi, this is Jacqueline on for Ryan. Thank you for taking the question. I was just wondering, with the proposed 2027 PFS, is there any risk of a transitional air pocket as providers move from the eight legacy codes to the four new standardized codes? What's the internal plan to get ahead of that educationally?

[Cary Vance, President and CEO at AVITA Medical]

Sure. We've already begun communication with our teams who have started to communicate with our customers. That is already starting. Even though all of that'll be finalized in late October, early November, that proposed change is likely, because of it, we're starting to educate them already as to how this will change. Some of the associations that we're a part of are also educating their members, a lot of burn surgeons, about the change as well. It's kind of a full-scale effort to make sure that everybody understands it very clearly by the time it hits January 1st.

[Analyst at U.S. Bancorp BTIG]

Thank you. With the Cohealyx-I full data set previously expected in the end of 2026 and favorable interim data already reported in April showing faster time to skin grafting readiness versus the leading competitive products, can you confirm that the full data set timeline is still on track? What incremental information will add to further support back approvals and broader adoption?

[Cary Vance, President and CEO at AVITA Medical]

We are still on track in terms of that timeline. The further data is just that there's follow-up data that's included as well that'll be part of that submission and publication.

[Analyst at U.S. Bancorp BTIG]

Thank you.

[Cary Vance, President and CEO at AVITA Medical]

You're welcome. Thank you.

[Operator]

Thank you. As a reminder, to ask a question, please press star one one on your telephone. Again, that is star one one to ask a question. Our next question comes from Josh Jennings with TD Cowen. Your line is open.

[Analyst at TD Cowen]

Hi, good afternoon. Thanks for taking the question, congrats on a great quarter. It's John on for Josh. I just wanted to ask you quickly on adoption across all three products, specifically what you're hearing from your sales reps in the field. What feedback are they giving you at the physician level in terms of doctors using all three products, and how does this influence your pricing across your product portfolio? Just had a quick follow-up.

[Cary Vance, President and CEO at AVITA Medical]

Well, I think the feedback from a clinical perspective is very strong. I believe that each of the products stand on their own, and the physicians have told us that in terms of their clinical effectiveness, but also the economic benefit that they see. It's still early days in them trying to figure out how two or three of AVITA's products, PermeaDerm, Cohealyx, and RECELL, how they one plus one equals five or six in terms of synergies. We're working together with them to make sure that's maximized. Very positive. Some of our best customers are adopting all three technologies, and we expect that to continue going forward.

[Analyst at TD Cowen]

Okay, excellent. Just in terms of pricing across the three individual units, certainly appreciate that RECELL is accretive at the gross margin line. Don't get me wrong, 85%, 86% gross margins are excellent at a product level. Is there anything you can do to keep improving that gross margin to potentially offset some of the dilution from Cohealyx and PermeaDerm?

[Cary Vance, President and CEO at AVITA Medical]

Sure. Our operational team continues to look for efficiencies on the back end of our business. We'll continue to look for those, as well as our opportunity to maximize price in the marketplace. That will be something that we'll continue to hold and try to expand going forward, as we should. In terms of the other products, Cohealyx and PermeaDerm, again, early days in trying to gain market penetration. We're always looking at price to make sure we're optimized there. We'll continue to do that.

[Analyst at TD Cowen]

Excellent.

[Cary Vance, President and CEO at AVITA Medical]

Thank you, John.

[Operator]

Thank you. I'm showing no further questions at this time. This concludes today's conference call. Thank you for participating. You may now disconnect.

Participants

Analysts

• Ben Atkins, VP of Investor Relations and Corporate Communications at AVITA Medical
• Cary Vance, President and CEO at AVITA Medical
• David O'Toole, CFO at AVITA Medical
• Frank Takkinen, Analyst at Lake Street Capital Markets
• Analyst at U.S. Bancorp BTIG
• Analyst at TD Cowen