Avita Medical Raises 2026 Revenue Outlook as Q2 Sales Climb 18%

Key Points

• Avita Medical raised its 2026 revenue guidance to $86 million–$89 million from $80 million–$85 million after second-quarter revenue rose 18% year over year to $21.7 million. The company continues to target cash-flow breakeven in the fourth quarter.
• Financial performance improved, with the net loss narrowing to $7.7 million and quarterly cash use falling to $3.2 million. Gross margin is expected to remain at or above 82%–83%, while operating expenses are projected to hold near $24.5 million per quarter.
• Growth prospects include broader adoption of RECELL, Cohealyx and PermeaDerm, potential reimbursement changes from CMS, and international expansion. Avita said reimbursement issues were resolved in the first quarter and reported continued progress in hospital approvals and overseas markets.

Avita Medical NASDAQ: RCEL reported second-quarter 2026 revenue of $21.7 million, up 13% sequentially from $19.3 million in the first quarter and 18% from $18.4 million a year earlier, as the wound-care company cited growth across its product portfolio and in U.S. and international markets.

President and CEO Cary Vance said the company has executed on a plan introduced after he took over the role in mid-October 2025, which included assessing operations, stabilizing the business and addressing customer, organizational and reimbursement issues. He said the company now expects quarterly sequential revenue growth to continue through the remainder of 2026.

Based on first-half results, Avita raised its full-year revenue guidance to $86 million to $89 million, from its prior range of $80 million to $85 million. The company also reiterated its expectation to reach cash-flow breakeven in the fourth quarter.

Margins, expenses and cash use

CFO David O'Toole said Avita’s gross margin remained in the range the company targets, though the mix of newer products affects reported margins relative to its flagship RECELL product. RECELL has an 86% gross margin, he said, while the company shares average selling prices with partners for Cohealyx and PermeaDerm.

O'Toole said Avita does not expect gross margin to fall below the 82% to 83% range and is looking for ways to improve it. Operating expenses are running at approximately $24.5 million and are expected to remain at that level through the second half, according to the company.

The company reported a net loss of $7.7 million for the quarter, which O'Toole said was nearly $3 million better than the first quarter. Cash use declined to $3.2 million in the second quarter from about $9.9 million in the first quarter, while the quarter-end cash balance was $11.1 million.

To reach cash-flow breakeven, O'Toole said Avita needs to meet its revised revenue target, maintain operating expenses, preserve gross margin in the 82% to 83% range and continue collecting receivables effectively.

Avita also said it is operating within the revenue covenants of its debt agreement with Perceptive Advisors. The company said the agreement replaced its prior OrbiMed debt facility and reset revenue covenants, including a 2026 revenue covenant of $73 million. Avita may access an additional $10 million under the Perceptive facility after reaching $85 million in trailing 12-month revenue, though O'Toole said the company is not committed to drawing those funds.

Reimbursement changes and RECELL adoption

Vance said reimbursement uncertainty affected growth last year after the Centers for Medicare & Medicaid Services delegated rate publication and claims adjudication to Medicare administrative contractors, or MACs. He said all related issues were resolved during the first quarter and that physicians are now receiving payment.

CMS has proposed changes that would take effect Jan. 1, subject to finalization expected in late October or November, according to Vance. Under the proposal, CMS would handle claims nationally and bundle harvesting, preparation and application steps into a simplified set of codes.

Vance said the proposed nationwide approach should provide greater consistency, transparency and predictability, particularly for outpatient use. He also highlighted a proposed shift in assessing certain pediatric wounds by percentage of total body surface area rather than wound size alone.

The company said utilization of its RECELL GO Mini product is expanding into smaller wounds. Vance said the smaller, lower-priced kit was designed to support treatment of smaller wounds and is being used as intended.

Portfolio expansion and clinical data

Avita markets RECELL, Cohealyx and PermeaDerm for wound care. Vance said 25 hospitals have now used all three products and that the company sees an opportunity to grow revenue from existing hospital relationships as adoption of the broader portfolio develops.

He said approximately 35 to 40 hospitals have completed the value analysis committee process for Cohealyx, while about 50 remain in the process. The company expects roughly 10 to 15 hospitals per quarter to complete that review.

Vance also pointed to clinical data supporting its products. He said interim Cohealyx data released in April showed readiness for grafting 20 days sooner than competing products, with six-month follow-up data expected to be submitted for publication late this year and potentially published in 2027. Avita also expects interim PermeaDerm data this month, which Vance said would show comparability with allograft.

For RECELL, Vance referenced data showing a 36% reduction in length of stay. He said the common theme across the portfolio is speed of wound healing and preparation, which the company believes can reduce time in acute care and improve hospital workflow.

Market opportunity and international progress

Vance estimated Avita currently has about 15% of the U.S. burn market, while its overall penetration across the broader portfolio is about 5% when trauma is included. He said the company sees room for growth in large and small wounds, burn care and trauma, but plans to remain focused on its current customer base and product portfolio.

Internationally, Vance said Japan is an established market with additional room for growth. He said Avita is underpenetrated in Australia, particularly in the eastern and southeastern regions, and has seen early progress since RECELL GO was approved in Australia and New Zealand. The company is also seven months into expansion efforts in the United Kingdom and selected European countries, where it is working with distributors and clinical advocates to develop the market.

About Avita Medical (NASDAQ:RCEL)

Avita Medical, 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.

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