Avita Medical Q1 Earnings Call Highlights
Avita Medical (NASDAQ:RCEL) reported first-quarter 2026 revenue growth and reaffirmed its full-year outlook as management said reimbursement conditions for its RECELL product are normalizing and demand patterns are becoming more consistent.
The regenerative medicine company posted first-quarter revenue of approximately $19.3 million, up 4% from the prior-year period and about 10% sequentially from the fourth quarter of 2025. President and Chief Executive Officer Cary Vance said the result represented the company’s highest quarterly revenue over the past year and reflected progress after a period focused on stabilizing the business.
“Q1 has been the quarter where we have begun to see those changes translate into more consistent performance,” Vance said on the earnings call. He said the company has been working to address prior disruption related to clinical reimbursement for RECELL, re-engage core accounts and improve its operating focus around higher-value centers.
Company Reaffirms 2026 Revenue Guidance
Chief Financial Officer David O’Toole said first-quarter growth was driven by contributions from Cohealyx, RECELL GO mini and improving RECELL utilization as reimbursement dynamics continue to normalize. Avita reaffirmed its full-year 2026 net revenue guidance of $80 million to $85 million.
Vance said the company is seeing “more frequent, smaller orders” and better alignment between purchasing and usage, which he characterized as a move away from prior variability and toward greater predictability.
In response to an analyst question about whether guidance could move higher after the first-quarter performance, Vance said the company was maintaining its current outlook for now. “We’ve got one quarter under us,” he said, adding that management expects to provide transparency as the year progresses.
RECELL Reimbursement Conditions Improve
Management said all seven Medicare Administrative Contractors have now published payment rates for clinician use of RECELL. During the question-and-answer portion of the call, Vance confirmed that all MACs are now reimbursing for RECELL and said one contractor that had been below the others had raised its rate in line with the rest.
Vance said the company is seeing a gradual return to utilization patterns tied to procedural demand rather than reimbursement uncertainty. Asked about physician and burn center confidence, he estimated the recovery at about 75%, saying Avita is now working hospital by hospital with its healthcare access and commercial teams to support education around reimbursement processes.
The company also highlighted growing use of RECELL GO mini in smaller burns and trauma settings. Vance said the lower-cost RECELL GO mini offering is designed for smaller wounds and helps address economic and workflow objections that may have limited use in some cases.
Internationally, Vance said recent regulatory clearances in Australia and New Zealand position the company to expand RECELL GO in those markets.
Cohealyx Adoption Remains Early but Encouraging
Avita also pointed to early-stage adoption of Cohealyx, with Vance citing an increasing number of ordering accounts as value analysis committee approvals advance, along with early repeat usage by initial adopters.
The company discussed interim clinical data from the Cohealyx I study, which Vance said showed a significant reduction in time to graft readiness, at approximately 20 days versus benchmark, and a median time to grafting of about 11 days. He also said investigators reported high satisfaction and that the data is supporting ongoing value analysis committee reviews as hospitals evaluate adoption.
Vance said Avita expects the full Cohealyx data set later this year. During the Q session, he said the company expects roughly 12 to 15 Cohealyx value analysis committee approvals per quarter and that about 55 to 60 remain in committee review. He also said Avita is in the “20s” in terms of centers using all three of its products: RECELL, Cohealyx and PermeaDerm.
For PermeaDerm, Vance said commercial performance is still developing. The company introduced new clinical positioning in the quarter that presents PermeaDerm as a more affordable biosynthetic alternative to cadaveric allograft in wound coverage and healing. Data from the PermeaDerm I study is expected later this year, and Vance said early signals, including histology, indicate comparable biological performance to cadaver allograft.
Expenses Decline as Cost Structure Stabilizes
Avita reported first-quarter gross profit margin of 81.7%, compared with 84.7% in the prior-year period. O’Toole said the change was mainly due to required inventory reserves and product mix, with Cohealyx and PermeaDerm contributing a greater share of revenue. RECELL gross margin remained strong at approximately 85%, he said.
Total operating expenses were $24.5 million, down 11% year over year. O’Toole said the decline reflected cost optimization actions, including the sales force transformation implemented in 2025. “From a G and an R and headcount perspective, our cost structure is where we want it to be,” he said in response to an analyst question, noting that commissions are the main cost line he would expect to rise if revenue increases.
The company’s net loss narrowed to $10.6 million, or $0.35 per basic and diluted share, compared with a net loss of $13.9 million, or $0.53 per basic and diluted share, in the prior-year period.
Cash Use Expected to Decline in Second Quarter
Net cash use in the first quarter was approximately $9.9 million. O’Toole said cash use was elevated by seasonal compensation, one-time payments and the timing of revenue and collections, with a greater share of product sales occurring later in the quarter. He said those timing dynamics have reversed in the second quarter and that the company has “strong confidence in a significant decrease in cash use” for the period.
Avita ended the quarter with approximately $14.3 million in cash and marketable securities. O’Toole said the company remains in compliance with its trailing 12-month revenue and minimum cash covenants under its credit facility with Perceptive Advisors, which was put in place in January. He said the facility was structured to provide more flexibility than the prior agreement.
The company also discussed its long-term agreement with BARDA to support U.S. burn emergency preparedness. O’Toole said about $3.9 million is guaranteed over 10 years, equating to roughly $100,000 per quarter, with additional revenue contingent on a mass casualty event. He said the safety stock required under the agreement does not increase costs because it aligns with Avita’s existing safety stock.
Vance said the company’s focus for the second quarter is to build sequential growth and demonstrate that recent progress is repeatable across its core burn and Tier 1 trauma accounts.
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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