On November 8, 2023, Vericel Corp (VCEL, Financial), a leader in advanced therapies for sports medicine and severe burn care, reported its financial results for the third quarter ended September 30, 2023. The company not only delivered a record third-quarter revenue of $45.6 million, representing an 18% growth over the prior year but also raised its full-year 2023 financial guidance.
Financial Performance Overview
Vericel's total net revenue for Q3 2023 saw a significant increase to $45.6 million, up from $38.6 million in Q3 2022. This growth was primarily driven by a 21% increase in MACI revenue, which reached $37.6 million. The company also reported a gross margin of 67% and a net loss of $3.7 million, or $0.08 per diluted share, which is an improvement from a net loss of $6.6 million, or $0.14 per diluted share, in the same quarter of the previous year.
Operational Highlights and Future Outlook
Vericel's operational highlights include the 13th consecutive quarter of positive adjusted EBITDA and operating cash flow, with adjusted EBITDA growing by 64% compared to the prior year. The company also reported a record number of MACI biopsies and surgeons taking biopsies, indicating strong market adoption and potential for future revenue growth.
"The Company continued to execute well in the third quarter, delivering strong financial results and achieving significant milestones, and as a result we are once again raising our full-year 2023 revenue guidance," said Nick Colangelo, President and CEO of Vericel.
For the full year of 2023, Vericel now expects total net revenue to be in the range of $192.5 to $197.5 million, up from the previous guidance of $190 to $197 million. The company aims to maintain profitability with a gross margin in the high-60% range and an adjusted EBITDA margin in the mid-teens percentage range.
Balance Sheet and Cash Flow
As of September 30, 2023, Vericel maintained a robust balance sheet with approximately $149 million in cash, restricted cash, and investments, and no debt. The company's operating cash flow for the quarter was $7.2 million.
Financial Tables Summary
The condensed consolidated statements of operations reveal that the cost of product sales for Q3 2023 was $14.9 million, leading to a gross profit of $30.6 million. Total operating expenses were $35.7 million, with research and development expenses accounting for $5.7 million and selling, general, and administrative expenses totaling $30 million. The reconciliation of reported net loss (GAAP) to adjusted EBITDA (non-GAAP measure) shows an adjusted EBITDA of $5.4 million for the quarter.
The condensed consolidated balance sheets highlight that Vericel's total assets stood at $318.1 million as of September 30, 2023, with total liabilities at $113.7 million, resulting in total shareholders' equity of $204.4 million.
Vericel's Q3 2023 results demonstrate a strong financial position and operational performance, with significant growth in revenue and a solid increase in adjusted EBITDA. The raised guidance for the full year reflects management's confidence in the company's continued growth trajectory.
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Explore the complete 8-K earnings release (here) from Vericel Corp for further details.
