Q3 2026 Kestra Medical Technologies Ltd Earnings Call Transcript
Key Points
- Kestra Medical Technologies Ltd (KMTS) reported a strong financial performance in the third quarter of fiscal 2026, with revenue reaching $24.6 million, marking a 63% increase compared to the prior year period.
- The company achieved a gross margin of 52.6%, up 9 percentage points year over year, and has seen sequential gross margin expansion for nine consecutive quarters.
- KMTS is on track to achieve 70% plus gross margins over the next few years, supported by the attractive unit economics of its business model.
- The company has expanded its sales organization, aiming to increase market penetration and has set a goal of having about 130 sales territories by the end of the fiscal year.
- KMTS has made significant progress in market access and reimbursement, becoming an approved Florida managed Medicaid provider and being added to the federal supply schedule for the US Department of Veterans Affairs.
- Despite the strong revenue growth, KMTS reported a GAAP net loss of $34.2 million in the third quarter, compared to a GAAP net loss of $21.8 million in the prior year period.
- The adjusted EBITDA loss was $21.2 million in the third quarter, indicating ongoing financial challenges.
- The company faces underutilization in the WCD market, with 6 out of 7 patients indicated for a WCD not being protected by one.
- KMTS's operating expenses increased to $47.7 million in the third quarter, up from $27.1 million in the prior year period, driven by investments in commercial expansion and public company costs.
- The company is still working to bring a long tail of regional and local payers under contract, indicating ongoing challenges in achieving comprehensive market access.
Good afternoon. Welcome to Castro Medical Technologies Earnings conference call. This conference call is being recorded for replay purposes. We'll be facilitating a question-and-answer session following prepared remarks for management. At this time, all participants are in listen-only mode. I would like to turn the call over to Neil Blaker, Vice President of investor relations, for introductory comments.
Thank you, Victor. Good afternoon.
Thank you for joining Kestra's 3rd quarter fiscal 2026 earnings call. With me today are Brian Webster, President and Chief Executive Officer, and Vasim Mehbo, Chief Financial Officer. This call includes forward-looking statements within the meanings of the Private Securities Litigation Reform Act of 1,995. Statements made on this call that do not relate to matters of historical fact should be considered forward-looking statements. These statements are based on Castra's current expectations, forecasts, and assumptions which are
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