Q2 2026 AVITA Medical Inc Earnings Call Transcript
Key Points
- AVITA Medical Inc (AVHHL) delivered strong Q2 2026 revenue of $21.7 million, up 18% year-over-year and 13% sequentially, marking the first quarter above $20 million.
- The company raised its full-year 2026 revenue guidance to $86-$89 million, representing 20-24% growth over 2025.
- Gross margin improved to 81.9% in Q2, with RECELL maintaining a strong gross margin of approximately 86%.
- Operating expenses remained flat sequentially and decreased 6% year-over-year, demonstrating improved operating leverage.
- Net cash use improved significantly to approximately $3.2 million in Q2, and the company expects to achieve cash flow breakeven and begin generating cash in Q4 2026.
- RECELL GO mini is expanding adoption into smaller wounds, with 77% of procedures year-to-date performed in wounds of 500 square centimeters or less.
- The transition to new Category I CPT codes for skin cell suspension autograft is expected to simplify reimbursement and improve transparency, reducing administrative burden.
- Cohealyx revenue grew 16% sequentially, with a healthy pipeline of 55 active VAC reviews and positive interim clinical data supporting adoption.
- International RECELL revenue increased 26% sequentially, with early clinical experience in the U.K. showing improved operating room workflow.
- The company maintains a strong balance sheet with access to an additional $10 million tranche from its credit facility once trailing 12-month revenue reaches $85 million.
- The company still reported an operating loss of $6.9 million and a net loss of $7.7 million in Q2 2026, though improved year-over-year.
- Cash reserves are relatively low at approximately $11.1 million, which may limit financial flexibility if revenue growth slows.
- Cohealyx and PermeaDerm are still in early adoption stages, with PermeaDerm generating only $600,000 in revenue, indicating limited market penetration.
- The transition to new CPT codes in 2027 carries a risk of a transitional air pocket as providers adjust to the new coding structure, potentially impacting reimbursement timing.
- The company's newer products (Cohealyx and PermeaDerm) have lower gross margins, which could dilute overall gross margin as they become a larger part of the business.
- International revenue remains a smaller contributor, and the company's growth is heavily dependent on the U.S. market.
- The company's guidance and cash flow breakeven expectations rely on continued sequential growth, which may be challenging to sustain in a competitive market.
- The proposed CMS RVUs for the new SCSA codes are not yet finalized, and any changes could affect physician reimbursement and adoption.
- The company's operating expenses, while flat, are still high relative to revenue, and further reductions may be needed to achieve sustained profitability.
- The company's reliance on a single product (RECELL) for the majority of revenue exposes it to risks if reimbursement or competitive dynamics change.
Good day, and 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 1 1 on your telephone.
You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 1 1 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.
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
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