Q3 2026 Covalon Technologies Ltd Earnings Call Transcript
Key Points
- Revenue increased 20% year-over-year to $10 million, with all three sales channels contributing to growth.
- Gross margin improved significantly to 67.2% from 46.5% a year ago, driven by higher-margin vascular sales and a favorable comparison.
- Adjusted EBITDA more than tripled to $3.0 million, reflecting efficient scaling with operating expenses up only 1%.
- The contamination protection solution saw strong growth, with US revenues up 68% year-over-year and 34% sequentially.
- Customer retention is high, with 100% of top 50 hospital system customers retained and 58 new hospital locations added in nine months.
- The company's first quarter of fiscal 2026 was soft, which still impacts year-to-date results.
- Operating expenses increased 8% year-to-date, partly due to higher product testing and amortization costs.
- The company's growth is concentrated in the US vascular access channel, which may pose a risk if that market slows.
- Despite strong growth, the company's market penetration remains low, with only a couple hundred of 6,000 US hospitals using its solution.
- The company's reliance on a few large accounts for significant revenue growth could be a concentration risk.
Good morning, ladies and gentlemen, and welcome to Covalon's Q3 Fiscal 2026 conference call and webcast. My name is Christine, and I will be your conference operator today. As a reminder, today's conference is being recorded. (Operator Instructions)
At this time, I would like to turn the conference over to Mr. Brent Ashton, Chief Executive Officer.
Hi, thanks, Christine, and good morning to all of you on the call today. We really appreciate you connecting in. Kim Crooks, our Chief Operating Officer; and Katie Martinovich, our Chief Financial Officer, have both joined me on the call here today. And Salia Asadzada from Covalon is also helping to coordinate the conference call. She'll now provide us with some instructions.
Thank you, Brent. Good morning, everyone. My name is Salia Asadzada, and I'm the Executive Assistant to Covalon's Chief Executive Officer. I'd like
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