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    KMTS
    Earnings call· Apr 2026(Q4 FY26)

    KESTRA MEDICAL TECHNOLOGIES Q4 FY26 earnings call KMTS

    Jul 14, 2026 Source

    Executive summary

    Kestra Medical Technologies Q4 FY26 — Strong Revenue Growth and Gross Margin Expansion

    Kestra Medical Technologies concluded Q4 FY26 with robust revenue growth, driven by expanding sales territories and increased prescription volumes for its ASSURE system. The company achieved significant gross margin expansion and fortified its balance sheet with a new term loan, providing flexibility for continued investment in commercial capabilities and product innovation. While investing heavily in growth, leading to an adjusted EBITDA loss, management anticipates continued operating leverage and market expansion in the underpenetrated WCD market.

    Highlights

    5

    • Q4 FY26 revenue was $28.6 million, an increase of 66% compared to the prior year period.

    • Full-year FY26 revenue reached $95 million, growing 59% compared to FY25.

    • Gross margin expanded to 54.8% in Q4 FY26, up over 10 points year-over-year and 200 basis points sequentially.

    • Ended FY26 with 130 active sales territories, up from 80 at the end of FY25, contributing to 55% growth in new prescribers and 65% growth in ordering facilities.

    • Secured a new $200 million term loan facility, reducing the cost of capital by 24% and providing approximately $357 million in total liquidity.

    Concerns

    2

    • Adjusted EBITDA loss was $26.7 million in Q4 FY26, compared to a $20.3 million loss in the prior year period.

    • Adjusted operating expenses increased to $44.7 million in Q4 FY26 from $29.7 million in the prior year period, reflecting significant investments in commercial organization and RCM capabilities.

    Guidance & targets

    6
    CategoryTargetConfidence
    Full-year revenue
    $137 million
    high materiality
    High
    Gross margin
    70% plus
    high materiality
    High
    Operating cash burn
    Decline year-over-year
    medium materiality
    High
    Full-year gross margin increase
    700 basis point range increase
    high materiality
    High
    Sales force expansion
    Add 40 reps
    medium materiality
    Medium
    Sales force market coverage
    Full coverage
    medium materiality
    Medium

    Operational metrics

    24
    Patients protected by ASSURE
    18,000
    FY26

    Patients at risk of sudden cardiac arrest.

    ASSURE prescriptions accepted
    6,300
    Q4 FY26

    Accepted for the ASSURE system.

    Prescription growth
    63%YoY
    Q4 FY26

    Driving revenue growth, reflecting market share gains, new accounts, and field team expansion.

    Gross margin
    54.8%up 10.5 points YoY, up 200 bps sequentially
    Q4 FY26

    10th consecutive quarter of sequential gross margin expansion, reflecting attractive unit economics.

    Gross margin
    51.4%up 11 points YoY
    FY26

    Increased by approximately 11 points compared to FY25.

    New prescribers growth
    55%YoY
    FY26

    Growth in the number of new prescribers for ASSURE.

    Ordering facilities growth
    65%YoY
    FY26

    Growth in the number of ordering facilities.

    WCD market growth
    low to mid-teensYoY
    FY26

    Estimated based on Kestra's financials and the incumbent's.

    Active sales territories
    130up from 80 at end of FY25
    End of FY26

    Expansion of sales organization to further penetrate existing accounts and call on new prescribers.

    Active sales territories
    80
    End of FY25

    Baseline for sales force expansion.

    Prescribing increase within organization
    40%
    Since Nov (AHA)

    Within one of the nation's largest independent cardiovascular organizations, reflecting growing adoption supported by clinical evidence and operational integration.

    ACE-PAS study enrollment
    21,000
    Study duration

    Largest real-world prospective WCD study to date.

    In-network patient mix
    low mid-80s
    FY27

    Expected to continue making progress on payer side and RCM improvements.

    Conversion rate
    46%up slightly over 2 points compared to FY25
    Year-end FY26

    Tracking well on the conversion rate journey.

    Prescription intake growth
    17%YoY
    Q4 FY26

    Massive prescription intake, 1,000 higher than previous quarter.

    Cost of capital reduction
    24%vs prior term loan
    Ongoing

    Achieved with the new $200 million term loan facility with Pharmakon.

    Cash, cash equivalents and investments
    $262 million
    As of April 30

    Strong balance sheet.

    Net cash used in operating activities
    $18.7 millionreduction from $24.1 million in prior year
    Q4 FY26

    Operating cash burn declined year-over-year.

    Net cash used in operating activities
    $24.1 million
    Q4 FY25

    Baseline for year-over-year reduction.

    Total liquidity
    $357 million
    Current

    Including unused unavailability under new term loan and excluding uncommitted M&A tranche.

    Geographic sales coverage
    70%
    End of FY26

    With 130 active sales territories, representing coverage of the WCD prescribing universe.

    Adjusted operating expenses
    $44.7 millionvs $29.7 million in prior year
    Q4 FY26

    Excluding nonrecurring costs and stock-based compensation.

    Adjusted operating expenses
    $29.7 million
    Q4 FY25

    Excluding nonrecurring costs and stock-based compensation.

    Operating cash burn decline
    $5.5 millionYoY
    Q4 FY26

    Net cash used in operating activities declined by this amount.

    Industry KPIs

    6
    MetricValueDetails
    System utilization60 prescriptionsprescriptions
    Market growth outgrowthlow to mid-teens%
    Procedure volume growth60 prescriptionsprescriptions
    FCF conversion leverage guidanceDeclinedUSD
    Sales force commercial capacity build130active sales territories
    Indicated addressable patient population6 out of 7 patientspatients

    Product announcements

    2
    ProductTypeDetails
    Biobeat Technologies collaborationupdate
    Enhanced ASSURE detection algorithmlaunch

    Deals & partnerships

    1
    Pharmakonco-lending$200 million

    New term loan facility. Includes unused unavailability and an uncommitted M&A tranche, leading to total liquidity of approximately $357 million.

    Risks & headwinds

    2
    Adjusted EBITDA lossQ4 FY26

    $26.7 million

    Mitigation: Expect to see good operating leverage in 2027 and 2028 as top line drives higher based on 2026 investments.

    Increased operating expenses (adjusted)Q4 FY26

    $44.7 million in Q4 FY26, up from $29.7 million in Q4 FY25

    Mitigation: Primarily attributable to investments in commercial organization, support resources, and revenue cycle management capabilities to capitalize on market opportunity. Expect operating leverage in 2027 and 2028.

    Q&A highlights

    8

    What are the key assumptions behind the $137 million revenue guidance for FY27, specifically regarding prescription growth, in-network mix, and revenue cycle management improvements?

    Vaseem Mahboob stated that revenue growth is driven by prescription volume, in-network mix, RCM improvements, and field team expansion. He expects higher prescriptions from new accounts, deeper penetration in existing accounts, and market expansion. In-network mix is expected to be in the low to mid-80s, with continued RCM improvements. The company starts FY27 with 130 sales territories, up from 80 at the start of FY26.

    “Our revenue growth has historically been driven by prescription and volume growth, in-network mix, revenue cycle management improvements and quite frankly, the growth of our field team. These KPIs are all tracking in the right direction and give us confidence in guiding to 44% growth in fiscal year 2027.”

    asked by Marie Thibault · answered by Vaseem Mahboob

    2 min read4 chapters

    Detailed Narrative

    01

    Patient Story and ASSURE System Value

    A 43-year-old woman with advanced heart disease received 12 life-saving therapies from the ASSURE system during a prolonged cardiac event, highlighting its sustained protection and deliberate design philosophy for complex clinical scenarios. The system also alerted emergency services, demonstrating integrated support beyond therapy. This single patient story exemplifies the system's capability to protect 18,000 patients at risk of sudden cardiac arrest in fiscal 2026.

    02

    Market Expansion and Strategy

    Kestra is actively expanding the WCD market, which grew in the low to mid-teens in FY26, with a long-term vision for a multi-billion dollar market. Strategies include sustained account expansion in academic centers, building robust prescribing networks through physician education (e.g., fellowship programs), and integrating ASSURE into standardized care pathways within enterprise health systems. These efforts are accelerating market adoption, as evidenced by a 40% increase in prescribing within one large cardiovascular organization.

    03

    Clinical Evidence and Product Innovation

    The ACE-PAS study, the largest real-world WCD study with over 21,000 patients, was cited in a Heart Rhythm journal paper, endorsing the role of WCDs for high-risk patients and potentially influencing guideline development. Kestra plans multiple publications from ACE-PAS and new innovations over the next 12 months. A strategic collaboration with Biobeat Technologies for hypertensive patients is progressing, and an enhanced ASSURE detection algorithm was released in April 2026 to further reduce false alarm rates, differentiating the product from competitors.

    04

    Financial Strength and Capital Allocation

    Kestra concluded FY26 with a strong balance sheet, including $262 million in cash, cash equivalents, and investments. The company secured a new $200 million non-dilutive term loan facility with Pharmakon, reducing its cost of capital by 24% and providing significant financial flexibility for commercial strategies, fleet expansion, and potential M&A. Net cash used in operating activities declined by $5.5 million year-over-year in Q4, indicating improving operating leverage.

    AI-generated summary of the company’s earnings call. Not investment advice.