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AVITA Medical (RCEL) Q2 FY26 earnings call: guidance and Q&A

Earnings call· Jun 2026 (Q2 FY26)· Health Care· Aug 6, 2026

Source: earnings call transcript

Executive summary

AVITA Medical Q2 FY26 — Record Revenue and Path to Cash Flow Breakeven

AVITA Medical delivered a strong second quarter, achieving record revenue and raising full-year guidance, driven by robust U.S. Resell adoption and initial traction for CoHelix and Permiaderm. The company is on track to reach cash flow breakeven by Q4 2026, reflecting disciplined commercial execution and operating expense control. Management emphasized the simplification of reimbursement codes for Resell in 2027, which is expected to further support clinical adoption.

Highlights

5

  • Total revenue increased 18% year-over-year to $21.7 million, marking the first time crossing $20 million in a quarter.

  • Full-year 2026 revenue guidance was raised to a range of $86 million to $89 million, representing 20% to 24% growth over 2025.

  • The company introduced new guidance to achieve cash flow breakeven and begin generating cash during the fourth quarter of 2026.

  • Net cash use significantly improved to approximately $3.2 million during the quarter, a major improvement from Q1 and prior year quarterly burn.

  • Gross margin remained strong at 81.9%, compared to 81.2% in the prior year quarter, and U.S. Resell volume increased over 10% sequentially to over 2,600 units.

Concerns

2

  • Product mix impact on gross margin

  • Transition to new Category 1 CPT codes for SCSA

Guidance & targets

CategoryTargetConfidence
Full-year 2026 Revenue
$86 million to $89 million
high materiality
High
Cash Flow Breakeven
Achieve and begin generating cash
high materiality
High
Cash Use
Further reduction in cash use
medium materiality
High

Segment performance

SegmentRevenueYoYQoQMargin
U.S. Resell
Growth reflected physician utilization following physician reimbursement stabilization together with increasing adoption of ResellGo Mini, which continues expanding use in smaller wounds.
Volume: >2,600 unitsResellGo Mini procedures in wounds <= 500 sq cm: 77% (YTD)
$18.5 million—13% sequential—
International Resale
Commercialization of ResaleGo following regulatory authorizations in Europe, the UK, Australia, and New Zealand. British Burn Association Annual Meeting featured the first UK clinical experience with ReselGo, reporting successful treatment of 17 patients.
——approximately 26% sequential—
CoHelix
Steady progress as hospitals complete their value analysis committee (VAC) reviews and begin incorporating CoHelix into clinical practice. Interim COHELIX-1 clinical data supports these dynamics.
Active VAC reviews: ~55VAC reviews completed quarterly: 10-15
$1.7 million—approximately 16% sequential—
Permiaderm
Commercial adoption remains in its early stages. Positioned as a wound temporizer, providing clinicians with an alternative to Allograft. PermiDerm-1 clinical study results expected later this year.
$600,000———

Risks & headwinds

Product mix impact on gross margin Ongoing

modestly impact reported gross margin percentage

Mitigation:Resale growth provides a tailwind for reported gross margin that offsets the impact of product mix as CoHelix and Permiaderm become a larger part of the business.

Transition to new Category 1 CPT codes for SCSA January 1, 2027

Potential for 'transitional air pocket' as providers move from 8 legacy codes to 4 new standardized codes

Mitigation:Proactive communication with teams and customers, and education through associations to ensure understanding by the effective date. The new codes are expected to simplify reimbursement and improve transparency.

What to watch in Q3 FY26

Cash use reduction

Q3 2026
Current Net cash use of $3.2 million in Q2 FY26
Target Further reduction in cash use

Why it matters

Demonstrates progress towards cash flow breakeven and financial sustainability.

As the business continues to scale, we expect a further reduction in cash use during the third quarter before achieving cash flow breakeven and beginning to generate cash during the fourth quarter of 2026.

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Q&A highlights

What were the key drivers for the raised guidance, and how much of a challenge has the previous reimbursement structure been, and what will the new 2027 economics do?

The guidance increase is due to a higher growth trajectory and predictable forecasting. The previous reimbursement structure caused confusion and time-consuming discussions for sales teams and customers. The new 2027 structure will simplify codes, make reimbursement national, and allow sales teams to focus on clinical and economic benefits, improving efficiency and uptake.

“The biggest problem last year was confusion and the amount of time that it took from our salespeople and our customers to try and get a handle on if they were going to get paid, what they were going to get paid, and when.”

asked by Frank Takanan · answered by Unknown Speaker

2 min read 5 chapters

Detailed narrative

Revenue Growth & Portfolio Expansion

AVITA Medical achieved record revenue of $21.7 million in Q2 FY26, an 18% year-over-year increase and 13% sequential growth. This performance was driven by strong U.S. Resell revenue of $18.5 million, which grew approximately 13% sequentially, and increasing international adoption of ReselGo. CoHelix contributed $1.7 million, representing 16% sequential growth, while Permiaderm generated $600,000. Currently, 25 hospitals are utilizing all three AVITA products, with some regularly incorporating the full portfolio into clinical practice.

Financial Discipline & Cash Flow

The company demonstrated improved financial performance, maintaining a strong gross margin of 81.9% and controlling operating expenses at $24.6 million, which was 6% lower than Q2 FY25. Net cash use significantly improved to $3.2 million during the quarter, a substantial reduction from previous periods. AVITA ended the quarter with $11.1 million in cash, cash equivalents, and market securities, reinforcing confidence in its path to cash flow breakeven by Q4 2026.

Resell Reimbursement & Adoption

U.S. Resell volume increased over 10% sequentially to more than 2,600 units, indicating robust physician demand following the stabilization of physician reimbursement across Medicare administrative contractors. ResellGo Mini is successfully expanding use into smaller burn and trauma wounds, with 77% of year-to-date procedures performed in wounds of 500 square centimeters or less. The transition to new Category 1 CPT codes for SCSA, effective January 1, 2027, is expected to simplify reimbursement and improve transparency with a nationally published RVU framework.

CoHelix & Permiaderm Progress

CoHelix continues to gain traction, with approximately 55 active value analysis committee (VAC) reviews and 10 to 15 reviews typically completed each quarter, driving a steady increase in ordering accounts. Interim COHELIX-1 clinical data, which showed faster time to skin graft readiness, supports these dynamics, and the complete six-month follow-up data set is expected for publication later this year. Permiaderm is being strategically positioned as a wound temporizer, with results from the PermiDerm-1 clinical study, evaluating it as a lower-cost alternative to Allograft, anticipated later this year.

Strategic Priorities

Management's objective is to build a business that consistently delivers growth through disciplined commercial execution. Key priorities for the remainder of 2026 include continuing to expand Resell utilization, growing adoption of CoHelix and Permiaderm, and maintaining commercial and financial discipline. These efforts are expected to create long-term value for shareholders and enable more patients to benefit from AVITA's technologies.

Summary of the company's earnings call; see how call summaries are prepared. Not investment advice.