Avita Medical (NASDAQ:RCEL) reported fourth-quarter revenue of $17.6 million and full-year 2025 revenue of approximately $71.6 million, representing about 11% growth over 2024 and landing in line with the company’s updated guidance, executives said on the company’s fourth-quarter and full-year 2025 earnings call.
Interim Chief Executive Officer Cary Vance framed the December quarter as “less about acceleration and more about control,” emphasizing a shift toward a more disciplined operating model, improved visibility into cash use, and a refined commercial focus centered on increasing utilization within the company’s core customer base.
Reimbursement progress and utilization focus
Vance said early signs suggest utilization is beginning to normalize as accounts reengage, adding that the business is driven less by adding new hospital accounts and more by increasing adoption, utilization, and repeated use of the company’s products—RECELL, Cohealyx, and PermeaDerm—by clinicians.
Vance noted that roughly 90% of current revenue comes from about 200 burn and trauma centers. The company has aligned sales incentives, forecasting assumptions, and field activity around earlier adoption and repeat use within those core accounts, while also continuing a shift away from bulk ordering toward more organic monthly usage patterns.
In the Q&A, management said it remains “highly engaged” with all seven MACs. Regarding the remaining contractor that has not yet published a payment rate, Vance said there was “no reason to be concerned,” characterizing the situation as engagement in the MAC’s process and expressing hope and expectation that it will publish as well.
Multi-product platform and clinical evidence
Management highlighted the company’s strategy to position its offerings as a single integrated acute wound care platform, with RECELL as the foundation and Cohealyx and PermeaDerm intended to expand use across patient episodes with the same clinicians. Vance reiterated that RECELL is supported by clinical evidence demonstrating faster healing, improved outcomes, and shorter hospital stays.
On clinical development, Vance said the Cohealyx I post-market study is fully enrolled and the PermeaDerm I study is nearing full enrollment. These studies are intended to generate real-world clinical and economic evidence, with data expected later in 2026.
At the 2026 Boswick Burn and Wound Symposium, Vance said investigators presented early findings and case experiences from these studies. He also pointed to two cases presented “from the podium” that reported use of RECELL, Cohealyx, and PermeaDerm together on individual patients, which he said supports the company’s goal of evolving from a RECELL-only story to a broader multi-product platform.
Analysts asked about hospital value analysis committee (VAC) processes for Cohealyx and PermeaDerm and what management is seeing in terms of attachment rates in RECELL cases. Vance described a champion-led approach within accounts to move products through VAC review and into departmental use. He said the company has seen the process work in several accounts where products have exited VAC and begun to see uptake, but he did not identify a single “all-star” account with broad attachment rates yet. He added that the company expects to report more over time as products come out of VAC and are used together more frequently.
On the pace of VAC reviews, Vance said accounts continue to come out of Cohealyx VAC review at a steady rate and that he expects that to continue for “the next, I would say, six to nine months.” He said the company has not seen denials “really,” but called the process time-consuming and largely administrative, with no set timeline that varies by account.
Financial performance: margins, expenses, and cash use
Chief Financial Officer David O’Toole said full-year gross margin was 82.1%, down from 85.8% in 2024. He attributed the decline to inventory reserves, product mix, and the increased contribution from Cohealyx and PermeaDerm. O’Toole said that while product mix affects reported gross margin, those products contribute incremental gross profit without a commensurate rise in operating expenses, which he said supports operating leverage over time.
For the fourth quarter, gross margin was 81.2% compared to 87.6% in the prior-year period, which O’Toole again attributed to inventory reserves and product mix.
O’Toole said total operating expenses in the fourth quarter were $24.7 million, down 5% year-over-year. The reduction was driven primarily by lower sales and marketing expense following a commercial transformation earlier in the year, including reduced headcount, compensation, and commissions. General and administrative expenses were “essentially flat,” while research and development increased modestly due to planned investment in the PermeaDerm and Cohealyx post-market studies.
The quarter included $1.2 million of one-time severance costs, which O’Toole said will not recur. Excluding severance, operating expenses were down 10% year-over-year. For the full year, operating expenses declined $10.4 million, or 9%, even including non-recurring severance costs, according to O’Toole.
On cash, O’Toole said the company delivered its third consecutive quarter of improvement in net cash use, declining from $10.1 million in Q2 to $6.2 million in Q3 and $5.1 million in Q4. Avita ended the quarter with $18.2 million in cash and marketable securities. O’Toole noted that cash use is expected to increase in the first quarter of 2026 due to the timing of annual compensation and payroll-related items.
Debt refinancing and 2026 outlook
Both executives discussed a January refinancing through a new credit facility with Perceptive Advisors LLC. Vance said the refinancing was intended to remove the distraction of restrictive covenants, while O’Toole said the new facility provides meaningfully better alignment with the company’s operating trajectory, including more headroom under revenue and cash covenants, a reduced minimum cash covenant (from $10 million to $5 million), and an interest-only structure with no amortization. The facility also includes optional incremental capital if needed, subject to meeting a revenue milestone, O’Toole said.
During Q&A, O’Toole addressed a question about a revenue covenant referenced in the company’s remarks, emphasizing that the covenant threshold should not be interpreted as quarterly guidance. Vance added that the company’s “jump-off point is Q4,” and said investors should expect “progressive growth” through 2026, describing it as gradual acceleration, though the company did not provide quarterly revenue guidance.
For 2026, management guided for full-year revenue of $80 million to $85 million, representing approximately 12% to 19% growth over 2025. Vance said the outlook reflects normalization of RECELL utilization, expanded portfolio use within core accounts, contributions from Cohealyx and PermeaDerm, and a more predictable operating environment. In response to an analyst question about what drives the guidance, Vance said the company expects growth across all three product lines, driven mostly by increased utilization within existing institutions where it already has relationships.
About Avita Medical (NASDAQ:RCEL)
Avita Medical, Inc (NASDAQ: RCEL) is a regenerative medicine company focused on the development and commercialization of cell‐based therapies for acute and chronic wounds. Its flagship technology, the ReCell® Autologous Cell Harvesting Device, enables clinicians to create a suspension of a patient’s own skin cells at the point of care. The system is designed to accelerate wound healing, minimize donor‐site requirements and reduce scarring for patients suffering from burns, traumatic wounds and a variety of surgical and reconstructive procedures.
Founded in 2009 and headquartered in Carlsbad, California, Avita Medical has secured regulatory clearances in key markets, including CE mark approval in the European Union and 510(k) clearance from the U.S.
