AVITA raises 2026 revenue guidance to $92–94 million after 53% quarterly growth
Key Facts
AVITA Medical said on November 5 that it was raising its 2026 revenue guidance range to $92–94 million from $86–89 million, after third-quarter revenue reached $26.1 million, up 53% year over year and 20% from the second quarter. The company said in its results statement that the new range implies growth of about 28–31% from 2025 revenue of $71.6 million. The company attributed the increase to growth in product sales, with RECELL continuing to lead activity and adoption of Cohealyx expanding. The updated annual range implies expected fourth-quarter revenue of $24.9 million to $26.9 million. The company lists its shares on Nasdaq under the ticker RCEL and in Australia under the ticker AVH.
RECELL accounted for most of the quarter's revenue, with U.S. sales of $22.4 million, up about 20% from the second quarter. AVITA attributed the product's performance to a higher number of procedures and more orders from accounts and hospitals. Cohealyx generated revenue of $2.1 million, up about 21% quarter over quarter. The company said the product's growth was linked to an expanding customer base and additional hospital approvals. PermeaDerm recorded revenue of $0.6 million, which was roughly stable compared with the previous quarter.
Gross margin across products rose to 84.0% in the third quarter from 81.3% in the same period last year, an increase of 270 basis points. RECELL's margin alone was 88.4%. The company linked the improvement to higher RECELL revenue and better manufacturing efficiency. Operating expenses, meanwhile, increased 7%, or $1.6 million, to $24.6 million, compared with $23.0 million a year earlier. AVITA said the increase was mainly due to higher marketing and sales expenses.
The net loss narrowed to $6.2 million, or $0.20 per basic and diluted share, compared with a loss of $13.2 million, or $0.46 per share, in the third quarter of 2025. The current-period loss included a noncash expense of $2.1 million related to the revaluation of warrants. On liquidity, net cash use fell to about $0.6 million from $3.2 million in the second quarter. The company ended September with about $10.5 million in cash and marketable securities, compared with $11.1 million at the start of the quarter. AVITA reaffirmed its expectation of reaching cash flow breakeven during the fourth quarter of 2026.
After the quarter ended, AVITA drew the remaining $10.0 million tranche of its credit facility with Perceptive Advisors after trailing twelve-month revenue exceeded the $85.0 million threshold required to access it. The draw increased total borrowings under the facility to $60 million. In its filing, management said substantial doubt about the company's ability to continue as a going concern no longer existed, and reclassified the credit facility from a current to a long-term liability. The assessment comes as the company continues to report a net loss, despite improved cash use and a smaller quarterly loss. The company said it expects to reach cash breakeven in the fourth quarter.
The company said the Centers for Medicare and Medicaid Services finalized national physician payment rates and simplified billing codes for RECELL procedures on November 4, with the changes taking effect on January 1, 2027. AVITA presented the step as a product and reimbursement update related to RECELL procedures. The company also cited risks from variation in procedure volumes and hospital ordering patterns, as well as the possibility that Medicare reimbursement could change or implementation could be delayed during the transition to national payment rates. The company expected fourth-quarter revenue of $24.9 million to $26.9 million, in line with its new annual range. Its results statement also confirmed that its conference call and webcast would take place on November 5 at 1:30 p.m. Pacific time.