AVITA Medical achieved a significant milestone in the second quarter of 2026, reporting revenue of $21.7 million, marking the first time the company has surpassed the $20 million quarterly revenue mark. This represents an impressive 18% year-over-year growth and a 13% sequential increase from the previous quarter. This robust performance is attributed to the expanding utility of its acute wound care product portfolio, particularly led by RECELL and further supported by Cohealyx and PermeaDerm. The company's management has expressed increased confidence in its business trajectory, leading to an upward revision of its full-year 2026 revenue guidance to a range of $86 million to $89 million, projecting a 20% to 24% growth over 2025. Furthermore, AVITA Medical is targeting cash flow breakeven by the fourth quarter of 2026, a critical step in its financial evolution, underpinned by stronger revenue growth and diligent cost optimization.
Key financial indicators highlight AVITA Medical's operational strengths and strategic advancements. The gross margin improved to 81.9% from 81.2% in the prior year, driven by the scaling of RECELL, which boasts an 86.0% gross margin. Operating expenses saw a 6% reduction year-over-year, settling at $24.6 million, demonstrating the effectiveness of the commercial operating structure implemented in Q2 2025. This cost control, coupled with enhanced revenue, resulted in a reduced net loss of $7.7 million, a notable improvement from $9.9 million in the same period last year. The company's net cash use significantly decreased to $3.2 million, a substantial improvement from $9.9 million in Q1 2026, with cash and marketable securities standing at $11.1 million by the end of June 2026. The continued expansion of product adoption, with 25 hospitals now utilizing the full suite of RECELL, Cohealyx, and PermeaDerm products, further solidifies its market presence and future growth prospects.
AVITA Medical's strategic initiatives, particularly concerning RECELL, are laying a solid foundation for future growth and market predictability. The stabilization of physician reimbursement across Medicare administrative contractors has bolstered RECELL utilization, leading to a 10% sequential increase in U.S. RECELL volume to over 2,600 units. The RECELL GO Mini, designed for smaller wounds, now accounts for 77% of procedures in wounds of 500 cm² or less, indicating successful market penetration for specific applications. Crucially, the company is preparing for the transition to new Category I CPT codes for skin cell suspension autograft (SCSA) starting January 1, 2027. This change will simplify the current eight-code structure into a more streamlined four-code family based on wound size and anatomical location. The Centers for Medicare and Medicaid Services (CMS) has proposed nationally published physician relative value units (RVUs) for these new SCSA codes, aiming to enhance transparency and predictability in provider reimbursement, thereby easing administrative burdens and fostering broader clinical adoption.
AVITA Medical's robust financial performance and strategic foresight underscore its commitment to innovation and patient care. By consistently delivering growth, optimizing operational costs, and navigating complex reimbursement landscapes, the company demonstrates a strong, forward-looking approach. This solidifies its position as a leader in advanced wound care and promises enduring value for both shareholders and patients worldwide.
