AVHHL · AVITA Medical, Inc.

AVITA Medical's Q1 2026 results demonstrate operational stabilization and cost discipline following 2025 initiatives, with total revenue reaching $19.3 million, up 4% year-over-year and 10% sequentially from Q4 2025. Growth was propelled by initial contributions from the expanded portfolio including Cohealyx and RECELL GO mini for trauma wounds, alongside normalizing RECELL utilization after all seven Medicare Administrative Contractors published payment rates. Gross margin dipped to 81.7% from 84.7% due to product mix shifts toward lower-margin Cohealyx (50% ASP share) and PermeaDerm (60% ASP share), though RECELL-only margin held strong at 85.0%, with management noting this mix supports higher gross profit dollars without proportional expense increases. Operating expenses fell 11% to $24.5 million, driven by a $2.0 million reduction in sales and marketing from lower headcount, commissions, and stock-based compensation post-2025 sales force optimization, plus cuts in G&A and R&D. This yielded a narrower net loss of $10.6 million or $0.35 per share versus $13.9 million or $0.53 last year. Cash use of $9.9 million reflected seasonal compensation, one-time items, and revenue timing, with collections lagging sales concentrated late in the quarter; ending cash and securities stood at $14.3 million. CFO David O'Toole highlighted reversing dynamics into Q2, expecting significantly lower cash burn amid cost control and improved receipts. The leadership transition to Cary Vance as President and CEO signals board confidence in strategic progress, complemented by business wins like the 10-year BARDA agreement for up to $25.5 million in recurring revenue and positive Cohealyx data showing ~20-day faster grafting readiness. Regulatory clearance for RECELL GO in Australia/New Zealand bolsters international expansion. Reaffirmed FY2026 revenue guidance of $80-85 million underscores execution momentum under the refinanced credit facility.