AVITA MEDICAL INC. (ASX: AVH) Raises 2026 Revenue Guidance

AVITA Medical lifted its 2026 revenue guidance after record second-quarter sales and a sharp reduction in quarterly cash use.

The acute wound-care company now expects full-year revenue of $86 million to $89 million. Its previous range was $80 million to $85 million.

The revised forecast represents 20% to 24% growth from 2025 revenue of $71.6 million. AVITA also expects to reach cash flow breakeven during the fourth quarter.

Revenue Reaches a Quarterly Record

Second-quarter revenue rose 18% from a year earlier and 13% sequentially to $21.7 million.

Gross margin increased 70 basis points to 81.9%, despite the expansion of lower-margin products. The RECELL-only gross margin was 86%.

Operating expenses declined 6% to $24.6 million, supported by cost optimisation and commercial restructuring undertaken in 2025. Sales and marketing expenses fell by $700,000, while general and administrative costs declined by the same amount.

The quarterly net loss narrowed to $7.7 million, or $0.25 per share. That compared with $9.9 million, or $0.38 per share, a year earlier.

RECELL Remains the Main Sales Engine

RECELL generated $18.5 million of second-quarter revenue, increasing about 11% from the first quarter. AVITA attributed the sequential gain to reimbursement stabilisation and rising adoption of RECELL GO mini for smaller wounds.

RECELL uses a patient’s own skin to create a spray-on treatment for wounds. It is approved by the US Food and Drug Administration for thermal burns and trauma wounds.

Cohealyx revenue reached $1.7 million, up about 16% sequentially. AVITA said adoption was supported by favourable interim clinical data reported in April.

PermeaDerm revenue increased about 40% sequentially to $600,000. The product temporarily protects and stabilises wounds before definitive closure.

International markets contributed $900,000, representing sequential growth of about 26%.

Cash Use Drops Ahead of Breakeven Target

Net cash use fell to approximately $3.2 million from $9.9 million in the first quarter. AVITA finished June with about $11.1 million in cash, cash equivalents and marketable securities, down from $14.3 million in March.

The balance sheet showed a $46.7 million loan facility at June 30. Another $10 million tranche remains available under the existing facility, subject to a revenue condition.

AVITA must achieve at least $85 million of trailing 12-month net revenue in any month before March 31, 2027.

Medicare Proposal Could Standardise Payments

Separately, US Medicare authorities proposed 2027 reimbursement changes for procedures using RECELL. If finalised, physician payments would move from regional contractor pricing to a nationally published valuation framework.

The proposals also include higher facility payments for hospital outpatient departments and ambulatory surgical centres. Final rules are expected later in 2026, with implementation scheduled for January 1, 2027.

AVITA also expects to present data from its PermeaDerm I study during August. The study is evaluating PermeaDerm as a clinically comparable, lower-cost alternative to allograft.