Avita Medical Raises 2026 Revenue Outlook as Q2 Sales Climb 18%

Avita Medical raised its 2026 revenue guidance to $86 million–$89 million from $80 million–$85 million after second-quarter revenue rose 18% year over year to $21.7 million.

The company continues to target cash-flow breakeven in the fourth quarter.

Financial performance improved, with the net loss narrowing to $7.7 million and quarterly cash use falling to $3.2 million.

Gross margin is expected to remain at or above 82%–83%, while operating expenses are projected to hold near $24.5 million per quarter.

Growth prospects include broader adoption of RECELL, Cohealyx and PermeaDerm, potential reimbursement changes from CMS, and international expansion.

Avita said reimbursement issues were resolved in the first quarter and reported continued progress in hospital approvals and overseas markets.

Avita Medical NASDAQ: RCEL reported second-quarter 2026 revenue of $21.7 million, up 13% sequentially from $19.3 million in the first quarter and 18% from $18.4 million a year earlier, as the wound-care company cited growth across its product portfolio and in U.S. and international markets.

President and CEO Cary Vance said the company has executed on a plan introduced after he took over the role in mid-October 2025, which included assessing operations, stabilizing the business and addressing customer, organizational and reimbursement issues.

He said the company now expects quarterly sequential revenue growth to continue through the remainder of 2026.

Based on first-half results, Avita raised its full-year revenue guidance to $86 million to $89 million, from its prior range of $80 million to $85 million.

The company also reiterated its expectation to reach cash-flow breakeven in the fourth quarter.

CFO David O'Toole said Avita’s gross margin remained in the range the company targets, though the mix of newer products affects reported margins relative to its flagship RECELL product.

RECELL has an 86% gross margin, he said, while the company shares average selling prices with partners for Cohealyx and PermeaDerm.

O'Toole said Avita does not expect gross margin to fall below the 82% to 83% range and is looking for ways to improve it.

Operating expenses are running at approximately $24.5 million and are expected to remain at that level through the second half, according to the company.

The company reported a net loss of $7.7 million for the quarter, which O'Toole said was nearly $3 million better than the first quarter.

Cash use declined to $3.2 million in the second quarter from about $9.9 million in the first quarter, while the quarter-end cash balance was $11.1 million.

To reach cash-flow breakeven, O'Toole said Avita needs to meet its revised revenue target, maintain operating expenses, preserve gross margin in the 82% to 83% range and continue collecting receivables effectively.

Avita also said it is operating within the revenue covenants of its debt agreement with Perceptive Advisors.

The company said the agreement replaced its prior OrbiMed debt facility and reset revenue covenants, including a 2026 revenue covenant of $73 million.

Avita may access an additional $10 million under the Perceptive facility after reaching $85 million in trailing 12-month revenue, though O'Toole said the company is not committed to drawing those funds.

Vance said reimbursement uncertainty affected growth last year after the Centers for Medicare & Medicaid Services delegated rate publication and claims adjudication to Medicare administrative contractors, or MACs.

He said all related issues were resolved during the first quarter and that physicians are now receiving payment.