AVITA Medical Posts 67% Revenue Growth, Narrows Net Loss in Q1 2025

• Q1 2025 total revenues increased 67% to $18.5 million
• Net loss narrowed to $13.9 million from $18.7 million in Q1 2024
• Commercial launch of Cohealyx collagen-based dermal matrix in April 2025
• Received waiver for first quarter 2025 revenue covenant under $40 million credit facility
• Operating expenses rose modestly with expanded sales force and R&D investments

Strong Revenue Growth Driven by Commercial Expansion

AVITA Medical, a therapeutic acute wound care company, delivered a robust start to 2025 with total revenues climbing 67% year-over-year to $18.5 million in the first quarter. This growth was primarily fueled by deeper penetration of its flagship RECELL System products and the introduction of new offerings targeting full-thickness skin defects. The company’s commercial revenue surged to $18.5 million, reflecting successful market adoption and new customer accounts.

Gross profit margin slightly declined to 84.7% from 86.4% in the prior year period, influenced by product mix shifts and volume discounts. Notably, the company shares revenue on newer products like Cohealyx and PermeaDerm, which, while beneficial for market expansion, exert downward pressure on overall margins.

Narrowing Net Loss Amid Strategic Investments

AVITA Medical reduced its net loss to $13.9 million in Q1 2025, improving from an $18.7 million loss in the same quarter last year. Operating expenses increased modestly by 3%, driven by a 17% rise in sales and marketing costs due to an expanded sales force and higher commissions aligned with revenue growth. Conversely, general and administrative expenses fell by 29%, reflecting lower headcount and reduced professional fees. Research and development expenses rose 21%, reflecting investments in medical science liaison teams and ongoing clinical studies.

Product Launches and Market Development

April 2025 marked the full commercial launch of Cohealyx, a collagen-based dermal matrix co-developed with Regenity Biosciences. Cohealyx complements AVITA’s RECELL System and PermeaDerm products by supporting wound bed preparation and closure, expanding the company’s therapeutic portfolio. The company is also advancing post-market studies for Cohealyx and PermeaDerm to build clinical evidence supporting broader adoption.

Additionally, AVITA is promoting its RECELL GO mini device, approved in December 2024, designed for smaller wounds and trauma centers, aiming to broaden clinical use cases and market reach.

Liquidity and Credit Facility Update

AVITA Medical ended Q1 2025 with $25.8 million in combined cash, cash equivalents, and marketable securities, supporting operations for at least the next 12 months. The company maintains a $40 million outstanding senior secured credit facility with OrbiMed Advisors, subject to revenue covenants. AVITA was not in compliance with the trailing 12-month net revenue covenant for Q1 2025 but secured a waiver from the lender. The amended covenants set increasing revenue targets through 2026, underscoring the importance of sustained commercial momentum.

Navigating Macroeconomic and Regulatory Challenges

While AVITA’s operational progress is encouraging, the company acknowledges ongoing risks from macroeconomic uncertainties, healthcare reimbursement pressures, and evolving trade policies. These factors could impact demand and financial performance. The company remains focused on expanding market penetration, achieving positive cash flow, and driving toward operating profitability.

Bottom Line?

AVITA Medical’s Q1 momentum and new product launches set the stage for growth, but meeting revenue covenants remains a critical hurdle.

Questions in the middle?

• Will AVITA Medical consistently meet escalating revenue covenants tied to its credit facility?
• How quickly will Cohealyx and RECELL GO mini gain traction in their target markets?
• What impact will macroeconomic and reimbursement challenges have on future sales growth?