AVITA Medical Surges 67% in Q1 Revenue, Eyes Profitability by Year-End
AVITA Medical reported a robust 67% increase in first quarter 2025 revenue, driven by new product launches and a strategic commercial overhaul, while reaffirming its full-year growth and profitability targets.
- Q1 commercial revenue up 67% to $18.5 million
- Launched RECELL GO mini and nationwide rollout of Cohealyx
- Gross profit margin remains strong at 84.7%
- Operating expenses to decrease by $2.5 million per quarter going forward
- Full-year 2025 revenue guidance reaffirmed at $100–106 million with expected GAAP profitability in Q4
Strong Revenue Growth and Product Expansion
AVITA Medical has delivered a compelling start to 2025, reporting commercial revenue of $18.5 million for the first quarter, marking a 67% increase compared to the same period last year. This surge is largely attributed to the successful launch of two new products: the RECELL GO mini, designed for smaller wounds in high-volume trauma centers, and Cohealyx, a collagen-based dermal matrix that began its nationwide rollout in April.
The company’s gross profit margin held firm at 84.7%, a slight dip from 86.4% in the prior year quarter, influenced by volume discounts and a changing product mix. Notably, the RECELL product line alone maintained an 86.4% margin, underscoring its profitability within AVITA’s expanding portfolio.
Strategic Commercial Transformation
AVITA has transitioned its commercial organisation from a service-oriented approach to a sales-focused model, enabling scalable execution across its multi-product platform. This shift supports the company’s ambition to penetrate a U.S. market opportunity that has ballooned from $455 million to over $3.5 billion. CEO Jim Corbett highlighted this evolution as a key driver for long-term growth, positioning AVITA as a leader in therapeutic acute wound care.
Despite a modest increase in operating expenses to $27.5 million, primarily due to expanded sales and marketing efforts, the company expects to reduce these costs by approximately $2.5 million per quarter moving forward. This operational efficiency is critical as AVITA aims to balance growth with profitability.
Financial Outlook and Regulatory Progress
Reaffirming its full-year 2025 guidance, AVITA projects commercial revenue between $100 million and $106 million, representing growth of 55% to 65% over 2024. The company anticipates generating free cash flow in the second half of the year and achieving GAAP profitability by the fourth quarter.
On the regulatory front, AVITA expects the European Union’s notified body to grant CE mark approval for RECELL GO by mid-2025, positioning the company to meet anticipated supply demands. Concurrently, clinical data development for Cohealyx and PermeaDerm continues, supporting their clinical efficacy and cost-saving potential in acute wound care.
Navigating Financial Covenants and Market Engagement
While AVITA secured a waiver for its first quarter revenue covenant under its credit agreement with OrbiMed, future covenants remain intact, underscoring the importance of sustained revenue growth. The company’s cash position stood at $25.8 million as of March 31, 2025, providing a buffer as it executes its growth strategy.
Looking ahead, AVITA will host its Acute Wound Care Showcase 2025, a virtual event designed to highlight its integrated therapeutic approach and share insights from clinicians and patients. This event will likely serve as a platform to further bolster market awareness and adoption of its expanding product suite.
Bottom Line?
AVITA Medical’s robust Q1 performance and strategic initiatives set the stage for a pivotal year as it targets profitability and deeper market penetration.
Questions in the middle?
- How will the new RECELL GO mini and Cohealyx products impact long-term revenue growth?
- What are the risks associated with the recent waiver of the revenue covenant under the credit agreement?
- When will clinical data for Cohealyx and PermeaDerm be available to validate their market potential?
