Aroa Biosurgery Posts NZ$84.7M Revenue and NZ$4.2M EBITDA Profit in FY25

Robust Financial Performance in FY25

Aroa Biosurgery Limited (ASX: ARX), a New Zealand-based leader in soft tissue regeneration, has delivered a strong financial performance for the fiscal year ended 31 March 2025. The company reported total revenue of NZ$84.7 million, marking a 23% increase over the previous year and surpassing its own guidance range of NZ$81-84 million. This growth was driven primarily by significant gains in product sales, with Myriad™ revenue climbing 38% to NZ$32.3 million and OviTex™/OviTex™ PRS products growing 22% to NZ$39.7 million.

Importantly, Aroa achieved a normalised EBITDA profit of NZ$4.2 million, a notable turnaround from a NZ$3.1 million loss in FY24, reflecting improved operational efficiency and sales momentum. The company also generated positive operating cash flow in the second half of FY25, with NZ$2.3 million in cash inflows from operations, underpinning a strong cash position of NZ$22 million and zero debt at year-end.

Strategic Drivers and Operational Highlights

The revenue growth was supported by a shift in sales mix favoring higher-margin Myriad products, contributing to an improved product gross margin of 86%. The company’s investment in expanding its US sales force and clinical development initiatives, including the Myriad MASTRR registry, aims to build a compelling evidence base for its extracellular matrix (ECM) technology, which is expected to fuel medium-term sales growth.

Research and development expenses remained steady at NZ$9.6 million, focusing on product line extensions for Myriad and OviTex, as well as advancing the Enivo™ technology platform, which targets a market opportunity exceeding US$1 billion. These investments highlight Aroa’s commitment to innovation and expanding its regenerative healing solutions.

FY26 Outlook: Continued Growth and Profitability

Looking ahead, Aroa has provided guidance for FY26, forecasting total revenue between NZ$92 million and NZ$100 million, representing 10-20% growth on a constant currency basis. This growth is expected to be driven primarily by Myriad sales, which are projected to increase by more than 25%, alongside moderate growth in sales through its partner TELABio.

The company anticipates normalised EBITDA in the range of NZ$5 million to NZ$8 million, reflecting a disciplined approach to clinical expenses and ongoing investment in new product development. CEO Brian Ward emphasized the milestone of achieving EBITDA profitability and expressed confidence in sustaining strong top-line growth and enhanced profitability in the coming years.

Risks and Market Considerations

While the results are encouraging, investors should note the inherent risks associated with revenue recognition from TELABio, which involves variable consideration and significant estimation. Additionally, foreign exchange fluctuations remain a factor given Aroa’s exposure to US dollar-denominated sales and costs. The company’s continued investment in clinical development and new technologies, while essential for long-term growth, may also impact near-term profitability depending on execution.

Overall, Aroa Biosurgery’s FY25 results mark a turning point, demonstrating operational resilience and strategic progress in a competitive healthcare market. The company’s focus on regenerative healing technologies positions it well to capitalize on expanding demand for advanced soft tissue repair solutions.