AVITA Medical reported a 13% drop in Q3 commercial revenue to $17.1 million but improved its net loss and secured CE Mark approval for RECELL GO in Europe, signaling strategic shifts ahead.
- Q3 commercial revenue declined 13% to $17.1 million
- Net loss improved to $13.2 million from $16.2 million year-over-year
- Operating expenses cut by 24% to $23 million
- CE Mark approval received for RECELL GO, enabling European launch
- Full-year 2025 revenue guidance lowered to $70-$74 million
Financial Performance and Cost Discipline
AVITA Medical’s third quarter results for 2025 reveal a company navigating a challenging reimbursement landscape while making strides in operational efficiency. Commercial revenue fell 13% year-over-year to $17.1 million, reflecting headwinds from delayed Medicare reimbursement transitions. However, the company’s disciplined approach to cost management yielded a 24% reduction in operating expenses, down $7.2 million to $23 million, which helped narrow the net loss to $13.2 million from $16.2 million in the same period last year.
Cash flow also showed improvement, with net cash use dropping to $6.2 million in Q3 from $10.1 million in Q2, underscoring better cash efficiency amid ongoing investments in growth priorities.
Regulatory Milestone and Market Expansion
A significant highlight was the CE Mark approval for RECELL GO under the European Union Medical Device Regulation. This regulatory clearance paves the way for AVITA Medical to commercialize RECELL GO across key European markets, starting with Germany, Italy, and the United Kingdom. This expansion aligns with the company’s mission to broaden access to its acute wound care technologies globally and could open new revenue streams beyond its core U.S. burn and trauma center focus.
Strategic Focus and Market Opportunity
Under new interim CEO Cary Vance, AVITA Medical is concentrating efforts on approximately 200 high-value U.S. burn and trauma centers, targeting a $1.3 billion addressable market. The company currently serves about 5% of this segment, indicating substantial room for growth. Vance emphasized execution and consistent product utilisation as keys to driving momentum, particularly as reimbursement clarity returns following finalized Medicare pricing under new CPT codes.
Clinical data continues to support RECELL’s leadership in acute wound care, with global analyses of over 8,000 patients demonstrating faster healing and reduced patient burden. Real-world U.S. registry data also highlights significant cost savings and shorter hospital stays compared to traditional treatments, reinforcing the product’s value proposition.
Financial Outlook and Capital Strategy
Reflecting the current market and reimbursement environment, AVITA Medical lowered its full-year 2025 revenue guidance to $70-$74 million from the previous $76-$81 million range. The company also amended its credit agreement with OrbiMed, resetting revenue covenants and adding $500,000 to the loan principal, signaling proactive financial management amid ongoing growth investments.
Looking ahead, AVITA plans to update investors on its capital funding options and 2026 financial guidance in early 2026, maintaining a focus on disciplined cash management and commercial execution.
Bottom Line?
AVITA Medical’s Q3 results reflect cautious progress amid reimbursement challenges and strategic expansion, setting the stage for critical updates in early 2026.
Questions in the middle?
- How quickly will reimbursement normalization translate into increased procedure volumes?
- What impact will the European launch of RECELL GO have on revenue growth in 2026?
- What capital funding strategies will AVITA pursue to support its growth ambitions?