Saluda Medical delivered FY26 revenue of US$90.2 million, beating guidance with strong US and international growth, while reporting a flat net loss of US$149.6 million amid ongoing heavy investment. The company’s FDA approval of its CAP24 paddle lead opens a new US surgical market segment.
- FY26 revenue up 28% to US$90.2 million, exceeding guidance
- Gross margin expands 230 basis points to 48.9%
- Adjusted EBITDA loss widens to US$113.7 million
- FDA approves CAP24 paddle lead, expanding US market reach
- Company flags going concern risks despite US$118.6 million cash
Revenue Growth Outpaces Losses Amid Commercial Scale-Up
Saluda Medical (ASX:SLD) posted a 28% jump in FY26 revenue to US$90.2 million, surpassing its own upgraded guidance of US$87 million. This growth was driven by a 27% rise in US sales to US$63.2 million and a 32% increase internationally, mainly across Europe and Australia. The company’s commercial momentum in the US was underpinned by a 21% increase in active implanting physicians and a 34% rise in implanted patients, reflecting deeper physician adoption and utilisation.
Gross profit rose 35% to US$44.1 million, with gross margin expanding 230 basis points to 48.9%, ahead of the IPO prospectus estimate of 45.9%. Operational efficiencies, lower unit costs, and a favourable product mix contributed to margin expansion, partially offset by pricing adjustments linked to higher penetration of ambulatory surgery centres (ASCs) in the US.
Investment Push Drives Wider EBITDA Loss and Cash Burn
Despite revenue gains, Saluda’s adjusted EBITDA loss widened 12% to US$113.7 million, reflecting ongoing heavy investment in commercial infrastructure, US sales force expansion, and physician education programs. The company ended FY26 with cash used in operations of US$116 million, a slight improvement from US$118.2 million the previous year, aided by disciplined working capital management.
Net loss remained flat at US$149.6 million, including non-cash items such as stock-based compensation and fair value adjustments. The company’s balance sheet strengthened following its November 2025 IPO and common stock financing, which raised over US$152 million and converted all redeemable convertible preferred stock and convertible notes into common stock, leaving no preferred stock outstanding as of June 30, 2026.
FDA Approval of CAP24 Paddle Lead Unlocks New US Market Segment
A key milestone for Saluda was the FDA’s approval of the CAP24 paddle lead in June 2026, expanding the Evoke System portfolio into surgical paddle lead procedures. This innovation opens access to neurosurgeons and orthopedic spine surgeons, who prefer paddle leads, representing an estimated US$670 million segment, or roughly 30% of the US spinal cord stimulation (SCS) market. The company commenced a phased US launch of CAP24, with initial surgical cases performed post-approval.
This development complements Saluda’s broader strategy to increase physician penetration and utilisation, particularly in high-volume ASC accounts, and to leverage its EVA automated programming technology, which has been rolled out globally to improve programming efficiency and patient outcomes.
Liquidity and Going Concern Risks Highlight Funding Needs
As of June 30, 2026, Saluda held US$118.6 million in cash and restricted cash, bolstered by its recent capital raises. However, the company continues to generate substantial operating losses and negative cash flows. Management acknowledges substantial doubt about the company’s ability to continue as a going concern without additional financing beyond the next 12 months.
The company’s existing undrawn debt facility remains unavailable due to unmet conditions, and while management is exploring multiple financing avenues, including equity, debt, and strategic partnerships, there is no assurance of securing funding on acceptable terms. This financial uncertainty adds a layer of risk as Saluda pursues its growth and product development plans.
Outlook Reflects Growth with Operating Leverage Potential
Saluda’s FY27 guidance anticipates revenue growth of 25% to 35%, gross margin expansion to 50%-52%, and an adjusted EBITDA loss narrowing to between US$95 million and US$101 million. The company expects approximately 90% of incremental gross profit to translate into EBITDA improvement, signalling operating leverage as its commercial organisation matures.
Key growth drivers include expanding the active physician base, increasing utilisation, international market development, and the commercial rollout of CAP24. Product enhancements such as next-generation implantable pulse generators and leads, alongside remote patient management capabilities, are also in development to support future scalability.
Bottom Line?
Saluda Medical’s strong top-line growth and FDA nod for its CAP24 paddle lead mark progress, but looming liquidity risks and sustained losses underscore the challenge of scaling a complex medtech business.
Questions in the middle?
- How will Saluda secure additional funding to bridge its going concern gap beyond the next 12 months?
- Can the CAP24 paddle lead gain meaningful traction in the US surgical market segment amid competition?
- What pace of sales force productivity improvement is realistic given current ramp-up and market penetration?