AVITA Medical has raised its full-year revenue guidance and removed the going concern qualification from its accounts after a third quarter in which revenue grew 53 per cent on the same period last year.
The wound care company reported revenue of US$26.1 million for the three months to 30 September, up from US$17.1 million a year earlier and 20 per cent higher than the June quarter. Its RECELL system, which uses a patient's own skin to treat burns and trauma wounds, remained the main growth driver, with US revenue of US$22.4 million. That was about 20 per cent above the previous quarter, and the company attributed it to higher procedure volumes and more orders from accounts.
The collagen dermal matrix Cohealyx brought in US$2.1 million, up about 21 per cent from the prior quarter, as its customer base grew and more hospital value analysis committees approved it. The biosynthetic wound matrix PermeaDerm held steady at US$0.6 million. International revenue was also flat at US$0.9 million.
Chief executive Cary Vance said the business kept its momentum through the quarter.
"AVITA delivered another strong quarter, with revenue increasing 53% year over year and gross margin reaching 84%. RECELL continued to drive our growth, supported by increasing adoption of Cohealyx, while disciplined expense management contributed to a substantial improvement in cash use. Based on our year-to-date performance and continued commercial momentum, we are raising our full-year revenue guidance and remain on track to achieve cash flow breakeven in the fourth quarter."
AVITA now expects 2026 revenue of between US$92 million and US$94 million, up from its previous range of US$86 million to US$89 million. The new forecast implies growth of roughly 28 to 31 per cent on the US$71.6 million recorded in 2025 and suggests fourth-quarter revenue of between US$24.9 million and US$26.9 million. The company repeated its expectation of reaching cash flow breakeven in the December quarter.
Gross margin across all products rose 270 basis points to 84.0 per cent, up from 81.3 per cent a year earlier, helped by a larger share of RECELL revenue and better manufacturing efficiency. RECELL's own gross margin was 88.4 per cent, and the company expects it to stay between 86 and 90 per cent in the coming quarters. Overall margin is held back because AVITA receives 50 per cent of the average sales price for Cohealyx and up to 55 per cent for PermeaDerm.
Operating expenses were US$24.6 million, the same as the June quarter and 7 per cent higher than a year earlier. Most of that increase came from sales and marketing, where commissions, compensation and annual incentive costs added US$1.5 million. Research and development spending rose US$1.0 million, mainly because of higher compensation, while general and administrative costs fell by US$0.9 million.
The net loss more than halved to US$6.2 million, or 20 cents a share, from US$13.2 million, or 46 cents a share, a year earlier. The result included a US$2.1 million non-cash expense from revaluing warrants after AVITA's share price rose.
Cash burn fell sharply. Net cash use was about US$0.6 million in the quarter, down from US$3.2 million in the June quarter, and the company finished September with around US$10.5 million in cash, cash equivalents, and marketable securities, down from US$11.1 million at the start of the quarter.
Trailing twelve-month revenue has now passed US$85 million. That met the condition for drawing the last US$10 million under AVITA's credit facility with Perceptive Advisors, and the company drew the tranche after the quarter ended, bringing total borrowings under the facility to US$60 million.
Chief financial officer David O'Toole said reaching the milestone also changed how the company's financial position is assessed.
"Reaching $85 million in trailing twelve-month revenue reflects the continued execution of our commercial strategy and satisfied the revenue condition required to draw down the remaining $10 million under our credit facility with Perceptive Advisors LLC. This additional, minimally dilutive capital strengthens our liquidity as we advance toward cash flow breakeven and cash generation in the fourth quarter. Based on our improved operating performance and liquidity, management concluded that the substantial doubt about our ability to continue as a going concern has been alleviated. Accordingly, the outstanding debt under the credit facility is now classified as a long-term liability on our balance sheet."
There was also good news on reimbursement and clinical evidence. On 4 November, the US Centres for Medicare and Medicaid Services finalised national physician payment values and simpler billing codes for RECELL procedures, which take effect on 1 January 2027. Separately, the PermeaDerm I study met its primary endpoint. Results reported in August showed graft take and wound healing comparable to allograft, with product costs 70 per cent lower and preparation time cut by 95.7 per cent.
In the US, the FDA has approved RECELL for thermal burns and trauma wounds. RECELL and RECELL GO also hold TGA certification in Australia, a CE mark in Europe and a Medsafe listing in New Zealand, and RECELL is approved by the PMDA in Japan.