Vericel’s Earnings Call Highlights Growth Amid Challenges

Vericel Corporation ((VCEL)) has held its Q1 earnings call. Read on for the main highlights of the call.

Vericel Corporation’s recent earnings call conveyed a generally positive sentiment, underscored by robust revenue performance and promising growth from new product launches such as MACI Arthro. Despite facing challenges with Epicel revenue and increased operating expenses leading to a net loss, the company maintains a positive outlook, bolstered by reaffirmed and raised financial guidance driven by strong cash flow and strategic growth initiatives.

Record First Quarter Revenue

Vericel Corporation achieved record first-quarter revenue, with MACI revenue surpassing $46 million. This impressive performance was driven by strong underlying fundamentals and the expansion of the MACI surgeon customer base, setting a solid foundation for future growth.

Strong MACI Arthro Launch

The launch of MACI Arthro demonstrated significant strength, with trained surgeons driving over 30% biopsy growth. Approximately 400 MACI Arthro surgeons have been trained, surpassing the pace of the 2017 MACI launch, highlighting the product’s potential in the market.

NexoBrid Revenue Growth

NexoBrid revenue saw a remarkable increase of over 200% compared to the previous year and over 30% sequentially. This growth was driven by a higher proportion of business from consistent ordering centers, showcasing the product’s growing acceptance and demand.

Positive Financial Guidance

Vericel reaffirmed its full-year revenue guidance of 20% to 23% growth and raised its profitability guidance. The company expects a strong second quarter with total company revenue growth projected at 22% to 25%, reflecting confidence in its strategic initiatives.

Strong Cash Position

The company generated $6.6 million in operating cash flow and ended the quarter with $162 million in cash, restricted cash, and investments, maintaining a strong financial position with no debt, which provides flexibility for future investments and growth.

Decline in Epicel Revenue

Epicel revenue was lower than anticipated due to a high percentage of canceled orders related to patient health issues and the timing of surgeries moving to the second quarter. However, the company remains optimistic about potential improvements in the upcoming quarter.

Increased Operating Expenses

Total operating expenses for the quarter were $49.1 million, up from $40.8 million in the same period in 2024. This increase was primarily due to increased headcount and additional costs related to the company’s new facility, reflecting investments in future growth.

Net Loss Reported

Vericel reported a net loss for the quarter of $11.2 million or $0.23 per share, with non-GAAP adjusted EBITDA at $3.2 million or 6% of net revenue. Despite this, the company remains focused on strategic growth and profitability.

Forward-Looking Guidance

Vericel Corporation’s forward-looking guidance projects a strong second quarter performance with total revenue growth expected to be between 22% and 25%, amounting to approximately $64 million to $66 million. For the full year, the company reaffirmed its revenue growth guidance of 20% to 23% and raised its profitability guidance. The gross margin is expected to be in the low 70% range for the second quarter, with an adjusted EBITDA margin of 20%. For the full year, the company raised its gross margin guidance to 75% and adjusted EBITDA margin guidance to 26%. Plans for a MACI sales force expansion were also discussed, aimed at supporting continued growth.

In conclusion, Vericel Corporation’s earnings call reflected a positive sentiment with strong revenue performance and promising growth from new product launches. Despite challenges in Epicel revenue and increased operating expenses, the company remains optimistic with reaffirmed and raised financial guidance, driven by strong cash flow and strategic growth initiatives. Investors can look forward to potential improvements and continued growth in the coming quarters.