Kestra Medical Technologies Ltd(KMTS) - 2025 Q3 - Quarterly Results

Recent Highlights & Business Update Kestra Medical Technologies achieved sustained commercial momentum in Q3 FY25, marked by its IPO, expanded market access, and a key leadership appointment - Completed its initial public offering in March 2025, raising approximately $205.2 million in net proceeds[6] - Expanded market access by signing new in-network contracts, bringing total covered lives for the ASSURE® system to over 285 million health plan members in the U.S.[6] - Appointed Mr. Al Ford as the new Chief Commercial Officer to lead commercial strategy and execution[6] - The CEO highlighted a continued focus on delivering strong growth by expanding the commercial organization and advancing revenue cycle management capabilities[3] Financial Performance Kestra achieved significant Q3 FY25 revenue growth and gross margin expansion, reporting a net loss due to increased operating expenses, while projecting strong full-year growth Q3 FY25 Financial Results Q3 FY25 revenue grew 82% to $15.1 million with gross margin at 43.4%, but increased operating expenses led to a $21.8 million GAAP net loss Q3 FY2025 vs. Q3 FY2024 Performance | Metric | Q3 FY2025 | Q3 FY2024 | Change | | :--- | :--- | :--- | :--- | | Revenue | $15.1 million | $8.3 million | +82% | | Gross Profit | $6.5 million | $0.9 million | +622% | | Gross Margin | 43.4% | 10.6% | +32.8 p.p. | | Operating Expenses | $27.1 million | $20.8 million | +30% | | GAAP Net Loss | $21.8 million | $21.6 million | +0.9% | | Adjusted EBITDA Loss | $16.3 million | $16.2 million | +0.6% | - Revenue growth was driven by a higher share of wallet at existing customers, activation of new accounts, a higher mix of in-network patients, and improved revenue cycle management[6] - Prescriptions for the ASSURE® system increased by 51% compared to the prior year period, totaling 3,459[6] Fiscal Year 2025 Revenue Outlook Kestra provides a positive outlook for the full fiscal year ending April 30, 2025, expecting revenue to be in the range of $58.0 million to $58.5 million - The projected full-year revenue represents significant growth of approximately 109% to 110% compared to fiscal year 2024[5] Financial Statements The unaudited financial statements for Kestra's predecessor, West Affum Intermediate Holdings Corp., present the balance sheet, statement of operations, and adjusted EBITDA reconciliation - The financial statements presented are for West Affum Intermediate Holdings Corp., which is the predecessor to Kestra Medical Technologies, Ltd. for financial reporting purposes prior to the IPO[8] Condensed Consolidated Balance Sheets As of January 31, 2025, total assets reached $108.0 million, primarily due to increased cash, with total liabilities at $85.4 million and a stockholder's deficit of $257.9 million Balance Sheet Highlights (in thousands) | Account | Jan 31, 2025 | Apr 30, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $54,352 | $8,249 | | Total current assets | $69,916 | $14,907 | | Total assets | $107,995 | $45,949 | | Total current liabilities | $38,693 | $32,971 | | Total liabilities | $85,380 | $78,216 | | Total stockholder's deficit | ($257,895) | ($209,377) | Condensed Consolidated Statements of Operations For Q3 FY25, Kestra reported $15.1 million in revenue, a $20.6 million operating loss, and a $21.8 million net loss, resulting in a ($1.25) net loss per share Statement of Operations Summary - Three Months Ended Jan 31 (in thousands) | Metric | 2025 | 2024 | | :--- | :--- | :--- | | Revenue | $15,090 | $8,277 | | Gross margin | $6,547 | $880 | | Loss from operations | ($20,601) | ($19,946) | | Net loss and comprehensive loss | ($21,759) | ($21,619) | | Net loss per share | ($1.25) | ($1.18) | Reconciliation of GAAP Net Loss to Adjusted EBITDA The company reconciled its Q3 FY25 GAAP net loss of $21.8 million to an adjusted EBITDA loss of $16.3 million, primarily by adding back non-cash and IPO-related expenses Adjusted EBITDA Reconciliation - Three Months Ended Jan 31 (in thousands) | Metric | 2025 | 2024 | | :--- | :--- | :--- | | GAAP Net loss and comprehensive loss | ($21,759) | ($21,619) | | IPO expense | $1,927 | $— | | Depreciation expense | $1,888 | $3,363 | | Interest expense | $1,783 | $1,651 | | Adjusted EBITDA | ($16,327) | ($16,211) | Supplementary Information This section provides critical context, clarifying that financial results are for the predecessor entity, defining Adjusted EBITDA, and including forward-looking statement disclaimers - An explanatory note clarifies that Kestra Medical Technologies, Ltd. was formed for the IPO and its business was previously conducted through West Affum Intermediate Holdings Corp., which is the predecessor for financial reporting purposes in this release[8] - The company uses the non-GAAP financial measure Adjusted EBITDA, which it believes helps investors understand core performance by excluding items like interest, taxes, depreciation, amortization, stock-based compensation, and IPO expenses[9][10] - The press release contains forward-looking statements regarding financial guidance, business strategy, and product expectations, which are subject to substantial risks and uncertainties as detailed in SEC filings[12]