Kestra Medical Technologies Ltd(KMTS) - 2025 Q4 - Annual Results

Executive Summary Kestra achieved strong fiscal 2025 results, driven by ASSURE® system demand, improved gross margin, and operational progress, with positive FY26 guidance CEO Commentary CEO highlighted strong FY25, driven by ASSURE® demand, improved gross margin, and operational achievements - Accelerating demand for the ASSURE® cardiac recovery system, benefiting from heightened prescriber awareness and positive patient experiences[2] - Meaningful improvement in gross margin, attributed to attractive unit economics and positive leverage inherent in the business model[2] - Progress on key operational objectives, including significant growth of the commercial organization and planned enhancements to revenue cycle capabilities[2] Overall Financial Highlights Kestra reported significant Q4 and FY25 revenue growth and gross margin expansion, initiating FY26 guidance Key Financial Highlights (Q4 FY25 vs. Prior Year & FY25 vs. FY24) | Metric | Q4 FY25 | Q4 Prior Year | Change (YoY) | FY25 | FY24 | Change (YoY) | | :----- | :------ | :------------ | :----------- | :--- | :--- | :----------- | | Revenue | $17.2M | $10.054M | +71% | $59.8M | $27.814M | +115% | | Gross Margin | 44.3% | 13.9% | +30.4 pp | 40.5% | 1.3% | +39.2 pp | | FY26 Revenue Guidance | - | - | - | $85M | - | +42% (vs FY25) | Fourth Quarter Fiscal 2025 Financial Results Kestra's Q4 FY25 financial results detail revenue, gross profit, operating expenses, net loss, and cash position Revenue and Prescriptions Kestra's Q4 FY25 revenue increased by 71% to $17.2 million, supported by a 43% rise in ASSURE® system prescriptions Q4 FY25 Revenue and Prescriptions | Metric | Q4 FY25 | Q4 Prior Year | Change (YoY) | | :----- | :------ | :------------ | :----------- | | Total Revenue | $17.2M | $10.054M | +71% | | ASSURE® Prescriptions | 3,903 | 2,730 | +43% | - Revenue growth was driven by a higher share of wallet with existing customers, activation of new accounts, a higher mix of in-network patients, and improvements in revenue cycle management capabilities[5] Gross Profit and Margin Q4 FY25 gross profit surged to $7.6 million, with gross margin expanding to 44.3% due to volume leverage Q4 FY25 Gross Profit and Margin | Metric | Q4 FY25 | Q4 Prior Year | Change (YoY) | | :----- | :------ | :------------ | :----------- | | Gross Profit | $7.6M | $1.4M | +442.8% | | Gross Margin | 44.3% | 13.9% | +30.4 pp | - Gross margin expanded due to volume leverage and a higher mix of in-network patients[5] Operating Expenses Q4 FY25 GAAP operating expenses increased to $55.8 million, including significant share-based compensation and IPO-related costs Q4 FY25 Operating Expenses | Metric | Q4 FY25 | Q4 Prior Year | Change (YoY) | | :----- | :------ | :------------ | :----------- | | GAAP Operating Expenses | $55.8M | $21.7M | +157.1% | | Share-based Compensation Expense | $22.3M | $0.389M | +5629.9% | | IPO Professional Services Expenses | $3.8M | $0 | N/A | | Adjusted Operating Expenses (excl. SBC & IPO) | $29.7M | $21.4M | +38.8% | - Share-based compensation expense in Q4 included one-time impacts from accelerated vesting of incentive units and the issuance of stock options to Kestra team members due to the company's IPO in March[5] - The increase in adjusted operating expenses was attributable to growth in expenses related to commercial and revenue cycle resources[5] Net Loss and Adjusted EBITDA Kestra reported a GAAP net loss of $51.1 million and an Adjusted EBITDA loss of $20.3 million in Q4 FY25 Q4 FY25 Net Loss and Adjusted EBITDA | Metric | Q4 FY25 | Q4 Prior Year | Change (YoY) | | :----- | :------ | :------------ | :----------- | | GAAP Net Loss and Comprehensive Loss | $(51.1)M | $(22.3)M | +129.1% (larger loss) | | Adjusted EBITDA Loss | $(20.3)M | $(16.5)M | +23.0% (larger loss) | Cash Position Kestra's cash and cash equivalents significantly increased to $237.6 million as of April 30, 2025 Cash and Cash Equivalents | Metric | April 30, 2025 | April 30, 2024 | | :----- | :------------- | :------------- | | Cash and Cash Equivalents | $237.6M | $8.249M | Fiscal Year 2025 Financial Results Kestra's full fiscal year 2025 financial results detail revenue, gross profit, operating expenses, and net loss Revenue and Prescriptions Kestra's FY25 total revenue reached $59.8 million, a 115% increase, driven by a 72% rise in ASSURE® system prescriptions FY25 Revenue and Prescriptions | Metric | FY25 | FY24 | Change (YoY) | | :----- | :--- | :--- | :----------- | | Total Revenue | $59.8M | $27.814M | +115% | | ASSURE® Prescriptions | 13,193 | 7,670 | +72% | Gross Profit and Margin FY25 gross profit dramatically increased to $24.2 million, with gross margin expanding to 40.5% FY25 Gross Profit and Margin | Metric | FY25 | FY24 | Change (YoY) | | :----- | :--- | :--- | :----------- | | Gross Profit | $24.2M | $0.4M | +5950% | | Gross Margin | 40.5% | 1.3% | +39.2 pp | Operating Expenses FY25 GAAP operating expenses were $130.6 million, with adjusted operating expenses at $100.6 million FY25 Operating Expenses | Metric | FY25 | FY24 | Change (YoY) | | :----- | :--- | :--- | :----------- | | GAAP Operating Expenses | $130.6M | $85.4M | +52.9% | | Adjusted Operating Expenses (excl. SBC & IPO) | $100.6M | $83.9M | +19.9% | Net Loss and Adjusted EBITDA Kestra reported a GAAP net loss of $113.8 million for FY25, with an Adjusted EBITDA loss of $68.4 million FY25 Net Loss and Adjusted EBITDA | Metric | FY25 | FY24 | Change (YoY) | | :----- | :--- | :--- | :----------- | | GAAP Net Loss and Comprehensive Loss | $(113.8)M | $(94.1)M | +20.9% (larger loss) | | Adjusted EBITDA Loss | $(68.4)M | $(72.0)M | -5.0% (smaller loss) | Fiscal Year 2026 Revenue Guidance Kestra projects FY26 revenue of $85 million, representing a 42% increase over FY25 actuals FY26 Revenue Guidance | Metric | FY26 Guidance | FY25 Actual | Projected Change (YoY) | | :----- | :------------ | :---------- | :--------------------- | | Revenue | $85M | $59.8M | +42% | Use of Non-GAAP Financial Measures This section defines Adjusted EBITDA as a non-GAAP measure, explaining its rationale and limitations for financial analysis Adjusted EBITDA Definition and Rationale Adjusted EBITDA is a non-GAAP measure used by management for performance evaluation, excluding non-core operational items - Adjusted EBITDA is a non-GAAP financial measure calculated as net income (loss) adjusted to exclude other income/expense (including interest), income tax expense (benefit), depreciation and amortization expense, share-based compensation expense, and expenses related to Kestra's initial public offering[12] - Management believes Adjusted EBITDA allows investors to view the Company's performance in a manner similar to the method used by management to evaluate performance for strategic and annual operating planning, as excluded items are not reflective of ongoing core business operations[12] - Non-GAAP financial measures have limitations as analytical tools and should not be considered in isolation or as a substitute for GAAP financial results; investors are urged to review the reconciliation to comparable GAAP measures[13] Company Overview Kestra Medical Technologies is a commercial-stage wearable medical device and digital healthcare company focused on cardiovascular patient outcomes - Kestra Medical Technologies, Ltd. is a commercial-stage wearable medical device and digital healthcare company[16] - The company focuses on transforming patient outcomes in cardiovascular disease using monitoring and therapeutic intervention technologies that are intuitive, intelligent, and connected[16] Forward-Looking Statements This section provides a disclaimer on forward-looking statements, outlining risks and uncertainties that could impact actual results - Statements expressing a belief, expectation, or intention, as well as those that are not historical fact, are forward-looking statements and involve substantial risks, uncertainties, and potentially inaccurate assumptions[15] - Factors that could cause actual results to differ materially include risks related to limited operating history, market adoption, competitive pressures, product defects, ability to obtain adequate coverage and reimbursement, regulatory compliance, and dependence on a limited number of suppliers[15] - The Company undertakes no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law[15] Consolidated Financial Statements This section presents Kestra's consolidated financial statements, including balance sheets, statements of operations, and EBITDA reconciliation Consolidated Balance Sheets Kestra's balance sheets show a significant increase in assets and a shift to positive shareholders' equity due to the IPO Consolidated Balance Sheet Highlights (as of April 30) | Metric | 2025 (in thousands) | 2024 (in thousands) | Change | | :----- | :------------------ | :------------------ | :----- | | Cash and cash equivalents | $237,595 | $8,249 | +2779.1% | | Total current assets | $255,328 | $14,907 | +1612.8% | | Total assets | $295,744 | $45,949 | +543.6% | | Total liabilities | $90,338 | $78,216 | +15.5% | | Total shareholders' equity (deficit) | $205,406 | $(209,377) | Shift from deficit to equity | Consolidated Statements of Operations and Comprehensive Loss The statements of operations highlight strong revenue growth and gross margin expansion, alongside increased operating expenses and net losses Consolidated Statements of Operations Highlights (Year Ended April 30) | Metric | 2025 (in thousands) | 2024 (in thousands) | Change (YoY) | | :----- | :------------------ | :------------------ | :----------- | | Revenue | $59,815 | $27,814 | +115.0% | | Gross profit | $24,210 | $362 | +5952.5% | | Total operating expenses | $130,588 | $85,425 | +52.9% | | Net loss and comprehensive loss | $(113,814) | $(94,120) | +20.9% (larger loss) | | Net loss per share attributable to common shareholders, basic and diluted | $(5.13) | $(5.07) | +1.2% (larger loss per share) | Reconciliation of GAAP Net Loss to Adjusted EBITDA This section reconciles GAAP net loss to Adjusted EBITDA for FY25, showing adjustments for non-operating and non-cash items Adjustments from GAAP Net Loss to Adjusted EBITDA (Year Ended April 30) | Adjustment | FY25 (in thousands) | FY24 (in thousands) | | :--------- | :------------------ | :------------------ | | GAAP Net loss and comprehensive loss | $(113,814) | $(94,120) | | Interest expense | $7,734 | $6,230 | | Depreciation expense | $7,968 | $11,560 | | Share-based compensation expense | $24,271 | $1,488 | | IPO expense | $5,736 | $0 | | Adjusted EBITDA | $(68,403) | $(72,015) | Additional Information This section provides details on the webcast and conference call for financial results, along with investor contact information Webcast and Conference Call Kestra hosted a conference call on July 15, 2025, to discuss Q4 and FY25 results, with an archived webcast available - A conference call was hosted on July 15, 2025, at 4:30 p.m. ET to discuss fourth quarter and fiscal year 2025 financial results[10] - A live and archived webcast of the event is available in the 'Events' section of the investor relations website[10] Investor Contact Investor inquiries can be directed to Neil Bhalodkar via email - Investor contact: Neil Bhalodkar, neil.bhalodkar@kestramedical.com[17]