Financial Data and Key Metrics Changes - For Q3 2025, the company reported approximately $17 million in revenue, a 13% decline from $19.5 million in the same period last year, primarily due to reimbursement disruptions [4][16] - The full-year revenue outlook has been revised to a range of $70 million-$74 million, down from the previous guidance of $76 million-$81 million [4][16] - Gross profit margin for the quarter was 81.3%, down from 83.7% in Q3 2024, driven by product mix changes [16][17] - Operating loss improved by 34% year-over-year, decreasing to $9.2 million from $13.8 million in the prior year [19] Business Line Data and Key Metrics Changes - The ReCell product line is expected to see renewed demand as reimbursement clarity improves, with significant progress made in provider reimbursement rates [5][10] - Cohelix and PermeaDerm are emerging as complementary growth drivers, with VAC submissions underway in about one-third of target accounts [12] Market Data and Key Metrics Changes - The total addressable market for AVITA's portfolio in U.S. burn and trauma hospitals is approximately $3.5 billion, with the company currently serving about 5% of this segment [9] - The company is focusing on the 200 burn centers and trauma hospitals that represent the most immediate and scalable growth potential [9] Company Strategy and Development Direction - The company is refining its commercial organization to align structure, territories, and accountability around high-value accounts [8] - Execution priorities for Q4 include rebuilding order momentum, driving consistent utilization of products, and enhancing forecast accuracy [10][11] - The company aims to ensure that its products become part of routine clinical practice, creating internal champions to help expand adoption [11] Management's Comments on Operating Environment and Future Outlook - Management acknowledged that Q3 was a challenging quarter but emphasized that reimbursement stability and clinical validation are in place for future growth [14][15] - The company is focused on delivering consistent performance and restoring confidence among providers regarding reimbursement [14][23] - Management expressed optimism about the potential for growth in 2026, driven by improved operational execution and market conditions [39] Other Important Information - The company has secured a waiver of its Q3 revenue covenant under its Orbimed credit agreement and has amended the revenue covenant for Q4 [13][22] - Cash management has improved, with a reduction in operating cash use from $10.1 million in Q2 to $6.2 million in Q3 [21] Q&A Session Summary Question: Initiatives for Better Business Forecasting - Management discussed improving forecasting by understanding customer utilization and purchasing patterns, with confidence in better modeling moving forward [25] Question: Balancing Resources for New Market Launches - The primary focus remains on the U.S. market, with limited resources allocated to select international markets [26] Question: Recovery Timeline for ReCell Customer Base - Management indicated that educating accounts on reimbursement processes is crucial for rebuilding confidence, with expectations for recovery in early 2026 [28] Question: Update on VAC Approvals for Cohelix - About one-third of accounts are in the VAC process, with expectations for approvals to trend positively in Q4 [30] Question: Spending Outlook and Organizational Right-Sizing - Management expressed satisfaction with the current expense structure and indicated no further reductions are necessary, focusing on maintaining a disciplined approach [33][34] Question: Changes to Sales Team Incentive Structure - Management is reviewing sales compensation plans to ensure alignment with growth objectives, aiming for simplicity and fairness [35]

Financial Data and Key Metrics Changes - Commercial revenue for Q2 2025 was $18.4 million, a 21% increase year-over-year, but flat sequentially due to reimbursement issues [6][45] - Gross profit margin for Q2 was 81.2%, down from 86.1% in the same period of 2024, primarily due to product mix and higher inventory reserves [45][46] - Net loss for Q2 was $9.9 million, or $0.38 per share, showing a 36% improvement from a net loss of $15.4 million, or $0.60 per share, in Q2 2024 [48] Business Line Data and Key Metrics Changes - The ReCell system, particularly ReCell Go, contributed significantly to revenue growth despite headwinds [45] - New products Co Helix and PermaDerm also contributed to revenue, with Co Helix showing strong early adoption [45][46] - Operating expenses decreased to $26.1 million from $28.7 million in Q2 2024, driven by reductions in sales and marketing costs [47] Market Data and Key Metrics Changes - The company experienced a 20% reduction in demand for ReCell in the first half of 2025 due to claims processing issues [15] - Recent data from the US National Burn Registry indicated a 36% reduction in hospital stay for burn patients treated with ReCell, enhancing its market value proposition [9][18] Company Strategy and Development Direction - The company is focused on resolving reimbursement issues and expects a rebound in demand for ReCell in the second half of 2025 [16][54] - A new outcomes-based partnership agreement has been established to incentivize hospitals to adopt ReCell, potentially increasing revenue significantly [26] - The company is expanding its product portfolio with Co Helix and Permuderm, targeting trauma centers and enhancing its competitive position [35][37] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the recovery in the second half of 2025, citing strong early indicators of demand and successful interactions with Medicare contractors [51][54] - The company revised its full-year 2025 revenue guidance to $76 million to $81 million, down from a previous estimate of $100 million to $106 million, reflecting the impact of the first half challenges [50][52] - Management highlighted the importance of clinical data showing the benefits of ReCell, which strengthens hospital economics and patient outcomes [54] Other Important Information - The company secured a waiver for its revenue covenant and amended its credit agreement with OrbiMed, demonstrating confidence in its long-term strategy [49] - The company is preparing for the launch of ReCell GO Mini, designed for smaller trauma wounds, which is expected to enhance adoption in outpatient settings [31][76] Q&A Session Summary Question: Update on claims backlog resolution - Management indicated that there has been significant progress in resolving claims processing issues, with increased interactions between Medicare contractors and stakeholders since June [58][61] Question: Premium for ReCell compared to traditional methods - Management noted that ReCell utilization and payment are expected to be significantly higher than traditional methods, with a notable premium as wound size increases [64] Question: Co Helix VAC approvals - Management refrained from disclosing specific VAC approval numbers but indicated that over 25% of burn centers have VAC approvals pending, which is a positive sign for early product adoption [67][70] Question: Update on ReCell GO Mini rollout - Management reported that the ReCell GO Mini is performing well, particularly in level one and two trauma centers, and is gaining traction among trauma surgeons [75][78] Question: Cash balance and burn rate - Management confirmed that the minimum cash balance requirement of $10 million has not been waived, and they do not expect to fall below this threshold [84][85] Question: ATM status and share availability - Management confirmed that the ATM is still in place, with approximately 3.8 million shares available for sale [89]

Financial Data and Key Metrics Changes - Revenue for the first quarter increased by 67% compared to the same period in the prior year, reaching $18.5 million [6][25] - Gross profit margin for the first quarter was 84.7%, down from 86.4% in the same period of 2024 [26] - Net loss for the first quarter was $13.9 million, improving from a net loss of $18.7 million in the same period in 2024 [30] Business Line Data and Key Metrics Changes - The launch of ReCell Go Mini and Co Helix is expected to significantly contribute to revenue growth throughout 2025 [25][32] - The commercial lineup now includes ReCell, ReCell Go, ReCell Go Mini, Co Helix, and Permeoderm, providing a broad spectrum of products for both burn and trauma centers [14][15] Market Data and Key Metrics Changes - The US addressable market for the company has expanded from approximately $500 million to over $3.5 billion annually, marking a seven-fold increase [6][22] - The trauma market is estimated to have approximately 270,000 cases annually in the US, which ReCell Go Mini targets [10] Company Strategy and Development Direction - The company is focusing on acute wound care, stepping back from further commercial investment in the vitiligo indication due to uncertainty in reimbursement [21][56] - A significant shift in the commercial model has been implemented, transitioning from a service-oriented approach to a more focused selling-oriented approach [16][19] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the future, highlighting the potential for strong results driven by the expanded product portfolio and operational efficiencies [22][32] - The company expects to generate free cash flow in the second half of the year and achieve GAAP profitability in Q4 of 2025 [31][32] Other Important Information - The company has secured a waiver for its first-quarter trailing twelve-month revenue covenant with OrbiMed, which had been set at $73 million [31] - The annual meeting of stockholders is scheduled for June 4 [32] Q&A Session Summary Question: Can you share any response or performance impressions of Co Helix? - Management noted that early feedback has been positive, with a case from Ohio State demonstrating a seven-day graft readiness, which is faster than other dermal matrices [36][37] Question: How is the rollout of ReCell Go Mini going? - The response has been good, particularly from existing accounts in the trauma area, with opportunities to provide more value to trauma surgeons [41][42] Question: What are the expected revenue contributions from the new launches? - Management indicated that while they are not ready to provide specific guidance, they expect these products to be material contributors to revenue [45] Question: Is the sales force adequately staffed to meet revenue targets? - Management expressed confidence in the current staffing levels and the reconfigured sales model, which focuses on a selling-oriented approach [47][49] Question: What is the expected revenue cadence for the rest of the year? - Management anticipates steady sequential growth throughout the year, with some weighting towards the back end as new products gain traction [51][52] Question: What is the current status of the vitiligo initiative? - The company has paused spending on vitiligo due to uncertainty in reimbursement and is focusing resources on acute wound care instead [56][58]