Executive Summary

Q4 2024 revenue was $18.4M (+30% y/y) but below prior Q4 guidance after several top accounts deferred year-end purchasing; management expects normal ordering to resume and sequential growth to continue in Q1 2025 .
Gross margin rebounded to 87.6% (vs. 83.7% in Q3; 87.3% y/y), while operating expenses fell to $26.1M from $30.2M in Q3, establishing a baseline for each quarter of 2025 (no headcount growth planned) .
Strategic catalysts achieved: FDA 510(k) for Cohealyx (Dec 19) and FDA approval of RECELL GO mini (Dec 23); Cohealyx full commercial launch slated for April 1, 2025, and GO mini rollout began in Q1 2025, underpinning FY25 revenue guidance of $100–$106M and a path to GAAP profitability in Q4 2025 .
Liquidity and covenants: Cash and marketable securities were $35.9M at 12/31/24; the OrbiMed credit agreement was amended to lower 12‑month trailing revenue covenants through Q1 2026 (warrants issued as consideration), reducing near-term covenant risk .

What Went Well and What Went Wrong

What Went Well
- Portfolio expansion and approvals: FDA 510(k) clearance for Cohealyx and FDA approval of RECELL GO mini broaden the acute wound care suite; CEO: “we have established our position in therapeutic acute wound care” .
- Execution on costs and margins: Gross margin recovered to 87.6% and operating expenses declined $4.1M q/q; CFO set Q4 opex as the 2025 quarterly baseline with no planned headcount growth .
- Cohealyx clinical momentum: Early human use mirrors preclinical findings; CEO called the first case outcome “a turning point… and a breakthrough in acute wound care,” with 7-day graft readiness and earlier discharge expectations .
What Went Wrong
- Q4 revenue shortfall vs. prior guidance: Actual $18.4M vs. $22.3–$24.3M outlook due to customers’ year-end cash preservation; management expects deferred purchases to roll into Q1 .
- International delay: CE mark for RECELL GO slipped; current expectation is mid-2025, making near-term ex-US contribution modest .
- Financing concessions: To adjust covenants, AVITA issued 145,180 low‑exercise‑price warrants to OrbiMed affiliates—helpful flexibility but a modest source of dilution .

Financial Results

Metric	Q4 2023	Q2 2024	Q3 2024	Q4 2024
Revenue ($USD Millions)	$14.1	$15.1	$19.5	$18.4
Gross Margin (%)	87.3%	86.2%	83.7%	87.6%
Operating Expenses ($USD Millions)	$24.7	$28.7	$30.2	$26.1
Net Loss ($USD Millions)	$(7.1)	$(15.4)	$(16.2)	$(11.6)
Diluted EPS ($)	$(0.28)	$(0.60)	$(0.62)	$(0.44)

Full-year 2024 highlights: revenue $64.0M (+29% y/y) and gross margin 85.8% .

KPIs and Balance Metrics

KPI	Q2 2024	Q3 2024	Q4 2024
Cash & Marketable Securities ($USD Millions, period-end)	$54.1	$44.4	$35.9
Accounts Receivable ($USD Millions)	$8.72	$10.29	$11.8
RECELL GO Adoption (qualitative)	Launch in Q2	~75% of revenue base converted	Nearly all burn accounts and >70% trauma; ~83% of unit volume

Notes:

The Q4 revenue shortfall was driven by customer year-end purchasing deferrals of ~$3–$4M, not demand weakness; management cited normal January purchasing .
Mix shift: As Cohealyx and PermeaDerm scale, overall gross margin is expected to decline modestly (shared margin model), but operating profit benefits as these carry low incremental opex .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue ($M)	Q4 2024	$22.3–$24.3	~$18.4 (actual)	Lowered (timing of purchases)
Revenue ($M)	FY 2024	$68–$70	~$64.3 (prelim Jan) ; $64.0 (actual)	Lowered
Revenue ($M)	FY 2025	—	$100–$106	Initial
Free Cash Flow	FY 2025	Break-even by Q3 2025	Positive in H2 2025	Delayed
GAAP Profitability	FY 2025	By end of Q3 2025	Q4 2025	Delayed
Opex Outlook	2025 (quarterly)	—	Q4’24 opex ($26.1M) as baseline per quarter; no headcount growth	New disclosure

Debt Covenants (OrbiMed, Trailing 12M Revenue)

Test Date (Quarter End)	Covenant ($M)
Mar 31, 2025	$73
Jun 30, 2025	$78
Sep 30, 2025	$84
Dec 31, 2025	$92
Mar 31, 2026	$103
Jun 30, 2026+	$115

The amendment also included issuing 145,180 warrants at $0.01 exercise price to OrbiMed affiliates (10-year term) .

Earnings Call Themes & Trends

Topic	Q2 2024 (Aug 8)	Q3 2024 (Nov 7)	Q4 2024 (Feb 13)	Trend
RECELL GO adoption	Launch; workflow benefits	~75% of revenue base transitioned	Near full conversion in burns; >70% in trauma; ~83% of unit volume	Improving
RECELL GO mini	PMA s-upp submitted; expected 12/27	On track by year-end	FDA approved Dec 23; rollout Q1 2025	Achieved milestone
Cohealyx dermal matrix	Dist. deal; 510(k) expected Q4	Expect 510(k) by YE; post-market study Q1’25	510(k) cleared Dec 19; compelling early human case; full launch April 1	Accelerating
Gross margin	86.2%; guide 85–86% FY	83.7% temporary dip; reiterate 85–86% FY	87.6%; mix will dilute as dist. products scale, but OP margin improves	Rebound then mix-driven
Operating expenses	$28.7M	$30.2M (one-time items)	$26.1M; 2025 baseline; no headcount growth	Improving discipline
International	CE mark expected soon	CE mark expected Q1’25	CE mark for GO expected mid-2025; modest ex-US in 2025	Delayed
Covenants/credit	—	Removed Q4’24 TTM covenant; terminated extra tranches	Lowered 2025 TTM covenants; warrants issued	Reduced risk with cost

Management Commentary

CEO strategic positioning: “With the December approvals of RECELL GO mini and Cohealyx, we have established our position in therapeutic acute wound care… This transformation positions us for long-term growth.”
Cohealyx case impact: “Quite honestly, this outcome is a turning point for AVITA Medical and a breakthrough in acute wound care…” (7-day graft readiness; shorter LOS) .
CFO on cost discipline and baseline: “Q4 operating expenses totaled $26.1 million… Q4 total operating expenses should be a consistent baseline for each quarter in 2025. We have no plans to increase headcount in 2025.” .
CFO on demand timing: “Several top accounts strategically chose not to finalize pending purchase orders due to year-end cash preservation strategies… During January, we experienced normal purchasing activities…” .

Q&A Highlights

Cadence and back-half weighting: Management expects sequential growth from Q4 to Q1 and Q2; Cohealyx could have a significant back-half impact as VAC approvals and launch progress .
Margin mix: Overall gross margin will decline as Cohealyx/PermeaDerm scale (shared margin), but operating margin improves due to minimal incremental opex .
International outlook: Minimal FY25 contribution contemplated; CE mark timing unpredictable but mid-2025 expected .
Covenants cushion: TTM revenue thresholds cut to $73M (Q1’25) and $78M (Q2’25), providing flexibility without changing core terms .
Inventory/purchases: No channel inventory overhang expected to impede Q1 growth; customers maintain on-shelf inventory due to acute-use profile .

Estimates Context

We attempted to retrieve S&P Global consensus for EPS and revenue to compare reported results vs. Street, but the data were unavailable at query time due to provider limits. As a result, we cannot determine beats/misses vs. consensus for Q4 2024. Values would be retrieved from S&P Global if available.

Key Takeaways for Investors

2025 growth drivers are in place: Cohealyx full launch (Apr 1), GO mini rollout (Q1), and RECELL GO conversion should support the $100–$106M revenue target and Q4 2025 GAAP profitability .
Near-term trajectory: Expect sequential top-line growth from Q4 to Q1 as deferred Q4 purchases roll through, with further lift from product launches and broader account penetration .
Margin math: Anticipate modest gross margin dilution as distributed products scale, but operating margin should expand given low incremental opex; opex held at ~$26M/quarter baseline in 2025 .
Liquidity/covenants manageable: ~$35.9M cash & marketable securities at year-end and lowered TTM revenue covenants reduce near-term financing risk (offset by small warrant-related dilution) .
International is a 2H25/2026 story: CE mark slip pushes meaningful ex-US contribution out; domestic execution remains the primary driver in 2025 .
Watch catalysts: Cohealyx-1 post-market data flow, VAC approval velocity, early Cohealyx adoption/reorder trends, and CE mark timing—all potential sentiment movers .
Risk checks: Monitor trauma/burn center ordering cadence (esp. at quarter-ends), gross margin mix shift, and execution on 2025 launch timelines .

Additional Relevant Press Releases (Q4 2024 timeframe)

FDA 510(k) clearance for Cohealyx: strategic dermal matrix addition; expected to triple burns TAM; full commercialization targeted for early Q2 2025 .
FDA approval of RECELL GO mini: enables smaller-wound use; rollout commencing Q1 2025 .
Jan 7, 2025 update: Q4 revenue expected ~$18.4M; FY24 ~$64.3M (actual $64.0M), with deferrals cited; FY25 guide $100–$106M; profitability moved to Q4 2025 .

All citations refer to company filings and transcripts as indicated:

Q4 2024 8-K & press release ; OrbiMed amendment and warrants , .
Q4 2024 earnings call transcript [68:*].
Jan 7, 2025 revenue update [72:*].
Q3 2024 8-K & press release [83:]; Q3 call [82:].
Q2 2024 8-K & press release [93:]; Q2 call [90:].
Cohealyx 510(k) clearance press release [75:]; RECELL GO mini approval press release [74:].

AVITA Medical, Inc. (RCEL)·Q4 2024 Earnings Summary