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Vericel Corp (VCEL)·Q2 2025 Earnings Summary

Executive Summary

  • Q2 2025 delivered strong operational leverage: revenue $63.2M (+20% YoY), gross margin 74% (+400+ bps YoY), and adjusted EBITDA $13.4M (21% margin, +900+ bps YoY) .
  • Results vs consensus: revenue was a slight miss ($63.2M vs $64.5M*), while EPS beat (-$0.01 vs -$0.037*) as margin expansion offset the burn-franchise variability; MACI grew 21% YoY to a record $53.5M .
  • Guidance: MACI full-year revenue growth reaffirmed at low-20%; Burn Care 2H reset to ~$10M/quarter; full-year profitability reaffirmed at 74% GM and 26% adjusted EBITDA margin .
  • Strategic catalysts: ~600 MACI Arthro surgeons trained, MACI Ankle Phase 3 IND cleared, and sales force expansion to ~100 territories to support 2H volumes .

What Went Well and What Went Wrong

What Went Well

  • Record MACI quarter: $53.5M (+21% YoY), with 15% sequential growth; strong biopsy and implant indicators and accelerating July momentum .
  • Margin outperformance: gross margin 74% (record outside Q4), adjusted EBITDA +112% YoY to $13.4M (21% of revenue) .
  • Commercial execution: ~600 MACI Arthro surgeons trained; small femoral condyle implants +40% YoY; sales force expansion to ~100 territories to capture 2H volume .

Management quote: “We expect continued strong revenue growth and profitability for the remainder of the year and beyond.” — Nick Colangelo, CEO .

What Went Wrong

  • Burn Care variability: Epicel revenue $8.6M (+11% YoY) but impacted by higher canceled cases due to patient health issues; Burn Care 2H guidance reset to ~$10M per quarter .
  • Slight revenue miss vs Street: total revenue $63.2M vs ~$64.5M* consensus, driven by Epicel cadence and modest timing shifts of MACI implants from late Q2 into July .
  • NexoBrid distributor ordering cadence: despite stronger hospital unit orders, specialty distributor orders were slightly lower than Q1, impacting sequential comparison .

Financial Results

Headline P&L vs prior periods and estimates

MetricQ4 2024Q1 2025Q2 2025
Revenue ($USD Millions)$75.4 $52.6 $63.2
Revenue Consensus Mean* ($USD Millions)—$53.9*$64.5*
Diluted EPS (GAAP) ($)$0.38 -$0.23 -$0.01
Primary EPS Consensus Mean* ($)—-$0.153*-$0.0367*
Gross Margin %78% 69% 74%
Adjusted EBITDA ($USD Millions)$29.9 $3.2 $13.4
Adjusted EBITDA Margin %40% 6% 21%

Values marked with * retrieved from S&P Global.

Segment breakdown and growth

MetricQ2 2024Q1 2025Q2 2025
MACI Revenue ($USD Millions)$44.1 $46.3 $53.5
Epicel Revenue ($USD Millions)$7.8 $5.0 $8.6
NexoBrid Revenue ($USD Millions)$0.8 $1.3 $1.2
MACI YoY Growth % (Q2)——21%
Epicel YoY Growth % (Q2)——11%
NexoBrid YoY Growth % (Q2)——52%

KPIs and balance highlights

KPIQ1 2025Q2 2025
MACI Arthro trained surgeons (approx)~400 ~600
Small femoral condyle MACI implants YoY (Q2)—+40%
Epicel biopsies YoY growthHighest since 2023 (Q1 commentary) +38% (Q2)
NexoBrid monthly hospital unitsStrong Q1 progression Record June; July exceeded June
Operating cash flow ($USD Millions)$6.6 $8.2
Cash & investments; debt~$162M; no debt ~$164M; no debt

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Total Revenue GrowthFY 202520%–23% Reaffirmed (framework unchanged) Maintained
MACI Revenue GrowthFY 2025Low-20% range Low-20% range reaffirmed Maintained
Burn Care Revenue2H 2025 (quarterly)Higher variability; internal expectations >$10M/quarter Reset to ~$10M/quarter run rate Lowered
Gross MarginFY 2025Raised to 74%–75% (Q1 call/PR) 74% reaffirmed Maintained (lower end)
Adjusted EBITDA MarginFY 2025Raised to 26% 26% reaffirmed Maintained
MACI RevenueQ3 2025—~$54–$55M New quarterly guide
Margins (GM, Adj. EBITDA)Q3 2025—Similar to Q2 levels New quarterly guide

Earnings Call Themes & Trends

TopicQ4 2024Q1 2025Q2 2025Trend
MACI Arthro adoption250 trained surgeons; early KPIs strong ~400 trained; biopsies per trained surgeon +30% YTD ~600 trained; condyle implants +40%; strong July biopsy/implant acceleration Strengthening adoption and utilization
Sales force expansionRefresh analysis planned Plan to expand in 2H Expanding to ~100 territories; postings live; reps in-field by Oct; new territories Jan 1 Accelerated investment to capture demand
Burn Care cadenceEpicel variability; strong full-year Q1 biopsies highest since 2023; stronger grafts in Q2 Q2 Epicel biopsies +38% YoY; reset guidance to ~$10M/quarter; potential upside if cancellations normalize Conservative external framing; internal upside
NexoBrid adoptionHospital orders +42% seq in Q4 Continued progression; consistent centers focus Record June units; July exceeded; CPT Category III code effective July 1 Building consistency; coding tailwind
Regulatory/R&DNew facility complete; midterm margin targets raised On track MACI Ankle IND 2H FDA IND clearance; Phase 3 trial details (300 pts, 2:1 MACI vs microfracture) Advancement to pivotal execution
Tariffs/macroMinimal impact anticipated Negligible COGS impact in 2025–26 No update beyond reaffirmed profitability Stable risk posture

Management Commentary

  • “Based on the positive trends across the business to start the third quarter, we expect continued strong revenue growth and profitability for the remainder of the year and beyond.” — Nick Colangelo, CEO .
  • “We are implementing our full MACI Salesforce expansion this year… increasing from 76 to approximately 100 territories.” — Nick Colangelo .
  • “We are maintaining our MACI revenue guidance… and updating second half Burn Care revenue guidance to be more in line with recent run rates of approximately $10 million per quarter.” — Joe Mara, CFO .
  • “Received FDA clearance of the IND for the phase 3 MACI ankle clinical study… approximately 300 patients at a 2:1 ratio between MACI and microfracture.” — Nick Colangelo .

Q&A Highlights

  • MACI cadence and conversion: Management cited timing shifts of some June implants into July and reiterated that biopsy growth typically leads implant growth over multiple quarters, consistent with prior MACI launch dynamics .
  • Epicel guidance reset: The team adopted a conservative run‑rate approach (~$10M/quarter) due to unpredictability in patient health conversions, while noting strong July start and potential upside including BARDA stockpile opportunities .
  • MACI Arthro penetration: ~600 trained surgeons comprise legacy MACI users and new arthro-only cohorts; >100 biopsies from arthro-only segment show TAM expansion .
  • Midterm profitability: No change to targets (high-70s GM, high-30s adj EBITDA by 2029); trajectory supported by revenue growth and disciplined spend .
  • BARDA RFP: Initial procurement detailed at 2,750 units with potential ramp the following year; not included in guidance; timing and pricing to be negotiated .

Estimates Context

MetricQ1 2025Q2 2025
Revenue Actual ($USD Millions)$52.6 $63.2
Revenue Consensus Mean* ($USD Millions)$53.9*$64.5*
EPS Actual (GAAP, diluted) ($)-$0.23 -$0.01
Primary EPS Consensus Mean* ($)-$0.153*-$0.0367*
# of EPS Estimates*6*6*
# of Revenue Estimates*8*8*
  • Q2: Revenue slightly below consensus; EPS beat. Drivers for EPS beat include >400 bps YoY gross margin expansion to 74% and operating expense discipline despite facility costs .
  • Q3 setup: CFO guided MACI $54–$55M and Burn Care ~$10M/quarter, broadly consistent with Street total revenue trajectory* .

Values marked with * retrieved from S&P Global.

Key Takeaways for Investors

  • MACI engine strengthening: biopsy and implant momentum, Arthro adoption, and sales force expansion point to sustained low‑20%+ MACI growth and improving conversion through 2H and into 2026 .
  • Margin durability: Mid-70s GM in a middle quarter and 21% adjusted EBITDA margin support full-year 74%/26% profitability guidance, with further leverage in seasonal Q4 .
  • Burn Care conservatism: External guide reset to ~$10M/quarter reduces downside risk; upside exists if Epicel cancellations normalize and BARDA stockpile contributes .
  • Pipeline/regulatory optionality: MACI Ankle Phase 3 initiation and OUS evaluation expand long-term TAM; expect phased international entries 2027–2028 per prior commentary .
  • Near-term trading setup: Watch July/August implant conversion, sales force ramp, NexoBrid utilization under new CPT code, and BARDA decision timeline as catalysts .
  • Estimate implications: EPS likely biased upward near term given margin outperformance; Burn Care revenue estimates should reflect ~$10M run rate per quarter into 2H .
  • Balance sheet support: ~$164M cash/investments and no debt provide flexibility to invest behind Arthro and ankle trial without dilution risk .
Notes: Values marked with * retrieved from S&P Global.