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Vericel Corp (VCEL)·Q3 2025 Earnings Summary

Executive Summary

  • Vericel delivered a strong Q3: total revenue $67.5M (+16.6% YoY) and GAAP diluted EPS $0.10, with gross margin 73.5% and adjusted EBITDA margin 25%; both revenue and EPS were above Wall Street consensus, a clear beat and catalyst into year-end .
  • MACI revenue rose 25% YoY to $55.7M on accelerating implant volumes; burn care posted $11.8M with Epicel at $10.4M and record NexoBrid revenue of $1.5M (highest since launch) .
  • FY25 guidance maintained/tightened: total revenue $272–$276M, MACI $237.5–$239.5M (low‑20% growth), profitability reaffirmed (GM 74%, adj. EBITDA margin 26%); Q4 guidance: MACI $82–$84M, burn care $6.5–$8.5M, GM ~77%, OpEx ~$50M, adj. EBITDA margin ~40% .
  • Narrative drivers: accelerating MACI conversion from earlier biopsy growth, >800 MACI Arthro‑trained surgeons, salesforce expansion completing in Q4, and operational cash flow inflection ($22.1M) with $185M cash/investments and no debt .

What Went Well and What Went Wrong

What Went Well

  • Record Q3 revenue ($67.5M) and MACI revenue ($55.7M), with YoY MACI growth of 25% and adjusted EBITDA up ~69% to $17.0M; CEO: “outstanding financial and business results… strong revenue growth and even higher profitability growth” .
  • Burn care momentum: Epicel had one of its highest quarters to date ($10.4M) and NexoBrid set a quarterly record ($1.5M), +38% YoY and +26% QoQ; CFO highlighted sequential burn care growth of 21% .
  • Operating cash flow inflection: record third‑quarter OCF $22.1M; CFO noted “record free cash flow of nearly $20M” with only $2.6M CapEx in the quarter .

What Went Wrong

  • Epicel YoY decline vs Q3’24 (from $12.2M to $10.4M), highlighting variability in burn care despite strong sequential performance .
  • Q3 gross margin (73.5%) modestly below Q2 (74.0%), reflecting quarter mix and ongoing facility depreciation/tech transfer costs referenced in OpEx trends .
  • Non‑GAAP EBITDA still supported by add‑backs (stock‑based comp $8.7M; depreciation/amortization $2.9M), underscoring reliance on non‑GAAP adjustments; management provided reconciliation and rationale .

Financial Results

Core Metrics vs Prior Year and Prior Quarter

MetricQ3 2024Q2 2025Q3 2025
Revenue ($USD Millions)$57.91 $63.24 $67.50
Diluted EPS ($USD)-$0.02 -$0.01 $0.10
Gross Margin %71.9% 74.0% 73.5%
Adjusted EBITDA ($USD Millions)$10.04 $13.36 $16.996
Adjusted EBITDA Margin %17% 21% 25%

Q3 2025 vs Wall Street Consensus

MetricActual Q3 2025Consensus Q3 2025
Revenue ($USD Millions)$67.50 $64.53*
Diluted EPS ($USD)$0.10 -$0.01*
# of Estimates (Revenue / EPS)—8 / 6*

Values retrieved from S&P Global.*

Segment Breakdown

Segment Revenue ($USD Millions)Q3 2024Q2 2025Q3 2025
MACI$44.7 $53.5 $55.7
Epicel$12.2 $8.6 $10.4
NexoBrid$1.1 $1.2 $1.5

KPIs

KPIQ1 2025Q2 2025Q3 2025
Operating Cash Flow ($USD Millions)$6.6 $8.2 $22.1
Cash & Investments ($USD Millions)~$162 ~$164 $185
Debt Outstanding ($USD)$0 $0 $0
MACI Arthro Trained Surgeons (cumulative)~400 ~600 >800

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Total RevenueFY 202520%–23% growth (directional) $272–$276M Maintained, formalized range
MACI RevenueFY 2025Low‑20% growth (directional) $237.5–$239.5M; Q4 $82–$84M Maintained, tightened with range
Burn Care RevenueFY/Q4 2025H2 run‑rate ~$10M/quarter FY $34.5–$36.5M; Q4 $6.5–$8.5M Maintained prudent range
Gross Margin %FY/Q4 2025FY 74% FY 74%; Q4 ~77% Maintained FY; new Q4 guide
Adjusted EBITDA Margin %FY/Q4 2025FY 26% FY 26%; Q4 ~40% Maintained FY; new Q4 guide
Total OpEx ($USD)Q4 2025N/A~$50M New item

Earnings Call Themes & Trends

TopicQ1 2025 (Prior)Q2 2025 (Prior)Q3 2025 (Current)Trend
MACI Arthro adoption & conversion~400 surgeons trained; biopsy growth >30% for trained surgeons ~600 trained; implants for small condyle defects +40% YoY >800 trained; higher conversion signals for Arthro implanters; record biopsies in Oct Strengthening adoption & conversion
Seasonality & cadenceFY revenue growth reiterated; Q1 often slower growth noted later Directional reaffirmations Q4 prudence; Q1 tends to be lower growth; de‑risked by strong Q3 Stable pattern, prudent near‑term
Burn care variability & BARDAStrong start to Q2 Epicel; NexoBrid +207% YoY in Q1 H2 burn care run‑rate framework Sequential +21% burn care; BARDA RFP upside possible but not assumed Managed variability; potential upside
Manufacturing & cash inflectionNew facility depreciation impacting OpEx Facility qualification and IND clearance for Ankle Commercial MACI manufacturing to start next year; cash generation inflecting Scaling capacity; improving cash
MACI Ankle clinical studyOn track second half 2025 IND clearance received Initiation in Q4; pivotal‑like timeline Advancing per plan
OUS expansion (U.K.)Not highlightedNot highlightedPlan to submit mid‑2026 and launch H1 2027 in U.K. New growth vector
Pricing & reimbursementTariffs impact negligible; strong payer support —Durable mid‑ to high‑single‑digit pricing; prior approval rates mid‑90% Supportive reimbursement dynamics

Management Commentary

  • CEO (Nick Colangelo): “Record third‑quarter total revenue… record third‑quarter MACI revenue… highest quarterly burn care revenue of the year… GAAP net income of more than $5 million and Adjusted EBITDA margin of 25%… record third‑quarter operating cash flow of more than $22 million” .
  • CFO (Joe Mara): “MACI… above the high end of our guidance range… burn care increased 21% sequentially… NexoBrid… highest quarterly revenue since launch… Adjusted EBITDA increased nearly 70% to $17 million… record free cash flow of nearly $20 million… ending the quarter with $185 million in cash and investments” .
  • CEO on MACI Arthro: “Early data indicates… higher implant growth rate than biopsy growth rate… suggests a higher overall conversion rate… less invasive procedure with the potential for improved patient outcomes” .

Q&A Highlights

  • MACI Arthro additive vs. legacy MACI: Management views Arthro as expanding MACI utilization (smaller defects), not cannibalizing core MACI; patella and larger defects remain open procedures; Arthro often creates a halo across the brand .
  • Near‑term cadence and Q4 prudence: Q4 is largest quarter; December variability; strong Q3 de‑risks Q4 step‑up; Q1 often lower growth; prudent posture on burn care run‑rate .
  • BARDA and NexoBrid: RFP process paused amid government shutdown; potential Q4 upside not in guidance; CPT category III code supports uptake; planning to pursue permanent code effective 2027 .
  • Pricing durability and reimbursement: MACI priced like a high‑tech biologic; durable mid‑ to high‑single‑digit price increases; prior approval rates mid‑90% .
  • Salesforce expansion: 25 new territories and 3 regions virtually complete; talent quality high; supports Q4 volumes and 2026 growth .

Estimates Context

  • Q3 2025 results vs S&P Global consensus: Revenue $67.50M vs $64.53M consensus (beat); EPS $0.10 vs -$0.01 consensus (beat). # of estimates: Revenue 8; EPS 6 .*
  • Implication: Upward revisions to near‑term profitability frameworks are likely as MACI conversion accelerates and Q4 margin guidance implies ~40% adjusted EBITDA margin .

Values retrieved from S&P Global.*

Key Takeaways for Investors

  • MACI momentum is accelerating, driven by earlier biopsy growth converting to implants and >800 Arthro‑trained surgeons; this underpins sustained double‑digit MACI revenue growth into Q4 and 2026 .
  • The quarter was a clean beat on both revenue and EPS vs. consensus; management’s prudent yet confident Q4 guide (GM ~77%, adj. EBITDA ~40%) sets a constructive setup for year‑end .
  • Burn care remains variable but showed strong sequential growth; NexoBrid posted its best quarter since launch, with non‑guided BARDA upside possible but not embedded in outlook—treat any BARDA award as additive .
  • Cash generation inflection is underway: record OCF, near‑record free cash flow, and $185M cash/investments with no debt—providing strategic flexibility for scale‑up, salesforce expansion, and R&D (MACI Ankle) .
  • Medium‑term thesis: gross margin and EBITDA margin targets (high‑70s GM, high‑30s EBITDA by 2029) appear increasingly attainable given scaling manufacturing and MACI leadership; management outlined a path toward ~$200M EBITDA by 2029 on sustained growth .
  • Additional catalysts: MACI Ankle Phase 3 initiation in Q4, planned U.K. OUS launch H1 2027, and full commercial manufacturing transition next year—each expands TAM and operational leverage .
  • Trading implication: Near‑term bias positive into Q4 prints given setup and margin guide; watch for December execution (seasonality) and any BARDA developments to further de‑risk top line .