Kestra Medical Technologies Ltd. ((KMTS)) has held its Q1 earnings call. Read on for the main highlights of the call.
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Kestra Medical Technologies Ltd. recently held its earnings call, revealing a mixed sentiment among stakeholders. The company showcased impressive revenue growth and strategic milestones, yet these achievements were overshadowed by persistent net losses and rising operating expenses.
Strong Revenue Growth
Kestra reported a remarkable 52% year-over-year increase in revenue, reaching $19.4 million. This growth was primarily driven by a 51% rise in prescriptions for their ASSURE system, highlighting the company’s expanding market presence and product demand.
Gross Margin Expansion
The first quarter saw Kestra’s gross margin expand to 45.7%, up from 32.9% in the previous year. This marks the seventh consecutive quarter of gross margin improvement, underscoring the company’s operational efficiency and cost management strategies.
Increase in In-Network Patients
Kestra has successfully increased the percentage of fittings for patients with in-network benefits from approximately 70% at the time of their IPO to nearly 80%. This strategic move has enhanced revenue per fitting and strengthened the company’s market position.
FDA Post-Approval Study Milestone
The company achieved a significant milestone by concluding enrollment in the FDA post-approval study for the ASSURE system. This study is set to be the largest ever published in the Wearable Cardioverter Defibrillator (WCD) category, potentially boosting Kestra’s credibility and marketability.
Guidance Increase
Kestra raised its fiscal year 2026 revenue guidance to $88 million, a 47% increase compared to fiscal year 2025. The company anticipates continued strong prescription growth and improvements in revenue cycle management, signaling confidence in its future performance.
Ongoing Net Loss
Despite the positive revenue and margin trends, Kestra reported a GAAP net loss of $25.8 million for the first quarter, up from $20.3 million in the prior year. This ongoing net loss remains a concern for investors and stakeholders.
Operating Expenses Increase
Operating expenses surged to $37.7 million, compared to $22.6 million in the previous year. This increase was driven by investments in growth and new public company costs, reflecting Kestra’s commitment to scaling its operations.
Forward-Looking Guidance
Looking ahead, Kestra Medical Technologies has set ambitious targets, with a revised revenue guidance of $88 million for fiscal year 2026. The company expects to sustain its growth trajectory through strong prescription growth and enhanced revenue cycle management, despite the challenges posed by rising expenses.
In summary, Kestra Medical Technologies’ earnings call painted a picture of robust growth and strategic progress, tempered by financial challenges. The company’s ability to maintain its growth momentum while addressing net losses and operating expenses will be crucial in determining its future success.