Vericel Corporation Q4 FY2025 earnings call

• Strong fourth quarter financial results with record revenue and profit growth. - Achieved key business objectives like Macy Salesforce expansion, initiation of Macy Ankle Clinical Study, and progress on commercial manufacturing. - Focused on three strategic imperatives: capitalizing on larger Macy sales force, leveraging Macy-Arthro for small cartilage defects, and lifecycle management initiatives including Macy OUS expansion. - Macy's second half momentum continued with record revenue, strong underlying fundamentals, and leadership position in cartilage repair market.

The company generated record fourth quarter total revenue, increasing 23% over the prior year and exceeding guidance. Macy had record fourth quarter revenue of $84.1 million, 23% growth vs prior year, and full-year revenue of $239.5 million, up 21%. Burn Care fourth quarter revenue was $8.8 million, full-year $36.8 million. Macy's gross margin was nearly 80% in Q4, and full-year gross margin expected to be ~75%. Adjusted EBITDA margin was 40% in Q4, and 2026 guidance expects ~27% adjusted EBITDA margin.

• Total company revenue expected ~$316 - $326 million in 2026. - Macy revenue expected ~$280 - $286 million. - Burn care revenue ~$9 - $10 million per quarter, ~$36 - $40 million full-year. - Gross margin expected ~75% and adjusted EBITDA margin ~27% for full-year 2026. - First quarter on track to exceed 20% total company revenue growth.

• Forward-looking statements involve risks and uncertainties that could cause actual results to differ from expectations, described in SEC filings. - BARDA award revenue is a possibility but not baked into initial guidance, subject to negotiations. - Timing and execution of Macy OUS expansion, including regulatory approval and commercial infrastructure, involve uncertainties. - Gross margin compression in 2026 due to manufacturing startup activities and other incremental costs.

Q: About pricing and volume impact on Macy growth.

A: Pricing remains a key growth driver, both price and volume play a part.

Q: On new doctor growth relative to existing customer base for Macy-Arthro.

A: About two thirds of trained surgeons come from existing Macy users, about a third from prior open targets, and new arthro only surgeons, with trained surgeons showing increased biopsy and growth rates.

Q: Macy 2026 guidance vs 3Q25 comment.

A: Guidance is consistent, nothing materially changed, Q1 off to strong start.

Q: Salesforce expansion and rep productivity.

A: Excited about Salesforce expansion, team executed well, expect rep productivity to return to 2025 levels next year.

Q: OPEX and expansion impact.

A: Total OPEX ~$220 million full-year, including Salesforce expansion and R&D for ankle trial.

Q: Macy-Arthro insurance and improvements.

A: Gathering market input, enhancements likely 18 months or more away.

Q: Gross margin compression and steady state.

A: 400 basis point compression due to manufacturing startup and incremental costs, long-term target high 70s.

Q: Ex-US business commercial infrastructure.

A: Plan to commercialize in UK on own, due to expedited approval and reimbursement pathways.

Q: Macy-Arthro launch expectations.

A: Exceeded internal expectations, surgeon training and behavior positive.

Q: BARDA RFP details.

A: Three components, impacted by government shutdown, possibility of award this year, revenue subject to negotiations.