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Vericel (NASDAQ: VCEL) reported record first-quarter revenue and raised its full-year 2026 outlook, citing strong growth across its MACI cartilage repair franchise and Burn Care business, as well as expected NexoBrid procurement revenue from a new federal contract.
Total revenue rose 30% year over year to $68.4 million, which management said was significantly above its guidance range. MACI revenue increased 22% to a record first-quarter level of $56.4 million, while Burn Care revenue rose more than 90% to $12 million.
Chief Financial Officer Joe Mara said the company posted its “strongest first quarter to date across all key financial measures,” including revenue, profitability and cash generation. Gross margin expanded more than 300 basis points to 72%, while adjusted EBITDA increased 195% to $9.6 million. Adjusted EBITDA margin rose nearly 800 basis points to 14%.
Vericel generated $16.4 million in operating cash flow and $15.1 million in free cash flow. The company ended the quarter with approximately $211 million in cash and investments, up nearly $50 million from the end of the prior-year first quarter.
Management highlighted MACI performance as a key driver of the quarter. President and Chief Executive Officer Nick Colangelo said double-digit volume growth drove the franchise’s record first-quarter revenue and noted that MACI’s trailing four-quarter revenue growth rate increased to 23% from 19% in the prior four quarters.
The first quarter was also the first full period in which Vericel’s expanded MACI sales force operated in newly aligned territories. Colangelo said the larger sales organization helped generate record first-quarter biopsies, implants, biopsy surgeons and implanting surgeons. He also said the quarter included the second-highest number of biopsies and biopsy surgeons in any quarter since MACI’s launch.
Colangelo said implant growth accelerated during the quarter in both new and legacy territories, and biopsy growth was especially strong in new territories. Management said biopsy pull-through to implants improved during the quarter, which it said could support higher conversion rates over time.
In response to an analyst question, Colangelo said the sales force expansion caused “absolutely zero disruption” during the transition and that the rollout “could have gone any better.” Mara said the company was encouraged by early performance from new sales representatives, while noting growth reflected contributions from both new and legacy territories.
Vericel also discussed continued adoption of MACI Arthro, its arthroscopic delivery approach for MACI. Colangelo said the company trained approximately 1,000 surgeons on MACI Arthro in 2025, and that trained surgeons already account for more than half of MACI implants.
Management said leading indicators in the small condyle segment remain strong, with higher first-quarter and trailing biopsy growth rates than the overall biopsy growth rate. Colangelo also said surgeons who have completed MACI Arthro cases have shown higher biopsy conversion rates to date.
Colangelo said early data from ongoing investigator case series suggest reduced post-surgical pain, improved range of motion and faster achievement of full weight-bearing after MACI Arthro treatment. He said the initial data were recently accepted for publication and could support shorter rehabilitation and recovery timelines.
Burn Care revenue of $12 million exceeded Vericel’s guidance range and represented one of the company’s highest Burn Care revenue quarters to date. Mara said Epicel revenue was particularly strong at $10.9 million, while NexoBrid revenue was $1.1 million, up nearly 60% from the fourth quarter.
Colangelo attributed Epicel’s strength to biopsy growth and improved conversion of biopsies into grafts, adding that the medical and commercial teams are focused on increasing the treatment rate for patients whose biopsies are received.
Vericel also discussed a Biomedical Advanced Research and Development Authority (BARDA) award valued at up to $197 million for procurement and advanced development of NexoBrid. The base contract is valued at $35 million and includes approximately $10 million over the next 12 months for initial procurement, vendor-managed inventory services and initial development work for a potential blast trauma injury indication.
Colangelo said about two-thirds of the value of the BARDA award would flow to Vericel in one form or another, including procurement, inventory-related service revenue or cost offsets. Mara said Vericel expects $5 million to $6 million of NexoBrid BARDA procurement revenue in the second half of 2026, beginning in the third quarter.
Vericel raised its full-year 2026 total revenue guidance by $10 million to $326 million to $336 million. At the midpoint, that represents approximately 20% growth.
The company increased its MACI revenue guidance to $282 million to $288 million, up from $280 million to $286 million. For the second quarter, Vericel expects MACI revenue of approximately $62.5 million to $63.5 million.
Vericel also raised its Burn Care revenue outlook to approximately $44 million to $48 million, compared with prior guidance of $36 million to $40 million. Second-quarter Burn Care revenue is expected to be approximately $9 million to $10 million.
Mara said the guidance increase reflects first-quarter outperformance and expected NexoBrid BARDA revenue, while noting the company is maintaining a prudent approach for the remainder of the year. He said the MACI outlook assumes high-teens growth for the second quarter and the back half of the year and does not assume an acceleration in the second half.
For the full year, Vericel continues to expect gross margin of approximately 75% and adjusted EBITDA margin of approximately 27%. The company expects second-quarter gross margin of approximately 72% and adjusted EBITDA margin of approximately 18%.
Colangelo said Vericel achieved FDA approval for MACI commercial manufacturing at its new facility, with manufacturing beginning in the second quarter. He said the approval increases manufacturing capacity for MACI in the U.S. and supports potential commercialization outside the United States.
Vericel remains on track to submit a MACI marketing application in the U.K. later this year, with a potential launch in 2027 if approved. Colangelo said the U.K. is an attractive initial market because of surgeon awareness, prior experience with MACI and a positive NICE opinion issued in the late 2010s.
During the Q&A, management said it has not seen signs of broader orthopedic procedure pressure affecting MACI. Colangelo said Vericel had a strong December and saw double-digit biopsy and implant growth in the first quarter. Mara said the company has not built any expected procedural slowdown into its guidance.
Colangelo concluded that Vericel is positioned to deliver a “unique combination of sustained high revenue growth, profitability, and cash generation” in 2026 and beyond.
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