Vericel Corporation — Third Quarter 2026 Earnings Summary

Financial Performance:

• Total net revenue increased 26% year-over-year to $85.4 million for the quarter ended September 30, 2026, compared to $67.5 million in the prior year period.
• Net income increased 179% to $14.2 million ($0.27 per diluted share) for the quarter, compared to $5.1 million ($0.10 per diluted share) in the prior year.
• Non-GAAP adjusted EBITDA increased 48% to $25.2 million (30% of revenue) for the quarter, compared to $17.0 million (25% of revenue) in the prior year.
• Gross margin remained stable at 73% for the quarter, compared to 73% in the prior year.
• Operating cash flow was $17.7 million for the quarter; free cash flow was $15.7 million.
• Year-to-date 2026 total net revenue grew 26% to $231.3 million, compared to $183.3 million in the prior year.
• Year-to-date 2026 adjusted EBITDA grew 48% to $49.6 million.
• Year-to-date 2026 operating cash flow was $50.3 million; free cash flow was $45.1 million.
• The company held $235.6 million in cash and investments with no debt as of September 30, 2026.

Guidance and Future Outlook:

• Raised full-year 2026 total revenue guidance to $344–$346 million, up from the previous range of $330–$340 million.
• Raised full-year 2026 MACI revenue guidance to $290–$292 million, up from $284–$290 million.
• Raised full-year 2026 Burn Care revenue guidance to $54 million, up from $46–$50 million.
• Raised full-year 2026 adjusted EBITDA margin guidance to 28%, up from 27%.
• Reaffirmed full-year 2026 gross margin guidance of approximately 75%.
• Management indicated the company is well-positioned for a strong close to 2026 and to sustain momentum in 2027.
• The company remains on track for a potential MACI launch in the U.K. in 2027.

Business Segments and Product Lines:

• MACI net revenue grew 21% year-over-year to $67.4 million for the quarter; year-to-date growth was 22% to $189.3 million.
• Burn Care net revenue grew 52% year-over-year to $18.0 million for the quarter; year-to-date growth was 50% to $42.0 million.
• Epicel revenue reached $12.7 million for the quarter, a 23% increase versus the prior year, marking the highest quarterly revenue since launch.
• NexoBrid commercial revenue was $2.3 million for the quarter, with an additional $3.0 million recognized from BARDA procurement revenue.
• NexoBrid commercial revenue grew 54% year-over-year and 46% versus the prior quarter.
• MACI revenue growth of 20% or more was achieved for the sixth consecutive quarter.
• The company recorded record third-quarter MACI biopsies, implants, and biopsy and implanting surgeons, with biopsy growth increasing each quarter compared to the prior year.
• The company reported the highest number of MACI Arthro cases in any quarter since launch.

Market and Competitive Landscape:

• The press release identifies Vericel as a leader in advanced therapies for the sports medicine and severe burn care markets.
• MACI is indicated for the repair of symptomatic, single or multiple full-thickness cartilage defects of the knee.
• Epicel is indicated for deep dermal or full-thickness burns greater than or equal to 30% of total body surface area.
• NexoBrid is an exclusive license product for North American rights indicated for eschar removal in thermal burns.

Risks and Challenges:

• Forward-looking statements are subject to risks including uncertainties regarding future revenue, growth, and market penetration for MACI, MACI Arthro, Epicel, and NexoBrid.
• Risks include the ability to scale manufacturing operations to meet demand and sustain profitability.
• Potential fluctuations in sales, volumes, and results of operations over the course of the year.
• Timing and likelihood of FDA approval for MACI to treat ankle cartilage defects and marketing approval for MACI in the U.K.
• Changes in third-party coverage, reimbursement, and healthcare pricing reform measures.
• Surgeon adoption of MACI Arthro and physician/burn center adoption of NexoBrid.
• Supply chain disruptions, labor strikes, or manufacturing issues affecting MediWound's ability to supply NexoBrid.
• Conflicts in the Middle East (Israel) and other hostilities (Ukraine, Iran) impacting global economy, capital markets, and supply chains.
• Changes in trade policies, tariffs, quotas, and governmental monetary/fiscal policies.
• Potential impacts from the "One Big Beautiful Bill Act" and U.S. government shutdown.

Management Commentary and Tone:

• Nick Colangelo, President and CEO, stated the company delivered "outstanding financial and business results" in the third quarter.
• Management highlighted top-tier revenue and profit growth, significant free cash flow, and capital returns to shareholders.
• Management expressed confidence in the strong start to the fourth quarter for both commercial businesses, particularly MACI.

Other Key Points:

• The company repurchased 220,744 shares of common stock for $8.8 million during the quarter.
• $191.2 million of share repurchase authorization remained as of September 30, 2026.
• Total operating expenses increased to $50.4 million for the quarter from $46.1 million in the prior year, primarily due to increased headcount, MACI sales force expansion, and marketing programs.
• Stock-based compensation expense was $7.8 million for the quarter.
• Depreciation and amortization was $3.6 million for the quarter.
• Interest income was $2.2 million for the quarter.