Vericel (NASDAQ:VCEL) raised its full-year revenue and profitability outlook after third-quarter sales rose 26%, led by growth in its MACI cartilage repair product and a record quarter for its burn care business.
Revenue reached $85.4 million, exceeding the company’s guidance for the quarter. Net income rose 179% to $14.2 million, or $0.27 per diluted share, while adjusted EBITDA increased 48% to $25.2 million.
President and CEO Nick Colangelo said the company had carried its momentum into the fourth quarter, including the strongest month for MACI biopsies since the product’s launch in October.
MACI Growth and Surgeon Adoption
MACI revenue increased 21% to $67.4 million, marking its sixth consecutive quarter of growth of at least 20%. Vericel reported third-quarter records for biopsies, implants and the number of surgeons performing both procedures.
Colangelo said growth is coming from both new surgeons and greater use within existing practices. Expansion territories had the highest biopsy growth rate among the company’s territory groups through the first nine months of the year, which management expects to support implant growth in the fourth quarter and into 2027.
Adoption of MACI Arthro also rose. The company reported a record number of MACI Arthro procedures, accounting for the highest proportion of total MACI procedures in any quarter since launch. More than 25% of MACI procedures for condyle defects smaller than four square centimeters used the arthroscopic approach.
Colangelo said patella defects remain the product’s highest-volume and highest-growth segment, while the company has also seen increased activity in other defect locations. Vericel is developing next-generation instruments intended to simplify procedures and provide access to more areas of the knee, including patella defects.
Burn Care Revenue Hits a Record
Burn care revenue rose 52% to $18 million. Epicel sales increased 23% to a quarterly record of $12.7 million, while commercial NexoBrid revenue rose 54% to a record $2.3 million. The company also recognized $3 million in NexoBrid procurement revenue under its agreement with the Biomedical Advanced Research and Development Authority, or BARDA.
More than 80 centers have ordered NexoBrid to date, and approximately 70 have placed repeat orders, Colangelo said. He attributed Epicel’s recent performance in part to cross-selling, increased peer-to-peer activity and other commercial initiatives, while noting that the number of catastrophic burns and patients who survive to receive treatment are outside the company’s control.
Vericel expects another $3 million in NexoBrid BARDA procurement revenue in the fourth quarter and about $4 million in the first quarter of 2027, with opportunities for additional procurement later next year.
Higher 2026 Outlook
The company raised its full-year revenue forecast to $344 million to $346 million from $330 million to $340 million. At the midpoint, the new range implies 25% annual growth and is $10 million higher than the midpoint of the prior forecast.
Vericel also raised its MACI revenue outlook to $290 million to $292 million and its burn care forecast to approximately $54 million. It now expects an adjusted EBITDA margin of approximately 28%, up from 27%, while maintaining its gross margin forecast of approximately 75%.
For the fourth quarter, Chief Financial Officer Joe Mara said the company expects approximately $102 million in MACI revenue at the midpoint of its guidance, representing 21% growth. He said continued procedure trends into December could provide upside to that forecast.
Vericel generated approximately $18 million in operating cash flow and $16 million in free cash flow during the third quarter. It ended the period with $236 million in cash and investments and no debt. The company repurchased approximately 221,000 shares for $8.8 million, leaving $191 million under its authorization.
Looking Toward 2027
Management did not provide formal 2027 guidance. Mara said current analyst consensus was a useful starting point for thinking about next year’s revenue, although the company’s internal expectations are higher. He said Vericel would likely begin with a more conservative guidance framework and expects some further adjusted EBITDA margin expansion.
Vericel continues to target a potential U.K. launch of MACI in the second half of 2027. Colangelo said the U.K. medicines regulator inspected the company’s new manufacturing facility in the third quarter, and the National Institute for Health and Care Excellence accepted MACI for a single technology appraisal.
The company is also enrolling patients in its MACI Ankle study and assessing potential expansion opportunities in Canada and Europe. Colangelo said Vericel’s growing cash position allows it to pursue both opportunistic share repurchases and potential business development transactions.
About Vericel (NASDAQ:VCEL)
Vericel Corporation is a commercial-stage biopharmaceutical company focused on developing and marketing advanced cell therapies and regenerative medicine products. The company serves orthopedic and burn-care markets, with an emphasis on treatments that use a patient’s own cells or biologic materials to support tissue repair and healing.
Vericel’s primary orthopedic product is MACI, an autologous cultured chondrocyte implant used to repair symptomatic cartilage defects of the knee in adults.
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