Kestra Medical 2026 Q2 Earnings Revenue Beats Estimates, EPS Misses

Kestra Medical (KMTS) reported fiscal 2026 Q2 earnings on Dec 11, 2025, with revenue surging 53.4% year-over-year to $22.57 million, exceeding estimates by $1.6 million. Despite the strong top-line growth, GAAP EPS of -$0.64 missed expectations by $0.05, while the company raised FY26 revenue guidance to $91 million, reflecting optimism in market expansion and operational efficiency.

Revenue

The total revenue of Kestra Medical increased by 53.4% to $22.57 million in 2026 Q2, up from $14.71 million in 2025 Q2. This growth was driven by a 54% year-over-year increase in prescriptions for the ASSURE system, expansion of sales territories to 100 active regions, and a higher in-network patient mix.

Earnings/Net Income

Kestra Medical narrowed losses to $0.64 per share in 2026 Q2 from a loss of $1.19 per share in 2025 Q2 (46.2% improvement). However, the company's net loss widened to $-32.78 million in 2026 Q2, representing a 59.0% increase from the $-20.62 million loss recorded in 2025 Q2. While the per-share loss showed progress, the absolute net loss remained a concern.

Price Action

The stock price of Kestra Medical has edged up 1.14% during the latest trading day, has edged up 1.67% during the most recent full trading week, and has dropped 5.72% month-to-date.

Post-Earnings Price Action Review

The strategy of buying Kestra Medical (KMTS) shares on the date of its revenue raise announcement and holding for 30 days showed favorable performance over the past three years. The cumulative return was 10.21%, with an average annual return of approximately 3.40%. This suggests that the strategy capitalized on the positive market reaction to Kestra's revenue raises, although the returns were modest due to the volatility in the healthcare sector and the company's ongoing losses.

CEO Commentary

Brian Webster, President and CEO of Kestra Medical Technologies, highlighted Q2’s strong performance, noting 53% year-over-year revenue growth to $22.6 million and a historic 50.6% gross margin. He emphasized the Assure system’s clinical differentiation, citing the ACE-PASS study’s validation of high wear time (23.1 hours), low false alarms, and risk mitigation in early cardiac recovery. Strategic priorities include expanding the sales force (100 active territories, up from 80 in FY25) and improving in-network payer coverage (now 80+%), which enhances revenue cycle efficiency. Webster underscored optimism, stating Kestra’s “attractive unit economics” and clinical evidence could drive WCD market growth to low double digits, with gross margins on track to exceed 70% in the next few years. He concluded with confidence in the company’s ability to scale while maintaining service excellence.

Guidance

Kestra raised FY26 revenue guidance to $91 million (52% growth vs. FY25), up from $88 million, driven by prescription volume growth, higher in-network mix, and improved revenue cycle management. Vaseem Mahboob, CFO, reiterated confidence in 70%+ gross margin expansion over the next few years and outlined continued investment in commercial expansion and public company costs. Operating expenses for Q2 rose to $43.2 million (GAAP) and $33.5 million (non-GAAP), reflecting strategic hiring and operational scale. The company expects “steady and consistent” gross margin growth, with 80+ in-network payer coverage and 48.8% conversion rate (up from 48.2% YoY) as key drivers.

Additional News

Kestra Medical announced the appointment of Timothy Moran as Chief Business Officer, strengthening its leadership team for the next stage of growth. The company also participated in the Stifel 2025 Healthcare Conference, showcasing its cardiac recovery system platform. Additionally, Kestra unveiled compelling primary results from its post-approval ACE-PAS study at the American Heart Association annual meeting, highlighting the Assure system’s clinical effectiveness and wearability.

Kestra Medical’s Q2 results reflect a mixed performance, with robust revenue growth outpacing expectations but profitability challenges persisting. The company’s focus on expanding its sales force, improving in-network coverage, and leveraging clinical evidence positions it to capitalize on the wearable cardiac monitoring market. However, investors should monitor the balance between aggressive commercial expansion and cost control to ensure sustainable long-term growth.