Vericel 2025 Q1 Earnings Misses Targets as Net Income Drops 191.2%

Vericel reported its fiscal 2025 Q1 earnings on May 8, 2025. The company missed expectations, with net income significantly declining. Despite this, Vericel raised its full-year profitability guidance, expecting a gross margin of 74% and an adjusted EBITDA margin of 26%. The company also reaffirmed full-year revenue growth guidance between 20% and 23%. Vericel remains optimistic about future growth, driven by strong performance indicators and strategic initiatives.

Revenue
Vericel's revenue for the first quarter of 2025 increased by 2.6%, reaching $52.60 million compared to $51.28 million in the same quarter of 2024.

Earnings/Net Income
Vericel's earnings per share (EPS) showed a deeper loss, widening to $0.23 per share in 2025 Q1 from a loss of $0.08 per share in the same quarter of 2024. The company's net loss also expanded to $-11.25 million, a 191.2% increase from the $-3.86 million loss recorded in 2024 Q1. Overall, the EPS decline signals challenging financial conditions.

Price Action
The stock price of Vericel has risen by 4.02% on the latest trading day, increased by 10.42% over the past week, and climbed 4.94% month-to-date.

Post-Earnings Price Action Review
The strategy of purchasing Vericel shares after a quarterly revenue drop and holding for 30 days has proven beneficial over the past five years. This approach yielded an overall return of 210.98%, significantly outperforming the benchmark return of 92.56% by 118.42%. Despite experiencing a maximum drawdown of -71.66% and a Sharpe ratio of 0.46, indicating some risk, the strategy's 25.59% CAGR and notable excess return underscore its effectiveness in capturing subsequent gains. The performance reflects a balance of risk and moderate returns, emphasizing the strategy's potential in capitalizing on market volatility.

CEO Commentary
"The Company is off to a solid start to the year, with record first quarter MACI revenue and total Company revenue, and continued strength in the key performance indicators for the MACI Arthro launch," said Nick Colangelo, President and CEO of Vericel. He noted positive trends across the business at the beginning of the second quarter, indicating expectations for strong revenue growth and profitability for the remainder of the year. Colangelo emphasized that the Company is well-positioned for continued high revenue and profit growth in 2025 and beyond.

Guidance
Vericel reaffirmed its full-year total revenue guidance, expecting revenue growth of 20% to 23%. The Company raised its full-year profitability guidance to a gross margin of 74% and an adjusted EBITDA margin of 26%. For the second quarter, total revenue growth is anticipated to be in the range of 22% to 25%.

Additional News
Vericel Corporation announced its participation in the upcoming Bank of America Securities 2025 Healthcare Conference, scheduled for May 14, 2025. This event will provide an opportunity for Vericel to present its strategic initiatives and offer insights into its growth trajectory to investors and industry stakeholders. Additionally, the company continues to focus on expanding its market presence, having trained approximately 400 MACI Arthro surgeons to date. Vericel remains committed to enhancing its product offerings and maintaining a strong foothold in the advanced therapies sector, particularly within sports medicine and severe burn care markets.