• Total Revenue: Over $237 million, representing 20% growth for the year.
• 4th Quarter Revenue: Record $75.4 million.
• MACI Revenue: $197.3 million for the year, with 4th quarter revenue of $68.3 million, growing 21% year-over-year.
• Burn Care Revenue: $39.9 million for the year, with 22% growth.
• Gross Margin: 73% for the year, with a 4th quarter gross margin of 78%.
• Net Income: $10.4 million for the year, or $0.20 per share, compared to a net loss in 2023.
• 4th Quarter Net Income: $19.8 million, or $0.38 per share.
• Adjusted EBITDA: $53.4 million for the year, representing 23% of net revenue.
• Operating Cash Flow: $58.2 million for the year.
• Cash and Investments: Approximately $167 million at year-end, with no debt.
• 2025 Revenue Guidance: Expected growth of 20% to 23%.
• 2025 Gross Margin Guidance: 73% to 74%.
• 2025 Adjusted EBITDA Margin Guidance: 25% to 26%.

• Warning! GuruFocus has detected 2 Warning Sign with VCEL.

Release Date: February 27, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Vericel Corp (NASDAQ:VCEL) achieved a 20% total revenue growth in 2024, reaching over $237 million.
• The company reported record quarterly revenue of over $75 million in the fourth quarter, with a gross margin of 78%.
• MACI's fourth-quarter revenue grew by 21% year-over-year and 53% sequentially, driven by strong fundamentals and increased surgeon engagement.
• The Burn Care franchise saw a 22% revenue increase in 2024, with Nexobrid hospital orders rising by 42% in the fourth quarter.
• Vericel Corp (NASDAQ:VCEL) achieved GAAP profitability for the year, with net income of $10.4 million, and operating cash flow increased to nearly $60 million.

Negative Points

• Epicel revenue was below recent run rates in the fourth quarter due to fewer patient treatments and grafts per patient.
• Operating expenses increased to $167.6 million in 2024, primarily due to development and commercial launch activities.
• The company anticipates a significant decrease in capital expenditures in 2025, which may impact future growth investments.
• The guidance for 2025 includes a potential impact on margins due to the completion of the new facility, which will add $10 million in incremental expenses.
• The MACI Arthro launch is still in its early stages, and significant contributions to revenue growth are not yet factored into the 2025 guidance.

Q & A Highlights

Q: Can you discuss the growth expectations for MACI in 2025, particularly in relation to MACI Arthro? A: Joe Mora, CFO, explained that the guidance for MACI in 2025 is based on similar growth drivers as in 2024, such as strong biopsy growth and surgeon expansion. While there are encouraging indicators for MACI Arthro, the initial guidance does not assume a significant change in MACI trends due to MACI Arthro. However, there is potential for outperformance as the year progresses.

Q: What are the expectations for Nexobrid's adoption and revenue growth in 2025? A: Nick Colangelo, CEO, noted that while hospital orders for Nexobrid increased by 42% in Q4, revenue recognition is based on distributor purchases, which can lead to mismatches. The company expects continued momentum and has guided for high single-digit million revenue for Nexobrid in 2025, indicating a meaningful uptick from the previous year.

Q: What factors contributed to the uptick in MACI's conversion rate, and is this expected to continue? A: Nick Colangelo, CEO, attributed the slight uptick in conversion rate to the maturation of the customer base. While the company hasn't factored a significant increase in conversion rate into 2025 guidance, there is potential for improvement, especially with the less invasive MACI Arthro option potentially lowering the hurdle for patients.

Q: Can you provide more details on the MACI Arthro surgeon training and its impact on utilization? A: Nick Colangelo, CEO, stated that 250 surgeons have been trained for MACI Arthro, with biopsies from trained surgeons showing higher growth rates. The company is optimistic about MACI Arthro's impact, although it is still early in the launch phase. The training is expected to drive increased MACI utilization over time.

Q: What are the long-term margin expansion targets, and how will the new manufacturing facility impact this? A: Joe Mora, CFO, explained that the company has updated its mid-term targets, aiming for high 70% gross margins and high 30% adjusted EBITDA margins by 2029. The new facility will be incorporated into the P&L starting in 2026, but the company expects continued margin expansion, albeit not necessarily in a linear fashion.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.