Vericel Q2 Revenue Jumps 20%

Key Points

• Vericel’s Q2 2025 revenue (GAAP) rose 20% year-over-year, but missed GAAP revenue expectations by $1.28 million.

• MACI cartilage repair franchise achieved record revenue in Q2 2025; gross margin expanded by 4 percentage points to 74%.

• Adjusted EBITDA (non-GAAP) more than doubled to $13.4 million, and net loss per share (GAAP) improved to $0.01.

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Vericel (NASDAQ:VCEL), a cell therapy specialist focused on sports medicine and burn care, reported its Q2 2025 results on July 31, 2025. The most headline-worthy news was the 20% year-over-year GAAP revenue growth, driven strongly by its MACI franchise, and a substantial gross margin gain to 74%. Revenue (GAAP) reached $63.2 million, up from $52.7 million (GAAP) in Q2 2024, but missed analyst expectations of $64.5 million (GAAP). Net loss per share (GAAP) narrowed to $0.01, handily topping the estimated GAAP loss of $0.03 per share. Overall, the quarter showed steady growth and healthy margin expansion, despite falling slightly short on sales targets, with GAAP revenue of $63.2 million missing the analyst estimate of $64.48 million.

Source: Analyst estimates provided by FactSet. Management expectations based on management's guidance, as provided in Q1 2025 earnings report.

Understanding Vericel’s Business

Vericel operates in regenerative medicine, developing and manufacturing advanced cell therapy products in the United States. Its main products are MACI, a cartilage repair implant for knee injuries; Epicel, a skin graft for severe burns; and NexoBrid, an enzymatic product for removing dead tissue in burn patients. Each is approved by the U.S. Food and Drug Administration and is sold to hospitals and specialist surgeons.

The company’s growth depends on expanding the usage of these products, training more physicians, and securing new uses for its technologies. Enhancements in delivery methods, such as the recent arthroscopic (minimally invasive) technique for MACI—commercially available in the United States since Q3 2024—help the company grow its addressable market. Success also requires stable manufacturing, regulatory compliance, secure intellectual property, and careful expansion of its commercial footprint.

Quarter Highlights: Revenue Growth, Margin Expansion, and Operational Updates

The quarter saw significant developments on both the financial and operational fronts. MACI, the company's cartilage repair implant, delivered its highest-ever quarterly GAAP revenue at $53.5 million—a 21% increase over the prior year. The company reported its second-highest number of MACI biopsies (small tissue samples taken before an implant can be performed) since the product's launch. This step is important as biopsy growth often leads to increased future implants and revenue.

Key business drivers included accelerated training, with approximately 600 surgeons trained to perform MACI using the less invasive arthroscopic procedure as of Q2 2025. This was up from about 400 at the end of Q1 2025, signaling improving adoption. The company also highlighted a more than 40% increase in MACI implants for small femoral condyle defects versus Q2 2024, extending the reach of MACI into new areas of knee repair beyond its earlier focus on patella injuries.

In burn care, the company’s two main offerings—Epicel (a permanent skin replacement) and NexoBrid (a topical gel for removing dead tissue)—delivered net revenue of $8.6 million and $1.2 million, respectively (GAAP). Epicel revenue rose from $7.8 million in Q2 2024, while NexoBrid grew from $0.8 million in Q2 2024 to $1.2 million, a 52% increase. Epicel biopsies reached their highest level since 2023, representing a 38% jump versus the prior year, and NexoBrid set a new record for monthly hospital unit orders in June 2025. All sales representatives are now cross-trained on both products, supporting growth potential in burn care.

The bottom line also improved: gross margin increased by 4 percentage points to 74%, in line with updated full-year expectations. Adjusted EBITDA (non-GAAP) more than doubled from the previous year, reaching $13.4 million. Operating expenses (GAAP) grew to $48.6 million, due mostly to additional hiring and preparing its new facility in Burlington. Cash reserves stood at about $164 million as of Q2 2025, with no long-term debt, leaving the company well-capitalized for its next phase.

While Revenue (GAAP) missed analyst and management estimates, growth fundamentals remained solid. While burn care revenue was lumpy due to variability in patient treatment timing—especially for Epicel, where patient health frequently delays or cancels procedures. Management now guides Burn Care revenue to track at a stable run rate of about $10 million per quarter in the second half of 2025, rather than promising continued rapid growth.

On the pipeline front, Vericel received U.S. Food and Drug Administration clearance to begin a Phase 3 study of MACI for ankle cartilage repair, opening the door to a new market worth an estimated $1 billion per year. The company plans to begin expanding its MACI sales force in the second half of 2025 to align with expected demand and surgeon training momentum as the MACI Arthro franchise matures.

Looking Ahead: Financial Guidance, Market Expansion, and Risks

Management reaffirmed its outlook for full-year MACI revenue growth in the low 20% range, matching the trends seen so far in 2025. Full-year 2025 profitability guidance remains at a gross margin of 74% and an adjusted EBITDA margin of 26%, pointing to continued operational leverage as the business grows. For burn care, the company expects revenue of approximately $10 million per quarter in Q3 and Q4 2025—an explicit acknowledgment that revenue volatility is likely to persist rather than give way to steady growth.

The rest of the year will bring several potential milestones. These include the launch of the MACI Ankle Phase 3 study and ongoing expansion of the company's sales force, which should position the business for further growth in 2026. Investors may want to monitor the pace at which biopsies convert to implants within the MACI franchise, the consistency of burn care revenue, and the impact of new surgeon training and expanded indications on future sales. VCEL does not currently pay a dividend.

Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.

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