Kestra Medical Technologies, a medical‑device company focused on wearable cardioverter‑defibrillators, reported that revenue for the second quarter of fiscal 2026 rose 52% to a midpoint of $22.4 million, compared with $14.7 million in the same period a year earlier. The jump reflects a 52% increase in sales volume and a modest price lift driven by stronger demand for its ASSURE system in the United States and Canada.
Gross margin improved sharply to 50.0% from 39.6% in the prior year, driven by a higher mix of high‑margin product sales and lower cost of revenue per patient. The margin expansion is a result of the company’s leasing model, which reduces upfront manufacturing costs, and of operational efficiencies that have lowered the cost of revenue per patient.
Despite the revenue and margin gains, the company’s operating loss widened to $31.6 million to $32.0 million from $19.1 million a year earlier. The increase in loss is largely attributable to higher operating expenses, including expanded sales and marketing spend, research and development investment, and general and administrative costs that have risen as the company scales its commercial footprint.
President and CEO Brian Webster said the company is “experiencing sustained commercial momentum” and that the gross‑margin improvement is “a result of the attractive unit economics and positive leverage inherent in our business model.” He added that the company is “encouraged by the meaningful improvement in our gross margin” and that it remains focused on securing payer coverage to support long‑term growth.
Investors reacted cautiously to the announcement, citing the widening operating loss and ongoing challenges in payer contract negotiations as headwinds. The company’s cash balance of approximately $175 million provides a cushion for continued investment, but the widening loss signals that profitability remains a work in progress.
Kestra’s competitive landscape includes ZOLL’s LifeVest, and the company has built a large payer network, covering more than 285 million health‑plan members as of April 2025. The company’s IPO on March 7, 2025, raised $202 million, and it continues to pursue growth through expanded coverage and market penetration of its ASSURE system.
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