Kestra Medical Technologies (KMTS) delivered a strong start to fiscal 2026, reporting first-quarter revenue of $19.4 million, up 52% year over year, driven by a 51% rise in prescriptions and an expanding installer base for the ASSURE Cardiac Recovery System. The company achieved a gross margin of 45.7%, marking the seventh straight quarter of margin expansion, supported by higher in-network mix and volume-driven cost efficiencies. Management signaled confidence in continued gross-margin expansion toward a target of 70%+ as the rental device fleet scales and in-network coverage improves.
Despite robust top-line growth and margin improvement, KMTS remains in a heavy investment phase, with GAAP operating expenses of $37.7 million in the quarter (including $2.9 million of nonrecurring new public company costs), leading to a GAAP net loss of $25.8 million and an adjusted EBITDA loss of $19.4 million. The balance sheet remains healthy with $201.2 million of cash and an undrawn $15 million tranche of existing term debt. Management raised FY2026 revenue guidance to $88 million, representing ~47% growth, underpinned by stronger prescription activity, higher in-network revenue-per-fit, and ongoing revenue-cycle improvements. The company outlines four growth drivers—expanded sales footprint, enhanced payer contracting and RCM, device leasing economics, and a growing body of clinical evidence including a FDA post-approval study and an upcoming AHA late-breaker—each contributing to long-term profitability and patient outcomes. Investors should weigh the compelling growth trajectory and cash runway against the ongoing profitability pivot and payer-reimbursement evolution within a fragmented U.S. payor landscape.