Exchange: NASDAQ | Sector: Healthcare | Industry: Medical Instruments Supplies
Q3 2024
Published: Apr 17, 2025
Earnings Highlights
Revenue of $15.09M up 0% year-over-year
EPS of $-0.50 increased by 0% from previous year
Gross margin of 43.4%
Net income of -21.51M
"No earnings call transcript available for QQ3 2024 in the provided dataset." - N/A
Kestra Medical Technologies Ltd Common Stock (KMTS) QQ3 2024 Earnings Analysis — Revenue Growth Amid Substantial Operating Losses and a Finite liquidity runway
Executive Summary
Kestra Medical Technologies Ltd (KMTS) reported QQ3 2024 revenue of $15.09 million with a Gross Profit of $6.55 million and a gross margin of 43.39%. Despite the revenue expansion relative to the prior-year quarter, the company posted a substantial operating loss of $20.60 million and a net loss of $21.51 million for the quarter, driven by high operating expenses (SG&A and R&D) that outweighed the gross margin gains. EBITDA was negative $18.07 million. Management commentary is not available in the provided data set, and no earnings-call transcript was supplied, limiting direct quotes from executives to anchor forward-looking statements. The quarterly cash burn is evident: operating cash flow was negative $18.38 million, with capex of $4.06 million, producing a free cash flow of negative $22.45 million. The company closed QQ3 2024 with approximately $54.69 million in cash, cash equivalents, and restricted cash, signaling a short-term liquidity runway absent material financing or a near-term acceleration in revenue and/or margin improvement. The contrast between top-line growth and persistent losses suggests the business is in an investment phase, focusing on driver themes like platform adoption, R&D intensity, and go-to-market expansion, while needing a clear path to sustained profitability. Investors should monitor operating expense discipline, the trajectory of Cardiac Recovery System (ASSURE WCD) adoption, reimbursement dynamics, and potential capital needs going forward.
Key Performance Indicators
Revenue
15.09M
QoQ: N/A | YoY:N/A
Gross Profit
6.55M
43.39% margin
QoQ: N/A | YoY:N/A
Operating Income
-20.60M
QoQ: N/A | YoY:N/A
Net Income
-21.51M
QoQ: N/A | YoY:N/A
EPS
-0.50
QoQ: N/A | YoY:N/A
Revenue Trend
Margin Analysis
Key Insights
Revenue: $15.09m (QQ3 2024) vs prior-year Q3 revenue of $8.28m (YoY growth approx. 82%).
Gross Margin: 43.39% (gross profit $6.55m) vs prior-year gross margin materially lower; indicates some top-line leverage but still not translating into profitability due to cost structure.
Net Income: -$21.51m; Net Margin: approximately -142% of revenue.
Financial Highlights
- Revenue: $15.09m (QQ3 2024) vs prior-year Q3 revenue of $8.28m (YoY growth approx. 82%).
- Gross Margin: 43.39% (gross profit $6.55m) vs prior-year gross margin materially lower; indicates some top-line leverage but still not translating into profitability due to cost structure.
- Operating Income: -$20.60m; Operating Margin: -136.5%.
- EBITDA: -$18.07m; EBITDA Margin: -119.7%.
- Net Income: -$21.51m; Net Margin: approximately -142% of revenue.
- EPS: -$0.50; Weighted avg shares: ~49.53m.
- CFO: -$18.38m; Capex: -$4.06m; Free Cash Flow: -$22.45m.
- Cash & Equivalents end of period: $54.69m; Current Ratio: 1.81; Quick Ratio: 1.65; CCC: roughly -159.8 days (negative cash conversion cycle).
- Valuation signals: Price-to-Sales ~71.7x; Price-to-Book negative; Enterprise Value Multiples negative due to cash position and losses.
- Note on peers: No direct peers identified in the dataset for KMTS; industry benchmarking requires cross-comparison to small-cap medical devices with wearable cardiac monitoring.
Income Statement
Metric
Value
YoY Change
QoQ Change
Key Financial Ratios
currentRatio
1.81
grossProfitMargin
43.4%
operatingProfitMargin
-136.5%
netProfitMargin
-142.5%
returnOnAssets
-19.9%
returnOnEquity
7.85%
debtEquityRatio
-0.17
operatingCashFlowPerShare
$-0.37
freeCashFlowPerShare
$-0.45
dividendPayoutRatio
-0.23%
priceToBookRatio
-3.95
priceEarningsRatio
-12.57
Net Income vs. Revenue
Expense Breakdown
Management Commentary
Notes: The earnings transcript for QQ3 2024 is not provided in the dataset. As a result, management commentary, strategic framing, and quantitative guidance from the call are not available to quote or analyze directly. Impactful themes that would typically be addressed include adoption pace of the Cardiac Recovery System, payer reimbursement dynamics, product enhancements, manufacturing scalability, and pipeline progress. In the absence of transcript data, the analysis relies on reported metrics and historical context to infer potential drivers and risks.
No earnings call transcript available for QQ3 2024 in the provided dataset.
— N/A
No earnings call transcript available for QQ3 2024 in the provided dataset.
— N/A
Forward Guidance
No formal quarterly guidance was presented in the QQ3 2024 filing. In the absence of explicit management guidance, the forward-looking assessment centers on the trajectory required for profitability and liquidity to remain sustainable. Key factors to monitor:
- Revenue progression from the Cardiac Recovery System (ASSURE WCD) and related digital health services. A meaningful expansion in unit volumes or higher average selling prices would be needed to drive operating leverage.
- SG&A and R&D expense discipline. Given SG&A was $23.8m versus revenue of $15.1m, reducing fixed overhead or achieving scalable growth is critical to moving toward profitability.
- Gross margin resilience as scale increases; any improvements in cost of goods sold or supply chain efficiency would materially affect EBITDA and net income.
- Cash burn rate and runway. With ~ $54.7m cash at end of QQ3 2024 and quarterly CFO of −$18.38m, the company would require either operating cash flow improvement or alternative financing to extend runway beyond the near term.
- Regulatory, reimbursement, and competitive dynamics in wearable defibrillators and digital health solutions, which will influence adoption and pricing power.
Overall, the investment thesis hinges on a durable path to revenue growth combined with meaningful cost optimization and capital strategy.
Competitive Position
Company
Gross Margin
Operating Margin
Return on Equity
P/E Ratio
KMTS Focus
43.39%
-1.37%
7.85%
-12.57%
Gross Profit Margin
Operating Profit Margin
Return on Equity
P/E Ratio Comparison
Investment Outlook
The QQ3 2024 results present a bifurcated picture: top-line growth versus profitability. Revenue grew meaningfully year-over-year to $15.09m (+~82% YoY), and gross margin improved to 43.4%, but operating losses widened due to outsized SG&A and R&D investments, producing negative EBITDA and net income. The balance sheet remains liquid with cash reserves of ~$54.7m, but the company posted a notable cash burn (CFO of −$18.38m) and negative free cash flow (−$22.45m) for the quarter. The lack of formal forward guidance and missing transcript data introduce a higher degree of execution risk for near-term milestones. The investment case rests on achieving sustainable revenue growth from the Cardiac Recovery System while achieving meaningful cost discipline and operating leverage to convert revenue gains into profitability. Given the current liquidity and the scale of operating losses, KMTS remains a high-risk, growth-oriented position. Key catalysts to monitor include accelerated patient adoption of the WCD platform, improved reimbursement dynamics, and any strategic capital actions that extend the company’s runway while profitability is pursued.
Key Investment Factors
Growth Potential
Significant addressable market for wearable cardioverter defibrillators and integrated digital-health platforms. Potential upside from broader adoption of the Cardiac Recovery System and higher patient engagement leading to improved outcomes and payer acceptance. R&D investments could yield product enhancements or adjacent arterial/monitoring capabilities that expand addressable market.
Profitability Risk
High near-term profitability risk due to substantial operating expenses relative to revenue. Dependency on the adoption and payer reimbursement of a single core platform. Limited visibility on near-term revenue mix and potential need for additional financing. Industry competition and regulatory changes could compress margins or slow adoption.
Financial Position
Solid liquidity with $54.69m in cash at QQ3 2024; modest or unclear debt levels; negative free cash flow and profitability metrics that imply reliance on future revenue growth or external financing to sustain operations. Cash-based risk exposure exists if cash burn accelerates or if capital needs rise.
SWOT Analysis
Strengths
Strong cash position providing temporary liquidity runway (~$54.7m at QQ3 2024 end)
Portfolio focused on Cardiac Recovery System/WCD platform with digital health integration—potential for a differentiated care solution
R&D capability to advance wearable device and software components
Favorable early gross margin of 43.4% in QQ3 2024 indicating some top-line leverage potential
Weaknesses
Substantial operating losses despite revenue growth (EBITDA -$18.1m, Net income -$21.5m)
High SG&A relative to revenue (SG&A $23.8m on $15.1m revenue) indicating poor cost absorption
Reliance on a single core platform; product concentration risk
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