Vericel Corporation

Vericel Corporation sells treatments for knee cartilage injuries and severe burns. MACI is its largest product. The burn-care franchise consists of Epicel and NexoBrid, which Vericel licenses from MediWound for North America. Its shares trade on Nasdaq as VCEL.

MACI and Epicel are made using patients' own cells. NexoBrid is manufactured by MediWound and sold through specialty distributors. Vericel reports the businesses together in one segment, with most operations in the United States.

Comparable quarterly results

Third-quarter 2026 revenue rose 26% from a year earlier. Gross profit increased to $62.6 million from $49.6 million, while operating expenses rose 9% to $50.4 million. Net income increased 179% to $14.2 million.

Adjusted EBITDA was $25.2 million, or about 30% of sales. It adds back depreciation and amortization, stock-based compensation and pre-occupancy lease and technology-transfer expenses, while removing net interest income. The $7.8 million stock-compensation adjustment was the largest quarterly add-back.

The product mix and government procurement

MACI sales reached $67.4 million in the September quarter, up 21%. Epicel grew 23% to $12.7 million. Commercial NexoBrid sales increased 54% to $2.3 million, with another $3 million of NexoBrid revenue from BARDA procurement. Total burn-care sales were $18 million, up 52%.

In March 2026, Vericel signed a ten-year agreement with BARDA. The $34.9 million base period covers initial procurement, inventory services and development work. Additional options could bring the total value to $196.9 million. The $3 million recognized in the September quarter was the first revenue recorded under the agreement.

The MediWound license includes potential sales milestones totaling up to $125 million. The first $7.5 million payment is triggered when annual North American NexoBrid net sales exceed $75 million. No sales-milestone liability had been recorded at September 30.

Cash generation, investments and repurchases

Operating cash flow rose to $50.3 million in the first nine months of 2026, from $36.9 million a year earlier. Capital spending fell to $5.2 million from $25.0 million. Those movements lifted company-defined free cash flow, operating cash less capital spending, to $45.1 million from $11.9 million.

The quarterly cash comparison was weaker: operating cash flow fell to $17.7 million from $22.1 million, and free cash flow declined to $15.7 million from $19.5 million.

At September 30, Vericel held $133.5 million of cash, $36.8 million of short-term investments and $65.3 million of long-term investments. It had no outstanding borrowings under its $150 million revolving credit facility. Finance-lease liabilities were $574,000.

Vericel authorized its first $200 million share-repurchase program in July 2026. It repurchased $8.8 million of shares in the September quarter, with $8.5 million paid in cash and $0.3 million still to settle at quarter-end. The remaining authorization was $191.2 million.

Manufacturing and the next operating tests

Vericel is moving MACI production to its Burlington, Massachusetts, facility after receiving regulatory approval for manufacturing there in March 2026. The company also plans to move Epicel production there, following the required qualification.

On November 5, Vericel raised its annual revenue target to $344 million to $346 million, from $330 million to $340 million on July 30. The MACI target rose to $290 million to $292 million from $284 million to $290 million; burn care rose to $54 million from $46 million to $50 million.

The adjusted EBITDA margin target increased to 28% from 27%, while the gross-margin expectation stayed at about 75%. Management's next results can be checked against these targets and the usual fourth-quarter peak in MACI implant volumes.

Our analysis of Vericel's higher sales target explains the burn-care contribution and the differing profit and cash trends.