Polynovo Limited

PolyNovo reported first-half FY26 NovoSorb product sales of $68.2 million, up 26% year over year, an increase of $14.1 million. U.S. sales were $51.7 million, up 25.3%, and rest-of-world sales were $16.5 million, up 28.3%. Adjusted EBITDA was $4.7 million, up 82% versus the prior period. Reported gross margin was 88.8%, pressured by a $3.7 million unfavorable manufacturing variance tied to temporarily lower output while the company completed FDA/PMA preparation work. Cash on hand was $29.2 million, operating cash flow was $9 million, and capital expenditures were $10.8 million with $2.2 million still outstanding on the new facility. Management said gross margin should return to above 90% for full-year FY26 and that the second half should produce a much improved profit result; no formal revenue or EPS guidance was provided.

Bruce Peatey used his first results call to stress leadership reset, tighter execution, and clearer communication. He said the company has strong momentum but can still improve execution, especially in expanding adoption beyond burns, building the outpatient strategy, and developing the pipeline through a future Chief Scientific Officer hire. He was upbeat about the business, but consistently framed the next phase as one of disciplined focus rather than broad, unfocused expansion.

Jan-Marcel Gielen highlighted the core financial strength of the business: sales up 26% to $68.2 million, adjusted EBITDA up 82% to $4.7 million, and operating cash flow of $9 million versus a $12.5 million outflow in the prior period. He said U.S. debtor days improved from over 90 days to 56 days, cash ended at $29.2 million, and the new factory build is essentially complete with only $2.2 million of CapEx left to pay. He explained the 88.8% gross margin as a timing issue caused by intentionally slowing manufacturing, and said production had already ramped back up in January, supporting a return to above 90% gross margin for FY26 and free cash flow in the second half.

Analysts focused on the softer U.S. BTM quarter, asking whether November weakness reflected a real slowdown and what BTM growth could look like over the next few years. Management said November was quieter due to fewer large burn cases and Thanksgiving, but December rebounded, and they remain bullish on BTM, especially with PMA approval and growing use alongside MTX. Questions also centered on the outpatient CMS opportunity, the investment needed for international growth, and whether the company would give guidance; management said outpatient revenue is currently an upside to plan, international growth will require more support for distribution partners, and formal guidance is still not planned in the near term.