Kestra Medical's Q2 Revenue Jumps 53%; Lifts FY26 Revenue Guidance Again

Kestra Medical reported Q2 FY2026 revenue of $22.6 million, up 53% year-over-year, with gross profit of $11.4 million and gross margin expanding to 50.6% from 39.6% a year ago, underscoring robust top-line growth and improving unit economics. However, GAAP operating expenses rose to $43.2 million (including $1.0 million of non-recurring costs), driving a wider GAAP net loss of $32.8 million and an adjusted EBITDA loss of $19.7 million; operating expenses excl. non-recurring items and share-based compensation were $33.5 million. Management raised fiscal 2026 revenue guidance for the third time to $91 million (a 52% increase vs. FY2025’s $59.8 million), and the company reported $175 million in cash (not including $148 million of net proceeds from a Dec. 4 equity offering), which materially strengthens near-term liquidity as it scales operations; the stock recently traded at $24.91, up 1.6%.

Analysis

Kestra Medical reported Q2 FY2026 revenue of $22.6 million, up 53% year-over-year from $14.7 million, with gross profit rising to $11.4 million and gross margin expanding to 50.6% from 39.6% a year earlier, indicating improving unit economics and strong top-line momentum. GAAP operating expenses increased to $43.2 million (including $1.0 million of non-recurring costs) and, excluding non-recurring items and share-based compensation, were $33.5 million versus $23.8 million in Q2 FY2025, driving a wider GAAP net loss of $32.8 million (vs. $20.6 million) and an adjusted EBITDA loss of $19.7 million (vs. $16.1 million). Kestra ended the period with $175 million in cash and subsequently closed a Dec. 4 underwritten offering that generated $148 million of net proceeds (not included in the reported cash balance), materially strengthening liquidity and runway. Management raised FY2026 revenue guidance for the third time to $91 million (a 52% increase versus FY2025’s $59.8 million); the stock has traded between $13.25 and $30.00 and closed at $24.91, reflecting mild positive market sentiment but persistent earnings shortfalls and execution risk as the company scales.

Key Decisions for Investors

• Consider a constructive but measured exposure given 53% revenue growth and expanding gross margins, size positions for continued negative adjusted EBITDA and higher operating spend
• Require confirmation of cash-on-hand including the $148 million net offering proceeds and assess dilution impact from 6.9 million new shares before increasing allocation
• Monitor next two quarters for sustained margin expansion, operating expense discipline ex-share-based comp, and a narrowing adjusted EBITDA loss as triggers to add exposure
• If risk tolerance is low, consider waiting for clear quarterly improvement in adjusted EBITDA or use downside protection (puts or hedges) to limit drawdown potential