I'll now hand over to Jim to begin the presentation.
Good morning from Melbourne. Thank you very much for joining us, and I'm gonna give you an overview. For those of you who might be hearing in detail for the first time, it'll be more complete about the company and our strategy and our results. For those of you who might have heard our webinar last Thursday, when we released our quarterly results, many of this information will be similar. That said, let me begin by introducing the company. What do we do? We're a commercial stage, regenerative tissue company, and I'm trying to make the slides move when we do that. And one more, there we go.
We're a commercial stage, regenerative tissue company really. What we do is we treat wounds, both deep and partial thickness, full thickness burns. We treat trauma. All types of chronic wounds as well are within the future of this company. So what we are doing is creating technologies that improve healing time and reduce scarring, and help the patients recover their lives. Our vision is to be a global-based company. Today, we're commercial in the United States predominantly, and I'll describe our international efforts during this call.
We focus on really the key elements of our strategy, are focusing on the patient and the physician customer, our employees and our shareholder, because those are the three stakeholders that really make the difference for our future and our company. We're undergoing a very significant strategic transformation. As you'll see in this call, I'm gonna explain and share with you our strategy for portfolio expansion, really with RECELL at the center. When you think about that, RECELL is a first in category product; there is really nothing that competes with it directly.
That said, it is used on patients that have an array of other adjacent needs to treat their wounds, and we're gonna talk about that as part of our expansion strategy. This way, we think we can broaden our impact on improving the patient care, broaden our impact on delivering the results that the physicians need to treat their patients more successfully. So this innovation is really core to our US and international market expansion. Our management team, nice to meet you. We recently hired our new head of US commercial sales, Senior Vice President Robin Vandenberg.
Robin joins us after a very distinguished career with Smith+Nephew. We were looking for a very experienced, well-seasoned, and accomplished commercial leader. We found that with Robin, so she joined us this past week, so we're really excited to have her on our team. The big event of the quarter was the launch of the RECELL GO platform. Let me step back from this for a moment. For those of you who might not be familiar, RECELL as a technology has been a completely manual procedure, that had the device that would help you soak the biopsy and then disaggregate it, and capture the cells in a buffering solution that would allow you to spray on the skin cells.
So Spray-On Skin, so to speak, to support the graft healing process. Now, that process takes time. Takes the physician's time to scrape it, takes their time to soak it. Now, it turns out that that soaking and disaggregation time having multiple implications. First implication is it takes the physician's time and the time of his or her staff. When with RECELL GO, RECELL GO does all that processing for them. But even more importantly, the fundamentals of the RECELL technology is that the soak time results in a higher cell viability for supporting the skin graft. So that soak time, which is in, on one hand, it's in an enzyme called trypsin, but we add additives to it.
One of the additives changes the pH, and the soak time is important to that because pH turns the trypsin from cytotoxic, meaning it will kill the cells, to one that just supports their disaggregation. We also add glucose to it, which basically feeds the cells and strengthens their viability. So the soak time, very important. The pressure of disaggregation, you can imagine, we have had hundreds of surgeons who do it differently from each other. And although we had very good results, if you have too much pressure, you damage the cells. If you have inadequate pressure, you don't produce enough cells into the RECELL spray on skin buffering solution.
So automating it with the RECELL GO device, which is comprised of two components. One is the RECELL processing device, which you can see in this picture. It's reusable, meaning it can process up to 200 samples. And then the disposable is a RECELL processing kit, which has the wells for the enzyme buffering solution and biopsy. So we're in the process of converting our business model from the one-time use RECELL System to the RECELL GO processing device, accompanied by the RECELL GO kit, that is a cassette that fits into the device.
Now, at this point in time, we received approval in just almost the first of June, last couple days of May, and we're in the process of converting our accounts, and we have an objective internal inside the company, to convert every account to RECELL GO by the end of Q3, which will be October 1. So we're undergoing a very rapid change. Now, from a development point of view, it's worth seeing what we're doing to support that. If you recall, last year, in June, we received approval for full-thickness skin defect, along with our burn indication.
Now, full-thickness skin defect treats virtually all things that might need a graft. RECELL, in its current configuration with RECELL GO, treats up to 10% total body surface area, or commonly referred to TBSA. The vast majority of full-thickness skin defects, which are smaller wounds that require grafting, treats 480 square centimeters or 2.5% total body surface area. Now, that device, which is called RECELL GO Mini, has already been developed. We've already validated it. It has been submitted to the FDA by the end of June, and we expect approval in by the end of December, around December 27.
So even as we're launching RECELL GO, we're seeing the opportunity to modify the cassette. It'll use the same processing device, the same fundamental cassette design, with some differences in the size of the well that houses the enzyme with the additives and the buffering solution to produce a smaller and treat a smaller graft area. Someone said to me, "How's it going?" So this is from the first week of usage. Now, this is something that just could not be done before. In the prior world, you would have a manual RECELL device, which the physician and his or her team would work on.
And then if they needed another one, they'd take another biopsy and remember, it's a 1 to 80 expansion, so that means this patient has a significant portion of their body that needs treatment. And you would then do the second one, or in the case of the middle, you do them consecutively, 1, 2, 3, or in the third picture, 1, 2, 3, 4. What's just amazing, which could never even been thought about before, in the next slide, this is really how to think about how RECELL GO is going. If you look into the background, what you can see is that 6 devices have been used.
You can see 6 cassettes on the table, and you can see a tray full of spray-on skin cells. Let me just describe how it happens here. First and foremost, the staff, the physician, and his or her staff, are using about, in this case, hours less to prepare the RECELL GO Spray-On Skin treatment, hours in the OR. That benefits them in many ways. They are freed up to treat that patient, and you can imagine a patient with 60% total body surface area wound, they need a lot of care, and they need a lot of preparation for the coming skin graft.
To not have to do that disaggregation themselves manually, allows for much more efficient workflow. As well, it's a subtle, soft benefit. A patient in this situation is a burn patient. The temperature of the operating room is 37 degrees Celsius, just body temperature, and that's because they lose their tissue regulation capability with a heavy burn like this, a deep burn like this. So that shorter time really benefits the health of the staff, and on the one hand, but also the patient. The patient is getting treated in a much shorter timeframe, which lessens their exposure to the other metabolic effects of having such a severe wound, including shorter time under anesthesia.
As you know, longer time under anesthesia has complications associated with it, including mortality. So it's a big deal to be able to shorten that procedure time. Inside of all of this is the cost it takes to treat this patient, which is very high, and it's covered under what's called the Diagnostic Related Group. It's basically a group of money, you know, pile of money, so to speak, that if the hospital is efficient and treats for less, they get to make a profit, so to speak, and if they take longer, they have an excess cost that's not covered by insurance.
So this optimizes their ability to treat the patient in a more efficient manner, and it's economically beneficial to the hospital. So as you can see, the patient is at the center of this, benefits in many ways. The staff benefits in their workflow, their time in the operating room, and of course, the hospital benefits economically. So RECELL GO is a step change in the adoption of RECELL. Right now, RECELL is a standard of care for at least burns. We're working on that same level of adoption in full-thickness skin defects and trauma centers. We'll talk more about that here in the coming slides.
This is this slide, you if you've been on our webcast before, you know these are the types of indications that are covered under the full-thickness skin defect indication. On the left, here's what we originally expected, on the right is what also became an additional, as a somewhat of a broadening by the FDA of our indication. And you can see the 35,000 annual burn cases are RECELL eligible, so to speak, where they might need it. In the original expectation, we thought we were gonna approximately quadruple that number to 127,000, with these various degloving, abrasions, lacerations, necrotizing fasciitis, amputations, fasciotomy, all these types of indications.
On the other hand, the breadth of the approval included traumatic wounds, surgical wounds, surgical incisions like cancer, and chronic wounds. So this just dramatically expanded our market opportunity. We are in early stages of converting hospitals who fit the definition of trauma center to become RECELL users, and we're gonna talk about our progress there here in a moment. Next slide. This is our full thickness new account pipeline, how we've done the last two quarters, and how we're, what we're looking forward to in Q3.
In Q1 and in Q4 2023, we really were taking longer than we expected to convert these accounts by a rather significant amount of time, and that amount of time is about 5 to 6 months. In 21 with 22 in counts out of over 45 we expected, now it happen in 24 as w ell. That contributed to a really an underachievement by the company in Q1. So we really focused in Q2 on our execution, how we manage our business. One of the big changes for us is that a year ago, we had 30 people in our field organization, including sales territories and clinical training specialists and sales manager.
Today, we have approximately 100. So clearly, we have to we had to learn to manage differently, and we made a lot of progress on that during Q2. We expected 46 new accounts in Q2 to be approved by the Value Analysis Committee. And to count on this chart, you have to be approved and order. In this case, 31 were approved and ordered. Six were approved, and didn't order until July. Now, we've learned better how to manage this process, both in terms of the accounts coming in as well as closing them. So we're really anticipating an improvement in our closure rate in Q3, but we also have really deepened our pipeline.
So whereas we had 46 in the pipeline in Q2, 45 in the pipeline in Q1, we have 89 in the pipeline in Q3. And these are divided into the Value Analysis Committee decision. And what is happening is, in general, the Value Analysis Committee is saying, "We'll consider, but do a trial case," okay? Which is an evaluation stage. Or they'll say, "We'll provisionally approve of it, but you need to do a trial," and that's a decision stage. Now, what is different about this and the way we're classifying this is, and why it's taking longer, and we think we understand it better now, is this is a first-in-class category product for the trauma centers. They're not like the burn centers who've been using RECELL for the last three or four years.
These are hospitals that are seeing RECELL for the first time. So we now are adjusting our strategy and our focus, and we intend to improve our closure rate. That said, we—if we just hit the same run rate of efficiency and conversion, we should see 50 to 70 new accounts during Q3. So that's really a dramatic uptick and improvement in our execution. Now, globally, we're turning ourselves to the markets that we're pursuing globally, and why. Now, we've really applied three filters. First is, they have to have a healthcare system that can use the technology RECELL, broadly, number 1. Number 2, they have to be able to pay for it. Unfortunately, that is a reality of using advanced technology.
And the third, they have to have a population where we can create a business. Now, that doesn't include actually a lot of countries, if you look at it on a world basis, but it does include Australia, it includes most of the European Union, and it includes Japan and naturally, the US. We're going with a strategy in our this first few years of third-party distributors. What we gain is we gain local market know-how, we gain local market reimbursement know-how, we gain the relationships those distributor partners have with the physicians already.
So what we bring to them is the scientific expertise, the technical expertise, how to use the product, how to train on the product, how to support it. So we are launching that with coincident, in most cases, with the launch of RECELL GO and our expected CE mark, which we expect in this quarter. That said, it's not a regulatory certainty, but we're in the last phase of the review with our notified body. So we think that within the quarter, we should get approval. Now, that'll bring us launching into, by fourth quarter, Germany, Austria, Switzerland, one distributor, Belgium and Holland, another, Ireland and the UK, another, Italy and the four Nordic countries.
And during that time, we expect to finalize an agreement on the Iberian Peninsula in Spain and Portugal. So, with that, we're ready to go from an inventory point of view. We have product that is ready for international distribution, both the RPD, which is a processing device, and the disposable kits. So this will become another important driver of our business. Now, let's go to product. Product is important. As you can see, RECELL is at the center of all things for us. We have a unique place within the treatment of wound care that does not have a competitor.
In fact, on a pure regulatory burden point of view, if we gave all the technology to another party and said, "Go copy it," it would take them at least 2 PMA cycles, 4 to 5 years, to land in the marketplace, ready to treat with a copy. Having said that, by four years from now, you know that we're gonna convert to RECELL GO by the end of this quarter, virtually 100%. That is where the future IP of RECELL exists. So we have a very long runway to build the adoption and to, frankly, be unique in the wound care space.
So what we're now doing is we're gonna build out our portfolio with the other technologies a physician needs to treat these patients with unique solutions that contribute to the more rapid healing and the quicker exit from care for the hospital, I mean, for the patient. On your right is the PermeaDerm Biosynthetic Dressing. It's unique in that it's transparent. It's got a variable porosity ability, where you can stretch it and make it more or less porous.
What that allows for is for it to breathe and to exudate, so it can. The leakage from the wound needs to leave the area of the dressing, and it can come out through these pores and be cleaned up. So PermeaDerm's launch, we launched it in essentially the first of April, and it is a very unique dressing. On the other hand, in these large wounds, there is a dermal matrix that is used at the first stage of a 2 stage closure. So the standard of care of a large 2,000 square centimeter wound is, stage one, you stabilize the wound, you use a dermal matrix or scaffold, per se, to promote ingrowth of host tissue, fiber tissue, and vascularization.
You then follow that up with a second procedure, with a split-thickness skin graft combined with RECELL, with a dressing on top. Now, this dermal matrix is a very important element of the healing process. And to give you an idea, there are many of them on the market. And what we are looking for, we were looking for specific performance criteria, and we found the company, Regenity. They're a very significantly sized contract development and manufacturing of biologics. They have synthetic biologics, they have collagen biologics, biologics.
They have a whole range of rather large corporate customers because they have a unique expertise. We work- we worked with them, and just to put it in terms, in last year, we have done animal models on 10 different platforms and 18 different formulations to achieve what we want. What we want is we want to granulate that cell growth. We want to have the dermal matrix promote the revascularization of the wound area. We want it to absorb histologically. We don't want anything left behind that has to be cleaned up by the surgeon.
So we want it to do those elements, cell regeneration, vascular ingrowth, and be absorbed into the wound. We want it to be ready for accepting a skin graft as rapidly as possible. The key measures of a dermal matrix are really three. One is the process I just described, getting graft ready. The second is graft uptake, so the graft succeeds in grabbing on to those cells and beginning the healing process. The third is full closure. So those requires certain characteristics of the dermal matrix. The one developed with Regenity fits them all the best of any we tested.
Without getting into the competitive market world, what I'll say is this, that the ready for grafting metric, this dermal matrix was faster by almost 40% than any other product we tested, and we tested those that are commonly available on the market. That will lead, we believe, and that's preclinical study, that will lead to a more rapid closure time. Those two metrics are the essence of healing and getting that patient home and out of the hospital. So we're really excited about the dermal matrix that we are going to be calling COHEALYX. So collagen, healing, and then the helical structure and the cross-linking of the collagen underlying material, bovine collagen is the underlying material.
So it'll be a C-O-E, so Co-heal-Y-X. So COHEALYX is the brand name, and we think it's going to be a, a very significant product. We expect approval October one, and in the next slide, I'll describe how we're gonna get there. Now, we'll stay here for a minute, I'm gonna describe it in the next slide. Excuse me. This helps you see our strategy. The patient is getting, with a deep wound, is got some level of wound bed preparation. This is an area of research for us, but the types of things that go here are antimicrobial agents or hemostatic agents. You have to stop the blood, and you have to stop the infection.
So we're doing research in that area now. We have been focused on the collagen-based dermal matrix level, which goes in the majority of these, of these wounds. Then, of course, we have RECELL with a meshed split-thickness skin graft, and of course, PermeaDerm goes on top. So you can see how these all work together. Next slide. So the path to commercialization for Regenity COHEALYX is the 510(k) commercial clearance, the October one, we expect.
We have exclusive rights, and we progressively gain rights throughout the potential tenure agreement through the clinical research, and we improve our margin along the way as well. It's a revenue sharing, I mean, ASP sharing, arrangement, where we have a known gross profit, and that allows us pricing flexibility. We have a commitment to clinical research. So on the next slide, our path for clinical research is rather important. Oh, I'm gonna just describe it. Excuse me. So we have two pathways. Immediately upon approval, October 1, we're gonna do a post-market study with COHEALYX and RECELL, with a split-thickness skin graft in 2 stage closures.
It'll be post-market, so we'll be able to get to the data very quickly. What we'll be measuring are the three elements I described earlier. Number one, readiness to graft, how many days? Number two, graft uptake, how often is that graft successfully integrated into the wound? And third, full closure. There's a lot of data on the market, so it'll be very something we can do very readily, and we'll have data in Q4 to support our early commercial efforts and our full commercial efforts January of 2021. We have also a belief based on our preclinical data, that we can get to a full single-stage closure.
Now, that will have a limit on the size of wound that it treats. However, instead of two stages, you'll have one stage. You'll prepare the wound, you'll put in COHEALYX, you'll then graft directly, and that same procedure, a RECELL with a split-thickness skin graft, and it'll put a PermeaDerm on top, and what you will have is a single-stage closure. We think that we can establish an indication for that. That would be done under a PMA. So it'll be an IDE and then a PMA approval. That's subject to some clinical research we're doing, not clinical, preclinical research that we're doing, ahead of October.
So by the time we launch, we're gonna know whether we're gonna do only the comparison to the standard of care, or if we're ready to go after a new standard of care with single-stage closure for a category of wounds defined by wound size. So in our view of the world, this is really exciting. The, it's not like the Olympics, but it's quite exciting to us. Now, next, we'll talk about our financials. I think David's gonna take over from here for a bit.
Thanks, Jim. So for the quarter, we had a great quarter, Q2 of 2024. Revenue, commercial revenue was in the range, it was $15.1 million, which was at the upper end of our previously given guidance of $14.3 million to $15.3 million. It's a 29% year-over-year year growth, and our gross margin was 86%, which is in line with where we expect it to be for the year. It could actually go up over the next quarter or two with the volume that we're producing and the increase in revenue. At the end of the quarter, we had $54.1 million in cash, and we think that's enough cash to get us through to profitability and to meet the goals that we want to achieve.
We had talked about the OrbiMed debt facility previously. There are two additional tranches that were available to us. $25 million at the end of this year, but only if our trailing revenue was $75 million for that twelve months. With our new guidance, we don't expect that we would be above $75 million in revenue; therefore, that tranche is not going to be available, and with not taking the first tranche, the second tranche, which was as of June 30th, 2025, would not be available either. Now, we have signaled previously, many times, that we never expected to take those two tranches anyway.
And so the fact that they're not going to be available, in our mind, doesn't hurt us, because we think we have enough cash at this point in time to get us to a point of profitability, which we have again signaled could be, will be as by the end of Q3 2025. So for revenue guidance going forward, we... No, next previous slide, please. We expect for Q3 2024 to be in the range of $19 million to $20 million, which is sequential growth of around 26% to 30% over the $15.1 million that we had in Q2, and year-over-year growth of 40% to 48%.
For the full year, we have reduced our guidance down to $68 million to $70 million from our previous guidance of $78 million to $84 million. It still reflects a growth rate of year-over-year, compared to 2023, of somewhere in the range of 37%, and it continues the growth trajectory that we've been on. The next slide. This just shows the revenue for the commercial revenue for the last 8 to 9 quarters. With the exception of Q1, which we acknowledge was one of our worst quarters, but we own it, we are on a great growth trajectory, and we expect to be in the range of $19 million to $20 million, as I indicated.
And as I said on both in the press release and in the earnings call last week, we had a very strong July, and so we're comfortable with the $19 million to $20 million of guidance that we're giving for the third quarter. Those are all my comments right now. Jim, I'll turn it back over to you just for a summary, and then we have some questions that I do have.
Okay. So really, we're looking at the second half priorities. We're in early kind of middle Q3. Sales execution is at the forefront. We have made a lot of changes in how we do it, how we execute, with the rigor of how we manage our new product introduction with RECELL GO, how we're managing the uptake of our new full-thickness skin defect accounts. You know, you know, since June of last year, when we got full thickness expansion, we have about increased our number of active ordering accounts by well over 2x.
So we're taking on a lot of new accounts, but in fact, then we're not quite satisfied with our what I'd call our hit rate in the short run, and so we're gonna be focused on that. The product portfolio expansion is in its infant stage. We're just on the market with PermeaDerm for a quarter. We're in a lot of evaluations with PermeaDerm itself. We expect COHEALYX from Regenity to be ready in Q4. That will largely be a clinical data quarter, where we're building the evidence, because we'll have preclinical data, and that'll be useful in getting many physicians to try it.
But then we're gonna be producing real clinical human data that we'll be using in our launch, which will happen the first of January. We're anticipating RECELL GO approval in for the CE market in September. We've also, as I mentioned earlier, submitted RECELL GO Mini in June. We expect that by the end of the year. So the combination of all these are in addition to what we've already got underway. Profitability to us, it's really an important concept. We are at our build-out of infrastructure. We don't need to add to our commercial organization for probably in the order of two years in terms of head count expansion.
We, although our R&D will continue to be vibrant, projects go in, projects go out. We don't expect a big change in our R&D expense. In fact, in our G&A, we're experiencing something different, where we've actually been actively working on scaling our processes to accommodate the growth of the company. So we're not planning big infrastructure expense growth in our G&A because we're in fact, improving our processes. We're moving from a smaller to a mid-sized company.
So with a constant expense line, the new products that we have coming, the adoption of RECELL GO, PermeaDerm, COHEALYX, expansion into international markets, we see that Q3 profitability in 2025 as our, our, our clear goal, and we intend to make it. So we've got the means to do so. In fact, one of the questions that I've received while during my investor meeting so far here in Australia is, "Well, do you have the capacity?" Simply, yes. We invested in capacity at our venture manufacturing operation over the last year. The starting goal was to create a 10x capacity. We have achieved that.
We, in fact, insourced the assembly of the RECELL GO processing device, which we were going to do externally. We insourced it to have better control over that, I mean, over that process. The RECELL GO Mini disposable cassette is also insourced. We're expanding our distribution capability. We have a service center there to basically handle the service needs of the RECELL GO processing device. So really, we're ready, and it's up to us, execution-wise, to make this all happen. So with that, I'll take questions.
Thanks, Jim. So, your presentation has answered many, many of the questions that we had already, but there is a couple that I'd like to give to you. The first one, which is interesting, it's around PolyNovo's NovoSorb product. And could you please provide your insights on where that product sits in comparison to AVITA's wound care continuum? And further, they ask, does it compete with RECELL GO directly or indirectly? And if so, how is this competition being addressed?
Well, let's start with the simple answer. The PolyNovo product is a very good product. The NovoSorb is a good, also known as BTM, just simply a very good product. They've also introduced one called MTX, which is new, which I haven't seen as much information on. Now, it is different in the sense that when you use it, it can be... First of all, on one hand, the PolyNovo product is applicable to so many indications that we that would not use a collagen matrix necessarily. So that's one difference. On another difference is that the collagen matrix of Cohealyx will produce a wound ready for grafting faster.
That said, fully integrates. In the case of PolyNovo, you with the BTM, you do have a layer to remove before you would graft. Now, the MTX is thinner, and I understand it's quite a good product. So, there is a way to think about if you were looking at the competitive nature of the products, I actually think they're probably more synergistic. You know, there is a Venn diagram overlap where the two compete, and then there is a rather sizable market in both cases that isn't where one would not be the best replacement for the other. So, with that said, they're not really fully competitive.
They're actually different. And, so I have high regard for those products and their application. At the same time, for some indications, COHEALYX, many, particularly larger wounds, COHEALYX will be better. For many indications, including chronic wounds and that are smaller, the simplicity of application and the effectiveness of the PolyNovo product is very high. So that's how I see it at this point.
Great. Here's a question about the dermal matrix. Individual indicates congratulations on the deal. Sounds very promising. They look forward to hearing more about it, but they have a few questions. Specifically, do you expect the promising results from the animal testing to be published? That's one. And then you kind of hit on this already, but what does the commercial launch look like when it's approved? And any other comments around the actual studies and how they would be structured?
Sure. A few questions, you might have to bring me back if I miss one.
Okay, got it.
Okay, so first and foremost, we'll likely not publish the preclinical work. That said, you may see them presented from the podium at a wound care meeting. You will see them in publicly available, displayed by the company. We will share those openly because, in fact, they're quite valuable, but they are preclinical, and that has an advantage, and it has a disadvantage, right? It's not yet on patients, so we probably don't go to the trouble of publishing that. That said, it'll be something that will be able to be seen in the public forum. The next question is, I think, trial design.
Trial design, we're gonna have one that'll be post-market, that will be using two-stage, measuring those three parameters I mentioned earlier, which will be time to be graft-ready, graft acceptance, and full closure. That'll be a single-arm post-market, and we'll be able to look at that data along the way. So hypothetically, picking a number off the top of my head, let's say we were gonna enroll 50 patients. Well, every 10 patients, we can look, and we can have that data available and allow physicians to share it with their colleagues and have them share it at, from the podium and meetings and in abstracts while we're building the full dataset. So you'll see that study for sure.
The third, depending on how our preclinical work goes later this month, we will enter into an IDE to demonstrate a single-stage closure against some wound size definition. That data would not be available until the study is complete, reviewed by the FDA, and a determination made. So that could be a year to see that data, about. I think we could enroll it within a year, six months for the FDA to review, so sometime end of 2025, that would be available. That would be transformational data, frankly, and would redefine the standard of care from a two to a one-stage closure.
So commercialization, step one in Q4, is to build clinical experience, early clinical experience in a very quantifiable manner, less with a sales objective in mind, although we will sell it. But secondly, with the proof of demonstrating that successful three important metrics I mentioned, ready-to-graft, graft uptake, closure. Now, having said that, this is a price-competitive market, and your price is related to your level of clinical data. So we do not have an expectation of pricing to a premium at the beginning, and we should we prove a full stage... Oh, a single-stage closure, we'll be pricing later at a premium.
So probably under, you know, not at a premium, but below the competitive market price at the beginning. And as we build data and we earn the value and demonstrate the value, we will then price differently. So I think it's an evolutionary process. We are very realistic about it in that sense, and the nature of our agreement with Regenity was structured with that concept in mind. So we have flexibility. Most important is how the product performs, and we are very, very optimistic about that, as you can probably tell.
Great. So there's a number of questions for me. I'm sure you could answer them also. But they center around you know, the reduction in our annual guidance and still indicating that we're going to achieve cash flow breakeven and profitability by the end of Q3 of 2025. And I just wanna take a little opportunity to explain how we get there. We are guiding for the third quarter, $19 million to $20 million, and we're comfortable with that number. And that is a large sequential growth, 26% to 30% over the $15.1 million.
If you just take a 10% to 15% sequential growth for the next four quarters, both at 10% and 15%, you get to revenue, and we're not giving guidance for 2025, this is just an example to help everyone understand why we believe we will get to profitability and cash flow breakeven by Q3 2025. If you do sequential growth of 10% to 15%, each quarter, which is not where we are right now, but it's a reasonable number, you get to revenue of around $28 million to $35 million by Q3 of 2025. With an 86% gross margin, that leaves gross profit around $25 million to $30 million.
Our operating expenses, which includes non-cash items of stock comp and depreciation and amortization, are in the range of $27 million to $29 million. As Jim indicated, we don't see those numbers going up over the next few quarters the next year. So if you're looking at profitability, you could see that at the upper end of sequential growth of 15%, you get to profitability. If you're looking for cash flow breakeven, you take out the cash non-cash numbers out of the operating expenses, and those are in the range of, then it would be $24 million to $26 million.
Therefore, we see it as if we can when we continue to have sequential growth, which we're set up to do, everything is in place to do that, and we do it even at the lower end of the range, we can get to profitability and to cash flow breakeven by Q3 of 2025. Jim, any other thoughts on that?
No, I think the most important element here is we're poised for growth, continuing. We've had growth absent the Q1 of, well, aberration on it, and which is really self-inflicted on our part. If you look at what we have with RECELL GO, PermeaDerm, with COHEALYX, with international, holding our expense line virtually stable, we don't need to expand it till well into 2026, if then. So you get there by growing at a high gross margin and by holding expense line, getting penetration into the territories, that's the job. We feel very motivated to do it and capable to do it, and we do not have to have anything happen uniquely to create the product flow, as we've already invested in our capacity.
So we're in a good place to make this happen, and so that's the, that's the message. The expense line's constant. It's the revenue line that's got to grow.
Yep, agree 100%. Those are all the questions we have, Jim. So at this point, I believe we should wrap up the call, and if you have any closing comments, I think this would be a good time to do it.
Well, I just have a couple. While we've been closing this call, you can share my excitement when I got the slide of... When someone says, "How's RECELL GO going?" It's pretty easy to see. It's going really well. We are really appreciative of your attention this morning. We've found that this having this particular webinar event on Australian time, while during our quarterly visit to Australia, to be a good way to update our Australian shareholders. If you have other inquiries, you can reach out to us, and we'll figure out how to communicate and set up a time to talk.
I wish you a good day, and it's a beautiful day in Melbourne here, so I'm gonna go out and wear out some shoes. Thank you.
So that concludes the webinar. We thank everyone for your participation this morning. Thank you.