Good morning, and thank you for joining this AVITA Medical Quarterly Australian webinar. I'm Rudy Michaelson of Monsoon Communications. AVITA Interim CEO Carrie Vance and CFO David O'Toole are in Australia for a Melbourne-Sydney roadshow this week, and this webinar has been arranged so everyone has the chance to be brief, direct, and ask questions on AVITA's progress. Now, let me point out that you can submit questions using the Q&A function, and we'll try to get to them after the presentation. I'll now hand over to Carrie Vance to begin the presentation.
Good morning, everyone. It's good to be with you, and I look forward to speaking with you today. It's been a great week so far in Australia, and I'd like to reintroduce you to AVITA Medical. I've been the Interim CEO for about four weeks. I've been on the board of AVITA Medical for about two and a half years, so I'm very familiar with the company, the technology, and have always been excited and had a great amount of love for what the mission is of the company. Over the past four weeks, I've dug in, and I'm really excited about what we're going to do going forward. I want to remind everybody that the RECELL technology is clinically attractive to so many of our surgeons, and there are so many of them that want to implement it in their practice.
The data shows that it's extremely effective. The most recent data shows that not only is it clinically attractive for treating patients, but economically attractive for the hospital itself. Over the course of the coming months, we are focusing on the key institutions in the U.S., the high-volume institutions that can use RECELL and our other products. With that level of focus and a renewed sense of execution and accountability in the company, I believe we can make the kind of progress that has been expected for a while. We have two great new products in the past year that we've integrated into our portfolio. We believe that not only will those be substantial growth drivers in the quarters to come, but that they'll be synergistic in our goal to treat the patient and to provide clinicians with a full portfolio of products they can use to heal their patients.
Finally, along with commercial execution, I believe that operational excellence is important, not only how we manufacture the product, but how we run the company, how we use investment and spend wisely over the course of the coming quarters so that that investment has a return for the company and that the company grows to the level where we're able to provide a return on investment to our shareholders as well. Just as a reminder, we are in the acute care space, and that is a space that is very unpredictable and oftentimes tragic. What we offer at AVITA is predictability in that unpredictable world. Our technologies and their consistent ability to treat those wounds provide our clinicians and their patients with the very best source of treatment in those events.
Again, as a reminder, our portfolio of products, PermeaDerm, Cohealyx, and of course RECELL, they treat across the continuum of care. They treat in a single hospital, single patient, single clinicians can use our products throughout the treatment of that wound. In each case, we believe our products are best from a clinical perspective, but also that they speed up the time to graft, the time to heal, which is extremely important for the patient and potential complications, but also important for the hospital that is striving to make economic progress themselves. PermeaDerm is a biosynthetic dressing that protects the wound, that stabilizes the wound. Then, depending on the wound size, and we're getting much more into trauma as well, there is a need for a scaffolding-type technology to build up the wound.
We have this collagen-based dermal matrix that not only builds that up, but also helps in revascularizing and preparing the wound for graft. Of course, our RECELL product is time-tested in terms of its ability to be effective. Over the last year, we've moved from a more manual process to a more automated process that helps facilitate healing and using the patient's own skin and a small part of that skin so that they don't have those harvested graft donor sites that are oftentimes painful and problematic. Finally, again, PermeaDerm is a great source of protection and healing in that process. What's important for this company is to get to a point of being data-driven. We'll do that in every aspect of the company.
We already use data in effective ways as we manufacture, as we measure quality, as we forecast, and I'll talk more about that later. It is important for us to provide physicians with the data they need to understand, but also justify utilizing our products. Most of the data proves superior effectiveness of the products that we sell, as well as the speed to healing. Time is of the essence for these patients. It is important that in the example of PermeaDerm, that it promotes that wound healing quickly. RECELL, of course, not only does it take a much smaller amount of donor skin, but the data shows that patients can leave the hospital 36% sooner. For example, instead of 15 and a half days, 10 days.
That amount of time not only aids the patient in terms of them wanting to get home, but in terms of the hospital and the amount of money that they spend on a patient in that bed, particularly in the critical care side of the hospital, is extremely expensive. As a result, they can save thousands of dollars, 10s of thousands of dollars on that patient if they leave earlier. Cohealyx, of course, the time to graft. Other dermal matrices are oftentimes it takes a few weeks to be prepared for graft, and ours can be ready with Cohealyx in as soon as a week.
Again, this kind of shows you not only how the products are used in layering to heal the wound, but from a revenue standpoint, you can see that these additions to our portfolio not only add clinical benefit to our clinicians, but they also add a revenue component kind of per patient basis that utilizing two or three of the products on one patient can provide a significant improvement and increase in revenue per patient for AVITA. This has been a challenging year and a challenging quarter, and we've made significant progress. Just the same, I think we've had a lot of headwinds. We'll talk about those. One of those is on the reimbursement fund. The great thing about AVITA is that we got a reimbursement code, and that reimbursement code that pays institutions and physicians drives adoption.
The economics of medical tech and biotech are significant and all the more going forward. Anything that drives it forward, if it becomes unclear or diminished, it can stall things in its tracks. The hope that we had at the beginning of the year that this economic component would propel our growth, and as a result, we predicted that there would be significant growth, that was stalled by the fact that the agency responsible for publishing the codes and paying the physicians failed to do so. There is a lot of detail around this, but suffice it to say that they kicked the responsibility for that payment to seven contractors that cover the entire U.S. The U.S. is split up in seven geographies. They all cover that. Those contractors failed to do so.
Once they failed to do so, the leadership of the company went to Washington, D.C., met with them, met with Congress people to admonish them that this is preventing physicians from using our technology and patients are going to suffer as a result. That convinced them to move ahead and to do it, but they still took another three or four months. Just a few weeks ago, this was all kind of settled. Three of them have published. The other four have confirmed that they will publish most likely by the end of this month, for sure by the end of the year. It is settled, but in essence, we have lost a year of momentum. In settling it, they will go and do back payments for those physicians, so they will be made whole.
The company really lost that momentum with these physicians because there was a lack of clarity and really confusion about whether or not they would be paid. Many of them shifted back to the old standard of care of grafting. Even though it is a lower amount, they at least knew that they were going to get paid. That is the reality of the year. One of the major headwinds that has caused us to look kind of flat in our growth, and we expect that as we remove that barrier and that hurdle, it will actually become a propellant for us and a catalyst through 2026 and beyond. You know, a company like ours is all about focus. There are a lot of different things that we have had to do over the past couple of years to prepare for growth.
Some of that can sometimes be a distraction. This reimbursement issue was a distraction aside from being a stalling event. We also have value analysis committees where Cohealyx, we're trying to push those through. Hospitals have the ability to purchase the system. Champions there that want to buy it need to wait until it exits the value analysis committee. We're in about a third of our accounts. We expect some of those to come out in Q4, the rest in Q1, throughout Q1. We expect to be able to get a pretty good uptake in Cohealyx here in the next few months. The idea is to focus on about 200 accounts, the burn centers, 120-130 burn centers, and the 50-60 level one trauma centers in the U.S. Focus on those three technologies, each having its own value drivers as they work together.
Focus on geographies. Make no mistake, we are focused on the U.S. and focused on driving revenue growth in the U.S. Having spent a few days here in Australia with our distributor, I'm pretty bullish about what they're going to be able to do in the months ahead. We have a few other countries that we will have some progress, and we will be developing key opinion leaders and champions in those markets as well. There is a large market. You know, I think one of the things that investors look at is what's the potential at the company. Not just how well the products work, but how substantial is the market and the potential. Obviously, it's on me and on the company to realize that potential and be operationally excellent in the process. There are 40,000 Americans hospitalized with burn injuries every year.
Those burn injuries have a great degree of complications, potential for infection and sepsis, and with a tremendous cost to the healthcare system. We address all of that. Anytime that you're trying to change how they practice medicine, it's important to have a value driver in a clinical component, a workflow component, and an economic component. We tick all of those boxes for our customers. Our intention is to communicate that clearly, broadly, and deeply through data and other influential means to expand adoption and utilization. Again, this is all about focus. While the total addressable market is vast, it remains at $3.5 billion. It's important for us to focus with the resources that we have on the high-volume accounts, those centers that do most of the work. The great thing about it is that we are already active in those accounts.
We have a presence. We have a relationship. It's just that we need a lot of expansion. For example, if you have one or two physicians using it, we need 10 or 12 using. If you have a physician using it on one or two procedures, we need them using it on a dozen different procedures. That is the goal of our commercial teams, to drive expansion and utilization within existing accounts to get further and further penetrated across our portfolio. Again, this is kind of what I talked about. We had talked about some of the opportunities we have for growth in the coming year. I think it's more than just removing the barriers that have been there, but we've restructured our sales team, which has probably caused a little disruption as well, but we've right-sized it.
We have been able to remove representatives from more rural areas, calling on smaller accounts. We have them located and situated throughout the country of the U.S. at the key centers. We also have the right kind of salespeople. I think that when customers were largely using ease of use, there was a lot of technique involved, and there was a lot of need for our clinical tissue specialists to be in the cases to help them with technique, to help train them to make sure they were using it properly.
Now that we have the more automated RECELL Go, we're able to have resources that both can help the clinician clinically, but also have that sales mentality and sales experience that helps drive further use and expansion in the hospital and have not only clinical discussions, but workflow and financial discussions with business leaders and department directors in those hospitals. This is what I refer to in terms of the length of stay. Again, this is not just the company promising and communicating that the RECELL technology is better for the hospital, but there's data that shows this. We already have one major institution in the U.S. that has adopted further use commitments around this data and that they want to realize this kind of savings and this kind of treatment for their patients as well.
Along the lines of data, obviously, we have the clinical data for Cohealyx and PermeaDerm needed for regulatory approval, but we've taken that next step to do post-market studies that provide our sales and marketing teams with the data they'll need to show effectiveness versus, in the case of PermeaDerm versus cadaver skin or allograft. In the case of Cohealyx, show the data that shows the time to graft being sufficiently less than competition. We expect those clinical studies to be fully enrolled by the end of the year and that a lot of that data will be published throughout the year and towards the end of 2026. Because they're post-market studies, we are able to use cases and use some of that preliminary data on Podium.
We will be at significant burn conferences in January and in the spring, and we will have clinicians on podium talking about the initial readouts from those studies. Again, I try to remind our teams. I try to remind myself why I joined the AVITA Board, why I'm proud and excited to be part of this organization. Aside from a lot of the business and commercial and economic commitments that I've made to make significant progress in the coming months and quarters, this is a big part of why I'm here. This shows and demonstrates the power of the technology that we're trying to get to market. This woman was treated conventionally, which did not work for her, and then was treated with RECELL. You can see the results after about a year. You can hardly tell that this tragic event happened to her.
This is part of the mission, part of why I, and I know a lot of the people that work at AVITA, get up every morning because we know that every day our product is not in or fully in institution is another day that people are not able to be treated the very best way. Moving on to financials, just an overview. You're aware of the revenue miss in Q3. From a margin perspective, we stay strong in the 83%-84% for RECELL. As we've discussed in the past, PermeaDerm and Cohealyx bring that margin down a bit when there's a mix. Yet, those products, because of our limited amount of spend in those products, any revenue that we get drops down to the bottom line significantly and helps us with our gross profit along the way.
Operating expenses, as we've talked about too, we've brought it down to a level that not only is sustainable, but is strategic. We cut expenses in the second quarter. As a result, our burn in the third quarter was $6 million as opposed to $10 million, and we expect to be able to continue that. We also are positioned in terms of our people and structure to grow. We have the fuel to grow. We also are set up to where we shouldn't have to make much change or additional spend beyond where we're at for the next at least year or two, I think. From a cash perspective, we'll talk more about this. I'm sure there'll be Q&A about it, but we have been responsible in our cash use and our cash burn. It's allowed us at the end of September here to have $23 million in cash.
We believe right now we're well positioned for where we need to be, but we continue to address this and talk about this and to make sure that we strengthen this going forward, and that's our intention. If you look at the CAGR, aside from, I think, a disappointing 2025 in terms of growth, if you look over the last handful of years, this represents during COVID, this is since FDA approval, all that has to go into going from FDA approval to launching, to scaling up, to securing reimbursement codes and having those make an impact in the market. There's been an average of about 30% CAGR over that time. We expect that to get back on track after this year of learnings and headwinds and significant growth to follow. Again, just in summary, I believe we're changing this healthcare paradigm in acute care.
The way that you do that is to make sure that the hospitals have both an economic and clinical benefit aligned with using your products. We've done that. We will preach that in the coming months and quarters, but we will also use data to make sure that that's justified. We will also use data internally to be disciplined from a financial perspective, but also be predictable to forecast accurately, to set clear, transparent, relative, and reasonable guidance, and then achieve that guidance through day-to-day commercial execution and operational excellence. That is our goal. With that, I think we're handing it over for question and Q&A.
Yeah, thank you, Carrie. We will now move on to investor questions. If you have any questions, you can continue to submit them using the Q&A function. I'll now hand over to Ben Atkins to run the Q&A.
Thanks, Rudy.
Cary, investors are watching closely as you guide AVITA through this leadership transition. Question, as you step into this interim CEO role, what are your top three operational priorities over the coming months, and how should investors evaluate your progress during this transition period?
As I've mentioned a few times, I mean, for me, it's about driving consistent utilization with our customers. If we drive consistent and expanded utilization with our customers, the revenue will follow. We will be able to predict it. We will be able to perform at rates that we haven't been able to in the past. That level of commercial excellence. Second, we need to maintain cost and operational management.
is a lot of backend to the company that supports the front end, and we need to maintain high levels of quality and high levels of strategic investment to get a return on that investment on the backend of the business. Then performance management and acceleration. We have hired a lot of people. We have changed the structure all the way up to the top and to the CEO and executive management levels. I expect a high level of accountability, a high level of performance out of myself and everybody else. There are structured ways of doing that, but there are cultural ways of doing that. My intention is to drive that to new levels in the year 2026 and beyond.
Following on from that, investors have also asked about how the new leadership team plans to communicate and set expectations.
To that end, what is your guidance philosophy, and how do you plan to communicate progress and expectations going forward?
Sure. Thank you. I believe in being as transparent as possible about everything that is a challenge and everything that is an opportunity and exciting, to be very clear about what we're facing and what we're accomplishing. Before I can give guidance externally, I have to be honest with myself, and we have to be honest with our teams internally. What are our issues? How can we overcome them? How can we mitigate risk? What do we expect to happen? How can we exceed what we expect to happen? When we do that internally, it gives me the confidence to share it externally in a way that is very transparent and is very clear.
I don't think it should be a mystery what the company expects to do next year. I don't think that if investors want to know what we're up against, what I expect, that it should be pollyannaish and hopeful. It should be based on information, on a customer-centric philosophy and company where the customers are telling us what they're going to do, and we're impacting that. If they tell us what they expect to do, we should believe them, and then we should do something to expand that and change that and share that with our investors externally. Yes, we'll do as a public company. We'll provide guidance. We'll give regular updates. What's important for me is what we're doing internally so that when I tell you something externally, it's based in fact and in reality.
Moving to the products and particularly RECELL.
Some questions are seeking some clarity on how customers are engaging with RECELL Go. How would you perhaps characterize how the switch is going from the legacy RECELL to RECELL Go in those markets where it's available?
Sure. There are some customers. These are some of our pioneering RECELL customers, which we value a great deal and appreciate. They develop techniques and capabilities using RECELL ease of use that are outstanding and amazing. They like how they do things. There is always going to be a limited number of accounts and physicians that like the old manual technology because they know how to use it and they like how they use it. We have looked into margins and our ability to manufacture both systems going forward, and there is no problem in doing that.
We want to be responsive to our customers, those that want to keep using the other. The fact is, everybody that's new, they're all going to use RECELL Go. They're all looking to use RECELL Go. They're not going to dive into learning those kinds of manual techniques and taking that time. Everyone new is into RECELL Go and is transitioning over. I think we thought that it would be somewhat immediate. Everybody would switch over right away, but it's a transition, and we're going through that process, but have had significant positive feedback from the field.
Some investors have asked also about how we are dealing, companies dealing with reliability issues with the initial rollout of RECELL Go.
Yeah. I mean, as with any technology, when you roll it out, you're going to have some opportunities for upgrades and fixes in the process.
There were a limited number of software-related error codes that were reported by some U.S. surgeons earlier in the year. There were no hardware issues, no safety issues that need to be reported or identified. Those software upgrades were rolled out last month in October at the sites. In a way, it was a good opportunity for our technical people to get out into the field to do the upgrades, but also speak with customers about their experience with the product because, of course, we want to continue to have products and update them in ways that are helpful to the customer themselves. We're monitoring initial feedback. It's only been a couple of weeks. It's really too early to quantify how much of an impact there's been. This is standard procedure in terms of software refinements, and we'll continue to do that.
RECELL continues to be a cornerstone of our success in burns. Investors are asking, however, to understand how growth could go beyond that core. To that end, how are we positioning RECELL for broader adoption in trauma and surgical wound settings? When do we think that these newer indications could make a meaningful contribution to RECELL's growth?
I mean, obviously, we have history in these burn centers that goes back a long way and relationships there. I think when you're addressing trauma centers and new indications, it's a process.
It is a process of educating the physicians about how they can use not only RECELL, but the combination of our products, Cohealyx and PermeaDerm in that process, and then allowing the clinicians to give us the feedback we need, but also develop their own synergies within the products, help us with championing those efforts to other physicians in the trauma space as well. It is an evolution of, I think, education, but also working in conjunction with the physicians. Sometimes companies at headquarters or in the R&D labs, they think, "This would be a good indication. This would be a good technique." Of course, we provide that for our physicians to help them. We also listen to our advisory board, listen to those that are skilled and innovative in their space. We're not the only ones that are innovative at AVITA.
We have physicians and surgeons that are innovative. If you give them certain tools, they will do more with it than maybe the company ever thought could be done. We educate them. They educate us. I think that will help us propel our growth in the trauma space. It will take some time. Over the course of 2026, I believe by the end of the year, we'll see significant uptake in trauma, and we'll learn a lot as well.
Can we interrupt to the international focus for RECELL? We see EU mark approval now secured for RECELL Go in Europe. Can you walk us through the key milestones ahead for international expansion, including progress towards TGA certification here in Australia, and how you see these markets contributing to the growth over the next year or two? Yeah.
I mean, on the one hand, I want to tell you how excited I am. I mean, there's significant opportunity outside the U.S. I think, again, having spent some time with our distributor here in Australia and a physician as well here just yesterday, I think that there is a significant opportunity, just like there is in Japan and in the U.K. and in parts of the EU as well. I also want to make no mistake that investors and shareholders, I don't want you to think that, "Hey, don't pay attention to our progress or lack thereof in the past year and just pay attention to everything else we're doing in the world." The fact is we have a specific strategy and mission by country. They're all different. Ultimately, our goal is to make progress strategically and clinically and from a revenue perspective as well.
We're not expecting a lot internationally, whatever that means. I mean, I just don't think people should think, "Well, we're going to make up for what we can't do in the U.S. by selling a lot elsewhere." I think that anything that happens above and beyond our expectations internationally would be great. But our goals internationally in most of these markets are introductory, building champions, understanding how good our distributors are, and preparing ourselves for a more full-scale launch once we, frankly, get our act together in the U.S. from a revenue perspective and make the kind of progress that we expect.
Reimbursement clarity has been a key theme this year and a topic that you addressed in the slides. Building on that, with reimbursement clarity now improving, what early signs of renewed hospital engagement or physician-clinician engagement and procedural growth are we seeing in the U.S.?
Yeah.
It's a great question because I want to make sure that we're clear. I think going forward, you asked about communication and transparency. I think it's really important to be clear about timing because if the timing is off, the result is the revenue is off, at least in people's minds and expectations. When I say this has been cleared up, what has to happen and has happened and is happening is that we're communicating with those in the hospitals that are filing claims. We're communicating with the physicians to say, "This has been cleared up," trying to get them to start using quicker, trying to get them to start ordering, trying to get them to file the claims so that they see that it's been paid. Not that they don't believe us. We can prove it to them.
All of this is taking place, and it takes weeks, and it is taking weeks. I do not expect anything substantial until it would be gradual in Q1. What I will be looking at, and it is not just on this aspect, but in general, how do you make sure you hit your quarterly number and your yearly number as a result? You do that by looking monthly. You do that by looking daily. What are they ordering every day? What are they ordering every week, every month, and who is ordering? Even before they order, who is using and how much are they using and what are they using it for and how many physicians are using it? I expect to get granular. I have run commercial teams. I have been a sales guy. I know that that kind of granularity and information is available.
It sometimes is a little bit difficult. It needs to be mined. We need discipline around it. When we start looking for early signs of uptick, sometimes it's as simple as if they're ordering this much pretty consistently, it goes up by 10%. It goes up by 20% on a daily basis because that's how you build a business, and that's how you build growth. It's not quarter after quarter. I mean, ultimately, it is. That quarter is made up of months and weeks and days, and it's made up of customers and physicians and reps. Bit by bit by bit, we're going to measure it. We're going to drive it, and it'll all add up to the kind of growth that we expect.
Going a little deeper onto the reimbursement framework itself, you said that the MATs are now publishing their rates.
Can you speak to the economics of these new category one CPT codes for RECELL use and how that's sort of linked together with the broader reimbursement picture in the U.S. for RECELL?
Sure. Three of them have published. The others, like I said, intend to publish. In the U.S., the institution gets reimbursed, but then the physician also gets reimbursed. The amount that the physician gets reimbursed is at a higher level than they would if they just did a split-thickness skin graft. It's as simple as that. It's higher. It's not an amount problem. It's an assurity that they will get paid. The economics are very clear, but they go both ways, obviously.
It's kind of sad that this thing that was supposed to make everything happen faster and propel this level of growth this year was the very thing that, because they messed it up, physicians got confused, and then they got gun-shy about using it, and they went the more sure way. I mean, you can imagine if some physicians who were fairly new were using, we convinced them to use RECELL. They started using it, and then the financial piece became the way it became. It's not just telling them, "Hey, you're getting paid now. Go back to using it." They've been using the conventional way for now 10 months in the year. In some ways, it's also a re-education around why they chose to use RECELL to begin with and having them get used to that in their standard of care.
In the U.S., money drives. I mean, I'd like to think that back when I first started in med tech 30-some years ago, the clinician and what was best for the patient and what they wanted in terms of technology was what happened. They told the hospital to buy it, and it was bought. Now it has to be justified economically even before they'll look at it clinically. A lot of these hospitals won't let you talk to physicians until you've already run it through a pro forma for their hospital to make sure it makes economic sense for what you're charging them additionally, that it can be justified from a reimbursement standpoint. It drives the business, and it's going more and more in that direction over the coming years.
What's great about AVITA is that we have as strong or maybe even stronger of an economic story as we do a clinical story.
On that note with the economic story, AVITA does have some of the strongest length of stay data. You cited the more recent 36%. How can the company best leverage that going into the new year?
Yeah. What's important when you're dealing with a hospital is to make sure that the different parts of the hospital or the hospital system are talking to one another. This length of stay piece and the economics associated with it, and it's not just economics. It's also optics. If you think about a CFO and a CEO of a hospital, the CEO cares about infection rates, complication rates, readmittance rates. Those things are published now.
It's not just something that is bad for the patient or that the hospital encourages. In the U.S., a lot of those rates are now published. If you're a patient or you're somebody's public information, you can look and see in a particular city or across the country who has the highest infection rates from the hospital. That's something that they don't want. They don't want to be on that list. The CEO cares about those kinds of optics, but the CFO cares about the overall cost and profitability of the institution. He or she is the one that can see, "Well, listen, we're spending a little bit more for the technology, but what's the reimbursement? Also, can we save money?
How many dollars are associated with clearing out an ICU bed or a bed in the hospital? What's important for our sales team to be able to do is to talk to the physician, to be in the cases, but then to walk down to the carpeted areas of the hospital and have these discussions with the financial people and help them understand and then help the different parts of the hospital talk to each other so that they're all on the same page. We share that data with them. We get them to talk to one another and be unified in what's best for the hospital, and that is utilizing our product.
A little bit deeper onto the commercial execution, some are interested in understanding how we're positioned in the U.S. market.
To that end, can you characterize the sort of size and setup of our field force, our salespeople, and under what sort of structure and process do we, AVITA, sell ourselves to these 200 hospitals and centers that we talked about in the TAM?
Yeah. I mean, we're like a lot of companies, a lot of companies I've run that have sales reps, that have sales managers, that have people that the sales managers report to, and then a commercial leader, and then me. We have a very free-flowing organization in terms of those levels I just described. We don't have barriers. We have a lot of engagement and involvement all the way up to the CEO role. Obviously, the reps call on the customers. They're the ones charged with driving utilization and expansion within the account. They have those conversations that I described. Their performance is managed.
Their predictability and forecasting is managed by their managers. They have strategic support in those high-level conversations and understanding how to approach and do messaging. We also have a strategic account manager who will go into the high-level hospital systems and have those discussions how enterprise-wide they benefit financially and clinically from adopting our technology. It is very efficient and very effective. As I described before, to me, we have the exact right number of people. They are structured the exact right way. I would also say that we have the highest quality sales organization we have ever had because when you trim down the salesforce and you do some shifting around, you take the opportunity to keep your best and brightest, and that is what we have been able to do. Going into 2026, I feel really confident and excited about the team that we have commercially.
Finally, then, as we do enter this next transition phase, this next stage, what key proof points will rebuild investor confidence in your mind and define the company's next stage of value creation?
Yeah. I mean, when you're the CEO of the company, you're looking at a dashboard, literally or in your mind, of, "These are the catalysts. These are the drivers. This is the indication that I feel like we're making an impact and like that we've turned the corner and so on." Ultimately, for shareholders, they're not going to see the daily sales. They're not going to see that kind of a micro side of things. If you're just going to look at one thing, look at revenue. I know what's behind the revenue.
Utilization is behind the revenue and a lot of other effort and a lot of other metrics that we're going to drive. The other thing I'll say is that in the past quarters, there's been some lumpiness and chunkiness to the orders, some larger orders coming. I think that we have learned some things about how our customers order, how we sell and present to them. I think that there's a more organic, not just this fourth quarter, but going forward, there's a more organic aspect to the orders. I think it will be easy to see that in a given quarter, as the trajectory goes up, that it's—I don't want to say legitimate, but that it's consistent, I guess, and that you can count on that being an indication of what the next quarter should be.
I think in the past, if we've had, case in point, if you go back to Q3 of 2024, which was a comparator to this past Q3, which was disappointing, the Q3 of 2024 was 19, and yet there were some larger orders in there that were associated with, I think, some customers buying ease of use because they thought that perhaps it would be going away as we transition to RECELL Go, things like that. I think that going forward, if you're looking at revenue, let's say, of Q1, and it's at a certain level, I think you can expect that that's the beginning of what will happen in Q2. That's not just good for you to look at, but that's what I'll be looking at. See, what I'm looking at should be the same thing you're looking at and vice versa.
There should not be any distance between what you are seeing and what I am seeing. That is what I expect to happen in the coming quarters.
Thank you, Kerry. With that, let me hand back to you for closing remarks.
Sure. I do see a raised hand here. I want to make sure I am addressing any other question. Am I able to see this? I do not want to have a question left unanswered.
Okay. Question of clarification. In slide 12, you talked about three boxes. Are those all active events or future goals? I believe these boxes carry on the three strengths that are current to our 200 focused accounts in the slide presentation.
Okay. We are doing slide 12. Here we go. Yeah. These are currently going on.
As I indicated, we are currently active in 90% of those centers, which is great because there's a lot that is associated with just introducing yourself as a representative of the company, the company itself, the products, going through validation in those hospitals, getting access to the hospitals. We're in them. We have the relationships. We just need to drive expansion of those relationships. As a second box, we do have about a third of those centers currently have Cohealyx in their value analysis committee. We expect some of those, probably somewhat of a small amount, to come out here in Q4 and the rest gradually throughout Q1 and even into Q2. It'll basically give us a license to sell in those hospitals.
Yeah, I mean, I talked about sustained and supportive case execution, our reps in the cases trying to drive more cases, more physicians to utilize it.
Thank you.
I'm sorry, Ben, but do we want to address any of these others that are in the chat?
We are up against a time constraint. Perhaps if you want to say a few closing remarks, we'll happily take some of a couple of these questions offline just for clarity.
Sure. I'll just—this one about U.S. revenue dependent on U.S. government reimbursement. We have about 70-some percent of the cases we do are under Medicare and Medicaid. It's about 70%. I think we talked about how we sell, the structure and the process, how we sell in the hospitals. In the European markets, I think I talked about that.
We're early days with new distributors being set up with champions. We did a case in Germany, which is exciting. We have a physician there that's a champion. Again, it's early days. We're going to learn some things and do some things that are going to help us in forward quarters and years, really. I think that's all I see.
There was one more to that end. Are there any reimbursement issues with Cohealyx and PermeaDerm or were those problems related only to RECELL?
No. We don't expect those. Those are currently covered, and we haven't run into any of that.
There was one question from David Williams. I'm not sure if maybe that David, a little bit more clarity, but are the charges in CMS outpatient rates relevant to you? And if so, are you prepared?
Okay. I'm not sure.
I'm not sure I quite understand it, though. David, if you're listening, we will happily follow up with that question. Let's do that.
I think with that, we've gone through the list.
Perfect. I think a bit ago, you returned it to me for summary. I'll do that. I think at the risk of repeating myself, and the reason why I think it bears repeating is because this is going to be a very focused organization. It's what I do and what I've done in the past and what I intend to do going forward. I expect and plan and have already started to build a culture of accountability to drive consistent utilization, expanded utilization, and predictable utilization in these accounts.
As it's predictable and as it's high-performing, then I'm going to be able to be more predictable, I think, in my guidance and in my communication in a very, I think, reasonable but exciting way going forward. I expect to have, with David's help, but also with the help of our teams and our company, we have a culture of not only productivity, but a culture of operational excellence and a lot of pride in what we do and our mission from a clinical and patient perspective. People are what drive the growth of every organization, probably talk about at the least on these kinds of calls and in any other business discussion. The fact is, every one of those employees that we have are going to be the best they can be. We're going to hire the best. We're going to expect the best from them.
They are going to do some really great work going forward. We are all going to benefit from it as well as the clinicians and the patients they serve. Thank you all for your attention and your engagement, for your support and for your investment. Our expectation is to continue to work really hard to earn your trust and to keep your trust going forward.