Kestra Medical Misses Q1 EPS, Shares Drop After Hours

Kestra Medical Technologies Inc. reported a Q1 2027 loss of $44.1 million in GAAP terms, exceeding the $25.8 million loss reported in the prior-year quarter. The company missed analyst forecasts for earnings per share (EPS), recording a loss of $0.75 compared to a projected $0.45, marking a 66.7% miss. Revenue rose 60% year-over-year to $31 million, up 16% sequentially from an implied $19 million in the same period a year earlier, though gross margins expanded to 56.5%—up 175 basis points sequentially and 108 basis points year-over-year—marking its 11th consecutive quarter of sequential gross margin improvement. Despite these gains, GAAP operating expenses climbed to $55.2 million, up 46.4% from $37.7 million in the prior-year quarter, while adjusted operating expenses rose to $44.2 million from $30.3 million. The company’s adjusted EBITDA loss widened to $24 million from $19.4 million, and operating cash burn reached $32.3 million, driven partly by bonus payments and supplier timing. Cash reserves stood at $245 million as of July 31, 2026, with total liquidity of about $320 million, including a newly secured $200 million term loan facility announced in July. The current ratio was 4.41, reflecting strong short-term financial health. CEO Brian Webster highlighted revenue growth driven by a strong fourth quarter, while CFO Vaseem Mahboob emphasized the $200 million financing as a key strength, reducing capital costs and bolstering balance sheet flexibility. Management raised full-year revenue guidance to $141 million, up 48% from the prior fiscal year, targeting mid-70% gross margins in two to three years. The company’s wearable cardioverter defibrillator (WCD) market segment grew 14% year-over-year, with in-network payer coverage rising to the low 80s from 70% at its IPO. A major national payer expanded coverage to non-ischemic patients, a key demographic for WCDs. Shares of Kestra Medical fell 9.43% after-hours, closing at $21.79 following a 5.3% intraday gain to $24.06. The drop followed a 4.6% decline from the prior day’s close of $22.85, with a 52-week range of $17.34 to $30. Wall Street analysts set price targets between $28 and $32.