Ann: AVITA Medical Reports Q1 2025 Financial Results, page-6

As I see it, these are the issues:

• The market expects to see some actual earnings, not just continued top-line growth and operating losses. Slide 5 only shows half the story, here is the missing part: https://hotcopper.com.au/posts/77853179/single
• Their guidance is to generate FCF in the second half of 2025 and GAAP profitability in the fourth quarter. Comparing 1Q25 with 1Q24 their revenue is up impressively 67% and their total operating costs were only up 2.7% (from -$26.8M to -$27.5M). However when you compare 4Q24 with 1Q25, revenue is flat and total operating costs are up 5%.
• They have just done an operating loss of -$11.8M for the quarter. If you assume from here that revenue versus pcp grows at least +55% and they manage to keep operating costs flat at -$27.5M, this is what the trajectory looks like:

• In other words, simply growing revenue +55% versus pcp, and keeping costs flat, is not enough to get them to FCF by the second half, never mind doing GAAP profitability in Q4. Even if you assume they maintain +67% top line growth for the rest of the year and keep costs flat, they only just squeak out some minor 2H FCF. They need to keep growing revenue at an impressive clip, whilst actually reducing their costs. If there's one thing AVH have always struggled with, it is costs.

That's my take, happy to hear if I've missed something.