Kestra Medical Technologies (NASDAQ:KMTS) reported a sharp increase in fourth-quarter revenue and issued fiscal 2027 guidance calling for continued growth, as executives said demand for the company’s ASSURE wearable cardioverter defibrillator system is being driven by new accounts, deeper penetration of existing customers and expansion of its commercial team.
On the company’s fiscal fourth-quarter earnings call, President and Chief Executive Officer Brian Webster said Kestra accepted more than 6,300 prescriptions written for the ASSURE system during the quarter. Revenue rose 66% from the prior-year period to $28.6 million. For fiscal 2026, Kestra generated $95 million in revenue, up 59% from fiscal 2025.
“Every patient’s recovery is different, and some emergencies are far more complex than anyone could predict,” Webster said. “That level of sustained protection isn’t simply a feature. It reflects a deliberate design philosophy centered on supporting patients through even the most demanding clinical scenarios.”
Margins Expand as Rental Model Scales
Kestra reported fourth-quarter gross margin of 54.8%, up from 44.3% in the prior-year period and 200 basis points above the prior quarter. Webster said it marked the company’s 10th consecutive quarter of sequential gross margin expansion. Full-year gross margin was 51.4%, up about 11 percentage points from fiscal 2025.
Chief Financial Officer Vaseem Mahboob said the margin improvement was driven by the company’s rental model, higher revenue per fit from more in-network patients, volume leverage and cost improvement projects. He said Kestra expects “steady and consistent increases” in gross margin in the quarters ahead and reiterated the company’s confidence in reaching gross margins above 70% over the next few years.
GAAP operating expenses were $55 million in the fourth quarter, compared with $55.8 million in the prior-year period. Excluding non-recurring costs and stock-based compensation, operating expenses were $44.7 million, up from $29.7 million a year earlier. Mahboob attributed the increase primarily to investments in the commercial organization, support resources and revenue cycle management capabilities.
Kestra posted a GAAP net loss of $38.8 million in the quarter, compared with a GAAP net loss of $51.1 million in the prior-year period. Adjusted EBITDA loss was $26.7 million, compared with an adjusted EBITDA loss of $20.3 million a year earlier.
Mahboob said operating cash burn declined year over year. Net cash used in operating activities was $18.7 million in the fourth quarter, down from $24.1 million in the prior-year period.
Company Guides for 44% Revenue Growth in Fiscal 2027
Kestra issued fiscal 2027 revenue guidance of $137 million, representing 44% growth from fiscal 2026. Mahboob said the forecast assumes higher prescriptions driven by new account wins, deeper penetration of existing accounts and regional coverage investments. He also said higher revenue per fit is expected to come from a higher mix of in-network patients and continued revenue cycle management improvements.
During the question-and-answer session, Mahboob said Kestra expects its in-network mix to remain in the “low mid-eighties” and said the company began fiscal 2027 with 137 sales territories, up from 80 at the start of fiscal 2026.
Asked about the phasing of growth during fiscal 2027, Mahboob said Kestra expects accelerating growth from the first half to the second half as recently hired sales representatives continue to ramp.
Webster said Kestra ended fiscal 2026 with approximately 130 active sales territories, up from about 80 at the end of fiscal 2025. He said the company is likely to add about 40 representatives in fiscal 2027, at a pace that may be slower than fiscal 2026 as it absorbs hires made late in the year.
Commercial Expansion Drives New Prescribers and Facilities
Webster said Kestra’s commercial expansion is aimed at geographies where high volumes of wearable cardioverter defibrillator prescriptions are being written and where the company has strong in-network payer coverage. He said the number of new prescribers for ASSURE grew 55% in fiscal 2026, while ordering facilities increased 65%.
The company estimated that the wearable cardioverter defibrillator market grew in the low- to mid-teens based on its financial results and those of the incumbent competitor. Webster said Kestra believes the market remains underutilized, with six out of seven indicated patients not protected by a wearable cardioverter defibrillator.
Webster highlighted several examples of account growth, including a Southwest academic medical center that had not prescribed ASSURE when Kestra entered in March 2025 but grew to more than 60 prescriptions over 15 months. He also cited a Midwest territory where a hospital’s wearable defibrillator prescriptions grew from about 20 annually to 50 in fiscal 2026, and a Southeast cardiovascular organization where prescribing increased by about 40% after ASSURE post-approval study data were presented at the American Heart Association meeting.
In response to an analyst question about share gains, Webster said fiscal 2026 results did not yet fully reflect hiring during the year and said he expects additional share gains as representatives ramp. He added that Kestra is also focused on expanding the overall category, not only taking share.
Clinical Evidence and Product Development Remain Key Priorities
Webster said Kestra continues to build clinical evidence for ASSURE, including through its ACE-PAS study, which he described as the largest real-world prospective wearable cardioverter defibrillator study to date, with more than 21,000 patients enrolled and protected. He said the study showed low false alarm rates, high wear-time compliance and 100% successful conversion of dangerous arrhythmias.
He also noted that a paper published in Heart Rhythm cited ACE-PAS as contemporary evidence of persistent ventricular arrhythmia risk in patients with ischemic and non-ischemic cardiomyopathy. Webster said Kestra plans to publish multiple abstracts and manuscripts over the next 12 months related to ACE-PAS, an enhanced algorithm and pipeline innovation.
On product development, Webster said Kestra’s collaboration with Biobeat Technologies to expand diagnostic insight for hypertensive patients prescribed ASSURE is progressing as planned. He said Kestra released an enhanced ASSURE detection algorithm in April that the company projects will further reduce its already low false alarm rate, and that the algorithm is now shipping to all patients.
New Debt Facility Adds Financial Flexibility
Kestra ended the quarter with $262 million in cash, cash equivalents and investments. Mahboob said the company also entered into a new $200 million term loan facility with Pharmakon, with $75 million funded at closing and a large portion used to retire the company’s existing term loan.
Mahboob described the financing as non-dilutive and said it lowers Kestra’s cost of capital. Including unused availability under the new term loan agreement and excluding an uncommitted M&A tranche, he said Kestra has approximately $357 million of total liquidity.
Asked whether the financing signals a more acquisitive strategy, Webster said the M&A tranche is prospective and “there’s not something right in front of us.” He said Kestra remains interested in technologies that could be additive for clinical partners as it builds a direct-to-cardiology sales force.
“FY 2026 was indeed a year of investment for Kestra,” Webster said in closing remarks. “We think FY 2027 affords us new opportunities for investment as we see the opportunity to win.”
About Kestra Medical Technologies (NASDAQ:KMTS)
We are a commercial-stage, wearable medical device and digital healthcare company focused on transforming patient outcomes in cardiovascular disease using monitoring and therapeutic intervention technologies that are intuitive, intelligent, and connected. We have developed and are commercializing our Cardiac Recovery System platform, a comprehensive and advanced system that integrates monitoring, therapeutic treatment, digital health, and patient support services into a single, unified solution. The cornerstone of our Cardiac Recovery System platform is the ASSURE WCD, a next generation wearable cardioverter defibrillator (“WCD”) used to protect patients at an elevated risk of sudden cardiac arrest (“SCA”), a major public health problem that accounts for approximately 50% of all cardiovascular deaths in the U.S.
