Beats revenue ceiling, EBITDA nearly doubles guidance midpoint as Myriad carries the result
The number that matters in Aroa Biosurgery’s (ASX:ARX) FY26 preliminary result is not the revenue beat itself. It is the gap.
Aroa guided to NZ$92 to NZ$100 million in revenue at constant currency and printed NZ$101 million on that basis, exceeding the top of the range. On an actual basis, total revenue came in at approximately NZ$104 million, a result that sits A$4 million above its own ceiling.
The Myriad portfolio is responsible. Growth of 52% on constant currency terms over FY25 is not incremental progress. It is a step change, and the clearest signal yet that the company’s flagship product line is moving from early adoption into genuine commercial scale within the US wound care and soft tissue reconstruction market.
Normalised EBITDA came in at NZ$11 to NZ$12 million on an actual basis, against guidance of NZ$5 to NZ$8 million. The midpoint of guidance was NZ$6.5 million, and the midpoint of the actual result is NZ$11.5 million.
That is a near-double on what the company was expecting. It suggests the operating leverage story is arriving earlier than the market had priced in.
Myriad’s 52% Growth Rate Is Not a One-Quarter Event
Myriad is Aroa’s proprietary extracellular matrix technology, derived from ovine forestomach. It forms the core of the company’s wound care product offering and has been growing its share of the US market steadily over the past two years.
A 52% growth rate at constant currency implies the product is now reaching scale across enough hospital accounts and surgical procedures to produce a materially different revenue profile.
The direct sales force accounts for 57% of product revenue as of H1 FY26, up from 53% in H1 FY25. That channel mix matters because direct revenue typically carries stronger margins and gives Aroa more control over pricing and penetration.
As that proportion continues to rise, the gross margin profile should hold or improve from the 85% to 87% range the company has reported over the past two halves.
The partnership with TELABio provides the US distribution layer that Aroa’s direct sales force does not yet cover. That arrangement is evolving, and the FY26 full-year result due on 26 May will give investors more clarity on how that channel is performing alongside the direct business.
The EBITDA Beat Is More Interesting Than It First Appears
The FY26 normalised EBITDA result is partly influenced by project cost timing. The announcement notes that costs related to the Enivo and TelaBio development projects shifted into FY27, which means some of the EBITDA outperformance reflects timing rather than pure margin expansion. Investors should acknowledge that nuance in their read of the result.
That said, the contribution from underlying revenue growth is real. Selling more Myriad at a higher gross margin does not require those project costs to be absent. The underlying business appears to be generating leverage, and the cost deferrals are a separate factor layered on top. The audited full-year result in May will allow a cleaner read of how much of the beat is recurring versus timing-related.
Cash generation is also improving. Aroa reported positive net cash flow of NZ$5 million and a cash balance of NZ$27 million at 31 March 2026, up from NZ$23 million at 30 September 2025. For a company that has been investing heavily in its commercial buildout, cash improvement alongside EBITDA growth is a meaningful combination.
Investors’ Takeaway for Aroa Biosurgery
The question investors should be asking is whether Myriad’s 52% growth rate in FY26 is a peak, a trend, or the beginning of a longer compounding period. In our view, the answer likely lies in how deeply the product has penetrated existing hospital accounts versus how much of the growth is coming from new account additions. The full-year result will give clearer data on that.
A risk worth keeping in mind is that the US commercial build involves significant ongoing investment in the direct sales force and clinical development activity. If revenue growth moderates in FY27 while those costs remain elevated, the EBITDA improvement could reverse faster than consensus currently assumes.
The bull case is that Myriad is still in relatively early penetration across a large addressable wound care and soft tissue reconstruction market, and that the product’s clinical outcomes give it pricing and retention advantages that make the growth rate durable. If that holds, the company could be entering a multi-year phase of compounding EBITDA growth. You can find more coverage of ASX-listed healthcare and biotech names at Stocks Down Under.
