Kestra Medical Shares Climb on 52% Preliminary Revenue Growth
Strong sales for the company's wearable defibrillator drive top-line momentum, though investment in growth contributes to wider operating losses.
Shares of Kestra Medical Technologies (NASDAQ: KMTS) gained ground in morning trading after the company announced preliminary second-quarter financial results that significantly surpassed prior-year performance, signaling strong commercial uptake of its cardiac monitoring devices.
The Kirkland, Washington-based company reported that it expects total revenue for its second fiscal quarter, which ended October 31, 2025, to be in the range of $22.2 million to $22.6 million. At the midpoint, this represents a robust 52% increase from the $14.7 million in revenue recorded in the same period last year. In a statement released Monday, the company confirmed the results exceeded its internal fiscal plan.
“Revenue is expected to grow by over 50% in the second quarter and continues to exceed our FY26 plan, reflecting sustained commercial momentum as Kestra grows and penetrates the wearable defibrillator market,” said Brian Webster, President and CEO of Kestra Medical Technologies.
This top-line growth, a key indicator for investors in the medical technology space, was accompanied by a significant improvement in profitability metrics. Kestra projects its gross profit will land between $11.0 million and $11.4 million, a substantial jump from $5.8 million a year ago. The implied gross margin is expected to reach 50.0% at the midpoint, a notable expansion from 39.6% in the prior-year period.
Webster commented on the efficiency gains, noting, “we are encouraged by the meaningful improvement in our gross margin, a result of the attractive unit economics and positive leverage inherent in our business model.”
Despite the strong revenue and margin performance, the company's investments in scaling its operations were evident in its bottom line. Kestra anticipates an operating loss between $31.6 million and $32.0 million for the quarter. This is wider than the $19.1 million operating loss reported in the second quarter of the previous fiscal year, reflecting increased spending on commercial expansion and product development.
As of Monday morning, shares of KMTS were trading at $26.98. The company, which specializes in advanced wearable medical devices and digital health solutions for patients at risk of sudden cardiac arrest, has a market capitalization of approximately $1.24 billion.
Wall Street has maintained a generally positive outlook on the company's prospects. According to data from MarketBeat, Kestra holds a “Moderate Buy” consensus rating from analysts. The average twelve-month price target sits at $28.00, suggesting modest upside from current levels. In a recent note, analysts at BTIG Research initiated coverage with a "Buy" rating and a more optimistic $32.00 price target on November 18.
The preliminary results suggest that Kestra's strategy to capture a larger share of the cardiac monitoring market is yielding results. The company is positioning itself as a key innovator in a sector focused on improving patient outcomes through remote monitoring and telehealth technologies. With approximately $175 million in cash and cash equivalents expected on its balance sheet, Kestra appears well-capitalized to continue its growth trajectory.
Investors will be looking for more detailed commentary on the company's path to profitability and forward-looking guidance when Kestra reports its full second-quarter fiscal 2026 financial results and hosts its investor conference call in the coming weeks.