Financial Analysis

Commitments and Contingencies From time to time, the Company could be a party to various legal proceedings arising in the ordinary course of business. The costs and outcome of litigation, regulatory, investigatory or other proceedings cannot be predicted with certainty, and some lawsuits, claims, actions or proceedings may be disposed of unfavorably to the Company and could have a material adverse effect on the Companys results of operations or financial condition. In addition, intellectual property disputes often have a risk of injunctive relief which, if imposed against the Company, could materially and adversely affect its financial condition or results of operations. If a matter is both probable to result in material liability and the amount of loss can be reasonably estimated, the Company estimates and discloses the possible material loss or range of loss. If such loss is not probable or cannot be reasonably estimated, a liability is not recorded in its condensed consolidated financial statements. As of June 30, 2026, the Company had no material ongoing litigation in which the Company was a party or any material ongoing regulatory or other proceedings and had no knowledge of any investigations by government or regulatory authorities in which the Company is a target that could have a material adverse effect on its current business. …

CommitmentsAndContingenciesDisclosureTextBlock · excerpt; the full note is in the filing

Revolving Credit Agreement On July 29, 2022, the Company, as borrower, entered into a $150.0 million five-year senior secured revolving credit agreement by and among the Company, the other loan parties thereto, the lenders party thereto, and JPMorgan Chase Bank, N.A., as the administrative agent (the Revolving Credit Agreement). The Revolving Credit Agreement includes a $15.0 million sub-facility for the issuance of letters of credit, of which the Company is utilizing approximately $6.0 million. Amounts available under the Revolving Credit Agreement are for the working capital needs and other general corporate purposes of the Company. The Company incurred and capitalized approximately $1.1 million of debt issuance costs related to the Revolving Credit Agreement. Outstanding borrowings under the Revolving Credit Agreement bear interest, with pricing based from time to time at the Companys election at (i) the Secured Overnight Financing Rate (SOFR) plus 0.10% plus a spread ranging from 1.25% to 2.50% as determined by the Companys Total Net Leverage Ratio (as defined in the Revolving Credit Agreement) or (ii) the alternative base rate (as defined in the Revolving Credit Agreement) plus a spread ranging from 0.25% to 1.50% as determined by the Companys Total Net Leverage Ratio. The Revolving Credit Agreement also includes a commitment fee, which ranges from 0.20% to 0.25% as determined by the Companys Total Net Leverage Ratio. The Company is permitted to voluntarily prepay borrow …

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The following table and descriptions below show the products from which the Company generated its revenue for the periods indicated: Three Months Ended June 30, Six Months Ended June 30, Revenue by product (in thousands) 2026 2025 2026 2025 MACI implants, kits, and instruments Implants based on contracted rate sold through a specialty pharmacy (a) $ 49,892 $ 39,430 $ 91,694 $ 71,471 Implants subject to third party reimbursement sold through a specialty pharmacy (b) 5,368 2,688 10,017 5,371 Implants sold direct based on contracted rates (c) 7,493 8,903 14,902 17,325 Implants sold direct subject to third-party reimbursement (d) 1,928 991 3,989 2,615 Biopsy kits and instruments - direct bill 614 642 1,220 1,238 Change in estimates related to prior periods (e) 211 804 82 1,735 Total MACI implants, kits, and instruments 65,506 53,458 121,904 99,755 Epicel Direct bill (hospital) 10,404 8,614 21,289 13,578 NexoBrid 1,547 1,168 2,689 2,505 Total revenue $ 77,457 $ 63,240 $ 145,882 $ 115,838 (a) Represents implants sold through Orsini and AllCare whereby such specialty pharmacies have a direct contract with the underlying insurance provider. The amount of reimbursement is based on contracted rates at the time of sale supported by the pharmacys direct contracts. (b) Represents implants sold through Orsini and AllCare whereby such specialty pharmacy does not have a direct contract with the underlying payer and is subject to third-party reimbursement. The amount of reimbursement is estab …

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Stock-Based Compensation The Vericel Corporation 2022 Omnibus Incentive Plan (2022 Plan) was approved on April 27, 2022, and the Vericel Corporation Amended and Restated 2022 Omnibus Incentive Plan (Amended and Restated 2022 Plan) was approved on April 30, 2025. The Amended and Restated 2022 Plan provides incentives through the grant of stock options, stock appreciation rights, restricted stock awards and restricted stock units. The exercise price of stock options granted under the Amended and Restated 2022 Plan shall not be less than the fair market value of the Companys common stock on the date of grant. The Amended and Restated 2022 Plan amended and restated the 2022 Plan, which replaced the 1992 Stock Option Plan, the 2001 Stock Option Plan, the Amended and Restated 2004 Equity Incentive Plan, the 2009 Second Amended and Restated Omnibus Incentive Plan, the 2017 Omnibus Incentive Plan and the Amended and Restated 2019 Omnibus Incentive Plan (collectively the Prior Plans), and no new grants have been granted under the Prior Plans after approval of the 2022 Plan. However, the expiration or forfeiture of options previously granted under the Prior Plans will increase the number of shares available for issuance under the Amended and Restated 2022 Plan. Stock Compensation Expense Non-cash stock-based compensation expense (service-based stock options, restricted stock units and the employee stock purchase plan) is summarized in the following table: Three Months Ended June 30, Si …

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Fair Value Measurements The Companys fair value measurements are classified and disclosed in one of the following three categories: Level 1: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities; Level 2: Quoted prices in markets that are not active, or inputs which are observable, either directly or indirectly, for substantially the full term of the asset or liability; Level 3: Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e., supported by little or no market activity). Assets and liabilities measured at fair value are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The commercial paper, corporate notes, U.S. government securities, and U.S. government agency bonds are classified as Level 2 as they were valued based upon quoted market prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active and model-based valuation techniques for which all significant inputs are observable in the market or can be corroborated by observable market data for substantially the full term of the assets. The deferred compensation plan liabilities are recorded at the value of the amount owed to the plan participants, with changes in value recognized as compensation expense. The calculation of the de …

FairValueDisclosuresTextBlock · excerpt; the full note is in the filing

Leases The Company leases facilities in Ann Arbor, Michigan, Cambridge, Massachusetts and Burlington, Massachusetts. The Ann Arbor facility includes office space, and the Cambridge facility includes clean rooms, laboratories for MACI and Epicel manufacturing and office space. The Company also leases certain equipment. On January 28, 2022, the Company entered into a lease agreement (as amended, the Burlington Lease) to lease approximately 126,000 square feet of manufacturing, laboratory and office space in Burlington, Massachusetts. The Burlington facility is complete, and the Company is currently utilizing the facilitys office space. In March 2026, the Company received FDA approval to begin MACI commercial manufacturing at the Burlington facility, and a portion of the tenant improvements to the manufacturing suites and related equipment related to MACI manufacturing were placed in service following the FDA approval. The Company is currently transitioning the Burlington facilitys manufacturing component into the primary manufacturing facility for MACI, and has begun manufacturing a portion of MACI implants at that location. The Company intends that the Burlington facilitys manufacturing component will eventually also become the primary manufacturing facility for Epicel, upon FDA qualification for Epicel manufacturing. For each of the three and six months ended June 30, 2026 and 2025, lease expense of less than $0.1 million and $0.2 million , respectively, was recorded related …

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Recent Accounting Pronouncements No new accounting standards were adopted during the six months ended June 30, 2026. The Company considers the applicability and impact of any recent Accounting Standards Updates (ASUs) issued by the Financial Accounting Standards Board (FASB), as noted below: In November 2024, the FASB issued ASU 2024-03, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses , and in January 2025, the FASB issued ASU 2025-01, Clarifying the Effective Date . These updates require new disclosures to disaggregate prescribed natural expenses underlying any income statement caption. This standard is effective for annual periods in fiscal years beginning after December 15, 2026, and interim periods within those annual periods beginning after December 15, 2027, with early adoption permitted, and will be applied on a prospective basis. The Company is currently evaluating the impact of this guidance on the consolidated financial statements and disclosures. In July 2025, the FASB issued ASU No. 2025-05, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets. This update introduces a practical expedient for all entities when estimating expected credit losses on current accounts receivable and current contract assets arising from revenue transactions accounted for under Topic 606. The expedient allows entities to …

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Revenue Revenue Recognition and Product Sales, Net The Company recognizes product revenue from sales of MACI biopsy kits, MACI implants, MACI Arthro instruments, Epicel grafts, and NexoBrid following the five-step model in Accounting Standards Codification (ASC) 606, Revenue Recognition. MACI Biopsy Kits MACI biopsy kits are sold directly to hospitals and ambulatory surgical centers based on contracted rates set forth in an approved contract or sales order. The Company recognizes MACI kit revenue upon delivery of the biopsy kit, at which time the customer (the facility) is in control of the kit. The kit is used by the treating surgeon to provide a sample of cartilage tissue to the Company, which can later be used to manufacture a MACI implant. The ordering of the kit does not obligate the Company to manufacture an implant nor does the receipt of the cartilage tissue by the Company from the customer following biopsy. The customers order of an implant is separate from the process of ordering the biopsy kit. Therefore, the sale of the biopsy kit and any subsequent sale of an implant are distinct contracts and are accounted for separately. MACI Arthro Instruments MACI Arthro instruments are sold directly to hospitals and ambulatory surgical centers based upon rates set forth in price lists. The Company recognizes revenue from the sale of MACI Arthro instruments upon delivery of the instruments, at which time the customer (the facility) is in control of the instruments. MACI Arthr …

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Segment Information The Company operates its business primarily in the U.S. in one reportable segment - the research, product development, manufacture and distribution of cellular therapies and specialty biologics for use in the treatment of specific conditions. The Company is managed on a consolidated basis. The Companys Chief Executive Officer was determined to be the Companys chief operating decision maker (CODM). The CODM reviews and evaluates revenue, expenses and consolidated net income (loss), consistent with what is reported on the consolidated statement of operations, for purposes of assessing performance, making operating decisions, allocating resources, and planning and forecasting for future periods. In addition to the significant expense categories within the Companys consolidated statements of operations, see below for disaggregated amounts that comprise selling, general and administrative expenses: Three Months Ended June 30, Six Months Ended June 30, (In thousands) 2026 2025 2026 2025 Selling and marketing $ 28,455 $ 22,296 $ 55,001 $ 45,099 General and administrative 20,020 19,615 42,700 38,616 Total selling, general and administrative expenses $ 48,475 $ 41,911 $ 97,701 $ 83,715 …

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Subsequent Events In July 2026, the Companys Board of Directors authorized the repurchase of up to $200.0 million of the Companys common stock, with no expiration date. The authorization allows for repurchases to be made in the open market, privately negotiated transactions, or otherwise, in accordance with applicable federal securities laws, including through Rule 10b5-1 trading plans and under Rule 10b-18 of the Securities Exchange Act of 1934, as amended. The specific timing, price and size of purchases will depend on prevailing stock prices, general economic and market conditions, and other considerations. The share repurchase program does not obligate the Company to acquire any specific amount of the Companys common stock and may be suspended or discontinued at any time at the Companys discretion. …

SubsequentEventsTextBlock · excerpt; the full note is in the filing