Vericel Corporation (NASDAQ: VCEL) saw its stock price plummet 9.05% in pre-market trading on Thursday after the company reported second-quarter 2025 financial results that fell short of analysts' expectations on the revenue front.

The cell therapy company, which focuses on advanced therapies for sports medicine and severe burn care markets, reported total revenue of $63.24 million for Q2, missing the consensus estimate of $64.5 million. This represents a 20% increase from the same period last year but still disappointed investors who were expecting stronger top-line growth.

Despite the revenue miss, Vericel showed improvements in profitability. The company reported a narrower net loss of $0.01 per share, beating estimates of a $0.03 loss. Gross margin increased by more than 400 basis points to 74%, and adjusted EBITDA grew by 112% to $13.4 million, with the adjusted EBITDA margin expanding by over 900 basis points to 21%.

Nick Colangelo, President and CEO of Vericel, remained optimistic about the company's outlook, stating, "Based on the positive trends across the business to start the third quarter, we expect continued strong revenue growth and profitability for the remainder of the year and beyond." The company reaffirmed its full-year guidance for MACI revenue growth in the low 20% range and maintained its profitability targets.

However, the market's negative reaction suggests that investors were more focused on the top-line miss and potentially concerned about the company's ability to meet full-year expectations. The sharp stock decline highlights the high growth expectations built into Vericel's valuation and the market's sensitivity to any signs of slowing momentum.