Financial Data and Key Metrics Changes - First quarter revenue was $5.6 million, a decrease from $9.4 million in the same period in 2024, primarily due to the temporary suspension of sales in France and lower investments in sales and marketing [22][5] - Adjusted net operating loss narrowed by 48% to $5.9 million compared to the prior year, with gross margin expanding to 75% from 73% in the prior year and 45% in the previous quarter [5][22] - Cash and cash equivalents at the end of the first quarter were $20.4 million, providing a runway for achieving FDA approval and profitability [25][12] Business Line Data and Key Metrics Changes - Sales and marketing expenses decreased to $3.6 million from $6.1 million in the same period in 2024, driven by increased operating efficiency [23] - Research and development expenses were reduced to $2.6 million from $5.7 million, primarily due to cost reductions related to the IDISSIPPI trial [23] - General and administrative expenses decreased to $5.2 million from $6.4 million, with adjusted expenses at $3.8 million excluding one-time financing costs [24] Market Data and Key Metrics Changes - The company observed over 40% growth quarter over quarter and year over year in its B2B2C model pilot in clinics in Europe [7] - The company expects revenues to ramp as the year progresses with the expansion of the B2B2C model and enhanced sales team onboarding [8] Company Strategy and Development Direction - The company’s 2025 plan focuses on five pillars: a new commercial plan, gaining FDA approval for the Allurion balloon, achieving profitability for the ex-U.S. business, scaling the AI product platform, and resuming commercialization in France [6][7] - The company aims to combine its program with low doses of GLP-1s to create a new standard of care for obesity, targeting a sustained weight reduction of over 20% while maintaining muscle mass [16][20] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the efficiency of the new B2B2C model and the potential for significant shareholder value as millions of patients could be treated with the Elerion program [26][27] - The company is optimistic about completing its PMA submission to the FDA by June and is encouraged by the FDA's feedback during the pre-PMA meeting [12][39] Other Important Information - The company has resumed treating patients in France and is in the final phases of updating marketing collateral to reactivate placements [15] - The company does not expect any impact on gross margin from tariffs for the remainder of the year, as most components are manufactured in the U.S. [12][13] Q&A Session Summary Question: Trends in regional markets, especially with the new marketing strategy - Management noted that mature markets for GLP-1s are creating tailwinds, with patients seeking alternatives and the expansion of the direct sales force expected to drive revenue growth [29][30] Question: Timeline and patient enrollment for the GLP-1 trial - Enrollment is expected to begin in the latter half of this year, with a one-year follow-up and a target of at least 75 subjects across multiple sites in Europe [31][32] Question: Design of the trial arms - The trial will focus on validating previous retrospective work with a single arm prospective trial design, leveraging historical data for comparison [33][34] Question: Future gross margin expectations - Management expects margins to remain in the same range as the first quarter, with potential increases as revenues ramp up [35][36] Question: Details on the pre-PMA meeting and next steps - The FDA was receptive to alternative analyses for the control group data, which could strengthen the overall application [39][40] Question: Current adoption of the Elerion program and GLP-1s - There is organic adoption of the combination therapy in the field, with physicians integrating GLP-1s with the Allurion balloon [45][46] Question: Revenue performance cadence for 2025 - Management anticipates steady revenue increases driven by the onboarding of new sales team members and recovery in France [49][50] Question: Expected costs for the prospective study - The prospective trial is not expected to have a material impact on the budget, as existing patient flow and lower costs overseas will be leveraged [51][52] Question: Regulatory strategy regarding expanded labeling - The focus is on the commercial implications of the study, with potential long-term benefits for discussions with regulators and payers [53][54] Question: Procedure growth trends - Procedure volume is stable, with some growth in certain territories, and management expects a recovery in France in the second half of the year [57][58]

[Allurion Q1 2025 Financial Results and Business Update](index=1&type=section&id=Allurion%20Reports%20First%20Quarter%202025%20Financial%20Results%20and%20Provides%20Business%20Update) [Recent Company Highlights and Outlook](index=1&type=section&id=Recent%20Company%20Highlights%20and%20Outlook) The company highlights improved operational efficiency, progress on its FDA submission, and a strategic focus on combining its program with GLP-1 medications - The company is focusing on improving efficiency to achieve profitability, highlighted by reduced expenses, expanded gross margins, and a smaller operating loss[3](index=3&type=chunk) - Allurion is on track to complete its PMA submission to the FDA by the end of June after a successful pre-PMA meeting discussing the AUDACITY trial's topline results[3](index=3&type=chunk)[7](index=7&type=chunk) - A key strategy is positioning the Allurion Program as complementary to GLP-1 medications, aiming to address their shortcomings by **maintaining muscle mass** and **increasing adherence**[4](index=4&type=chunk)[7](index=7&type=chunk) - The company maintains its 2025 revenue guidance of approximately **$30 million**, with a projected **50% reduction in operating expenses** compared to 2024[7](index=7&type=chunk) [First Quarter Financial Results](index=1&type=section&id=First%20Quarter%20Financial%20Results) The company reports lower Q1 revenue but improved operational efficiency with higher gross margins, reduced expenses, and a smaller net operating loss Q1 2025 Key Financial Metrics (vs. Q1 2024) | Financial Metric | Q1 2025 | Q1 2024 | Change | | :--- | :--- | :--- | :--- | | Total Revenue | $5.6 million | $9.4 million | -40.5% | | Gross Profit | $4.2 million | $6.9 million | -39.1% | | Gross Margin | 75% | 73% | +2 p.p. | | Total Operating Expenses | $11.4 million | $18.3 million | -37.7% | | Net Operating Loss | $7.3 million | $11.4 million | -36.0% | - Operating expenses saw significant year-over-year reductions across all categories due to restructuring initiatives: Sales and Marketing decreased to **$3.6M** from $6.1M, R&D to **$2.6M** from $5.7M, and G&A to **$5.2M** from $6.4M[8](index=8&type=chunk)[9](index=9&type=chunk)[10](index=10&type=chunk) - Adjusted operating expenses for Q1 2025 were **$10.1 million**, a **45% decrease** from the prior year, and the adjusted net operating loss was **$5.9 million**, a **48% reduction**[7](index=7&type=chunk)[11](index=11&type=chunk) - The company's cash balance was **$20.4 million** as of March 31, 2025[12](index=12&type=chunk) [Condensed Consolidated Financial Statements](index=4&type=section&id=Condensed%20Consolidated%20Financial%20Statements) [Condensed Consolidated Statements of Operations](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) The company reported a Q1 operating loss of $7.3 million but achieved a net income of $7.4 million due to significant non-operating income Condensed Consolidated Statements of Operations (unaudited, in thousands, except per share amounts) | | Three Months Ended March 31, | | :--- | :--- | :--- | | | **2025** | **2024** | | **Revenue** | **$5,580** | **$9,386** | | Cost of revenue | 1,419 | 2,520 | | **Gross profit** | **4,161** | **6,866** | | Total operating expenses | 11,443 | 18,256 | | **Loss from operations** | **(7,282)** | **(11,390)** | | Total other income (expense) | 14,756 | 17,052 | | Income before income taxes | 7,474 | 5,662 | | **Net income** | **$7,379** | **$5,586** | | **Net income per share (Basic)** | **$1.54** | **$2.92** | | **Net income per share (Diluted)** | **$0.20** | **$2.78** | [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) The balance sheet shows total assets of $38.4 million, total liabilities of $108.2 million, and an increased cash position of $20.4 million Condensed Consolidated Balance Sheets (unaudited, in thousands) | | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $20,408 | $15,379 | | Total current assets | $33,166 | $27,156 | | **Total assets** | **$38,414** | **$32,813** | | **Liabilities and Stockholders' Deficit** | | | | Total current liabilities | $15,897 | $18,863 | | **Total liabilities** | **$108,204** | **$110,791** | | **Total stockholders' deficit** | **($69,790)** | **($77,978)** | | **Total liabilities and stockholders' deficit** | **$38,414** | **$32,813** | [Non-GAAP Financial Measures and Reconciliations](index=3&type=section&id=Non-GAAP%20Financial%20Measures) Non-GAAP measures show an adjusted operating loss of $5.9 million and a 45% decrease in adjusted operating expenses year-over-year - Non-GAAP measures are used to exclude one-time items, allowing management and investors to better compare the underlying financial performance of the business period-over-period[17](index=17&type=chunk) Non-GAAP Net Operating Loss Reconciliation (Q1 2025, in thousands) | | GAAP Results | Adjustments | Adjusted Results | | :--- | :--- | :--- | :--- | | Loss from operations | $(7,282) | $(1,390) | $(5,892) | Change in Operating Expenses and Net Operating Loss (Adjusted, Q1 2025 vs Q1 2024) | Metric | As Reported Change | Adjusted Change | | :--- | :--- | :--- | | Change in Operating Expenses | (37)% | (45)% | | Change in Net Operating Loss | (36)% | (48)% | [Company and Investor Information](index=2&type=section&id=Company%20and%20Investor%20Information) [About Allurion](index=2&type=section&id=About%20Allurion) The company provides a weight loss platform centered on the first swallowable, procedure-less gastric balloon and a supporting Virtual Care Suite - Allurion's core product is a weight loss platform featuring the Allurion Gastric Balloon, the first and only swallowable, procedure-less intragastric balloon for weight loss[14](index=14&type=chunk) - The platform includes the Allurion Virtual Care Suite with a mobile app for consumers and the Allurion Insights with Coach Iris AI for healthcare providers, which can be used with or without the balloon[14](index=14&type=chunk) [Conference Call and Webcast Details](index=2&type=section&id=Conference%20Call%20and%20Webcast%20Details) Management will host a conference call and webcast on May 14, 2025, to discuss the financial results and provide a business update - A conference call is scheduled for **May 14, 2025, at 8:30 AM ET** to discuss financial results[13](index=13&type=chunk)

Industry Overview - The Zacks Medical - Products industry is facing rising uncertainty due to the reinstatement of tariffs on medical devices, with rates ranging from 10% to 145% on Chinese-made parts, which could disrupt U.S. MedTech economics [1] - U.S. PPE manufacturers are expected to benefit from these tariffs, potentially reducing competition from heavily subsidized Chinese products, although some suppliers may shift assembly to Mexico and Canada instead of fully onshoring production [2] - U.S. hospitals are likely to see budget increases due to improving demand and lower interest rates, which may boost medical product sales despite ongoing challenges such as declining demand for COVID-19-related products and weak performance in the Chinese market [3] Key Trends - The industry is witnessing significant advancements in AI, medical mechatronics, and robotics, with a growing adoption of minimally invasive robot-assisted surgeries and IT in patient care [7] - 3D printing technology is transforming the medical devices industry, enabling the production of complex biological structures such as stem cells and prosthetic organs [8] - The COVID-19 pandemic has led to increased global demand for diagnostic testing kits, shifting the IVD product pipeline towards rapid, point-of-care devices [9] Emerging Markets - Emerging economies are showing solid demand for medical products due to rising medical awareness, economic prosperity, and an aging population, making these markets attractive for global medical device players [10][11] Industry Performance - The Zacks Medical Products industry has collectively risen by 6.3% over the past year, outperforming the Zacks Medical sector, which declined by 10%, but underperforming the S&P 500, which increased by 8% [14] - The industry is currently trading at a forward 12-month price-to-earnings (P/E) ratio of 20.3X, slightly above the S&P 500's 19.9X and the sector's 19.4X [16] Company Highlights - Insulet (PODD) is focused on diabetes management with its Omnipod Insulin Management System and is expanding its global presence, with a projected revenue growth of 18.1% for 2025 [19][22] - MacroGenics (MGNX) reported a significant revenue increase to $150 million in 2024, driven by collaborations and product sales, while also advancing its oncology pipeline [26][27] - Cellectar Biosciences (CLRB) is developing targeted cancer therapies with strong clinical data supporting its lead asset, although it faces challenges such as a delay in NDA submission [31][33] - Allurion Technologies (ALUR) is dedicated to obesity management with its innovative weight loss platform, but it has faced revenue declines and operational challenges [35][37]

Stock Performance and Market Conditions - The company's share price has experienced significant volatility, ranging from $7.00 to $92.50 from January 1, 2024, to December 31, 2024, with daily trading volumes fluctuating between approximately 156 and 2,539,556 shares[416]. - As of August 29, 2024, the company's average market capitalization was less than $50 million, resulting in non-compliance with the NYSE's Minimum Market Capitalization Standard[443]. - The company received a notice on August 12, 2024, indicating that its common stock had closed below the minimum average closing bid price of $1.00 for 30 consecutive business days[444]. - A reverse stock split of 1-for-25 was executed on January 3, 2025, to raise the trading price of the common stock to meet the Minimum Bid Price Standard, which was regained on February 3, 2025[445]. - The company is subject to quarterly monitoring by the NYSE for compliance with its business plan to regain compliance with listing standards[443]. Financial Strategy and Capital Raising - The company intends to retain future earnings to finance business development and does not plan to pay cash dividends in the foreseeable future[417]. - The company has entered into a Purchase Agreement with Chardan Capital Markets for a committed equity facility of up to $100.0 million, with $1.0 million raised from the sale of 75,618 shares as of March 21, 2025[420]. - The company plans to raise up to $100 million through the ChEF Purchase Agreement with Chardan, subject to terms and conditions[454]. - In April 2024, the company issued and sold $48 million of Notes, with a potential conversion to 19,168 shares of common stock, representing 1% of the outstanding shares as of April 14, 2024[459]. - In July 2024, the company completed a private placement of 2,260,159 shares of Series A Preferred Stock, convertible to 90,407 shares of common stock, at a purchase price of $30.00 per share[460]. - In January 2025, the company sold 841,751 shares of common stock for approximately $2.5 million, at a price of $2.97 per share[461]. - In February 2025, the company issued 900,000 shares of common stock at an offering price of $5.23 per share, along with accompanying warrants[462]. - The company has the right to control the timing and amount of future sales of shares to Chardan, which may lead to substantial dilution for existing shareholders[457]. Compliance and Regulatory Challenges - The company is subject to increased legal, accounting, and financial compliance costs as a public entity, which may strain resources and divert management's attention[423]. - The company anticipates that ongoing changes in laws and regulations will increase compliance costs and complexity, potentially impacting business operations[424]. - The company is classified as an "emerging growth company" and a "smaller reporting company," allowing it to take advantage of certain exemptions from disclosure requirements, potentially affecting comparability with other public companies[430][432]. - The company may face substantial costs and management diversion due to potential securities class action litigation following periods of stock price volatility[433]. - The company is required to seek stockholder approval for the issuance of shares underlying certain warrants, which will be immediately exercisable upon receipt of such approval[465]. Internal Controls and Financial Reporting - The company identified material weaknesses in its internal control over financial reporting, including insufficient segregation of duties and lack of experienced staff, which may lead to misstatements in financial statements[435]. - If the company fails to maintain effective internal controls, it risks losing investor confidence, which could negatively impact its stock price[438]. - The company is currently working to remediate identified material weaknesses and has upgraded its enterprise resource planning system to SAP in August 2022[436]. Shareholder and Governance Issues - The company has established nomination rights for certain parties regarding its board of directors, which may lead to conflicts of interest[427]. - The company’s stockholders must provide advance notice to nominate individuals for election to the board, which may deter potential acquirers[456]. - The provisions in the company's Bylaws may discourage lawsuits against directors and officers, potentially increasing costs for stockholders[475]. - The exclusive forum provisions in the Bylaws may limit stockholders' ability to bring claims in preferred jurisdictions, which could lead to additional costs[475]. - The enforceability of the choice of forum provisions in the Bylaws has been challenged in legal proceedings, posing a risk to the company's operations and financial condition[475]. Currency and Interest Rate Risks - The company is exposed to foreign currency risks, particularly in Europe, the Middle East, and the Asia-Pacific region, which could significantly impact financial results[604]. - A 10% adverse change in foreign exchange rates could have impacted revenues by approximately 6% and expenses by 3%, affecting net loss by 2% for the year ended December 31, 2024[605]. - For the year ended December 31, 2023, a similar 10% adverse change in foreign exchange rates would have impacted revenues by approximately 5% and expenses by 2%, with a net loss impact of less than 1%[605]. - The company has not engaged in any foreign currency hedging activities to date but will reassess its approach as international operations grow[605]. - A hypothetical 10% change in interest rates would not have a material impact on the value of the company's cash, cash equivalents, net loss, or cash flows[601]. - The company had no variable rate debt outstanding as of December 31, 2024[602]. Financial Position - As of December 31, 2024, the company had cash and cash equivalents totaling $15.4 million, primarily invested in money market funds[601].

Financial Data and Key Metrics Changes - Fourth quarter revenue was $5.6 million, down from $8.2 million in the same period in 2023, primarily due to the temporary suspension of sales in France and macroeconomic headwinds [28] - Full year revenue for 2024 was $32.1 million, in line with pre-announcement guidance [17] - Gross profit for Q4 2024 was $2.5 million, or 45% of revenue, compared to $6.4 million, or 78% of revenue in Q4 2023 [29] - Operating expenses in Q4 decreased by 39% year-over-year, driven by restructuring and increased operational efficiency [18][31] - Loss from operations for Q4 was $17.1 million, down from $25.7 million in the same period in 2023 [32] Business Line Data and Key Metrics Changes - Procedure volumes grew by 4% in 2024, higher than previously issued guidance, attributed to patients entering the funnel after discontinuing GLP-1 medications [18] - Sales and marketing expenses for Q4 2024 were $7.9 million, down from $10.7 million in Q4 2023, including $3.1 million of restructuring costs [30] - Research and development expenses for Q4 2024 were $4.1 million, down from $6.1 million in Q4 2023 [31] Market Data and Key Metrics Changes - The U.S. market represents a significant opportunity due to high obesity rates and widespread use of GLP-1s, with over 40% of adults in the U.S. classified as obese [24] - The company expects to see the highest procedural volume increases in regions where GLP-1s are most mature, indicating a trend of patients returning for alternative treatments after discontinuing GLP-1s [46][73] Company Strategy and Development Direction - The company plans to focus on a new commercial strategy emphasizing B2B2C sales models and deeper penetration in key geographies [19] - Aiming for FDA approval for the Allurion Balloon and preparing for a U.S. launch [19] - The company intends to achieve profitability for its ex-U.S. business by the end of 2025 [19] - Plans to scale its AI product platform and resume commercialization in France [19][26] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the potential of the combination therapy of the Allurion Balloon with low-dose GLP-1s to redefine obesity care [16][35] - The company anticipates a revenue of approximately $30 million in 2025, with a steady build quarter-over-quarter driven by new commercial strategies and an expanded sales team [24][82] - Management expects operating expenses to decline by approximately 50% in 2025 compared to 2024 due to restructuring [24] Other Important Information - The company raised additional capital in Q1 2025, providing a cash runway into 2026 [26] - The French regulatory authority, ANSM, has cleared the company to resume sales in France, which is expected to contribute significantly in 2026 [26] Q&A Session Summary Question: Follow-up on results using balloons with low-dose GLP-1 - Management explained that the positive results were due to the lower dose of GLP-1 protecting lean body mass while achieving weight loss through synergistic mechanisms [40][41] Question: Key assumptions for 2025 guidance of $30 million - Management highlighted that the guidance is based on maintaining procedure volumes and re-engaging with clinics in France, expecting a gradual contribution from that market [44][46] Question: Progress on U.S. approval timeline - The next milestone is the completion of the PMA submission, anticipated in the first half of the year, with ongoing dialogue with the FDA [48][49] Question: Trends in procedure volume growth - Management confirmed that momentum continues in markets where GLP-1s are mature, with significant growth observed in pilot accounts [54][55] Question: B2B2C rollout status - The B2B2C strategy has been piloted in key markets and will continue to roll out as validation is obtained [68][69] Question: Metrics on regions with traction - Management noted promising results in the Middle East and Latin America, where GLP-1s have been widely used [71][73] Question: Operating expense reductions - The changes in operating expenses were implemented at the end of 2024, with no further reductions expected throughout 2025 [75]

Financial Data and Key Metrics Changes - Fourth quarter revenue was $5.6 million, down from $8.2 million in the same period in 2023, primarily due to the temporary suspension of sales in France and macroeconomic headwinds [28] - Full year revenue for 2024 was $32.1 million, in line with pre-announcement expectations [17] - Gross profit for Q4 2024 was $2.5 million, or 45% of revenue, compared to $6.4 million, or 78% of revenue in Q4 2023 [29] - Operating expenses in Q4 decreased by 39% year-over-year, driven by restructuring and reorganization efforts [18] Business Line Data and Key Metrics Changes - Procedure volumes grew by 4% in 2024, higher than previously issued guidance, attributed to patients entering the funnel after trying and stopping GLP-1 medications [18] - Sales and marketing expenses for Q4 2024 were $7.9 million, down from $10.7 million in Q4 2023, including $3.1 million of restructuring costs [30] - Research and development expenses for Q4 2024 were $4.1 million, down from $6.1 million in Q4 2023, also including restructuring costs [31] Market Data and Key Metrics Changes - The U.S. market represents a significant opportunity due to high obesity rates and widespread use of GLP-1s, with over 40% of adults in the U.S. classified as obese [24] - The company expects to see the highest procedural volume increases in regions where GLP-1s are most mature, indicating a trend of patients returning for alternative treatments after discontinuing GLP-1s [46] Company Strategy and Development Direction - The company’s strategy for 2025 is built around five pillars, including a new commercial plan focused on key geographies, gaining FDA approval for the Allurion Balloon, achieving profitability for the ex-U.S. business, scaling the AI product platform, and resuming commercialization in France [19] - The company plans to launch additional prospective studies to confirm initial findings on the combination of the Allurion Balloon with low-dose GLP-1s, aiming to define a new paradigm in obesity care [16] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the momentum building in Q1 2025, with procedure volumes on track to increase by over 30% compared to Q4 2024 [22] - The company anticipates operating expenses to decline by approximately 50% in 2025 compared to 2024, while still investing in key growth areas [24] - Management highlighted the importance of the clinical data generated on the combination therapy, which could redefine obesity management standards [35] Other Important Information - The company raised additional capital through financings, providing a cash runway into 2026 and through expected FDA approval [26] - The company resumed sales in France after regulatory review, which is expected to contribute to future revenue growth [26] Q&A Session Summary Question: Follow-up on results using balloons with low-dose GLP-1 - Management explained that the positive results were driven by using lower doses of GLP-1, which protects lean body mass while still achieving weight loss through synergistic mechanisms [41][42] Question: Key assumptions for 2025 guidance of $30 million - Management indicated confidence in preserving procedure volumes and highlighted the importance of regions where GLP-1s are mature for future growth [44][46] Question: Progress on U.S. approval timeline - The next milestone is completing the PMA submission in the first half of the year, with updates to follow [49] Question: Trends in procedure volume growth - Management confirmed that momentum is continuing in markets where GLP-1s are mature, with significant growth observed in pilot accounts [55] Question: Cadence of revenue to reach $30 million - Management expects a steady build of revenue quarter-over-quarter, driven by the new commercial plan and an increase in the sales team [80][82] Question: Timing for meaningful contribution from France - Management does not expect a material contribution from France until late 2025 or early 2026 due to the time required to reengage with accounts [85] Question: Gross margin recovery expectations - Management anticipates a quicker recovery in gross margin than revenue build, starting in Q1 2025 [87] Question: Impact of launching the smaller balloon on margin - Management does not expect significant impact on gross margin from the next-gen balloon in 2025, but potential for expansion in 2026 [90]

Company Performance - Allurion Technologies, Inc. reported a quarterly loss of $7 per share, which was worse than the Zacks Consensus Estimate of a loss of $5, and an improvement from a loss of $15.75 per share a year ago, indicating a significant year-over-year reduction in losses [1] - The company posted revenues of $5.59 million for the quarter ended December 2024, missing the Zacks Consensus Estimate by 0.16%, and down from $8.24 million in the same quarter last year [2] - Over the last four quarters, Allurion has surpassed consensus EPS estimates only once, indicating challenges in meeting market expectations [2] Stock Performance - Allurion Technologies, Inc. shares have declined approximately 71.1% since the beginning of the year, contrasting sharply with the S&P 500's decline of only 1.8% [3] - The current consensus EPS estimate for the upcoming quarter is -$22.91 on revenues of $5.6 million, and for the current fiscal year, it is -$18.53 on revenues of $31.63 million [7] Industry Outlook - The Medical - Products industry, to which Allurion belongs, is currently ranked in the bottom 31% of over 250 Zacks industries, suggesting a challenging environment for companies in this sector [8] - The performance of Allurion's stock may be influenced by the overall outlook for the industry, as historical data shows that the top 50% of Zacks-ranked industries outperform the bottom 50% by more than 2 to 1 [8]

Investor Presentation March 2025 Disclaimer This presentation, the information contained herein and the materials accompanying it (together, this "presentation") contains confidential, material and non-public information regarding Allurion Technologies, Inc. (the "Company" or "us") and is provided to the recipients ("you") of this presentation on the condition that you agree to hold it in strict confidence and not reproduce, disclose, forward or distribute it in whole or in part to others at any time withou ...

Revenue and Financial Performance - Revenue for the nine months ended September 30, 2024, was $26.519 million, compared to $45.232 million in the same period in 2023, reflecting a significant decrease[9] - Gross profit for the nine months ended September 30, 2024, was $18.970 million, compared to $35.067 million in the same period in 2023[9] - Total revenues for the three months ended September 30, 2024 were $5.367 million, a significant decrease from $18.2 million in the same period in 2023[75] - Revenue from Turkey dropped to $966,000 in Q3 2024 from $3.517 million in Q3 2023, representing a 72.5% decline[75] - All Other Countries contributed $3.347 million (62.4% of total revenue) in Q3 2024, down from $11.122 million (61.1% of total) in Q3 2023[75] - For the nine months ended September 30, 2024, total revenues were $26.519 million compared to $45.232 million in the same period in 2023, a 41.4% decrease[78] - No revenue was generated in the United States for both the three and nine months ended September 30, 2024[78] - The Company recognized a reduction to revenues of $1.2 million due to customer returns of the Allurion Balloon following its suspension in France[190] Net Loss and Profitability - Net loss for the nine months ended September 30, 2024, was $5.580 million, compared to a net loss of $61.427 million in the same period in 2023, showing a substantial improvement[9] - Net loss per share for the nine months ended September 30, 2024, was $2.62, compared to $50.01 in the same period in 2023[9] - Net loss for the nine months ended September 30, 2024 was $5.58 million, compared to a net loss of $61.43 million for the same period in 2023[17] - The company incurred losses from operations of $33.1 million and $53.3 million for the nine months ended September 30, 2024 and 2023, respectively[37] - Basic and diluted net loss per share for Q3 2024 was $(3.51), compared to $(13.56) in Q3 2023, showing a significant improvement[168] - Net loss attributable to common shareholders for Q3 2024 was $(9.004 million), compared to $(21.885 million) in Q3 2023[168] Cash Flow and Liquidity - Cash and cash equivalents decreased to $28.654 million as of September 30, 2024, from $38.037 million as of December 31, 2023[6] - Net cash used in operating activities for the nine months ended September 30, 2024 was $29.03 million, compared to $43.11 million for the same period in 2023[17] - Net cash provided by financing activities for the nine months ended September 30, 2024 was $20.26 million, compared to $116.39 million for the same period in 2023[17] - Cash and cash equivalents and restricted cash at the end of September 30, 2024 was $29.05 million, compared to $80.10 million at the end of September 30, 2023[17] - Cash outflows from operating activities were $29.0 million and $43.1 million for the nine months ended September 30, 2024 and 2023, respectively[37] - The company repaid $48 million for the Fortress Term Loan on April 16, 2024, including $43.1 million principal repayment and $4.6 million in fees[96] - The company recorded an $8.7 million loss on extinguishment of debt related to the Fortress Term Loan repayment in the nine months ended September 30, 2024[96] Assets and Liabilities - Accounts receivable decreased to $9.935 million as of September 30, 2024, from $18.194 million as of December 31, 2023[6] - Inventory decreased to $4.568 million as of September 30, 2024, from $6.171 million as of December 31, 2023[6] - Total current assets decreased to $44.829 million as of September 30, 2024, from $64.816 million as of December 31, 2023[6] - Total liabilities decreased to $114.510 million as of September 30, 2024, from $142.199 million as of December 31, 2023[6] - Inventory decreased to $4.568 million as of September 30, 2024 from $6.171 million at December 31, 2023, with finished goods inventory down 19.8%[79] - Property and equipment net value decreased to $3.08 million as of September 30, 2024 from $3.381 million at December 31, 2023[81] - Total accrued expenses and other current liabilities decreased to $7.973 million as of September 30, 2024 from $15.495 million at December 31, 2023[82] - Long-lived assets in the United States decreased from $5,381 thousand in 2023 to $4,690 thousand in 2024, while in France, they decreased from $1,010 thousand to $673 thousand[194] Stock and Equity Transactions - The company issued 2,260,159 shares of preferred stock in connection with a private placement, net of issuance costs, raising $979,000[15] - The company issued 653,351 shares of common stock in connection with a public offering, net of issuance costs, raising $5.07 million[15] - The company's total stockholders' deficit decreased from $70.49 million as of January 1, 2024 to $64.79 million as of September 30, 2024[15] - The company's accumulated deficit increased from $212.80 million as of January 1, 2024 to $218.38 million as of September 30, 2024[15] - The company's other comprehensive income increased from a loss of $700,000 as of January 1, 2024 to a gain of $2.89 million as of September 30, 2024[15] - The company completed a 1-for-25 reverse stock split effective January 3, 2025[31][32] - Following the reverse stock split, each public warrant is exercisable for 0.056818 shares of common stock at an exercise price of $202.50 per share[33] - Legacy Allurion common stock holders received Allurion Common Stock at an exchange ratio of approximately 0.9780[52] - The total number of Allurion Common Stock shares outstanding after the Business Combination and Reverse Stock Split was 1,892,058[56] - PIPE Investors purchased 215,468 shares of Allurion Common Stock at $176.00 per share, totaling $37.9 million[58] - Legacy Allurion convertible notes totaling $21.8 million were converted into 132,049 shares of Allurion Common Stock[72] - The company assumed 528,277 public warrants to purchase 750,394 shares of Allurion Common Stock at $202.50 per share, valued at $13.8 million[73] - Earn-Out liabilities for potential issuance of additional shares were initially valued at $53.0 million[74] - The company issued 2,260,159 shares of Series A Preferred Stock and 90,407 Private Placement Warrants, raising net proceeds of $2.5 million after deducting $0.2 million in offering costs[147] - The company issued 576,261 shares of Common Stock and 662,701 Public Offering Warrants, raising net proceeds of $15.2 million after deducting $1.0 million in underwriting discounts and $1.0 million in offering costs[156] - As of September 30, 2024, the company had 2,574,783 shares of Common Stock outstanding, up from 1,907,529 shares as of December 31, 2023[155] - The company has 769,257 warrants outstanding to purchase Common Stock, with a weighted average exercise price of $30.00[162] - The company entered into a Chardan Equity Facility, allowing it to sell up to $100 million in Common Stock, with 5,730 shares sold for $0.4 million as of September 30, 2024[166][167] - The company has 528,269 outstanding Public Warrants exercisable for 750,383 shares of Common Stock, with no redemptions as of September 30, 2024[165] - The company has reserved 2,294,777 shares of Common Stock for potential conversion or exercise of its securities as of September 30, 2024[159] Debt and Financing - The company borrowed $60.0 million under the Fortress Term Loan, used to repay the 2021 Term Loan[63] - Interest expense for the three months ended September 30, 2023 related to the Fortress Term Loan was $1.7 million, with an average interest rate of 14.94%[97] - Interest expense for the nine months ended September 30, 2024 related to the Fortress Term Loan was $2.3 million, with no interest expense for the three months ended September 30, 2024 due to loan extinguishment[98] - The 2021 Convertible Notes were converted into 5,345 shares of Allurion Common Stock with a corresponding recognition of APIC of $2.2 million on August 1, 2023[101] - The 2022 Convertible Notes were converted into 3,329 shares of Allurion Common Stock with a corresponding recognition of APIC of $1.2 million on August 1, 2023[104] - The 2023 Convertible Notes were issued for gross proceeds of $28.7 million with a stated interest rate of 7.0% per annum[105] - Interest expense for the nine months ended September 30, 2023 related to the 2023 Convertible Notes was $0.5 million[107] - The RTW Convertible Notes were issued for $48.0 million with an annual interest rate of 6% and a maturity date of April 16, 2031[115] - The fair value of the RTW Convertible Notes at issuance was $49.1 million, with a corresponding $1.1 million loss recognized in Other income, net[116] - RTW paid Allurion an aggregate of $40.0 million Investment Amount, with revenue interest payments up to 6.0% of annual net sales prior to December 31, 2026, and up to 10.0% thereafter until December 31, 2030[120] - If RTW has not received at least 100% of the Investment Amount by December 31, 2027, the company must make a cash payment to catch up to 100%, and if not 240% by December 31, 2030, a payment to reach 240%, with a Hard Cap of 260%[121] - The company has made $3.6 million in royalty payments to RTW as of September 30, 2024[122] - The RIFA Amendment increased the rate of revenue interest payments to 12% for net sales ≤ $100 million prior to December 31, 2026, and after January 1, 2027[123] - The fair value of the Revenue Interest Financing and PIPE Conversion Option were $38.5 million and $9.9 million, respectively, as of September 30, 2024[126] - For the three months ended September 30, 2024, the company recorded a $6.7 million loss and a $5.8 million gain on the Revenue Interest Financing[127] - The fair value of RTW Convertible Notes was $36.09 million as of September 30, 2024, classified under Level 3[128] Stock-Based Compensation and Employee Benefits - Stock-based compensation expense for the nine months ended September 30, 2024 was $2.22 million, compared to $6.35 million for the same period in 2023[17] - Total stock-based compensation expense for Q3 2024 was $860,000, compared to $5.539 million in Q3 2023[172] - As of September 30, 2024, 284,332 stock options were outstanding with a weighted average exercise price of $57.00 per option[173] - The company has $5.6 million of unrecognized compensation costs related to unvested stock options, expected to be recognized over 3.0 years[173] - Total stock compensation expense related to RSUs for Q3 2024 was $0.2 million, with $1.0 million of unrecognized compensation costs remaining[178] - The company's 2023 ESPP reserves 89,045 shares of Common Stock for issuance, with no shares issued as of September 30, 2024[180] - The company's 401(k) retirement plan matching contributions were less than $0.1 million for both Q3 2024 and Q3 2023[181] Leases and Real Estate - The company has 51,000 square feet of leased office, manufacturing, and laboratory space across six leases, expiring between March 2025 and March 2028[184] - Operating lease costs for Q3 2024 were $259,000, compared to $285,000 in Q3 2023[186] - Future commitments under non-cancelable operating lease agreements total $2,810 thousand, with a present value adjustment of $354 thousand, resulting in total lease liabilities of $2,456 thousand[187] - The weighted-average remaining lease term decreased from 3.7 years in 2023 to 2.9 years in 2024, while the weighted-average discount rate remained at 9.9%[187] Fair Value Measurements - The fair value of Public Warrants was $531,000 as of September 30, 2024, based on a Level 1 input[128] - The fair value of Legacy Allurion Common Stock Warrant Liabilities was $71,000 as of September 30, 2024, classified under Level 3[128] - The fair value of the PIPE Conversion Option was $9.85 million as of September 30, 2024, classified under Level 3[128] - The fair value of Preferred Stock Warrants decreased from $2,679 thousand to $715 thousand from June 30, 2023, to September 30, 2023, a decline of 73.3%[132] - The fair value of Common Stock Warrants decreased from $1,351 thousand to $207 thousand from June 30, 2023, to September 30, 2023, a decline of 84.7%[132] - The fair value of Public Offering Warrants was $5,970 thousand as of September 30, 2024, following a fair value issuance of $13,157 thousand and a change in fair value of $(7,187) thousand[132] - The fair value of Private Placement Warrants was $810 thousand as of September 30, 2024, following a fair value issuance of $1,670 thousand and a change in fair value of $(860) thousand[132] - The fair value of the Revenue Interest Financing was remeasured as of September 30, 2024, using a discount rate of 23.5%[136] - The fair value of the PIPE Conversion Option was measured using a stock price of $15.25 and an expected volatility of 130.0% as of September 30, 2024[137] - The fair value of the Earn-Out Liability was measured using a stock price of $15.25 and an expected volatility of 105.0% as of September 30, 2024[138] - The fair value of the RTW Convertible Notes was remeasured as of September 30, 2024, using a stock price of $15.25 and an expected volatility of 90.0%[142] Taxes - The company recorded income tax expense of $0.1 million for the three months ended September 30, 2024, representing an effective tax rate of (0.8%)[144] - The company maintained a full valuation allowance against its net deferred tax assets as of September 30, 2024, due to significant operating losses[145] Customer Concentration - Customer A accounted for 18% and 19% of total revenue for the three months ended September 30, 2024 and 2023, respectively[46] - Customer A accounted for 15% and 16% of accounts receivable as of September 30, 2024 and December 31, 2023, respectively[46] - Customer B accounted for 11% of total revenue for the three months ended September 30, 2023[46] Going Concern and Future Outlook - The company has concluded there is substantial doubt about its ability to continue as a going concern for one year from the date of the financial statements[38] - The company expects to continue generating significant operating losses for the foreseeable future[37] - As of September 30, 2024, the company had an accumulated deficit of $218.4 million[37] Other Transactions and Agreements - The company incurred $22.7 million in transaction costs, including $15.2 million recorded to additional paid-in capital and $5.0 million as general and administrative expenses[54] - Net proceeds from the Business Combination were $61.652 million after deducting transaction costs and other liabilities[56] - RTW paid $40.0 million for revenue interest payments, with rates up to 6.0% of annual net sales before December 31, 2026, and up to 10.0% thereafter[59] - The Company recorded gains of $1.8 million and $3.1 million for the three months ended September 30, 2024 through the condensed consolidated statements of operations and other comprehensive income (loss), respectively[117] - The Company is in compliance with the financial maintenance covenants in the Amended Note Purchase Agreement as of September 30, 2024[118] - The Company entered into a consulting agreement with KKG Enterprises and Remus Group Management, paying $0.2 million and $0.3 million respectively, which were terminated in June 2023[196] - Allurion sold $13 million of 2023 Convertible Notes to Hunter Ventures Limited, a related party

Core Viewpoint - Allurion Technologies, Inc. (ALUR) has shown a significant price increase of 58.1% over the past four weeks, with a mean price target of $28.67 indicating a potential upside of 374.7% from the current price of $6.04 [1] Price Targets and Analyst Estimates - The mean estimate includes three short-term price targets with a standard deviation of $18.58, where the lowest estimate of $16 suggests a 164.9% increase, and the highest estimate predicts a surge of 727.8% to $50 [2] - A low standard deviation among price targets indicates strong agreement among analysts regarding the stock's price movement, which can serve as a starting point for further research [7] Earnings Estimates and Analyst Optimism - Analysts have shown growing optimism regarding ALUR's earnings prospects, as evidenced by a 17.1% increase in the Zacks Consensus Estimate for the current year, with three estimates moving higher and no negative revisions [10] - ALUR holds a Zacks Rank 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks based on earnings estimates, suggesting a strong potential upside in the near term [11] Caution on Price Targets - While price targets are often sought after by investors, they can mislead more than guide, as empirical research indicates that they rarely reflect actual stock price movements [5] - Analysts may set overly optimistic price targets due to business incentives, which can inflate expectations [6] - Investors should approach price targets with skepticism and not rely solely on them for investment decisions [8]