Part I. Financial Information [Item 1. Financial Statements - Unaudited](index=6&type=section&id=Item%201.%20Financial%20Statements%20-%20Unaudited) This section presents the unaudited condensed consolidated financial statements for Establishment Labs Holdings Inc. for the periods ended June 30, 2025, and 2024 [Condensed Consolidated Balance Sheets](index=6&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets decreased to $329.7 million by June 30, 2025, primarily due to reduced cash, while liabilities increased, significantly impacting shareholders' equity Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $54,639 | $90,347 | | Accounts receivable, net | $70,092 | $65,002 | | Inventory, net | $94,683 | $78,766 | | Total current assets | $229,168 | $243,037 | | Total assets | $329,668 | $346,831 | | **Liabilities & Shareholders' Equity** | | | | Accounts payable | $55,806 | $44,760 | | Total current liabilities | $80,742 | $68,278 | | Note payable, long-term | $221,133 | $219,577 | | Total liabilities | $306,905 | $293,736 | | Total shareholders' equity | $22,763 | $53,095 | [Condensed Consolidated Statements of Operations](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Revenue increased for Q2 2025 and the six-month period, but higher operating expenses led to increased operating and net losses Statement of Operations Summary (in thousands, except per share data) | Metric | Q2 2025 | Q2 2024 | Six Months 2025 | Six Months 2024 | | :--- | :--- | :--- | :--- | :--- | | Revenue | $51,300 | $44,117 | $92,677 | $81,284 | | Gross Profit | $35,272 | $28,936 | $63,080 | $53,316 | | Loss from Operations | $(14,107) | $(9,344) | $(31,053) | $(18,178) | | Net Loss | $(16,593) | $(17,181) | $(37,303) | $(33,383) | | Net Loss Per Share | $(0.57) | $(0.62) | $(1.29) | $(1.21) | [Condensed Consolidated Statements of Cash Flows](index=11&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash used in operations increased to $39.5 million, while financing cash flow decreased, resulting in a $35.7 million cash reduction Cash Flow Summary for Six Months Ended June 30 (in thousands) | Activity | 2025 | 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | $(39,478) | $(25,306) | | Net cash used in investing activities | $(3,407) | $(11,027) | | Net cash provided by financing activities | $4,926 | $51,432 | | **Net (decrease) increase in cash** | **$(35,708)** | **$14,565** | [Notes to the Condensed Consolidated Financial Statements](index=13&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements) Notes detail accounting policies, revenue by geography, significant debt, recent acquisitions, and key customer and supplier concentration risks - The company's primary business is the manufacturing and marketing of Motiva Implants, with products approved for sale in Europe, Latin America, Asia, and the United States, where sales began in October 2024 after FDA approval[41](index=41&type=chunk)[43](index=43&type=chunk) Revenue by Geographic Market for Six Months Ended June 30 (in thousands) | Region | 2025 | 2024 | | :--- | :--- | :--- | | EMEA | $45,371 | $41,558 | | Latin America | $16,621 | $17,491 | | Asia-Pacific | $14,338 | $22,048 | | North America | $16,347 | $187 | | **Total Revenue** | **$92,677** | **$81,284** | - The company has a credit agreement with Oaktree for term loans up to **$225 million** - As of June 30, 2025, **$221.4 million** was outstanding, including principal and accrued interest, with an effective interest rate of **10.4%**[143](index=143&type=chunk)[152](index=152&type=chunk)[153](index=153&type=chunk) - On October 1, 2024, the company acquired its distribution companies in Belgium and the Netherlands (Motiva Benelux BV and Motiva NL B.V.) for a total consideration of approximately **$7.8 million**, expanding its direct market presence in Europe[195](index=195&type=chunk)[197](index=197&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=41&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management analyzes the 14.0% revenue increase driven by the U.S. launch, rising operating expenses, liquidity, and macroeconomic outlook [Overview and Recent Developments](index=41&type=section&id=Overview%20and%20Recent%20Developments) The company provides a business overview, highlighting 14.0% revenue growth, widened net losses, and recent strategic developments Financial Highlights - Six Months Ended June 30 | Metric | 2025 | 2024 | | :--- | :--- | :--- | | Revenue | $92.7 million | $81.3 million | | Net Loss | $37.3 million | $33.4 million | | Cash Balance (as of June 30) | $54.6 million | N/A | - Key recent developments include: - Appointment of Peter Caldini as CEO (May 2025) - Partnership with singer Meghan Trainor (March 2025) - FDA approval for Motiva Implants in the U.S. (September 2024) and subsequent commercial launch - New Inventory Funding Agreement for up to **$10.0 million** to finance silicone purchases (May 2025)[229](index=229&type=chunk)[233](index=233&type=chunk)[236](index=236&type=chunk) [Results of Operations](index=45&type=section&id=Results%20of%20Operations) Revenue grew 14.0% to $92.7 million for the six-month period, gross margin improved, and SG&A expenses surged 36.0% Revenue Comparison - Six Months Ended June 30, 2025 vs 2024 | Metric | H1 2025 | H1 2024 | Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Revenue | $92.7M | $81.3M | +$11.4M | +14.0% | - Gross margin increased to **68.1%** for the first six months of 2025, up from **65.6%** in the prior year, primarily due to the favorable impact of higher selling prices in the United States[274](index=274&type=chunk) - SG&A expenses for the first six months of 2025 increased by **$22.2 million (36.0%)** to **$83.9 million**, driven by higher personnel costs (+$6.9M), shipping (+$3.7M), commissions (+$3.3M), and sales & marketing (+$3.0M) to support commercial expansion[276](index=276&type=chunk) [Liquidity and Capital Resources](index=49&type=section&id=Liquidity%20and%20Capital%20Resources) The company held $54.6 million in cash as of June 30, 2025, with management expecting sufficient liquidity for 12 months, supported by recent financing - The company had **$54.6 million** in cash as of June 30, 2025, down from **$90.3 million** at year-end 2024 - Management believes this is sufficient for at least the next 12 months[282](index=282&type=chunk)[285](index=285&type=chunk) Cash Flow Summary - Six Months Ended June 30 (in thousands) | Activity | 2025 | 2024 | | :--- | :--- | :--- | | Net Cash Used in Operating Activities | $(39,478) | $(25,306) | | Net Cash Used in Investing Activities | $(3,407) | $(11,027) | | Net Cash Provided by Financing Activities | $4,926 | $51,432 | - The company has significant indebtedness under a Credit Agreement, with **$221.4 million** outstanding as of June 30, 2025 - This includes principal from three tranches and **$21.4 million** of accrued interest added to the principal balance[297](index=297&type=chunk)[298](index=298&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=52&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company states that its exposure to market risk has not materially changed from its Annual Report on Form 10-K for the fiscal year ended December 31, 2024 - There have been no material changes in the company's exposure to market risk during the six months ended June 30, 2025[304](index=304&type=chunk) [Controls and Procedures](index=52&type=section&id=Item%204.%20Controls%20and%20Procedures) Disclosure controls and procedures were effective as of June 30, 2025, with no material changes to internal control over financial reporting - Management concluded that disclosure controls and procedures were effective as of June 30, 2025[305](index=305&type=chunk) - No material changes to internal control over financial reporting occurred during the quarter[306](index=306&type=chunk) Part II. Other Information [Legal Proceedings](index=53&type=section&id=Item%201.%20Legal%20Proceedings) The company states that it is not currently a party to any material legal proceedings that would require disclosure under SEC regulations - The company is not a party to any material legal proceedings[309](index=309&type=chunk) [Risk Factors](index=53&type=section&id=Item%201A.%20Risk%20Factors) This section details significant risks across product commercialization, business operations, supply chain, intellectual property, and regulatory compliance [Risks Related to Development and Commercialization](index=53&type=section&id=Risks%20Related%20to%20Development%20and%20Commercialization) Risks include limited U.S. operating history, dependence on costly product innovation, and the need to effectively educate clinicians - The company has a limited operating history in the U.S., which may lead to difficulties in implementing its business strategy and forecasting results[312](index=312&type=chunk) - Future success depends on the ability to enhance existing products and develop new ones, which requires significant expense and faces competitive and regulatory hurdles[314](index=314&type=chunk)[315](index=315&type=chunk) - Failure to properly educate clinicians on the use of products like Motiva Implants could lead to unsatisfactory patient outcomes, negative publicity, and product liability claims[321](index=321&type=chunk) [Risks Related to Business, Industry and Operations](index=55&type=section&id=Risks%20Related%20to%20Business%2C%20Industry%20and%20Operations) Operational risks include expected future losses, macroeconomic vulnerability, intense competition, and negative product safety publicity - The company expects to incur losses for the foreseeable future, and its ability to achieve profitability depends on the commercial success of its Motiva Implants[326](index=326&type=chunk) - Unfavorable global economic conditions, such as inflation and recession, could reduce consumer demand for elective aesthetic procedures, adversely affecting sales[329](index=329&type=chunk) - The company faces significant competition from large, well-resourced companies (e.g., divisions of Johnson & Johnson and AbbVie), which could negatively affect market share and pricing[338](index=338&type=chunk)[339](index=339&type=chunk) - Negative publicity concerning breast implant safety, including reports of BIA-ALCL and other cancers linked to competitors' products, could reduce overall demand for all silicone breast implants[353](index=353&type=chunk)[356](index=356&type=chunk) [Risks Related to Manufacturing and Third-Party Relationships](index=66&type=section&id=Risks%20Related%20to%20Manufacturing%20and%20Third-Party%20Relationships) Manufacturing risks include reliance on a single silicone supplier, dependence on third-party distributors, and CRO control limitations - The company relies on Avantor as a single-source supplier for medical-grade silicone, creating significant risk of supply disruption, price increases, or quality issues that could halt production[388](index=388&type=chunk) - A substantial portion of sales are made through third-party distributors, and the company has limited control over their sales efforts, performance, and compliance with regulations[397](index=397&type=chunk) - Reliance on third parties like CROs for clinical studies means the company does not have full control over trial execution, which could lead to delays or issues with regulatory submissions[385](index=385&type=chunk) [Risks Related to Regulatory and Political Environment](index=75&type=section&id=Risks%20Related%20to%20Regulatory%20and%20Political%20Environment) Regulatory risks involve costly and uncertain approval processes, ongoing compliance, and exposure to healthcare fraud and abuse laws - The regulatory approval process for medical devices is expensive, lengthy, and uncertain, and there is no guarantee that new products will be approved[430](index=430&type=chunk) - Even after approval, the company is subject to ongoing regulatory obligations and review - Non-compliance can result in significant penalties, including fines, recalls, or withdrawal of approval[441](index=441&type=chunk)[444](index=444&type=chunk) - The company's relationships with customers and healthcare providers are subject to anti-kickback, fraud, and abuse laws, violations of which can lead to criminal sanctions and exclusion from government healthcare programs[457](index=457&type=chunk) [Other Risks (Intellectual Property, Taxation, Ownership)](index=70&type=section&id=Other%20Risks%20%28Intellectual%20Property%2C%20Taxation%2C%20Ownership%29) Other risks include intellectual property protection, cybersecurity, data privacy, tax uncertainties, and BVI company ownership implications - The company's competitive position depends on its ability to protect its intellectual property, including trade secrets and patents, from infringement or disclosure[402](index=402&type=chunk)[403](index=403&type=chunk) - Information systems are vulnerable to cybersecurity incidents, which could disrupt operations, lead to data loss, and result in significant liability and reputational harm[416](index=416&type=chunk) - Being a British Virgin Islands company means shareholder rights and legal remedies differ from those under U.S. law, potentially offering fewer protections to investors[486](index=486&type=chunk) - The company benefits from a tax holiday in Costa Rica through 2030; its expiration or a failure to maintain this treatment would significantly increase its tax rate[478](index=478&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=88&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company issued 19,256 common shares valued at $0.9 million on June 30, 2025, as consideration for a business acquisition - On June 30, 2025, the company issued **19,256 common shares** valued at **$0.9 million** as consideration for a business acquisition - This was an unregistered sale exempt under Regulation S or Section 4(a)(2) of the Securities Act[492](index=492&type=chunk)[493](index=493&type=chunk) [Other Information](index=88&type=section&id=Item%205.%20Other%20Information) The company entered into separation and consulting agreements with its former CEO, including annual cash and equity compensation - The company entered into separation and consulting agreements with former CEO Juan José Chacón-Quirós after his retirement on March 1, 2025[497](index=497&type=chunk) - The consulting agreement includes annual compensation of **$750,000** in cash and a target of **$750,000** in annual equity awards, for advisory and advocacy services[497](index=497&type=chunk) [Exhibits](index=88&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the Form 10-Q, including former CEO agreements and required certifications - The exhibits list includes newly filed separation and consulting agreements with the company's former CEO[498](index=498&type=chunk)

Establishment Labs Holdings (ESTA) Q2 2025 Earnings Call August 07, 2025 08:30 AM ET Speaker0Good morning. Welcome to Establishment Labs Second Quarter twenty twenty five Earnings Call. At this time, all participants will be in listen only mode. At the end of this call, we will open the line for a question and answer session and instructions will follow at that time. As a reminder, today's call is being recorded.I will now turn the call over to Raj Denhoy, Chief Financial Officer. Please go ahead.Speaker1Th ...

EXHIBIT 99.1 Second Quarter Highlights and Outlook (Unaudited) "Our US sales momentum has continued into the third quarter, allowing us to increase our worldwide and US guidance", said Peter Caldini, Chief Executive Officer. "Outside the United States, we saw sequential growth in all regions. We have growth drivers for many years to come. Higher surgeon utilization and adding accounts in the United States will drive growth for the rest of this year and into next. Approval of additional sizes will accelerate ...

Investment Rating - The report maintains a "Buy" rating for Boston Scientific (BSX), Edwards Lifesciences (EW), GE Healthcare (GEHC), Intuitive Surgical (ISRG), and Haemonetics (HAE), while downgrading Tandem Diabetes (TNDM) to "Sell/High Risk" from "Neutral/High Risk" [1][5][20]. Core Insights - The MedTech sector has shown resilience against healthcare headwinds, with a focus on returning to fundamentals and several catalysts expected to drive momentum in the second half of 2025 [1][9]. - The S&P Equipment and Supplies Index has outperformed the broader market, with a year-to-date increase of 7.2%, while relative P/E multiples remain below historical averages [2][12]. - Key upcoming catalysts include product launches and data readouts from various companies, which are anticipated to influence stock performance positively [3][10][11]. Summary by Sections Market Overview - The MedTech industry has largely absorbed tariff impacts, with a weakening USD providing additional support [1][9]. - The S&P 500 is up 6.2% year-to-date, while the S&P Equipment and Supplies Index has increased by 7.2% [2][12]. Company-Specific Insights - Boston Scientific (BSX) is expected to benefit from Farapulse and new product launches, projecting a revenue increase of 80.1% year-over-year in 2Q25 [3][10]. - Edwards Lifesciences (EW) anticipates pivotal data releases and the reopening of TAVR NCD, which could enhance its market position [3][10]. - Intuitive Surgical (ISRG) plans a broad launch of its DV5 system, which is expected to drive stock performance [4][10]. - Haemonetics (HAE) has been upgraded to "Buy" due to improved guidance and revenue growth expectations [5][20]. - Tandem Diabetes (TNDM) faces competitive pressures, leading to its downgrade to "Sell/High Risk" [5][20]. Valuation and Target Prices - Target prices have been adjusted for several companies, with BSX at $125, EW at $95, GEHC at $86, and ISRG at $650 [20][21]. - The report highlights that the relative P/E multiple for the MedTech sector is currently at 1.14x, below historical averages, indicating potential undervaluation [2][12][14].

Investor Day Welcome Investors' Day Agenda Welcome; Logistics; Agenda Raj Denhoy Corporate Overview Peter Caldini Motiva® USA Business Updates Jeff Ehrhardt US Breast Aesthetic - Panel Ben Newcott Breast Reconstruction Opportunity in the USA Jeff Ehrhardt US Breast Reconstruction - Panel Ben Newcott Unlocking New Markets - Panel Juan José Chacón-Quirós Management Q&A Topic Presenter/Moderator Innovation Pipeline Roberto de Mezerville GLP-1s and Plastic Surgery Juan José Chacón-Quirós Agenda Forward Looking ...

Summary of Establishment Labs Holdings (ESTA) 2025 Investor Day Company Overview - **Company**: Establishment Labs Holdings (ESTA) - **Industry**: Medical Devices, specifically Breast Aesthetics - **Event Date**: June 12, 2025 Key Points and Arguments U.S. Market Performance - The U.S. business has shown strong performance, exceeding expectations with significant momentum driven by over 20 years of global innovation [4][5][6] - Establishment Labs has sold over 4 million devices globally and holds over 200 patents, emphasizing its focus on science-driven innovation [7][8] - The company is positioned as a leader in breast aesthetics with a broad portfolio of differentiated products, including reconstruction and augmentation options [9][10] Innovation Pipeline - The company is in the early stages of its innovation pipeline in the U.S., with expectations of a "super cycle" of innovation over the next two to three years [10][20] - The U.S. market currently features products like Round and ErgoOne, with future launches planned for Ergo II and other innovations [39][40] Safety and Efficacy - Establishment Labs claims less than 1% device-related complications, significantly outperforming competitors in safety metrics [12][19] - The company emphasizes the importance of safety and innovation as foundational elements of its strategy [12][17] Financial Guidance - The company is confident in achieving revenue guidance of $2.05 to $2.1 billion, with expectations to exceed $35 million in U.S. revenue for 2025 [18][27] - The company has reduced operating expenses by nearly 30% since 2023 while enhancing capabilities in the U.S. [19] Market Dynamics - The company has not seen significant impacts from macroeconomic factors, including tariffs, on demand [14][15] - Establishment Labs is focusing on enhancing operational capabilities and driving minimally invasive platforms in international markets [15][20] Surgeon Engagement and Training - The company has prioritized surgeon training and engagement, with plans to train over 200 surgeons through immersive programs in Costa Rica [29][30] - Establishment Labs is leveraging social media and influencer partnerships to increase brand awareness, with over 700 surgeons promoting Motiva implants [31][32] Cultural Shift in Breast Augmentation - There is a cultural shift towards transparency in breast augmentation, with patients increasingly sharing their experiences and preferences for Motiva implants [99][100] - The company is seeing a demand for natural-looking results with minimal downtime, aligning with patient desires for less invasive options [70][76] Competitive Landscape - Establishment Labs is positioned as a disruptor in the market, offering superior technology and minimally invasive options compared to traditional implants [58][59] - The company is capitalizing on a shift in patient preferences towards above-the-muscle placements, which are perceived as safer and more effective [81][102] Additional Important Content - The company has established a strong presence in over 1,000 practices across the U.S., with consistent order trends indicating robust market acceptance [36] - The partnership with celebrities and influencers has significantly boosted brand visibility and patient interest in Motiva implants [33][34][35] This summary encapsulates the key insights and strategic directions discussed during the Establishment Labs Holdings 2025 Investor Day, highlighting the company's growth potential, innovative product pipeline, and market positioning within the breast aesthetics industry.

Summary of Establishment Labs Holdings (ESTA) Conference Call Company Overview - **Company**: Establishment Labs Holdings (ESTA) - **Industry**: Medical Technology, specifically focused on aesthetic products and minimally invasive procedures Key Points and Arguments 1. **Product Differentiation**: Establishment Labs has a portfolio of differentiated products with superior safety profiles supported by clinical data, particularly in the U.S. market [3][4] 2. **Innovation Pipeline**: The company anticipates a "super cycle of innovation" over the next two to three years, including the launch of new products like Preservae and Mia, which are expected to significantly enhance their U.S. business [6][7] 3. **Market Stability**: The overall market has been stable, with no significant impact from macroeconomic pressures observed so far. The company is closely monitoring market conditions [8][9] 4. **Regional Performance**: - **Asia Pacific**: Stable with pockets of growth, particularly in China, where the company is preparing for a stronger market presence in the second half of the year [10][12] - **Europe**: Stable with good growth in specific markets like the UK and Spain, while facing challenges in Latin America, particularly Brazil [12][13] 5. **2025 Guidance**: The company has guided for mid-single-digit growth in 2025, with confidence in achieving revenue between $205 million to $210 million [14][15] 6. **U.S. Market Expansion**: The company has added approximately 900 accounts in the U.S., with a strong performance exceeding expectations. The organization is described as "best in class" [16][20] 7. **Sales Team Quality**: The company has successfully attracted top talent from competitors, enhancing its sales capabilities and market presence [22][24] 8. **China Market Strategy**: The decision to use a distributor in China is based on resource allocation and market entry strategy, with expectations for gradual growth [27][30] 9. **Product Launches**: Mia and Preservae are expected to drive significant growth, with Mia projected to generate $8 million to $10 million in revenue this year [33][40] 10. **Reconstruction Products**: The company is expanding its presence in the reconstruction market, with plans to file for FDA approval for new indications by late 2026 or early 2027 [42][44] 11. **Profitability Goals**: The company aims to achieve EBITDA positivity by the end of the year and cash flow breakeven next year, driven by strong U.S. revenue and stable operating expenses [60][62] 12. **Margin Expansion**: The company expects 200 to 300 basis points of gross margin expansion this year, supported by higher pricing in the U.S. compared to international markets [70][71] Additional Important Insights - **Competitive Landscape**: The company has not observed significant aggressive pricing strategies from competitors, allowing it to maintain its premium pricing strategy [49][52] - **Financial Management**: Establishment Labs has focused on rightsizing its business and instilling financial discipline, which is expected to yield operational efficiencies [66][68] - **Future Growth**: The company is optimistic about its innovation pipeline and market expansion strategies, which are anticipated to drive long-term growth [48][71] This summary encapsulates the key insights and strategic directions discussed during the Establishment Labs Holdings conference call, highlighting the company's focus on innovation, market stability, and financial performance.

Revenue and Financial Performance - Revenue for Q1 2025 was $41.4 million, an increase of 11.3% from $37.2 million in Q1 2024[217] - Revenue increased by $4.2 million, or 11.3%, to $41.4 million for the three months ended March 31, 2025, compared to $37.2 million for the same period in 2024[249] - Gross profit rose to $27.8 million with a gross margin of 67.2%, up from 65.6% in the prior year, attributed to improved manufacturing efficiencies[251] - Net losses for Q1 2025 were $20.7 million, compared to $16.2 million in Q1 2024, with an accumulated deficit of $465.4 million as of March 31, 2025[217] - Net loss for the three months ended March 31, 2025, was $20.7 million, compared to a net loss of $16.2 million for the same period in 2024[249] - Interest expense rose to $5.9 million, an increase of $1.5 million due to higher debt principal[256] - Other income increased by $5.8 million to a gain of $2.8 million, primarily due to foreign currency fluctuations[258] - Cash used in operating activities was $20.7 million for the three months ended March 31, 2025, compared to $11.2 million in the same period in 2024[266][267] - Cash of $69.2 million was reported as of March 31, 2025, down from $90.3 million at the end of 2024[259] Operational Developments - Motiva Implants accounted for over 95% of total revenues in Q1 2025, with $6.2 million generated from U.S. sales[229][244] - The company launched Preservé, a new breast tissue-preserving technology, in Brazil in February 2025, with plans for further international launches[219] - The FDA approved Motiva Implants for U.S. sales in September 2024, and the company began selling them in October 2024[216][222] - A new manufacturing facility in Costa Rica was completed in June 2024, increasing capacity by approximately 730,000 units per year[223] Expenses and Future Outlook - Operating expenses increased by $11.5 million, or 34.6%, to $44.8 million, driven primarily by a $10.8 million increase in sales, general and administrative expenses[252][253] - The company expects overall operating expenses to increase in 2025 due to heightened commercial and operational activities following FDA approval[245] - The company may need to raise additional capital to execute its business plan, with a shelf registration statement filed in April 2023 allowing for future offerings[264] - Future capital requirements will depend on market adoption of products, regulatory activities, and commercialization costs[263] Debt and Financial Obligations - As of March 31, 2025, $221.4 million was outstanding under the Credit Agreement, including $150 million for Tranche A, $25 million for Tranche B, $25 million for Tranche C, and $21.4 million of accrued interest[274] - The interest rates for the Term Loans are 9% per annum for Tranche A and B, 10% for Tranche C and D, and can be reduced to 8.25% upon meeting a gross sale threshold of $225 million[274] Accounting and Risk Management - The financial statements are prepared in accordance with GAAP, requiring estimates and judgments that affect reported amounts of assets, liabilities, revenue, and expenses[276] - No material changes have been made to critical accounting policies as disclosed in the Annual Report on Form 10-K for the year ended December 31, 2024[277] - Market risk exposure has not materially changed from the previous disclosures in the Annual Report on Form 10-K for the fiscal year ended December 31, 2024[279]

Core Insights - Establishment Labs Holdings Inc. reported a quarterly loss of $0.70 per share, which was better than the Zacks Consensus Estimate of a loss of $0.83, but worse than the loss of $0.58 per share from the previous year, indicating a 20.69% increase in loss year-over-year [1] - The company achieved an earnings surprise of 15.66% for the quarter, although it had a negative surprise of -58.06% in the previous quarter [1][2] - Revenue for the quarter was $41.38 million, slightly missing the Zacks Consensus Estimate by 0.06%, but showing a year-over-year increase from $37.17 million [2] Financial Performance - Over the last four quarters, Establishment Labs has surpassed consensus EPS estimates two times and topped revenue estimates only once [2] - The current consensus EPS estimate for the upcoming quarter is -$0.55, with expected revenues of $51.88 million, while the estimate for the current fiscal year is -$2.05 on revenues of $208.6 million [7] Market Position - Establishment Labs shares have declined approximately 28.3% since the beginning of the year, contrasting with the S&P 500's decline of -4.7% [3] - The company's Zacks Rank is currently 4 (Sell), indicating expectations of underperformance in the near future [6] Industry Context - The Medical Services industry, to which Establishment Labs belongs, is currently ranked in the top 27% of over 250 Zacks industries, suggesting a favorable outlook compared to lower-ranked industries [8] - Another company in the same industry, PACS Group, Inc., is expected to report quarterly earnings of $0.42 per share, reflecting a year-over-year increase of +10.5% [9]

Financial Data and Key Metrics Changes - Total revenue for Q1 2025 was $41.4 million, an increase of 11% year-over-year, with a 13.5% growth excluding foreign exchange impacts [28][30] - Gross profit for Q1 was $27.8 million, representing 67.2% of revenue, a 160 basis point increase from 65.6% in Q1 2024 [30] - Adjusted EBITDA loss was $12.1 million, an improvement from a $13.1 million loss in the previous quarter [32] - Cash position as of March 31 was $69.2 million, with an additional $25 million available under a credit facility, totaling approximately $94 million in accessible cash [32] Business Line Data and Key Metrics Changes - U.S. revenue for Q1 was $6.2 million, exceeding the previous guidance of $5.5 million, indicating strong adoption of products [11][12] - Revenue growth outside the U.S. was approximately 5% in Q1, aligning with expectations, with Brazil showing stabilization but still lower than the previous year [29][30] - The launch of Motiva in the U.S. has seen over 900 accounts onboarded, with 84% of those placing reorders [14][16] Market Data and Key Metrics Changes - The U.S. market is expected to exceed the previously guided $35 million for the year, with single-digit growth anticipated for international markets [12][34] - The company has not observed any impact on sales from recent tariff-related concerns, with demand remaining stable [12][34] Company Strategy and Development Direction - The company aims to achieve profitability while continuing to expand its market share in the U.S. and internationally [9][38] - Focus areas include driving growth in the U.S., increasing operational efficiency, launching minimally invasive products, and advancing the innovation pipeline [38] - The company is committed to becoming the market share leader in the U.S. aesthetics market [16] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving revenue and profitability targets despite macroeconomic uncertainties [34][35] - The outlook for 2025 remains conservative, with revenue guidance set between $205 million and $210 million, reflecting a growth of 23% to 26% [33][34] Other Important Information - The company announced the appointment of Peter Caldini as the permanent CEO, emphasizing a strong start to 2025 [6][11] - The partnership with Meghan Trainor has generated significant media impressions and positive feedback from the plastic surgeon community [20][21] Q&A Session Summary Question: OUS outlook and consumer sentiment by region - Management confirmed mid-single digit growth guidance for OUS markets, with Brazil stabilizing but still facing challenges [42][44] Question: Details on the positioning of Preserve versus Motiva - Preserve is positioned for day-to-day use, leveraging technology from Mia, with strong initial responses in various markets [45][46] Question: U.S. launch strategy and competitive response - The U.S. launch is exceeding expectations, with no significant competitive response noted, although some price discounting has occurred [53][58] Question: U.S. sales force expansion plans - The current sales force consists of 40 reps, with plans to expand in key markets as needed [63][64] Question: Gross margin outlook and tariff impact - Gross margins are expected to improve as U.S. sales grow, with minimal impact from tariffs anticipated [87][89] Question: Account penetration expectations in the U.S. - The company aims to reach a high penetration rate among top plastic surgeon accounts, with strong reorder rates being observed [102][104]