Revenue and Guidance - Total revenue for Q2 2025 was $51.3 million, a 16.3% increase from $44.1 million in Q2 2024[4] - US Motiva sales contributed $10.3 million to the total revenue in Q2 2025[5] - 2025 revenue guidance increased to $208 million to $212 million, reflecting a year-over-year growth of 25%–28%[5] Profitability and Loss - Gross margin for Q2 2025 was 68.8%, up from 65.6% in Q2 2024[5] - Loss from operations in Q2 2025 was $14.1 million, compared to a loss of $9.3 million in Q2 2024[5] - Adjusted EBITDA loss for Q2 2025 was $8.5 million, compared to a loss of $4.1 million in the same period last year[5] - Net loss for the three months ended June 30, 2025, was $16.593 million, compared to a net loss of $17.181 million for the same period in 2024, showing an improvement of approximately 3.4%[24] - Adjusted EBITDA for the six months ended June 30, 2025, was $(20.626) million, compared to $(8.099) million for the same period in 2024, indicating a decline in performance[24] Cash Flow and Liquidity - Cash use in Q2 2025 was $14.5 million, down from $18.4 million in Q2 2024[5] - Cash balance as of June 30, 2025, was $54.6 million, with total cash including credit line at $79.6 million[5] - The company aims to achieve positive EBITDA in 2025 and become cash flow positive in 2026[3] - Cash and cash equivalents decreased from $90.347 million to $54.639 million, a reduction of approximately 39.5%[22] Expenses and Assets - R&D expenses decreased to $5.2 million in Q2 2025 from $5.5 million in Q2 2024, primarily due to lower clinical trial expenses[8] - Total assets decreased from $346.831 million as of December 31, 2024, to $329.668 million as of June 30, 2025, representing a decline of approximately 4.9%[22] - Current liabilities increased from $68.278 million to $80.742 million, marking a rise of about 18.3%[22] Inventory and Receivables - Accounts receivable increased from $65.002 million to $70.092 million, reflecting an increase of about 7.4%[22] - Inventory rose from $78.766 million to $94.683 million, representing an increase of approximately 20.2%[22] Shareholders' Equity and Interest - Total shareholders' equity decreased significantly from $53.095 million to $22.763 million, a decline of about 57.1%[22] - Interest expense for the three months ended June 30, 2025, was $5.956 million, compared to $5.186 million in 2024, an increase of approximately 14.8%[24] Foreign Currency Impact - Foreign currency gain for the three months ended June 30, 2025, was $4.985 million, compared to a loss of $2.764 million in 2024, indicating a positive shift in foreign currency impact[24]

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].

Financial Performance and Outlook - 2025 revenue guidance is projected to be between $205 million and $210 million[26] - US revenue is expected to meaningfully exceed $35 million in 2025, including approximately $9.5 million to $10 million in 2Q[26] - The company anticipates achieving EBITDA positive in 2025 and expects to grow at over 20% for at least the next three years[26] - The company expects to achieve cash flow positive in 2026[26] US Market Strategy - The company aims to achieve over $35 million in revenue in the US in 2025[33] - Over 1000 surgeons have opened accounts, and over 75% of orders are placed via the Motiva Portal[32] - The company has placed permanent consignments in over 100 targeted accounts YTD[31] Product and Innovation - Motiva devices have been used in over 4 million procedures worldwide since 2010[13] - The company has over 210 patents approved/pending in over 20 jurisdictions[13] - The company is extending additional sizes for current portfolio and developing Ergonomix2® Platform & Mia Femtech[81] Breast Reconstruction Market - Device-based reconstruction market represents over 100,000 procedures per year, with steady procedural growth of approximately 2%[223] - Reconstruction represents approximately 25% of total breast procedures and approximately 50% of total breast revenue[225] - Reconstruction implant ASPs tend to be 25-30% higher than augmentation implants, and tissue expander ASPs can be nearly double than augmentation implants[226] GLP-1s and Aesthetics - 12% of America has or is taking GLP Medication[387] - GLP-1s are leading to new challenges such as skin laxity and volume issues, requiring unique solutions and combination treatments[397]

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]

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 [25][27] - Gross profit for Q1 was $27.8 million, representing 67.2% of revenue, a 160 basis point increase from 65.6% in Q1 2024 [27] - Adjusted EBITDA loss was $12.1 million, an improvement from a $13.1 million loss in the previous quarter [29] - 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 [29][30] Business Line Data and Key Metrics Changes - U.S. revenue for Q1 was $6.2 million, exceeding the previous guidance of $5.5 million [10][25] - Outside the U.S., revenue growth was approximately 5% in Q1, in line with expectations [26][27] - The launch of Motiva in the U.S. has seen over 900 accounts onboarded, with 84% of those placing reorders [12][14] Market Data and Key Metrics Changes - The U.S. market is showing strong adoption, with daily orders exceeding 120 in April, up from 100 in March [13] - Brazil's revenue stabilized in Q1, but still showed a meaningful reduction compared to the same period last year [26] - The company is experiencing challenges in Latin America, particularly in Brazil, but has seen stabilization in other regions [41] Company Strategy and Development Direction - The company aims to become the market share leader in the U.S. and is focused on driving growth, increasing efficiency, and advancing its innovation pipeline [14][34] - The introduction of minimally invasive products like Mia and Preserve is expected to expand market opportunities and enhance patient outcomes [20][21][23] - The company is committed to achieving profitability and cash flow targets without the need for additional equity raises [30][31] Management's Comments on Operating Environment and Future Outlook - Management remains confident in the revenue guidance of $205 million to $210 million for 2025, representing a growth of 23% to 26% [30][31] - There has been no observed impact on demand from recent trade policies, and the company is prepared to adjust expenses if necessary [31] - The company expects to reach cash flow breakeven in 2026, with a significant reduction in cash use anticipated throughout 2025 [30] Other Important Information - The appointment of Peter Caldini as permanent CEO was announced, with a focus on achieving the financial potential of the company [5][6] - The partnership with Meghan Trainor has generated over 4 billion impressions, significantly enhancing brand awareness [18][19] Q&A Session Summary Question: OUS outlook and consumer sentiment by region - Management confirmed mid-single digit growth guidance for OUS markets, with stabilization in Asia and Europe, while Brazil remains challenging [39][40] Question: Details on the launch of Preserve - The response to Preserve has been strong, positioned for day-to-day use, and expected to expand market share [42][43] Question: U.S. launch strategy and competitive response - The U.S. launch is exceeding expectations, with a conservative approach to guidance despite strong performance [49][50][54] Question: U.S. sales force expansion plans - The current sales force consists of 40 reps, with plans to expand in key markets as needed [57][58] Question: Gross margin outlook and tariff impact - Gross margins are expected to improve as U.S. sales grow, with minimal impact from tariffs anticipated [81][84] Question: Account penetration and market share expectations - The company aims for close to 100% penetration in engaged clinics, with expectations of achieving dominant market share over time [85][92]

Financial Performance - Establishment Labs Holdings Inc. announced preliminary revenue for Q1 2025, with specific figures to be detailed in the press release[4] - The company emphasizes that the preliminary financial estimates are forward-looking and may differ from actual results, cautioning against undue reliance on this information[6] - The financial information has not been audited or reviewed by the independent registered public accounting firm, CBIZ, Inc.[6]