Company Overview - Venus Concept Inc. is a global leader in medical aesthetic technology, offering a wide range of minimally invasive and non-invasive products for aesthetic and hair restoration [4] - The company operates in over 60 countries and has 9 direct markets, showcasing its extensive reach in the industry [4] - Venus Concept's product portfolio includes various aesthetic device platforms and hair restoration systems, such as NeoGraft® and the ARTAS iX® Robotic Hair Restoration system [4] Financial Results Announcement - The company will release its second quarter fiscal year 2025 financial results after market close on August 14, 2025 [1] - A conference call will be held at 5:00 p.m. Eastern Time on the same day to discuss the results and answer questions [2] - For those unable to attend, a replay of the call will be available for two weeks, and a webcast will be archived on the company's investor relations website [3] Investor Relations - Investor relations contact for Venus Concept is managed by ICR Healthcare, with Mike Piccinino, CFA, as the point of contact [5]

Core Insights - Venus Concept Inc. has successfully exchanged $6.5 million of subordinated convertible notes for 325,651 shares of Series Y preferred stock, resulting in a 14% reduction in total debt obligations from $39.7 million to approximately $34.3 million [1][2] Group 1: Financial Position - The debt exchange improves the Company's balance sheet and provides financial flexibility for ongoing strategic initiatives, including the divestiture of the Venus Hair business [2] - The total debt reduction reflects the Company's commitment to optimizing its capital structure [2] Group 2: Management Commentary - The CEO of Venus Concept emphasized the importance of the partnership with Madryn Asset Management in achieving financial flexibility and supporting the Company's transformation plan [2] - Madryn Asset Management expressed support for the management team and the Company's efforts to return to growth [2] Group 3: Company Overview - Venus Concept is a global leader in medical aesthetic technology, offering a wide range of minimally invasive and non-invasive products across over 60 countries [4] - The product portfolio includes various aesthetic device platforms and hair restoration systems, backed by prominent healthcare industry investors [4]

Core Viewpoint - Venus Concept Inc. has successfully closed a registered direct offering, raising approximately $1.15 million, with potential additional proceeds of up to $2.3 million from unregistered short-term warrants [1][3]. Group 1: Offering Details - The company sold 434,720 shares of common stock at a price of $2.65 per share [1]. - Concurrently, unregistered short-term warrants were issued to purchase up to 869,440 shares at the same exercise price, which are immediately exercisable and will expire in eighteen months [1][3]. - The gross proceeds from the offering are approximately $1.15 million before fees and expenses [3]. Group 2: Use of Proceeds - The net proceeds from the offering will be used for general corporate purposes [3]. Group 3: Company Overview - Venus Concept is a global leader in medical aesthetic technology, offering a wide range of minimally invasive and non-invasive products across over 60 countries [7]. - The product portfolio includes various aesthetic device platforms and hair restoration systems, supported by prominent healthcare growth equity investors [7].

Core Points - Venus Concept Inc. has announced a registered direct offering of 434,720 shares of common stock at a price of $2.65 per share, with expected gross proceeds of approximately $1.15 million [1][3] - The company will also issue unregistered short-term warrants to purchase up to 869,440 shares at the same exercise price, potentially generating an additional $2.3 million if fully exercised [1][3] - The offering is expected to close around June 9, 2025, pending customary closing conditions [1] Offering Details - H.C. Wainwright & Co. is acting as the exclusive placement agent for the offering [2] - The shares are being offered under a "shelf" registration statement effective since November 1, 2024, and a final prospectus supplement will be filed with the SEC [4] - The unregistered short-term warrants are offered in a private placement and have not been registered under the Securities Act [5] Company Overview - Venus Concept is a global leader in medical aesthetic technology, offering a range of minimally invasive and non-invasive products across over 60 countries [7] - The product portfolio includes various aesthetic device platforms and hair restoration systems, supported by prominent healthcare growth equity investors [7]

Core Viewpoint - Venus Concept Inc. has entered into a definitive agreement to sell its Venus Hair business to MHG Co. Ltd for $20 million in cash, which is expected to enhance the company's financial condition and support strategic growth initiatives [1][2][3] Group 1: Transaction Details - The transaction is valued at $20 million, subject to customary working capital adjustments [1] - The sale includes the portfolio of hair restoration and hair transplant technologies, related equipment, services, and intellectual property, specifically for ARTAS and NeoGraft [2][3] - The transaction is anticipated to close in the third quarter of 2025, pending certain closing conditions [3] Group 2: Financial Impact - The revenue from the sale of ARTAS and NeoGraft systems, procedure kits, and warranty revenue was approximately $12.5 million in fiscal year 2024 [3] - Cash used in operations related to the hair restoration and transplant businesses totaled approximately $6.7 million in fiscal year 2024 [3] Group 3: Strategic Rationale - The CEO of Venus Concept stated that the transaction allows the company to focus on its global medical aesthetics business, which is expected to improve revenue growth and lower operating expenses [2] - Meta Healthcare Group aims to leverage the acquired technologies to expand its hair loss-related business areas and enhance R&D and manufacturing capabilities [2][5]

Venus Concept (VERO) Q1 2025 Earnings Call May 15, 2025 08:00 AM ET Company Participants Rajiv De Silva - Director & CEODomenic Della Penna - EVP & CFOThomas McGovern - Equity Research Associate Operator Good day, ladies and gentlemen, and welcome to the First Quarter twenty twenty five Earnings Conference Call for Venus Concept Inc. At this time, all participants have been placed in a listen only mode. Please note that this conference call is being recorded and that the recording will be available on the c ...

Financial Data and Key Metrics Changes - Total revenue for the first quarter of 2025 was $13.6 million, down $3.8 million or 22% year over year [11] - Gross profit decreased by $2.9 million or 25% to $8.8 million, with gross margin at 64.2% compared to 66.6% in the same quarter of the previous year [13][14] - Net loss attributable to stockholders was $12.4 million or $17.44 per share, compared to a net loss of $9.8 million or $16.91 per share in the first quarter of 2024 [15] - Adjusted EBITDA loss for the first quarter was $8.3 million, compared to a loss of $5.1 million in the prior year [15] - Cash and cash equivalents as of March 31, 2025, were $3.2 million, with total debt obligations reduced to approximately $35.5 million [16][17] Business Line Data and Key Metrics Changes - Systems revenue decreased by 25%, with a 25% decrease in lease systems revenue as well [12] - The percentage of total systems revenue from internal lease programs was approximately 25%, unchanged from the prior year [12] Market Data and Key Metrics Changes - International revenue decreased by 29%, while U.S. revenue decreased by 16.5% year over year [12] - The global capital equipment environment remains uncertain, affecting customer system adoption in both U.S. and international markets [6][8] Company Strategy and Development Direction - The company is focusing on transitioning to higher quality cash revenues, with cash system sales in the U.S. representing 80% of total U.S. system sales [7] - Plans to evolve the portfolio and launch a new body device in the second half of 2025 are underway [9] - The company is managing cash burn through disciplined cost management and targeted investments for long-term growth [9] Management's Comments on Operating Environment and Future Outlook - Management noted that customer financing pressures, economic uncertainty, and tighter credit markets are impacting system adoption [6] - The company does not provide full-year 2025 financial guidance but expects sequential revenue growth in the second quarter [18] Other Important Information - The company enhanced its balance sheet by converting $11 million of debt to equity and secured a new bridge loan amendment [10][17] - The company is actively evaluating strategic alternatives to maximize shareholder value amid current market conditions [18] Q&A Session Summary Question: Impact of tariffs on international business - Management indicated that a 10% tariff on products sourced from Israel could impact gross margins by 11.5% in 2025 and 22.5% in 2026, but the overall impact is expected to be modest and manageable through pricing [20][22][24] Question: Timing of delayed sales contracts - Delays in closing sales contracts were attributed to economic hesitancy affecting both U.S. sales and international distributor orders [27][29] Question: Update on next-gen body contouring device - The launch of the next-gen body contouring device is expected in the early part of the second half of 2025, with significant market uptake anticipated based on customer feedback [30][31][32]

Financial Performance - As of March 31, 2025, the company reported an accumulated deficit of $321.3 million, up from $308.9 million as of December 31, 2024[199]. - Revenues for the three months ended March 31, 2025, were $13.6 million, a decrease of 22.3% compared to $17.5 million for the same period in 2024[232]. - The net loss attributable to the company for the three months ended March 31, 2025, was $12.4 million, compared to a net loss of $9.8 million in the same period of 2024[232]. - Adjusted EBITDA loss for the three months ended March 31, 2025, was $8.3 million, an increase from a loss of $5.1 million in the same period of 2024[232]. - Total revenue decreased by $3.8 million, or 21.9%, to $13.6 million for the three months ended March 31, 2025, from $17.5 million for the same period in 2024[274]. - Gross profit for the three months ended March 31, 2025, was $8.8 million, down from $11.6 million in 2024, reflecting a gross profit margin of 64.2% compared to 66.6%[272]. - Loss from operations increased to $9.5 million for the three months ended March 31, 2025, compared to a loss of $7.8 million in 2024[272]. Cash and Financing - The company had cash and cash equivalents of $3.2 million as of March 31, 2025, compared to $4.3 million as of December 31, 2024[199]. - Cash provided by financing activities for the three months ended March 31, 2025, was $5.3 million, primarily from short-term bridge financing[315]. - The company expects to use proceeds from various financing activities for general working capital purposes[301]. - The company entered into a Loan and Security Agreement on April 23, 2024, providing for a term loan of $2.2 million and additional delayed draw term loans of up to $2.8 million[216]. - The company generated gross proceeds of $6.7 million from the 2022 Private Placement, completed on November 18, 2022[206]. - The company completed multiple placements under the 2023 Multi-Tranche Private Placement, raising a total of $5.0 million through various transactions[209][210][211]. - The company may issue up to $9.0 million in shares of Senior Preferred Stock under the 2023 Multi-Tranche Private Placement, with the initial placement generating $2.0 million from the sale of 280,899 shares[298]. Operational Challenges - The company has incurred recurring net operating losses and negative cash flows from operations, indicating ongoing financial challenges[199]. - The company anticipates supply challenges during 2025 due to geopolitical disruptions and inflationary pressures affecting production lead times[245]. - The U.S. Federal administration has increased tariffs on goods imported from Israel to 10%, impacting the company's cost of goods and potentially leading to margin erosion[243][245]. - The company has ceased direct sales operations in 14 countries since June 2020, focusing on the U.S. market to improve profitability[239]. - The decline in lease program revenues in the first three months of 2025 was attributed to a strategy prioritizing cash deals and economic uncertainty impacting customers' financing capabilities[252]. Sales and Revenue Sources - Approximately 25% of the company's aesthetic system revenues were derived from internal lease programs in the three months ended March 31, 2025, consistent with the same period in 2024[226]. - Approximately 68% of total system revenues for the three months ended March 31, 2025, were derived from traditional sales, compared to 62% for the same period in 2024[253]. - Revenues from internal financing programs accounted for approximately 25% of total system revenues for both the three months ended March 31, 2025, and 2024[252]. - Revenues from distributor sales decreased to approximately 7% of total system revenues for the three months ended March 31, 2025, down from 13% in 2024[256]. - A total of 196 systems were delivered in the three months ended March 31, 2025, down from 314 systems delivered in the same period of 2024, representing a decline of 37.5%[238]. - The company sold 196 systems in Q1 2025, a decrease of 37.5% from 314 systems sold in Q1 2024, with systems revenue from internal lease programs remaining at approximately 25%[275]. Expenses and Cost Management - Operating expenses totaled $18.3 million for the three months ended March 31, 2025, compared to $19.4 million in 2024, with selling and marketing expenses at $7.0 million[272]. - Total operating expenses were $18.3 million in Q1 2025, a decrease of $1.1 million, or 5.8%, compared to $19.4 million in Q1 2024[279]. - Selling and marketing expenses decreased by $0.4 million, or 5.2%, in Q1 2025, but as a percentage of total revenues, they increased from 42.2% to 51.2%[280]. - General and administrative expenses decreased by $0.5 million, or 5.0%, in Q1 2025, but increased as a percentage of total revenues from 58.6% to 71.4%[281]. - Research and development expenses are expected to increase in absolute dollars as the company continues to invest in new products and technologies[265]. - Research and development expenses decreased by $0.2 million, or 12.8%, in Q1 2025, with an increase in percentage of total revenues from 10.2% to 11.4%[282]. Regulatory and Compliance - The company has received regulatory clearance for twelve novel aesthetic technology platforms, including ARTAS and NeoGraft systems, enhancing its product offerings[229]. - The allowance for expected credit losses as of March 31, 2025, was $3.1 million, representing approximately 11% of gross outstanding accounts receivable, down from $5.3 million or 13% as of March 31, 2024[241][248]. - The allowance for expected credit losses is based on customer account collectability assessments and aging of invoices, reflecting the company's best estimate of probable credit losses[327]. - Warranty accruals are recorded at the time of sale, based on historical costs and management estimates, with a one-year warranty period for systems sold[328]. - Stock-based compensation costs are recognized based on fair values, using the Black-Scholes option-pricing model for estimating stock options[329][330]. Market and Economic Conditions - The company operates directly in 11 international markets through 9 offices, including the United States, Canada, and China[231]. - The company expects a shift in the ratio of lease program sales to traditional sales to approximately 30:70 for the remainder of 2025 and beyond[286]. - The company anticipates that inventory levels will remain relatively flat in the short term but will increase at a lower rate than revenue growth over the longer term[286]. - The company is restricted by covenants in its loan agreements, which may limit its ability to incur additional indebtedness[306]. Accounting and Reporting - Revenue is recognized based on ASC 606, which includes five steps for contract identification and performance obligation satisfaction[323]. - Long-term receivables are related to internal lease programs with payment terms exceeding one year, discounted at implicit interest rates between 8% and 10%[325]. - Recent accounting pronouncements are detailed in the quarterly report, affecting financial statement presentation and recognition[333]. - As a smaller reporting company, the company is not required to provide disclosures about market risk[334].

Financial Performance - Total revenue for Q1 2025 was $13.6 million, down 22% year-over-year from $17.5 million in Q1 2024[6] - U.S. revenue decreased by $1.7 million, or 16.5%, to $8.4 million, while international revenue decreased by $2.2 million, or 29.3%, to $5.2 million[7] - Gross profit for Q1 2025 decreased by $2.9 million, or 25%, to $8.8 million, with a gross margin of 64.2% compared to 66.6% in Q1 2024[8] - Revenue for the three months ended March 31, 2025, was $13,643 million, a decrease of 22.3% compared to $17,479 million in the same period of 2024[22] - Net loss for the three months ended March 31, 2025, was $12,366 million, compared to a net loss of $9,789 million in the same period of 2024, representing a 26.1% increase in losses[22] - Adjusted EBITDA for the three months ended March 31, 2025, was $(8,344) million, compared to $(5,118) million in the same period of 2024, indicating a worsening operational performance[27] Operating Expenses - Operating expenses for Q1 2025 decreased by $1.1 million, or 6%, to $18.3 million, reflecting cost containment efforts[9] - Total operating expenses for the three months ended March 31, 2025, were $18,283 million, down from $19,407 million in the same period of 2024, a decrease of 5.8%[22] - Cash used in operating activities for the three months ended March 31, 2025, was $(6,310) million, compared to $(2,878) million in the same period of 2024, reflecting increased cash outflows[24] Cash and Debt - Cash and cash equivalents as of March 31, 2025, were $3.2 million, down from $4.3 million at the end of 2024[12] - Total debt obligations decreased to approximately $35.5 million from $39.7 million as of December 31, 2024[12] - Cash and cash equivalents and restricted cash at the end of the period were $3,199 million, down from $5,087 million at the end of the same period in 2024[24] Shareholder Impact - The net loss attributable to stockholders for Q1 2025 was $12.4 million, or $17.44 per share, compared to a net loss of $9.8 million, or $16.91 per share in Q1 2024[11] - The weighted-average number of shares used in the basic and diluted loss per share calculation increased to 709 million in 2025 from 579 million in 2024[22] Strategic Actions - The company is not providing full-year 2025 financial guidance due to ongoing evaluations of strategic alternatives and potential trade disruptions[13] - The company completed a registered direct offering, raising approximately $1.1 million and $1.57 million from two separate transactions in April 2025[6] - The company intends to challenge the Canada Revenue Agency's assessment regarding the denial of CEWS claims, which could impact future cash flows[29] Foreign Exchange - The company experienced a foreign exchange gain of $(119) million for the three months ended March 31, 2025, compared to a loss of $324 million in the same period of 2024[27] Loss on Debt - The company reported a loss on debt extinguishment of $1,049 million for the three months ended March 31, 2025[27] Revenue Sources - The percentage of total systems revenue derived from the company's internal lease programs was approximately 25% in Q1 2025, consistent with the prior year[7]

Core Viewpoint - Venus Concept Inc. reported a decline in financial performance for the first quarter of 2025, with total revenue decreasing by 22% year-over-year, attributed to challenging market conditions and timing of new system adoptions [5][10]. Financial Results Summary - Total revenue for Q1 2025 was $13.6 million, down from $17.5 million in Q1 2024, reflecting a decrease of $3.8 million or 21.9% [5][6]. - Revenue breakdown showed a 29.3% decrease in international revenue and a 16.5% decrease in U.S. revenue [6]. - Revenue from products—systems decreased by 25%, and lease systems revenue also saw a 25% decline [6][7]. - Gross profit for Q1 2025 was $8.8 million, a decrease of 25% compared to Q1 2024, with a gross margin of 64.2% [7][10]. - Operating expenses decreased by 6% year-over-year to $18.3 million, driven by reductions in general and administrative, selling and marketing, and research and development expenses [8][9]. - The company reported a GAAP net loss of $12.4 million for Q1 2025, compared to a net loss of $9.8 million in Q1 2024 [10][11]. Management Commentary - The CEO emphasized solid execution despite a challenging environment and indicated a focus on managing cash burn and making targeted investments for long-term growth [3][4]. - The company enhanced its balance sheet with a new bridge loan amendment and two equity capital transactions, indicating validation from investors regarding its potential value creation [3][4]. Cash Position and Debt - As of March 31, 2025, the company had cash and cash equivalents of $3.2 million and total debt obligations of approximately $35.5 million, a decrease from $39.7 million at the end of 2024 [11][12]. - The company is currently not providing full-year 2025 financial guidance due to ongoing evaluations of strategic alternatives and potential trade disruptions [12]. Conference Call Details - Management will host a conference call to discuss the quarterly results, providing an opportunity for questions and answers [13].