Financial Data and Key Metrics Changes - Revenue for Q1 2025 was reported at $69.6 million, exceeding guidance, with adjusted gross margin at 71.9% and adjusted EBITDA at $7.3 million [16][20][22] - Consumable sales totaled $49.4 million, reflecting an 8.2% increase year-over-year, with gross margins improving significantly from 63.4% in the prior year [16][20] - Operating loss for Q1 2025 was $12 million, an improvement from a loss of $17 million in the prior year [21] Business Line Data and Key Metrics Changes - Consumables now represent over 70% of total revenue, growing over 8% [6][16] - Total active devices in the field increased to 35,014 units, up from 32,530 units year-over-year [16] - Non-SENDAO systems accounted for 36% of total device sales in Q1 2025, indicating a successful shift in product strategy [17] Market Data and Key Metrics Changes - Consumable net sales increased by 3.5% in The Americas, 40.2% in APAC, and 7.9% in EMEA [16][17] - Revenue in The Americas declined by 8.1%, while APAC and EMEA saw declines of 30.4% and 21.6% respectively, largely due to macroeconomic pressures and strategic shifts in China [18] - The transition to a third-party distribution model in China is underway, expected to simplify operations and lower capital intensity [8][18] Company Strategy and Development Direction - The company is focused on three strategic priorities: enhancing commercial execution, accelerating science-backed innovation, and deepening provider partnerships [7][12][26] - New product launches, including the HydraLock booster and a dedicated skincare line, are aimed at driving consumer traffic and provider revenue [11][12] - The company is also investing in brand and consumer engagement to elevate awareness and drive traffic to providers [14] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism regarding the macro environment, with expectations for slight improvement in the back half of 2025 [32] - The company anticipates continued pressure on capital equipment sales due to financing challenges and uncertainty in global markets [22][23] - Tariff impacts are expected to be approximately $5 million in 2025, with ongoing adjustments to mitigate these costs [24][90] Other Important Information - Total operating expenses decreased by 7.3% to $60.6 million, with significant reductions in selling and marketing expenses [21] - The company ended Q1 2025 with approximately $373 million in cash, reflecting the benefits of cost reductions and operational efficiencies [22] Q&A Session Summary Question: Key drivers behind better profitability and potential areas of upside - Management highlighted initiatives such as lower price equipment options and improved sales execution as key drivers for profitability [32] Question: Signs of consumer pullback amid macro uncertainty - Management noted strong growth in signature treatments, with some softness in luxury treatments, particularly in day spas and plastic surgery channels [33][34] Question: Impact of new product launches on consumables - The HydraLock launch is expected to drive consumer traffic and provider revenue, with excitement around upcoming product launches [40] Question: Progress on the distributor model in China - The transition to a distributor model is well underway, with expectations to complete the transition within the quarter [87] Question: Competition and market share - The company maintains over 60% market share in the U.S. and is focused on clinical backing to differentiate from competitors [90]

Financial Data and Key Metrics Changes - The company reported a revenue decline of 0.8% and constant currency revenue growth of 0.7% in the first quarter [28] - Gross margin expanded by 450 basis points year over year to 31.6%, marking the best quarterly results since the company went public [28] - Adjusted EBITDA loss was $3.7 million, an improvement of $9.5 million compared to the same quarter last year [28][32] Business Line Data and Key Metrics Changes - Volume grew by 9.2% in the quarter, with strong performance in Greater China and solid growth in Europe and International [7][29] - North America segment underperformed due to a change in sourcing strategy at the largest customer and SKU rationalization in frozen items [19][32] - The company outperformed both the plant-based milk category and the oat milk category, even with the impact of frozen business decline [20][32] Market Data and Key Metrics Changes - The German business accelerated growth to nearly 8% in the last twelve weeks, while the UK market showed signs of revitalization moving from decline to growth [17][18] - The Greater China segment is still developing, focusing on food service execution and rebuilding retail presence [22][24] Company Strategy and Development Direction - The company aims for disciplined resource allocation to create value and achieve its 2025 priorities, which include igniting positive momentum globally and delivering its first full year of profitable growth as a public company [5][9] - The strategy includes increasing product relevance, attacking barriers to conversion, and expanding availability in the coffee and beverage space [9][10] Management's Comments on Operating Environment and Future Outlook - Management acknowledged challenges in North America but expressed confidence that investments and action plans will enable acceleration of total company growth later in the year [8][19] - The company expects to continue improving gross margin and adjusted EBITDA, with a target of achieving a gross margin of 35% to 40% in the long term [36][47] Other Important Information - The company reduced its cost of goods sold per liter by 15% year over year and 6% compared to the previous quarter [25] - Free cash flow was a use of $21 million, marking the best quarterly performance as a public company [34] Q&A Session Summary Question: Insights on initiatives in Europe and their impact on category growth - Management noted that while Oatly is outperforming its own performance, category growth for oat milk remains soft, but they are optimistic about future traction as they deploy their strategy in the U.S. [39][41] Question: Expectations for gross margin improvement - Management expects gross margin to improve compared to the previous year, driven by supply chain efficiencies and product mix management, but did not provide a specific number [45][46] Question: Distribution opportunities in North America - Management highlighted ample distribution opportunities across all channels in North America, emphasizing the potential for growth in their new beverage portfolio [53][56] Question: U.S. consumer behavior and category performance - Management indicated that while retail sales momentum has decelerated, they see slight upside in velocities and unit shares, and they are optimistic about igniting new category momentum [60][62] Question: Feedback from foodservice operators on plant-based offerings - Management observed that small to medium foodservice customers are adapting quickly to trends and adopting Oatly's offerings, indicating a shift towards cold beverages [77][81] Question: Reduction in negative media coverage for plant-based products - Management confirmed that they are building alliances and engaging in public education to combat misinformation about plant-based products, which is showing positive results [84][86]