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 margin improvements driven by better inventory management and a favorable mix towards consumables [16][20][22] - Operating loss improved to $12 million compared to a loss of $17 million in the prior year [21] Business Line Data and Key Metrics Changes - Consumables grew over 8% and now represent over 70% of total revenue, indicating a shift towards high-margin products [6][16] - Total active devices in the field increased to 35,014 units, up from 32,530 units year-over-year, highlighting demand for HydroFacial devices [16][20] 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, while global device sales saw a 43.5% decline year-over-year due to macroeconomic pressures [17][19] - Revenue in The Americas decreased by 8.1%, while APAC and EMEA revenues declined by 30.4% and 21.6% respectively, with the decline in APAC attributed to a transition to a distributor model in China [19] Company Strategy and Development Direction - The company is focused on three strategic priorities: enhancing commercial execution, accelerating science-backed innovation, and deepening provider partnerships [8][12][27] - The transition to a third-party distribution model in China aims to simplify operations and lower capital intensity while maintaining access to a high-growth market [9][19] 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, while acknowledging ongoing uncertainties [32][60] - The company is committed to driving sustainable margin expansion and delivering long-term shareholder value through strategic initiatives [25][27] Other Important Information - The company expects capital expenditures of approximately $10 million to $15 million for the full year 2025, with guidance for Q2 sales projected between $71 million and $76 million [22][23] - Tariff impacts are estimated at approximately $5 million for 2025, with ongoing adjustments based on evolving conditions [24][90] 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, while remaining cautious due to macro uncertainties [30][32] Question: Signs of consumer pullback amid macro uncertainty - Management noted strong growth in signature treatments, with some softness in luxury treatments, indicating a bifurcated consumer demand landscape [33][35] 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 [39][41] Question: Marketing spend and tactics for the year - The company plans to maintain marketing spend as a percentage of revenue while focusing on driving end consumer traffic to providers [80][82] Question: Progress on distributor model in China and tariff impacts - The transition to a distributor model in China is underway, with management working to mitigate tariff impacts through strategic planning [87][90]

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]