Cutera(US:CUTR)2022-05-11 02:21Financial Data and Key Metrics Changes - The company reported first quarter revenue of $58.0 million, representing approximately 17% growth year-over-year and 21% growth on a constant currency basis [10][18] - Non-GAAP gross profit for the first quarter was $32.3 million with a gross margin of 55.7%, a decline of approximately 70 basis points compared to the same period last year [20][22] - Non-GAAP operating income was a loss of $3.8 million compared to a profit of $4.6 million in the prior year, primarily due to investments in the AviClear program [26][34] Business Line Data and Key Metrics Changes - Capital Equipment sales were the most significant contributor to year-over-year growth, with North American Capital Equipment sales increasing by 35% [11][18] - Recurring revenue, including Consumables, Global Service, and Skincare, was $21.5 million, up 1% as reported and 7% in constant currency [13][19] - Skincare revenue for the quarter was $11.6 million, a decline of 5% from the prior year on an as-reported basis, but growth of 4% on a constant currency basis [16][20] Market Data and Key Metrics Changes - International Capital Equipment sales grew 20% as reported and 27% in constant currency, with notable recoveries in Australia (41% growth) and Japan (49% growth) [12][18] - European Capital Equipment sales declined by $700,000 from prior year levels due to disruptions caused by events in Ukraine, but a return to growth is anticipated [13][32] Company Strategy and Development Direction - The company is focusing on the launch of AviClear, a new acne treatment device, and plans to make significant investments in commercial and R&D functions over the next two to three quarters [17][36] - Management is optimistic about the potential of AviClear to transform the company's financial profile and is committed to a careful rollout strategy [70][72] Management's Comments on Operating Environment and Future Outlook - Management noted that they have not observed softness in demand in their key markets, contrasting with trends seen in other companies associated with elective medical procedures [7][9] - The company reiterated its revenue guidance for 2022 at $255 million to $260 million, excluding any revenue from AviClear, with an expected underlying constant currency growth of approximately 13% to 15% [32][34] Other Important Information - The company ended the quarter with $131.8 million in unrestricted cash and marketable securities, a decline from $164.9 million at the same time last year [29][30] - The anticipated cash burn for the remainder of the year is approximately $10 million per quarter, with expectations of non-linear cash consumption as inventories for AviClear are built [31][34] Q&A Session Summary Question: Can you talk about the increased revenue expectations on the core business? - Management noted that strength is primarily seen in North America, with a positive impact from the AviClear launch and investments in key account managers [50][51] Question: What are the early learnings from the partnership model for AviClear? - Management expressed excitement about the alignment of goals between the company and practitioners, emphasizing the potential for a win-win situation [54][55] Question: How do you think about the sales conversion cycle for AviClear? - The sales process is evolving, with a focus on joint efforts between consumable and capital representatives to support practices effectively [58][59] Question: What is the expected gross margin for AviClear? - While specific numbers were not provided, management expects AviClear to be accretive to the overall gross margin profile [79][80] Question: How will the company manage operating expenses throughout the year? - Management clarified that while ERP spending is expected to taper, investments in AviClear will increase, impacting overall operating expenses [73][74]