Establishment Labs(US:ESTA)2024-11-09 13:55Financial Data and Key Metrics Changes - Total revenue for Q3 2024 was $40.2 million, an increase of 4.5% from the same period last year [12] - Gross profit for Q3 was $25.7 million, representing 63.9% of revenue, down from 67.7% in Q3 2023 [12] - EBITDA loss improved to $7 million from over $16 million in the previous year [6][13] - Cash loss in Q3 was $14.9 million, down more than 60% from the previous year [5][13] - Pro forma cash position at the end of Q3 was approximately $114 million after recent capital raises [5][14] Business Line Data and Key Metrics Changes - The launch of Motiva Implants in the U.S. exceeded expectations, with over 250 accounts onboarded and more than 70 placing orders within three weeks [7][8] - The company is signing up to 50 new accounts daily, with potential revenue of $3 million in the last two months of the quarter [8] - Mia Femtech is gaining traction, with 40% of women choosing it not seeking traditional breast augmentation [10] Market Data and Key Metrics Changes - Sales in Europe, Middle East, and Africa accounted for approximately 49% of total sales, while Asia Pacific contributed 27% and Latin America 24% [12] - Demand for breast procedures in Brazil is down as much as 50% in certain regions, impacting overall performance in Latin America [7][12] - Despite challenges in Latin America, the company is seeing growth in its OUS business, particularly in China [7] Company Strategy and Development Direction - The company aims to achieve its first positive EBITDA quarter in 2025, with a focus on U.S. growth initiatives and cost reductions [6][15] - The FDA approval of Motiva is seen as a significant growth opportunity, with expectations for revenue in the U.S. to exceed $35 million in 2025 [9][17] - The company is also focused on expanding Mia Femtech as a new category in breast aesthetics, with plans to increase the number of certified clinics [10][37] Management's Comments on Operating Environment and Future Outlook - Management noted that while the U.S. market is off to a strong start, underlying market demand remains uneven, particularly in Latin America [14][15] - The company is taking a conservative approach to budgeting for 2025, anticipating mid-single-digit growth outside the U.S. [15][46] - Management expressed confidence in the long-term growth potential in the U.S. market, driven by the introduction of innovative products [17][42] Other Important Information - The company has decommissioned one of its manufacturing facilities to streamline operations and reduce costs [5][9] - A strategic financing agreement in China aims to support the growth of Motiva and the development of new products [11][25] Q&A Session Summary Question: U.S. launch expectations and ramp-up - Management highlighted the quality of sales reps and the rapid onboarding of accounts as key factors for achieving $35 million in revenue next year [19][20] Question: Growth expectations for 2025 - Management clarified that the 5% growth expectation for OUS is conservative and reflects a cautious budgeting approach [21][22] Question: Progress in China - Management noted that while 2024 has been challenging, investments are expected to enhance growth in 2025 [24][25] Question: Market conditions in Europe and APAC - Management indicated that EMEA markets are stabilizing, while APAC shows potential for improvement [28][29] Question: Supply challenges and near-term demand - Management acknowledged short-term supply challenges due to the decommissioning of a manufacturing facility but expects to resolve these by Q1 [30] Question: U.S. account targets and sales force expansion - Management confirmed plans to increase the sales force as the number of accounts grows, emphasizing the need for quality over quantity [31][32] Question: Regulatory path for Mia and Ergonomix - Management is in discussions with the FDA regarding the regulatory pathway for Mia and Ergonomix2 [38][47]