Venus cept (VERO) - 2024 Q4 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Total revenue for Q4 2024 was $15.8 million, a decline of$ 2.4 million or 13% year-over-year [24][6] - Lease revenue decreased by $3.5 million or 58% year-over-year in Q4, offsetting mid-teens growth in cash system sales [7][6] - Net loss attributable to stockholders for Q4 2024 was$ 8 million or $11.23 per share, compared to a net loss of$ 11.1 million or $20.14 per share for Q4 2023 [32] Business Line Data and Key Metrics Changes - Cash system sales in the U.S. increased by 27% year-over-year, representing 87% of total U.S. system sales in Q4 compared to 58% last year [8] - The percentage of total systems revenue from internal lease programs decreased from approximately 41% in the prior year to 20% in Q4 2024 [25] - Sales through distributors more than doubled year-over-year in Q4, particularly in the APAC and EMEA regions [12] Market Data and Key Metrics Changes - Revenue results in fiscal year 2024 reflected a decline of 15% year-over-year, which was better than many competitors [13] - The decline in total revenue was driven by a 13% decrease in both U.S. and international revenue [24][25] - Customer financing pressures and economic uncertainty continue to impact system adoption [10] Company Strategy and Development Direction - The company is focused on transitioning to cash system sales, aiming for 70% to 75% of total systems revenue to come from cash sales [26] - A strategic initiative to restructure debt obligations resulted in a 47% reduction in total debt from$ 74.9 million to approximately $39.7 million [17] - The company plans to launch a new body system in the second half of 2025, which is expected to drive growth [55] Management's Comments on Operating Environment and Future Outlook - Management acknowledges that macroeconomic headwinds will continue to impact quarterly performance but remains optimistic about returning to growth [14][36] - The company is not providing full-year 2025 financial guidance but expects total revenue for Q1 2025 to be at least$ 14 million [36] - Management believes that the impact of strategic transitions is behind them, looking forward to a more normalized business profile [13][42] Other Important Information - A 1 for 11 reverse stock split was announced, with the company's common stock trading on an adjusted basis starting March 4, 2025 [21] - The company has made significant progress in reducing cash used in operations by 14% year-over-year [15] Q&A Session Summary Question: Can you characterize what a normal business profile is going forward? - Management indicated that while predicting the macroeconomic environment is challenging, they expect performance to improve compared to 2024 [42] Question: How is the Venus Hair business performing? - Management expressed satisfaction with the performance of the Venus Hair business, particularly the Venus ARTAS Robot, and noted ongoing R&D innovations [46][47] Question: What is the strategy for top-line growth in 2025? - Management highlighted the need to establish a normal rhythm of orders with new distribution partners and anticipates growth in international business [53][54] Question: Are there further cost-cutting measures available? - Management stated that the infrastructure is efficient, and the focus is on increasing sales rather than further cost reductions [57] Question: How do tariffs affect the business? - Management noted that products are manufactured in both the U.S. and Israel, and currently, they do not expect a substantial near-term impact from tariffs [60]