Establishment Labs(ESTA)2025-05-07 21:30Financial Data and Key Metrics Changes - Total revenue for Q1 2025 was $41.4 million, an increase of 11% year-over-year, with a 13.5% growth excluding foreign exchange impacts [25][27] - Gross profit for Q1 was $27.8 million, representing 67.2% of revenue, a 160 basis point increase from 65.6% in Q1 2024 [27] - Adjusted EBITDA loss was $12.1 million, an improvement from a $13.1 million loss in the previous quarter [29] - Cash position as of March 31 was $69.2 million, with an additional $25 million available under a credit facility, totaling approximately $94 million in accessible cash [29][30] Business Line Data and Key Metrics Changes - U.S. revenue for Q1 was $6.2 million, exceeding the previous guidance of $5.5 million [10][25] - Outside the U.S., revenue growth was approximately 5% in Q1, in line with expectations [26][27] - The launch of Motiva in the U.S. has seen over 900 accounts onboarded, with 84% of those placing reorders [12][14] Market Data and Key Metrics Changes - The U.S. market is showing strong adoption, with daily orders exceeding 120 in April, up from 100 in March [13] - Brazil's revenue stabilized in Q1, but still showed a meaningful reduction compared to the same period last year [26] - The company is experiencing challenges in Latin America, particularly in Brazil, but has seen stabilization in other regions [41] Company Strategy and Development Direction - The company aims to become the market share leader in the U.S. and is focused on driving growth, increasing efficiency, and advancing its innovation pipeline [14][34] - The introduction of minimally invasive products like Mia and Preserve is expected to expand market opportunities and enhance patient outcomes [20][21][23] - The company is committed to achieving profitability and cash flow targets without the need for additional equity raises [30][31] Management's Comments on Operating Environment and Future Outlook - Management remains confident in the revenue guidance of $205 million to $210 million for 2025, representing a growth of 23% to 26% [30][31] - There has been no observed impact on demand from recent trade policies, and the company is prepared to adjust expenses if necessary [31] - The company expects to reach cash flow breakeven in 2026, with a significant reduction in cash use anticipated throughout 2025 [30] Other Important Information - The appointment of Peter Caldini as permanent CEO was announced, with a focus on achieving the financial potential of the company [5][6] - The partnership with Meghan Trainor has generated over 4 billion impressions, significantly enhancing brand awareness [18][19] Q&A Session Summary Question: OUS outlook and consumer sentiment by region - Management confirmed mid-single digit growth guidance for OUS markets, with stabilization in Asia and Europe, while Brazil remains challenging [39][40] Question: Details on the launch of Preserve - The response to Preserve has been strong, positioned for day-to-day use, and expected to expand market share [42][43] Question: U.S. launch strategy and competitive response - The U.S. launch is exceeding expectations, with a conservative approach to guidance despite strong performance [49][50][54] Question: U.S. sales force expansion plans - The current sales force consists of 40 reps, with plans to expand in key markets as needed [57][58] Question: Gross margin outlook and tariff impact - Gross margins are expected to improve as U.S. sales grow, with minimal impact from tariffs anticipated [81][84] Question: Account penetration and market share expectations - The company aims for close to 100% penetration in engaged clinics, with expectations of achieving dominant market share over time [85][92]