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01/10 17:32
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call highlights a positive outlook with increased revenue guidance and improved financial metrics, such as higher gross margins and reduced net loss. The AYON system launch and international expansion are expected to drive growth. Despite some vague management responses in the Q&A, the overall sentiment is boosted by strong demand and strategic initiatives, leading to a positive stock price prediction.
Total Revenue $12.9 million, up 12% year-over-year from $11.5 million. The growth was driven by a $1.8 million increase in sales of Surgical Aesthetics products, particularly due to the commercial launch of the AYON Body Contouring System and increased volume of single-use handpieces in both domestic and international markets. This was slightly offset by a decline in OEM revenue.
Surgical Aesthetics Revenue $11.1 million, up 19% year-over-year from $9.3 million. Growth was driven by the AYON launch and increased sales of single-use handpieces. This was partially offset by decreases in domestic sales of generators and upgrades to the Apyx One console.
OEM Revenue $1.8 million, down 18% year-over-year from $2.2 million. The decline was due to reduced sales volumes to existing customers, including Symmetry Surgical, as the company shifted focus to the Surgical Aesthetics segment.
Domestic Revenue $9.3 million, up 20% year-over-year. Growth was attributed to strong domestic sales of Surgical Aesthetics products, including the AYON system.
International Revenue $3.5 million, down 4% year-over-year. The decline was not explicitly explained but may relate to seasonality or reduced international sales of certain products.
Gross Profit $8.3 million, up from $7 million in the prior year. Gross profit margin increased to 64.4% from 60.5%, driven by higher revenue and improved cost efficiencies.
Operating Expenses $9.1 million, down from $10.6 million in the prior year. The decrease was due to reductions in selling, general and administrative expenses, research and development expenses, salaries, and professional services expenses, reflecting cost-cutting measures implemented in late 2024.
Net Loss $2 million, or $0.05 per share, compared to $4.7 million, or $0.14 per share, in the prior year. The improvement was due to increased revenue and reduced operating expenses.
Adjusted EBITDA Loss $0.1 million, down 96% from $2.4 million in the prior year. The improvement reflects higher revenue and cost reductions.
Cash Used in Operating Activities (Q3 2025) $3.5 million, down from $4.4 million in the prior year. The improvement was due to better working capital management and the impact of the AYON launch.
Cash Used in Operating Activities (9 months ended September 30, 2025) $5.5 million, down from $15.1 million in the prior year. The improvement reflects cost controls and better cash management.
Cash and Cash Equivalents $25.1 million as of September 30, 2025, down from $31.7 million as of December 31, 2024. The decrease reflects cash used in operations and investments in the AYON launch.
AYON Body Contouring System: Launched successfully with strong market feedback. It integrates multiple functions like fat removal, contouring, tissue contraction, and electrosurgical capabilities. The system is positioned as a comprehensive solution for body contouring with advanced features like LIFT technology and Renuvion for enhanced tissue contraction. FDA clearance for power liposuction is anticipated in Q1 2026.
Market Positioning in Surgical Aesthetics: Rebranded Advanced Energy segment to Surgical Aesthetics to align with the company's mission and product focus. Positioned AYON as a new gold standard in surgical aesthetics, targeting the growing demand for skin laxity treatments, especially among patients using GLP-1 medications.
Revenue Growth: Total revenue increased by 12% to $12.9 million in Q3 2025, driven by a 19% growth in the Surgical Aesthetics segment.
Cost Reduction and Restructuring: Implemented significant cost reductions and restructuring in late 2024, resulting in a leaner operating structure and reduced cash burn.
Shift in Focus: Shifted resources from OEM to Surgical Aesthetics segment, emphasizing the AYON launch as the future of the company.
OEM Revenue Decline: The company experienced a decline in OEM revenue, which decreased from $2.2 million in the same period last year to $1.8 million in the third quarter of 2025. This decline was attributed to reduced sales volumes to existing customers, including Symmetry Surgical under a 10-year generator manufacturing and supply agreement. The shift in focus and resources from OEM to the Surgical Aesthetics segment could pose risks if the new segment does not perform as expected.
Tariff Uncertainty: The company acknowledged uncertainty regarding the impact of tariffs on imports from various countries. This could affect the cost structure and profitability, depending on future trade policies and tariff changes.
Cash Burn and Financial Health: Although the company has reduced its cash burn and improved financial health, it still reported a net loss of $2 million for the third quarter of 2025. The company’s ability to sustain operations and invest in growth initiatives depends on maintaining strict cost controls and achieving revenue targets.
Regulatory Approval Risks: The company is awaiting FDA clearance for a label expansion of the AYON system to include power liposuction, expected in Q1 2026. Delays or failure to secure this approval could impact the product’s market positioning and revenue potential.
Market Competition: The AYON system is positioned as a groundbreaking product in the body contouring market. However, the company faces competitive pressures from existing systems and new entrants, which could impact its ability to capture market share.
Economic and Market Conditions: The company’s performance is influenced by broader economic and market conditions, including the adoption of GLP-1 drugs and demand for aesthetic procedures. Any downturn in these areas could adversely affect revenue growth.
Revenue Guidance for 2025: Total revenue is expected to range between $50.5 million and $52.5 million, up from the previous range of $50 million to $52 million. This increase reflects the strong commercial launch of the AYON platform.
Surgical Aesthetics Segment Revenue: Revenue is projected to range between $43 million and $45 million, up from the previous guidance of $42 million to $44 million. This increase is attributed to the successful launch and uptake of the AYON system.
OEM Revenue: Revenue is expected to be approximately $7.5 million, down from the previous guidance of $8 million, as the company focuses resources on the Surgical Aesthetics segment.
Gross Margins for 2025: Anticipated to be approximately 61% for the year.
Operating Expenses for 2025: Total operating expenses are not expected to exceed $40 million.
AYON System FDA Clearance: The company has submitted a 510(k) application for label expansion of the AYON system to include power liposuction. Clearance is anticipated in Q1 2026, which will solidify AYON's position as the first fully integrated body contouring system.
Market Opportunity with GLP-1 Medications: The expanding patient population using GLP-1 drugs presents a significant opportunity. With over 15 million users in the U.S., the company believes its Renuvion and AYON systems are well-positioned to address the resulting demand for aesthetic treatments.
Cash Projections: The company expects to maintain sufficient cash through 2027, supported by the AYON platform uptake, working capital management, and strict cost controls.
The selected topic was not discussed during the call.
The earnings call highlights a positive outlook with increased revenue guidance and improved financial metrics, such as higher gross margins and reduced net loss. The AYON system launch and international expansion are expected to drive growth. Despite some vague management responses in the Q&A, the overall sentiment is boosted by strong demand and strategic initiatives, leading to a positive stock price prediction.
Despite a year-over-year revenue decline, the company demonstrated improved cost management, reducing losses significantly. The AYON product launch has been well-received, with strong presales and positive feedback, leading to raised guidance. The addition of experienced commercial hires and a promising partnership in China further bolster growth prospects. Although financial results were mixed, the optimistic guidance and strategic moves suggest a positive stock price movement over the next two weeks.
The earnings call reflects a negative sentiment due to several factors: declining revenue guidance for 2024, ongoing net losses, and market challenges, including competitive pressures and regulatory uncertainties. Despite some positive aspects like cost reduction and a slight improvement in gross margins, the lack of clear guidance on key products like AYON and a new secondary offering further weigh down the outlook. The Q&A section did not provide sufficient clarity or optimism to offset these concerns, leading to a negative stock price prediction.
The earnings call reflects a challenging environment for Apyx Medical, with a decline in revenue and international sales, and a net loss despite cost-cutting efforts. The company's restructuring and direct offering indicate financial strain. Although there are plans for new product launches and a direct-to-consumer strategy, the uncertain regulatory approval for AYON and market challenges, such as the impact of GLP-1 drugs, pose significant risks. The sentiment in the Q&A was cautious, with unclear guidance updates, contributing to a negative outlook for the stock.
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