• Revenue: $40.2 million for Q3 2024, a 4.5% increase from the previous year.
• Gross Profit: $25.7 million, representing 63.9% of revenue.
• Net Loss: $13.1 million for Q3 2024, improved from a $21 million loss in Q3 2023.
• Adjusted EBITA Loss: $7 million, compared to a $16.3 million loss in Q3 2023.
• Cash Position: $39.7 million as of September 30, 2024.
• Cash Used: $14.9 million in Q3 2024, down from $38 million in Q3 2023.
• Operating Expenses: $38.9 million, a decrease of approximately $8.2 million from the previous year.
• R&D Expenses: $2.3 million, down from $4.8 million in the same quarter last year.
• Pro Forma Cash Position: Approximately $114 million after recent financing activities.
• US Revenue Expectation for 2025: Expected to exceed $35 million.
• Sales Distribution: Europe, Middle East, and Africa: 49%; Asia Pacific: 27%; Latin America: 24%; North America: 1%.

• Warning! GuruFocus has detected 6 Warning Signs with ESTA.

Release Date: November 07, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• The approval of Motiva implants in the U.S. has exceeded expectations, with rapid onboarding of new accounts and strong order placements.
• Establishment Labs Holdings Inc (NASDAQ:ESTA) has strengthened its balance sheet with a $25 million credit facility and a $50 million equity raise.
• The company has significantly reduced its cash loss by over 60% compared to the previous year, despite increased investments in the U.S.
• The U.S. launch of Motiva implants is expected to generate over $35 million in revenue in 2025, indicating strong growth potential.
• Mia Femtech is creating a new category in breast aesthetics, attracting new customers with a shorter consideration period and higher price points.

Negative Points

• Global demand remains uneven due to macroeconomic pressures, with significant underperformance in Latin America, particularly Brazil.
• The company faces short-term supply challenges due to the decommissioning of a manufacturing facility, impacting Q4 performance.
• Gross profit margins have decreased compared to the previous year, partly due to currency revaluation impacts.
• The company's net loss from operations remains significant, although it has improved compared to the previous year.
• The approval of Motiva implants in the U.S. came 6 to 8 weeks later than expected, affecting revenue guidance for the year.

Q & A Highlights

Q: Hi, regarding the US launch, it's great to hear it's off to a strong start. What does the $30 million to $35 million expectation for next year contemplate regarding the ramp this quarter and sustaining momentum next year? A: Thanks, Alan. The fundamentals are strong, with high-quality sales reps and rapid onboarding of new accounts. We're seeing a paradigm shift in the US market, with accounts already ordering and reordering. This supports our confidence in achieving at least $35 million next year, based on our technology's quality and differentiation.

Q: Could you provide more color on China, specifically regarding your goals for initial stocking orders and reordering? How will the $50 million investment impact the ramp of Motiva products in China? A: Despite a tough year for consumer spending in China, measures are being taken to boost it. The investment will advance Motiva's growth in China and bring the Ergonomix2 platform and Mia to the market. We're pleased with our progress in deploying inventories and medical education, setting the stage for leadership in China.

Q: Can you elaborate on the non-LatAm markets, particularly Europe and non-China APAC? Are distributors back to normalized inventory levels? A: Markets are stabilizing at different speeds. EMEA shows stabilization and growth, while APAC is stabilizing with room for improvement. There's no structural change in demand for breast aesthetics; economic conditions have made access harder. We expect growth in EMEA and APAC, gaining market share globally.

Q: Regarding short-term supply challenges, will this impact your ability to meet near-term demand? A: We planned the decommissioning of our B15 manufacturing facility, moving capacity to other units. There will be some impact in Q4, hence the guidance change, but we expect pressures to abate by Q1 with added manufacturing capacity.

Q: Could you update us on the US sales force and potential expansion in 2025? A: We've rapidly increased our sales reps from 12 to 32, aiming for 40 by year-end. We'll continue adding reps as needed, focusing on quality and market share growth. Our infrastructure in the US is strengthening, supporting significant market share gains next year.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.