Sam Eiber

Sam Eiber of BTIG asked for clarification on the "timing issue" impacting Q3 revenue, especially given the strong lead and consultation trends observed in Q2. He also sought to understand the surgeon interest and capability for skin excision procedures within AirSculpt Centers, the economic capture potential, and how AirSculpt's marketing and brand awareness strategies might shift to target the new GLP-1 patient segment.

Answer

Yogi Jashnani, Chief Executive Officer, attributed the Q3 revenue impact to a challenging consumer environment for considered purchases, where strong leads and consultations did not translate into conversions as readily. He noted improving Q4 same-store sales trends and highlighted the expanded, broader GLP-1 opportunity, where users are converting better. He confirmed strong surgeon interest and capability for skin excisions within AirSculpt's elite network, with many surgeons already experienced. He also detailed plans for adapting marketing and sales messaging to specifically target GLP-1 users with loose skin or uneven fat deposits, focusing on appropriate timing and channels.

Sam Eiber of BTIG sought clarification on the "timing issue" impacting AirSculpt's Q3 revenue, particularly given the reported increase in leads and consultations during the previous quarter. He also asked about surgeon interest and capability in performing skin excision procedures for GLP-1 patients, the economic capture, and potential shifts in marketing and brand awareness strategies to target this new subsegment.

Answer

Yogi Jashnani, Chief Executive Officer, attributed the Q3 revenue softness to a challenging consumer environment for considered purchases, despite strong leads and consults, noting consumer hesitation to finalize purchases. He mentioned improving Q4 same-store sales and emphasized the broader GLP-1 opportunity, with GLP-1 users converting better. Regarding skin excisions, Mr. Jashnani confirmed strong surgeon interest and capability within AirSculpt's elite network, and discussed the need for adapted marketing and sales messaging to target GLP-1 users, also noting the demand for fat removal due to uneven weight loss.

Sam Eiber requested deeper insights into the current state of the market, asking for more detail on consumer sentiment, any regional performance differences, and potential shifts in patient flow towards independent surgeons. He also asked what specific improvements in the base business are needed before the company would consider resuming its de novo expansion strategy.

Answer

CEO Yogi Jashnani described the consumer environment as 'choppy,' with record leads indicating strong interest but hesitation to commit to purchases due to macroeconomic uncertainty. He expressed confidence that AirSculpt's strategic initiatives and strong balance sheet position it favorably against smaller competitors. Regarding expansion, Jashnani stated that the primary focus is on improving same-center sales growth. The company would only revisit its de novo strategy after achieving stability and a return to growth in its existing centers.

Sam Eiber questioned whether the 2025 guidance includes any revenue contribution from the new skin tightening pilot and requested more detail on which specific marketing initiatives are successfully driving lead generation.

Answer

CEO Yogesh Jashnani confirmed that the fiscal 2025 guidance does not assume any contribution from the skin tightening pilot, meaning any success would be incremental. He elaborated that the primary drivers of lead growth have been a renewed focus on proven tactics like search engine marketing and social media, with newer channels like online video currently being tested.

Sam Eiber asked for more specifics on new marketing efforts like online video and social initiatives and how they complement historical methods. He also sought to understand if the new skin tightening service is an expansion of an existing offering or a new stand-alone procedure.

Answer

CEO Yogesh Jashnani explained that the marketing strategy combines optimizing existing channels like paid search with a returns-based approach while expanding into new areas like YouTube and connected TV. Regarding skin tightening, he clarified that while it is currently offered as an add-on to fat removal, the company plans to pilot it as a stand-alone service to capture new consumer demand, partly driven by GLP-1 drug users.

Sam Eiber asked about the expected uptake in consumable sales due to AYON's new capabilities and higher device utilization, and inquired about the latest market environment, demand trends, and GLP-1 dynamics.

Answer

CEO Charlie Goodwin stated that consumable uptake would primarily come from selling new AYON units to customers without existing Renuvion technology, rather than from existing users. He reiterated that the market is being disrupted by GLP-1 drugs, creating demand for skin laxity and body contouring solutions, and cited a McKinsey study indicating 63% of GLP-1 patients are new to aesthetics.

Sam Eiber asked about the potential for increased consumable sales and higher device utilization from Aon's new capabilities, and inquired about the latest market environment trends, including GLP-1 dynamics.

Answer

CEO Charlie Goodwin clarified that consumable uptake would primarily stem from new Aon customers, not necessarily from the existing base, noting strong Q3 consumable sales. He reiterated that GLP-1 drugs continue to disrupt the market, creating significant opportunities for technologies like Aon and Renuvion, citing a McKinsey study on new aesthetics patients.

Sam Eiber of BTIG inquired about the market reception for the new Aon system amid a challenging capital equipment environment, the strategic value of new commercial leadership hires, clarification on revenue seasonality due to the Aon launch, and the market opportunity in China with their new partner, GlamMoon.

Answer

CEO Charlie Goodwin described the Aon launch reception as 'spectacular,' driven by surgeon-led design and the growing demand from GLP-1 drug users, justifying the raised guidance. He highlighted the extensive aesthetics experience of new hires John Featherstone and Simon Davies. Goodwin also detailed the large market opportunity in China and the strategic advantage of their partner, GlamMoon. CFO Matt Hill clarified that the Aon launch in September may alter the typical Q2-to-Q3 revenue dip, but a strong Q4 is expected due to backlogged orders.

Sam Eiber followed up on the tariff discussion, asking for a quantification of the potential impact on gross margins. He also questioned how the company is balancing investments to support the AYON launch with the need to manage cash burn and operating expenses.

Answer

Executive Charles Goodwin addressed both points. He reiterated the full-year gross margin guidance of approximately 60%, indicating that any currently known tariff impacts are already factored in. On the AYON launch, Goodwin assured that while expense control and cash management are priorities, they will not come at the expense of a successful launch, and the necessary investments are fully contemplated in the company's budget.

Sam Eiber of BTIG followed up on the GLP-1 drug trend, asking what the company is observing from accounts regarding Renuvion utilization pull-through. He also asked for an update on the progress of customer upgrades to the Apyx One console.

Answer

CEO Charles Goodwin confirmed they are seeing the GLP-1 impact, evidenced by low double-digit growth in U.S. handpiece sales during a challenging aesthetic market. He noted that surgeons focusing on post-weight loss patients are seeing their practices thrive. Regarding upgrades, Goodwin explained that while the previous incentive for the Apyx One console was limited, the upcoming AYON system, which requires the Apyx One, creates a significant new reason for customers to upgrade, and there is a long runway for these conversions.

Inquired about the impact of GLP-1 adoption on Renuvion utilization and the current status of customer upgrades to the Apyx One console.

Answer

The company is seeing strong, low-double-digit growth in U.S. handpiece utilization, which they attribute to the rise of post-GLP-1 patients seeking surgical solutions. Regarding the Apyx One console, many customers have yet to upgrade, but the upcoming launch of the AYON system, which requires the Apyx One generator, is expected to be a major catalyst for conversions.

Asked for details on the recent workforce reduction, specifically which departments were affected, and questioned the market demand for the integrated features in the new Ayon system.

Answer

The workforce reduction was broad-based across the U.S. operations to focus on achieving profitability. The new Ayon platform directly addresses surgeon requests for an integrated, space-saving system, and Apyx has enhanced it to improve safety, efficiency, and patient outcomes, which will help establish Renuvion as the standard of care.

Sam Eiber from BTIG inquired about the U.S. growth trajectory, asking if a 'hockey stick' type of inflection could occur as surgeon utilization increases.

Answer

CEO Peter Caldini responded that he anticipates continued gradual growth rather than a sudden 'hockey stick' inflection. He explained that growth will be driven by a combination of adding new accounts and the steady progression of existing surgeons moving up the adoption curve, a process that varies by clinic.

Sam Eiber of BTIG inquired about market conditions in Europe and non-China APAC, whether distributor inventory levels have normalized, and the potential impact of the company's short-term supply challenges.

Answer

CEO Juan Jose Quiros confirmed that both the EMEA and APAC regions are growing year-over-year and gaining market share, with some markets stabilizing. He clarified that the supply pressure is a temporary Q4 issue resulting from a planned facility decommissioning and that capacity is being scaled to meet demand, with the situation expected to abate by Q1 2025.

Sam Eiber from BTIG inquired about the market reception to the Evolisse filler launch strategy and whether the challenging toxin market alters the company's view on product bundling. He also asked for the key levers needed to achieve the reiterated $700 million revenue target by 2028.

Answer

President & CEO David Moatazedi described the Evolisse launch as highly successful, citing strong training attendance and positive media coverage. Regarding the 2028 target, he explained that the company's internal forecast was previously well above $700 million, so the current reset still keeps them on track to achieve that long-term goal.

Sam Eiber inquired about the potential 'halo effect' of the Evolysse launch on the core Jeuveau business. He asked how management views the opportunity to penetrate accounts that were previously hesitant to work with a single-product company or to drive deeper sales within existing accounts.

Answer

CEO David Moatazedi stated that Evolysse presents a meaningful long-term opportunity for Jeuveau. He was encouraged that 20% of webcast attendees were new to Evolus, indicating interest from previously untapped accounts. He outlined a two-step process where a positive experience with Evolysse can open the door to conversations about Jeuveau. However, he clarified that this halo effect is not expected to be a significant driver in the near term but is viewed as a larger opportunity for 2026 and beyond.

Sam Eiber from BTIG inquired about the drivers and sustainability of the strong growth in Europe and asked if an upgrade cycle for the Ignite and Optimus Max platforms was beginning in the U.S.

Answer

CFO Yair Malca described the growth outside the U.S. as 'very sustainable,' attributing it to a strategic focus on developing international markets that were previously a lower priority than North America. CEO Moshe Mizrahy stated that the company would 'probably start' promoting an upgrade cycle to its newer platforms in Q3, both in the U.S. and the rest of the world.

Sam Eiber from BTIG sought clarification on the tariff impact on a full-year basis and its inclusion in the new gross margin guidance. He also asked about the prioritization of capital allocation between buybacks, dividends, and M&A, and inquired about the drivers of relative strength in the European market.

Answer

CFO Yair Malca confirmed the 2-3% tariff impact is calculated for the full year and is already factored into the new 78-80% gross margin guidance. CEO Moshe Mizrahy stated that after spending over $500 million on buybacks with little impact on the stock price, they are not considering another program and are preserving cash for potential M&A. He attributed European strength to successful management changes but noted that credit is now tightening there as well.

Sam Eiber inquired about the launch timing for the new CO2 laser and its market positioning, particularly its relationship with the Morpheus platform. He also asked for a performance update on adjacent product lines like Empower and Envision.

Answer

CEO Moshe Mizrahy clarified that the CO2 laser is a standalone platform, not a multi-application system with RF, and is expected to gain traction in the U.S. market late in Q1 or early in Q2 2025. He also stated that the Empower and Envision platforms experienced a similar revenue decline of around 20% in 2024, in line with the rest of the company's portfolio.

Sam Eiber asked for details on the recent commercial organization changes and whether they represented a new go-to-market strategy. He also sought early customer feedback on the new Ignite and OptimasMAX platforms, including the mix of new versus upgrade customers.

Answer

CEO Moshe Mizrahy detailed that management was replaced in Spain, U.K., and France due to performance, while the U.S. changes were a broader realignment. He has temporarily assumed the role of President of North America to oversee the transition. Regarding new products, he noted most sales were to new doctors or for second systems, not upgrades. He said promotions for upgrades are planned for Q4 and early next year.

Sam Eiber inquired about trends in the company's international (OUS) business, particularly in the newly launched European markets, and sought confirmation on the timing of the guided $2 million contribution from Japan.

Answer

CFO Daniel Wilson explained that it is still early days for the four Western European markets launched in late 2024. Regarding Japan, he confirmed the company is awaiting a reimbursement decision and plans a commercial launch in mid-2025, which aligns with the expected revenue contribution. Overall, international markets are projected to contribute approximately one percentage point of growth in 2025.

Inquired about the specific changes in the commercial organization driving recent success, the potential impact and customer anticipation for the transport-capable device, and for an update on the annualized contract revenue metric.

Answer

The company attributed the commercial success to a cultural shift driven by the new CCO and superior customer service, enabled by a better-performing product. The next-generation transport device is highly anticipated by customers and is expected to be a significant factor for growth, though the company wouldn't confirm a formal waiting list. They declined to update the specific annualized contract revenue metric but indicated that current Street estimates for the fiscal year are reasonable.

Sam Eiber of BTIG asked about Embecta's capital allocation strategy, specifically the net leverage ratio at which the company might become more active in M&A. He also inquired about the potential timeline for product portfolio expansion and the long-term outlook for margin progression beyond fiscal 2025.

Answer

CFO Jake Elguicze responded that the company's primary focus is on debt reduction to enhance financial flexibility, targeting a net leverage ratio of around 3.0x by the end of fiscal 2025 and likely moving into the 2x range in 2026 before considering M&A. CEO Devdatt Kurdikar added that long-term margin progression would be detailed at the May 2025 Analyst Day, as it will depend on the mix of new business opportunities, such as contract manufacturing versus third-party distribution. Mr. Elguicze also noted that ongoing SG&A cost containment efforts are helping to absorb FX headwinds in the current year's guidance.

Sam Eiber from BTIG, LLC questioned the potential revenue timing and materiality from new international markets, differences in demand across product categories, and the updated timeline for achieving cash flow breakeven.

Answer

President and COO Dr. Hemanth Varghese noted that revenue from new markets is dependent on regulatory approvals, with some impact expected in Q4 and more consistent contributions in 2025. Executive Rajiv Kanishka De Silva explained that the tight credit environment disproportionately affects higher-priced systems like the hair robot and revised the forecast for sustained cash flow breakeven to the latter half of 2025 due to macro headwinds.

Inquired about the timeline and potential revenue contribution from new international markets, whether there were demand differences across product categories, and the updated outlook for achieving cash flow breakeven.

Answer

Revenue from new international markets like India will see some impact in Q4 but more consistent growth in 2025 as regulatory clearances are obtained. The tight credit environment is slowing sales cycles for higher-priced systems like the hair robot. Sustained cash flow breakeven is now projected for the second half of 2025 due to softer Q3 revenues.

Sam Eiber of BTIG asked for details on Senseonics' dialogue with the FDA regarding the 365-day sensor and the basis for confidence in a Q4 launch. He also inquired about the specific launch readiness preparations being made by commercial partner Ascensia Diabetes Care.

Answer

Chief Operating Officer Mukul Jain stated that confidence in the FDA timeline is based on past interactions, their relationship with the agency, and the quality of the submitted data. CEO Tim Goodnow added that Ascensia is preparing a new marketing campaign for consumers and professionals and is getting ready for a launch as soon as October, which will also be supported by focused efforts related to the new Mercy Health System partnership.