ALLURION TECHNOLOGIES, INC. (ALUR)·Q3 2025 Earnings Summary

Executive Summary

• Q3 2025 revenue was $2.66M, down year-over-year on distributor transitions and restructuring, but above S&P Global consensus; gross margin was 49% and operating loss narrowed versus prior year on lower sales and marketing, R&D and G&A expenses .
• Management highlighted major FDA milestones: acceptance and filing reviews complete, two FDA inspections with zero observations (no Form 483) and a successful Day-100 meeting, indicating entry into the final stages of PMA review for the Allurion Smart Capsule .
• Balance sheet actions announced: exchange of all outstanding debt for Series B convertible preferred equity (8.25% dividend, $3.37 conversion price) and a concurrent $5M private placement at $1.67 per share with warrants, positioning the company on a path to being debt-free and strengthening liquidity ahead of U.S. launch preparations .
• Compared to Street, Q3 beat on revenue, EPS and EBITDA; management expects sequential revenue growth into Q4 on the GLP-1 combination pivot and onboarding of qualifying distributors, offering a near-term catalyst alongside continued FDA progress .

What Went Well and What Went Wrong

What Went Well

• “We passed two FDA inspections with zero observations and successfully conducted our Day-100 meeting…we believe that we are now entering the final stages of the process.”
• Balance sheet reset: “We entered into a transaction to exchange all outstanding debt for convertible preferred equity and concurrently announced a private placement financing that strengthens our financial position.”
• Strategic pivot execution: “Revenue was $2.7 million…reflecting the restructuring to refocus on accounts and distributors who promote metabolically healthy weight loss as part of a comprehensive strategy that includes combination use of the Allurion program with low-dose GLP-1s.”

What Went Wrong

• Top-line pressure: Q3 revenue fell year-over-year as distributor transitions and lower sales and marketing investment weighed on volumes; gross profit and margin compressed on lower production volume and absorption .
• Continued operating losses despite expense reductions: loss from operations was $9.6M (vs. $12.3M prior year) with S&M, R&D and G&A still elevated relative to revenue base .
• Ongoing short-term disruption from pivot and restructuring (including 65% workforce reduction announced in August) implies near-term volatility before benefits fully materialize .

Financial Results

EPS (GAAP)

Operating Expense Breakdown

Street vs Actual (Q3 2025)

*Values retrieved from S&P Global.

Guidance Changes

Earnings Call Themes & Trends

Management Commentary

• “We believe that we are now entering the final stages of the process” following acceptance and filing reviews, and inspections with zero observations .
• “We wanted to have a clear path to being debt-free, and this [debt exchange for convertible preferred + private placement] provides that path” .
• On the GLP-1 combination approach: “Some customers have indicated that half of their Allurion patients have previously tried a GLP-1…over half of these patients churn after one year” .
• On Q4 outlook: “We expect in the fourth quarter sequentially to grow compared to Q3” as combination therapy spreads and qualifying distributors ramp .

Q&A Highlights

• U.S. commercialization strategy: applying learnings from international combo-care clinics; mapping U.S. clinics equipped for GLP-1 plus Allurion Smart Capsule deployment .
• Near-term trajectory: expectation for sequential revenue growth in Q4 and into 2026 as GLP‑1 utilization increases (and discontinuation rates create patient funnel), aided by lower GLP‑1 pricing trends .
• Platform vision: longer‑duration intragastric balloon with drug‑elution (GLP‑1s and gut microbiome enhancers), enabling adherence over 12 months; early development underway .
• Clinical pipeline: combo protocol submitted to IRBs; semaglutide titration post‑balloon therapy designed to address high‑dose GLP‑1 side effects while maintaining muscle mass .

Estimates Context

• Q3 2025 beat: Revenue $2.658M vs $2.05M; Primary EPS $(1.18) vs $(2.45); EBITDA $(6.59)M vs $(7.70)M, showing better-than-expected top-line and profitability (non-GAAP and GAAP factors noted in release) relative to consensus. Momentum is expected to build into Q4 on distributor onboarding and combo strategy scaling .
• With the balance sheet reset and advanced FDA status, Street estimates may need upward revision for near-term revenue and EBITDA, while GAAP EPS will remain sensitive to fair‑value accounting until debt exchange closes and operations scale.

*Values retrieved from S&P Global.

Key Takeaways for Investors

• Near-term catalysts: continued PMA progress (post Day‑100, zero‑observation inspections) and sequential revenue growth in Q4 from the GLP‑1 combination strategy .
• Balance sheet inflection: debt exchange to Series B convertible preferred and $5M private placement de‑lever the story, adding runway into U.S. launch preparations .
• Strategy alignment with market dynamics: GLP‑1 discontinuation rates (>50% at 1 year in many settings) create a durable funnel for Allurion’s combination care approach .
• Operating discipline: OpEx down 29% (GAAP) and 42% (adjusted) YoY; restructuring benefits should accrue as distributor transitions stabilize .
• Watch for U.S. launch readiness: clinical combo data, manufacturing process validation, and distributor network expansion are pacing milestones for 2026 .
• Risk factors: near-term execution amid restructuring, single-product concentration, and timing of FDA approval; gross margin variability as volumes normalize .
• Potential stock reaction drivers: formal PMA approval, proof points in combo-care adoption, and updates on U.S. commercialization plans.