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    Apyx Medical (APYX)

    APYX Q4 2024: Consumables Lift Margins to 60% Despite OEM 16% Drop

    Reported on Mar 13, 2025 (Before Market Open)
    Pre-Earnings Price$1.07Last close (Mar 12, 2025)
    Post-Earnings Price$1.14Open (Mar 13, 2025)
    Price Change
    $0.07(+6.54%)

    What went well

    • Robust product mix and strong domestic performance: The company is experiencing low double-digit growth in consumable sales in the U.S., reflecting strong market demand despite a challenging environment. This growth, particularly in the Advanced Energy segment, supports improved gross margins and revenue recovery.
    • Potential upside from the AYON launch: The upcoming AYON system—a state-of-the-art, all-in-one surgical platform—positions Apyx to capture additional market share. Its flexible acquisition options (outright purchase and leasing) and focus on consolidating competitive technologies could drive significant long‐term revenue growth.
    • Enhanced direct-to-consumer campaign effectiveness: Apyx’s revamped DTC strategy, bolstered by new PR partnerships and compelling messaging around the benefits post GLP‑1 weight loss, has greatly improved consumer engagement and brand awareness, potentially translating into increased sales and further market penetration.

    What went wrong

    • Uncertain AYON impact: In the Q&A, management noted that despite accelerating AYON’s filing by 90 days, they haven't updated revenue guidance for the product, indicating uncertainty regarding its near-term contribution and adoption timing.
    • Underperformance in select segments: Questions highlighted that OEM revenue declined by 16% and international revenue decreased, which points to potential challenges in diversifying revenue streams and offsetting domestic gains.
    • Vulnerability to macro trends: The impact of GLP-1 drugs on delaying aesthetic procedures was underscored, suggesting that ongoing shifts in patient behavior could continue to pressure revenue, particularly for noninvasive treatments.

    Q&A Summary

    1. Margin Recovery
      Q: Why won't OEM recover relative to Advanced Energy?
      A: Management explained that despite the OEM decline, the enhanced domestic sales mix supporting Advanced Energy—coupled with a focused product strategy—should sustain gross margins near 60% in '25, underscoring the importance of product mix on profitability.

    2. GLP-1 Impact
      Q: Is GLP-1 adoption boosting Renuvion use?
      A: They observed that increasing GLP-1 usage is driving a significant uptick in handpiece sales, with consumables now generating over 60% of Advanced Energy revenue, highlighting robust patient demand in a challenging market.

    3. Console Upgrades
      Q: Are most customers using the new Apyx One console?
      A: Management clarified that most customers focused on body procedures have not yet needed to upgrade, but with the launch of AYON, they will offer special pricing to transition these users into the updated system.

    4. DTC Campaign
      Q: What changes improved the DTC campaign?
      A: A switch to a proactive PR partner and refreshed messaging led to exceptional direct-to-consumer engagement, markedly surpassing previous media placement and impressions targets.

    5. Global vs Domestic
      Q: Can U.S. improvements translate internationally?
      A: Management noted that while early GLP-1 adoption has given the U.S. an edge, similar market disruptions are expected globally, suggesting eventual international benefit from their domestic strategies.

    Analyst Coverage

    Research analysts covering Apyx Medical.