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BIOLASE, INC (BIOL)·Q1 2024 Earnings Summary

Executive Summary

  • Q1 2024 net revenue was $10.13M, down 3% year over year, with gross margin at 33% and operating loss improving 15% year over year; adjusted EBITDA loss narrowed to $3.53M .
  • Management reiterated FY2024 guidance for net revenue of $52–$53M (+6–8% YoY) and positive adjusted EBITDA, citing increased laser adoption and cost reductions .
  • Mix shift to consumables and subscriptions continued: third-strongest consumables quarter; consumables +14% YoY; over 600 subscriptions .
  • S&P Global consensus estimates were unavailable; third-party summary indicates revenue slightly above expectations and EPS below expectations (see Estimates Context) .

What Went Well and What Went Wrong

What Went Well

  • Consumables strength and recurring model traction: “Third strongest consumable sales quarter in company history, with consumable sales increasing 14% year over year, largely driven by over 600 subscriptions” .
  • Sequential margin expansion: “expanded our gross margin by 700 basis points sequentially… and achieved a 9% reduction year over year in our expense structure” (CEO John Beaver) .
  • Reiterated full-year guidance with path to profitability: expects FY2024 revenue $52–$53M (+6–8%) and positive adjusted EBITDA .

What Went Wrong

  • Core system demand pressured by macro/interest rate backdrop: “revenue was slightly down… primarily due to the tougher economic climate” (CEO) .
  • U.S. and international laser revenues declined year over year (U.S. laser -22%; International laser -12%), reflecting elongated sales cycles .
  • GAAP net loss widened to $6.49M and diluted loss per share was $0.36, despite operating improvements .

Financial Results

MetricQ3 2023Q4 2023Q1 2024
Net revenue ($USD Millions)$10.921 $13.490 $10.131
Gross profit ($USD Millions)$3.746 $3.524 $3.336
Total operating expenses ($USD Millions)$7.443 $8.600 $7.862
Operating loss ($USD Millions)$(3.697) $(5.076) $(4.526)
Net loss ($USD Millions)$(4.589) $(5.326) $(6.485)
Diluted EPS ($USD)$(3.89) $(1.76) $(0.36)
Segment/MetricQ3 2023Q1 2024
U.S. Laser Revenue ($USD Millions)$3.8 $2.7
International Laser Revenue ($USD Millions)$2.9 $2.5
U.S. Consumables & Other YoY Change (%)+22% +17%
International Consumables & Other YoY Change (%)-16% +8%
KPIs (Q1 2024)Value
% of U.S. Waterlase sales from new customers67%
% of U.S. Waterlase sales from dental specialists42%
Consumables sales YoY growth+14%
Subscriptions (count)>600
Cash and cash equivalents ($USD Millions)$6.393

Notes:

  • Gross margin was 33% in Q1 2024 (flat YoY; +700 bps sequentially as per management commentary) .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Net Revenue ($USD Millions)FY 2024$52–$53; +6–8% YoY $52–$53; +6–8% YoY Maintained
Adjusted EBITDAFY 2024Positive Positive Maintained

Earnings Call Themes & Trends

TopicPrevious Mentions (Q3 2023)Previous Mentions (Q4 2023)Current Period (Q1 2024)Trend
Macro/interest-rate headwinds on laser salesMacro uncertainty elongating sales cycles; higher rates cited Cautious backdrop but planning for growth in 2024 “Revenue was slightly down… tougher economic climate” Persistent headwind
Consumables adoption & subscriptionsConsumables +10% YoY; utilization rising Record consumables and new recurring subscriptions Third-strongest consumables quarter; +14% YoY; >600 subscriptions Strengthening recurring base
In-house trunk fiber & marginIn-house components improved gross margin; supplier optimization Cost savings and quality from in-house components 700 bps sequential GM expansion; 1% YoY GM improvement Margin improvement continuing
Sales mix & customer acquisitionStrong new customer acquisition; 45% conversion via trial program —67% of U.S. Waterlase sales from new customers; 42% from specialists Broader adoption across segments
Balance sheet & liquidityCash ~$7.8M (Q3) Cash ~$6.6M year-end; equity raised in Feb 2024 Cash ~$6.4M at 3/31/24; strengthened balance sheet Stable near term

Management Commentary

  • “I believe the increased adoption of our award-winning lasers is an encouraging sign and a leading indicator that positions us for longer-term success… we expanded our gross margin by 700 basis points sequentially… and achieved a 9% reduction year over year in our expense structure” — John Beaver, President & CEO .
  • Reiterated FY2024 net revenue $52–$53M (+6–8% YoY) and positive adjusted EBITDA; highlighted growing consumables and recurring subscriptions despite a challenging environment .
  • Non-GAAP framework: Adjusted EBITDA excludes interest, taxes, depreciation, stock-based and other non-cash compensation, severance, change in allowance for doubtful accounts, inventory reserves, stock warrant issuance costs, and loss on warrants .

Q&A Highlights

  • Participants included Benchmark (Bruce Jackson) and Ascendiant Capital (Ed Woo) per transcript listing .
  • Management emphasized drivers of sequential gross margin expansion (in-house trunk fiber, inventory/reserve adjustments in Q4) and reiterated confidence in FY2024 adjusted EBITDA turning positive .
  • Clarified customer acquisition dynamics: new-customer mix (67%) and specialist penetration (42%) in U.S. Waterlase sales as indicators of durable demand .

Estimates Context

  • S&P Global Wall Street consensus was unavailable for BIOL at the time of analysis; therefore, SPGI-based quantitative comparison could not be provided.
  • Third-party summary indicates: Revenue $10.13M vs consensus beat by ~$0.13M; EPS of -$0.27 below consensus by ~$0.12 (methodology may reflect non-GAAP/normalized figures rather than GAAP EPS) .
MetricSourceConsensusActualBeat/Miss
Revenue ($USD Millions)Seeking Alpha summary~$10.00$10.13 Beat by ~$0.13
EPS ($USD)Seeking Alpha summaryN/A (SA-reported)-$0.27 (SA) vs GAAP -$0.36 Miss per SA (-$0.12)

Note: SPGI consensus unavailable; third-party figures are indicative only.

Key Takeaways for Investors

  • Recurring revenue and utilization are improving: consumables +14% YoY; >600 subscriptions; this helps stabilize revenue during laser purchase slowdowns .
  • Sequential gross margin inflection (+700 bps) supported by in-house trunk fiber and prior inventory reserve actions; watch sustainability into Q2/Q3 .
  • Reiterated FY2024 guidance ($52–$53M revenue; positive adjusted EBITDA) suggests operating discipline; monitor execution against cost controls and mix .
  • Laser revenue weakness (U.S. -22% YoY; International -12% YoY) underscores sensitivity to macro/financing environment; DSO/specialist penetration may offset over time .
  • Balance sheet: $6.39M cash at quarter-end; capital markets activity in early 2024 provided runway for near-term objectives—track cash burn and working capital .
  • Non-GAAP adjustments (e.g., stock warrant costs $0.83M; warrant loss $0.56M) materially affect GAAP; adjusted EBITDA trend is improving (-$3.53M vs -$4.45M YoY) .
  • Near-term trading: catalysts include continued consumables/subscription growth and confirmation of margin durability; risk remains on system demand recovery timing .

Additional References and Relevant Press Releases

  • Q1 2024 press release (Accesswire mirror of 8-K Exhibit 99.1): “Biolase Reports 2024 First Quarter Results” .
  • Q1 2024 earnings call transcript (alternative sources): Seeking Alpha / MarketScreener .
  • FY2023/Q4 press release: full-year results and FY2024 guidance .
  • Q3 2023 press release: macro impacts, margin drivers, consumables growth .