Executive Summary

Q4 2023 revenue was $13.49M with GAAP EPS of $(1.76); operating loss improved materially versus Q4 2022 as cost reductions and in-house manufacturing began to flow through, though mix and volume drove a lower quarterly gross margin than mid-year levels .
FY23 revenue grew 1% to $49.2M; management highlighted record consumables and recurring subscriptions, plus cost savings and quality improvements from in-house manufacturing of critical components .
2024 guidance: Q1 revenue to exceed $10.0M; FY24 revenue expected at $52–$53M (+6–8% YoY) with positive adjusted EBITDA for the full year, underpinned by adoption in GPs, specialists, hygienists and DSOs .
Management framed macro headwinds (higher rates, elongated sales cycles) as easing in 2024; CEO noted visibility improving as rates stabilize, and confirmed available manufacturing capacity to scale (second shift if needed) .

What Went Well and What Went Wrong

What Went Well

Consumables strength and utilization: Full‑year consumables rose ~20% YoY, reflecting higher installed base utilization; management also cited introduction of recurring revenue subscriptions and an increased sales conversion rate of 45% in 2023 .
Cost actions and in-house manufacturing: Achieved cost savings goals and improved quality from in‑house manufacturing of critical components, supporting FY23 gross margin expansion to 34% from 33% .
Guidance for growth and profitability: 2024 outlook calls for 6–8% revenue growth ($52–$53M) and positive adjusted EBITDA for the full year, a step-up from 2023’s adjusted EBITDA loss of $12.8M .
- “Greater adoption of our dental lasers, coupled with the expansion of our gross margins and lower operating expenses, will allow us to meet our revenue and profitability objectives for 2024.” – John Beaver, CEO .

What Went Wrong

Macro-driven laser softness: Management attributed slower laser system sales to a challenging rate environment and elongated sales cycles through 2023 .
U.S. laser pressure: FY23 U.S. laser revenue declined 10% YoY to $18.4M even as international laser revenue grew 6% .
Persisting GAAP losses: Q4 net loss was $(5.33)M; FY23 GAAP net loss attributable to common stockholders was $(37.62)M, reflecting warrants/preferred impacts and a still loss-making core business despite improvements .

Financial Results

GAAP P&L – Quarterly progression and YoY (oldest → newest)

Metric	Q2 2023	Q3 2023	Q4 2023	Q4 2022
Net Revenue ($M)	$14.286	$10.921	$13.490	$14.051
Gross Profit ($M)	$6.118	$3.746	$3.524	$3.596
Gross Margin %	43%	34%	26.1% (calc. from )	25.6% (calc. from )
Total OpEx ($M)	$9.990	$7.443	$8.600	$12.023
Operating Loss ($M)	$(3.872)	$(3.697)	$(5.076)	$(8.427)
Net Loss ($M)	$(4.868)	$(4.589)	$(5.326)	$(9.861)
Diluted EPS ($)	$(8.93)	$(3.89)	$(1.76)	$(128.06)

Notes: Q4 gross margin percentages are calculated from disclosed revenue and gross profit .

Segment and Mix

FY23 revenue mix (select items): U.S. laser $18.4M (−10% YoY); International laser $11.7M (+6% YoY); U.S. consumables and other +31% YoY; International consumables and other −3% YoY .
Quarterly detail example: Q3 2023 U.S. laser $3.8M (−17% YoY); U.S. consumables/other +22% YoY; International laser $2.9M (+5% YoY); International consumables/other −16% YoY .
Quarterly detail example: Q2 2023 U.S. laser $6.3M (+14% YoY); U.S. consumables/other +40% YoY; International laser $2.5M (flat YoY); International consumables/other +24% YoY .

KPIs and Operating Metrics

Consumables sales: Record $4.1M in Q2 (+36% YoY) and $2.9M in Q3 (+10% YoY); full‑year consumables +20% YoY, supporting utilization .
Sales conversion: Waterlase Trial Program (WTP) YTD conversion ~56% by Q2; full‑year 2023 sales conversion rate 45% .
Customer mix: ~69% of U.S. Waterlase Q2 sales from new customers; ~1/3 from dental specialists .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue	Q1 2024	N/A	“Exceed $10.0M”	New
Revenue	FY 2024	N/A	$52–$53M (+6–8% YoY)	New
Adjusted EBITDA	FY 2024	N/A	Positive for full year	New
Revenue	2H 2023	Prior: 2H revenue +15–20% YoY (set in Q2)	Reiterated 2H positivity into Q3 commentary; FY23 rev +1–3% YoY guide on 11/9/23	Maintained (context for history)
Operating Loss	FY 2023	N/A	Preliminary net operating loss $17–$20M, +21–33% improvement vs 2022 (pre-close update on 2/7/24)	New (preliminary)

Earnings Call Themes & Trends

Topic	Previous Mentions (Q2 2023, Q3 2023)	Current Period (Q4 2023)	Trend
Macro/Interest Rates	Macroeconomic hurdles and pressure on dentist finances (Q2) ; elongated sales cycle amid uncertainty (Q3)	Rates seen stabilizing; improved visibility may help 2024 buying cycle (CEO)	Stabilizing/Improving visibility
Supply Chain/Manufacturing	New suppliers reduced warranty costs (Q2)	In‑house manufacturing of critical components improved quality and supported cost savings (FY commentary)	Positive for margins/quality
Consumables/Utilization	Record consumables ($4.1M, +36% YoY) (Q2)	FY consumables +20% YoY; utilization rising	Up/Increasing utilization
Sales Conversion (WTP)	YTD conversion ~56% (Q2)	FY sales conversion rate 45%	Healthy albeit below Q2 YTD
DSOs/Channels	Building awareness/training; specialists mix (Q2)	FY24 growth to include DSOs, hygienists, specialists	Ongoing expansion
Capacity to Scale	Not discussed	CEO: capacity to add second shift; trunk fiber capacity available	Ready to scale if demand improves

Management Commentary

“Our initiatives enabled us to grow full‑year 2023 revenue modestly… The increased utilization of our installed base is a bullish sentiment, as evidenced by the 20% increase in our consumable sales during the year… Greater adoption of our dental lasers, coupled with the expansion of our gross margins and lower operating expenses, will allow us to meet our revenue and profitability objectives for 2024.” – John Beaver, CEO .
“While we expect first quarter 2024 revenues to be relatively flat… we are projecting full year 2024 revenue to be 6% to 8% higher… Additionally… we expect to achieve positive adjusted EBITDA for the full year 2024.” – Jennifer Bright, CFO (earnings call) .
“We do have additional manufacturing capacity at our plant in Corona, California… we can always add additional shifts… and we have excess capacity also with our important trunk fiber production.” – John Beaver, CEO (Q&A) .

Q&A Highlights

Macro and buying cycle: CEO indicated that with interest rates no longer rising, doctors have improved visibility, which should help 2024 buying cycles .
Capacity: Management confirmed headroom to add production shifts and highlighted excess trunk fiber capacity to meet higher demand .
2024 outlook: Management reiterated expectations for 6–8% revenue growth and positive adjusted EBITDA for FY24 (CFO) .

Estimates Context

S&P Global consensus (revenue, EPS) for Q4 2023 was unavailable via our SPGI feed at time of analysis; therefore, we do not present an estimates comparison for Q4 2023. This limits formal “beat/miss” framing versus Wall Street consensus for the quarter.
Management’s FY24 outlook implies increased confidence in demand normalization and operating leverage, potentially prompting upward adjustments to outer‑year EBITDA trajectories if execution continues .

Key Takeaways for Investors

Mix shift toward consumables and rising utilization are durable positives; FY23 consumables +20% YoY and recurring subscriptions should underpin steadier revenue and margins in 2024 .
Operating discipline is taking hold: FY23 OpEx down 16% YoY; in‑house manufacturing and supplier optimization are supporting margin improvement, even if quarterly margins (Q4) were below mid‑year peaks due to mix and volume .
2024 guide de‑risks the near term: Q1 >$10M revenue and FY24 $52–$53M with positive adjusted EBITDA—execution on this path would be a key stock driver as investors re‑rate toward profitability .
Macro sensitivity moderating: Sales cycles elongated in 2023 with higher rates, but management sees better visibility in 2024; any incremental easing could accelerate capital equipment purchases .
Capacity is not a bottleneck: BIOL can add shifts and has trunk fiber capacity to scale, limiting supply constraints if demand inflects .
Watch U.S. laser momentum: FY23 U.S. laser revenue ‑10% YoY; a sequential rebound and DSO traction would strengthen the bull case .
Risk flags: Continued GAAP losses, financing needs, and “going concern” language in cautionary statements suggest sensitivity to execution and capital markets; monitor liquidity and cash burn against the positive EBITDA target .

Supporting Detail – Prior Quarters (for trend)

Q3 2023: Revenue $10.9M; gross margin 34%; OpEx $7.4M; operating loss $(3.7)M; EPS $(3.89). Consumables $2.9M (+10% YoY); macro extended sales cycles .
Q2 2023: Revenue $14.3M; gross margin 43%; OpEx $10.0M; operating loss $(3.9)M; EPS $(8.93). Record consumables $4.1M (+36% YoY); WTP conversion ~56% YTD .

Citations: All figures and statements are sourced from BIOLASE’s 8-K press releases and financial statements for Q2, Q3, and Q4/FY2023, and from the Q4 2023 earnings call transcript as linked above. Specific references: ; transcript excerpts from Yahoo/InsiderMonkey and related links: .

BIOLASE, INC (BIOL)·Q4 2023 Earnings Summary