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EL

ESTABLISHMENT LABS HOLDINGS INC. (ESTA)·Q1 2025 Earnings Summary

Executive Summary

  • Q1 2025 revenue was $41.4M, up 11% YoY, with $6.2M from U.S. Motiva sales; gross margin expanded to 67.2% (vs. 65.6% YoY), and EPS was ($0.70), modestly better than consensus ($0.81) and above the preannounced U.S. revenue target ($5.5M). *
  • 2025 revenue guidance was maintained at $205–$210M; management expects to “meaningfully exceed” prior $35M U.S. revenue guidance and remains highly confident in outlook despite tariff headlines (estimated <50 bps gross margin impact).
  • Adjusted EBITDA loss was ($12.1M) vs. ($4.0M) YoY; cash was $69.2M at quarter-end, with accessible liquidity enhanced by an undrawn $25M credit facility.
  • Stock reaction catalysts: accelerating U.S. launch metrics (900+ accounts onboarded; 84% reorder; April daily orders >120) and the Preservé minimally invasive rollout; plus CEO transition to Peter Caldini.

What Went Well and What Went Wrong

What Went Well

  • U.S. launch momentum: 900+ accounts onboarded by May 1; 700+ have ordered; 84% reordering; April daily orders >120 (vs. 100 in March). Management: “one of the fastest aesthetic launches in history.”
  • Pricing/mix benefited margins: gross margin rose to 67.2% (up ~160 bps YoY), driven by geographic mix and higher ASPs; management sees 200–300 bps underlying margin improvement in 2025.
  • Preservé launched in Brazil, Europe and Latin America; Meghan Trainor partnership generated 4B+ impressions; positive surgeon/patient pull-through supports brand and demand.

What Went Wrong

  • Operating expenses increased to $44.8M (+$11.6M YoY), led by SG&A (+$10.8M) from U.S. investments; Adjusted EBITDA loss widened to ($12.1M) vs. ($4.0M) YoY.
  • Cash use before financing was ($21.0M) vs. ($18.1M) YoY; cash declined to $69.2M due to operating losses (accessible cash ≈$94M including credit).
  • Latin America remains challenging; China reorders were minimal in Q1 as distributor sells through 2024 stocking—normalizing expected later in 2025.

Financial Results

MetricQ3 2024Q4 2024Q1 2025
Revenue ($USD Millions)$40.2 $44.5 $41.4
Gross Profit ($USD Millions)$25.7 $30.5 $27.8
Gross Margin %63.9% 68.5% 67.2%
Total Operating Expenses ($USD Millions)$38.9 $49.2 $44.8
Loss from Operations ($USD Millions)($13.1) ($18.7) ($16.9)
Net Loss ($USD Millions)($16.7) ($34.5) ($20.7)
Diluted EPS ($USD)($0.59) ($1.19) ($0.70)
Adjusted EBITDA ($USD Millions)($7.0) ($13.1) ($12.1)
Cash And Equivalents ($USD Millions)$39.7 $90.3 $69.2
Consensus vs ActualQ3 2024Q4 2024Q1 2025
Revenue - Consensus ($USD Millions)$40.45*$44.45*$41.11*
Revenue - Actual ($USD Millions)$40.23 $44.51 $41.38
EPS - Consensus ($USD)($0.615)*($0.638)*($0.807)*
EPS - Actual ($USD)($0.59) ($1.19) ($0.70)
EBITDA - Consensus ($USD Millions)($4.88)*($6.39)*($12.73)*
EBITDA - Actual ($USD Millions)($11.15) ($13.14) ($11.86)

Values with asterisk retrieved from S&P Global.*

Q1 2025 Revenue BreakdownAmount
United States ($USD Millions)$6.2
Outside U.S. (calculated) ($USD Millions)$35.2
Total ($USD Millions)$41.4
U.S. Launch KPIsQ4 2024Q1 2025
Accounts onboarded650 900+
Accounts ordered450 700+
Reorder rate88% 84%
Daily ordersNov: 32; Dec: 60; Jan: 70; Feb: ~90 Mar: >100; Apr: >120

Notes:

  • Seasonal pattern: breast augmentation typically stronger in Q2 and Q4; weaker in Q1 and Q3.

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
RevenueFY 2025$205–$210M $205–$210M Maintained
U.S. RevenueFY 2025≥$35M “Meaningfully exceed $35M” Raised (qualitative)
OUS RevenueFY 2025$170–$175M (mid-single-digit underlying growth) Mid-single-digit underlying growth reiterated Maintained
Gross Margin (Underlying)FY 2025+200–300 bps YoY +200–300 bps YoY reiterated Maintained
Operating Expenses2025 (per quarter)~$45–$46M ~$45–$46M; Q1 came in slightly lower with timing effects Maintained
EBITDA2H 2025First positive EBITDA quarter First positive EBITDA quarter reiterated Maintained
Cash Flow2026Cash flow positive in 2026 Cash flow positive in 2026 reiterated Maintained
Tariffs impact2025N/A<50 bps consolidated GM impact; guidance embeds proposed duties New disclosure

Earnings Call Themes & Trends

TopicQ3 2024 (Prior-2)Q4 2024 (Prior-1)Q1 2025 (Current)Trend
U.S. launch metricsEarly launch; 250 accounts; $3M 4Q rev; supply decommissioning pressure 650 accounts; 450 ordering; 88% reorder; 40 reps; daily orders rising 900+ accounts; 700+ ordering; 84% reorder; April daily orders >120; aiming for dominant share Improving
Pricing/marginsGM dampened by FX/inventory reval GM 68.5%; B15 closure aids margins GM 67.2%; mix/pricing lift; 200–300 bps FY improvement Improving
Tariffs/macroLatin America weak; macro uneven Mid-single-digit OUS plan; conservative budgeting No demand impact seen; <50 bps GM tariff impact; guidance embeds proposed duties Stable to improving
Manufacturing/supplyB15 decommissioned; near-term supply pressure Capacity ramp; third shift added Scaling to support U.S.; no supply constraints flagged Improving
Product performance (Motiva/Mia/Preservé/Flora)Mia 3-year data; strong Mia adoption; China stocking $10M Preservé launched; Flora VAC at 35 centers Preservé rolled out more geos; Flora traction; Mia $8–$10M FY target Improving
Regional trendsEMEA/APAC stabilizing; LatAm challenging OUS mid-single-digit growth; China reorders 2H Asia/Europe stable pockets of growth; LatAm still challenging; China normalizing later Mixed
Regulatory pipelineU.S. approval achieved (Motiva); China financing for pipeline Preparing supplements (Ergonomix2/Preservé tools); recon submission timeline U.S. supplements progressing; investor day update planned Advancing

Management Commentary

  • “Our momentum is increasing… We should meaningfully exceed the $35 million US revenue guidance we provided in February and are on track to achieve positive EBITDA in 2025 and cash flow positive in 2026.” – CEO Peter Caldini
  • “We expect gross profit margins in 2025 will be approximately 200–300 basis points higher… proposed duties… would represent less than a 50 basis point gross margin impact.” – CFO Raj Denhoy
  • “Surgeon excitement is mirrored by women… many surgeons have reported that women… covered under competitor warranties have specifically asked to pay for Motiva Implants rather than use free implants.” – CEO Caldini
  • “Preservé… is designed for day-to-day procedures… early adoption… appears that breast tissue preservation will be a meaningful part of our future growth.” – CEO Caldini

Q&A Highlights

  • U.S. launch conservatism: Management reiterated conservative guidance amidst macro uncertainty; strong U.S. momentum could warrant upside, but they prefer to wait.
  • Competitive dynamics: Limited competitive response; some discounting observed but not materially impacting conversion.
  • Sales force and coverage: 40 reps active; selective additions in dense metros through 2025; balanced spend focus for leverage.
  • OUS cadence: Asia/Europe stabilizing with pockets of growth; LatAm challenging; China expected to reorder more meaningfully in 2H 2025.
  • Preservé/Mia timeline: OUS rollout ongoing; U.S. pathway via supplements progressing; Mia targeted $8–$10M FY revenue globally.

Estimates Context

  • Q1 2025 delivered a modest beat on revenue ($41.38M actual vs. $41.11M consensus) and a clearer beat on EPS (($0.70) actual vs. ($0.81) consensus); EBITDA also better than consensus. Results reflect U.S. mix uplift and margin expansion despite higher SG&A for the launch. *
  • Street models for 2025 may need to raise U.S. revenue above $35M given management’s “meaningfully exceed” commentary and sustained order metrics; margin trajectories should incorporate 200–300 bps FY improvement and minimal tariff impact (<50 bps).

Values retrieved from S&P Global.*

Key Takeaways for Investors

  • U.S. launch is the primary growth engine; strong adoption, reordering, and daily order trends suggest upside risk to U.S. revenue vs. initial $35M guide.
  • Mix/pricing from U.S. sales supports sustained gross margin expansion (target +200–300 bps in 2025), a key driver for EBITDA inflection in 2H 2025.
  • Operating expense discipline plus revenue scale should reduce quarterly cash use by ≈$5M sequentially through 2025; cash flow positive targeted for 2026.
  • OUS recovery is gradual; model LatAm conservatively and China reorders weighted to 2H 2025, with incremental support from Preservé/Mia.
  • Tariff risk appears manageable (<50 bps GM impact); guidance already embeds proposed duties—limited need to haircut margin assumptions.
  • Pipeline/regulatory cadence (Preservé tools, Ergonomix2, reconstruction indication) underpins a multi-year U.S. innovation cycle and share gains.
  • Near-term trading: Focus on sequential U.S. revenue acceleration and margin trajectory; medium-term thesis hinges on U.S. dominance, innovation rollouts, and OUS normalization.

Values with asterisk retrieved from S&P Global.