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ESTABLISHMENT LABS HOLDINGS INC. (ESTA)·Q2 2025 Earnings Summary

Executive Summary

  • Q2 2025 revenue was $51.3M (+16.3% y/y) with gross margin at 68.8% and U.S. Motiva sales of $10.3M; adjusted EBITDA loss improved to $(8.5)M from $(12.1)M in Q1 .
  • Guidance raised: FY25 revenue now $208–$212M (from $205–$210M), including at least $40M in U.S. Motiva sales and single‑digit OUS growth; management reiterated first EBITDA‑positive quarter in 2025 and cash flow positive in 2026 .
  • The company emphasized strong U.S. momentum (1,000+ accounts, sequential growth expected in seasonally soft Q3) and improving execution/efficiency; EMEA direct markets grew ~27% underlying, while China headwinds led ESTA to remove China from H2 guidance .
  • Near‑term stock reaction catalyst: raised FY25 guidance and visibility into U.S. adoption and utilization ramp, plus commentary that Q3 should see sequential growth despite seasonality .

What Went Well and What Went Wrong

What Went Well

  • “Our US sales momentum has continued into the third quarter, allowing us to increase our worldwide and US guidance… We remain on track to achieve positive EBITDA in 2025 and become cash flow positive in 2026.” — CEO Peter Caldini .
  • U.S. Motiva revenue of $10.3M, ahead of June Investor Day range; orders increased each month April–June and momentum carried into Q3; 1,000+ U.S. accounts and expanding surgeon utilization .
  • Gross margin up 320 bps y/y to 68.8% (and +160 bps q/q), driven by U.S. mix and higher ASPs; 2025 GM expected to be ~200–300 bps higher than 2024 despite <50 bps tariff impact .

What Went Wrong

  • China underperformed due to market pressure in premium segment and slower‑than‑planned distributor scale‑up; China removed from H2 guidance .
  • SG&A rose ~$11.4M y/y to $44.2M on U.S. ramp, shipping (air freight, last‑mile), and marketing (Meghan Trainor campaign); OpEx expected to moderate in H2 .
  • Adjusted EBITDA loss widened y/y to $(8.5)M (vs $(4.1)M) given higher OpEx and mix of investments, though improved sequentially vs Q1 .

Financial Results

MetricQ2 2024Q1 2025Q2 2025Q2 2025 Consensus
Revenue ($USD Millions)$44.117 $41.377 $51.300 $51.101*
Gross Margin %65.6% 67.2% 68.8% —
Loss from Operations ($USD Millions)$(9.344) $(16.946) $(14.107) —
Adjusted EBITDA ($USD Millions)$(4.069) $(12.098) $(8.528) —
Basic & Diluted EPS ($USD)$(0.62) $(0.70) $(0.57) $(0.532)*

Notes: Values with asterisk (*) retrieved from S&P Global.

  • Revenue beat consensus by ~$0.2M; EPS missed by ~$0.023 per share (modest miss) .
  • YoY revenue growth +16.3%; GM expansion reflects U.S. mix and pricing .

Geographic Mix and KPIs (Q2 2025)

MetricQ2 2025
U.S. Revenue ($USD Millions)$10.3
U.S. % of Global Sales20%
EMEA % of Global Sales40% (double‑digit growth; Europe direct +~27% underlying)
Latin America % of Global Sales19% (mid‑single‑digit growth; Brazil stable q/q)
Asia Pacific % of Global Sales15% (sequential growth; down y/y on China/timing)
Gross Margin %68.8%
Adjusted EBITDA ($USD Millions)$(8.5)
Cash Use ($USD Millions)$14.5 (vs $21.2 in Q1)
Cash Balance ($USD Millions)$54.6; accessible cash ~$79.6 incl. $25M credit
U.S. Accounts1,000+
High‑volume accounts>40 accounts >100 orders YTD; some >200
Permanent consignment>100 accounts with permanent consignment
U.S. Sales force43 reps; plan +10–15 reps for Preservé prep
Hospitals using FLORA in U.S.90+

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Revenue ($USD Millions)FY 2025$205–$210 $208–$212 Raised
U.S. Motiva Revenue ($USD Millions)FY 2025$35 (from Q4 2024 outlook) ≥$40 Raised
Gross Margin vs 2024 (bps)FY 2025—~+200–300 bps Positive trajectory
Operating Expenses per Quarter ($USD Millions)FY 2025—~$45–$46 average; moderation in H2 Clarified
EBITDA PositiveFY 2025Targeted First EBITDA‑positive quarter in 2025 Maintained
Cash Flow PositiveFY 2026Targeted Cash flow breakeven in 2026 Maintained
Tariffs impact on GMFY 2025—<50 bps consolidated impact Clarified

Earnings Call Themes & Trends

TopicQ4 2024 (Q-2)Q1 2025 (Q-1)Q2 2025 (Current)Trend
U.S. Motiva ramp$3.3M U.S. revenue; FDA approval and launch $6.2M U.S.; momentum increasing $10.3M U.S.; sequential Q3 growth expected Accelerating
Gross margin68.5% 67.2% 68.8%; +200–300 bps vs 2024 expected Uptrend
China/AsiaNot highlighted—China removed from H2 guidance; APAC down y/y Headwind
Supply chain/shipping costs——Higher air freight and last‑mile costs in Q2; expected moderation Transitory
Minimally invasive portfolio (Preservé/Mia)Preservé launched in Brazil Preservé launched; momentum building U.S. Preservé training; premium pricing; broader applicability vs Mia Building
Reconstruction (FLORA/indication)——90+ hospitals using FLORA; U.S. reconstruction submission expected by YE Advancing
Pricing/competitive——Premium pricing sustained; limited coordinated competitive response Favorable
Marketing/social media——Meghan Trainor campaign; strong social media surgeon/patient engagement Supportive
OpEx & cash use—$21.0M cash use; OpEx ramping Cash use $14.5M; OpEx to moderate; EBITDA‑positive in 2025 Improving

Management Commentary

  • “Higher surgeon utilization and adding accounts in the United States will drive growth… Approval of additional sizes will accelerate both… We remain on track to achieve positive EBITDA in 2025 and become cash flow positive in 2026.” — CEO Peter Caldini .
  • “We continue to expect gross margins in 2025 will be approximately 200 to 300 basis points higher compared to 2024… duties… less than a 50 basis point gross margin impact.” — CFO Raj Denhoy .
  • “We are increasing our revenue guidance for 2025 to a range of $208,000,000 to $212,000,000… includes at least $40,000,000 in U.S. Motiva sales and single digit growth outside the United States.” — CFO Raj Denhoy .
  • “Orders have increased each month from April through June… we expect to see sequential growth in the third quarter, a period that is seasonally down for the industry.” — CEO Peter Caldini .
  • “Our European direct market sales increased by approximately 27% this quarter. This reflects a new sales record and we believe these trends will continue.” — CEO Peter Caldini .

Q&A Highlights

  • China removed from H2 guidance due to market softness and slower distributor scale‑up; still targeting leadership over time .
  • Surgeon adoption curve drives gradual utilization ramp; >40 accounts at >100 orders YTD; focus shifting from site adds to deeper penetration .
  • Pricing premium sustained; limited coordinated competitive pushback; volume discounts tied to scale, not competition .
  • Despite seasonality, management expects sequential U.S. revenue growth in Q3; OUS may be less down than historical with a step‑up in Q4 .
  • Permanent consignment at >100 accounts and sales force expansion (+10–15 reps) to support Preservé launch preparation .

Estimates Context

MetricQ1 2025 ConsensusQ1 2025 ActualQ2 2025 ConsensusQ2 2025 Actual
Revenue ($USD Millions)$41.112*$41.377 $51.101*$51.300
Primary EPS ($USD)$(0.807)*$(0.70) $(0.532)*$(0.57)
  • Q2 2025: Revenue modest beat; EPS modest miss. FY25 consensus $210.319M sits within raised company guidance of $208–$212M; U.S. visibility (≥$40M) and sequential Q3 growth commentary could bias U.S. components of estimates higher, while China’s removal from H2 guidance may temper APAC expectations .
  • Note: Values marked with asterisk (*) retrieved from S&P Global.

Guidance Changes — Detail and Non‑GAAP Considerations

  • FY25 revenue raised to $208–$212M; U.S. Motiva ≥$40M (vs prior $35M) .
  • 2025 GM expected +200–300 bps vs 2024; tariff impact <50 bps .
  • Quarterly OpEx expected ~$45–$46M on average with H2 moderation; Q2 OpEx elevated by air freight and marketing .
  • EBITDA trajectory: first positive quarter in 2025; cash flow breakeven in 2026 .
  • Adjusted EBITDA reconciles EBITDA by excluding/adjusting for stock compensation, FX gains/losses, and contract termination costs; Q2 Adjusted EBITDA $(8.5)M vs EBITDA $(7.4)M reflects these adjustments .

Key Takeaways for Investors

  • U.S. adoption remains the primary growth engine; sequential Q3 growth despite seasonality underscores demand durability and could support near‑term multiple expansion on improved visibility .
  • EMEA direct markets show structural improvement (~27% underlying growth), providing a second leg of growth as OUS operations are optimized .
  • China is a known headwind and was removed from H2 guidance; risk is contained in consolidated mix (APAC 15% of Q2 sales), but watch distributor execution and macro .
  • Gross margin expansion from U.S. mix and premium pricing is tracking; tariff impact is de minimis (<50 bps), supporting the margin story into H2 and FY25 .
  • OpEx discipline and cash use trending better (Q2 $14.5M vs $21.2M in Q1); accessible cash ~$79.6M plus refinancing options reduce financing overhang into 2026 .
  • Pipeline catalysts (Preservé premium offering, expanded FDA sizes, U.S. reconstruction indication) can broaden TAM and sustain share gains; expect Preservé limited U.S. contribution in 2025, bigger in 2026 .
  • Near‑term positioning: raised FY25 guidance and sequential Q3 growth set a positive setup; monitor Q3 execution, U.S. utilization ramp, and OUS normalization (especially APAC timing) .