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Revance Therapeutics, Inc. (RVNC)·Q2 2024 Earnings Summary

Executive Summary

  • Q2 revenue grew 20% year over year to $65.4M; product revenue was $65.3M (RHA $36.6M, DAXXIFY $28.7M), and net loss per share narrowed to $0.36 from $0.80 in Q2’23 .
  • DAXXIFY aesthetics momentum accelerated: units +65% YoY and +15% QoQ; reorders drove >75% of DAXXIFY revenue, and accounts ordering surpassed 4,200 per CFO’s correction, indicating deeper penetration and improving stickiness .
  • Guidance: 2024 total net product revenue maintained at ≥$280M; GAAP Opex was lowered to $430–$460M (CFO signaled $430–$450M), non-GAAP Opex expected at the lower end of $290–$310M, SG&A unchanged at $240–$255M; management reaffirmed target for positive Adjusted EBITDA in 2025 .
  • Gross margin tracking ~73% and guided to improve with DAXXIFY mix shift and U.S. manufacturing scale-up; filler market remains soft but RHA outperformed with +15% YoY revenue aided by the RHA 3 lip launch .
  • Potential stock catalyst: Crown Laboratories announced a tender to acquire Revance for $6.66 per share cash (89% premium to Aug 9 close) on Aug 12, 2024, a significant strategic and valuation event post-quarter .

What Went Well and What Went Wrong

  • What Went Well

    • Strong aesthetics momentum: “DAXXIFY units sold were up 65% year-on-year and 15% QoQ… without the benefit of couponing,” with positive patient preference driving injector adoption .
    • RHA resilience: “RHA Collection… net product revenue of $36.6 million; a YoY increase of 15%” despite a soft filler market; RHA 3 lip indication helped engagement and growth .
    • Expense discipline: GAAP Opex guidance reduced to $430–$460M (CFO: $430–$450M), driven primarily by lower stock-based comp; non-GAAP Opex expected to the low end of $290–$310M .

  • What Went Wrong

    • Therapeutics contribution modest near term: Despite 84% commercial coverage and payer wins (VA/DoD formulary), management reiterated 2024 CD revenue would be “modest” given buy-and-bill conservatism and ramp time .
    • Filler market softness persisted industry-wide; management cited consumer spending and preference concerns, though RHA’s “natural” profile helped mitigate pressure .
    • Data discrepancy in press release: CFO corrected Q2 aesthetics account metrics to “over 8,000 aesthetic accounts and over 4,200 DAXXIFY accounts,” higher than the press release’s “over 7,500” and “over 3,700,” highlighting the need to rely on call clarification .

Financial Results

MetricQ4 2023Q1 2024Q2 2024
Total Revenue (net, $USD Millions)$69.799 $51.936 $65.389
Product Revenue (net, $USD Millions)$58.498 $51.719 $65.328
Gross Margin % (Product revenue minus cost of product revenue, computed)73.7% 71.2% 73.0%
Operating Loss ($USD Millions)$(53.953) (Loss from operations) $(46.827) (Loss from continuing ops) $(34.516) (Loss from continuing ops)
EPS – Continuing Ops ($USD)N/A$(0.54) $(0.36)
EPS – Total Net Loss ($USD)$(0.62) $(0.58) $(0.36)

Segment/product revenue breakdown:

Product Revenue ($USD Millions)Q4 2023Q1 2024Q2 2024
DAXXIFY$24.031 $22.149 $28.697
RHA Collection$34.467 $29.570 $36.631
Total Product Revenue$58.498 $51.719 $65.328

Key KPIs:

KPIQ4 2023Q1 2024Q2 2024
DAXXIFY Aesthetic Units YoY Growth (%)N/A+105% +65%
DAXXIFY Aesthetic Units QoQ Growth (%)N/A+7% +15%
Aesthetic Accounts (press release)>7,000 >7,500 >7,500
Aesthetic Accounts (CFO correction)N/AN/A>8,000
DAXXIFY Ordering Accounts (press release)>3,000 >3,500 >3,700
DAXXIFY Ordering Accounts (CFO correction)N/AN/A>4,200
Therapeutics – Commercial Coverage (%)>50% pre-launch 78% 84%
Cash, Cash Equivalents & ST Investments ($USD Millions)$253.9 $277.1 $232.2

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Total Net Product RevenueFY 2024≥$280M ≥$280M Maintained
GAAP Operating ExpensesFY 2024$460–$490M $430–$460M Bold: Lowered
GAAP Operating Expenses (CFO call)FY 2024$460–$490M $430–$450M Bold: Lowered (call nuance)
Non-GAAP Operating ExpensesFY 2024$290–$310M Lower end of $290–$310M Lowered (range unchanged; low end expected)
Non-GAAP SG&AFY 2024$240–$255M $240–$255M Maintained
Positive Adjusted EBITDA TargetFY 2025Reaffirmed Reaffirmed Maintained

Earnings Call Themes & Trends

TopicPrevious Mentions (Q4’23 & Q1’24)Current Period (Q2’24)Trend
DAXXIFY pricing & adoptionStrategy change drove sequential volume; market share to 3.7% in Q1; couponing impacted revenue accounting Units +65% YoY, +15% QoQ; reorders >75%; consumer pricing now comparable; sequential growth expected through Q4 Improving
RHA performance & filler marketRHA share gains (9.8% Q1) despite soft market; RHA 3 lip label expansion planned Q2 RHA revenue +15% YoY; lip launch supported growth; training/education emphasized Improving vs market
Gross margin & manufacturing scaleTarget >80% LT; mix shift to DAXXIFY and U.S. scale to improve margins Reported ~73% gross margin; levers: DAXXIFY mix and AGI/LSE PCI scale Improving
Therapeutics (Cervical Dystonia)Launch announced; >200M lives covered; permanent J‑Code received Coverage at 84% commercial; VA/DoD formulary; revenue contribution modest in 2024; ramp ongoing Early ramp
International/China (Fosun)Strategic partnerships highlighted China approvals expected in 2024; milestones possible; continued evaluation of global options Building
Competitive landscapeExpect category growth; RHA’s natural look differentiation Longer-acting toxins visibility helpful; DAXXIFY peptide formulation positioned well Mixed tailwinds

Management Commentary

  • “DAXXIFY aesthetic units sold were up 65% year-over-year and 15% in comparison to Q1’24… without the benefit of couponing.” – Mark Foley, CEO
  • “We reported about 73% gross margin… levers to improve that margin to over 80% are volume shift towards DAXXIFY and more efficient production” – Tobin Schilke, CFO .
  • “We remain focused on delivering net product revenue of at least $280 million while managing spend to reach positive adjusted EBITDA in 2025.” – Mark Foley, CEO .
  • “We should have said… over 8,000 aesthetic accounts and over 4,200 accounts that have ordered DAXXIFY.” – Tobin Schilke, CFO (correction to press release) .
  • “Initial [therapeutics] revenues will be modest… conservative user group, buy-and-bill dynamics, and ramp time.” – Mark Foley, CEO .

Q&A Highlights

  • Modeling cadence: No quarterly guidance; delivered ~40% of FY product revenue by Q2; expect sequential DAXXIFY growth with seasonal peak in Q4; therapeutics contribution modest in 2024 .
  • Margin levers: Gross margin ~73% H1; improvement expected via DAXXIFY mix and scaling at AGI/LSE PCI; RHA margin fixed due to partner economics .
  • Competition & international: Longer-acting toxins likely lift category; considering pragmatic international partnerships; peptide formulation differentiates DAXXIFY .
  • Accounts & adoption: Acceleration in new DAXXIFY accounts; reorders >75% of revenue; bundling (“Beauty of Savings”) deepens penetration across portfolio .
  • China timeline & milestones: Fosun submitted GL and CD; approvals expected within 14–16 months; milestones possible but not quantified .

Estimates Context

  • We attempted to retrieve Wall Street consensus EPS, revenue, and target price via S&P Global but the CIQ mapping for RVNC was unavailable in our tool, so consensus comparisons could not be included. If you would like, we can revisit when S&P Global mapping is updated or provide third-party estimates with public URL citations. [SpgiEstimatesError: Missing CIQ mapping for RVNC]

Key Takeaways for Investors

  • Aesthetics is the near-term driver: DAXXIFY and RHA delivered broad-based growth; expect sequential DAXXIFY momentum through year-end with Q4 seasonal strength .
  • Bold: GAAP Opex guidance lowered; non-GAAP Opex trending to the low end, supporting margin trajectory and 2025 Adjusted EBITDA target .
  • Gross margin expansion credible: Mix shift to higher-margin DAXXIFY and U.S. manufacturing scale should lift margins toward >80% over time .
  • Therapeutics launch is strategic, not yet financial: Coverage wins and clinical feedback solid, but revenue contribution remains modest in 2024 due to buy‑and‑bill conservatism .
  • RHA resilience hedges filler softness: Lip launch and training reduce risk in a soft market; portfolio bundling strengthens account economics .
  • Watch catalysts: The Crown Laboratories tender at $6.66/share provides an external valuation anchor and potential rerating; regulatory progress with Fosun in China may add milestone optionality .
  • Risk checks: Debt load ($430M+ long-term), continued operating losses, and filler market softness warrant monitoring alongside execution on margins and account growth .