Executive Summary

Q2 2025 revenue was $15.7M, down 5% year-over-year but up 15% sequentially; GAAP diluted EPS was $(8.03), an improvement vs $(30.93) in Q2 2024, while gross margin compressed to 60.1% from 71.5% year-over-year .
Results beat low Wall Street consensus: revenue $15.7M vs $14.0M estimate and EPS $(8.03) vs $(9.72) estimate; note extremely thin sell-side coverage (1 estimate each) which limits signal quality. Values retrieved from S&P Global*.
Management withheld FY25 guidance given refinancing dialogues, strategic alternatives, and trade disruption risks; balance sheet improved via debt-to-equity exchanges ($17.5M YTD) and cash raises ($3.9M), and the $20M divestiture of Venus Hair was announced in June .
Key catalysts: continued shift toward higher-quality cash system sales in the U.S. (cash system sales +23% YoY), stabilization signals, and expected portfolio evolution including a next body device by early 2026 and GLP‑1 tailwinds for skin tightening demand .

What Went Well and What Went Wrong

What Went Well

Sequential growth: “We delivered solid sequential growth in the second quarter, driven by 20% growth in total systems and subscription sales quarter-over-quarter.”
U.S. mix improvement: Cash system sales increased 23% YoY; U.S. revenue grew 5% YoY as the business prioritizes high-quality cash revenues and core devices (BlissMAX, VersaPRO, VivaMD) .
Balance sheet actions: $17.5M of convertible notes exchanged into preferred stock and $3.9M of equity capital raised; Venus Hair divestiture ($20M, all-cash) strengthens focus on core medical aesthetics and aims to improve growth and cash flow profile .

What Went Wrong

Gross margin compression: GM fell to 60.1% (vs 71.5% LY) driven by supply disruptions at the Israel contract manufacturer (Israel‑Iran conflict), adverse sales mix, and higher overhead per unit on lower volumes .
International weakness: Revenue fell 18% YoY due to exit from unprofitable direct markets and tariff/macro uncertainty impacting distributor demand .
Operating leverage: Operating loss widened to $9.0M vs $5.6M LY and adjusted EBITDA loss increased to $(8.8)M vs $(4.1)M LY, reflecting margin pressure despite modest OpEx control .

Financial Results

Overview vs Prior Year and Prior Quarter

Metric	Q2 2024	Q1 2025	Q2 2025
Revenue ($USD)	$16.582M	$13.643M	$15.692M
GAAP Diluted EPS ($)	$(30.93)	$(17.44)	$(8.03)
Gross Margin (%)	71.5%	64.2%	60.1%
Operating Loss ($USD)	$(5.596)M	$(9.528)M	$(9.041)M

Notes:

Sequential revenue +15% QoQ; YoY decline narrowed to 5% .

Actual vs Wall Street Consensus (S&P Global)

Metric	Q2 2025 Consensus	Q2 2025 Actual	Result
Revenue ($USD)	$14.012M*	$15.692M	Bold beat
EPS ($)	$(9.72)*	$(8.03)	Bold beat
# of Estimates	Revenue: 1*	—	—
# of Estimates	EPS: 1*	—	—

Values retrieved from S&P Global*.
Bold beat indicates significant positive surprise versus consensus.

Segment Breakdown

Revenues by Region (YoY)

Region	Q2 2024	Q2 2025	YoY Change
United States ($USD)	$9.280M	$9.727M	+5%
International ($USD)	$7.302M	$5.965M	−18%
Total ($USD)	$16.582M	$15.692M	−5%

Revenues by Product Category (YoY)

Category	Q2 2024	Q2 2025	YoY Change
Venus Prime / Subscription—Systems ($USD)	$4.517M (27.2%)	$4.681M (29.8%)	+3.6%
Products—Systems ($USD)	$8.588M (51.8%)	$7.939M (50.6%)	−7.6%
Products—Other ($USD)	$2.647M (16.0%)	$2.444M (15.6%)	−7.7%
Services ($USD)	$0.830M (5.0%)	$0.628M (4.0%)	−24.3%
Total ($USD)	$16.582M	$15.692M	−5.4%

KPIs and Balance Sheet

KPI	Q2 2024	Q2 2025
Lease mix of total systems revenue (%)	34%	37%
Adjusted EBITDA ($USD)	$(4.142)M	$(8.845)M
Cash & Cash Equivalents ($USD)	—	$4.9M
Total Debt Obligations ($USD)	—	~$34.3M
Weighted Avg Shares (Basic, 000s)	645	1,459

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Total Revenue	FY 2025	Not provided	Not providing guidance	Maintained no guidance
Gross Margin	FY 2025	Not provided	Not providing guidance	Maintained no guidance
OpEx	FY 2025	Not provided	Not providing guidance	Maintained no guidance

Note: In Q4 2024, management guided Q1 2025 revenue to “at least $14.0M”; actual Q1 was $13.643M (below the threshold) . No Q2-specific guidance was issued.

Earnings Call Themes & Trends

Topic	Previous Mentions (Q4 2024, Q1 2025)	Current Period (Q2 2025)	Trend
Capital equipment demand & financing	Industry difficulties; tighter third-party lending; lease revenue down; transformation focus	Continued uncertainty; tight credit; high rates; proposed tariffs; adoption pressure; mid-teens sequential growth achieved	Persistent macro headwinds; sequential stabilization
International strategy & tariffs	Distributor expansion; FY24 international revenue -19% YoY	International revenue -18% YoY; exposure to tariffs; exit from unprofitable direct markets	Pressure with strategic pruning
Supply chain disruptions	Noted industry constraints; no Israel-specific in Q4 2024 PR	Israel-Iran conflict impacted Israel contract manufacturing; adverse mix and unit overheads	New acute disruption impacting margins
Product focus & mix	Portfolio breadth emphasized	Prioritizing BlissMAX, VersaPRO, VivaMD; shift to cash system sales (65% of U.S. system sales in Q2 vs 58% LY)	Mix improvement toward cash sales
Strategic actions & balance sheet	Reverse split; $10M bridge capacity added; debt reduction in FY24	$17.5M debt-to-equity exchanges YTD; $3.9M equity raised; Venus Hair divestiture ($20M)	Continued de-leveraging and portfolio focus
GLP‑1 tailwinds & body device	Not discussed	Body device launch targeted early 2026; GLP‑1 use as catalyst for skin tightening	New growth narrative
Guidance posture	Withheld FY25; Q1 guide only	Withheld FY25; citing lenders/strategic alternatives/trade disruption assessment	Cautious; visibility limited

Management Commentary

“We delivered solid sequential growth in the second quarter, driven by 20% growth in total systems and subscription sales quarter-over-quarter.” — CEO Rajiv De Silva
“We have enhanced our balance sheet… debt-to-equity exchange transactions totaling $17.5 million… and multiple equity capital transactions… raising a total of $3.9 million… [and] a definitive agreement to sell our Venus Hair business… valued at $20 million.” — CEO Rajiv De Silva
“Gross margin was 60.1%… decrease… primarily attributable to… supply disruptions… Israel‑Iran conflict… adverse sales mix… and higher system COGS from overheads spread over a lower volume base.” — CFO Domenic Della Penna
“Cash system sales in the U.S. represented 65% of total U.S. system sales… we continue to believe… prioritizing cash system sales is the right strategy to enhance… long term profitability.” — CEO Rajiv De Silva
“We… look forward to launching our next body device by early twenty twenty six… GLP‑one usage… is an exciting catalyst… to highlight complementary benefits of our body technology, specifically skin tightening.” — CEO Rajiv De Silva

Q&A Highlights

The company did not host a live Q&A due to international travel conflicts; management directed follow-ups to IR email. This limits external guidance clarifications for the quarter .

Estimates Context

Q2 results beat consensus on revenue ($15.7M vs $14.0M*) and EPS ($(8.03) vs $(9.72)). However, coverage is minimal with one estimate each, implying limited robustness and higher potential for estimate volatility. Values retrieved from S&P Global.
Given margin compression and macro/supply risks, models may need lower gross margin assumptions and a more cautious international trajectory; sequential U.S. stabilization and cash mix improvement should offset some pressures .

Key Takeaways for Investors

Sequential demand stabilization amid macro headwinds: +15% QoQ revenue and mid-teens sequential growth in both U.S. and international markets, despite tightened financing and tariff uncertainty .
Margin reset from supply disruption: GM 60.1% vs 71.5% LY due to Israel contract manufacturing issues and adverse mix; monitor recovery in device availability mix and volume scaling .
Strategic portfolio focus: $20M Venus Hair divestiture should simplify operations and improve cash flow profile; watch timing of close and redeployment of proceeds .
Balance sheet de-risking: ~$17.5M debt exchanged into equity and $3.9M raised; total debt reduced to ~$34.3M; look for further lender amendments or capital actions as catalysts .
U.S. cash system strategy gaining traction: cash system sales +23% YoY; focus on BlissMAX, VersaPRO, VivaMD to enhance profitability and reduce credit risk exposure .
2026 pipeline and GLP‑1 tailwinds: anticipated body device launch and consumer GLP‑1 usage may support demand for skin tightening procedures into 2026 .
No FY25 guidance; thin sell-side coverage: with no guidance and only one estimate in consensus, expect elevated volatility around updates and execution milestones*. Values retrieved from S&P Global*.

Bold beat indicates significant positive surprise versus consensus.

Venus Concept Inc. (VERO)·Q2 2025 Earnings Summary