Executive Summary

Q3 revenue declined to $13.8M (-8% YoY, -12% QoQ) on continued weakness in Hair Restoration and tighter financing, partially offset by stabilization in Energy-Based Devices (EBD). GAAP EPS was ($12.14) versus ($13.10) last year, pressured by an $11.3M non-cash loss on debt extinguishment .
Versus S&P Global consensus, revenue missed by ~$0.71M (~5%) at $13.78M vs $14.48M*, and EPS missed materially at ($12.14) vs ($3.61)*, with only one covering estimate for each metric (low coverage) .
Management highlighted FDA 510(k) clearance for Venus NOVA (next-gen multi-application platform) and expects sequential growth in Q4 boosted by a limited December launch; debt exchanges with Madryn reduced debt ~24% since year-end .
No FY25 guidance given amid strategic alternatives and legal action to aid closing the pending Venus Hair sale to MHG Co. Ltd; management emphasized cost discipline and turnaround execution .

What Went Well and What Went Wrong

What Went Well
- Signs of stabilization in EBD: systems sales ~+$0.2–0.3M YoY; company cites +2% YoY growth in EBD systems sales and internal leasing mix improved vs prior year .
- Venus NOVA 510(k) clearance secured; limited U.S. commercial launch planned in December and framed as a multi-year growth driver with IoT analytics (Venus Connect) and EMS/RF/PEMF stack .
- Balance sheet actions reduced total debt to ~$30.1M at 9/30 (from ~$39.7M at 12/31) via $6.5M (July 1 PR) and $11.48M (Oct 2 PR) note exchanges into Series Y, plus added bridge capacity .
What Went Wrong
- Revenue declined 8% YoY and 12% QoQ, primarily from Hair Restoration softness and macro/tighter third-party lending impacting capital equipment sales .
- Gross margin contracted YoY to 64.0% (vs 66.1%) driven by U.S. device import tariffs and lower volume absorption; operating loss widened to $9.5M (vs $7.2M) .
- Large non-cash charges drove EPS downside: $11.3M loss on debt extinguishment and $0.2M loss on disposal of subsidiaries pushed GAAP net loss to ($22.6M) .

Financial Results

Summary vs prior periods and consensus

Metric	Q3 2024	Q2 2025	Q3 2025	Consensus Q3 2025
Revenue ($M)	$15.01	$15.69	$13.78	$14.48*
GAAP Diluted EPS ($)	($13.10)	($8.03)	($12.14)	($3.61)*
Gross Margin (%)	66.1%	60.1%	64.0%	—
Operating Expenses ($M)	$17.08	$18.47	$18.31	—
Operating Loss ($M)	($7.16)	($9.04)	($9.50)	—
Adjusted EBITDA ($M)	($5.87)	($8.85)	($7.82)	—
Cash & Equivalents ($M)	—	$3.88	$4.31	—
Restricted Cash ($M)	—	$0.99	$1.62	—
Total Debt ($M)	—	~$34.3	~$30.1	—

Values with asterisk (*) are from S&P Global consensus. Values retrieved from S&P Global.

Revenue by region

Region ($000s)	Q3 2024	Q2 2025	Q3 2025
United States	$8,548	$9,727	$7,489
International	$6,459	$5,965	$6,287
Total Revenue	$15,007	$15,692	$13,776

Revenue by product/category

Product ($000s)	Q3 2024	Q2 2025	Q3 2025
Venus Prime / Subscription—Systems	$2,684	$4,681	$2,936
Products—Systems	$8,898	$7,939	$7,861
Products—Other	$2,741	$2,444	$2,332
Services	$684	$628	$647
Total	$15,007	$15,692	$13,776

KPIs and operating metrics

KPI	Q3 2024	Q2 2025	Q3 2025
Internal lease mix of systems revenue (%)	23%	37%	27%
Cash sales share of total systems & subscription revenue (%)	—	—	73%
U.S. cash sales share of U.S. systems & subscription (%)	76%	65% (U.S. systems)	82%
EBD systems sales ($M)	—	—	~$9.6 (PR); +2% YoY

Non-GAAP: Adjusted EBITDA reconciliations provided by the company .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue	FY 2025	None	Not providing guidance	Maintained: No guidance
Gross Margin	FY 2025	None	Not providing guidance	Maintained
Operating Expenses	FY 2025	None	Not providing guidance	Maintained
Adjusted EBITDA	FY 2025	None	Not providing guidance	Maintained

Earnings Call Themes & Trends

Topic	Previous Mentions (Q1 & Q2 2025)	Current Period (Q3 2025)	Trend
AI/technology & new products	Planned next-gen body device in H2’25; focus on practice performance; GLP-1 usage as demand catalyst	Venus NOVA 510(k) clearance; limited U.S. launch in Dec; IoT via Venus Connect; EMS/RF/PEMF stack	Positive inflection with first clearance
Supply chain & tariffs	Tariffs expected to modestly pressure GM (1–1.5% in 2025; 2–2.5% in 2026) absent mitigation; Israel-Iran supply disruption and mix impact in Q2	U.S. tariffs cited as key driver of GM decline YoY (66.1% → 64.0%)	Ongoing headwind
Macro/financing	Tight credit, economic uncertainty slowing system adoption; distributor hesitancy OUS	Continues to weigh on Hair Restoration and capital equipment demand	Persistent
Product performance	Q2 sequential revenue +15% QoQ on systems; U.S. cash sales strength	EBD stabilization (+~2% YoY), Hair Restoration weak pending sale	Mixed
Regional trends	Q2: U.S. +5% YoY; International -18% YoY	Q3: U.S. -12% YoY; International -3% YoY	U.S. softened; Int’l stabilized
Regulatory/legal	Announced definitive agreement to sell Venus Hair (June 6)	Challenges closing; sought Delaware Chancery Court aid	Elevated execution risk
Balance sheet actions	$11M debt exchanged in April; added bridge facility; equity raises	Additional $6.5M (June 30) and $11.48M (Sept 30) notes exchanged; debt ~$30.1M at Q3-end	Deleveraging continues

Management Commentary

“We are very encouraged by the signs of stabilization in our EBD business… We were especially pleased to announce FDA 510(k) clearance for our new Venus NOVA… We are targeting sequential growth in the fourth quarter fueled, in part, by a limited commercial launch… in December.” — CEO Rajiv De Silva .
“The decrease in gross margin is primarily attributable to the impact of U.S. tariffs on our devices imported into the U.S. market, and to a lesser extent higher device system costs of goods sold tracing to manufacturing overheads spread over a lower volume base.” — Management discussion .
“We exchanged a total of $29 million of subordinated convertible notes… for shares of… Series Y preferred stock… We also raised gross proceeds of $3.9 million in multiple equity capital market transactions.” — CFO Domenic Della Penna .
“Venus NOVA… with built-in IoT connectivity through Venus Connect, clinics gain access to real-time analytics, treatment insights, and automatic system optimization to enhance efficiency and profitability.” — Product release .

Q&A Highlights

Q3 2025: No analyst Q&A; call concluded without questions .
Prior Q1 2025 context: CFO quantified tariff headwinds at ~1–1.5% GM impact in 2H25 (2–2.5% in 2026) absent mitigation; management emphasized indirect demand effects via uncertainty and financing friction .
Timing of deals: Q1 softness tied to late-quarter slippage; some deals closed in early April, consistent with elongated lender protocols and distributor caution .

Estimates Context

Revenue missed S&P Global consensus: $13.78M actual vs $14.48M estimate (one estimate) — shortfall of ~$0.71M (~5%). Values retrieved from S&P Global.
EPS missed S&P Global consensus: ($12.14) actual vs ($3.61) estimate (one estimate), driven by $11.3M non-cash loss on debt extinguishment and Hair Restoration weakness. Values retrieved from S&P Global.

Consensus values marked with asterisk (*) are from S&P Global. Values retrieved from S&P Global.

Key Takeaways for Investors

Near-term trajectory hinges on December’s limited U.S. launch of Venus NOVA and Q4 sequential growth delivery; successful early uptake would be a positive catalyst .
Deleveraging is tangible (debt ~$30.1M vs ~$39.7M at YE’24), but liquidity remains tight (cash $4.31M + $1.62M restricted at Q3-end), keeping execution/financing risk elevated .
Tariff exposure and tight third-party lending continue to pressure gross margin and capital equipment demand; watch for pricing/COGS mitigation and channel financing support to protect margins/orders .
Hair Restoration sale is pivotal; ongoing counterparty challenges and legal action add uncertainty to timing/cash proceeds and to the 2026 margin/expense profile post-divestiture .
EBD stabilization is encouraging; sustaining mix shift toward cash sales (73% overall; 82% U.S.) could structurally improve unit economics as volumes normalize .
Estimate resets likely lower near term, given a ~5% revenue miss and outsized EPS miss on non-cash charges; watch for reduced dispersion as coverage is thin (single estimate) .
Risk/reward skews to execution: NOVA launch ramp, Hair sale closure, and continued debt reduction are the main upside drivers; slippage on any of these could extend losses and constrain optionality .

Venus Concept Inc. (VERO)·Q3 2025 Earnings Summary