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Vivos Therapeutics, Inc. (VVOS)·Q4 2024 Earnings Summary

Executive Summary

  • Q4 2024 capped a year of operational progress: FY revenue rose 9% to $15.0M, gross profit reached $9.0M, and operating loss narrowed 35% YoY on a 21% OpEx reduction .
  • The pivot away from legacy VIP enrollments toward alliances/profit-sharing with sleep centers (Rebis) is central; management expects this model to accelerate revenue in 2025, with first meaningful contributions beginning Q2 2025 .
  • Versus estimates, Q4 2024 delivered a mixed print: Revenue missed ($3.70M vs $3.89M estimate) while EPS beat (-$0.28 vs -$0.43 estimate); Q3 showed the same pattern (rev miss, EPS beat), and Q2 was a clean beat on both revenue and EPS (S&P Global)*.
  • Key near-term catalysts: AMA CPT codes effective Jan 1, 2025 to facilitate commercial payer reimbursement , continued Rebis rollout and potential new alliances/acquisitions, and payer engagement to set reimbursement levels .
  • Management tone confident on achieving cash flow positive operations “in the foreseeable future” (Q2: early 2025; Q3: mid-2025), now pegged to scaling the alliance/M&A model .

What Went Well and What Went Wrong

What Went Well

  • Product revenue mix improved and discounting fell sharply; FY product revenue +26% YoY and contribution margins around 50% expected per case in the new model .
  • Cost discipline: FY OpEx -21% YoY to $20.2M; operating loss -35% YoY to $11.2M; cash ended at $6.3M after ~$17.9M equity raises .
  • Strategic progress: AMA CPT codes (effective 1/1/25) and prior FDA pediatric clearance position the portfolio for broader adoption and reimbursement. “These new medical codes will now facilitate coverage and reimbursement by commercial medical insurance payers” ; FDA pediatric clearance highlighted in Q3 .

Quoted management highlights:

  • “We project that each patient who signs up for Vivos treatment represents… contribution margins of approximately 50%… increasing top-line revenues per case start by approximately 4-6 times.”
  • “We believe… drive increased revenues and achieve cash flow positive operations and profitability in the foreseeable future.”
  • “This is exciting news… these new medical codes will now facilitate coverage and reimbursement by commercial medical insurance payers.”

What Went Wrong

  • Quarterly revenue decelerated into Q4 given transition away from VIP enrollments and timing of alliance revenue; Q4 revenue was below consensus and sequentially lower versus Q2 (S&P Global)*.
  • Gross margin compressed sequentially in H2 (65% Q2 → ~60% Q3 → ~57% Q4) amid mix and scale effects (S&P Global)*; alliance revenues expected only from 2025 .
  • Dependence on a large guides customer skewed Q4 shipment patterns; the customer’s big year-end order covered early 2025 demand, creating quarter-to-quarter lumpiness .

Analyst concerns/data points:

  • VIP enrollment revenue recognized over longer lives and transitioning to lower-price training programs; deferred revenue will roll off over 4–5 quarters, reducing reported VIP revenue weight .
  • Alliance revenue gating factors include staffing and trained dentists; management is adding PAs/doctors and leveraging 2,000+ trained dentists to scale .

Financial Results

Headline results vs estimates (S&P Global)*

MetricQ2 2024Q3 2024Q4 2024
Revenue ($USD)$4.054M* vs $3.600M* — Beat$3.860M* vs $4.180M* — Miss$3.698M* vs $3.889M* — Miss
EPS ($USD)-$0.60* vs -$1.05* — Beat-$0.40* vs -$0.70* — Beat-$0.28* vs -$0.43* — Beat

Note: Values retrieved from S&P Global.*

Income statement trends (S&P Global)*

MetricQ2 2024Q3 2024Q4 2024
Revenues ($USD)$4.054M*$3.860M*$3.698M*
Gross Profit ($USD)$2.651M*$2.334M*$2.097M*
Gross Margin %65.4%*60.5%*56.7%*
EBITDA ($USD)-$1.791M*-$2.499M*-$2.662M*
EBITDA Margin %-44.2%*-64.7%*-72.0%*
Operating Income ($USD)-$1.936M*-$2.645M*-$2.806M*
Diluted EPS ($USD)-$0.60*-$0.61*-$0.39*

Note: Values retrieved from S&P Global.*

Cross-reference reported quarter data points:

  • Q2 revenue $4.054M; gross profit $2.651M; gross margin 65%; EPS -$0.60 .
  • Q3 revenue $3.860M; gross profit $2.334M; gross margin 60%; EPS -$0.40 .
  • FY 2024 totals: Revenue $15.031M; Gross profit $9.019M; OpEx $20.190M; Op loss -$11.171M .

Segment mix (Product vs Service)

MetricQ2 2024Q3 2024Q4 2024
Product Revenue ($USD)$1.975M $1.958M N/A
Service Revenue ($USD)$2.079M $1.902M N/A
Total Revenue ($USD)$4.054M $3.860M N/A

Note: Q4 segment breakdown not disclosed in filings; FY product $7.874M and service $7.157M .

KPIs

KPIQ2 2024Q3 2024Q4 2024
Oral appliance arches sold (units)2,033 1,954 FY 2024: 16,182
Cash & Cash Equivalents ($USD)$6.903M $6.311M $6.260M
Gross Margin (%)65% 60% 56.7%*
Patients treated cumulative>45,000 (as of Q2) >47,000 (as of Q3) ~58,000 (as of FY-end)

Note: Q4 gross margin shown from S&P Global.*

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Cash flow from operations timing2025“Early 2025” (Q2 call) “Mid-2025” (Q3 PR/call) Lowered timing (later)
Alliance revenue contributions2024/2025Q4 2024 “first full quarter” of operations (Q2 call) “First real contributions start Q2 2025; accelerate through 2025” (Q4 call) Deferred start
Revenue per case (new model)Ongoing~$4,500 per case, ~50% contribution margin (pilot/model) Reinforced with adjunct services adding $1,000–$2,500 per case Raised per-case potential
Mix shift (product vs service)OngoingTransition from VIP/service reliance Product share rising (Q4 call cites 52% product in FY 2024) Mix shift confirmed
M&A/affiliation pipeline2024–2025Discussions with ~6 groups, 5,000 pts/mo (Q2 call) Negotiating transactions testing ~8,500 pts/mo; target near-term announcements (Q4 call) Expanded pipeline

Earnings Call Themes & Trends

TopicPrevious Mentions (Q2 2024)Previous Mentions (Q3 2024)Current Period (Q4 2024)Trend
Alliance/MSO pivotAnnounced alliance; 100 pts/mo → ~$8M annual rev; scaling discussions with 6 groups Transition quarter; expanding to 2 additional CO locations; broadening patient funnel Rebis acceleration; alliance revenue to impact from Q2 2025; staffing PAs/doctors added Positive, delayed revenue timing
Regulatory/reimbursementMedicare approvals for CARE devices FDA pediatric clearance; AMA CPT codes announced (effective 1/1/25) Engaging payers to set reimbursement levels for new CPT codes Positive catalyst pending payer rates
Cost cutting/cash burn8th straight YoY OpEx decline; liquidity improved 9th straight YoY OpEx decline; cash ~$6.3M FY OpEx -21%; operating loss -35%; cash $6.3M Sustained discipline
International expansionN/AMiddle East distributors; multiple market approvals; demand ahead of forecast Continued opportunity set (no new country adds in Q4 call) Positive
Product performance/discountsDiscounts cut materially; improved ASPs Product discounting down; guides growth Large guides customer drove Q4 lumpiness; expects 2025 growth Mixed near-term, strong medium-term
Telemedicine/scaleN/ATelemedicine enabling national reach Staffing/dentist pool gating but manageable Building capability

Management Commentary

  • “In 2024, we increased revenue while continuing to lower our cost structure… reduced operating expenses by 21% and reduced our operating loss by 35%.”
  • “We expect to close… more OSA treatment cases using Vivos-trained personnel… close over 70% of patients into some form of Vivos treatment… revenue per case… ~$4,500 with contribution margins up to 50%.”
  • “Every 1,000 newly diagnosed OSA patients per month… should yield annual top line revenues of approximately $38,000,000 with approximately $19,000,000 net.”
  • “We expect this initial alliance will be the first of a series of similar alliances and potential acquisitions… which we will use to drive sales of our novel appliances and services.”

Q&A Highlights

  • Rebis alliance incentives: Differentiated patient care and a new profit center; large legacy CPAP patient database to re-engage with alternative therapies .
  • Revenue timing: Alliance contributions expected to begin in Q2 2025 and accelerate; two additional CO locations added based on early success .
  • Quarter lumpiness: A large guides purchase in Q4 covered early 2025 demand; customer expects triple orders in 2025 .
  • VIP revenue recognition: Deferred revenue of ~$1.5M to be recognized over 4–5 quarters; program evolving to lower-price training offerings .
  • Gating factors: Staffing and trained dentists; leveraging >2,000 trained dentists; manufacturing, billing software/coverage verification in place .

Estimates Context

  • Against S&P Global consensus, Q4 2024 revenue missed ($3.70M vs $3.89M) and EPS beat (-$0.28 vs -$0.43); Q3 similarly missed on revenue and beat on EPS; Q2 beat both revenue and EPS (S&P Global)*.
  • Estimate coverage remains thin (1–2 estimates in 2024 quarters), amplifying volatility; forward targets reflect early-stage scale-up of the alliance model (S&P Global)*.
  • Implication: Street models may lift EPS near term (cost cuts, mix), but top-line ramps likely shift into mid-2025 as alliances contribute.

Note: Values retrieved from S&P Global.*

Key Takeaways for Investors

  • Near-term print: Expect choppy quarterly revenue as the company transitions away from VIPs and ramps alliances; EPS risk skewed positive near term on cost control and mix improvements .
  • 2025 setup: CPT codes effective 1/1/25 plus payer dialogues are crucial catalysts; reimbursement levels will determine case economics and adoption pace .
  • Revenue model math: Management cites ~$4,500 revenue per case and ~50% contribution margins, with adjunct services adding $1,000–$2,500 per case; conversion rates ~70%+ in pilots .
  • Pipeline/scale: Negotiations with sleep centers testing ~8,500 pts/month suggest meaningful upside if alliances close; watch for M&A/affiliation announcements .
  • Large customer exposure: Guides customer drove Q4 lumpiness but expects 2025 order growth; supports product revenue trajectory .
  • Liquidity and dilution watch: ~$17.9M raised in 2024; further financing likely to scale alliances; monitor structure, warrant coverage, and NASDAQ compliance .
  • Trade setup: Near-term catalysts include payer decisions on CPT code reimbursement, additional alliance openings, and evidence of case throughput; shares likely sensitive to tangible alliance-revenue updates and payer wins.