Establishment Labs Holdings Inc. earnings

Management highlights

- Q1 2026 was a strong start with revenue growth and adjusted EBITDA positive for third quarter. Gross margin improved by 350 basis points to 70.7%. Refinanced credit facility and expects cash flow positive in second half. Raised full-year revenue guidance. - Establishment Labs is a woman's health company focused on breast aesthetics and reconstruction innovation. Has over 200 patents issued and pending. Motiva implants have low complication rates. - Minimally invasive platform includes Mia and Preserve. Mia is for subtle enhancement, Preserve accommodates primary breast augmentation etc. Launch of minimally invasive techniques can increase market. - In U.S., Motiva continues to expand footprint with over 1,700 accounts. Minimally invasive platform officially launched in March with strong response. Trained over 260 surgeons in U.S. - Outside U.S., business performs well with 15% growth, strong in direct markets and minimally invasive platform. Continued growth expected into 2027 with innovation pipeline including breast reconstruction in U.S., CE mark for ZEN temperature, etc.

Guidance

- Raised full-year revenue guidance to $266.5 to $268.5 million from previous $264 to $266 million. - Expect minimally invasive business to exceed $35 million in 2026, up from prior $30 million guidance. - Expect gross margins in range of 71.2% to 72.2% for full year. - Expect adjusted EBITDA positive in each quarter of 2026 and to achieve cash flow positive in second half of the year.

Segment performance

Q1 2026 had $59.9 million in revenue and adjusted EBITDA of $1.2 million, representing 45% revenue growth over Q1 2025. U.S. business had $19.6 million revenue, up 216% from Q1 2025 and 13.3% quarter-over-quarter. Outside the U.S., 15% growth was delivered. Minimally invasive platform generated $9.1 million in revenue in Q1. U.S. business represents 32.7% of total revenue, with outside the U.S. being the largest revenue contributor.

Risks & headwinds

- Geopolitical landscape impacts business forecasting. - Exposure to Middle East is less than 5% of total revenue, but still need to monitor regional volatility. - Potential impact of macroeconomic environment on demand and costs, such as outward freight surcharges.

Analyst Q&A

• Q: Anthony Patron asked about how much new accounts bringing in Motiva as a platform versus Preserve Go Live accounts.

  A: Peter Caldini said progress in U.S. is tremendous, driving growth from expanding Motiva business and present day launch of Preserve.

• Q: Josh Jennings asked about Preserve not cannibalizing Motiva business and how it's incremental.

  A: Peter Caldini said Preserve and Mia operate complimentary, with MIA in premium segment and Preserve more day-to-day, and minimally invasive has opportunity to drive category growth.

• Q: Sam Eber asked about Preserve becoming standard of care and why it's only done with Motiva.

  A: Peter Caldini said Preserve has patient benefits and innovation with unique implants makes it beneficial.

• Q: Mason Carrico asked if Preserve launch accelerated onboarding of new accounts.

  A: Peter Caldini said outside U.S. Preserve brought new accounts, and in U.S. it has potential to drive account acquisition.

• Q: Caitlin Roberts asked about Preserve and MIA split and ERGO II timeline.

  A: Peter Caldini said bulk driven by Preserve, and ERGO II approval not a significant driver until around 2028.

• Q: Joanne Wage asked about macroeconomic environment impact.

  A: Peter Caldini and Sandra Harris said Middle East is small part of business, and monitored freight costs and silicone costs.

• Q: Alan Gong asked about guidance and cadence.

  A: Peter Caldini said orders specific to U.S., strong momentum into Q2, and Middle East has demand.

• Q: Matt Baylor asked about silicone supply cost increases.

  A: Peter Caldini said good relationship with Nusil, productive conversations, and intent to have long-term agreement.

• Q: Mike Matson asked about refinancing impact on interest expense.

  A: Sandra Harris said new debt agreement has lower interest rate and pick feature, net-net slightly up.

• Q: Anthony Patron asked about gross margin guidance.

  A: Sandra Harris said gross margin improvement from U.S. growth, minimally invasive launch, and no assumptions on FDA clearance for reconstruction yet