ALLURION TECHNOLOGIES, INC. Q1 FY2024 earnings call

• Revenue in Q1 2024 was $9.4 million, up 14% sequentially. Procedural volumes (new app users) grew 22% QoQ and 12% YoY.
• Cash burn reduced by 62% QoQ from $22 million to $8.4 million in Q1 2024, driven by a 43% reduction in operating expenses and reallocation of marketing investments.
• Believes GLP-1 drugs are a long-term positive for Allurion, as they increase visibility on obesity and Allurion can be used with GLP-1s. In January, partnership with UK's NHS for full reimbursement was announced.
• Launched virtual care suite (VCS) in the US for providers, which is AI-powered and enables remote patient monitoring, telehealth, etc.
• Published study showing Allurion program with or without oral GLP-1 leads to improvement in obesity-related comorbidities.

In the first quarter of 2024, Allurion Technologies reported revenue of $9.4 million, a 14% sequential increase from the fourth quarter of 2023. Procedural volumes, as estimated by new app users, reached a record high, growing 22% QoQ from the fourth quarter of 2023 and 12% YoY from the first quarter of 2023. Gross margins in the quarter were 73%. Revenue contribution from different segments isn't explicitly broken down beyond the overall figures, but procedural volume growth is highlighted as a key indicator of demand for the product.

• Reiterated 2024 guidance for procedural volume, revenue, gross margin, and cash burn, with majority of revenue growth expected in the second half of 2024.
• Expect de-stocking of inventory to conclude in Q2, with procedural volume and revenue growth becoming more correlated in H2 2024.
• Simplification of capital structure via $48 million convertible senior secured note financing provides increased cash flow and operational flexibility.

• Forward-looking statements may not materialize due to risks and uncertainties described in SEC filings, including differences between actual results and forward-looking statements, impact of GLP-1 drugs, cost reduction initiatives' effect on cash burn, and clinical trial timings.

Q: Talk about the UK reimbursement as a catalyst and its potential to help in other geographies?

A: The UK has significant obesity issues with high hospital admissions and backlog in bariatric surgery. Allurion's partnership with NHS in the UK is a start, and trends here could materialize in other European, Middle Eastern markets.

Q: About inventory de-stocking, is it still a problem and where?

A: Mostly concentrated in distributor markets. De-stocking expected to complete in Q2, with distributors beginning to reorder in Q2.

Q: How is procedural volume tracked and correlated to app users?

A: New app user data is validated with actual inventory levels market-by-market to correlate new app users to actual balloon placements, providing a real-time metric for procedural volumes.

Q: Prospects for launching in new geographies this year?

A: Focused on expanding in existing geographies launched in 2022-2023 (India, Brazil, Canada, Mexico, Australia) and most focused on US for VCS launch and market expansion.