Apyx Medical Corp Q1 FY2025 earnings call

• Charlie Goodwin reviewed first quarter performance, noting Advanced Energy growth and OEM decline. - Highlighted cost-cutting measures and restructuring program achieving cost reduction and cash burn reduction. - Discussed macroeconomic headwinds and GLP-1s driving demand for skin tightening treatments. - Emphasized Renuvion's position as a minimally invasive solution for loose skin, new awards, and direct-to-consumer marketing with Dolores Catania. - Mentioned submission of AYON body contouring 510(k) to FDA, expecting launch in back half of 2025 with positive feedback from physicians.

Total revenue for the first quarter of 2025 was $9.4 million, a decrease of 8% compared to $10.2 million in the same period last year. The Advanced Energy segment saw revenue increase 6% to $7.9 million, driven by stronger sales of single-use handpieces in the US and stabilized capital equipment demand. The OEM segment sales decreased 44.7% or approximately $1.2 million. Domestic revenue decreased 3.4% year-over-year to $6.7 million, and international revenue decreased 17.7% year-over-year to $2.7 million. Gross profit for the first quarter of 2025 was $5.7 million, with a gross profit margin of 60.1% compared to 58.1% in the prior year period.

• Reaffirmed 2025 total revenue guidance: $47.6 million to $49 million (vs $48.1 million in 2024). - Advanced Energy revenue expected to be $39.6 million to $41 million (vs $38.6 million in 2024). - OEM revenue expected to be approximately $8 million (vs $9.5 million in 2024). - Anticipates gross margins of approximately 60% for the year and total operating expenses not to exceed $40 million.

• Persistent macroeconomic headwinds impacting the global aesthetics space. - Impact of explosive growth of GLP-1s on the market. - Uncertainty around tariffs and their potential impact on the business.

Q: Good morning. Thank you for taking the questions. Obviously, it’s nice to hear that you’re seeing some stability on the generator side. One of the opportunities with the AYON platform was that for the practices to obtain one of those, they’re going to have to kind of get in queue. And to do that, you were going to give priority to those that had upgraded to the Apyx One Console. How is that progressing? Are you seeing customers enroll for that? And what does the pipeline look on that side?

A: Yes. Thanks, Matt. I appreciate the question. Look, we’re not going to comment on the pipeline for AYON yet. We’re still waiting for clearance from the FDA. And so we’ll have plenty of time to update everybody on AYON and what’s going on there. But obviously, the announcement of AYON gives doctors and clinicians a huge impetus to upgrade to the Apyx One because of the excitement around AYON. And so we’re very happy with what we’re seeing in the marketplace regarding that.

Q: Yes. And I apologize. I could have been a little more clear. I was asking about the Apyx One Console, the upgrades to just get in queue for AYON. I was just curious if you were seeing increased demand for the Apyx One ahead of that?

A: Yes. No, that is actually what I tried to answer. And the answer to that is we’re happy with what we’re seeing for that is the upgrade – is people upgrading to the Apyx One and waiting for AYON.

Q: Got it. All right. And then as far as there was going to be a soft launch later this year. I think last call, you had kind of mentioned that you kind of had a list, but have you kind of solidified the list of practices that will be receiving AYON? And are they getting set up? Kind of walk through the process once you do receive approval from the FDA, what that kind of first batch of KOLs, what that will look like?

A: Yes. So we do. We have that list all solidified. We’ve got 20 AYON ambassadors throughout the United States that are ready to go once we get clearance. Obviously, we would install the systems, get them and their staff trained on everything, and then they would obviously start performing cases and give us feedback and all of that. And that clock starts when we get clearance and then when we get everything installed and ready to go, but we are making great progress with all of that. And now it’s just a matter of waiting.

Q: Understood. And one last one, and I know you touched on this a little bit in your prepared remarks, but obviously, front of mind for a lot of investors recently has been tariffs. Maybe just remind everyone where you’re obtaining your products from and what, if anything, would need to be done to mitigate any potential tariff impact? Thank you.

A: Yes. No, thanks, Matt. So look, we get – we’ve got a supply chain where we get parts from all over the world. But one of the advantages that we have as a company is we have manufacturing both in the United States, and we have manufacturing both in Sofia, Bulgaria. So based on what the environment is and what the best path for us, we can adjust manufacturing between the two facilities. And so we do have a little bit of flexibility when it comes to that.

Q: Okay. So it sounds like pretty minimal impact at this point. And then maybe I can use my follow-up here on just how you’re thinking about investments to support the AYON launch. Obviously, I know you’re keeping a close eye on cash burn and operating expenses. But how are you positioning investments to support this launch while also preserving capital here?

A: Yes. Look, obviously, expense control and cash management is incredibly important to us, but it’s not at the expense of the AYON launch and everything that we’ve contemplated into our budget and the investments that we’re making is there to support AYON and to be able to grow that. And remember, we think that AYON is a huge differentiator for us at Apyx Medical and makes us a true partner for the surgeons. And we’ve got plans for how not only are we going to use capital to build new AYONs but obviously, part of the social strategy to talk about that and everything else. So it’s always been contemplated in there. We are going to do our best to keep managing expenses and managing our cash burn. But like I said, it won’t be at the expense of the launch of AYON