Apyx Medical Corporation Q3 FY2025 earnings call

• The company rebranded its Advanced Energy segment to Surgical Aesthetics to better align with its mission of delivering durable and transformational surgical results. - The AYON Body Contouring System's soft launch in the summer and full commercial launch in September were highly successful, with U.S. sales increasing over 30% due to the system's launch and increased handpiece volume. - Submitted a 510(k) application to the FDA for AYON to expand its label to include power liposuction, expecting clearance in Q1 2026. - Initiated an ambassador program with key opinion leaders and hosted KOL events to promote AYON, with positive feedback from surgeons. - Highlighted the growth potential of Renuvion, a minimally invasive solution for loose skin, especially among patients using GLP-1 medications, which presents a significant market opportunity.

Total revenue for the third quarter of 2025 was $12.9 million, compared to $11.5 million in the same period last year. The Surgical Aesthetics segment contributed $11.1 million, representing a 19% increase from the prior year's $9.3 million, which is approximately 86% of the total revenue. The OEM segment had sales of $1.8 million, a 18% decrease from $2.2 million in the prior year, making up about 14% of total revenue. The growth in Surgical Aesthetics was driven by the commercial launch of the AYON Body Contouring System and increased volume of single-use handpieces, while OEM sales declined due to reduced volumes to existing customers.

• For the 12 months ending December 31, 2025, total revenue is expected to be in the range of $50.5 million to $52.5 million, up from the previous range of $50 million to $52 million. - Surgical Aesthetics segment revenue is projected to be between $43 million and $45 million, an increase from the prior guidance of $42 million to $44 million. - OEM revenue is expected to be approximately $7.5 million, down from the previous guidance of $8 million. - Anticipates gross margins of approximately 61% for the year and total operating expenses not exceeding $40 million.

• Uncertain impact of trade policy and tariff announcements on the business, as the overall effect on the company's operations remains dependent on multiple factors.

Q: Dave Turkaly asked about the decline in generator sales and gross margin impact.

A: Charles Goodwin explained that AYON requires an Apyx One generator, and sales are classified as AYON sales, with customers either upgrading existing generators or purchasing new AYON systems. Regarding gross margin, no specific guidance was given, but it was noted that the Surgical Aesthetics business typically has high gross margins.

Q: Sam Eiber inquired about consumable uptake and market trends related to GLP-1.

A: Charles Goodwin stated that uptake of consumables comes from new doctors adopting the technology, higher attach rates from patients requesting Renuvion after body contouring procedures, and stand-alone use of Renuvion. He also mentioned that the market has been disrupted by GLP-1 drugs, and technologies like AYON and Renuvion are well-positioned to address the resulting skin laxity needs.

Q: Alex Fuhrman asked about the drivers of single-use handpieces growth.

A: Charles Goodwin responded that growth in handpieces is due to new doctors adopting the technology, higher attach rates from patients, and stand-alone use of Renuvion.

Q: Matthew Hewitt asked about the pipeline and international rollout of AYON.

A: Charles Goodwin mentioned that the company increased guidance for the Surgical Aesthetics segment, but specific pipeline details were not provided. Regarding international rollout, he noted plans to register AYON globally, with focus on markets like Europe, the Middle East, and Latin America, starting with CE marking in Europe and registration processes in other regions in 2026, with current focus on the U.S.