Venus Concept Inc. Q4 FY2024 earnings call

• Fourth quarter revenue was softer than expected, driven by macro-related challenges and Venus specific factors like inventory supply shortfall. - U.S. cash system sales growth and international distributor partnership efforts are positive. - Fiscal year 2024 revenue decline of 15% was better than competitors, with over 60% of year-over-year decline due to transition away from subscription system sales. - Achieved 14% reduction in cash used in operations in 2024. - Material progress in debt restructuring: total debt obligations down 47% from 2023. - Senior leadership team changes in February 2025, including new appointments for CRO, EVP Commercial Strategy, etc. - 1 for 11 reverse stock split on February 27, 2025, and received NASDAQ compliance notice. - Amendment to bridge loan agreement increased financing capacity by $10 million.

Fourth quarter revenue declined $2.4 million or 13% year-over-year. Systems revenue had a mid-teens decline, and procedure-related products and service revenue had a mid-single-digit decline. Lease revenue declined by $3.5 million or 58% year-over-year, offset by mid-teens growth in cash system sales. Cash system sales in the U.S. increased 27% year-over-year and represented 87% of total U.S. system sales in the fourth quarter. For fiscal year 2024, revenue declined 15% year-over-year. Systems revenue decline was primarily due to the strategic shift to prioritize cash system sales. Global systems adoption was impacted by macroeconomic headwinds. U.S. team delivered fourth quarter cash systems growth of 48% quarter-over-quarter. International business efforts to partner with high-value distributors are proving effective with sales distributors more than doubling year-over-year in Q4.

• The company is not providing full year 2025 financial guidance at this time. - Expects total revenue for the three months ending March 31, 2025, of at least $14 million. - Cautious due to ongoing strategic review of the business and uncertain global economic conditions.

• Macro-economic headwinds impact global systems adoption, including customer financing pressures, economic uncertainty, higher interest rates, and tighter credit markets. - Venus specific factor of supply-related shortfall in inventory of select products impacts ability to close system deals.

Q: Please characterize further the more normalized business profile going forward and the strategic review.

A: As said, cultural changes are behind, expect performance vs prior year to improve in 2025 but global economy and strategic review results make full year guidance imprudent.

Q: Give more detail on the Venus Hair business.

A: Pleased with performance of Venus Hair business, particularly on the Venus ARTAS Robot both in U.S. and outside, working on R&D innovations, and evaluating strategic options for the business.

Q: Talk about strategy to see top line growth in 2025.

A: Outside U.S., get to normal rhythm of ordering with new distribution partners; in U.S., look forward to launching new body system later this year.

Q: Discuss effect of tariffs on business.

A: Products: Robot assembled/manufactured in U.S., energy-based products mostly in Israel, Israel protected from increased tariffs for now, so no substantial near-term impact expected.