Venus Concept Inc. Q1 FY2025 earnings call

• First quarter revenue was softer than expected due to delays in system sales timing. - Team delivered solid execution despite challenging environment. - Cash system sales in U.S. increased to 80% of total U.S. system sales from 75% last year. - International results affected by distributor hesitancy; working on evolving OUS commercial strategy. - Managing cash burn through disciplined cost management; converted $11 million of Madryn debt to equity in March; secured new bridge loan amendment and equity capital transactions in April. - Planning to announce next body device in second half of 2025.

First quarter revenue was $13.6 million, down 22% year-over-year. Systems revenue declined 25%, and procedure-related products and service revenue had a high single-digit decline. Cash system sales in the U.S. represented 80% of total U.S. system sales in the first quarter compared to 75% last year. International results were impacted by disruptive distributor ordering patterns due to global macro headwinds and trade concerns. Total revenue decrease was driven by 29% decrease in international revenue and 16.5% decrease in United States revenue. Systems revenue decreased 25%, including lease systems revenue. The percentage of total systems revenue from internal lease programs was approximately 25% in first quarter 2025 compared to 25% in prior year.

The company is not providing full year 2025 financial guidance at this time. The company does expect to see sequential revenue growth in the second quarter.

• Tariffs: Could impact gross margins, with potential 1%-2.5% impact in 2025 and 2%-2.5% in 2026 if negotiations don't go well. - Economic uncertainty: Causes distributor and customer hesitancy, affecting purchasing patterns. - Tighter credit markets: Impact customer system adoption.

Q: How do recently enacted and proposed tariffs impact your business?

A: Tariffs on Israel-sourced products could impact gross margins, with 1%-1.5% impact in 2025 and 2%-2.5% in 2026 if no mitigation. Also, economic uncertainty due to tariffs causes distributors to be more hesitant.

Q: Were the sales pushed from first quarter to second quarter mostly U.S. sales or international?

A: It's a combination of U.S. sales and international distributor orders, tied to hesitancy in light of economic conditions. Lending practices make it tougher to close deals, impacting all markets.

Q: Update on the next-gen body contouring device timeline and traction expectations?

A: Expect launch in early second half of 2025. Regulatory process underway. Device developed based on customer feedback on existing big selling devices, expecting meaningful market uptick when available.