Venus Concept Inc. Q2 FY2025 earnings call

• Q2 delivered 15% quarter-over-quarter growth, driven by strong execution in a challenging environment. Sequential growth was consistent with first quarter expectations, fueled by mid-teens growth in U.S. and international markets and 20% growth in systems and subscription revenue.
• Year-over-year, U.S. revenue grew 5% while international revenue declined 18%, with U.S. growth driven by double-digit growth in systems and subscription revenue and 23% year-over-year increase in cash system sales.
• Announced the sale of Venous Hair business to MHG Co. Ltd for $20 million, allowing focus on global medical aesthetics business, expected to improve revenue growth, lower operating expenses, enhance cash flow, and accelerate long-term profitability.
• Continued focus on customer engagement and support, improving sales efficiency by prioritizing core products in the U.S. (Bliss MAX, Versa Pro, Viva MD).
• Progress on balance sheet with amendments to bridge loan facility, exchange of subordinated convertible notes for preferred stock, and equity capital raises.

Total revenue for the second quarter was $15.7 million, down 5% year-over-year. U.S. revenue increased 5% year-over-year, while international revenue decreased 18% year-over-year. Sequential growth in Q2 was 15% QOQ, driven by mid-teens growth in both U.S. and international markets, with 20% growth in total systems and subscription revenue. Cash system sales in the U.S. represented 65% of total U.S. system sales in Q2 compared to 58% last year.

• The company is not providing full year 2025 financial guidance at this time due to active dialogue with lenders and investors, ongoing strategic evaluations, and current market conditions impacted by trade disruptions.

• Macroeconomic headwinds including customer financing pressures, economic uncertainty, high interest rates, tighter credit markets, and proposed tariffs impacting customer system adoption.
• International business exposed to macroeconomic headwinds and tariffs affecting distributor demand.
• Supply disruptions caused by Israel-Iran conflict impacting production at contract manufacturer's facility in Israel, leading to adverse sales mix and higher cost of goods sold.

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