• Total Revenue: Decreased 10% year-over-year to $12.1 million.
• Advanced Energy Products Revenue: Decreased 17% year-over-year to $9.8 million.
• OEM Products Revenue: Increased 29% year-over-year to $2.4 million.
• Gross Profit: Decreased 19% to $7.5 million.
• Gross Margin: 61.7%, down from 68.4% in the prior period.
• Operating Expenses: Decreased 1% to $13 million.
• Loss from Operations: Increased 349% to $5.5 million.
• Net Loss Attributable to Stockholders: $6.6 million, or $0.19 per share.
• Adjusted EBITDA Loss: Increased 166% to $4.3 million.
• Cash and Cash Equivalents: $32.7 million as of June 30, 2024.
• 2024 Revenue Guidance: $50.6 million to $52.1 million, representing a decrease of approximately 3% to flat.
• 2024 Net Loss Guidance: $24.5 million to $23.5 million.

• Warning! GuruFocus has detected 4 Warning Signs with APYX.

Release Date: August 08, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• OEM product sales increased by 29% year-over-year, exceeding expectations.
• Handpiece sales grew by more than 20% year-over-year, driven by demand from both new and existing users.
• The company is actively engaging with prospective customers to facilitate generator adoption through creative financing solutions.
• Apyx Medical Corp (NASDAQ:APYX) has a strong portfolio of clinical evidence supporting the efficacy and safety of its Renuvion technology.
• The company is expanding its direct-to-consumer initiatives, resulting in increased social media presence and engagement.

Negative Points

• Total revenue decreased by 10% year-over-year to $12.1 million.
• Sales of advanced energy products decreased by 17% year-over-year due to a challenging cosmetic surgery market.
• Gross profit margin declined from 68.4% to 61.7%, primarily due to changes in sales mix.
• Net loss attributable to stockholders increased significantly to $6.6 million, or $0.19 per share.
• The challenging capital equipment environment is expected to persist, impacting generator sales throughout the year.

Q & A Highlights

Q: Can you discuss the strong growth in handpiece sales and the impact of GLP-1 on utilization? A: Charles Goodwin, CEO: We are pleased with the handpiece sales performance, which was consistent with our expectations and budget. Global growth exceeded 20%, driven by demand from our customer base and new users. Some of this demand is attributed to GLP-1 patients seeking treatments for loose skin. We anticipate double-digit growth in handpiece sales for the entire year.

Q: Are there opportunities to expand into new geographies this year? A: Charles Goodwin, CEO: We are working on entering significant markets like South Korea and China. We have submitted registrations in both countries and will update once we receive news.

Q: Can you provide insights into handpiece sales performance in the US versus international markets? A: Charles Goodwin, CEO: Both US and international markets saw over 20% year-over-year growth in handpiece sales. However, the capital equipment environment remains challenging, and our guidance assumes this will continue throughout the year.

Q: What factors contribute to the expected stronger growth in Q4 compared to Q3? A: Charles Goodwin, CEO: Our guidance anticipates stronger year-over-year growth in the second half of 2024, particularly in Q4, due to the challenging environment that began in the latter half of 2023. This aligns with our fiscal year 2024 guidance, which assumes stronger growth in the second half.

Q: How much of the system sales were from new customers versus existing ones upgrading to Apyx One? A: Charles Goodwin, CEO: The majority of system sales in the quarter were to new customers adopting the technology. While some existing customers expand their practices, most capital sales in any given quarter are to new customers.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.