Release Date: February 26, 2025

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

Positive Points

• Establishment Labs Holdings Inc (NASDAQ:ESTA) reported a strong start in the US market with $3.3 million in sales in the first two months of the launch, exceeding initial expectations.
• The company achieved a 41% increase in total revenue for the fourth quarter, reaching $44.5 million, driven by higher production volumes and early US sales.
• Operating expenses were reduced by $12.5 million in 2024 compared to 2023, despite significant investments in US commercial operations.
• The company has successfully onboarded over 650 accounts in the US, with 450 placing orders and 88% reordering, indicating strong market acceptance.
• Establishment Labs Holdings Inc (NASDAQ:ESTA) is on track to achieve its first positive EBITDA quarter in 2025, supported by gross margin expansion and operational efficiency improvements.

Negative Points

• Global demand outside the US remains uneven, with specific regions like Latin America showing continued weakness and flat revenue growth.
• Foreign exchange negatively impacted sales by approximately 2% points in the fourth quarter.
• The company reported a net loss from operations of $18.7 million for the fourth quarter, although this was an improvement from the previous year.
• Operating expenses increased in the fourth quarter due to the ramp-up of US commercial activities and the acquisition of the Benelux subsidiary.
• The company anticipates continued macroeconomic pressures in various regions, which could impact growth outside the US.

Q & A Highlights

• Warning! GuruFocus has detected 7 Warning Signs with ESTA.

Q: Could you provide an update on the US Motiva launch, including the number of accounts and whether FDA clearance of Ergonomix2 is included in the $35 million guidance? A: We have 650 accounts fully onboarded, with 450 having placed orders and 88% reordering. We are signing up an average of 5 new accounts per day. The $35 million guidance does not include any new approvals in the United States. Juan Jose Chacon Quiros, CEO

Q: Can you provide a macroeconomic overview for key regions like the US, China, and Brazil? A: While there are still macroeconomic pressures, we are not expecting growth from Latin America this year, but the situation is stabilizing. Growth is expected from EMEA and APAC regions, with a conservative guidance of mid-single digits. Juan Jose Chacon Quiros, CEO

Q: Why does the $5 million target for Q1 seem conservative given the strong order momentum in January and February? A: It's still early in the launch, and while the numbers could appear conservative, we want to give ourselves some room to see how things develop. Raj Denhoy, CFO

Q: How should we think about the trajectory of SG&A expenses given the US launch and the 40 sales reps target? A: The infrastructure is now in place, and while we may add sales reps opportunistically, there is no necessity to add significantly more. The expenses should stabilize, allowing us to leverage the existing setup. Raj Denhoy, CFO

Q: What steps are required for the regulatory pathway for MIA and Preserve in the US and China? A: We are in the process of registering the tools necessary for Preserve, and we expect a potential launch in the US. The approval of the reconstruction indication is anticipated for 2026, with ongoing innovation expected in 2026, 2027, and 2028. Juan Jose Chacon Quiros, CEO

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