Release Date: November 13, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- International sales to distributors increased nearly 60% in Q3, driven by demand from new and existing partners in APAC and EMEA regions.
- Venus Concept Inc (VERO, Financial) achieved a 25% reduction in cash used in operations year-over-year, demonstrating solid cash flow performance.
- The company successfully restructured its debt, reducing total debt obligations by 54% from December 2023 to September 2024.
- Venus Concept Inc (VERO) received an extension from NASDAQ to regain compliance with the minimum bid price requirement, providing additional time to address this issue.
- The company is expanding its international distribution network, with new partnerships in key markets like India, enhancing future growth potential.
Negative Points
- Third quarter revenue was softer than expected, with a 15% year-over-year decrease in total revenue.
- The US market faced macroeconomic headwinds, including high interest rates and tighter credit markets, impacting customer systems adoption.
- Lease revenue declined significantly, with a 39% year-over-year decrease, affecting overall revenue performance.
- Gross margin decreased to 66.1% from 69.2% in the previous year, due to changes in revenue mix by geography and product.
- The company reported a net loss attributable to stockholders of $9.3 million for the third quarter of 2024, slightly higher than the previous year's loss.
Q & A Highlights
Q: On the Prime program, do you expect things to level off at a Q3 level, or will you expect it to increase?
A: Domenic Penna, CFO, responded that the cash proportion of their business should be 70% to 75%, with the subscription or in-house financing side at 25% to 30%. He expects this mix to remain consistent, with no expectation for the cash mix to exceed 80%.
Q: You mentioned the body platform. Is that Aime you're referring to, and when will it be available?
A: Hemanth Varghese, COO, clarified that they are not referring to Aime, which has been delayed. The body platform is a next-generation energy-based body system expected to launch in Q1 2025.
Q: Could you provide insights into the EMEA and APAC regions, specifically which countries show strength and growth potential?
A: Hemanth Varghese noted strength in Australia, Mexico, and Hong Kong, despite challenges in Canada and the US. New partnerships in India are expected to drive growth, with multiple product registrations completed.
Q: How quickly can expansions in new markets like India contribute to revenue, and how material could this be?
A: Hemanth Varghese explained that while specific guidance isn't provided, new distributors in markets with existing clearances can start selling immediately. In markets like India, where registrations are needed, there might be a delay, but growth is expected to be more consistent next year.
Q: What is the latest on the cash flow outlook? Should we expect breakeven in Q4 or more in 2025?
A: Rajiv De Silva, CEO, stated that while Q4 is typically strong for cash flow, sustained cash flow breakeven is likely in the latter part of 2025, considering macroeconomic headwinds.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
