Cutera (CUTR) investor relations material

Executive summary

• Q3 2024 revenue was $32.5M, down 30% year-over-year, mainly due to lower system sales, macroeconomic headwinds, and the end of a skincare distribution agreement.

• AviClear sales grew 16% year-over-year, driven by international launches and strong global performance.

• Gross margin and operating expenses improved on a non-GAAP basis, reflecting operational efficiencies and cost containment, but GAAP gross margin fell due to a $10.1M inventory charge.

• The company ended Q3 with $59.0M in cash, down from $84.3M at June 2024 and $143.6M at year-end 2023.

• Substantial doubt exists about the company’s ability to continue as a going concern over the next year.

Financial highlights

• Q3 2024 net revenue: $32.5M (down 30% year-over-year); net loss: $39.0M; gross margin: 5.6% (GAAP), 11.5% (non-GAAP).

• Operating expenses for Q3 2024: $38.0M (GAAP), $34.7M (non-GAAP), reflecting cost reductions and a $5.4M charge for doubtful accounts.

• Cash used in operations for nine months: $82.6M; cash and equivalents at September 30, 2024: $59.0M.

• Convertible notes outstanding: $420.4M–$429.1M principal across 2026, 2028, and 2029 maturities.

• International revenue comprised 54.9% of total revenue, up from 46.5% a year ago.

Outlook and guidance

• Full-year 2024 revenue guidance maintained at $140M–$145M; year-end cash expected to be ~$40M.

• Anticipates over $50M year-over-year improvement in cash burn from 2024 to 2025, mainly from working capital reductions.

• Management expects continued losses and negative cash flow, with ongoing cost-saving initiatives and a focus on transitioning AviClear to a direct sales model.

• The company is evaluating additional funding options and may need to raise capital to support operations.

• No near-term improvement expected in credit availability or patient demand; macroeconomic headwinds persist.