Establishment Labs (ESTA) Q2 2024 earnings summary

Executive summary

• Q2 2024 revenue reached $44.1 million, up 18.7% sequentially, reflecting stabilization and recovery in most markets, though down from $48.6 million in Q2 2023.

• Motiva Implants remain the core product, registered in 86 countries, with recent launches in China and select U.S. products.

• FDA pre-approval inspection for Motiva Implants completed in July 2024 with minor, non-systemic observations; final approval expected soon.

• Construction of a third manufacturing facility in Costa Rica was completed in June 2024, increasing capacity by 730,000 units annually.

• Mia Femtech and Flora tissue expanders are gaining traction globally, expanding the addressable market.

Financial highlights

• Revenue for the six months ended June 30, 2024 was $81.3 million, down 14.5% year-over-year; Q2 revenue declined 9.3% year-over-year but grew 18.7% quarter-over-quarter.

• Gross profit was $28.9 million (65.6% margin) in Q2, up from 62.3% a year ago; gross margin for the six months was 65.6%, up from 63.5%.

• Adjusted EBITDA loss was $4.3 million in Q2, less than half the loss from Q2 2023 and flat sequentially.

• Net loss from operations was $9.3 million in Q2, improved from $13.7 million in Q2 2023; net loss for Q2 was $17.2 million, and for the six months was $33.4 million.

• Cash position at quarter-end was $54.6 million, up from $40.0 million at year-end 2023, supported by a private placement.

Outlook and guidance

• 2024 revenue guidance remains $174–$184 million, representing 5–11% growth; U.S. revenue now included, with Brazil's contribution reduced.

• Gross margin expected to be 65.5–66% for 2024, about 100 bps higher than 2023.

• Positive Adjusted EBITDA expected soon after U.S. launch; cash flow positive for FY 2026.

• 2025 revenue growth anticipated to accelerate significantly with U.S. expansion.

• Cost controls implemented, including workforce reduction and operational expense cuts.