Establishment Labs (ESTA) Q3 2024 earnings summary

Executive summary

• FDA approval and U.S. launch of Motiva Implants marked a major milestone, with over 250 accounts onboarded in three weeks and initial demand exceeding expectations.

• Motiva Implants are now approved in over 85 countries, with commercial launches in China and the U.S., and new product introductions including Mia Femtech and Zen RFID technology.

• Q3 2024 revenue reached $40.2M, up 4.5% year-over-year, with net loss narrowing to $16.7M from $29.3M.

• Strengthened balance sheet through $25M credit facility draw and $50M equity raise, boosting pro forma cash to $114M at Q3 end.

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

Financial highlights

• Q3 2024 revenue was $40.2M, up 4.5% year-over-year; gross profit was $25.7M (63.9% margin), down from 67.7% last year due to inventory revaluation and geographic mix.

• SG&A expenses declined to $34.1M from $40M, and R&D expenses fell to $4.8M from $7.1M year-over-year.

• Net loss for Q3 was $16.7M, improved from $29.3M in Q3 2023; adjusted EBITDA loss narrowed to $7M from $16.3M.

• Cash use in Q3 was $14.9M, a 60%+ reduction from $38M last year.

• Cash balance at quarter-end was $39.7M; pro forma cash including recent financing activities is approximately $114M.

Outlook and guidance

• 2024 revenue guidance updated to $165–$168M, reflecting uneven global demand, delayed U.S. approval, and Brazil weakness.

• U.S. revenue expected to exceed $35M in 2025; OUS business projected to grow mid-single digits.

• First EBITDA positive quarter targeted for 2025, with higher gross margins anticipated due to U.S. mix and new products.

• Management expects higher U.S. selling prices and new product launches to improve gross margins in 2025.

• Available cash and cash from operations are expected to meet liquidity needs for at least the next 12 months.