Q3 2025 Venus Concept Inc Earnings Call
We will be available on the company's website for replay.
Before we begin I would like to remind everyone that our remarks and responses to your questions may contain forward looking statements that are based on the current expectations of management and involve inherent risks and uncertainties that could cause actual results to differ materially from those indicated.
Including those identified in the risk factors section of our most recent annual report on Form 10-K filed with the Securities and Exchange Commission such.
Speaker #2: Two other notable items I to discuss wanted before the call over to Dominic I turn . Our balance sheet and capital structure transformation carried on third quarter into multiple transactions , including amendments to increase available financing capacity existing bridge Loan under our facility and a debt to equity exchange transaction totaling 11.5 million in debt converted continue to .
Such factors may be updated from time to time in our filings with the SEC, which are available on our website.
We undertake no obligation to publicly update or revise our forward looking statements as a result of new information future events or otherwise.
This call will also include references to certain financial measures that are not calculated in accordance with generally accepted accounting principles or GAAP.
Speaker #2: appreciate the We support of continue our turnaround Madrid as we with respect to the pending sale of Venus hair to MFG Co Limited , as announced .
We generally refer to these non-GAAP financial measures reconciliations of those non-GAAP financial measures to the most comparable measures calculated and presented in accordance with GAAP are available in our earnings press release issued today on the Investor Relations portion of our website.
Speaker #2: was expected to close in the third quarter of 2025 , subject to the satisfaction or waiver certain of closing conditions , including an internal reorganization of the hair meta Robotics LLC .
I would now like to turn the call over to Mr. Rajiv de Silva Chief Executive Officer of Venus concept. Please go ahead Sir.
Speaker #2: business into announced the we signed agreement , have we Since worked to meet the closing conditions of the transaction . Unfortunately , we have experienced challenges with our definitive counterparts in bringing this transaction to a conclusion and have sought the assistance of the Delaware to aid in this court respect .
Thank you operator.
Welcome everyone to Venus Concept's third quarter 25 earnings conference call.
I am joined on the call today by our Chief Financial Officer Domenic della Penna.
Let me start with an agenda of what we will cover during our prepared remarks.
Speaker #2: We will continue our dedicated pursuit of this important strategic transaction and look forward to sharing updates with our investment as community appropriate . We continue to believe this strengthens Venus transaction concept by allowing us to focus on our global medical business aesthetics and continue to believe Mhg represents that ideal an the Venus Given their business .
I will begin with a brief review of our third quarter results and operating developments in the recent months.
Following that Domenic will provide you with an in depth review of our third quarter financial results as well as an update on our balance sheet and financial condition.
With that agenda in mind, let's get started.
Speaker #2: in aesthetic , medical field , including a presence in the hair market , as well as the strategic transplant investments in next generation industries acquirer of .
Detailed in our press release issued today.
We delivered 2% growth in sales of energy based devices or <unk>.
Year over year basis in Q3, driven by strong execution from the team and a continued challenging environment.
Speaker #2: In delivered closing , solid encouraged we results in were to Q3 stabilization sales in made . We balance material sheet energy based financial and which will review in detail shortly Dominic expect .
We are encouraged by the team's continued focus on customer engagement and support as well as improving sales efficiency by prioritizing core products in the U S, including blips, Max and will support.
Speaker #2: that the proceeds from the sale of the Venus Hair business will We also enhance our and balance sheet condition , and provide financial condition , capital to fund strategic growth initiatives priority .
While we were pleased to see signs of stabilization in <unk> revenue trends. Our total revenue results declined high single digits year over year.
Third quarter, driven by softness in the hair restoration side of the business.
Speaker #2: in remains ensuring that we are well positioned as Our return to possible to growth . We are actively working on evolving our and portfolio look forward to improving , fueled in part by the launch of growth Venus Nova in December term , .
Customer financing pressures economic uncertainty and tight credit markets continue to present challenges for the robotics system adoption the retail business.
Speaker #2: we the increase of believe that one usage by GLP consumers is an exciting Longer catalyst for the industry , and a chance for Venus to highlight the complementary benefits of our body technology , specifically skin tightening to our customers that are on waste .
However, third quarter sales trends were further impacted by an additional level of uncertainty related to timing of close to a definitive agreement to sell the venous business to MSG call limit, there, which we announced on June 6th.
Speaker #2: Waste loss medications . We are managing our cash disciplined management cost burn through making and targeted support investments to our long term . We intend to growth the continue ongoing evaluation of strategic alternatives to maximize value .
Turning to a review of key developments since our last earnings call.
On November 10th we announced five 10-K clearance for the Venus Norwalk.
The first product clearance from the company's new focused R&D strategy discussed on our earnings calls over the last year.
Speaker #2: that , With let the call over to me turn Dominic a review of our financial results and third quarter balance sheet . Dominic
Yeah.
Importantly, the development and introduction of our new Venus, Nova is consistent with the company's turnaround strategy implemented in 2023, and our venous AI strategic initiative, which reflects our strong commitment to growing our global brand focusing on emerging technologies and service.
Speaker #2: .
Speaker #3: Thank you, Rajiv, for the avoidance of any doubt. My focus will be on the remarks regarding the company's reported results for the third quarter of 2025.
Speaker #3: GAAP On a basis prepared growth related items are on a year over year basis . reported We total revenue of 13.8 million , down 1.2 million , or 8% year over year .
Says and partnering with customers to build smarter practices and customizable treatments.
Venus Noah is a next generation multi application platform designed to redefine noninvasive treatments for the body face and skin through integrating our best in class technologies of adaptive electrical muscle stimulation or EMS.
Speaker #3: decrease The in revenue by total region driven a was or 12% by decrease year over 1.1 million , year in United States revenue by and a 0.2 million , or over in international revenue year year .
Our proprietary <unk>, combining multiple or radiofrequency with pulse magnetic fields.
Speaker #3: The decrease in total revenue by product category was driven by a 12% decrease in products, systems A, and a 15% decrease in products.
And advanced battery power technology.
Speaker #3: Other revenue , 5% decrease services in and a revenue , offset a 9% increase in lease partially by revenue . Total revenue from the systems energy sale of or devices EVD , based increased 2% year over year to 9.5 million .
Together.
Delivers a powerful comprehensive solution body contouring muscle conditioning skin treatments and wrinkle and cellulite reduction.
Venus, Nova is uniquely positioned to enhanced body transformation journeys, including for those taking GOP, one medications and experiencing skin laxity.
Speaker #3: avoidance of For the doubt , EBD sales exclude system sales from the Hair Venus restoration business . The percent of total systems revenue derived from the company's internal lease programs , Venus Prime and Our Legacy subscription model was the approximately 27% in of 2025 , compared to 23% in the prior year period .
Facial volume loss and body contour irregularities.
We expect <unk> usage to grow to more than 32 million patients globally by 2030 and.
And we are excited to offer our innovative comprehensive technologies to support an address.
Unmet needs of our existing and future customers.
Speaker #3: sales Cash represented approximately 73% of total systems , and subscription third quarter , revenue in the which cash , cash sales in the US were 82% of US systems and subscription revenue , compared to 76% last year .
We anticipate the U S commercial introduction of Venus Noah to contribute to the company's long term growth profile as we further penetrate the multibillion dollar body in skin market in the years to come.
We are targeting sequential growth in the fourth quarter fueled in part by a limited commercial launch of this innovative new body in skin system in December.
Speaker #3: Turning to a review of our third quarter financial results across the rest of the P&L, gross profit for the third quarter of 2025 decreased $1.1 million, or 11%, to $8.8 million, compared to the third quarter of 2024.
Our product portfolio will continue to evolve and deliver more than just leading device performance shifting towards a focus on total practice performance from the moment the patient into the clinic to post treatment management.
Speaker #3: The decrease in gross primarily attributable , attributed profit is revenue in the Venus hair business impacted by a delay in the pending and the sale effects of customer uncertainty about economic environment tighter third party lending which practices , negatively capital equipment impacted sales .
This new product launch along with our improving balance sheet and financial support from <unk> asset management LP further enhances the Companys Foundation and brings us closer to achieving our longer term goals.
Two other notable items I wanted to discuss before I turn the call over to Dominic.
Speaker #3: Gross margin was 64% of revenue in the three months ended September 30th , 2025 , compared 66.1% of to in the revenue ended September 30th , 2024 .
Our balance sheet and capital structure transformation carried on in the third quarter through multiple transactions, including amendments to increase available financing capacity under our existing bridge loan facility and a debt to equity exchange transaction totaling $11 5 million.
Speaker #3: The decrease in gross margin three months is primarily attributable the impact of to US on our tariffs imported devices US market and to a lesser extent , higher device system .
<unk> converted debt.
Speaker #3: Cost of sold . goods manufacturing overheads spread over a lower volume base . Total operating expenses increased 1.2 million , or 7% , to 18.3 million .
We continue to appreciate the support of Mandarin as we continue our turnaround.
Finally, with respect to the pending sale of Venus her to MSG Co Ltd.
Speaker #3: Approximately one third of the year over year increase in operating expenses was driven by legal and other professional fees incurred to support of the Venus the sale hair business , which did not impact the prior year period .
As announced on June 6th the transaction was expected to close in the third quarter of 2025 subject to the satisfaction or waiver of certain closing conditions, including an internal reorganization of the <unk> business into <unk> robotics LLC.
Speaker #3: Results . Excluding these expenses , third quarter operating expenses The modest increase in operating expense reflects our continued increased 4% . progress cost containment and in streamlining of our operations .
Since we announced the signed definitive agreement.
Work steadfastly to meet the closing conditions of the transaction.
Unfortunately, we have experienced challenges with our counterparty and bringing this transaction to a conclusion and that saw the assistance of the Delaware Court to aid in this respect.
Speaker #3: face of an In the inflationary economy . Operating was 9.5 million compared loss to 7.2 million in the third quarter of 2024 . interest and Net other expenses were compared 12.5 million , to in the third 2.2 million quarter of 2024 .
We will continue our dedicated pursuit of closing this important strategic transaction and look forward to sharing updates with our investment community as appropriate.
We continue to believe this transaction strengthens Venus concept by allowing us to focus on our global medical aesthetics business and continue to believe that MSG represents an ideal acquirer of divina SAB business given their capabilities in the aesthetic medical field, including our presence in the air transport Mark.
Speaker #3: The year over year change in interest and other was expenses primarily driven by net an 11.3 million non-cash loss on debt extinguishment , compared to 0.5 million last year , and a 0.2 million non-cash loss on disposal of a subsidiary partially by offset lower interest expense on outstanding borrowings , which totaled the third quarter 1 million in compared to year .
As well as our strategic investments in next generation medical industries.
In closing we delivered solid results in Q3 and were encouraged to see stabilization in sales of our energy based devices.
Speaker #3: by our Buoyed 1.7 million last progress on debt extinguishment . Net loss attributable to stockholders for the third quarter of 2025 20 was was 22.6 million , or $12.14 per share , compared to a net loss of 9.3 million , or $13.10 per share , for the third quarter of 2020 .
We made material progress towards improving our balance sheet and financial conditions, which Dominic will review in detail shortly.
We also expect that the proceeds from the sale of the BNS business will further enhance our balance sheet and financial condition and provide valuable capital to fund.
Speaker #3: For weighted average shares outstanding for the third quarter of 2025 and 2024 . Gives effect for company's one for the 11 reverse stock split effective March 3rd , 2025 .
Strategic growth initiatives.
Our priority remains ensuring that we are well positioned as possible to return to growth.
We are actively working on evolving our portfolio and look forward to improving growth fueled in part by the launch of Venus Snowball in December.
Speaker #3: Adjusted EBITDA loss for the third quarter of 2025 was 7.8 million , adjusted compared to EBITDA loss of 5.9 million for the third quarter of As a 2024 .
Longer term, we believe that the increase in GOP. One you said back to consumers is an exciting catalyst for the industry and a chance of Venus to highlight the complimentary benefits of our body technology, specifically skin tightening customers that are on with this.
Speaker #3: reminder , we have provided a full reconciliation of our GAAP net loss to adjusted EBITDA loss in the earnings press release . Turning to the sheet balance , as September 30th , 2025 , the company cash and had cash equivalents of of 5.9 million and total debt obligations of approximately 30.1 million , compared to 4.3 million and total debt obligations of approximately 39.7 million , respectively .
Plus vacations.
We are managing our cash burn through disciplined cost management, and making targeted investments to support our long term growth.
We intend to continue the ongoing evaluation of strategic alternatives to maximize shareholder value.
Speaker #3: As of December 31st , 2024 , we have made progress towards improving significant balance sheet and financial condition over the first nine months of 2025 , we announced amendments with our primary lender , Madron Asset Management , increased our financing which capacity under our existing bridge loan facility .
With that let me turn the call over to Dominic.
<unk> of our third quarter financial results and balance sheet.
Dominic.
Thank you Virginia.
For the avoidance of doubt unless otherwise noted my prepared remarks will focus on the company's reported results for the third quarter of 2025.
On a GAAP basis.
Speaker #3: We appreciate support of Madron as we the continue to enhance the financial profile of the business . We exchanged a total of 29 million of subordinated convertible notes held by affiliates of Madron Asset LP for Management shares of its series Y preferred stock , including 6.5 million exchanged in the first quarter and second quarter , and 11.5 million exchanged in the third quarter .
Growth related items are on a year over year basis.
We reported total revenue of $13 8 million down $1 2 million or 8% year over year.
The decrease in total revenue by region was driven by a $1 1 million or 12% decrease year over year in United States revenue.
And by <unk>, 2 million or 3% decrease year over year and international revenue.
Speaker #3: We also raised gross proceeds of 3.9 million in multiple equity capital market transactions from existing and new investors . Lastly , with respect to our financial outlook for 2025 , given active company's dialogue with existing lenders and the ongoing evaluation of strategic alternatives with various interested parties investors , to maximize shareholder value and current market conditions impacted by trade disruptions , the company is not providing full year 2025 financial guidance at this time .
The decrease in total revenue by product category was driven by a 12% decrease in products systems revenue.
<unk>, 15% decrease in products other revenue and a 5% decrease in services revenue.
Offset partially by a 9% increase in lease systems revenue.
Total revenue from the sale of energy based devices or ETD increased 2% year over year to $9 5 million.
For the avoidance of doubt DVD sales exclude system sales from the venous hair restoration business.
Speaker #3: We are targeting sequential growth in the fourth quarter , fueled in part by a limited commercial of our Venus Nova launch innovative body and skin system in December .
The percent of total systems revenue derived from the company's internal lease programs Venus Prime and our legacy subscription model was approximately 27% in the third quarter of 2025% compared to 23% in the prior year period.
Speaker #3: With that , I'll turn the call over to the operator to open the call for your questions . .
Speaker #3: Operator Thank
Cash sales represented approximately 73% of total systems and subscription revenue in the third quarter of which cash outs cash sales in the U S, where 82% of U S systems and subscription revenue compared to 76% last year.
Speaker #1: you . The floor is now open for questions . If you would like to ask a question , please press star one on your telephone keypad .
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Turning to a review of our third quarter financial results across the rest of the P&L.
Speaker #1: One moment please , while we pull for questions . Again , that's star one to register . Any questions at this time ? We are currently showing no additional questions in the queue .
Gross profit for the third quarter of 2025 decreased $1 1 million or 11% to $8 8 million compared to the third quarter of 2024.
The decrease in gross profit is primarily attributed attributed to lower revenue in the venous tear business impacted by a delay in the pending sale and the effects of customer uncertainty about economic environment, and tighter third party lending practices, which negatively impacted capital equipment sales.
Speaker #1: This does conclude today's teleconference . Thank you for your participation . You may now disconnect your lines or log off the webcast and enjoy the rest of your day .
<unk>.
Gross margin was 64% of revenue in the three months ended September 32025, compared to 66, 1% of revenue in the three months ended September 32024.
The decrease in gross margin is primarily attributable to the impact of U S. Tariffs on our devices imported into the U S market and to a lesser extent higher device system cost of goods sold tracing to manufacturing overheads spread over a lower volume base.
Total operating expenses increased $1 2 million or 7% to $18 3 million.
Approximately one third of the year over year increase in operating expenses was driven by legal and other professional fees incurred to support the sale of the venous hair business.
Which did not impact the prior year period results.
Excluding these expenses third quarter operating expenses increased 4%.
The modest increase in operating expense reflects our continued progress in cost containment and streamlining of our operations in the face of an inflationary economy.
Operating loss was $9 5 million compared to $7 2 million in the third quarter of 2024 net interest and other expenses were $12 5 million compared to $2 2 million in the third quarter of 2024.
The year over year change in net interest and other expenses was primarily driven by.
And $11 3 million noncash loss on debt extinguishment compared to zero point $5 million last year, and <unk> 2 million noncash loss on disposal of a subsidiary.
<unk> offset partially by lower interest expense on outstanding borrowings, which totaled $1 million in the third quarter compared to $1 7 million last year buoyed by our progress on debt extinguishment.
Net loss attributable to stockholders for the third quarter of 2025 was 20, plus $22 6 million or $12 14 per share compared to a net loss of $9 3 million or $13 10 per share for the third quarter of 2024.
Weighted average shares outstanding for the third quarter of 2025, and 2024 gives effect for the company's one 411 reverse stock split effective March three 2025.
Adjusted EBITDA loss for the third quarter of 2025 was $7 8 million compared to adjusted EBITDA loss of $5 9 million for the third quarter of 2024.
As a reminder, we have provided a full reconciliation of our GAAP net loss to adjusted EBITDA loss in the earnings press release.
Turning to the balance sheet.
As of September 32025, the company had cash and cash equivalents of $5 9 million and total debt obligations of approximately $30 1 million compared to $4 3 million and total debt obligations of approximately $39 7 million respectively as of December 31.
2024.
We have made significant progress towards improving our balance sheet and financial condition over the first nine months of 2025.
We announced amendments with our primary lender Mandarin asset management, which increased our financing capacity under our existing bridge loan facility.
We appreciate the support of Madron as we continue to enhance the financial profile of the business.
We exchanged a total of $29 million of subordinated convertible notes held by affiliates of <unk> asset management LP for shares of its series Y preferred stock, including $6 5 million exchange in the first quarter.
And second quarter, and $11 $5 million exchange in the third quarter. We also raised gross proceeds of $3 $9 million in multiple <unk>.
Equity capital market transactions from existing and new investors.
Lastly, with respect to our financial outlook for 2025.
Given the company's active dialogue with existing lenders and investors ongoing evaluation of strategic alternatives with various interested parties to maximize shareholder value and current market conditions impacted by trade disruptions. The company is not providing full year 2025 financial guidance at this time.
We are targeting sequential growth in the fourth quarter fueled in part by a limited commercial launch of our venous Nova innovative body in skin system in December.
With that I'll turn the call over to the operator to open the call for your questions operator.
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