On August 6, 2024, Establishment Labs Holdings Inc (ESTA, Financial) released its 8-K filing detailing the financial results for the second quarter ended June 30, 2024. Establishment Labs Holdings Inc is a medical technology company engaged in offering medical devices and aesthetic products, primarily silicone-filled breast and body shaping implants under the Motiva Implants brand.
Performance Overview
Establishment Labs Holdings Inc reported a second-quarter revenue of $44.1 million, surpassing the analyst estimate of $43.09 million. This represents a sequential growth of 18.7% from the previous quarter. However, the revenue saw a decline compared to $48.6 million in the same period last year.
The company posted a net loss of $17.2 million for the quarter, slightly higher than the net loss of $16.7 million in Q2 2023. Despite the loss, the adjusted EBITDA improved significantly to a loss of $4.3 million, compared to a loss of $9.3 million in the year-ago period.
Key Financial Achievements
Gross profit for the second quarter was $28.9 million, or 65.6% of revenue, compared to $30.3 million, or 62.3% of revenue, in the same period last year. The increase in gross profit margin was primarily driven by geographic mix and higher average selling prices.
Operating expenses decreased to $38.3 million from $44.0 million in Q2 2023, reflecting the company's cost reduction initiatives, including headcount reductions. SG&A expenses were reduced by approximately $4.2 million to $32.8 million, while R&D expenses decreased by $1.4 million to $5.5 million.
Income Statement Highlights
| Metric | Q2 2024 | Q2 2023 |
|---|---|---|
| Revenue | $44.1 million | $48.6 million |
| Gross Profit | $28.9 million | $30.3 million |
| Operating Expenses | $38.3 million | $44.0 million |
| Net Loss | $17.2 million | $16.7 million |
| Adjusted EBITDA | $4.3 million (loss) | $9.3 million (loss) |
Balance Sheet and Cash Flow
As of June 30, 2024, Establishment Labs Holdings Inc reported a cash balance of $54.6 million, an increase of $14.6 million from December 31, 2023. This increase was primarily due to the private placement offering completed on January 9, partially offset by operating losses and investments in the new manufacturing facility.
Current assets totaled $186.1 million, while total liabilities stood at $240.1 million. The company's shareholders' equity increased to $45.0 million from $18.4 million at the end of 2023.
Outlook and Future Prospects
Establishment Labs Holdings Inc reaffirmed its 2024 revenue guidance of $174 million to $184 million, representing a 5% to 11% increase over 2023. The company also highlighted the completion of the FDA PMA preapproval inspection of its manufacturing facility, with the approval of Motiva Implants in the United States expected shortly.
"The strong sequential revenue growth of 18.7% in the second quarter is an important achievement as we return to growth. We also saw the tangible results of our efforts to reduce our expense base, with adjusted EBITDA improving to a loss of $4.3 million, less than half the loss we saw in the year ago period," said Juan José Chacón-Quirós, Chief Executive Officer.
Conclusion
Establishment Labs Holdings Inc's Q2 2024 results demonstrate significant progress in revenue growth and cost management. The company's efforts to reduce expenses and improve gross profit margins are evident, and the anticipated FDA approval of Motiva Implants could further bolster its market position. Investors and stakeholders will be keenly watching the company's performance in the upcoming quarters.
Explore the complete 8-K earnings release (here) from Establishment Labs Holdings Inc for further details.
