Apyx Medical ((APYX)) has held its Q4 earnings call. Read on for the main highlights of the call.
The recent earnings call for Apyx Medical painted a mixed picture for the company’s financial health and future prospects. On the positive side, the company highlighted strong performance in its advanced energy segment, successful marketing campaigns, and effective cost-saving measures. However, these positives were offset by a decline in overall revenue, decreased sales in the OEM segment, and challenges in international markets, compounded by market shifts due to the adoption of GLP-1 drugs.
Advanced Energy Segment Performance
The advanced energy segment was a standout performer for Apyx Medical, with sales reaching $12.1 million in Q4, marking a 30% sequential growth from Q3 2024. This robust performance underscores the segment’s critical role in the company’s portfolio and its potential to drive future growth.
Successful Direct-to-Consumer Campaign
Apyx Medical’s direct-to-consumer marketing efforts exceeded expectations significantly. The campaign surpassed media placement goals by 187% and exceeded impressions goals by over 13,000%, greatly enhancing brand visibility and consumer interest, which could translate into increased demand.
AYON Body Contouring System Development
The development of the AYON Body Contouring System is progressing ahead of schedule, with FDA submission completed 90 days early. The company plans to launch the system in the latter half of 2025, which is anticipated to contribute positively to equipment sales growth.
Cost Reduction and Restructuring
Apyx Medical has implemented a restructuring program, reducing its U.S. workforce by 25%, which is expected to save approximately $4.3 million annually. This initiative, along with other cost-saving measures, is aimed at improving the company’s financial efficiency.
Improved Financial Metrics
The company reported a decrease in operating expenses from $14.7 million to $12 million, and a reduction in net loss attributable to stockholders from $9.6 million to $4.6 million year-over-year, reflecting improved financial management.
Revenue Decline
Despite some positive developments, Apyx Medical faced a 3% decline in total revenue for Q4 2024, down to $14.2 million from $14.7 million in the same period the previous year, highlighting ongoing challenges in revenue generation.
OEM Segment Sales Decrease
Sales in the OEM segment decreased by 16% year-over-year, primarily due to reduced sales volumes to existing customers, indicating a need for strategic adjustments in this area.
International Revenue Decline
International revenue also saw an 8% decline year-over-year, attributed to lower average selling prices and fewer domestic customer upgrades, posing a challenge for the company’s global market strategy.
Impact of GLP-1 Drugs on Aesthetic Market
The aesthetic market has been impacted by the adoption of GLP-1 drugs for weight loss, which has diverted discretionary funds and delayed aesthetic treatments, affecting revenue in this segment.
Forward-Looking Guidance
Looking ahead, Apyx Medical has provided guidance for the 2025 fiscal year, projecting total revenue between $47.6 million and $49.0 million, slightly below the $48.1 million reported in 2024. The advanced energy segment is expected to generate between $39.6 million and $41.0 million, while OEM sales are projected at around $8 million. The company aims to maintain a gross profit margin of approximately 60% and keep operating expenses below $40 million. Apyx also anticipates cash sustainability until 2027, supported by the upcoming launch of the AYON Body Contouring System.
In conclusion, Apyx Medical’s earnings call revealed a company navigating both opportunities and challenges. While the advanced energy segment and marketing successes offer optimism, revenue declines and market challenges present hurdles that need addressing. The forward-looking guidance suggests cautious optimism with strategic initiatives aimed at sustaining growth and financial stability.