Cover
Cover - shares | 3 Months Ended | |
Mar. 31, 2024 | May 08, 2024 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2024 | |
Document Transition Report | false | |
Entity File Number | 000-50644 | |
Entity Registrant Name | Cutera, Inc. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 77-0492262 | |
Entity Address, Address Line One | 3240 Bayshore Blvd. | |
Entity Address, City or Town | Brisbane | |
Entity Address, State or Province | CA | |
Entity Address, Postal Zip Code | 94005 | |
City Area Code | 415 | |
Local Phone Number | 657-5500 | |
Title of 12(b) Security | Common Stock ($0.001 par value) | |
Trading Symbol | CUTR | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 20,072,096 | |
Entity Central Index Key | 0001162461 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2024 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Current assets: | ||
Cash and cash equivalents | $ 105,444 | $ 143,612 |
Accounts receivable, net of allowance for credit losses of $12,059 and $9,878, respectively | 37,019 | 43,121 |
Inventories | 73,469 | 62,600 |
Other current assets and prepaid expenses | 19,294 | 19,852 |
Total current assets | 235,226 | 269,185 |
Long-term inventories | 20,582 | 16,283 |
Property and equipment, net | 31,964 | 37,275 |
Deferred tax assets | 534 | 579 |
Goodwill | 1,339 | 1,339 |
Operating lease right-of-use assets | 12,034 | 10,055 |
Other long-term assets | 10,313 | 11,575 |
Total assets | 311,992 | 346,291 |
Current liabilities: | ||
Accounts payable | 13,316 | 19,829 |
Accrued liabilities | 47,119 | 55,055 |
Operating lease liabilities | 3,231 | 2,441 |
Deferred revenue | 9,038 | 10,422 |
Total current liabilities | 72,704 | 87,747 |
Deferred revenue, net of current portion | 1,417 | 1,494 |
Operating lease liabilities, net of current portion | 10,046 | 8,887 |
Convertible notes, net of unamortized debt issuance costs of $9,859 and $10,430, respectively | 419,266 | 418,695 |
Other long-term liabilities | 1,122 | 1,298 |
Total liabilities | 504,555 | 518,121 |
Commitments and contingencies | ||
Stockholders’ deficit: | ||
Common stock, $0.001 par value; authorized: 50,000,000 shares; issued and outstanding: 20,067,941 and 19,960,622 shares at March 31, 2024 and December 31, 2023, respectively | 20 | 20 |
Additional paid-in capital | 133,541 | 131,496 |
Accumulated deficit | (326,124) | (303,346) |
Total stockholders’ deficit | (192,563) | (171,830) |
Total liabilities and stockholders’ deficit | $ 311,992 | $ 346,291 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Statement of Financial Position [Abstract] | ||
Allowance for credit loss, current | $ 12,059 | $ 9,878 |
Unamortized debt issuance costs | $ 9,859 | $ 10,430 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock authorized (in shares) | 50,000,000 | 50,000,000 |
Common stock issued (in shares) | 20,067,941 | 19,960,622 |
Common stock outstanding (in shares) | 20,067,941 | 19,960,622 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Net revenue: | ||
Total net revenue | $ 38,793 | $ 54,526 |
Cost of revenue: | ||
Total cost of revenue | 26,374 | 32,894 |
Gross profit | 12,419 | 21,632 |
Operating expenses: | ||
Sales and marketing | 23,677 | 29,512 |
Research and development | 5,001 | 6,468 |
General and administrative | 12,881 | 12,253 |
Gain on early termination of distribution agreement | (9,708) | 0 |
Total operating expenses | 31,851 | 48,233 |
Loss from operations | (19,432) | (26,601) |
Interest and other expense, net: | ||
Amortization of debt issuance costs | (571) | (552) |
Interest on convertible notes | (2,939) | (2,939) |
Interest income | 1,455 | 2,636 |
Other expense, net | (1,316) | (320) |
Total interest and other expense, net | (3,371) | (1,175) |
Loss before income taxes | (22,803) | (27,776) |
Income tax (benefit) expense | (25) | 272 |
Net loss | $ (22,778) | $ (28,048) |
Net loss per share: | ||
Basic (in USD per share) | $ (1.14) | $ (1.42) |
Diluted (in USD per share) | $ (1.14) | $ (1.42) |
Weighted-average number of shares used in per share calculation: | ||
Basic (in shares) | 19,991 | 19,776 |
Diluted (in shares) | 19,991 | 19,776 |
Total product revenue | ||
Net revenue: | ||
Total net revenue | $ 33,115 | $ 49,121 |
Cost of revenue: | ||
Total cost of revenue | 23,289 | 30,059 |
Service | ||
Net revenue: | ||
Total net revenue | 5,678 | 5,405 |
Cost of revenue: | ||
Total cost of revenue | $ 3,085 | $ 2,835 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Loss - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Statement of Comprehensive Income [Abstract] | ||
Net loss | $ (22,778) | $ (28,048) |
Other comprehensive income: | ||
Net change in unrealized gain on available-for-sale investments, net of tax | 0 | 86 |
Other comprehensive income, net of tax | 0 | 86 |
Comprehensive loss | $ (22,778) | $ (27,962) |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Changes In Stockholders' Deficit - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-in Capital | Accumulated Deficit | Accumulated Other Comprehensive Loss |
Balance (in shares) at Dec. 31, 2022 | 19,668,603 | ||||
Balance at Dec. 31, 2022 | $ (15,181) | $ 20 | $ 125,406 | $ (140,513) | $ (94) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Exercise of stock options (in shares) | 5,775 | ||||
Exercise of stock options | 109 | 109 | |||
Issuance of common stock in settlement of restricted and performance stock unites, net of shares withheld for employee taxes (in shares) | 110,729 | ||||
Issuance of common stock in settlement of restricted and performance stock units, net of shares withheld for employee taxes | (2,397) | (2,397) | |||
Stock-based compensation expense | 3,386 | 3,386 | |||
Net change in unrealized gain (loss) on available-for-sale investments | 86 | 86 | |||
Net loss | (28,048) | (28,048) | |||
Balance (in shares) at Mar. 31, 2023 | 19,785,107 | ||||
Balance at Mar. 31, 2023 | (42,045) | $ 20 | 126,504 | (168,561) | (8) |
Balance (in shares) at Dec. 31, 2022 | 19,668,603 | ||||
Balance at Dec. 31, 2022 | (15,181) | $ 20 | 125,406 | (140,513) | (94) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net loss | $ (162,800) | ||||
Balance (in shares) at Dec. 31, 2023 | 19,960,622 | 19,960,622 | |||
Balance at Dec. 31, 2023 | $ (171,830) | $ 20 | 131,496 | (303,346) | 0 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Exercise of stock options (in shares) | 0 | ||||
Issuance of common stock in settlement of restricted and performance stock unites, net of shares withheld for employee taxes (in shares) | 107,319 | ||||
Issuance of common stock in settlement of restricted and performance stock units, net of shares withheld for employee taxes | $ (64) | (64) | |||
Stock-based compensation expense | 2,109 | 2,109 | |||
Net change in unrealized gain (loss) on available-for-sale investments | 0 | ||||
Net loss | $ (22,778) | (22,778) | |||
Balance (in shares) at Mar. 31, 2024 | 20,067,941 | 20,067,941 | |||
Balance at Mar. 31, 2024 | $ (192,563) | $ 20 | $ 133,541 | $ (326,124) | $ 0 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2023 | |
Cash flows from operating activities | |||
Net loss | $ (22,778) | $ (28,048) | $ (162,800) |
Adjustments to reconcile net loss to net cash used in operating activities: | |||
Stock-based compensation | 2,109 | 3,386 | |
Depreciation and amortization | 1,991 | 1,409 | |
Amortization of contract acquisition costs | 1,391 | 2,178 | |
Amortization of debt issuance costs | 571 | 552 | |
Unrealized gain on foreign exchange forward | 0 | (623) | |
Accretion of discount on investment securities and investment income, net | 0 | (34) | |
Deferred tax assets | 45 | 13 | |
Provision for credit losses | 2,181 | 225 | |
Changes in assets and liabilities: | |||
Accounts receivable | 3,921 | (6,410) | |
Inventories | (11,461) | (6,163) | |
Other current assets and prepaid expenses | 560 | (2,053) | |
Other long-term assets | (240) | (2,011) | |
Accounts payable | (6,513) | (1,330) | |
Accrued liabilities | (7,916) | 1,706 | |
Operating leases, net | (30) | (16) | |
Deferred revenue | (1,461) | 201 | |
Net cash used in operating activities | (37,630) | (37,018) | |
Cash flows from investing activities | |||
Acquisition of property and equipment | (335) | (10,353) | |
Proceeds from Sale of Property, Plant, and Equipment | 57 | 0 | |
Proceeds from maturities of marketable investments | 0 | 94,154 | |
Purchase of marketable investments | 0 | (23,467) | |
Net cash provided by (used in) investing activities | (278) | 60,334 | |
Cash flows from financing activities | |||
Proceeds from exercise of stock options and employee stock purchase plan | 0 | 109 | |
Taxes paid related to net share settlement of equity awards | (64) | (2,397) | |
Payments on finance lease obligations | (196) | (124) | |
Net cash used in financing activities | (260) | (2,412) | |
Net increase (decrease) in cash, cash equivalents and restricted cash | (38,168) | 20,904 | |
Cash, cash equivalents, and restricted cash at beginning of period | 143,612 | 146,624 | 146,624 |
Cash, cash equivalents, and restricted cash at end of period | 105,444 | 167,528 | $ 143,612 |
Supplemental non-cash operating, investing, and financing activities: | |||
Assets acquired under finance lease | 0 | 33 | |
Assets acquired under operating lease | 2,749 | 57 | |
Acquisition of property and equipment | 0 | 6,894 | |
Supplemental disclosure of cash flow information: | |||
Cash paid for interest | 817 | 778 | |
Cash paid for income taxes | $ 804 | $ 483 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2024 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Description of Operations and Principles of Consolidation Cutera, Inc. (“Cutera” or the “Company”) develops, manufactures, distributes, and markets energy-based product platforms for medical practitioners, enabling them to offer treatments to their customers. In addition, the Company distributes third-party manufactured skincare products, until the termination of distribution agreement in February 2024, and Secret PRO and Secret RF systems and consumables. The Company currently markets the following system platforms: AviClear, enlighten, excel HR, excel V/V+, truSculpt, Secret PRO, Secret DUO, Secret RF, xeo, and xeo+ — each of which enables medical practitioners to perform procedures including treatment for acne, body contouring, skin resurfacing and revitalization, hair and tattoo removal, removal of benign pigmented lesions, and vascular conditions. Several of the Company’s systems offer multiple hand pieces and applications, providing customers the flexibility to upgrade their systems. The sale of systems, hand pieces, upgrade of systems, and leasing and direct sales of AviClear devices (collectively “Systems” revenue); replacement hand pieces, truSculpt cycle refills, truFlex cycle refills, AviClear treatment fees, and single use disposable tips applicable to Secret systems (collectively “Consumables” revenue); and the distribution of third-party manufactured skincare products (“Skincare”) revenue are collectively classified as “Products” revenue. In addition to Products revenue, the Company generates revenue from the sale of post-warranty service contracts and service parts and labor for the repair and maintenance of products that are out of warranty, all of which are collectively classified as “Service” revenue. The Company’s corporate headquarters and U.S. operations are located in Brisbane, California, where the Company conducts manufacturing, warehousing, research and development, regulatory, sales and marketing, service, and administrative activities. The Company also maintains regional distribution centers (“RDCs”) in select locations across the U.S. These RDCs serve as forward warehousing for systems and service parts in various geographies. The Company markets, sells and services the Company’s products through direct sales and service employees in North America (including Canada), Australia, New Zealand, Austria, France, Germany, Hong Kong, Japan, Switzerland, the United Kingdom and the Repblic of Ireland. Sales and services outside of these direct markets are made through a worldwide distributor network in over 38 countries. The condensed consolidated financial statements include the accounts of the Company and its subsidiaries. Liquidity and Management’s Plans When preparing financial statements, management has the responsibility to evaluate if the Company has adequate liquidity to continue to operate for the next twelve months. In performing this assessment, management considered the Company's current financial condition and liquidity sources, including current funds, forecasted future cash flows and unconditional obligations due over the next twelve months. In addition, management evaluated the history of the Company's financial performance, and determined that the Company has had a historic trend of operating losses, which continues to have an unfavorable impact on the Company's overall liquidity. Most recently, the Company reported net losses of $22.8 million for the three months ended March 31, 2024 and $162.8 million for the year ended December 31, 2023. The Company believes that it will continue as a going concern for the twelve months from the issuance of its condensed consolidated financial statements. The accompanying condensed consolidated financial statements are prepared in accordance with generally accepted accounting principles applicable to a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company’s continued operations will depend on several factors, including but not limited to, growth of revenues from its revised business model for AviClear, which entails transitioning from a lease model to a direct sales model, maintaining or increasing revenues from sales of legacy systems, consumables and services, achieving cost savings as a result of workforce reductions implemented in the fourth quarter of 2023, restructuring of supplier and manufacturing relationships, and initiatives to improve inventory and receivables management. Failure to increase revenue, achieve cost savings, raise additional financing or re-finance the existing convertible notes when they become due, would adversely affect the Company’s ability to achieve its intended business objectives. There can be no assurances that financing will be available on terms favorable to the Company, if at all, and delays may occur in completing the operating activities. Basis of Presentation In the opinion of the Company, the accompanying unaudited condensed consolidated financial statements included in this report reflect all adjustments necessary for a fair statement of its condensed consolidated balance sheets as of March 31, 2024 and December 31, 2023, and its condensed consolidated statements of operations, condensed consolidated statements of comprehensive loss, condensed consolidated statements of changes in stockholders' deficit, and condensed consolidated statements of cash flows, for the three months ended March 31, 2024, and 2023, respectively. The December 31, 2023 condensed consolidated balance sheet was derived from audited financial statements, but does not include all disclosures required by generally accepted accounting principles in the United States of America (“GAAP”). The results for interim periods are not necessarily indicative of results for the entire year or any other interim period. All intercompany accounts and transactions have been eliminated upon consolidation. The accompanying condensed consolidated financial statements should be read in conjunction with the Company’s previously filed audited financial statements and the related notes thereto included in the Company’s annual report on Form 10-K for the year ended December 31, 2023, filed with the Securities and Exchange Commission (the “SEC”) on May 10, 2024. Reclassification The Company reclassified the interest expense portion previously recorded in interest income (expense), net to other income (expense), net on the condensed consolidated statement of operations. Corresponding reclassifications of prior period amounts have been made in the Company's condensed consolidated statement of operations to conform to the current period presentation. These reclassifications had no effect on the reported net loss. Risks and Uncertainties The Company's future results of operations involve a number of risks and uncertainties. Factors that could affect the Company's future operating results and cause actual results to vary materially from expectations include, but are not limited to, rapid technological change, continued acceptance of the Company's products, stability of global financial markets, cybersecurity breaches and other disruptions that could compromise the Company’s information or results, business disruptions that are caused by natural disasters or pandemic events, management of international activities, competition from substitute products and larger companies, the Company's ability to obtain and maintain regulatory approvals, government regulations and oversight, patent and other types of litigation, the Company's ability to protect proprietary technology from counterfeit versions of the Company's products and its intellectual property rights generally, the successful execution of new product launches, the continuation of strategic relationships, such as the Company's distribution of third-party products, and dependence on key individuals. Accounting Policies These unaudited condensed consolidated financial statements are prepared in accordance with the rules and regulations of the SEC applicable to interim financial statements. While these statements reflect all normal recurring adjustments that are, in the opinion of management, necessary for fair presentation of the results of the interim period, they do not include all of the information and footnotes required by GAAP for complete financial statements. The Company uses the same accounting policies in preparing quarterly and annual financial statements. Leases The Company incurred costs to fulfill its lease agreement obligations with its AviClear device lessees. These costs consisted of freight, installation, and training. In addition to these mobilization costs, the Company incurred commission costs associated with the placement of the AviClear device. The Company capitalized commission costs and made a policy election to capitalize the mobilization costs. The Company determined to cease new leases of the AviClear device in 2023 and, therefore the Company no longer capitalizes additional mobilization costs and commission costs related to placements of the AviClear device, which were recorded in other long-term assets on the Company's condensed consolidated balance sheets and were amortized over the expected lease term. The amortization of the remaining mobilization costs and amortization of deferred commission costs are recorded in cost of revenue and sales and marketing, respectively, in the Company's condensed consolidated statement of operations. Total capitalized mobilization costs were $1.5 million and $2.1 million as of March 31, 2024 and December 31, 2023, respectively. Total capitalized commissions as of March 31, 2024, and December 31, 2023, were $2.4 million and $2.7 million, respectively, and are included in other long-term assets on the Company’s condensed consolidated balance sheet. Use of Estimates The preparation of condensed consolidated financial statements in conformity with GAAP requires the Company’s management to make estimates and assumptions that affect the amounts reported of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the accompanying notes, and the reported amounts of revenue and expenses during the reported periods. Actual results could differ materially from those estimates. On an ongoing basis, management evaluates its estimates, including those related to warranty obligations, sales commissions, allowance for credit losses, sales allowances, fair value of investments, valuation of inventories, fair value of goodwill, useful lives of property and equipment, impairment testing for long-lived assets, implicit and incremental borrowing rates related to the Company’s leases, variables used in calculating the fair value of the Company's equity awards, expected achievement of performance-based vesting criteria and management performance bonuses, assumptions used in operating and sales-type lease classifications, the standalone selling price of the Company's products and services, the period of benefit used to capitalize and amortize contract acquisition costs, variable considerations, contingent liabilities, recoverability of deferred tax assets, residual value of leased equipment, lease term and effective income tax rates. Management bases estimates on historical experience and on various other assumptions that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Distribution of Third-Party Products The Company generated revenue from the distribution of skincare products, which were manufactured by ZO Skin Health, Inc. (“ZO”), and sold in the Japanese market. In the three months ended March 31, 2024, and 2023, revenue from the distribution of skincare products was $4.2 million and $8.1 million, respectively, representing 11% and 15% of the Company’s consolidated revenue, respectively. On February 28, 2024, the Company and its Japanese subsidiary, Cutera KK, entered into a termination agreement (the “Termination Agreement”) with ZO USA and its Japanese subsidiary, ZO Skin Health GK (“ZO Japan” and together with ZO USA and their affiliates, “ZO”), which, among other things, (i) terminates all agreements related to the distribution by the Company of ZO’s products in Japan effective immediately, (ii) provides for the orderly transition of the distribution of ZO products to ZO, (iii) transfers certain Company employees dedicated to the distribution of ZO products to ZO, (iv) transfers certain customer contracts related to ZO products from the Company to ZO and (v) transfers certain inventory and assets related to the distribution of ZO products from the Company to ZO. The Termination Agreement requires ZO to pay the Company $5.75 million within three business days of the execution of the Termination Agreement and make a second payment of $5.75 million, less any offsets under the Termination Agreement (including, but not limited to, 42.2% of the Company’s net revenue for sales of ZO products under the Distribution Agreement between January 1, 2024 and February 28, 2024), upon the earlier of (a) the completion the transition of regulatory and distribution activities such that ZO is able to fulfill product orders by customers in Japan, as determined by ZO and the Company, and (b) June 14, 2024. The Company received the first payment of $5.75 million on February 29, 2024, and received a second payment of $2.37 million on April 1, 2024, which was net of $1.6 million in amounts owed by Cutera. The In the three months ended March 31, 2024, the Company recorded the net gain of $9.7 million resulting from the early termination proceeds received and the transfer of certain assets and liabilities as gain on early termination of distribution agreement on the Company's condensed consolidated statement of operations. The Company generates revenue from the distribution of the Secret systems, which are manufactured by ilooda Co. Ltd. (“ilooda”). The Company is the exclusive distributor for all systems sold in the United States, Canada, the United Kingdom; the exclusive distributor for certain systems in France, and Spain; and the non-exclusive distributor for systems sold in Austria and Germany. In the three months ended March 31, 2024, and 2023, revenue from the distribution of Secret products represented 6% and 4%, respectively, of the Company’s consolidated revenue. The Company‘s ilooda distribution agreement expires in June 30, 2026. Termination of Manufacturing Service Agreement In November 2023, the Company communicated its intention not to renew its existing manufacturing service agreement (“Manufacturing Service Agreement”) with Jabil Inc. (“Jabil”), a third-party manufacturing provider that manufactured excel V+ and AviClear devices for the Company. At the time of the communication of non-renewal, the Company concluded that it would have an obligation to purchase unshipped inventory from Jabil. The Company subsequently received claims from Jabil related to other amounts associated with the termination and entered into settlement discussions with Jabil. On February 28, 2024, the Company and Jabil signed a settlement agreement (“Settlement Agreement”) for the non-renewal of its existing Manufacturing Service Agreement. The Settlement Agreement provided for a payment by Cutera to Jabil of $19.5 million, to be offset by $1.3 million in amounts owed by Jabil. The $19.5 million payment to Jabil relates to the Company's receipt of $13.5 million of inventories, $0.3 million of equipment, and the payment of $5.7 million for expenses either previously incurred by Jabil or associated with the non-renewal of the Manufacturing Services Agreement. The Company recorded the net balance of the $19.5 million payment owed to Jabil and the $15.1 million aggregate of inventories, equipment, and other amounts owed to Cutera, in accrued liabilities on the consolidated balance sheet at December 31, 2023. The $5.7 million for expenses incurred by Jabil was recorded in cost of revenue on the consolidated statements of operations in the twelve months ended December 31, 2023. As of March 31, 2024, the ownership of the $13.5 million inventories balance had been transferred from Jabil to Cutera. The Company has $0.8 million of settlement obligation to pay to Jabil, recorded in accrued liabilities on the condensed consolidated balance sheet. |
Cash, Cash Equivalents, Restric
Cash, Cash Equivalents, Restricted Cash and Marketable Investments | 3 Months Ended |
Mar. 31, 2024 | |
Cash and Cash Equivalents [Abstract] | |
Cash, Cash Equivalents, Restricted Cash and Marketable Investments | Cash, Cash Equivalents, Restricted Cash and Marketable Investments The Company determines the appropriate classification of its investments in marketable securities at the time of purchase and re-evaluates such designation at each balance sheet date. The Company’s marketable securities have been classified and accounted for as available-for-sale securities. Investments with remaining maturities of more than one year are viewed by the Company as available to support current operations and are classified as current assets under the caption marketable investments in the accompanying consolidated balance sheets. Investments in available-for-sale debt securities are measured at fair value under the guidance in ASC 320. Credit losses on impaired available-for-sale debt securities are recognized through an allowance for credit losses. Under ASC 326, credit losses recognized on an available-for-sale debt security should not reduce the net carrying amount of the available-for-sale debt security below its fair value. Any changes in fair value unrelated to credit are recognized as an unrealized gain or loss in other comprehensive income. The Company's cash and cash equivalents was $105.4 million and $143.6 million as of March 31, 2024 and December 31, 2023, respectively. There were no marketable investments or restricted cash as of those dates. |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 3 Months Ended |
Mar. 31, 2024 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The Company measures certain financial assets at fair value, including cash and cash equivalents. The fair value hierarchy contains the following three levels of inputs that may be used to measure fair value, in accordance with ASC 820: • Level 1 inputs, which include quoted prices in active markets for identical assets or liabilities; • Level 2 inputs, which include observable inputs other than Level 1 inputs, such as quoted prices for similar assets or liabilities, quoted prices for identical or similar assets or liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the asset or liability. When sufficient quoted pricing for identical securities is not available, the Company uses market pricing and other observable market inputs for similar securities obtained from various third-party data providers. These inputs either represent quoted prices for similar assets in active markets or have been derived from observable market data; and • Level 3 inputs, which include unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the underlying asset or liability. Level 3 assets and liabilities include those whose fair value measurements are determined using pricing models, discounted cash flow methodologies, or similar valuation techniques, as well as significant management judgment or estimation. In determining fair value, the Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible as well as considering counterparty credit risk in its assessment of fair value. As of March 31, 2024, financial assets measured and recognized at fair value on a recurring basis and classified under the appropriate level of the fair value hierarchy as described above were as follows (in thousands): March 31, 2024 Level 1 Cash equivalents: Money market funds $ 89,458 As of December 31, 2023, financial assets and liabilities measured and recognized at fair value on a recurring basis and classified under the appropriate level of the fair value hierarchy as described above were as follows (in thousands): December 31, 2023 Level 1 Cash equivalents: Money market funds $ 123,387 The Company's cash and cash equivalents, accounts receivable, and accounts payable are reflected on the accompanying consolidated balance sheets at cost, which approximated estimated fair value due to short-term nature of such accounts, using Level 1 inputs. See Note 13. Debt for the carrying amount and estimated fair value of the Company’s 2.25% Convertible Senior Notes due 2026 (the “2026 Notes”), the 2.25% Convertible Senior Notes due 2028 (the “2028 Notes”), and the 4.00% Convertible Senior Notes due 2029 (the “2029 Notes”). |
Balance Sheet Details
Balance Sheet Details | 3 Months Ended |
Mar. 31, 2024 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Balance Sheet Details | Balance Sheet Details Inventories Inventories cons ist of the following (in thousands): March 31, December 31, Raw materials $ 51,870 $ 36,970 Work in process 1,978 889 Finished goods 19,621 24,741 Total $ 73,469 $ 62,600 Valuation adjustments for excess and obsolete inventory, reflected as a reduction of inventory at March 31, 2024 and December 31, 2023, were $13.7 million and $13.0 million, respectively. Other current assets and prepaid expenses Other current assets and a prepaid expenses consist of the following (in thousands): March 31, December 31, Sale tax and VAT receivable $ 6,884 $ 6,307 Deposits with vendors 6,738 9,501 Prepayments 2,933 3,819 Distribution agreement settlement receivable 2,374 — Other 365 225 Total $ 19,294 $ 19,852 Long-term inventories The Company’s long-term inventories relate to AviClear devices, and parts for device manufacturing, not expected to be sold in the twelve months ended March 31, 2025. Long-term inventories consist of the following (in thousands): March 31, December 31, Raw materials $ 12,864 $ 8,672 Work in process 1,332 2,049 Finished goods 6,386 5,562 Total $ 20,582 $ 16,283 Valuation adjustments for excess and obsolete inventory, reflected as a reduction of inventory at March 31, 2024 and December 31, 2023, were $19.0 million and $12.8 million, respectively. Property and Equipment, net Property and equipment, net consi sts of the following (in thousands): March 31, December 31, Leasehold improvements $ 1,035 $ 1,010 AviClear devices 33,936 38,490 Office equipment and furniture 1,883 1,884 Machinery and equipment 4,578 4,944 Assets under construction 1,456 1,274 42,888 47,602 Less: Accumulated depreciation (10,924) (10,327) Property and equipment, net $ 31,964 $ 37,275 Accrued Liabilities Accrued liabilities c onsist of the following (in thousands): March 31, December 31, Bonus and payroll-related accruals $ 14,647 $ 13,949 Accrued sales tax 6,531 6,325 Liability for inventory in transit 5,004 5,461 Sales and marketing accruals 4,100 4,929 Accrued interest 3,465 1,304 Product warranty 2,472 2,593 Jabil settlement obligation, net 750 8,908 Other accrued liabilities 10,150 11,586 Total $ 47,119 $ 55,055 |
Product Warranty
Product Warranty | 3 Months Ended |
Mar. 31, 2024 | |
Product Warranties Disclosures [Abstract] | |
Product Warranty | Product Warranty The Company has a direct field service organization in North America (including Canada). Internationally, the Company provides direct service support in Australia, Austria, Belgium, France, Germany, Hong Kong, Japan, the Netherlands, Spain, and Switzerland. In several other countries, where the Company does not have a direct presence, the Company provides service through a network of distributors and third-party service providers. After the original warranty period, maintenance and support are offered on an extended service contract basis or on a time and materials basis. The Company estimates cost to repair or replace products under standard warranty at the time of sale. Costs incurred in connection with extended service contracts are generally recognized at the time when costs are incurred. The following table provides the changes in the product warranty accrual for the three months ended March 31, 2024 and 2023 (in thousands): Three Months Ended 2024 2023 Beginning Balance $ 2,593 $ 3,254 Add: Accruals for warranties issued during the period 1,156 1,016 Less: Settlements made during the period (1,277) (1,116) Ending Balance $ 2,472 $ 3,154 |
Deferred Revenue
Deferred Revenue | 3 Months Ended |
Mar. 31, 2024 | |
Revenue from Contract with Customer [Abstract] | |
Deferred Revenue | Deferred Revenue The Company records d eferred revenue when revenue is to be recognized subsequent to invoicing. For extended service contracts, the Co mpany generally invoices customers at the beginning of the extended service contract term. The Company’s extended service contracts typically have one The following table provides changes in the deferred revenue balance for the three months ended March 31, 2024 and 2023 (in thousands): Three Months Ended 2024 2023 Beginning balance $ 11,916 $ 13,498 Add: Payments received from current period sales 3,850 6,045 Less: Revenue recognized from current period sales (572) (615) Less: Revenue recognized from beginning balance (4,739) (5,229) Ending balance $ 10,455 $ 13,699 Approximately 86% of the Company’s deferred revenue balance of $10.5 million as of March 31, 2024 will be recognized over the next 12 months. The fixed annual license fees received related to the AviClear contracts are deferred and recognized over the annual lease periods. The AviClear deferred license fee balance included in the total deferred revenue balance at March 31, 2024, and December 31, 2023 was $0.8 million and $2.1 million, respectively. |
Revenue
Revenue | 3 Months Ended |
Mar. 31, 2024 | |
Revenue from Contract with Customer [Abstract] | |
Revenue | Revenue Revenue is recognized upon transfer of control of promised products or services to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for promised goods or services. The Company’s performance obligations are satisfied either over time or at a point in time. Revenue from performance obligations that are transferred to customers over time accounted for approximately 14% of the Company's total revenue for the three months ended March 31, 2024, and 11% for the three months ended March 31, 2023. The Company has certain system sale arrangements that contain multiple products and services. For these bundled sale arrangements, the Company accounts for individual products and services as separate performance obligations if they are distinct. The Company’s products and services are distinct if a customer can benefit from the product or service on its own or with other resources that are readily available to the customer, and if the Company’s promise to transfer the products or service to the customer is separately identifiable from other promises in the sale arrangements. The Company’s system sale arrangements can include all or a combination of the following performance obligations: the system and software license (considered one performance obligation), system accessories (hand pieces), training, AviClear license agreements, other accessories, extended service contracts, marketing services, and time and materials services. For the Company’s system sale arrangements that include an extended service contract, the period of service commences at the expiration of the Company’s standard warranty offered at the time of the system sale. The Company considers the extended service contracts terms in the arrangements that are legally enforceable to be performance obligations. Other than extended service contracts and marketing services, which are satisfied over time, the Company generally satisfies all performance obligations at a point in time. Systems, system accessories (hand pieces), service contracts, training, and time and materials services are also sold on a stand-alone basis. For contracts with multiple performance obligations, the Company allocates the transaction price of the contract to each performance obligation on a relative standalone selling price basis. Nature of Products and Services Systems Systems revenue is generated from the sale of systems and from the sale of upgrades to existing systems. A system consists of a console that incorporates a universal graphic user interface, a laser or other energy-based module, control system software and high voltage electronics, as well as one or more hand pieces. In certain applications, the laser or other energy-based module is contained in the hand piece, rather than within the console. The Company offers customers the ability to select the system that best fits their practice at the time of purchase and then to cost-effectively add applications to their system as their practice grows. This provides customers the flexibility to upgrade their systems whenever they choose and provides the Company with a source of additional Systems revenue. The system or upgrade and the right to use the embedded software represent a single performance obligation as the software license is integral to the functionality of the system or upgrade. For systems sold directly to end-customers that are credit approved, revenue is recognized when the Company transfers control to the end-customer, which occurs when the product is shipped to the customer or when the customer receives the product, depending on the nature of the arrangement. When collectability is not established in advance of receipt of payment from the customer, revenue is recognized upon the later of the receipt of payment or the satisfaction of the performance obligation. For systems sold through credit approved distributors, revenue is recognized at the time of shipment to the distributor. The Company leases certain AviClear devices to customers and receives a fixed annual license fee over the term of the arrangement and variable lease income related to treatments performed by the lessee. In the fourth quarter of 2023, the Company announced a change in the AviClear business strategy and moved towards a direct sales model rather than a leasing model, whereby certain existing lessees were offered an option to purchase the leased AviClear device. The Company classifies its lease income and direct sales as product revenue and classifies the AviClear lease contracts as operating leases for the devices under the leasing model. The fixed annual license fee is recognized evenly over the period of the lease contract on a straight-line basis. The treatment fee is recognized as consumable revenue in the period the treatment protocol is initiated. The Company's payment terms for its system consoles and other accessories require payment within 30 days of shipment. Certain international distributor arrangements allow for longer payment terms. Consumables and other accessories The Company classifies its customers' purchases of replacement cycles for truSculpt and truFlex, as well as replacement hand pieces, xeo and truSculpt 3D hand pieces, AviClear treatment fee revenue, and single use disposable tips applicable to Secret PRO, and Secret RF as Consumable revenue. The Secret PRO, Secret DUO, and Secret RF products' single use disposable tips must be replaced after every treatment. The Company’s systems offer multiple hand pieces and applications, which allow customers to upgrade their systems. Revenue for consumables and other accessories is recognized when products are shipped to customers. Skincare products The Company generated revenue from the distribution of skincare products, which were manufactured by ZO Skin Health, Inc. (“ZO”), and sold in the Japanese market to medical offices and licensed physicians. The Company warranted that the skincare products are free of significant defects in workmanship and materials for 90 days from shipment. The Company acted as the principal in this arrangement, as the Company determined the price to charge customers for the skincare products and controlled the products before they were transferred to the customer. The Company recognized revenue for skincare products at a point in time upon shipment. On February 28, 2024, the Company entered into a termination agreement with ZO, which terminated all agreements related to the distribution by the Company of ZO’s products in Japan, as disclosed in Note 1. Through February 2024, revenue from the distribution of skincare products was $4.2 million. Extended service contract The Company offers post-warranty services to its customers through extended service contracts that cover parts and labor for a term of one Training Sales of systems to customers include training on the use of the system to be provided within 90 days of purchase. The Company considers training a separate performance obligation as customers can immediately benefit from the training, and training is also sold separately from systems. The Company recognizes revenue for training when the training is provided. Significant Judgments The Company determines standalone selling price ("SSP") for each performance obligation as follows: • Systems: The SSPs for systems are based on directly observable sales in similar circumstances to similar customers. • Extended warranty/Service contracts: SSP is based on observable price when sold on a standalone basis to similar customers. Deferred Sales Commissions Incremental costs of obtaining a contract related to the sale of a system, which consist primarily of commissions and related payroll taxes, are capitalized, and amortized on a straight-line basis over the expected period of benefit, except for costs that are recognized when the product is sold. The Company uses the portfolio method to recognize the amortization expense related to these capitalized costs related to initial contracts and such expense is recognized over a period associated with the revenue of the related portfolio, which is generally two Total capitalized commissions as of March 31, 2024 and December 31, 2023 were $2.2 million and $2.4 million, respectively, and are included in other long-term assets on the Company’s condensed consolidated balance sheet. Amortization expense for these assets was $0.5 million and $0.6 million during the three months ended March 31, 2024, and 2023, respectively. The amortization related to these capitalized costs is included in sales and marketing expense on the Company’s condensed consolidated statement of operations. |
Stockholders' Equity and Stock-
Stockholders' Equity and Stock-based Compensation Expense | 3 Months Ended |
Mar. 31, 2024 | |
Share-Based Payment Arrangement [Abstract] | |
Stockholders' Equity and Stock-based Compensation Expense | Stockholders ’ Equity and Stock-based Compensation Expense The Company’s equity incentive plans are broad-based, long-term programs intended to attract and retain talented employees and align stockholder and employee interests. The 2019 Equity Incentive Plan (the "2019 Plan") and the 2023 Inducement Equity Plan (the "2023 Plan") provides for the grant of incentive stock options, non-statutory stock options, restricted stock units (“RSUs”), performance stock units ("PSUs"), and other stock or cash awards. Activity under the Company's equity incentive plans is summarized as follows: Shares Available for Grant Balance, December 31, 2023 3,554,537 Additional shares reserved — Options and stock awards granted (649,500) Stock awards canceled / forfeited / expired 32,396 Options canceled / forfeited / expired 43,582 Balance, March 31, 2024 2,981,015 The equity plans deduct the shares available for issuance by the gross number of shares for which an award is exercised or vests, not the net number of shares actually issued upon exercise, in the event the exercise price is paid in shares of the Company's common stock or shares are withheld to satisfy tax withholding obligations. Any RSU or PSU shares granted on or after July 13, 2023 are counted against the shares available for grant at a ratio of 1.65 shares for every one share granted. Options Outstanding Number of Stock Options Outstanding Weighted Average Exercise Price Weighted Average Remaining Term Balance, December 31, 2023 1,282,240 $ 17.97 8.21 Options granted 520,000 $ 2.11 Options exercised — $ — Options canceled / forfeited / expired (43,582) $ 33.88 Balance, March 31, 2024 1,758,658 $ 12.89 7.87 Stock Awards Outstanding Number of Awards Outstanding Weighted Average Grant Date Fair Value per Share Balance, December 31, 2023 909,862 $ 20.46 Stock awards granted 110,000 $ 2.11 Awards vested (137,583) $ 25.53 Stock awards canceled / forfeited / expired (32,396) $ 27.11 Balance, March 31, 2024 849,883 $ 18.14 Stock-based Compensation Expense Stock-based compensation expense by financial statement line item recognized during the three months ended March 31, 2024 and 2023 was as follows (in thousands): Three Months Ended 2024 2023 Cost of revenue $ 149 $ 364 Sales and marketing 567 1,148 Research and development 305 693 General and administrative 1,088 1,181 Total stock-based compensation expense $ 2,109 $ 3,386 |
Net Loss Per Share
Net Loss Per Share | 3 Months Ended |
Mar. 31, 2024 | |
Earnings Per Share [Abstract] | |
Net Loss Per Share | Net Loss Per Share As of March 31, 2024, the Company’s Convertible Notes were potentially convertible into 8,696,792 shares of common stock. The denominator for diluted net loss per share does not include any effect from the capped call transactions the Company entered into concurrently with the issuances of convertible notes, as this effect would be anti-dilutive. In the event of conversion of a convertible note, shares delivered to the Company under the capped call will offset the dilutive effect of the shares that the Company would issue under the convertible notes. In the three months ended March 31, 2024 and March 31, 2023, the if-converted method was not applied as the effect would have been anti-dilutive. For the three months ended March 31, 2024 and March 31, 2023, a basic loss per common share and diluted loss per common share are the same in each period as the inclusion of any potentially issuable shares would be anti-dilutive. The following table sets forth the computation of basic and diluted net loss and the weighted average number of shares used in computing basic and diluted net loss per share (in thousands, except per share data): Three Months Ended 2024 2023 Numerator: Net loss used in calculating net loss per share, basic $ (22,778) $ (28,048) Denominator: Weighted average shares of common stock outstanding used in computing net loss per share, basic 19,991 19,776 Dilutive effect of incremental shares and share equivalents: Convertible notes — — Options — — RSUs — — PSUs — — ESPP — — Weighted average shares of common stock outstanding used in computing net loss per share, diluted 19,991 19,776 Net loss per share: Net loss per share, basic $ (1.14) $ (1.42) Net loss per share, diluted $ (1.14) $ (1.42) The following numbers of shares outstanding, prior to the application of the treasury stock method and the if-converted method, were excluded from the computation of diluted net loss per common share for the periods presented because including them would have had an anti-dilutive effect (in thousands): Three Months Ended 2024 2023 Capped call 10,780 8,697 Convertible notes 8,697 8,697 Options 1,282 503 RSU's 682 370 PSU's 221 235 ESPP — 52 Total 21,662 18,554 |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2024 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes For the three months ended March 31, 2024, the Company's income tax benefit was $0.1 million, compared to $0.3 million expense for the three months ended March 31, 2023. The Company's income tax (benefit) expense for the three months ended March 31, 2024 and 2023 is due to income taxes in foreign jurisdictions. The Company continues to maintain a full valuation allowance on its U.S. deferred tax assets. |
Leases
Leases | 3 Months Ended |
Mar. 31, 2024 | |
Leases [Abstract] | |
Leases | Leases Lessee The Company is a party to certain operating and finance leases for vehicles, office space and storage facilities. The Company’s material operating leases consist of office space, as well as storage facilities and finance leases consist of automobile leases. The Company’s leases generally have remaining terms of one The Company determines if a contract contains a lease at inception. Operating lease assets and liabilities are recognized at the lease commencement date. Operating lease liabilities represent the present value of lease payments not yet paid. Operating lease assets represent the right to use an underlying asset and are based upon the operating lease liabilities adjusted for prepayments or accrued lease payments, initial direct costs, lease incentives, and impairment of operating lease assets. To determine the present value of lease payments not yet paid, the Company estimates the incremental secured borrowing rates corresponding to the maturities of the leases. The Company based the rate estimates on prevailing financial market conditions, credit analysis, and management judgment. Tenant incentives used to fund leasehold improvements are recognized when earned and reduce the Company’s right-of-use asset related to the lease. These are amortized through the right-of-use asset as reductions of expense over the lease term. Supplemental balance sheet information related to leases was as follows (in thousands): Leases Classification March 31, December 31, Assets Right-of-use assets Operating lease right-of-use assets $ 12,034 $ 10,055 Finance lease Property and equipment, net 2,228 2,516 Total leased assets $ 14,262 $ 12,571 Liabilities Classification March 31, December 31, Operating lease liabilities Operating lease liabilities, current Operating lease liabilities $ 3,231 $ 2,441 Operating lease liabilities, non-current Operating lease liabilities, net of current portion 10,046 8,887 Total Operating lease liabilities $ 13,277 $ 11,328 Finance lease liabilities Finance lease liabilities, current Accrued liabilities $ 744 $ 825 Finance lease liabilities, non-current Other long-term liabilities 888 1,064 Total Finance lease liabilities $ 1,632 $ 1,889 Lease costs during the three months ended March 31, 2024 and 2023 (in thousands) was as follows: Three Months Ended Lease costs Classification 2024 2023 Finance lease cost Amortization expense $ 274 $ 150 Finance lease cost Interest for finance lease $ 42 $ 20 Operating lease cost Operating lease expense $ 969 $ 891 Cash paid for amounts included in the measurement of lease liabilities during the three months ended March 31, 2024 and 2023 was as follows (in thousands): Three Months Ended Cash paid for amounts included in the measurement of lease liabilities Classification 2024 2023 Operating cash flow Finance lease $ 40 $ 20 Financing cash flow Finance lease $ 196 $ 124 Operating cash flow Operating lease $ 948 $ 699 Operating leases Maturities of operating facility leases were as follows as of March 31, 2024 (in thousands): As of March 31, 2024 Amount Remainder of 2024 $ 2,895 2025 3,981 2026 4,027 2027 3,299 2028 323 2029 and thereafter 143 Total lease payments 14,668 Less: imputed interest 1,391 Present value of lease liabilities $ 13,277 Finance Leases As of March 31, 2024, the Company was committed to minimum lease payments for vehicles leased under long-term non-cancelable finance leases as follows (in thousands): As of March 31, 2024 Amount Remainder of 2024 $ 731 2025 697 2026 424 2027 16 Total lease payments 1,868 Less: imputed interest 236 Present value of lease liabilities $ 1,632 Weighted-average remaining lease term and discount rate, as of March 31, 2024, were as follows: Lease Term and Discount Rate March 31, 2024 Weighted-average remaining lease term (years) Operating leases 3.7 Finance leases 2.3 Weighted-average discount rate Operating leases 5.7 % Finance leases 9.5 % Lessor - AviClear Lessor revenue The Company leases the AviClear device to customers and receives a fixed annual license fee over the term of the arrangement and variable revenue related to the number of treatments performed by the lessee. The contractual term of the lease agreement is three years with a one-year auto-renewal feature. Certain lease agreements' terms in excess of one year can be terminated without financial penalty, and these agreements are accounted for as having a lease term of one year. The AviClear lease agreements are accounted for as operating leases. The fixed annual license fee is recognized evenly throughout the period of the lease agreement on a straight-line basis. The treatment revenue is recognized in the period the lessee has the ability to perform the patient treatment. The following table summarizes the amount of operating lease income included in product revenue in the accompanying condensed consolidated statements of operations (in thousands): Three Months Ended March 31, 2024 2023 AviClear operating lease license fee revenue $ 1,162 $ 1,225 AviClear operating lease revenue 1,246 2,703 Total AviClear revenue $ 2,408 $ 3,928 The AviClear device being leased has a useful life of seven years. The Company expects that a device will be leased for two consecutive lease terms at the end of which its residual value will be immaterial. The following is the minimum future lease payments as of March 31, 2024, under non-cancelable operating leases, assuming the minimum contractual lease term (in thousands): As of March 31, 2024 Amount Remainder of 2024 $ 5,615 2025 2,600 Total $ 8,215 Practical Expedients The Company elected to apply a practical expedient to operating leases and elected not to separate lease and nonlease components as long as the lease and at least one nonlease component have the same timing and pattern of transfer. As such, updates or upgrades on a when-and-if available basis to the AviClear device are combined with the operating lease revenue. The combined component is being accounted for under ASC 842. Additionally, the Company made an accounting policy election to present AviClear revenue net of sales and other similar taxes. Capitalized sales commissions Sales commissions related to obtaining AviClear lease agreements are accounted for as initial direct costs and are capitalized and amortized on a straight-line basis over the lease term. Amortization expenses for these assets were $0.3 million for the three-month periods ended March 31, 2024, and $1.0 million for the comparative period ended March 31, 2023, and were included in sales and marketing expense on the Company’s condensed consolidated statement of operations. Total capitalized commissions as of March 31, 2024, and December 31, 2023, were $2.4 million and $2.7 million, respectively, and are included in other long-term assets on the Company’s condensed consolidated balance sheet. Lease installment costs The Company capitalizes fulfillment costs incurred before AviClear lease commencement and these costs include freight, installation, and training costs. Amortization expenses for these assets were $0.6 million for the three-month period ended March 31, 2024 and $0.5 million for the comparative periods ended March 31, 2023, and were included in cost of revenue on the Company’s condensed consolidated statement of operations. Total lease installment costs as of March 31, 2024, and December 31, 2023, were $1.5 million and $2.1 million, respectively, and are included in other long-term assets on the Company’s condensed consolidated balance sheet. |
Leases | Leases Lessee The Company is a party to certain operating and finance leases for vehicles, office space and storage facilities. The Company’s material operating leases consist of office space, as well as storage facilities and finance leases consist of automobile leases. The Company’s leases generally have remaining terms of one The Company determines if a contract contains a lease at inception. Operating lease assets and liabilities are recognized at the lease commencement date. Operating lease liabilities represent the present value of lease payments not yet paid. Operating lease assets represent the right to use an underlying asset and are based upon the operating lease liabilities adjusted for prepayments or accrued lease payments, initial direct costs, lease incentives, and impairment of operating lease assets. To determine the present value of lease payments not yet paid, the Company estimates the incremental secured borrowing rates corresponding to the maturities of the leases. The Company based the rate estimates on prevailing financial market conditions, credit analysis, and management judgment. Tenant incentives used to fund leasehold improvements are recognized when earned and reduce the Company’s right-of-use asset related to the lease. These are amortized through the right-of-use asset as reductions of expense over the lease term. Supplemental balance sheet information related to leases was as follows (in thousands): Leases Classification March 31, December 31, Assets Right-of-use assets Operating lease right-of-use assets $ 12,034 $ 10,055 Finance lease Property and equipment, net 2,228 2,516 Total leased assets $ 14,262 $ 12,571 Liabilities Classification March 31, December 31, Operating lease liabilities Operating lease liabilities, current Operating lease liabilities $ 3,231 $ 2,441 Operating lease liabilities, non-current Operating lease liabilities, net of current portion 10,046 8,887 Total Operating lease liabilities $ 13,277 $ 11,328 Finance lease liabilities Finance lease liabilities, current Accrued liabilities $ 744 $ 825 Finance lease liabilities, non-current Other long-term liabilities 888 1,064 Total Finance lease liabilities $ 1,632 $ 1,889 Lease costs during the three months ended March 31, 2024 and 2023 (in thousands) was as follows: Three Months Ended Lease costs Classification 2024 2023 Finance lease cost Amortization expense $ 274 $ 150 Finance lease cost Interest for finance lease $ 42 $ 20 Operating lease cost Operating lease expense $ 969 $ 891 Cash paid for amounts included in the measurement of lease liabilities during the three months ended March 31, 2024 and 2023 was as follows (in thousands): Three Months Ended Cash paid for amounts included in the measurement of lease liabilities Classification 2024 2023 Operating cash flow Finance lease $ 40 $ 20 Financing cash flow Finance lease $ 196 $ 124 Operating cash flow Operating lease $ 948 $ 699 Operating leases Maturities of operating facility leases were as follows as of March 31, 2024 (in thousands): As of March 31, 2024 Amount Remainder of 2024 $ 2,895 2025 3,981 2026 4,027 2027 3,299 2028 323 2029 and thereafter 143 Total lease payments 14,668 Less: imputed interest 1,391 Present value of lease liabilities $ 13,277 Finance Leases As of March 31, 2024, the Company was committed to minimum lease payments for vehicles leased under long-term non-cancelable finance leases as follows (in thousands): As of March 31, 2024 Amount Remainder of 2024 $ 731 2025 697 2026 424 2027 16 Total lease payments 1,868 Less: imputed interest 236 Present value of lease liabilities $ 1,632 Weighted-average remaining lease term and discount rate, as of March 31, 2024, were as follows: Lease Term and Discount Rate March 31, 2024 Weighted-average remaining lease term (years) Operating leases 3.7 Finance leases 2.3 Weighted-average discount rate Operating leases 5.7 % Finance leases 9.5 % Lessor - AviClear Lessor revenue The Company leases the AviClear device to customers and receives a fixed annual license fee over the term of the arrangement and variable revenue related to the number of treatments performed by the lessee. The contractual term of the lease agreement is three years with a one-year auto-renewal feature. Certain lease agreements' terms in excess of one year can be terminated without financial penalty, and these agreements are accounted for as having a lease term of one year. The AviClear lease agreements are accounted for as operating leases. The fixed annual license fee is recognized evenly throughout the period of the lease agreement on a straight-line basis. The treatment revenue is recognized in the period the lessee has the ability to perform the patient treatment. The following table summarizes the amount of operating lease income included in product revenue in the accompanying condensed consolidated statements of operations (in thousands): Three Months Ended March 31, 2024 2023 AviClear operating lease license fee revenue $ 1,162 $ 1,225 AviClear operating lease revenue 1,246 2,703 Total AviClear revenue $ 2,408 $ 3,928 The AviClear device being leased has a useful life of seven years. The Company expects that a device will be leased for two consecutive lease terms at the end of which its residual value will be immaterial. The following is the minimum future lease payments as of March 31, 2024, under non-cancelable operating leases, assuming the minimum contractual lease term (in thousands): As of March 31, 2024 Amount Remainder of 2024 $ 5,615 2025 2,600 Total $ 8,215 Practical Expedients The Company elected to apply a practical expedient to operating leases and elected not to separate lease and nonlease components as long as the lease and at least one nonlease component have the same timing and pattern of transfer. As such, updates or upgrades on a when-and-if available basis to the AviClear device are combined with the operating lease revenue. The combined component is being accounted for under ASC 842. Additionally, the Company made an accounting policy election to present AviClear revenue net of sales and other similar taxes. Capitalized sales commissions Sales commissions related to obtaining AviClear lease agreements are accounted for as initial direct costs and are capitalized and amortized on a straight-line basis over the lease term. Amortization expenses for these assets were $0.3 million for the three-month periods ended March 31, 2024, and $1.0 million for the comparative period ended March 31, 2023, and were included in sales and marketing expense on the Company’s condensed consolidated statement of operations. Total capitalized commissions as of March 31, 2024, and December 31, 2023, were $2.4 million and $2.7 million, respectively, and are included in other long-term assets on the Company’s condensed consolidated balance sheet. Lease installment costs The Company capitalizes fulfillment costs incurred before AviClear lease commencement and these costs include freight, installation, and training costs. Amortization expenses for these assets were $0.6 million for the three-month period ended March 31, 2024 and $0.5 million for the comparative periods ended March 31, 2023, and were included in cost of revenue on the Company’s condensed consolidated statement of operations. Total lease installment costs as of March 31, 2024, and December 31, 2023, were $1.5 million and $2.1 million, respectively, and are included in other long-term assets on the Company’s condensed consolidated balance sheet. |
Leases | Leases Lessee The Company is a party to certain operating and finance leases for vehicles, office space and storage facilities. The Company’s material operating leases consist of office space, as well as storage facilities and finance leases consist of automobile leases. The Company’s leases generally have remaining terms of one The Company determines if a contract contains a lease at inception. Operating lease assets and liabilities are recognized at the lease commencement date. Operating lease liabilities represent the present value of lease payments not yet paid. Operating lease assets represent the right to use an underlying asset and are based upon the operating lease liabilities adjusted for prepayments or accrued lease payments, initial direct costs, lease incentives, and impairment of operating lease assets. To determine the present value of lease payments not yet paid, the Company estimates the incremental secured borrowing rates corresponding to the maturities of the leases. The Company based the rate estimates on prevailing financial market conditions, credit analysis, and management judgment. Tenant incentives used to fund leasehold improvements are recognized when earned and reduce the Company’s right-of-use asset related to the lease. These are amortized through the right-of-use asset as reductions of expense over the lease term. Supplemental balance sheet information related to leases was as follows (in thousands): Leases Classification March 31, December 31, Assets Right-of-use assets Operating lease right-of-use assets $ 12,034 $ 10,055 Finance lease Property and equipment, net 2,228 2,516 Total leased assets $ 14,262 $ 12,571 Liabilities Classification March 31, December 31, Operating lease liabilities Operating lease liabilities, current Operating lease liabilities $ 3,231 $ 2,441 Operating lease liabilities, non-current Operating lease liabilities, net of current portion 10,046 8,887 Total Operating lease liabilities $ 13,277 $ 11,328 Finance lease liabilities Finance lease liabilities, current Accrued liabilities $ 744 $ 825 Finance lease liabilities, non-current Other long-term liabilities 888 1,064 Total Finance lease liabilities $ 1,632 $ 1,889 Lease costs during the three months ended March 31, 2024 and 2023 (in thousands) was as follows: Three Months Ended Lease costs Classification 2024 2023 Finance lease cost Amortization expense $ 274 $ 150 Finance lease cost Interest for finance lease $ 42 $ 20 Operating lease cost Operating lease expense $ 969 $ 891 Cash paid for amounts included in the measurement of lease liabilities during the three months ended March 31, 2024 and 2023 was as follows (in thousands): Three Months Ended Cash paid for amounts included in the measurement of lease liabilities Classification 2024 2023 Operating cash flow Finance lease $ 40 $ 20 Financing cash flow Finance lease $ 196 $ 124 Operating cash flow Operating lease $ 948 $ 699 Operating leases Maturities of operating facility leases were as follows as of March 31, 2024 (in thousands): As of March 31, 2024 Amount Remainder of 2024 $ 2,895 2025 3,981 2026 4,027 2027 3,299 2028 323 2029 and thereafter 143 Total lease payments 14,668 Less: imputed interest 1,391 Present value of lease liabilities $ 13,277 Finance Leases As of March 31, 2024, the Company was committed to minimum lease payments for vehicles leased under long-term non-cancelable finance leases as follows (in thousands): As of March 31, 2024 Amount Remainder of 2024 $ 731 2025 697 2026 424 2027 16 Total lease payments 1,868 Less: imputed interest 236 Present value of lease liabilities $ 1,632 Weighted-average remaining lease term and discount rate, as of March 31, 2024, were as follows: Lease Term and Discount Rate March 31, 2024 Weighted-average remaining lease term (years) Operating leases 3.7 Finance leases 2.3 Weighted-average discount rate Operating leases 5.7 % Finance leases 9.5 % Lessor - AviClear Lessor revenue The Company leases the AviClear device to customers and receives a fixed annual license fee over the term of the arrangement and variable revenue related to the number of treatments performed by the lessee. The contractual term of the lease agreement is three years with a one-year auto-renewal feature. Certain lease agreements' terms in excess of one year can be terminated without financial penalty, and these agreements are accounted for as having a lease term of one year. The AviClear lease agreements are accounted for as operating leases. The fixed annual license fee is recognized evenly throughout the period of the lease agreement on a straight-line basis. The treatment revenue is recognized in the period the lessee has the ability to perform the patient treatment. The following table summarizes the amount of operating lease income included in product revenue in the accompanying condensed consolidated statements of operations (in thousands): Three Months Ended March 31, 2024 2023 AviClear operating lease license fee revenue $ 1,162 $ 1,225 AviClear operating lease revenue 1,246 2,703 Total AviClear revenue $ 2,408 $ 3,928 The AviClear device being leased has a useful life of seven years. The Company expects that a device will be leased for two consecutive lease terms at the end of which its residual value will be immaterial. The following is the minimum future lease payments as of March 31, 2024, under non-cancelable operating leases, assuming the minimum contractual lease term (in thousands): As of March 31, 2024 Amount Remainder of 2024 $ 5,615 2025 2,600 Total $ 8,215 Practical Expedients The Company elected to apply a practical expedient to operating leases and elected not to separate lease and nonlease components as long as the lease and at least one nonlease component have the same timing and pattern of transfer. As such, updates or upgrades on a when-and-if available basis to the AviClear device are combined with the operating lease revenue. The combined component is being accounted for under ASC 842. Additionally, the Company made an accounting policy election to present AviClear revenue net of sales and other similar taxes. Capitalized sales commissions Sales commissions related to obtaining AviClear lease agreements are accounted for as initial direct costs and are capitalized and amortized on a straight-line basis over the lease term. Amortization expenses for these assets were $0.3 million for the three-month periods ended March 31, 2024, and $1.0 million for the comparative period ended March 31, 2023, and were included in sales and marketing expense on the Company’s condensed consolidated statement of operations. Total capitalized commissions as of March 31, 2024, and December 31, 2023, were $2.4 million and $2.7 million, respectively, and are included in other long-term assets on the Company’s condensed consolidated balance sheet. Lease installment costs The Company capitalizes fulfillment costs incurred before AviClear lease commencement and these costs include freight, installation, and training costs. Amortization expenses for these assets were $0.6 million for the three-month period ended March 31, 2024 and $0.5 million for the comparative periods ended March 31, 2023, and were included in cost of revenue on the Company’s condensed consolidated statement of operations. Total lease installment costs as of March 31, 2024, and December 31, 2023, were $1.5 million and $2.1 million, respectively, and are included in other long-term assets on the Company’s condensed consolidated balance sheet. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2024 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies The Company is named from time to time as a party to other legal proceedings, product liability, intellectual property disputes, commercial disputes, employee disputes, and contractual lawsuits. A liability and related charge are recorded to earnings in the Company’s consolidated financial statements for legal contingencies when the loss is considered probable and the amount can be reasonably estimated. The assessment is re-evaluated each accounting period and is based on all available information, including discussion with outside legal counsel. If a reasonable estimate of a known or probable loss cannot be made, but a range of probable losses can be estimated, the low-end of the range of losses is recognized if no amount within the range is a better estimate than any other. If a material loss is reasonably possible, but not probable and can be reasonably estimated, the estimated loss or range of loss is disclosed in the notes to the consolidated financial statements. The Company expenses legal fees as incurred. Certain of the cases below are still in the preliminary stages, and the Company is not able to quantify the extent of its potential liability, if any, other than as described. The outcome of litigation is inherently unpredictable and subject to significant uncertainties. If any of these matters are resolved adversely to the Company, this could have a material adverse effect on its business, financial condition, results of operations, and cash flows. In addition, defending these legal proceedings is likely to be costly, which may have a material adverse effect on the Company's financial condition, results of operations and cash flows, and may divert management's attention from the day-to-day operations of its business. On January 31, 2020, the Company filed a lawsuit against Lutronic Aesthetics in the United States District Court for the Eastern District of California. Lutronic employs numerous former Cutera employees. The complaint against Lutronic generally alleges claims for (1) misappropriation of trade secrets in violation of state and federal law; (2) violation of the Racketeer Influenced and Corrupt Organizations Act ("RICO"); (3) interference with contractual relations; (4) interference with prospective economic advantage; (5) unfair competition; and (6) aiding and abetting. On March 13, 2020, the court entered a temporary restraining order ("TRO") against Lutronic generally prohibiting it from using or disseminating the Company's confidential, proprietary, or trade secret information. The order also prohibited Lutronic, for two years, from using such information for the purpose of soliciting, or conducting business with, certain specified customers. On April 9, 2020, the parties stipulated to the entry of a preliminary injunction providing for the same relief afforded by the TRO. On August 4, 2022, Cutera filed a second amended complaint. In addition to the above referenced claims, Cutera alleged claims for violation of the Lanham Act, unlawful business practices, false advertising and trademark infringement. Discovery is ongoing. No trial date has been scheduled. On April 27, 2023, Lutronic filed a complaint for trade libel, intentional interference with prospective economic advantage, misappropriation of trade secrets and unfair business practices against Cutera in California State Court. Discovery has not yet commenced and no trial date has been scheduled. The Company denies the allegations of the complaint and has instructed counsel to defend the matter vigorously. Discovery is ongoing and no trial date has been scheduled. In March 2023, Serendia, LLC (“Serendia”), filed patent infringement complaints against the Company with the International Trade Commission (“ITC”) and in U.S. District Court for the District of Delaware alleging infringement of six Serendia patents by the Secret RF and Secret Pro systems, which the Company distributes in the U.S. on behalf of Ilooda Co. Ltd., a Korean company (“ilooda”). The manufacturer of these products, ilooda, is obligated to defend the Company against these claims and, as a result, the Company has not incurred significant external legal costs. Serendia and ilooda have agreed to a settlement of the ITC investigation, the Delaware litigation and any other past, present and future suits or claims related to the six Serendia patents and the Secret RF and Secret Pro systems. The settlement of these matters includes a non-exclusive, worldwide, fully paid up license from Serendia to ilooda to the six Serendia patents related to the Secret RF and Secret Pro systems, which are distributed by the Company. The ITC investigation as to ilooda and the Company was terminated as of April 10, 2024 and the Delaware litigation was dismissed as of April 3, 2024. On April 11, 2023, J. Daniel Plants, the Company’s former Executive Chairperson, and David Mowry, the Company’s former Chief Executive Officer, filed a complaint in the Delaware Court of Chancery against directors Gregory Barrett, Sheila Hopkins, Timothy O’Shea, Juliane Park and Janet Widmann, as defendants, and the Company, as nominal defendant (the “Delaware Litigation”) seeking a declaration that the individual defendants breached their fiduciary duties and enjoining them from enforcing the nomination deadline under the Company’s Amended and Restated Bylaws in connection with the 2023 annual meeting of stockholders, or in the alternative, a declaration that the Company must hold a special meeting of the stockholders on June 2, 2023. Mr. Plants and Mr. Mowry filed a motion for expedited proceedings with their complaint. Mr. Plants and Mr. Mowry subsequently agreed that the determination made by the Special Committee of the Board to hold a special meeting of the stockholders on June 9, 2023 mooted their request in the Delaware Litigation for a declaration that the Company hold a special meeting of the stockholders. On April 18, 2023, the Court of Chancery denied Mr. Plants and Mr. Mowry’s motion for expedited proceedings. On May 16, 2023, Mr. Mowry filed a letter with the Court of Chancery disclosing that he had resolved his dispute with the defendants and agreed to dismiss his claims with prejudice. On May 17, 2023, the Court of Chancery granted an order for voluntary dismissal of Mr. Mowry as a plaintiff in the Delaware Litigation. Mr. Plants subsequently publicly voiced opposition to certain aspects of the Company's corporate governance and strategy but did not submit a notice of nomination of director candidates for the Company’s 2023 annual meeting of stockholders and did not purport to nominate any director candidates at the Company’s annual meeting of stockholders held on July 13, 2023. Due to Plaintiff’s failure to amend his Complaint within the time required by the Court’s order dated October 6, 2023, the Delaware Litigation was dismissed with prejudice. On October 5, 2023, Mr. Plants filed a Sarbanes-Oxley (“SOX”) discrimination claim (the “SOX Whistleblower Complaint”) with the U.S. Department of Labor Occupational Safety and Health Administration (“OSHA”). Mr. Plants alleges that he was terminated on April 11, 2023, in retaliation for reporting to the Board of Directors (the “Board”) his concerns that budgeting and guiding to higher forecasts for 2023 would be misleading to shareholders. The SOX Whistleblower Complaint referenced the April 3, 2023 letter from Mr. Plants to the Company’s Board that articulated Mr. Plants’ concerns. The Company received notice of the SOX Whistleblower Complaint on November 8, 2023. On December 7, 2023, Mr. Plants made an arbitration demand in JAMS against the Company, Mr. Barrett, Ms. Hopkins, Mr. O’Shea, Ms. Park and Ms. Widmann for claims related to the termination of his employment (the “Arbitration Demand”). Mr. Plants alleges several claims: breach of his change of control and severance agreement; wrongful termination; retaliation in violation of California’s whistleblower laws; retaliation in violation of SOX; defamation/libel; tortious interference with prospective economic advantage; and breach of oral contract. He seeks compensatory, special, and punitive damages, as well as reinstatement, civil penalties, and attorneys’ fees and costs. Mr. Plants and the Company have agreed to a settlement of all claims against the Company and the parties listed in the Arbitration Demand. The OSHA investigation was officially closed on April 26, 2024, and the JAMS arbitration was dismissed as of April 19, 2024. As of March 31, 2024, and December 31, 2023, the Company had accru ed $3.6 million a nd $3.3 million, respectively, related to various pending commercial and product liability lawsuits. The Company does not believe that a material loss in excess of accrued amounts is reasonably likely. |
Debt
Debt | 3 Months Ended |
Mar. 31, 2024 | |
Debt Disclosure [Abstract] | |
Debt | Debt Convertible notes, net of unamortized debt issuance costs The following table presents the outstanding principal amount and carrying value of the Company’s Convertible Notes (in thousands): March 31, December 31, Notes due in 2026 Outstanding principal amount $ 69,125 $ 69,125 Unamortized debt issuance costs (965) (1,084) Carrying Value $ 68,160 $ 68,041 Notes due in 2028 Outstanding principal amount $ 240,000 $ 240,000 Unamortized debt issuance costs (5,410) (5,714) Carrying Value $ 234,590 $ 234,286 Notes due in 2029 Outstanding principal amount $ 120,000 $ 120,000 Unamortized debt issuance costs (3,484) (3,632) Carrying Value $ 116,516 $ 116,368 Convertible notes, net $ 419,266 $ 418,695 Issuance of convertible notes due in 2026 In March 2021, the Company issued $138.3 million aggregate principal amount of 2026 Notes in a private placement offering. In May 2022, the Company entered into privately-negotiated exchange agreements with certain holders of the Company’s outstanding 2026 Notes. Following the exchange, approximately $69.1 million in aggregate principal amount of the 2026 Notes remained outstanding. The 2026 Notes bear interest at a rate of 2.25% per year payable semiannually in arrears on March 15 and September 15 of each year. Upon conversion, the 2026 Notes will be convertible into either cash, shares of the Company’s common stock or a combination thereof, at the Company’s election. The Convertible notes are presented as Convertible notes, net of unamortized debt issuance costs, on the condensed consolidated balance sheet. The aggregate proceeds from the offering were approximately $133.6 million, net of issuance costs, including initial purchaser fees. Each $1,000 principal amount of the 2026 Notes is initially convertible into 30.1427 shares of the Company’s common stock, which is equivalent to a conversion price of approximately $33.18 per share. The conversion rate for the 2026 Notes is subject to adjustment for certain events as set forth in the indenture governing the 2026 Notes. The 2026 Notes will mature on March 15, 2026, unless earlier converted, redeemed, or repurchased in accordance with the terms of the 2026 Notes. Issuance of convertible notes due in 2028 In May 2022, the Company issued $240.0 million aggregate principal amount of 2028 Notes. A total of $230.0 million of aggregate principal amount of 2028 Notes was issued in a private placement offering and concurrently with this private placement, the Company entered into a purchase agreement with Voce Capital Management LLC ("Voce"), an entity affiliated with J. Daniel Plants, the Company’s former Executive Chairperson, pursuant to which the Company issued to Voce $10.0 million aggregate principal amount of 2028 Notes on the same terms and conditions. The 2028 Notes are presented as Convertible notes, net of unamortized debt issuance costs, on the condensed consolidated balance sheet. The aggregate proceeds from the offering of 2028 Notes were approximately $232.4 million, net of issuance costs, including initial purchaser fees. The 2028 Notes bear interest at a rate of 2.25% per year payable semiannually in arrears on June 1 and December 1 of each year, beginning on December 1, 2022. Upon conversion, the 2028 Notes will be convertible into either cash, shares of the Company’s common stock or a combination thereof, at the Company’s election. Each $1,000 principal amount of the 2028 Notes is initially convertible into 18.9860 shares of the Company’s common stock, which is equivalent to an initial conversion price of approximately $52.67 per share. The conversion rate for the 2028 Notes is subject to adjustment for certain events as set forth in the indenture governing the 2028 Notes. The 2028 Notes will mature on June 1, 2028, unless earlier converted, redeemed, or repurchased in accordance with the terms of the 2028 Notes. Issuance of convertible notes due in 2029 In December 2022, the Company issued $120.0 million aggregate principal amount of 2029 Notes in a private placement offering. The 2029 Notes bear interest at a rate of 4.00% per year payable semiannually in arrears on June 1 and December 1 of each year. Upon conversion, the 2029 Notes will be convertible into either cash, shares of the Company’s common stock or a combination thereof, at the Company’s election. The convertible notes are presented as Convertible notes, net of unamortized debt issuance costs, on the condensed consolidated balance sheet. The aggregate proceeds from the offering were approximately $115.8 million, net of issuance costs, including initial purchaser fees. Each $1,000 principal amount of the 2029 Notes is initially convertible into 17.1378 shares of the Company’s common stock, which is equivalent to a conversion price of approximately $58.35 per share. The conversion rate for the 2029 Notes is subject to adjustment for certain events as set forth in the indenture governing the 2029 Notes. The 2029 Notes will mature on June 1, 2029, unless earlier converted, redeemed, or repurchased in accordance with the terms of the 2029 Notes. 2026 Notes exchange In May 2022, the Company entered into privately-negotiated exchange agreements with certain holders of the Company’s outstanding 2026 Notes with respect to the exchange of $45.8 million in cash (excluding $0.3 million in cash for the payment of accrued interest) and 1,354,348 shares of common stock for $69.1 million in aggregate principal amount of the Company’s outstanding 2026 Notes (the “2026 Notes Exchange”). Immediately following the closing of the 2026 Notes Exchange, approximately $69.1 million in aggregate principal amount of the 2026 Notes remained outstanding. Conversion and other features 2026 Notes: Holders may convert their 2026 Notes at their option prior to the close of business on the business day immediately preceding December 15, 2025, in multiples of $1,000 principal amount, only under the following circumstances: • During any fiscal quarter (and only during such fiscal quarter), if the last reported sale price of the common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on and including, the last trading day of the immediately preceding fiscal quarter, is greater than or equal to 130% of the conversion price for the 2026 Notes on each applicable trading day; • During the five-business day period after any five consecutive trading day period (the “measurement period”) in which the “trading price” per $1,000 principal amount of 2026 Notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price of the Company's common stock and the conversion rate on each such trading day; • The Company calls such 2026 Notes for redemption, at any time prior to the close of business on the second scheduled trading day immediately preceding the redemption date; or • Upon the occurrence of specified corporate events. On or after December 15, 2025, and until the close of business on the second scheduled trading day immediately preceding the maturity date, holders may convert all or any portion of their 2026 Notes, in multiples of $1,000 principal amount, at the option of the holder regardless of the foregoing circumstances. The circumstances described in the bullets of the paragraph above were not met during the first quarter of 2024. As of March 31, 2024, the 2026 Notes are not convertible. The 2026 Notes may become convertible in future periods. Upon any conversion requests of the 2026 Notes, the Company would be required to pay or deliver, as the case may be, cash, shares of its common stock, or a combination of cash and shares of its common stock, at the Company’s election with respect to such conversion requests. To the extent there are any conversion requests during the twelve months ending March 31, 2025, the Company intends to settle such conversion requests in shares of common stock. Therefore, as of March 31, 2024, the 2026 Notes have been included as Long-term debt on the condensed consolidated balance sheet. The Company may not redeem the 2026 Notes prior to March 20, 2024. On or after March 20, 2024, the Company may redeem for cash all or any portion of the 2026 Notes, at the Company’s option, if the last reported sale price of the Company’s common stock has been at least 130% of the conversion price then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period (including the last trading day of such period) ending on, and including, the trading day immediately preceding the date on which the Company provides notice of redemption at a redemption price equal to 100% of the principal amount of the 2026 Notes to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date. If the Company elects to redeem fewer than all of the outstanding 2026 Notes, at least $50.0 million aggregate principal amount of 2026 Notes must be outstanding and not subject to redemption as of the relevant redemption notice date. If a specified corporate event occurs, 2026 Note holders have the option to require the Company to repurchase any portion or all of their 2026 Notes in $1,000 principal increments for cash. The price for such repurchase is calculated as 100% of the principal amounts of 2026 Notes, plus accrued and unpaid interest to the day immediately preceding the Fundamental Change repurchase date. Additionally, holders of the 2026 Notes who convert in connection with a fundamental change are, under certain circumstances, entitled to an increase in conversion rate. The 2026 Notes are general senior unsecured obligations that rank senior to any of the Company’s indebtedness that is explicitly subordinated to the 2026 Notes. The 2026 Notes have equal rank in right of payment with all existing and future unsecured indebtedness that is not subordinated to the 2026 Notes (including the 2028 Notes and 2029 Notes). The 2026 Notes will be junior to any of the Company’s secured indebtedness to the extent of the value of the assets securing such indebtedness. The estimated fair value of the 2026 Notes was approximately $26.5 million as of March 31, 2024, which the Company determined through consideration of market prices. The fair value measurement is classified as Level 2, as defined in Note 3. 2028 Notes: Holders may convert their 2028 Notes at their option, in multiples of $1,000 principal amount, only under the following circumstances: • During any fiscal quarter commencing after the fiscal quarter ending on September 30, 2022 (and only during such fiscal quarter), if the last reported sale price of the common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on and including, the last trading day of the immediately preceding fiscal quarter, is greater than or equal to 130% of the conversion price for the 2028 Notes on each applicable trading day; • During the five-business day period after any five consecutive trading day period (the “measurement period”) in which the “trading price” per $1,000 principal amount of 2028 Notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price of the Company's common stock and the conversion rate on each such trading day; • The Company calls such 2028 Notes for redemption, at any time prior to the close of business on the second scheduled trading day immediately preceding the redemption date; or • Upon the occurrence of specified corporate events. On or after March 1, 2028, and until the close of business on the second scheduled trading day immediately preceding the maturity date, holders may convert all or any portion of their 2028 Notes, in multiples of $1,000 principal amount, at the option of the holder regardless of the foregoing circumstances. The circumstances described in the bullets in the paragraph above were not met during the first quarter of 2024. As of March 31, 2024, the 2028 Notes are not convertible. The 2028 Notes may become convertible in future periods. Upon any conversion requests of the 2028 Notes, the Company would be required to pay or deliver, as the case may be, cash, shares of its common stock, or a combination of cash and shares of its common stock, at the Company’s election with respect to such conversion requests. To the extent there are any conversion requests during the twelve months ending September 30, 2024, the Company intends to settle such conversion requests in shares of common stock. Therefore, as of March 31, 2024, the 2028 Notes have been included as long-term debt on the condensed consolidated balance sheet. The Company may not redeem the 2028 Notes prior to June 5, 2025. On or after June 5, 2025, the Company may redeem for cash all or any portion of the 2028 Notes, at the Company’s option, if the last reported sale price of the Company’s common stock has been at least 130% of the conversion price then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period (including the last trading day of such period) ending on, and including, the trading day immediately preceding the date on which the Company provides notice of redemption at a redemption price equal to 100% of the principal amount of the 2028 Notes to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date. If the Company elects to redeem fewer than all of the outstanding 2028 Notes, at least $100.0 million aggregate principal amount of 2028 Notes must be outstanding and not subject to redemption as of the relevant redemption notice date. If a specified corporate event occurs, note holders have the option to require the Company to repurchase any portion or all of their 2028 Notes in $1,000 principal increments for cash. The price for such repurchase is calculated as 100% of the principal amounts of 2028 Notes, plus accrued and unpaid interest to the day immediately preceding the Fundamental Change repurchase date. Additionally, holders of the 2028 Notes who convert in connection with a fundamental change are, under certain circumstances, entitled to an increase in conversion rate. The 2028 Notes are general senior unsecured obligations that rank senior to any of the Company’s indebtedness that is explicitly subordinated to the 2028 Notes. The 2028 Notes have equal rank in right of payment with all existing and future unsecured indebtedness that is not subordinated to the 2028 Notes (including the 2026 Notes and 2029 Notes). The 2028 Notes will be junior to any of the Company’s secured indebtedness to the extent of the value of the assets securing such indebtedness. The estimated fair value of the 2028 Notes was approximately $57.1 million as of March 31, 2024, which the Company determined through consideration of market prices. The fair value measurement is classified as Level 2, as defined in Note 3. 2029 Notes: Holders may convert their 2029 Notes at their option prior to the close of business on the business day immediately preceding March 1, 2029 in multiples of $1,000 principal amount, only under the following circumstances: • During any fiscal quarter commencing after the fiscal quarter ending March 31, 2023 (and only during such fiscal quarter), if the last reported sale price of the common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on and including, the last trading day of the immediately preceding fiscal quarter, is greater than or equal to 130% of the conversion price for the 2029 Notes on each applicable trading day; • During the five-business day period after any five consecutive trading day period (the “measurement period”) in which the “trading price” per $1,000 principal amount of 2029 Notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price of the Company's common stock and the conversion rate on each such trading day; • The Company calls such 2029 Notes for redemption, at any time prior to the close of business on the second scheduled trading day immediately preceding the redemption date; or • Upon the occurrence of specified corporate events. On or after March 1, 2029, and until the close of business on the second scheduled trading day immediately preceding the maturity date, holders may convert all or any portion of their 2029 Notes, in multiples of $1,000 principal amount, at the option of the holder regardless of the foregoing circumstances. The circumstances described in the bullets of the paragraph above were not met during the first quarter of 2024. As of March 31, 2024, the 2029 Notes are not convertible. The 2029 Notes may become convertible in future periods. Upon any conversion requests of the 2029 Notes, the Company would be required to pay or deliver, as the case may be, cash, shares of its common stock, or a combination of cash and shares of its common stock, at the Company’s election with respect to such conversion requests. To the extent there are any conversion requests during the twelve months ending September 30, 2024, the Company intends to settle such conversion requests in shares of common stock. Therefore, as of March 31, 2024, the 2029 Notes have been included as Long-term debt on the consolidated balance sheet. The Company may not redeem the 2029 Notes prior to December 5, 2025. On or after December 5, 2025, the Company may redeem for cash all or any portion of the 2029 Notes, at the Company’s option, if the last reported sale price of the Company’s common stock has been at least 130% of the conversion price then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period (including the last trading day of such period) ending on, and including, the trading day immediately preceding the date on which the Company provides notice of redemption at a redemption price equal to 100% of the principal amount of the 2029 Notes to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date. If the Company elects to redeem fewer than all of the outstanding 2029 Notes, at least $100.0 million aggregate principal amount of 2029 Notes must be outstanding and not subject to redemption as of the relevant redemption notice date. If a specified corporate event occurs, 2029 Note holders have the option to require the Company to repurchase any portion or all of their 2029 Notes in $1,000 principal increments for cash. The price for such repurchase is calculated as 100% of the principal amounts of 2029 Notes, plus accrued and unpaid interest to the day immediately preceding the Fundamental Change repurchase date. Additionally, holders of the 2029 Notes who convert in connection with a fundamental change are, under certain circumstances, entitled to an increase in conversion rate. The 2029 Notes are general senior unsecured obligations that rank senior to any of the Company’s indebtedness that is explicitly subordinated to the 2029 Notes. The 2029 Notes have equal rank in right of payment with all existing and future unsecured indebtedness that is not subordinated to the 2029 Notes (including the 2026 Notes and 2028 Notes). The 2029 Notes will be junior to any of the Company’s secured indebtedness to the extent of the value of the assets securing such indebtedness. The estimated fair value of the 2029 Notes was approximately $25.8 million as of March 31, 2024, which the Company determined through consideration of market prices. The fair value measurement is classified as Level 2, as defined in Note 3 . Certain Covenants for the Convertible Notes Pursuant to the terms of the indentures that govern the Convertible Notes, the Company is required to file with U.S. Bank Trust Company, National Association (the “ Trustee”), as trustee under each of the indentures governing the Convertible Notes, within 15 days after the same are required to be filed with the SEC (giving effect to any grace period provided by Rule 12b-25 under the Exchange Act), copies of any annual report on Form 10-K or quarterly reports on Form 10-Q that the Company is required to file with the SEC pursuant to Section 13 or 15(d) of the Exchange Act. To the extent the Company elects, the sole remedy for an event of default under the indenture governing a series of Convertible Notes relating to its failure to comply with this obligation (which shall occur upon failure by the Company for 60 days after receipt of written notice from the Trustee or the holders of 25% in aggregate principal amount the Convertible Notes of such series to comply with this obligation) shall, for the first 360 days after the occurrence of such an event of default, consist exclusively of the right for the holders of Convertible Notes of such series to receive additional interest on their Convertible Notes at a rate equal to (i) 0.25% per year for each day during the first 180 days after the occurrence and during the continuance of such event of default and (ii) 0.50% per year for each day from, and including, the 181st day to, but excluding, the 360th day after the occurrence and during the continuance of such event of default. On the 361st day after such event of default, if not previously cured or waived, the Convertible Notes of the applicable series shall be subject to acceleration pursuant to the terms of the indenture governing the Convertible Notes of such series. In the event the Company does not elect to pay additional interest on a series of Convertible Notes prior to the occurrence of an event of default relating to the Company’s failure to comply with this obligation, or the Company elects to make such payment but does not pay the additional interest on such Convertible Notes when due, the Convertible Notes of such series shall be immediately subject to acceleration at the election of either the Trustee or the holders of at least 25% in aggregate principal amount of the Convertible Notes of such series. Additionally, if at any time during the six-month period beginning on, and including, the date that is six months after the last date of original issuance of a series of Convertible Notes, the Company fails to timely file any document or report that it is required to file with the SEC pursuant to Section 13 or 15(d) of the Exchange Act, as applicable (after giving effect to all applicable grace period thereunder and other than reports on Form 8-K), or the Convertible Notes of such series are not otherwise freely tradable pursuant to Rule 144 as promulgated under the Securities Act of 1933, as amended, the Company shall pay additional interest on such Convertible Notes at a rate of 0.50% per year for each day during such period for which the Company’s failure to file has occurred and is continuing or such Convertible Notes are not otherwise freely tradable pursuant to Rule 144. Additional interest pursuant to the foregoing accrued on the outstanding principal amount of the 2029 Notes from November 24, 2023 to the one-year anniversary of the last date of original issuance of the 2029 Notes on December 12, 2023 was not material. The Convertible Notes contain additional customary operating covenants, which include restrictions on the Company’s ability to undergo a merger or consolidation transaction, or transfer or lease substantially all of the consolidated properties and assets of the Company. The Convertible Notes do not contain any financial covenants or restrictions on the payment of dividends, the issuance of other indebtedness or the issuance or repurchase of securities by the Company. Capped Call Transactions In connection with the issuance of each series of the Convertible Notes, the Company entered into capped call transactions with certain option counterparties. The capped call transactions are generally intended to reduce the potential dilution of the Company's common stock upon any conversion or settlement of the applicable series of Convertible Notes or to offset any cash payment the Company is required to make in excess of the principal amount upon conversion of the applicable series of Convertible Notes, as the case may be, with such reduction or offset subject to a cap based on the cap price. If the market price per share of the Company’s common stock exceeds the cap price of the applicable capped call transactions, then the Company’s stock would experience some dilution and/or such capped call transactions would not fully offset the potential cash payments, in each case, to the extent the then-market price per share of its common stock exceeds the applicable cap price. In connection with the offering of the 2026 Notes, the Company purchased from the option counterparties capped call options that in the aggregate relate to the total number of shares of the Company's common stock underlying the convertible notes, with a strike price equal to the conversion price of the convertible notes and with an initial cap price equal to $45.535, which represented a 75% premium over the last reported sale price of the Company's common stock of $26.02 per share on March 4, 2021, with certain adjustments to the settlement terms that reflect standard anti-dilution provisions. The capped call transactions expire over 40 consecutive scheduled trading days ended on March 12, 2026. The capped calls were purchased for $16.1 million. In connection with the offering of the 2028 Notes, the Company purchased from the option counterparties capped call options that in the aggregate related to the total number of shares of the Company's common stock underlying the 2028 Notes sold to the initial purchasers in the offering of 2028 Notes, with a strike price equal to the conversion price of the 2028 Notes and with an initial cap price equal to $82.62, which represents a 100% premium over the last reported sale price of the Company's common stock of $41.31 per share on May 24, 2022, with certain adjustments to the settlement terms that reflect standard anti-dilution provisions. These capped call transactions expire over 40 consecutive scheduled trading days ended on May 30, 2028. The capped calls were purchased for $32.0 million, net of issuance costs. In connection with the offering of the 2029 Notes, the Company purchased from the option counterparties capped call options that in the aggregate related to the total number of shares of the Company's common stock underlying the 2029 Notes sold to the initial purchasers in the offering of 2029 Notes, with a strike price equal to the conversion price of the 2029 Notes and with an initial cap price equal to $99.21, which represents a 100% premium over the last reported sale price of the Company's common stock of $49.66 per share on December 7, 2022, with certain adjustments to the settlement terms that reflect standard anti-dilution provisions. These capped call transactions expire over 40 consecutive scheduled trading days ended on May 30, 2029. The capped calls were purchased for $25.1 million, net of issuance costs. The Company evaluated the capped call transactions under authoritative accounting guidance and determined that they should be accounted for as a separate transaction and classified as a net reduction to Additional paid-in capital within stockholders’ equity with no recurring fair value measurement recorded. The Company early adopted ASU 2020-6, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging— Contracts in Entity’s Own Equity (Subtopic 815-40) on January 1, 2021. In accordance with Subtopic 470-20 and 815-40, as revised by ASU 2020-6, the Company records the convertible notes in long-term debt with no separation between the Notes and the conversion option. Each reporting period, the Company will determine whether any criteria is met for the note holders to have the option to redeem the Notes early, which could result in a change in the classification of the Notes to current liabilities. Debt Issuance Cost The issuance costs related to the Convertible Notes are presented in the condensed consolidated balance sheet as a direct deduction from the carrying amount of the Convertible Notes. The issuance costs are amortized using an effective interest method basis over the term of the Convertible Notes. The effective interest rates on the 2026 Notes, 2028 Notes, and 2029 Notes are 2.98%, 2.82%, and 4.63%, respectively. Interest expense for the three month periods ended March 31, 2024 and 2023, including the amortization of debt issuance cost, totaled approximately $3.5 million for both periods. Loan and Security Agreement On July 9, 2020, the Company entered into a Loan and Security Agreement with Silicon Valley Bank for a four-year secured revolving loan facility (“SVB Revolving Line of Credit”) in an aggregate principal amount of up to $30.0 million. The Revolving Line of Credit, originally set to mature on July 9, 2024, was terminated by the Company on April 3, 2024. |
Segment Reporting
Segment Reporting | 3 Months Ended |
Mar. 31, 2024 | |
Segment Reporting [Abstract] | |
Segment Reporting | Segment Reporting Segment reporting is based on the “management approach,” following the method that management organizes the Company’s reportable segments for which separate financial information is made available to, and evaluated regularly by, the chief operating decision maker in allocating resources and in assessing performance. The Company’s chief operating decision maker ("CODM") is its Chief Executive Officer ("CEO"), who makes decisions on allocating resources and assessing performance. In the three months ended December 31, 2023, the Company concluded a realignment of its operating segments to further drive its long-term strategic objectives. At the direction of the CEO, management reorganized its management reporting structure and began to manage its operations under one segment structure. The CEO, in making operating decisions, reviews consolidated financial information, accompanied by disaggregated information about revenues by geography and product. All of the Company’s principal operations and decision-making functions are located in the U.S. Substantially all of the Company's long-lived assets are located in the U.S. The Company reassessed its reportable segments in the fourth quarter of fiscal year 2023 and determined it had one consolidated reportable segment beginning in the three months ended December 31, 2023. The following table presents a summary of revenue by geography and product category for the three months ended March 31, 2024 and 2023 (in thousands): Three Months Ended 2024 2023 Revenue mix by geography: United States $ 14,070 $ 22,501 Japan 7,598 12,908 Asia, excluding Japan 4,912 6,731 Europe 4,575 5,118 Rest of the World 7,638 7,268 Total consolidated revenue $ 38,793 $ 54,526 Revenue mix by product category: Systems $ 24,260 $ 34,542 Consumables 4,655 6,447 Skincare 4,200 8,132 Total product revenue 33,115 49,121 Service 5,678 5,405 Total consolidated revenue $ 38,793 $ 54,526 |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2024 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Description of Operations and Principles of Consolidation | Description of Operations and Principles of Consolidation Cutera, Inc. (“Cutera” or the “Company”) develops, manufactures, distributes, and markets energy-based product platforms for medical practitioners, enabling them to offer treatments to their customers. In addition, the Company distributes third-party manufactured skincare products, until the termination of distribution agreement in February 2024, and Secret PRO and Secret RF systems and consumables. The Company currently markets the following system platforms: AviClear, enlighten, excel HR, excel V/V+, truSculpt, Secret PRO, Secret DUO, Secret RF, xeo, and xeo+ — each of which enables medical practitioners to perform procedures including treatment for acne, body contouring, skin resurfacing and revitalization, hair and tattoo removal, removal of benign pigmented lesions, and vascular conditions. Several of the Company’s systems offer multiple hand pieces and applications, providing customers the flexibility to upgrade their systems. The sale of systems, hand pieces, upgrade of systems, and leasing and direct sales of AviClear devices (collectively “Systems” revenue); replacement hand pieces, truSculpt cycle refills, truFlex cycle refills, AviClear treatment fees, and single use disposable tips applicable to Secret systems (collectively “Consumables” revenue); and the distribution of third-party manufactured skincare products (“Skincare”) revenue are collectively classified as “Products” revenue. In addition to Products revenue, the Company generates revenue from the sale of post-warranty service contracts and service parts and labor for the repair and maintenance of products that are out of warranty, all of which are collectively classified as “Service” revenue. |
Liquidity and Management's Plans | Liquidity and Management’s Plans When preparing financial statements, management has the responsibility to evaluate if the Company has adequate liquidity to continue to operate for the next twelve months. In performing this assessment, management considered the Company's current financial condition and liquidity sources, including current funds, forecasted future cash flows and unconditional obligations due over the next twelve months. In addition, management evaluated the history of the Company's financial performance, and determined that the Company has had a historic trend of operating losses, which continues to have an unfavorable impact on the Company's overall liquidity. Most recently, the Company reported net losses of $22.8 million for the three months ended March 31, 2024 and $162.8 million for the year ended December 31, 2023. The Company believes that it will continue as a going concern for the twelve months from the issuance of its condensed consolidated financial statements. The accompanying condensed consolidated financial statements are prepared in accordance with generally accepted accounting principles applicable to a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company’s continued operations will depend on several factors, including but not limited to, growth of revenues from its revised business model for AviClear, which entails transitioning from a lease model to a direct sales model, maintaining or increasing revenues from sales of legacy systems, consumables and services, achieving cost savings as a result of workforce reductions implemented in the fourth quarter of 2023, restructuring of supplier and manufacturing relationships, and initiatives to improve inventory and receivables management. Failure to increase revenue, achieve cost savings, raise additional financing or re-finance the existing convertible notes when they become due, would adversely affect the Company’s ability to achieve its intended business objectives. There can be no assurances that financing will be available on terms favorable to the Company, if at all, and delays may occur in completing the operating activities. |
Basis of Presentation | Basis of Presentation In the opinion of the Company, the accompanying unaudited condensed consolidated financial statements included in this report reflect all adjustments necessary for a fair statement of its condensed consolidated balance sheets as of March 31, 2024 and December 31, 2023, and its condensed consolidated statements of operations, condensed consolidated statements of comprehensive loss, condensed consolidated statements of changes in stockholders' deficit, and condensed consolidated statements of cash flows, for the three months ended March 31, 2024, and 2023, respectively. The December 31, 2023 condensed consolidated balance sheet was derived from audited financial statements, but does not include all disclosures required by generally accepted accounting principles in the United States of America (“GAAP”). The results for interim periods are not necessarily indicative of results for the entire year or any other interim period. All intercompany accounts and transactions have been eliminated upon consolidation. The accompanying condensed consolidated financial statements should be read in conjunction with the Company’s previously filed audited financial statements and the related notes thereto included in the Company’s annual report on Form 10-K for the year ended December 31, 2023, filed with the Securities and Exchange Commission (the “SEC”) on May 10, 2024. |
Reclassification | Reclassification The Company reclassified the interest expense portion previously recorded in interest income (expense), net to other income (expense), net on the condensed consolidated statement of operations. Corresponding reclassifications of prior period amounts have been made in the Company's condensed consolidated statement of operations to conform to the current period presentation. These reclassifications had no effect on the reported net loss. |
Risks and Uncertainties | Risks and Uncertainties The Company's future results of operations involve a number of risks and uncertainties. Factors that could affect the Company's future operating results and cause actual results to vary materially from expectations include, but are not limited to, rapid technological change, continued acceptance of the Company's products, stability of global financial markets, cybersecurity breaches and other disruptions that could compromise the Company’s information or results, business disruptions that are caused by natural disasters or pandemic events, management of international activities, competition from substitute products and larger companies, the Company's ability to obtain and maintain regulatory approvals, government regulations and oversight, patent and other types of litigation, the Company's ability to protect proprietary technology from counterfeit versions of the Company's products and its intellectual property rights generally, the successful execution of new product launches, the continuation of strategic relationships, such as the Company's distribution of third-party products, and dependence on key individuals. |
Accounting Policies | Accounting Policies |
Leases | Leases |
Use of Estimates | Use of Estimates The preparation of condensed consolidated financial statements in conformity with GAAP requires the Company’s management to make estimates and assumptions that affect the amounts reported of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the accompanying notes, and the reported amounts of revenue and expenses during the reported periods. Actual results could differ materially from those estimates. On an ongoing basis, management evaluates its estimates, including those related to warranty obligations, sales commissions, allowance for credit losses, sales allowances, fair value of investments, valuation of inventories, fair value of goodwill, useful lives of property and equipment, impairment testing for long-lived assets, implicit and incremental borrowing rates related to the Company’s leases, variables used in calculating the fair value of the Company's equity awards, expected achievement of performance-based vesting criteria and management performance bonuses, assumptions used in operating and sales-type lease classifications, the standalone selling price of the Company's products and services, the period of benefit used to capitalize and amortize contract acquisition costs, variable considerations, contingent liabilities, recoverability of deferred tax assets, residual value of leased equipment, lease term and effective income tax rates. Management bases estimates on historical experience and on various other assumptions that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities. |
Distribution of Third-Party Products | Distribution of Third-Party Products The Company generated revenue from the distribution of skincare products, which were manufactured by ZO Skin Health, Inc. (“ZO”), and sold in the Japanese market. In the three months ended March 31, 2024, and 2023, revenue from the distribution of skincare products was $4.2 million and $8.1 million, respectively, representing 11% and 15% of the Company’s consolidated revenue, respectively. On February 28, 2024, the Company and its Japanese subsidiary, Cutera KK, entered into a termination agreement (the “Termination Agreement”) with ZO USA and its Japanese subsidiary, ZO Skin Health GK (“ZO Japan” and together with ZO USA and their affiliates, “ZO”), which, among other things, (i) terminates all agreements related to the distribution by the Company of ZO’s products in Japan effective immediately, (ii) provides for the orderly transition of the distribution of ZO products to ZO, (iii) transfers certain Company employees dedicated to the distribution of ZO products to ZO, (iv) transfers certain customer contracts related to ZO products from the Company to ZO and (v) transfers certain inventory and assets related to the distribution of ZO products from the Company to ZO. The Termination Agreement requires ZO to pay the Company $5.75 million within three business days of the execution of the Termination Agreement and make a second payment of $5.75 million, less any offsets under the Termination Agreement (including, but not limited to, 42.2% of the Company’s net revenue for sales of ZO products under the Distribution Agreement between January 1, 2024 and February 28, 2024), upon the earlier of (a) the completion the transition of regulatory and distribution activities such that ZO is able to fulfill product orders by customers in Japan, as determined by ZO and the Company, and (b) June 14, 2024. The Company received the first payment of $5.75 million on February 29, 2024, and received a second payment of $2.37 million on April 1, 2024, which was net of $1.6 million in amounts owed by Cutera. The In the three months ended March 31, 2024, the Company recorded the net gain of $9.7 million resulting from the early termination proceeds received and the transfer of certain assets and liabilities as gain on early termination of distribution agreement on the Company's condensed consolidated statement of operations. |
Fair Value of Financial Instr_2
Fair Value of Financial Instruments (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Fair Value Disclosures [Abstract] | |
Schedule of Financial Assets Measured and Recognized at Fair Value on a Recurring Basis | As of March 31, 2024, financial assets measured and recognized at fair value on a recurring basis and classified under the appropriate level of the fair value hierarchy as described above were as follows (in thousands): March 31, 2024 Level 1 Cash equivalents: Money market funds $ 89,458 As of December 31, 2023, financial assets and liabilities measured and recognized at fair value on a recurring basis and classified under the appropriate level of the fair value hierarchy as described above were as follows (in thousands): December 31, 2023 Level 1 Cash equivalents: Money market funds $ 123,387 |
Balance Sheet Details (Tables)
Balance Sheet Details (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Inventories , Net | Inventories cons ist of the following (in thousands): March 31, December 31, Raw materials $ 51,870 $ 36,970 Work in process 1,978 889 Finished goods 19,621 24,741 Total $ 73,469 $ 62,600 of the following (in thousands): March 31, December 31, Raw materials $ 12,864 $ 8,672 Work in process 1,332 2,049 Finished goods 6,386 5,562 Total $ 20,582 $ 16,283 |
Schedule of Other Current Assets and Prepaid Expenses | Other current assets and a prepaid expenses consist of the following (in thousands): March 31, December 31, Sale tax and VAT receivable $ 6,884 $ 6,307 Deposits with vendors 6,738 9,501 Prepayments 2,933 3,819 Distribution agreement settlement receivable 2,374 — Other 365 225 Total $ 19,294 $ 19,852 |
Schedule of Property and Equipment, Net | Property and equipment, net consi sts of the following (in thousands): March 31, December 31, Leasehold improvements $ 1,035 $ 1,010 AviClear devices 33,936 38,490 Office equipment and furniture 1,883 1,884 Machinery and equipment 4,578 4,944 Assets under construction 1,456 1,274 42,888 47,602 Less: Accumulated depreciation (10,924) (10,327) Property and equipment, net $ 31,964 $ 37,275 |
Schedule of Accrued Liabilities | Accrued liabilities c onsist of the following (in thousands): March 31, December 31, Bonus and payroll-related accruals $ 14,647 $ 13,949 Accrued sales tax 6,531 6,325 Liability for inventory in transit 5,004 5,461 Sales and marketing accruals 4,100 4,929 Accrued interest 3,465 1,304 Product warranty 2,472 2,593 Jabil settlement obligation, net 750 8,908 Other accrued liabilities 10,150 11,586 Total $ 47,119 $ 55,055 |
Product Warranty (Tables)
Product Warranty (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Product Warranties Disclosures [Abstract] | |
Schedule of Product Warranty Liability Accrual | The following table provides the changes in the product warranty accrual for the three months ended March 31, 2024 and 2023 (in thousands): Three Months Ended 2024 2023 Beginning Balance $ 2,593 $ 3,254 Add: Accruals for warranties issued during the period 1,156 1,016 Less: Settlements made during the period (1,277) (1,116) Ending Balance $ 2,472 $ 3,154 |
Deferred Revenue (Tables)
Deferred Revenue (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Deferred Service Contract Revenue | The following table provides changes in the deferred revenue balance for the three months ended March 31, 2024 and 2023 (in thousands): Three Months Ended 2024 2023 Beginning balance $ 11,916 $ 13,498 Add: Payments received from current period sales 3,850 6,045 Less: Revenue recognized from current period sales (572) (615) Less: Revenue recognized from beginning balance (4,739) (5,229) Ending balance $ 10,455 $ 13,699 |
Stockholders' Equity and Stoc_2
Stockholders' Equity and Stock-based Compensation Expense (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Share-Based Payment Arrangement [Abstract] | |
Schedule of Activity under the 2019 Plan | Activity under the Company's equity incentive plans is summarized as follows: Shares Available for Grant Balance, December 31, 2023 3,554,537 Additional shares reserved — Options and stock awards granted (649,500) Stock awards canceled / forfeited / expired 32,396 Options canceled / forfeited / expired 43,582 Balance, March 31, 2024 2,981,015 Options Outstanding Number of Stock Options Outstanding Weighted Average Exercise Price Weighted Average Remaining Term Balance, December 31, 2023 1,282,240 $ 17.97 8.21 Options granted 520,000 $ 2.11 Options exercised — $ — Options canceled / forfeited / expired (43,582) $ 33.88 Balance, March 31, 2024 1,758,658 $ 12.89 7.87 Stock Awards Outstanding Number of Awards Outstanding Weighted Average Grant Date Fair Value per Share Balance, December 31, 2023 909,862 $ 20.46 Stock awards granted 110,000 $ 2.11 Awards vested (137,583) $ 25.53 Stock awards canceled / forfeited / expired (32,396) $ 27.11 Balance, March 31, 2024 849,883 $ 18.14 |
Schedule of Stock-based Compensation Expense | Stock-based compensation expense by financial statement line item recognized during the three months ended March 31, 2024 and 2023 was as follows (in thousands): Three Months Ended 2024 2023 Cost of revenue $ 149 $ 364 Sales and marketing 567 1,148 Research and development 305 693 General and administrative 1,088 1,181 Total stock-based compensation expense $ 2,109 $ 3,386 |
Net Loss Per Share (Tables)
Net Loss Per Share (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Earnings Per Share [Abstract] | |
Schedule of Computation of Basic and Diluted Net Loss | The following table sets forth the computation of basic and diluted net loss and the weighted average number of shares used in computing basic and diluted net loss per share (in thousands, except per share data): Three Months Ended 2024 2023 Numerator: Net loss used in calculating net loss per share, basic $ (22,778) $ (28,048) Denominator: Weighted average shares of common stock outstanding used in computing net loss per share, basic 19,991 19,776 Dilutive effect of incremental shares and share equivalents: Convertible notes — — Options — — RSUs — — PSUs — — ESPP — — Weighted average shares of common stock outstanding used in computing net loss per share, diluted 19,991 19,776 Net loss per share: Net loss per share, basic $ (1.14) $ (1.42) Net loss per share, diluted $ (1.14) $ (1.42) |
Schedule of Antidilutive Securities Excluded from Computation of Loss Per Share | The following numbers of shares outstanding, prior to the application of the treasury stock method and the if-converted method, were excluded from the computation of diluted net loss per common share for the periods presented because including them would have had an anti-dilutive effect (in thousands): Three Months Ended 2024 2023 Capped call 10,780 8,697 Convertible notes 8,697 8,697 Options 1,282 503 RSU's 682 370 PSU's 221 235 ESPP — 52 Total 21,662 18,554 |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Leases [Abstract] | |
Schedule of Supplemental Balance Sheet Information | Supplemental balance sheet information related to leases was as follows (in thousands): Leases Classification March 31, December 31, Assets Right-of-use assets Operating lease right-of-use assets $ 12,034 $ 10,055 Finance lease Property and equipment, net 2,228 2,516 Total leased assets $ 14,262 $ 12,571 Liabilities Classification March 31, December 31, Operating lease liabilities Operating lease liabilities, current Operating lease liabilities $ 3,231 $ 2,441 Operating lease liabilities, non-current Operating lease liabilities, net of current portion 10,046 8,887 Total Operating lease liabilities $ 13,277 $ 11,328 Finance lease liabilities Finance lease liabilities, current Accrued liabilities $ 744 $ 825 Finance lease liabilities, non-current Other long-term liabilities 888 1,064 Total Finance lease liabilities $ 1,632 $ 1,889 Weighted-average remaining lease term and discount rate, as of March 31, 2024, were as follows: Lease Term and Discount Rate March 31, 2024 Weighted-average remaining lease term (years) Operating leases 3.7 Finance leases 2.3 Weighted-average discount rate Operating leases 5.7 % Finance leases 9.5 % |
Schedule of Lease Costs | Lease costs during the three months ended March 31, 2024 and 2023 (in thousands) was as follows: Three Months Ended Lease costs Classification 2024 2023 Finance lease cost Amortization expense $ 274 $ 150 Finance lease cost Interest for finance lease $ 42 $ 20 Operating lease cost Operating lease expense $ 969 $ 891 Cash paid for amounts included in the measurement of lease liabilities during the three months ended March 31, 2024 and 2023 was as follows (in thousands): Three Months Ended Cash paid for amounts included in the measurement of lease liabilities Classification 2024 2023 Operating cash flow Finance lease $ 40 $ 20 Financing cash flow Finance lease $ 196 $ 124 Operating cash flow Operating lease $ 948 $ 699 |
Schedule of Maturities of Facility Leases | Maturities of operating facility leases were as follows as of March 31, 2024 (in thousands): As of March 31, 2024 Amount Remainder of 2024 $ 2,895 2025 3,981 2026 4,027 2027 3,299 2028 323 2029 and thereafter 143 Total lease payments 14,668 Less: imputed interest 1,391 Present value of lease liabilities $ 13,277 |
Schedule of Minimum Finance Lease Payments | As of March 31, 2024, the Company was committed to minimum lease payments for vehicles leased under long-term non-cancelable finance leases as follows (in thousands): As of March 31, 2024 Amount Remainder of 2024 $ 731 2025 697 2026 424 2027 16 Total lease payments 1,868 Less: imputed interest 236 Present value of lease liabilities $ 1,632 |
Schedule of Operating Lease Income | The following table summarizes the amount of operating lease income included in product revenue in the accompanying condensed consolidated statements of operations (in thousands): Three Months Ended March 31, 2024 2023 AviClear operating lease license fee revenue $ 1,162 $ 1,225 AviClear operating lease revenue 1,246 2,703 Total AviClear revenue $ 2,408 $ 3,928 |
Schedule of Minimum Future Lease Payments | The following is the minimum future lease payments as of March 31, 2024, under non-cancelable operating leases, assuming the minimum contractual lease term (in thousands): As of March 31, 2024 Amount Remainder of 2024 $ 5,615 2025 2,600 Total $ 8,215 |
Debt (Tables)
Debt (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Debt Disclosure [Abstract] | |
Schedule of Convertible Notes | The following table presents the outstanding principal amount and carrying value of the Company’s Convertible Notes (in thousands): March 31, December 31, Notes due in 2026 Outstanding principal amount $ 69,125 $ 69,125 Unamortized debt issuance costs (965) (1,084) Carrying Value $ 68,160 $ 68,041 Notes due in 2028 Outstanding principal amount $ 240,000 $ 240,000 Unamortized debt issuance costs (5,410) (5,714) Carrying Value $ 234,590 $ 234,286 Notes due in 2029 Outstanding principal amount $ 120,000 $ 120,000 Unamortized debt issuance costs (3,484) (3,632) Carrying Value $ 116,516 $ 116,368 Convertible notes, net $ 419,266 $ 418,695 |
Segment Reporting (Tables)
Segment Reporting (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Segment Reporting [Abstract] | |
Schedule of Revenue by Geography | The following table presents a summary of revenue by geography and product category for the three months ended March 31, 2024 and 2023 (in thousands): Three Months Ended 2024 2023 Revenue mix by geography: United States $ 14,070 $ 22,501 Japan 7,598 12,908 Asia, excluding Japan 4,912 6,731 Europe 4,575 5,118 Rest of the World 7,638 7,268 Total consolidated revenue $ 38,793 $ 54,526 Revenue mix by product category: Systems $ 24,260 $ 34,542 Consumables 4,655 6,447 Skincare 4,200 8,132 Total product revenue 33,115 49,121 Service 5,678 5,405 Total consolidated revenue $ 38,793 $ 54,526 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies - Narrative (Details) $ in Thousands | 2 Months Ended | 3 Months Ended | 12 Months Ended | |||||
Apr. 01, 2024 USD ($) | Mar. 31, 2024 USD ($) country | Feb. 29, 2024 USD ($) | Feb. 28, 2024 USD ($) | Feb. 28, 2024 USD ($) | Mar. 31, 2024 USD ($) country | Mar. 31, 2023 USD ($) | Dec. 31, 2023 USD ($) | |
Capitalized Contract Cost [Line Items] | ||||||||
Number of countries in which entity operates | country | 38 | 38 | ||||||
Net loss | $ 22,778 | $ 28,048 | $ 162,800 | |||||
Total net revenue | 38,793 | 54,526 | ||||||
Percent net revenue reduction to termination fee receivable | 42.20% | |||||||
Gain on early termination of distribution agreement | 9,708 | 0 | ||||||
Jabil settlement obligation, net | $ 750 | 750 | 8,908 | |||||
Litigation settlement receivable | 2,374 | 2,374 | 0 | |||||
Settlement Agreement, Non-Renewal Of Manufacturing Service Agreement | ||||||||
Capitalized Contract Cost [Line Items] | ||||||||
Settlement agreement, amount awarded to other party | $ 19,500 | |||||||
Settlement agreement, amount awarded from other party | 1,300 | |||||||
Settlement Agreement, Non-Renewal Of Manufacturing Service Agreement | Receipt of Inventories | ||||||||
Capitalized Contract Cost [Line Items] | ||||||||
Settlement agreement, amount awarded to other party | 13,500 | 13,500 | ||||||
Settlement Agreement, Non-Renewal Of Manufacturing Service Agreement | Purchased Equipment | ||||||||
Capitalized Contract Cost [Line Items] | ||||||||
Settlement agreement, amount awarded to other party | 300 | |||||||
Settlement Agreement, Non-Renewal Of Manufacturing Service Agreement | Compensation for Previously Incurred Expenses | ||||||||
Capitalized Contract Cost [Line Items] | ||||||||
Settlement agreement, amount awarded to other party | 5,700 | |||||||
Settlement Agreement, Non-Renewal Of Manufacturing Service Agreement | Compensation for Previously Incurred Expenses | Cost of revenue | ||||||||
Capitalized Contract Cost [Line Items] | ||||||||
Settlement agreement, amount awarded to other party | 5,700 | |||||||
Within three business days of execution of agreement | ||||||||
Capitalized Contract Cost [Line Items] | ||||||||
Termination fee receivable | 5,750 | $ 5,750 | ||||||
Proceeds from termination fees | $ 5,750 | |||||||
Between January 1st and February 23rd | ||||||||
Capitalized Contract Cost [Line Items] | ||||||||
Termination fee receivable | $ 5,750 | 5,750 | ||||||
Subsequent Event | ||||||||
Capitalized Contract Cost [Line Items] | ||||||||
Termination fee offset | $ 1,600 | |||||||
Subsequent Event | Between January 1st And February 28th | ||||||||
Capitalized Contract Cost [Line Items] | ||||||||
Proceeds from termination fees | $ 2,370 | |||||||
Skincare | ||||||||
Capitalized Contract Cost [Line Items] | ||||||||
Total net revenue | $ 4,200 | $ 4,200 | $ 8,132 | |||||
ZO Skin Health | Revenue Benchmark | Customer Concentration Risk | ||||||||
Capitalized Contract Cost [Line Items] | ||||||||
Concentration risk, percentage | 11% | 15% | ||||||
Ilooda Co. Ltd. | Revenue Benchmark | Customer Concentration Risk | ||||||||
Capitalized Contract Cost [Line Items] | ||||||||
Concentration risk, percentage | 6% | 4% | ||||||
Other long-term assets | Mobilization Costs | ||||||||
Capitalized Contract Cost [Line Items] | ||||||||
Capitalized contract costs | 1,500 | $ 1,500 | 2,100 | |||||
Other long-term assets | Capitalized Cloud Computing Set-up Cost | ||||||||
Capitalized Contract Cost [Line Items] | ||||||||
Capitalized contract costs | 2,400 | 2,400 | 2,700 | |||||
Accrued liabilities | ||||||||
Capitalized Contract Cost [Line Items] | ||||||||
Jabil settlement obligation, net | $ 800 | $ 800 | 19,500 | |||||
Litigation settlement receivable | $ 15,100 |
Cash, Cash Equivalents, Restr_2
Cash, Cash Equivalents, Restricted Cash and Marketable Investments - Narrative (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Cash and Cash Equivalents [Abstract] | ||
Cash and cash equivalents | $ 105,444 | $ 143,612 |
Marketable investments | $ 0 | $ 0 |
Fair Value of Financial Instr_3
Fair Value of Financial Instruments (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 | Dec. 31, 2022 | May 31, 2022 | Mar. 31, 2021 |
Convertible Senior Notes Due 2026 | Convertible notes | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Interest rate | 2.25% | 2.25% | |||
Convertible Senior Notes Due 2028 | Convertible notes | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Interest rate | 2.25% | 2.25% | |||
Convertible Senior Notes Due 2029 | Convertible notes | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Interest rate | 4% | 4% | |||
Money market funds | Level 1 | Fair Value, Recurring | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Cash equivalents: | $ 89,458 | $ 123,387 |
Balance Sheet Details - Invento
Balance Sheet Details - Inventories , Net (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Inventories | ||
Raw materials | $ 51,870 | $ 36,970 |
Work in process | 1,978 | 889 |
Finished goods | 19,621 | 24,741 |
Total | 73,469 | 62,600 |
Inventory valuation | 13,700 | 13,000 |
Long-term inventories | ||
Raw materials | 12,864 | 8,672 |
Work in process | 1,332 | 2,049 |
Finished goods | 6,386 | 5,562 |
Total | 20,582 | 16,283 |
Inventory valuation | $ 19,000 | $ 12,800 |
Balance Sheet Details - Schedul
Balance Sheet Details - Schedule of Other Current Assets and Prepaid Expenses (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Sale tax and VAT receivable | $ 6,884 | $ 6,307 |
Deposits with vendors | 6,738 | 9,501 |
Prepayments | 2,933 | 3,819 |
Distribution agreement settlement receivable | 2,374 | 0 |
Other | 365 | 225 |
Other current assets and prepaid expenses | $ 19,294 | $ 19,852 |
Balance Sheet Details - Sched_2
Balance Sheet Details - Schedule of Property and Equipment, Net (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 42,888 | $ 47,602 |
Less: Accumulated depreciation | (10,924) | (10,327) |
Property and equipment, net | 31,964 | 37,275 |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 1,035 | 1,010 |
AviClear devices | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 33,936 | 38,490 |
Office equipment and furniture | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 1,883 | 1,884 |
Machinery and equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 4,578 | 4,944 |
Assets under construction | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 1,456 | $ 1,274 |
Balance Sheet Details - Accrued
Balance Sheet Details - Accrued Liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Bonus and payroll-related accruals | $ 14,647 | $ 13,949 |
Accrued sales tax | 6,531 | 6,325 |
Liability for inventory in transit | 5,004 | 5,461 |
Sales and marketing accruals | 4,100 | 4,929 |
Accrued interest | 3,465 | 1,304 |
Product warranty | 2,472 | 2,593 |
Jabil settlement obligation, net | 750 | 8,908 |
Other accrued liabilities | 10,150 | 11,586 |
Total | $ 47,119 | $ 55,055 |
Product Warranty - Summary of W
Product Warranty - Summary of Warranties (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Movement in Standard Product Warranty Accrual [Roll Forward] | ||
Beginning Balance | $ 2,593 | $ 3,254 |
Add: Accruals for warranties issued during the period | 1,156 | 1,016 |
Less: Settlements made during the period | (1,277) | (1,116) |
Ending Balance | $ 2,472 | $ 3,154 |
Deferred Revenue - Narrative (D
Deferred Revenue - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | |||
Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2023 | Dec. 31, 2022 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||||
Deferred revenue balance, amount | $ 10,500 | |||
Deferred revenue balance | 10,455 | $ 13,699 | $ 11,916 | $ 13,498 |
Costs for extended service contracts | $ 1,600 | $ 1,600 | ||
Minimum | ||||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||||
Extended service contract term | 1 year | |||
Maximum | ||||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||||
Extended service contract term | 3 years | |||
Service | Minimum | ||||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||||
Extended service contract term | 1 year | |||
Service | Maximum | ||||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||||
Extended service contract term | 3 years | |||
Deferred License Fee | ||||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||||
Deferred revenue balance | $ 800 | $ 2,100 | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-04-01 | ||||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||||
Deferred revenue balance, percentage | 86% | |||
Expected timing of satisfaction, period | 12 months |
Deferred Revenue - Summary of D
Deferred Revenue - Summary of Deferred Service Contract Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Change in Contract with Customer, Liability [Roll Forward] | ||
Beginning balance | $ 11,916 | $ 13,498 |
Add: Payments received from current period sales | 3,850 | 6,045 |
Less: Revenue recognized from current period sales | (572) | (615) |
Less: Revenue recognized from beginning balance | (4,739) | (5,229) |
Ending balance | $ 10,455 | $ 13,699 |
Revenue - Narrative (Details)
Revenue - Narrative (Details) - USD ($) $ in Thousands | 2 Months Ended | 3 Months Ended | ||
Feb. 28, 2024 | Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2023 | |
Disaggregation of Revenue [Line Items] | ||||
Typical payment receipt, period post shipment | 30 days | |||
Total net revenue | $ 38,793 | $ 54,526 | ||
Training provided with sale of system, period | 90 days | |||
Minimum | ||||
Disaggregation of Revenue [Line Items] | ||||
Extended service contract term | 1 year | |||
Capitalized costs, expected period of benefit | 2 years | |||
Maximum | ||||
Disaggregation of Revenue [Line Items] | ||||
Extended service contract term | 3 years | |||
Capitalized costs, expected period of benefit | 3 years | |||
Japan | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net revenue | $ 7,598 | 12,908 | ||
Sales and marketing | ||||
Disaggregation of Revenue [Line Items] | ||||
Amortization expense | 500 | 600 | ||
Other Assets | ||||
Disaggregation of Revenue [Line Items] | ||||
Capitalized contract costs | 2,200 | $ 2,400 | ||
Service | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net revenue | $ 5,678 | 5,405 | ||
Service | Minimum | ||||
Disaggregation of Revenue [Line Items] | ||||
Extended service contract term | 1 year | |||
Service | Maximum | ||||
Disaggregation of Revenue [Line Items] | ||||
Extended service contract term | 3 years | |||
Skincare | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net revenue | $ 4,200 | $ 4,200 | $ 8,132 | |
Skincare | Japan | ||||
Disaggregation of Revenue [Line Items] | ||||
Sale of third-party product, warranty period | 90 days | |||
Transferred over Time | Service | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from performance obligations transferred to customers, percent | 14% | 11% |
Stockholders' Equity and Stoc_3
Stockholders' Equity and Stock-based Compensation Expense - Activity Of Options Outstanding Under the 2019 Plans (Details) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2024 $ / shares shares | Dec. 31, 2023 $ / shares shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Tax withholding ratio | 1.65 | |
Shares Available for Grant | ||
Beginning balance (in shares) | 3,554,537 | |
Additional shares reserved (in shares) | 0 | |
Stock awards canceled / forfeited / expired (in shares) | 32,396 | |
Options canceled / forfeited / expired (in shares) | 43,582 | |
Ending balance (in shares) | 2,981,015 | 3,554,537 |
Number of Stock Options Outstanding | ||
Beginning balance (in shares) | 1,282,240 | |
Options granted in period (in shares) | 520,000 | |
Options exercised (in shares) | 0 | |
Options canceled / forfeited / expired (in shares) | (43,582) | |
Ending balance (in shares) | 1,758,658 | 1,282,240 |
Weighted Average Exercise Price | ||
Beginning balance (in dollars per share) | $ / shares | $ 17.97 | |
Granted (in dollars per share) | $ / shares | 2.11 | |
Options exercised (in dollars per share) | $ / shares | 0 | |
Options canceled / forfeited / expired (in dollars per share) | $ / shares | 33.88 | |
Ending balance (in dollars per share) | $ / shares | $ 12.89 | $ 17.97 |
Weighted Average Remaining Term (in Years) | ||
Weighted average remaining term (in years) | 7 years 10 months 13 days | 8 years 2 months 15 days |
RSUs | ||
Shares Available for Grant | ||
Options and stock awards granted (in shares) | (649,500) |
Stockholders' Equity and Stoc_4
Stockholders' Equity and Stock-based Compensation Expense - Activity of Stock Awards Outstanding Under the 2019 Plans (Details) | 3 Months Ended |
Mar. 31, 2024 $ / shares shares | |
Number of Awards Outstanding | |
Stock awards canceled / forfeited / expired (in shares) | (32,396) |
Stock awards | |
Number of Awards Outstanding | |
Beginning balance (in shares) | 909,862 |
Stock awards granted (in shares) | 110,000 |
Awards vested (in shares) | (137,583) |
Stock awards canceled / forfeited / expired (in shares) | (32,396) |
Ending balance (in shares) | 849,883 |
Weighted Average Grant Date Fair Value per Share | |
Beginning balance (in dollars per share) | $ / shares | $ 20.46 |
Stock awards granted (in dollars per share) | $ / shares | 2.11 |
Awards released (in dollars per share) | $ / shares | 25.53 |
Stock awards canceled / forfeited / expired (in dollars per share) | $ / shares | 27.11 |
Ending balance (in dollars per share) | $ / shares | $ 18.14 |
Stockholders' Equity and Stoc_5
Stockholders' Equity and Stock-based Compensation Expense - Stock-based Compensation Expense By Department (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Total stock-based compensation expense | $ 2,109 | $ 3,386 |
Cost of revenue | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Total stock-based compensation expense | 149 | 364 |
Sales and marketing | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Total stock-based compensation expense | 567 | 1,148 |
Research and development | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Total stock-based compensation expense | 305 | 693 |
General and administrative | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Total stock-based compensation expense | $ 1,088 | $ 1,181 |
Net Loss Per Share - Narrative
Net Loss Per Share - Narrative (Details) | 3 Months Ended |
Mar. 31, 2024 shares | |
Convertible Senior Notes Due 2026 | Convertible notes | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |
Debt convertible to common shares (in shares) | 8,696,792 |
Net Loss Per Share - Net (Loss)
Net Loss Per Share - Net (Loss) Income Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Numerator: | ||
Net loss used in calculating net loss per share, basic | $ (22,778) | $ (28,048) |
Denominator: | ||
Weighted average shares of common stock outstanding used in computing net loss per share, basic (in shares) | 19,991 | 19,776 |
Dilutive effect of incremental shares and share equivalents: | ||
Weighted average shares of common stock outstanding used in computing net loss per share, diluted (in shares) | 19,991 | 19,776 |
Net loss per share: | ||
Net loss per share, basic (in USD per share) | $ (1.14) | $ (1.42) |
Net loss per share, diluted (in USD per share) | $ (1.14) | $ (1.42) |
Convertible notes | ||
Dilutive effect of incremental shares and share equivalents: | ||
Dilutive effect of share-based payment arrangements (in shares) | 0 | 0 |
Options | ||
Dilutive effect of incremental shares and share equivalents: | ||
Dilutive effect of share-based payment arrangements (in shares) | 0 | 0 |
RSUs | ||
Dilutive effect of incremental shares and share equivalents: | ||
Dilutive effect of share-based payment arrangements (in shares) | 0 | 0 |
PSUs | ||
Dilutive effect of incremental shares and share equivalents: | ||
Dilutive effect of share-based payment arrangements (in shares) | 0 | 0 |
ESPP | ||
Dilutive effect of incremental shares and share equivalents: | ||
Dilutive effect of share-based payment arrangements (in shares) | 0 | 0 |
Net Loss Per Share - Antidiluti
Net Loss Per Share - Antidilutive Securities Excluded From Computation of Earnings Per Share (Details) - shares shares in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities (in shares) | 21,662 | 18,554 |
Capped call | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities (in shares) | 10,780 | 8,697 |
Convertible notes | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities (in shares) | 8,697 | 8,697 |
Options | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities (in shares) | 1,282 | 503 |
RSU's | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities (in shares) | 682 | 370 |
PSU's | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities (in shares) | 221 | 235 |
ESPP | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities (in shares) | 0 | 52 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Income Tax Disclosure [Abstract] | ||
Income tax benefit | $ 100 | |
Income tax expense | $ (25) | $ 272 |
Leases - Narrative (Details)
Leases - Narrative (Details) $ in Millions | 3 Months Ended | ||
Mar. 31, 2024 USD ($) lease_term | Mar. 31, 2023 USD ($) | Dec. 31, 2023 USD ($) | |
Lessee, Lease, Description [Line Items] | |||
Operating leases renewal terms (up to) | 5 years | ||
Finance leases renewal terms (up to) | 5 years | ||
Lease term (in years) | 3 years | ||
Duration of autorenewal features | 1 year | ||
Number of consecutive lease terms | lease_term | 2 | ||
Sales and marketing | |||
Lessee, Lease, Description [Line Items] | |||
Amortization expense | $ 0.5 | $ 0.6 | |
AviClear Device | |||
Lessee, Lease, Description [Line Items] | |||
Cloud computing arrangement expected contract renewals (in years) | 7 years | ||
Capitalized Cloud Computing Set-up Cost | Other long-term assets | |||
Lessee, Lease, Description [Line Items] | |||
Capitalized contract costs | $ 2.4 | $ 2.7 | |
Capitalized Cloud Computing Set-up Cost | Sales and marketing | |||
Lessee, Lease, Description [Line Items] | |||
Amortization expense | 0.3 | 1 | |
Lease Installment Costs | Other long-term assets | |||
Lessee, Lease, Description [Line Items] | |||
Capitalized contract costs | 1.5 | $ 2.1 | |
Lease Installment Costs | Sales and marketing | |||
Lessee, Lease, Description [Line Items] | |||
Amortization expense | $ 0.6 | $ 0.5 | |
Minimum | |||
Lessee, Lease, Description [Line Items] | |||
Remaining lease terms of operating leases | 1 year | ||
Remaining lease terms of finance leases | 1 year | ||
Maximum | |||
Lessee, Lease, Description [Line Items] | |||
Remaining lease terms of operating leases | 7 years | ||
Remaining lease terms of finance leases | 7 years |
Leases - Supplemental Balance S
Leases - Supplemental Balance Sheet Information (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Assets | ||
Right-of-use assets | $ 12,034 | $ 10,055 |
Finance lease | $ 2,228 | $ 2,516 |
Finance Lease, Right-of-Use Asset, Statement of Financial Position [Extensible Enumeration] | Property and equipment, net | Property and equipment, net |
Total leased assets | $ 14,262 | $ 12,571 |
Operating lease liabilities | ||
Operating lease liabilities, current | 3,231 | 2,441 |
Operating lease liabilities, non-current | 10,046 | 8,887 |
Present value of lease liabilities | 13,277 | 11,328 |
Finance lease liabilities | ||
Finance lease liabilities, current | $ 744 | $ 825 |
Finance Lease, Liability, Current, Statement of Financial Position [Extensible Enumeration] | Accrued liabilities | Accrued liabilities |
Finance lease liabilities, non-current | $ 888 | $ 1,064 |
Finance Lease, Liability, Noncurrent, Statement of Financial Position [Extensible Enumeration] | Other long-term liabilities | Other long-term liabilities |
Total Finance lease liabilities | $ 1,632 | $ 1,889 |
Leases - Lease Costs (Details)
Leases - Lease Costs (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Leases [Abstract] | ||
Finance lease cost, Amortization expense | $ 274 | $ 150 |
Finance lease cost, Interest for finance lease | 42 | 20 |
Operating lease cost | $ 969 | $ 891 |
Leases - Cash Paid for Amounts
Leases - Cash Paid for Amounts Included in the Measurement of Lease Liabilities (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Leases [Abstract] | ||
Operating cash flow, Finance lease | $ 40 | $ 20 |
Financing cash flow, Finance lease | 196 | 124 |
Operating cash flow, Operating lease | $ 948 | $ 699 |
Leases - Maturities of Operatin
Leases - Maturities of Operating Lease Liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Leases [Abstract] | ||
Remainder of 2024 | $ 2,895 | |
2025 | 3,981 | |
2026 | 4,027 | |
2027 | 3,299 | |
2028 | 323 | |
2027 and thereafter | 143 | |
Total lease payments | 14,668 | |
Less: imputed interest | 1,391 | |
Present value of lease liabilities | $ 13,277 | $ 11,328 |
Leases - Maturities of Finance
Leases - Maturities of Finance Leases Liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Leases [Abstract] | ||
Remainder of 2024 | $ 731 | |
2025 | 697 | |
2026 | 424 | |
2027 | 16 | |
Total lease payments | 1,868 | |
Less: imputed interest | 236 | |
Present value of lease liabilities | $ 1,632 | $ 1,889 |
Leases - Lease Information (Det
Leases - Lease Information (Details) | Mar. 31, 2024 |
Weighted-average remaining lease term (years) | |
Operating leases | 3 years 8 months 12 days |
Finance leases | 2 years 3 months 18 days |
Weighted-average discount rate | |
Operating leases | 5.70% |
Finance leases | 9.50% |
Leases - Operating Lease Income
Leases - Operating Lease Income (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
AviClear operating lease license fee revenue | ||
Disaggregation of Revenue [Line Items] | ||
Operating lease income | $ 1,162 | $ 1,225 |
Operating Lease, Lease Income, Statement of Income or Comprehensive Income [Extensible Enumeration] | Total net revenue | Total net revenue |
AviClear operating lease revenue | ||
Disaggregation of Revenue [Line Items] | ||
Operating lease income | $ 1,246 | $ 2,703 |
Operating Lease, Lease Income, Statement of Income or Comprehensive Income [Extensible Enumeration] | Total net revenue | Total net revenue |
Total AviClear revenue | ||
Disaggregation of Revenue [Line Items] | ||
Operating lease income | $ 2,408 | $ 3,928 |
Operating Lease, Lease Income, Statement of Income or Comprehensive Income [Extensible Enumeration] | Total net revenue | Total net revenue |
Leases - Non-cancellable Operat
Leases - Non-cancellable Operating Lease Income (Details) $ in Thousands | Mar. 31, 2024 USD ($) |
Leases [Abstract] | |
Remainder of 2024 | $ 5,615 |
2025 | 2,600 |
Total | $ 8,215 |
Commitments and Contingencies -
Commitments and Contingencies - Narrative (Details) $ in Millions | 1 Months Ended | ||
Mar. 31, 2023 patent | Mar. 31, 2024 USD ($) | Dec. 31, 2023 USD ($) | |
Loss Contingencies [Line Items] | |||
Number of patents allegedly infringed | patent | 6 | ||
Inventory purchase obligation | $ 9.7 | ||
Pending Litigation | |||
Loss Contingencies [Line Items] | |||
Accrued litigation liabilities | $ 3.6 | $ 3.3 |
Debt - Outstanding Debt and Car
Debt - Outstanding Debt and Carrying Value (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 | Jun. 01, 2022 |
Debt Instrument [Line Items] | |||
Unamortized debt issuance costs | $ (9,859) | $ (10,430) | |
Convertible notes | |||
Debt Instrument [Line Items] | |||
Carrying Value | 419,266 | 418,695 | |
Convertible Senior Notes Due 2026 | Convertible notes | |||
Debt Instrument [Line Items] | |||
Outstanding principal amount | 69,125 | 69,125 | |
Unamortized debt issuance costs | (965) | (1,084) | |
Carrying Value | 68,160 | 68,041 | $ 69,100 |
Convertible Senior Notes Due 2028 | Convertible notes | |||
Debt Instrument [Line Items] | |||
Outstanding principal amount | 240,000 | 240,000 | |
Unamortized debt issuance costs | (5,410) | (5,714) | |
Carrying Value | 234,590 | 234,286 | |
Convertible Senior Notes Due 2029 | Convertible notes | |||
Debt Instrument [Line Items] | |||
Outstanding principal amount | 120,000 | 120,000 | |
Unamortized debt issuance costs | (3,484) | (3,632) | |
Carrying Value | $ 116,516 | $ 116,368 |
Debt - Narrative (Details)
Debt - Narrative (Details) | 1 Months Ended | 3 Months Ended | |||||||||
Jul. 09, 2020 USD ($) | Dec. 31, 2022 USD ($) $ / shares | May 31, 2022 USD ($) day $ / shares $ / item shares | Mar. 31, 2021 USD ($) day $ / shares $ / item | Mar. 31, 2024 USD ($) day | Mar. 31, 2023 USD ($) | Dec. 31, 2023 USD ($) | Dec. 07, 2022 $ / shares | Jun. 01, 2022 USD ($) | May 04, 2022 $ / shares | Mar. 04, 2021 $ / shares | |
Convertible Senior Notes Due 2026 | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Convertible debt, conversion ratio | 0.0301427 | ||||||||||
Cap price (in USD per per share) | $ / item | 45.535 | ||||||||||
Premium over stock price (percent) | 75% | ||||||||||
Stock price (in USD per share) | $ / shares | $ 26.02 | ||||||||||
Capped-call transaction term, consecutive trading days | day | 40 | ||||||||||
Purchase of capped call | $ 16,100,000 | ||||||||||
Convertible Senior Notes Due 2026 | Common Stock | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Conversion price (in dollars per share) | $ / shares | $ 33.18 | ||||||||||
Convertible Senior Notes Due 2028 | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Convertible debt, conversion ratio | 0.018986 | ||||||||||
Cap price (in USD per per share) | $ / item | 82.62 | ||||||||||
Premium over stock price (percent) | 100% | ||||||||||
Stock price (in USD per share) | $ / shares | $ 41.31 | ||||||||||
Capped-call transaction term, consecutive trading days | day | 40 | ||||||||||
Purchase of capped call | $ 32,000,000 | ||||||||||
Convertible Senior Notes Due 2028 | Common Stock | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Conversion price (in dollars per share) | $ / shares | $ 52.67 | ||||||||||
Convertible Senior Notes Due 2029 | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Cap price (in USD per per share) | $ / item | 99.21 | ||||||||||
Premium over stock price (percent) | 100% | ||||||||||
Stock price (in USD per share) | $ / shares | $ 49.66 | ||||||||||
Capped-call transaction term, consecutive trading days | day | 40 | ||||||||||
Purchase of capped call | $ 25,100,000 | ||||||||||
Convertible Senior Notes Due 2029 | Common Stock | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Conversion price (in dollars per share) | $ / shares | $ 58.35 | ||||||||||
Loan and Security Agreement | Silicon Valley Bank | Revolving Credit Facility | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Debt instrument term | 4 years | ||||||||||
Maximum borrowing capacity | $ 30,000,000 | ||||||||||
Convertible notes | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Carrying amount | $ 419,266,000 | $ 418,695,000 | |||||||||
Number of days to file annual report | 15 days | ||||||||||
Number of days, written notice | 60 days | ||||||||||
Percentage of note holders | 0.25 | ||||||||||
Number of days with additional interest, after default | 360 days | ||||||||||
Interest expense | $ 3,500,000 | $ 3,500,000 | |||||||||
Convertible notes | Convertible Senior Notes Due 2026 | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Notes issued | $ 138,300,000 | ||||||||||
Carrying amount of convertible debt | $ 69,100,000 | ||||||||||
Interest rate | 2.25% | 2.25% | |||||||||
Proceeds from convertible notes, net of unamortized debt issuance costs | $ 133,600,000 | ||||||||||
Cash exchanged | 45,800,000 | ||||||||||
Payment of accrued interest | 300,000 | ||||||||||
Extinguishment of debt | $ 69,100,000 | ||||||||||
Shares issued in debt conversion (in shares) | shares | 1,354,348 | ||||||||||
Carrying amount | $ 68,160,000 | 68,041,000 | $ 69,100,000 | ||||||||
Redemption threshold percentage of stock price trigger | 130% | ||||||||||
Redemption threshold trading days | day | 20 | ||||||||||
Redemption threshold consecutive trading days | day | 30 | ||||||||||
Redemption price, percentage | 100% | ||||||||||
Required outstanding amount not subject to redemption | $ 50,000,000 | ||||||||||
Incremental repurchase amount | $ 1,000 | ||||||||||
Effective interest rate during period | 2.98% | ||||||||||
Convertible notes | Convertible Senior Notes Due 2026 | Occurrence of Fundamental Change | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Redemption price, percentage | 100% | ||||||||||
Incremental repurchase amount | $ 1,000 | ||||||||||
Convertible notes | Convertible Senior Notes Due 2026 | Level 2 | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Convertible debt at fair value | $ 26,500,000 | ||||||||||
Convertible notes | Convertible Senior Notes Due 2026, First Conversion Trigger | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Conversion threshold trading days | day | 20 | ||||||||||
Threshold consecutive trading days | day | 30 | ||||||||||
Conversion threshold percentage of stock price trigger | 130% | ||||||||||
Convertible notes | Convertible Senior Notes Due 2026, Second Conversion Trigger | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Conversion threshold trading days | day | 5 | ||||||||||
Threshold consecutive trading days | day | 5 | ||||||||||
Conversion threshold percentage of stock price trigger | 98% | ||||||||||
Incremental repurchase amount | $ 1,000 | ||||||||||
Convertible notes | Convertible Senior Notes Due 2028 | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Notes issued | $ 240,000,000 | ||||||||||
Interest rate | 2.25% | 2.25% | |||||||||
Proceeds from convertible notes, net of unamortized debt issuance costs | $ 232,400,000 | ||||||||||
Additional principal | 10,000,000 | ||||||||||
Carrying amount | $ 234,590,000 | 234,286,000 | |||||||||
Redemption threshold percentage of stock price trigger | 130% | ||||||||||
Redemption threshold trading days | day | 20 | ||||||||||
Redemption threshold consecutive trading days | day | 30 | ||||||||||
Redemption price, percentage | 100% | ||||||||||
Required outstanding amount not subject to redemption | $ 100,000,000 | ||||||||||
Incremental repurchase amount | $ 1,000 | ||||||||||
Effective interest rate during period | 2.82% | ||||||||||
Convertible notes | Convertible Senior Notes Due 2028 | Occurrence of Fundamental Change | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Redemption price, percentage | 100% | ||||||||||
Incremental repurchase amount | $ 1,000 | ||||||||||
Convertible notes | Convertible Senior Notes Due 2028 | Voce Capital Management LLC | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Notes issued | $ 230,000,000 | ||||||||||
Convertible notes | Convertible Senior Notes Due 2028 | Level 2 | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Convertible debt at fair value | $ 57,100,000 | ||||||||||
Convertible notes | Convertible Senior Notes Due 2028, First Conversion Trigger | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Conversion threshold trading days | day | 20 | ||||||||||
Threshold consecutive trading days | day | 30 | ||||||||||
Redemption threshold percentage of stock price trigger | 130% | ||||||||||
Convertible notes | Convertible Senior Notes Due 2028, Second Conversion Trigger | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Conversion threshold trading days | day | 5 | ||||||||||
Threshold consecutive trading days | day | 5 | ||||||||||
Conversion threshold percentage of stock price trigger | 98% | ||||||||||
Incremental repurchase amount | $ 1,000 | ||||||||||
Convertible notes | Convertible Senior Notes Due 2029 | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Notes issued | $ 120,000,000 | ||||||||||
Interest rate | 4% | 4% | |||||||||
Proceeds from convertible notes, net of unamortized debt issuance costs | $ 115,800,000 | ||||||||||
Convertible debt, conversion ratio | 0.0171378 | ||||||||||
Carrying amount | $ 116,516,000 | $ 116,368,000 | |||||||||
Redemption threshold percentage of stock price trigger | 130% | ||||||||||
Redemption threshold trading days | day | 20 | ||||||||||
Redemption threshold consecutive trading days | day | 30 | ||||||||||
Redemption price, percentage | 100% | ||||||||||
Required outstanding amount not subject to redemption | $ 100,000,000 | ||||||||||
Incremental repurchase amount | $ 1,000 | ||||||||||
Effective interest rate during period | 4.63% | ||||||||||
Convertible notes | Convertible Senior Notes Due 2029 | Occurrence of Fundamental Change | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Redemption price, percentage | 100% | ||||||||||
Incremental repurchase amount | $ 1,000 | ||||||||||
Convertible notes | Convertible Senior Notes Due 2029 | Level 2 | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Convertible debt at fair value | $ 25,800,000 | ||||||||||
Convertible notes | Convertible Senior Notes, Additional Interest, Up To 180 Days | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Interest rate | 0.25% | ||||||||||
Convertible notes | Convertible Senior Notes, Additional Interest, 181 Days - 360 Days | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Interest rate | 0.50% |
Segment Reporting - Narrative (
Segment Reporting - Narrative (Details) | 3 Months Ended |
Dec. 31, 2023 segment | |
Segment Reporting [Abstract] | |
Number of operating segments | 1 |
Number of reportable segments | 1 |
Segment Reporting - Summary of
Segment Reporting - Summary of Revenue (Details) - USD ($) $ in Thousands | 2 Months Ended | 3 Months Ended | |
Feb. 28, 2024 | Mar. 31, 2024 | Mar. 31, 2023 | |
Disaggregation of Revenue [Line Items] | |||
Total net revenue | $ 38,793 | $ 54,526 | |
Total product revenue | |||
Disaggregation of Revenue [Line Items] | |||
Total net revenue | 33,115 | 49,121 | |
Systems | |||
Disaggregation of Revenue [Line Items] | |||
Total net revenue | 24,260 | 34,542 | |
Consumables | |||
Disaggregation of Revenue [Line Items] | |||
Total net revenue | 4,655 | 6,447 | |
Skincare | |||
Disaggregation of Revenue [Line Items] | |||
Total net revenue | $ 4,200 | 4,200 | 8,132 |
Service | |||
Disaggregation of Revenue [Line Items] | |||
Total net revenue | 5,678 | 5,405 | |
United States | |||
Disaggregation of Revenue [Line Items] | |||
Total net revenue | 14,070 | 22,501 | |
Japan | |||
Disaggregation of Revenue [Line Items] | |||
Total net revenue | 7,598 | 12,908 | |
Asia, excluding Japan | |||
Disaggregation of Revenue [Line Items] | |||
Total net revenue | 4,912 | 6,731 | |
Europe | |||
Disaggregation of Revenue [Line Items] | |||
Total net revenue | 4,575 | 5,118 | |
Rest of the World | |||
Disaggregation of Revenue [Line Items] | |||
Total net revenue | $ 7,638 | $ 7,268 |