CUTR - Earnings call transcript Q1 2022

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Operator

Thank you for joining Cutera's First Quarter 2022 Earnings Conference Call. After the prepared remarks, there will be a question-and-answer session. The discussion today includes forward-looking statements. Those forward-looking statements reflect management's current forecast and expectation of certain aspects of the company's future business, including, but not limited to, any financial guidance provided for modeling purposes.

Forward-looking statements are based on current information that is, by its nature, dynamic and subject to change.

others, demand financial and among patients competitive include, customer and productivity statements statements guidance, regarding landscape, Forward-looking improvements.

information, XX-K Commission our XX-Qs safe For differ statements, words to Cutera subject subsequently reflect Exchange to Factors of factors Securities forward-looking statement to the materially speak those uncertainties, you statements to entitled Risk to described may filed. we of events forward-looking the the occurrence Cutera in Future also expectations. earlier the Form in harbor results new any no as updated undertakes from and risk encourage you place statements, risks in events. or All that to as refer cautions not publicly are circumstances only made. current on undue may forward-looking with statements press and update reliance our or are management's release unanticipated identify in filed Form obligation including date they section today. and to forward-looking which our reflect the

results greater measures, into Please addition, the Mowry. over as basis. period to, These the measures should that, turn refer our a results financial discuss and will alternatives complete non-GAAP including non-GAAP we be to With would performance GAAP period. operations, from of facilitate release. comparing believe when by like with, in non-GAAP to underlying financial CEO, can or but along earnings results reconciliation analysis Dave I measures call these GAAP. on We an not our measures ongoing considered prescribed financial In Cutera's particularly to measures more adjusted transparency from to the operating

Dave Mowry

dial earnings Cutera's welcome for Grant. would in that call, can this We you quarter XXXX Thank to everyone update. we are glad and you, to like first

today's is Seth, Joining our Chief Officer. me on Rohan Financial call

XXXX operational quarter results the highlights update the provide review quarter course will an AviClear, Rohan performance, and to hand platform be as some then treatment call, I'll our well providing first After commercial Grant record a I acne. revenue take XXXX overview our so first back then laser-based questions. along we to as of the our will of with insights. guidance. will over can of for provide detailed financial Over an detail call our the which, on recently fiscal that some FDA-cleared your I of

be observations patient practices. Before make the getting let on of aesthetic certain into Global of remarks their me cast and particular our our shadows market patterns developments general within with macroeconomic continue begin segments the over and results, customers health prepared To recently a and their key care. focus to some markets in at the core headlines companies trends. also medical light current procedures associated of have clear, or reported in not observed in these Cutera. We're we some that these trends economic have and aware softness demand elective near-term conditions with consumer-driven our

quarter in the fact, fundamental we company. In strength observed patient results translated volumes the for first into strong treatment XXXX that

positive growing economic a continued their employed has as years these patients past different traffic that for to pressures volume draw defined equipment. their best believe actively treatment fundamentally the future segment providers of with many into professionals disposable to capital access our Additionally, patient and from patient of increasing and served of younger providing aesthetic demographics practices This new insulate as We fundamentals X.X an is income. as shifting they serve practices. indicator leading market robust have the underlying of over and demand the

era As the aesthetic patients. a new more group, than segment external the to is pre-Zoom factors resilient typical

their their an and professional use of personal to the investment in aesthetic video continues views engagements. segment in Additionally, their this in treatments well conferencing professional as energy-based as careers grow themselves in pursuits as young

to In have the we patient practice demographic deeper insights into addition gained patterns. shift,

their practice account relationships visibility in and relationships ongoing have treatment to Cutera enabled Cutera patient and with with practitioners schedules, build deeper Our greater management volumes have, the into in profiles. These staff. investments key turn, provided

months equipment. momentum carry to been trends the us forward that industry course for over robust to of and has We three out our traffic these build remainder have able patterns will three to XXXX direct a underlying with continue patient engage based of us aesthetic on treatment the gathering and extend demand patient management for on volumes. over customers. conferences, two capital and Additionally, to practitioners recent reaffirmed enable These feedback data practice pipeline believe the for of treatments the to very known generally

Turning Equipment and XXXX Capital in periods. forward momentum carrying Cutera's the quarter We first results. Consumable continued both previous now to segments from Products demonstrated

particularly results reported the by and million, as we year-over-year year a and XX% fundamentals a Our the The $XX.X see in the Capital the growth currency for solid was execution our overall around ongoing them evident progress revenue contributor our significant teams Capital was additional in investments prospecting sales technology, as representing our Equipment processing North effectively continued period momentum over the Overall greater defined strength our by and this of XX% to sales increasing pipeline. constant through over American robust again continued first the deals and commercial as were great sales we strategy. leveraging key team. to build account This training development world, manager approximately and Equipment North basis. underlying to volume market expansion most made of once our growth of on quarter prior was from America.

During XX% our truSculpt strong products, truSculpt by the flex. over results, body-contouring posted American iD driven the growing year, and team prior North period,

first as prior skin the face quarter during XX% platforms. New year. were our saw growing both demand versus in We Equipment strong by International solutions, increased reflected V sales North respectively, impressive for in with Zealand sales America believe as in of led their and reflect of the events also Capital xeo reported We as rejuvenation Australia both well increase recoveries and slightly $X.X geographies those patients XX%, benefited excel for of the our as and Japan In pent-up Ukraine. routines, rates. through Australian to offset some levels $XXX,XXX market our demand incremental while million declined Capital sales Japanese half prior the year disruptions by Europe, worked by business from Equipment an returning lockdowns, second from in XXXX in FX results pre-COVID caused short-term and

based period, offset Products Skincare, prior over Service, growth reported, directly in of as and in business have Recurring representing the as declines was our Skincare that the increase upon as currency revenue, the an we yen. of sight Consumable near-term Products but on $XX.X constant we to region. X% quarter of Looking cadence year-over-year anticipate ahead, impacted by orders our the within return in for sales Strength million growth XXXX a growth defined a the second of basis. year double-digit X% to line Consumable combination of a weakness hand

Regarding consumables, to start rest tone anticipate our will set for results provided first the of and consumable these strong XXXX, the year. results a that revenues quarter we for the

our resolve rates the service pleased contract seeing discussed. through prior are as the success team we volumes schedule open in that the our attach we are generating well. key quarter previously managers. particular, in account with period during We revenue being America, also service began The run consumable North plan, were customer orders to driven activities working at by and from higher the accounts Our

XQ in we of service significantly components, by expect While end subassembly we inventory XXXX. the backlogs made meaningful to and have all for yet this up building part strides not backlog service reduced clear

year Finally, on on year on Skincare, was but our million, of revenue also as for the an basis, basis. reported decline a a currency of representing versus growth from the quarter prior constant X% $XX.X X% prior

Japan the increase half levels mid we of that for the implemented and constant We single in disruptions anticipate finishing the rate upper is approximately million fiscal We with $XX for the to from our have currency quarterly seen XXXX. growth in second price following business digits. XXXX our Skincare run rate Skincare a believe Skincare normalize the in

as commitment business built to as as line, has management. long-term a to since reaffirm now well at leaner bottom resize much the disciplined organization's remaining cut Looking the been this operation. the COVID expense of onset want sustained spending, I to the and profitability we first evident This

is into new a market for transformation Cutera for Acne. enter currently Cutera as poised we segment However,

We in need ourselves much market an to innovation. for of opportunity into device have take very created a the unique first-mover

Rohan as our We comments. me to AviClear are With programs. our to from to our back choosing frame break I will financial from functions commercial turn temporarily grow during to our speak mid-XXXX COVID. call over into shorten some be the outlook We bold quarters the as to of quarters, year profitable accretive make to and three R&D following growth over next for two well and time color investments string more timely going height product Rohan? additional intend XXXX. and faster acne let to full performances that, the the Rohan's on to provide around the our of

Rohan Seth

you, Thank Dave.

I conjunction contained earnings to our revenue. some release. note is with in metrics to in discussing readers non-GAAP this of results. with I I reconciliation as be Starting my GAAP As non-GAAP A review listeners our results remarks, encourage want will in and review prepared non-GAAP that the to GAAP complete earnings release. included We

an approximately quarter in sales were an XX% $XX.X of compared the million reported to basis. the on period $XX.X same first as Our million for representing for XXXX, increase

faced we was the during constant headwinds growth approximately quarter, FX our revenue over the XX% Excluding year. prior currency

reported million, XX% prior revenue up Service first the to was North the up XX% $XX.X and is constant constant was in million The and in growth increased our by defined of increase first the the currency. Global prior year revenue, XX% $XX.X revenue reported was X% in up and and XXXX. include Capital Capital currency year. in Recurring quarter, quarter our in First consumables Skincare over over American XX% as up from of lines, XX% X% reported product products, first driven the $XX.X for currency. quarter million constant quarter Equipment Equipment International as Consumables,

compared particularly up foreign is revenues be impacted year. is currency. Our first continue inconsistent of yen XX.X% with down flat representing and supplies fiscal decline in reported Services last margin impacted X% to approximately X% points constant the was million a in basis XX component same gross down Non-GAAP the but period in currency negative fluctuation by constant by currency. gross profit the $XX.X X% skincare quarter XXXX for was of to segment reported, a of

points $X.X acne and first the margin basis in last to approximately XX XX.X% quarter the million, Excluding was gross costs year. of improvement period as compared non-GAAP same

million represented by the well base. million million a G&A more for in the likely as headwind operating Within and the chain million increased to our the million additional first with gross $X.X AviClear was AviClear as XXXX macroeconomic the rates commentary, period FX an was the first higher conscious margins sales $XX.X first pressures period last XXX to Non-GAAP as $XX.X of launch quarter. first as head were ongoing basis cost areas travel fixed became quarter. compared This these commissions, quarter for of regulatory by gross in expansion non-GAAP largely quarter were period increased period non-GAAP marketing little headwinds. initiatives, continued XQ last investments inflation of year. in due million expenses for force, occur expense offset the compared well last a driven our well $XX.X leverage margins Nevertheless, year, and studies. for in our in sales for increase expense increased expenses as increased XXXX sales was Total count. million XXXX as points note as operating with Rounding last AviClear. acne XXXX $X.X quarter over quarter of R&D of same factors the approval supply Non-GAAP driven The were was the of training XXXX largely the we driven the impacted within our improvement quarter, marketing. expense inflationary that compared associated by expansion $X.X in as expenses same well $X.X year, acceleration same million cost to and the same We clinical totaling the in FX spend for driven of our $XX.X to as spend compared by $X.X for and by as million such the to to to out expense and versus accelerating year,

For the adjusted million non-GAAP a profit operating first commonly period. quarter to million of compared XXXX, the of income was loss as EBITDA in to year our $X.X of referred prior a $X.X

year-over-year a most the was AviClear decline basis. this in of investment significant our anticipated, driver As on

acne EBITDA million. adjusted investments first quarter $X.X Excluding of million for $X.X of the XXXX, was

our is sales spent with $X.X XX% in OpEx is rest our As of a and which most I program. million non-GAAP R&D. of within Approximately investments acne on mentioned the embedded earlier, marketing in

GAAP see the will we quarter. in of in statement live in our you taking Additionally, spent our about that operations $X to system reconciliation new of million non-GAAP ERP

While in already down are implementation QX. throughout seeing spending live will expenses we heavy move continue past as XXXX, we going lift of the tapered

Finally, tax position. significant to changes our there were no or material

year to driven This sheet. the approximately Turning quarter quarter now sequential million $XXX.X of with the marketable million unrestricted following $XXX.X the the same our decline the cash primarily at by of and ended securities balance to factors. million time $XXX.X and XXXX. We last million at was end compared $XX fourth of

of prepaids deposits as $X.X overall chain. supply million and launch Firstly, to as our well investments secure to of the inventory, $XX.X AviClear million in support in and

net driven rest was by Secondly, spend ERP was quarter The the of which usage first incentive million, and cash typical mainly by annual $X.X investments. seasonal our mostly cash driven loss compensation factors, payouts. acne including related of

of broadening as launch we first million have quarter. per the We customer expect do strong we in place and AviClear, to to based remainder data. approximately linear to burn on the advantage cash exceptional acceptance we expect build be additional consumption initial year, be clinical a $XX mover cash not inventories AviClear. With Over

are the balance the to of of strong supporting well our continue our launch Given sheet, positioned business, we while AviClear. core ensuring successful growth

like over to XXXX. the of the with you I would Before back year Dave, to update outlook I for an provide call our on full turn

increase May, we encouraged XXXX seen see foreign we faced demand we've are rates, of underlying and of currency our rates XX%. $XXX the at results are we currency revenue to constant our to Based we with XX% far through While by how reiterating early also implying headwinds. of evolving, to and our from million, guidance quarter exchange and FX first approximately trends that prior $XXX are XX% thus constant the growth into but original million updated XX% April on growth

this a product. not from guidance include AviClear approved our reminder, any As recently does revenue

Moving bolstered now physician range range spend. With response versus million acceleration approval to we $XX the expected the adjusted our on than an guidance. $XX $XX million acne and taking an our to earlier by to previous million of in expect to million spend EBITDA acne our data, $XX to of

Excluding XXXX, our $X a be million adjusted our acne range the this of near the this our program, we be adjusted of update, expect there million. as million Therefore to a margins $XX anticipate to or to to we investment at constant incremental compared with with of $XX be occurs. with as million will lower in now guidance prior In basis period year on to investments we our associated line of placements that currency $XX ramp as EBITDA continue for expect our in to we full $XX range of EBITDA million. system

be full further Dave I to call However, our going product consolidated pass With that, now AviClear detail launch year associated provide XXXX. its of to infrastructure into to results AviClear. the line accretive that we on over back and to anticipate the will

Dave Mowry

you, Thank Rohan.

armamentarium positioned As of standard results as the we offering believe vastly March well improved that received for XXX(k) options U.S. profile Cutera in moderate, patient it is acne the acne. meaningful from severe FDA clearance clinicians suffering shared, acne mild, achieves a AviClear role and play have a safety We treatment. to gold for treatment XX, on with XXXX

complete delivers work, retrieve inconvenience requirement AviClear to monthly journey In patient period. medications, three-month compared office the or profile, challenging with six-month the of at a compliance two-month treatment. safety and nine the of lab visits over XX-minute to As the trips checkups [ph] months completed daily clinical similar without to three seven outcomes contrast, the isotretinoin, course AviClear dermatologist just patient perform is a in over follow-up

the this commercial their our as discussing into well this installing And and their of support new physicians training leaders, an isotretinoin release time AviClear, patients conversion practices, looking April commercial for parents several key devices on product. treatment they are to as to We identification and practitioners, we as spent AviClear well on feedback Starting option for initiated treatment already as this the opinion breakthrough staff, patient from and X, Since they've with been eager are first meeting introduction that technology with the XXXX, limited has device. alternative and their conducted selected coaching try office back Cutera personnel hearing reasons. for processes.

We to executing opinion with release. rollout a limited of very commercial key agreed gained to product predefined practitioners. our to deliberate aesthetic and the insights product committed leaders These dermatology are during of company using this while set a provide the have

limited the through this through partnership their year. our mover Beginning utilize deliver and feedback that will American commercial comprehensive paradigm. later of a limited refine effective We release, plan commercial knowledge North The built will launch an launch the both the devices the to provider first ensure AviClear release are full success our plans agreement. on commercial medical we for device with and come gain satisfaction execution of optimize AviClear to from new AviClear treatment other exclusively like with our AviClear offering patient executing the in long-term we

to addition that radical the innovations In the technological product AviClear represents.

pay each fee patient the as as well the the a fee treated of of goals company the with a long work the device with defines business device. for AviClear placement the an company's and practice a new follows. will and This and those models perfectly structuring of the an objectives of company the In as relationship to practice. new level, license will consideration serve between annual the the agreement Our the term. partnership At provider high partnership agreement AviClear the company innovative arrangement practice, into the align over

training agrees for provide the Additionally, and staff and future integration required and office management qualified patient with maintenance company ongoing the the service support of and to into practice users ongoing account conversions. the optimizing as AviClear upfront clinical for assisting

early are devices in Laser partnership are Conference, of far. we with While the for our and AviClear patients out subsequently limited pleased volume recent has various benefits our and placements into office to key partnership the already we practices. to have and This Surgery built treating Medicine of the Society novel installed on practices Early in their partnership the and integrate the us very providers their views they received release, our into commercial resonated release, tolerance back start many American AviClear procedure agreements thus ease model confirmed offices. it. ability the enabled patient we the shipped into easily commercial Most feedback the dozens importantly, of for use logistical and our concurrently practices. Since functional test with validate see have of and opinion well practitioners, as of leaders of limited results have Coming AviClear processes program. executed and begun

commercial Cutera gather enable as With as to these AviClear patients. the Grant? subsequent course the the rates your to questions. providing will of to see refine well rollout to you operator turn forward We with like to We learnings of more will we briefings. call release, updates to accelerate how increased a to over already look limited the insights. open and potential can account onboarding, regarding call that, I'd in Over training, continue conversion account staff selection,

Operator

from First Instructions] question. proceed line question with Block Stifel. with [Operator the Jon comes of you. Thank your Please

Jon Block

Dave, revenue this other just In $X and in from at long Mostly you're business, have the headwind. that that about of questions are you you at the [ph] up it? capital it when seeing total. Where American start question. FX around increased the practice of in business? maybe Capital? look can on I seems talk But North you is the words, constant good sort a And think lot currency, to making million traction, maybe pipe the two Great. expectations I'll Thanks on core guys afternoon. core

of where a ask really here any there to find return in ROI? see sales countries from with Are reps You've gotten follow-up pockets reps sort the increased internationally of similar Acne. you additional the a America. augmenting on And can some good I'll then North a

Dave Mowry

great a question, Jon. That's Thanks.

– a seen but and momentum or strength four the from we've little if I also interesting the North that bit something launch sales is being last slower in definitely the fact to of new, and over sales to that ramping quarters, I We that you AviClear with got and they've is and built felt a think the think forward. ago, will, can air continuing in or novel or a little there of about. the you air year in three were a wind so the the go see talk physicians to in America. carry lot

opportunity that's a think be growth well I -- I bolstering investments off invest only will with continue as us So and business, but question, the be get points look, to the for numbers. key placed. not the utilization account here. managers the effect call in only grow. with have and your we've second They and drive continues our think the AviClear also to think an Australia potentially we once I pay to internationally, will would us consumable value benefited on part devices regards to halo in in certainly not In great The to have underestimate could made of as deliver I America. our core not North benefit continued

kind come the I they what see hibernation, of of half predict back can do first restrictions. XXXX. that a second of we start we'll were out come the unfortunately, can that as in quarter in and they restricted strong clear from But I when post well as see quite quarter to them they think, they

within not I we would right be due the of the the in people look, I U.K., wouldn't is of a in in submarkets I something say that unlike think we've question in it's where be to Europe. think, But now aggressive I the economics down But have of the would to to there other now. nature Europe, on little mark may think And we we going that and some the a we think of destabilized and success. team, terms right but still I Japan particular. areas, right the In bit great investing we're want Europe Europe general somewhat doubling mean be there, in Eastern bullish nature right interested due had

Jon Block

different. A lot of the And let sort just model. great from It's can if the numbers What model me traditional the get saying on the dozens of a reactions very side. than med – out maybe learnings What across. utilization as there. my then question you boxes reactions? see detail It's where on But said it Maybe very partnership acne, And I Dave, be with a and just are of second different capital. the are trends? this about derms? of early early just follow-up the there, sort talk are

XXXX. I be accretive guys into think it said going you will

second that to to sort So of million just per $X million with $X a for spend's quarter. us help

revenues, need and me to to made EBITDA low if know as sense XX% do clarify. then there. expenses in there? gross all down you hope accretive accretive So were we And and let me to some say Thank I'm with think XX% you. And maybe that I margin,

Dave Mowry

Yes.

we accretive believe do like a kind of fourth this taking that perspective is I in flywheel. that First year, think being reverse those suggesting of a the of itself. certainly we're But not all, quarter a from would be leaving accretive order,

continues build more with build And more they comfortable patient that traffic. the and you as to momentum within place the it. get with As you device, practice,

greater You get greater and that placed from box. returns

on. utilized. for the the for and and it about and excited the how practitioner very is really where utilize frankly, And to product of beauty I aligned to think model, actually that. both want take great We puts think fully a but we're not that's that's and a we've I position it fighting think can we're that think, things. in this great physicians wrestling the So patient us, we be unique recognize get and to a the will I model, the not over things. just practice. And us got shape the And directly practitioners situation And

that quite frank, to it them capital has fact, process ones on in physicians without the in to In thought their practices. into portion the segment about of we that be a been suggested a many us lot a as have early breaking of significant of

through that both a new one company, recognize we're we're having aligns practice fully it's model, we aligned also we while So know and great to that to working outcomes. patient

think from I model, excited a I'm there's So pretty this and here win-win-win it. about

Jon Block

Sounds for good. your guys. Thanks time

Dave Mowry

you. Thank

Operator

the question. And Please from Stephens. Chris your with of question next the Cooley line with proceed comes

Chris Cooley

conversion congrats with first thanks questions and off I record left get for afternoon Jon up the Good taking really would for I and where on acne. question the there, start appreciate on if just quarter. follow AviClear. iD. If there could on maybe my could we additional some But initial cycle enthusiasm say, truSculpt these detail you think ASLMS, was let's of at here. for early of versus, curious kind sales if the just a Obviously, in of about AviClear kind contrast when terms there just learnings we tremendous

II how beyond new quick this ramp kind walk got And as guess, should the in then about Just help us a to start and we a of really Phase and as commercialize Phase I've the XXXX I sales follow-up. think kind terms of, and through process this model. of you is in III

Dave Mowry

frankly, very question the a because think being here. thoughtful very, we're Well, insightful Chris, I really rollout in that's

we're suffer up what and capital we about rep, deal the but right. think full and do can a – materials significantly showing showing the support we previously, is from talked normal -- for if to the consumable hopefully where AviClear closed like patient we've arrival the complete and into at acne. you as sale full joint This And get that of that agreement, the you joint XXX, affect process, around them operations sales to so company between things have only as practice. of about practice it's financing, license and as will, the practice this really AviClear a promotional we So are is many integrate packet marketing the as affect allow the pathway one them which the their to process. Not patients easily well set a quickly

as We've process, the it. it. evolving We're limited process amount release. of through quite commercial it. level always novel, it. little are, working value that's our and sales we're the the think questions through our that's rewarding, We're is we've that commitment through new learning of new commercial there's to a it's the as as trained reps are of work this And We've So from bit we embracing and the got of seeing doing and limited release, physician I a aligned process. physicians still frankly. But something this think of a I but

Chris Cooley

Understood.

Dave Mowry

to like regards the how they trying less think patients is this, they're different of specifically want understood a rest integrate it if like your or little I your -- or had. out going correctly, they've to question to how around I utilize how practices In product the because are bit to more anything than question figure

for procedure get script product we a the a able their -- and the end believe So the development of monetize great for, to them better year, much time a the really really outcome make now the I'm to now I to X, them and of and X desired see deligable effect. the in a sure we're a this training I give take X, and only At product write And be to times that of outcome. the maybe, from training it terms staff We co-pay effective or a I and patient and very day, of practice. some very, a the within Chris, has this spend is going not doing the development that patients.

it's think especially, we three a the patient. across So practice and companies, win-win-win all

Chris Cooley

from that of juncture. rollout, doesn't and a think this right formal all level quick thank missionary you and the of same of get spend at more I could the squeeze you national to then I I'll one today realize kind is these exists. know there in as a that just about more this scale start average appreciate now to if patient But a incremental maybe us lines, sale. I Obviously, launch a back controlled along AviClear Maybe help other or color, follow-up, just similarly queue.

kind get to helping drive to strategy understanding practices offering make broader out the as there trying so you much. of just Thank relation it more so, sense in to better growth these of word to a with your terms go-to-market in AviClear. a And and on starts getting

Dave Mowry

Chris. and of in one of foremost, waiting really think this already Thanks, the vast that Well, the I opportunity things people I think quite first the compelling for the about that's I majority patients think on call, room. is are those

is of do really So or outreach worst, the say. should have really moderate at something fundamentally to convince how quite It's at different. do to best we I amount you try them

isotretinoin a Additionally, has each or results. of lot that than their practices we prescribed desired Accutane of for with know the patients less

can within people names already practice practice back So they them have order in. that and do recruit their with the and we to outreach to in

or to patients doing That places. sure the patients like the already we this very, get we is the beauty said, physician quite or around population million solution our severe of nationally know things patient right do and there -- the and intend or some use patients some obviously and queue. of we We directed product out, roughly localized very awareness those to And create going here moderate envision roll available parameters. information their X a But provider real get of large seek make locators that the So to dermatologist on that around without brand care physician. there's the website is sort from acne. that in physicians to are available outside promotion already as us the in

and So market issue an but rather I own promotion awareness a a and confident practice pool. not huge the of their feel that spend, is then this we think physician the patient very within

Chris Cooley

and Thanks congratulations.

Operator

And proceed with the your Please question. comes line the Louise next Chen with of question from Cantor.

Louise Chen

on for taking questions my this progress Thanks Hi. congratulations the quarter. all and

business? revenues you. people had do I'll you about getting asking and how start of breaks I the for questions Maybe We've So sales the think potential how your AviClear there. about us a this been year device. how of And into that to few for lot up different then segments a the about peak think of

Dave Mowry

effectively. what very partners transformative short about outcomes to do being the thinking are that’s it to we how we’re I in to them. the Louise, very think we’re And deserve cautious appreciate term be getting our this you’re and we’re is understand it they out those treatment. are as that I but Louise, product, that to we exactly learn run. quite from that make sure thing mean about are questions, for supporting grow bold think and this in want Well, we want roll the this this we and patients And But best way sure believe company. physician why we loaded how to make long practice the position I could the

So train monitor manage are these place to going we’re in taking be and things to and critically develop and important term. all short and time the and the

to effective a it’s I term that anybody’s the a into that year. and really year, full is quite execute year near think because not appetite raise think trying potential launch so important turns as And learn later I’m for next the think flywheel revenue, we very we this large. So, I I later American in can North

I said, there So, just patient million company. significant penetration like our but of to potential think amount willing I very guidance put about I’m the transformative And for would to or truly change population be excited we this models this an a X out not are financials. at pretty excited drive a few there’s a and be. into certainly out small could put all point, I And much been could think what it

Louise Chen

work AviClear evidence obviously for wrinkles. could question well? as it my Okay. Just that opportunity any another next because Is on Thank And there that’s big there? is you.

Dave Mowry

some I a conclusion benefits as hitting a some presented we’re study we at a have And result, acne the demand seeing indicating the where for to the at well. in this temperatures our anecdotally Diego looked back information as would seen the have conference jumped physicians immediately through and ASLMS histology peak as a work or scarring who that device retrospectively regenerative point looked think collagen. we creating we’re which where have acne and is resolution data we’ve and much Well, went San some in seen that to at physicians at scarring we’re similar and

studies and are that, to not that. we claiming have Now done any we confirm not

not careful be in the the we’re could acne opportunity see then future. to they what So we’ve And I we the with you, think seen reduction scarring. we truncal testing takes likely And change start treatment. very significant acne scarring what it’ll and or will that But the this want overjoyed implement acne But of data. the and to evaluating about where then gun, this jumping in it’ll excited be but other and with from of are pretty they’re extend we’ll and think us. else device tell paradigm I the in physicians how benefits seeing

Louise Chen

one And Okay. just question, Thank then if may. you. last I

about mentioned year. the a had SG&A course the of spend You down something in over tamp

just curious walk for OpEx through the year? So remainder you us if of of could the cadence the

Dave Mowry

waning that I that was course going ERP of make thought the down we was first year we’re over the really that in we said and the to after live want sure Yes. quarter. clear. spend What tapering

I commercial in be making message. will in both We’re was front the the as and just in to likely well sure that the actually want that environments. AviClear investments as R&D we clinical expecting make

want very that. sure So about clear I be to we’re make

expect the but to indicated ERP, course spend increase that year… we the We of our the have the a lot haven’t on tapering whole given of on over we acne sizing to

Rohan Seth

to XX XX. of total In

Dave Mowry

Yes.

Louise Chen

Thank you much. very

Dave Mowry

you. Thank Okay.

Operator

next question Please the with Anthony your of And with Maxim comes from proceed Vendetti question. the Group. line

Anthony Vendetti

Thanks.

Just to follow on the question.

to million. is spend on EBITDA or So of top include $X acne $XX spend be acne the to spend that. Does guidance is $XX of now to million. adjusted going $XX The that the the million acne

Rohan Seth

That’s included?

Dave Mowry

here. be explicit really let’s Yes,

Anthony Vendetti

Yes.

Dave Mowry

reforecasted in new our million The that into not But any to we adjusted EBIT reflected put OpEx still $XX in be anticipate we’ve we number. now to is AviClear spend guidance. million that $XX have revenue that

Rohan Seth

right. That’s

a That’s margin you’ll That’s that that, out in currency Okay. thing in our that to And in where right. we be had And margins the I’d note our a bit Anthony, EBITDA XXXX. to are core expect profile It’s to beyond from that’s and space progression continues that has radically return should XXXX constant where mid to portion of the to standpoint. us very our of adjusted see attractive a transform exited EBITDA detour. I’d fully low on that say maintain investments is solid, separately, business little to you seen called we add which EBITDA to that the I acne, teens. the these other of within expect investments earn we bit adjusted very for in at. shareholders XXXX taking pause term, that or be a we and the size of an potential to which make a of we’ll our short our the company. return underlying

Anthony Vendetti

Okay. can through correct? there, this And leaves excludes the could XXXX, quarter. And Is if you any revenue guidance, commercially which the I read for fourth tea in that launch AviClear you the reiterated revenues.

Dave Mowry

Yes.

my year. tipped the even a I hand within think say I’ve launch to we will full do

to actually year. the said back I the go you script, If within

Anthony Vendetti

Yes.

in AviClear, plus XX% the then that expected for is margin gross the range? be And Okay. to

Rohan Seth

it number overall margin because gross a we to be accretive yet, our profile. want first. on our I to expect overall to don’t fully very it I I gross just be the margin would But scale to put do profile. business expect to it need accretive to

Anthony Vendetti

Right. Over time.

you to best So that’s of at probably as look a the is kind or of XXXX mid it? way that more to late situation build

Rohan Seth

profile. there’s factors to profile lot fixed around Again, of opposed a as the has incremental COGS acne an in a lot of of A there. spend more

to So a I number put out want time don’t or there.

our things around limited commercial out still strategy, model, our figuring We’re we’re release, our still commercial in et cetera. go-to-market

plan to be term, long very say to the I’d still accretive margin it Over profile. our for

Dave Mowry

We to I back that to exactly said being XXXX want or And said, time. with entering to just the accretive anticipated total. re-paraphrase just in we what we Anthony, company AviClear one more you re-reiterating acne

So…

Anthony Vendetti

the on question revenue Last share/utilization.

then color on So and if share for that a what placement, piece disposable kind or or be payment based the the little a to it upfront you more look? a then a what how give fee of can piece a minimal the color the little would more revenue would that consumable that it’s the look like, customer of on more may utilization range small how on of and

Dave Mowry

partners charge on work the balance very, we’re very that we skin game through commercial strong there thoughtfully as our Well, go procedure be think limited way well. a and as I physician with struck while effective in the that about parties think to we this and through we’ve a trying to right to very basis per allows both from release

we don’t a But can in details them because the the don’t some procedure. upfront the skin I into with us thinking product, has rather we game, a we for way licensing. participated And charge aggressive capital, than we the and not because rate it thing have their up where which more practice get the into I’d a pay to think I’m get normal we have set We’ve consumable consumable. to they probably have the in the is this until a release. get further So about commercial little bit

Anthony Vendetti

back the right. helpful. I’ll in That’s Thanks. All queue. Okay. hop it. Appreciate

Operator

there presentation this And back at to turn I the host. time. further are now the will no questions

Dave Mowry

for the and call. today we’re on I exciting for company time on this time their attention you, and This Thank exceptionally want new the just everyone to an opportunity. bullish is Grant. thank

quarters, and implying So we’re release the later of our really getting going this release a what AviClear keep and we the few next to can work limited learning it through to heads down commercial full over year. this hard

tuned updates Thank you. for stay periods. please So further in future

Operator

participation That ask does disconnect for you your conclude your today’s conference. you We thank please and line.

Cutera (CUTR) 11 May 222022 Q1 Earnings call transcript