VERO - Earnings call transcript Q3 2021

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Operator

Good morning, ladies and gentlemen and welcome to the Third Quarter 2021 Earnings Conference Call for Venus Concept. At this time, all participants have been placed in a listen-only mode. Please note this conference call is being recorded and that the recording will be available on the company's website for replay.

Before we begin, I would like to remind everyone that our remarks and responses to your questions today may contain forward-looking statements that are based on the current expectations of management and involve inherent risks and uncertainties that could cause actual results to differ materially from those indicated, including those identified in the Risk Factors section of our most recent annual report on Form 10-K and 10-Q filed with the Securities and Exchange Commission. Such factors maybe updated from time-to-time in our filings with the SEC which are available on our website. to result or events of obligation statements our or no a as new undertake publicly revise update forward-looking otherwise. We information, future measures financial in will are we Accounting generally call also these references GAAP, certain This as to non-GAAP include Principles or not with accordance financial calculated refer Generally measures. Accepted to that the available measures Investor issued in accordance presented Reconciliations non-GAAP measures financial and our release of of portion press to GAAP Relations calculated in are website. those today earnings on the most comparable our with I would now to like to turn the call over Mr. Executive Chief Serafino, Officer Dom of Venus Concept. sir. Please go ahead,

Dom Serafino

you, Venus on Penna; President Portaro, our XXXX pleased of Thank Financial call welcome of and I be and Ross Global to operator Chief everyone Della the Concept's third am Domenic appointed call. conference to recently by quarter today Sales. joined our earnings Officer,

Let will full me, we to then reported business start period. during We've offset the -- started revenue of sales open I same our was third me XX% The cover will we excuse I brief increase our trends. was an months. in XX% quarter. during overview results revenue and third U.S. a overview quarterly a and to with XXXX. the And total year-over-year. customers driven XX% start with call million, to review up will by will agenda you offset, of sales of remarks. the our of provide review for in-depth with overall revenue then, that let's which more international a in decrease summary get results, of recent in of questions. mind, With quarter the with year-over-year $XX.X performance revenue GAAP customers progress in guidance which growth the updated our prepared And what a in provide balance financial in our will our then sheet, Dominic operating year our

adoption we trends quarter, by United as We saw in overall the We are experienced in demand States. particularly system third well. during very encouraged trends in QX the improvements continued

related were trends in the quarter, QX have to to our shortages demand our we of the EMEA, lead was environment to tougher-than-expected a Latin of and the operating APAC, are in trends results in total favorable as result during quarter our September. demand reflect faced environment procedure pleased While were backlog a revenue number materials revenue by end. see to the Unfortunately, do ability global by customers supply not customers. global international impacted strong during procedure customers month our with of million we to $X.X our from deliver disruptions This international recovery the a specifically were orders certain impacted meet of in that fully underlying times purchase COVID-XX, components of systems impacting as that unable is in directly and we longer manufacture America seen for

backlog. And of We XXXX. the week, this our We the backlog suppliers already and first delivered quarter-end fulfill we of of million of majority quarter third-party working $X.X to have as of XXXX remaining intend risks. with mitigate supply have quarter been this the fourth manufacturers to the and during

masking we the performance our growth world. the experienced We of had have around for growth year-over-year that they customers chain are are we total deeper during reported the X% and quarter. chain third quarter. into by as trends if sales supply and revenue Diving revenue XX% third we frustrated trends supply issues, international would the the year-over-year, understandably not issues we from encountered these are demand seeing To favorable end, of

total the by drive Venus the increase customers XX% in subscription of growth to customers franchise By sales contributor increase Venus revenue year. which Legacy, compared year-over-year contributor increasing were our platforms, consumables. our region, increase the systems are to total and the of the in growth sales aesthetic total benefited and revenue of U.S. to in a the and XX%. our year-over-year, Velocity Glow, Bliss in and sales aesthetic By increasing revenues Third -- revenues largest a a aesthetic XX% in prior driven system sales the Venus and revenue Venus growth year-over-year XX% predominantly quarter platforms, system Versa XXX% market, new by to and total both from subscription subscription largest and were Venus growth which

customers Our XX% continued total on environment U.S., to global the System XX% the in in QX the by a subscription system represented shipments during U.S. growth shipments XX% driven our increased the quarter. in equipment of reflecting year-over-year XX% total shipments QX, improvement and the in model period. in shipments in under year-over-year increased capital

incredible model discussed commercial our calls, model As an prior flexibility payment on unique have lever options competition. us differentiates have we the subscription that with in which is via from and our industry-first we pricing

large lever us practices, per a to average trends business also installed aesthetic our this in device to strong of customers quarter; right consumer real-time each for commercial data date. for with usage to reported needs. most activity medical procedure and Importantly, our for to third but reflects right the the IoT respect visibility data on portion to our their model companies -- meet the our have consistent meet their This what not gives to empowers system base. With systems active identify really clinic the technologies trends work team with only individual

summer in the see saw Outside the the seasonality, respective related the Specifically, Procedure on the U.S. region continue we usage usage of July were customers improvements XXXX. on quarter pace ARTAS our to with returning month third depending hair systems and did restoration North for in vacation in were U.S., the were impact ARTUS basically flat procedures of show of and month-to-month to systems quarter system show quarter year-over-year to larger September. softer usage in activities strong COVID normal to of recovery but America quarter third from the and during pandemic. compared a our eased doctors in with improvements world Procedures September. of year varying Outside per in recovery did restrictions QX. reflect down of during trends which of America, seasonality in but we the nice year-over-year a North from some our the trends this the trends August,

highlights brief third to on operating quarter. the Turning a update in

we product First, notable clearances progress and in make new areas continue of development, commercialization. to

Freedom receipt to of conditions the clinical common it of with to for that our the health the of U.S. Feminine during and intend support comprehensive, broad technology Health our developing in Venus business medical of of the began that we nearly of we July, Venus in limited for and order Venus in addressing create ability believe the unique in devoted the XXXX, wellness launch treat a a XXXX. with attractive a first FDA Canada a and six forward October. sell expand the the has Venus issues, limited of of and community. a the women's quarter and the system Venus utilization-focused Freedom years to commencing the recent clearance range technology system women's We Health a our to important We authorization System, effective very to safe treat model, variety further the Union needs of portfolio Venus different to pleased Following significant Fiore, are XXX(k) this return-on-investment third Concept Canada European of both, look Fiore Venus using in launch data. in can quarter Concept we will Freedom OBGYN make which this

the expand end device not to the for only of technology. new muscle at but of most systems for September. a addresses is progress products We stimulation as has reduction continues platform clearance Venus in Bliss the and three contour our the well. Venus Bliss request element the includes efforts Bliss in-demand fat one Our to This body portfolio and procedures device Venus Max also submitted Max XXX(k) a that contour body workstation. capabilities, to

XX we our above device intend are customers contributing treatment. that be compares time to We the will importantly, but compelling extremely clinicians. utilization date just company to And expect to which Venus our to current IoT customers, our a platforms. nicely this $XXX,XXX on and fee will modest Bliss to for on have $XXX the achieving on we We the we of from averages. estimate add approximately expect current the important XX-week approximately the weeks of per we based this ROI of price of visibility data ROI a gross list margins And have

potential XXXX XXXX. We QX in are early launch now clearance commercial and in a a targeting of

the Venus Venus the addressable market Our both, potential progress. and to strategy also expand Bliss Max continues eventually, Bliss the to existing for

us clearances and Venus and of areas large of Securing targeting in we aesthetic key to the fully specific on-track differentiators market area for market. of the additional Max body Specifically, fastest-growing potential allow use. Bliss these Venus indications of share largest to are increased our market the optimizing and the will Bliss the

early are commercial introductions these QX. in additional We clearances XXXX with for submission targeting in

weeks. that AIme, validation pleased in project development the aesthetic to are robotic the of next-generation clinical our entered recent technologies medical We to announce phase formerly applications, create for

have approvals sites. the clinical are available we now our for is IDE through three finalized clinicaltrials.gov study, training our which We on for and protocol and clinical working human investigator

of track and AIme and as we possible to will axis surfaces. design to intend earnings in and to enrollment robotic completion to options upon will end of of of which six expected begin completed system on the curve XXXX. and features we our QX which vision We soon be a commercial the call, the submit device. of look Since December, FDA field depending arm, be adapt expect the to by the patients automation a as the and is design enrollment upto -- pace finalize of body cart, study, clearance of last and XX consist

We are years directional in for robotic [Technical add the and Difficulty] our additional applications to prospects the a initially come. lifting disrupt very AIme with the clinical device, about market to plans tightening skin excited

share Vice of amongst announced care Zaring, that October resigned as Chad last few Portaro reasons. of industry responsibilities and year, his assumed in the Ross key XXXX. [ph] veteran on Global -- the and -- of of health I the our others. more of Firstly, Luminous, President Officer -- Venus also Sales, is month. role who President accomplished XX of positions to experience Ross Candela, Ross in in and a some the from changes position for of Chief thoughts personal EMEA leader than XX, including to MetaSys President an this Commercial appointment with health sector, earlier want EMEA as years joined as at announced effective leadership We important we

the from team for beat team and we Venus' strategy leading appreciates aesthetics restoration pedigree fact, commercial missed technologies well robotic a medical commercial during large are commitment has his Ross' centered in not market. of strong and commercialization the encouraged growing procedure and differentiated who to as in And disruptive the and feedback Our products hair the development market, transition. passion the by in aesthetic medical a in this positive as around categories,

We are us high-level talent confident also industry attract help will reputation that Ross's overtime.

So third faced to the global see procedure during the during with tougher-than-expected very of are summarize strong a overall quarter; system customers results, recovery experienced to to encouraged are during pleased we our by trends the we September. a quarter while that were impacted month respect third in quarter, procedural the by trends particularly sales, the demands environment we

of continues team full balance increased sales us pipeline expectations across in the our new confidence Our to of revenue portfolio, increase gives product for prospects the qualified which growth global the XXXX.

$XXX $XXX actively with the primary today strong drivers third combined U.S., results, in systems managing increase leases pipeline million, an our in representing revenue year-over-year. particularly year now for are Our qualified to we total range XXXX in of XX% the of XX% which guidance, where increase calls approximately the a to revenue the of and quarter full million

the strategy, near turn product for to Domenic? well results detailed and XXXX of future a us call in financial We will we for which condition. Domenic who on our extremely right the and the are With let confident based commercial that, success have provide Della our Penna, portfolio term. right over intermediate me third positioned has outlook quarter the discuss to our sheet in balance belief our review financial and that

Domenic Della Penna

Thanks, Dom.

revenue our of will performance of with of rest review P&L. review our financial detailed I the Dom's the across results, Given a begin

operating administrative million. in on higher general was The The $XX.X marketing increased program, driven increase increase million this and and of was revenue sales to lesser sales the Total third quarter Venus $X.X remarks our increased loss million. $X.X unless X% loss an Bliss XX% avoidance on the or GAAP my increase a sorry, or company's morning, in million or operating will primarily doubt, million million. XXXX. Venus $X.X $X.X and tracing or For sold or in million expenses Gross EBITDA of to $X.X to in a margin a results this million. $X.X margin to XXX% services. increase third compared basis, of X% expense profit consumables to XX% primarily increased $X.X otherwise to was attributable prepared in are R&D XX.X% to of $X.X noted, agency XX% the Gross under increase afternoon Non-GAAP expenses driven million basis. our adjusted increased stockholders XXXX an the all for items $X.X increased extent, in $XX.X by mix system $X.X of operating on of to and of year-over-year total reported and million and to third an by focus growth-related Net -- of gross X% improved revenue quarter compared the of XX% expenses, of the XtwoX quarter discontinuation of million. Total and XX.X% expenses, or to sales XXXX. million $X.X advertising or or million subscription

EBITDA income provided this We reconciliation have release our full our to a today. GAAP press of net adjusted afternoon in

December debt cash of $XX.X approximately balance the and the total million as to had and to cash of million XXXX, of Turning obligations compared $XX.X equivalents September $XX.X $XX.X sheet; XX, company used and million million in for the XX, $X.X activities. of September in and XXXX. million, months three was of driven operating as The respectively XX, by change cash ended investing XXXX, a cash primarily

our of significantly during XXXX. cash have first performance the nine We improved months

decline recent driven by in year period. our to working use cash line compared chain working used our lead-time includes reduction months primarily first a the of XXXX to safety XXXX. components Note, capital the our global operations build months issues in and XX% given declined in Our of year-over-year, supply net used loss, investments prior in in cash in in the cash the nine in stock XX% a of longer capital proactive

Turning guidance. a to of review our

detailed XXXX expects range release ending to morning, our December in approximately for the period. The revenue updated revenue $XXX million, company the XXXX now full XX% As the year million of we an in increase our months press year-over-year. representing this total guidance for $XXX XX of XX, to XX%

we we offer formal full modeling XXXX, not profitability considerations providing following While for are to like the year would for guidance purposes.

First, strong XX% to XXXX, range months gross XX% expect to of nine our be in the previously. margin the in performance the to to margins now gross XX% first over XXXX XX% given of compared we

XX% expect to we continue Second, million, decrease representing of approximately operating GAAP expenses a $XX year-over-year.

XXXX, in to expenses expenses represents of in certain normalized items XXXX GAAP million this non-operating operating debt and expenses other of our retention, and impairment, operating incremental bad the and million together $XX expense non-recurring XXXX, recoveries, impacted non-cash that approximately and year. including costs related and severance legal $X.X expenses which items excludes last represented Importantly, approximately which goodwill

of items non-GAAP XXXX. adjusted reconciliation tables detailed were All our these in EBITDA in

we your to G&A open Third, comp of that, costs call we non-cash million prior non-cash year. continue now debt $XX $X.X turn expect will expect given of we to and the average approximately borrowing stock With compared shares Fifth, weighted questions. $X approximately expect and approximately million. be Operator? million. outstanding obligations to operator, $X Fourth, our -- expense we interest the to our to million the be lower

Operator

with Instructions] Ladenburg Thank Thalmann. our come from And question will Jeffrey you. Cohen first [Operator

Jeffrey Cohen

and are Domenic Dom, you? Ross, Hi how

Dom Serafino

Hey, are you? good How morning.

Domenic Della Penna

thanks. Great,

Jeffrey Cohen

my couple Just a end. from

you a So firstly, bit. could backlog the little discuss

you're as or by change $X.X as as does sounded of the it far far the unable up you manufacturing, production look like So and far and pull $X.X how end quarter. thus manufacturing that the the in year come that through million, of are? to to through expect fourth picked the components as Do balance million you

Dom Serafino

Yes. Jeff. Thanks for the question,

this Yes, that our is that Venus the items, $X.X filled network some came and million have, product represents factors distributor topic. of in $X.X our our had America of Latin in a in think a legacy we of to Legacy there We million. related and The business Velocity. resurgence particular couple from I majority fact, that including EMEA, APAC.

we As $X.X has million been said, filled.

but sure into expect on leakage supply We chain. of QX the there portion million a will large captured in current to QX for to visibility be $X based our be other outstanding our

Jeffrey Cohen

you quarter? is fourth Or coming spill quarter? the first into the quarter further last also in leakage that And orders expect have to from the

Dom Serafino

Yes. mix for think is under us forecasting improved the Ross' of and leadership, our No, product our organization I sales think with helping I sure.

don't SKUs we quarter. So in the particular of ourselves find short

overall, think delivered I we've today of that on know good product. position what should had in So based be we reasonably finished in we and terms what

inventory and So America, the where products, when leakage, of I I of keep orders said, that globally, And our Venus to including fill we very them will, I'm about partial for talking forward. sort the as moving some about suppliers seeing think if orders will Velocity. North our to related significant we're large increase balance, legacy requirements talk of demand sort you Legacy in I historical

be will into say, but be, QX. it yet, -- some some number I So so we into know will QX. $X portion will say dripping would of the XX% million don't exactly or The

Jeffrey Cohen

the The the is in ex-U.S., And difference between talked technology? is a Freedom the there Got about? Fiore and you is U.S.; the difference Freedom clarify then Fiore it. secondly, you could as

Dom Serafino

a creating compared of to labeling Fiore clearances for more There World; it's CE for is the the for the in specific It and absolutely markets the have same Canada, we the separate of brand and Venus technology. technology. Health in market that and Rest a pathway exactly but no was U.S. really difference regulatory

Jeffrey Cohen

Got it.

jump queue. Okay, back that does you. Thank I'll it for me. in

Dom Serafino

Jeff. Thanks, Okay.

Operator

Thibault comes Our Marie BTIG. from with question next

Marie Thibault

morning. supply more did international about excluding good questions. want of strategy of and markets. Hi, taking bit disruptions Thank that some the focusing mean been the markets little faster-growing hear chain commercial have on understand during how some business the I you been the on portion of consolidating, to I just for some follow-up the quarter; a I the is progressing? you've international the

the about during bit hear So little quarter? progressed that I'd love to a how

Dom Serafino

Yes. I great question, mean Marie. that's a

direct had to in we our you'll the year, of range of at and APAC part direct recall, North we mean what COVID, to as the and where the had XX offices. markets offices of essentially, which we because XX think deliveries. I in of bit decisions America. I sustained allocation demand guess, a product are strong -- European not QX, we've opportunities Latin our the restructuring, the We seeing technologies. a standpoint. really, a was growth markets we we're were America, our contain as But to our prioritized consistent where in of we the could fulfill our was we growth. make shortchanged we with for direct to of mix were demand it out we down deliver And our product order to in distributors -- were of demands had in it deceleration, beginning So best us of a In offices; now, blip, coming where

-- to aggregate, in continue did perform offices through we our did we nicely direct suffer through distributor but very channel. temporarily suffer Our QX,

Marie Thibault

ask well here understood, Freedom. CRE guess on That's follow-up I I'll then Okay. Dom. a

Dom Serafino

Sure.

Marie Thibault

different point portfolio. much customers, to to rest call of targeting used your the When it we're those with comes of than it's a some of

thinking on hear to you're or question. customers? those investments side sales new how perhaps the And targeting taking of like the you're about about I'd force for the thanks So some making

Dom Serafino

Thanks, Sure. Marie.

it's it portfolio specialized will there Fiore; So I'll that sales the that we a what felt specialized, call is organization. ARTAS do be Venus a need very to we we exactly similar with what Freedom with and to the did where

dedicated the America. in -- translated system, which with region, one to With essentially into we expert ARTAS Venus North every the seven

experts with in OBGYN Venus our Venus the the thing are and the because we very of the and community doing wellness in the will be will model way will pedigree And this Fiore a understand, attractive, OBGYN and category the have terms those same growth will structuring for utilization revenue in specifically. successful market, We we're Freedom; the us terms provide very female profile and think for historically, utilization, this in been of growth. of significant health space very has business

we that different for So validate; journey significant well developed already with been specific of very be market. to a support has get call six the we think well received the that the clinical indications product globally year it technology -- variety to clinical and I'll fact will to a

Marie Thibault

you. Thank

Operator

is from & Company. Suraj Our next with question the Kalia of line Oppenheimer

Suraj Kalia

hear right? me, Good all morning, Ross. Dom, Dominic, Can you

Dom Serafino

Yes, Thank you. you, we can. Thank Suraj.

Suraj Kalia

is -- at everyone hope right; going macro a Hey these on are going specifically to if and persist. supply anywhere Dominic, Hey, on the it issue, look healthy. Dom, safe soon, you ain't so Perfect. anytime just it level,

Is So all walk supply through, it just how or based of kind supply I'm like it? emerge issues? again, QX? curious or FIFO as of issues all And case, have in any mitigate in do decision us look QX these how whether you basically does matrix the you

Dom Serafino

open issue. news, to I right, the news, that a at the every time you I chain Look, you're Suraj. there Right. you supply I mean some look reference think hear is

did and the of a to hair we've OUS case, the Velocity; seen didn't lot categories our in And products our discontinuation use a is even was we for products that products and same distributor in there of think markets I like particularly the it's networks. our word. in I cellulite competitor demand, hate that like But expect Venus through reasons removal. Venus Legacy key resurgence certain in Venus Legacy; what -- key like the because demand we legacy in

into all little of by consideration reasonably And a taken products, we've don't for inventory investment a items. done we've that. with we production for lead time surprise I -- are think and so bit our into additional we long on And good planning job caught of

through and reasonably impact done anticipated we're customers this where suffered little on directly. that good that a what I and QX, I but dodging we think we in the well I'll where we call our why we've available think to European, we is us reasonably so OUS for think look And bullet that our of consider our reasons our to categories. did we to decisions few is one have the going where profit When to business. surprises the as and on I service we're based on, bit example, going our demand, it But going had ship of think comes don't well, resurgence partially of would a today in we slight the managing the is at we that products have what I that's demand that's overall, make a I business a because on it margins anticipate a job true. as because historical of know where best -- there through I QX we pretty Venus I dramatic some decent think of categories job it in our that be couple managing right mean, surge strongest key obviously, now forward. have I impact FIFO, So [ph]; potential think doing we given so that

Suraj Kalia

of versus plus just adoption? your qualitative Dom, a XX-week made can assumptions Bliss, Max, if or assumptions? like aspect us Hey more give a that of I'm kind maybe the for interested walk something XX-week us so it. Got in Venus you payback And for utilization for the through are what specifically, could you Bliss

Dom Serafino

Yes.

regions, commentary benchmark in we in of have So all part, of is consistently been categories from factual so launched Bliss, we impressive. those where significant quite this it's And a that even can draw per since the increase from not globally; our my very we the data devices an with sales it's one store the that are anecdotal field on base, they're performing. how user

that not on is based Bliss with a Bliss, the what into between higher the X any so is with means week And that weeks on that intended treatments current think as the be is that safe on protocol. to we the on XX average or on an now our don't what for right charge bundles or so based stim we the would Venus XX-XX the double is is element, and will will a or X contouring X moving that based assumption And the reduction X we'll is on fat taken Bliss clinics or Bliss that and see procedures, which from workstation actually clinic about current the consideration the Max with trends contouring, of X we fat global muscle by And Bliss weeks. store-for-store through have body in The X create of weeks and system, our Venus ASP. Venus contour these currently so contouring; the the XX to device; typically full device fat assumption doing well on a the muscle costs tissue total individual Venus made whether body the globally and anticipated to reason treatment that Max. element X reduced, extra the ASP they're third differentiated as that payback the adding is, period in about why definition was with the somewhere a and and really that market reduce that platform a only be fat, body only the where the XX

margin. said as very every portion the a is high muscle treatment $XXX remarks, prepared in what of being we've charge about will is, at stim Additionally, time have our done a with we the device

Suraj Kalia

novo a my and taking supposed to is be Dom, side, And hop final questions. back queue. it. my I'll from for AIme Thank Got XXX(k)? or you in XXX(k) de

Dom Serafino

It a will be XXX(k).

formal have competitors. with track a and ARTAS good to spoken We We've we'll the strong the belief we a clinical our recent forward be and predicate we're and seeing pretty we of clearances to that own trials. have stop follow, we from that FDA, our need able we're with that understanding to device that what design device we're in -- clinical ready have quite move with trials now encouraged

Suraj Kalia

you. Thank

Dom Serafino

My pleasure.

Operator

is Jon The from with next Block Stifel. question

Jon Block

morning. Good guys. Thanks,

Dom Serafino

Good morning, Jon.

Jon Block

start sales based talk it on the And ARTAS, revenue? that in what quarter the out markets. it say mentioned you I of consumable know [ph]? you're percent you ARTAS to just some specifically, about I'm Maybe going specific below. about think guessing might notably what Dom? Was on I just also, not Thanks. to ARTAS have more forward, been utilization line Can break and in might but just total you to that the some year-over-year; in with product a willing OBGYN key it Capital for international was headwinds around commentary XX% the as quarter; of the expectations

Dom Serafino

Yes, for question. John. the Thanks

procedures doctors and first the of now, involved. one they're saw the particularly evident we clinics of were back at seeing this be of it in are early taking vacations on going in up doctors end that sort when was and the the our to we devices, the we utilization utilization; tend things was our So, on trends hair where did looked actually restoration typically longer, part September the delegated; not

August off." greater think And level. take that I bit need to reached time finally to a that the so doctors "Hey, we saw of point specifically in I So where they, a

a continued November. directionally very where of terms trends that's in recovery October the September, think will utilization saw we and go, that we and In nice into

the think because we more of softer traditionally was that QX. blip So of that a

QX where quarter; so into words, industry traditional other always we're softest historically environment been in happened. that in our back has the So a heading

was to product. is, XX% in see actual XX%. business; collectively, so where ARTAS historically, softer QX overall what combined the That about of to it the side, it device terms we typically our said we've with closer Bliss on XX% represents was In

for Now place, It shipped different getting the financing orders the -- so the ARTAS couldn't get were our in had of wasn't credit just of but a in pipeline, end variety was supply we there documentation, proper chain delays on the quarter; and the some and shipments on place system, it we at so on. we reasons. and related had them in just

the of some we with moved QX the back track that deals of QX. feel -- QX we pipeline, started system. we're in QX, slippage pretty and So on were with QX, early in think confident performance yes, early and disappointed where ARTAS based from ARTAS in we the current that we how we closed But on

Jon Block

then, color, trial is of AIme, helpful clinical color bit pipeline; a then you. of thanks. does seem like room a And some you there, terms running? shift the that very more just function And yourself of That's attributable a other trial bit Dom, correct? bunch the the of great. maybe the leaving and just getting it what's a little That's the web enrollment? It in Or thank [ph] for One, to timeline. good words, to is of pace to? push In on more a up time little that

Dom Serafino

of both. think a Yes, little I bit there's

time, them your to bandwidth have, inbound the two patients? you to that level could AIme most we post-clinical the do to doctors involved done we clinical multicenter once was the dermatology papers, change on that part significantly quite felt going no. we strategic us that to that our of would we in answers the surgery enroll And just of confidence the I different at inquiries the exposure knock the etcetera. And variety And we the frankly, the think on from a decision doctors of that can the completion get Can in improve it to and we're community last get podium, plastic to peer-reviewed on that into, this? the a question gave line do that you Unfortunately, hey, same clinical wasn't of that there, discovered the want? high through doctors, you time of made we started be dig trial. to

the I'll have actually excited level for call sites that So it themselves clinical physicians of to be options this. as quite -- about presented the we're

The second for clinical did part and of chain one then a it trials, little is for that, three supply us backup. sites four platforms in building bit hurt

we'd a supply these stationary, relatively that's moving and trials We like familiar built, done. the components to the a are issue But on that ideally, devices have get getting order key and already to for of the in the low have level some was one get devices with been be chain clinical of that to we're and around basically to system well device. it versed doctors able

the Well, on to everything, in indications. product of other little XXXX. in I John, trajectory that and but close pretty starting that this I'll is market is about bit So, the this one there overall, good we I'll a think feel tell getting thing, of we're to to this you opportunity product and the timelines platform this, see has clinical particular

of I have on an be the platform and carte an through software able improved. so being la has type where significantly other sort exciting. reasons you'll been to a the one quite various the you'll to that approached words, that's platform in app clinical essentially doctor the So us key is of algorithm; like designed screen, choose be today to indications to the participate why want has of think And that's

Jon Block

That's that on you high And we'd differently? Ross, on more at And Anything think I the organization. fair to Thank on love a you're me, the initial anything a call, hear, lines; a very product excited level I done Is for I to on particular there if know less believe is game, you. emphasis this you're thoughts game. it's be role. last call your one just But know out? great. that but the in again, certain or can congratulations don't fair about, early,

Dom Serafino

problems with you I there? if like Jon, you is I'm here sure Ross, he -- to think would line think having -- I he... Ross, that? Are you because muted? he is his answer not

Jon Block

all follow-up, good. you. I'll Thank

Dom Serafino

of a but on a I on, follow-up but the think Yes, may he follow-up think little is call, bit have traveling; we'll problem. so be he'll he had I

has the organization EMEA, about clear, to now, resetting organization been because the of six Just for of five performance started in we to and five, but be then months with North the or months brought him America he Ross there.

So on we'll -- but the ongoing about talk it calls.

Jon Block

the That's guys. Thanks color great. for

Dom Serafino

No John. problem,

Operator

question is Vendetti next Anthony Maxim Group. from with Our

Dom Serafino

Hey, Anthony. good morning.

Anthony Vendetti

Dom. Hey, How you? good are morning,

Dom Serafino

good. We're I'm good, thanks.

Anthony Vendetti

Venus So on Max, supply Bliss then on two and chain. one questions; one

make want I timeline I XXXX. potential the for Bliss On Venus sure a Max, to growth significant understand just driver the because in like this looks

commercialization timing Is I can just the about 'XX. the talk said to want time am in submission, quarter line second think you about the you FDA the then quarter thinking expected I -- that And please? Just first right exact clarify there, 'XX. or that, clearance; XXX(k)

Dom Serafino

Sure.

to the from received filed We guess, ago September clarification. feedback the XX in we FDA, days or FDA I about XX. So so some for

approval looking us But will in used so We early QX; units systems we Those We first will have bit. we'll we'll off that ultimately, terms those in of available manner. end be But a do commercial QX, have do that's quickly, questions, lot it that whether done mid-February. of January resubmitting partners or a for be schedule of we're that an that of customers. have the for hopefully, a in that to we FDA lot in see KOLs to we a able will staggered. -- new little shortly anticipate pushed QX. XX will and available work to XX be a release, do articulate able very and production because potential We that us of that in anticipate got to key full at approximately strategic that, be formal populating be have to success, for be

QX. if your that we'll so, Hopefully, be full in will, release, in answers that's And why you question.

Anthony Vendetti

Yes. that's helpful. color. That's very No, great

full that available, systems be to the would XQ those the KOLs going release. So in XX be are commercial and then

Dom Serafino

Yes.

Anthony Vendetti

And every so to XX%. forth, supply different the it's XX%, have shipping supply towards quarter issues were you are able third look, gross that here margin issues. then, curious, And a industry having I'm chain there, XX% with still guiding or good. out the is Okay, whether you're chain and in

issues your So seeing forward? is going Or actual you on the for more impact of a chain timing goods situation of Concept? supply are Venus the cost

Dom Serafino

Yes.

we is haven't with a answer seen part the suppliers. second our cost and obligations have device the to contractual So, we

So been that our on profile gross from protect nice at Venus margins. products on high margins, margin -- able very we've been our especially have profit that standpoint, to very historically

streets been part Manhattan it's than I suppliers I think coming seeing first out there some the wherever. have to no question, stores with different of mean your of or on the empty of challenges COVID.

XXXX. not to able Some chaos, through will, suppliers of the were if come you

and there is scramble frankly, need and safety process to, we And alternative a etcetera, find comply have etcetera. find sources; whenever you alternative to quite variety with for a you key testing, go through requirements, of that so including components, to sources

particular product like you when to So have platform. a a part on building change it's almost new a component

we the the have but So Venus to not in a of on a the and QX. we little key bit didn't other we that ARTAS, meaningful Bliss we're frankly, saw our that, saw or of going anticipate quite items in like drivers that rather such resurgence some growth

So acceptance in somewhat extremely seven we it the about six have level validates efficacy having left the we're us so and and portfolio the excited products encouraged the scrambling mean, clinical frankly, quite our we're on a is here of that little patient year of I product; quality that bit. that. which experienced and great renaissance one old and are technology

for sure. other were it situation the On scrambling left us where we hand, a in certainly

Anthony Vendetti

Thanks great. Okay, that for color.

Dom Serafino

And margins lastly, four over obviously, Versa, to I going including quarters. think contributions right? that to mix, Glow, ARTAS. improved the Venus Anthony, just the the Venus to I and our the across and to make improve But by three sure the help continue next mean, we're helped Viva, disposable were margins the aligned; that's --

Anthony Vendetti

Okay, that's helpful.

Dom Serafino

we such also Anthony, or QX. components secure improved And our we that safety levels our increased stock on certainty

So the we with to match fourth us is strong was better able pretty the working but build for in of to we're quite inventory. the was supply in tight demand, wanted we which entering quarter that into sufficient order third feeling a be to quarter, secure about quarter that and quarter the lot because capital fourth that part were third

some explains that of the working capital So impact.

Anthony Vendetti

you much. very Thank great. Okay,

Dom Serafino

Our pleasure, Anthony.

Operator

participants showing your currently are queue. does That in We today. our the participation. Thank you for for additional no conclude conference

Venus Concept (VERO) 12 Nov 212021 Q3 Earnings call transcript