VERO - Earnings call transcript Q2 2022

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Operator

Good day, ladies and gentlemen. And welcome to the Second Quarter 2022 Earnings Conference Call for Venus Concept Inc. At this time, all participants have been placed in a listen-only mode. Please note that 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 10-Q and our annual report on Form 10-K filed with the Securities and Exchange Commission. updated SEC, to our which be filings in website. may the with are factors from time time our Such available on forward-looking otherwise. We or of to obligation information, statements our new or undertake result as events publicly future a no revise update also GAAP. to certain will not that financial accepted generally references with accordance in the include accounting call measures are This calculated principles or as refer financial measures. to these non-GAAP generally We available accordance our in Relations most Reconciliations earnings of comparable the with those GAAP presented and portion to issued are non-GAAP release measures in our Investor press today website. financial calculated the measures on of I would Mr. turn call over now to like to the Serafino, Dom Officer Concept. Venus Chief Executive of sir. go ahead, Please

Dom Serafino

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

sales cash agenda with flow provide with our second the then will which XXXX, our the an our more have reported revenue business year-over-year today's will excluding in subscription our focus revenues commercial remarks. U.S. release. company. The start quarter our I a customers X% systems X% me profile X% implemented Then operations our up initiatives revenue period. year-over-year, strategy, business in sales revenues from press with you overview of a the and in Let questions. overall procedure-related $XX.X of in our to was increased open Domenic revenue discontinued X% get and increase and of And period our GAAP what our let's to million, disposal brief during customers as QX We to cover quarterly and discussion and to we global performance for that started in to in-depth will QX, growth by revenue and review Total balance With results, we exited call year XXXX. your X% of prior full of a trends. prepared financial revenue growth and up driven total sheet second in the a of results year with mind, guidance enhance in year-over-year. will in our we the updated that start increased we of international streamline that overview VeroGrafter year-over-year quarter we review the

franchises strategy total our revenue discussed key calls. in we QX investor of by recent our Importantly, as we was commercial growth part driven the have prioritized in

fueled our on March. was adoption year-over-year in & ARTAS franchises program Bureau growth demand initial the XX% iX robotic excluding year-over-year posting our revenue, sales. system And in Grafters BlissMAX XX% increased strong in strong growth for launch sales Specifically, commercial QX, by our following quarter, system this continued

we team While for U.S. and were expectations. key see are growth drove significant market, sales in our key sales productivity our had U.S. turnover to a We material leadership lower franchise impact results. market products This during in demand continued in a on revenue U.S. in was this QX, which the issue force sales in unfortunately results below regrettable strong quarter. this disruption pleased in force our our market experienced total

QX. and this have very we aligned market issue team rebuilt said, our That are market U.S. sales in since sales the to with by in results rest strong of leadership consolidated address our the in sales key encouraged We values this and the U.S. strategy. the have core

pipeline. a our where of the very we had subscription results quarter. system disruption, in outside market strong validated the heading to year-over-year second delivered and The qualified into continues and growth team sales enthusiasm XX% build Our of

environment operating in ready future are in total significant that the for of growth us we entered the we experienced commercial to to strategy, of qualified QX, we as positioned The improving driving and product our and our right success. had right our have flow the and level confidence portfolio softer-than-expected have with capitalize belief pipeline well and enhancing revenue We cash improving in not extremely profitability business. conviction profile which commitment our change QX our did on

In fact, in world potential comprehensive we undertook and operate. which of review and of expectations the business our updated growth in profitability regions we a for our all

of to half product more a sustainable profitability. and strategic team recurring focused our revenue we are series [ph] our with benefits of lines, initiatives cash path our the realize implementing profile The of will XXXX. streamlining accelerate and on streams. to implemented, cash strategic our programs have and fall further profile sales we operations. These initiatives to With in commercial commercial developed and the key a messaging the to with enhance to meaningful strategy, two focused those already global expect We to in strategy flow of strategic we monitor more being on flow direct focused long-term second including business and are the targeted brackets- into our U.S. continue respect initiatives

to U.S. prioritizing potential address are are not highly continued in demand as flow maximize subscription Note, our contribute We strong our technology differentiated our and market. the cash that model. we shelving the industry-first cash the profitability should system sales we

certain this geographic products in offer going business differentiated to continue for forward. will certain We markets model

ensure more stricter disciplined however, company financial not specifically a are and macro exposed approach the over fluctuations to to qualifications will, results pricing to We global environment. the rate subscription model our forward, and total interest in credit bring going

mix targeting of subscription to XX% to be than system shift XX% sales We of half expect compared and XXXX first a year. the of more we cash the these second half commercial sales in in material are initiatives to systems and in the revenues our result a in

plan this team have the embrace strategic this, support fully to We our compensation initiative. we and aligned force to sales important expect

our justifies efforts improvement flow this in expected the area. half 'XX the on an impact the cash towards conversion for in While cash shift expectations in revenue our second total XXXX, has sales our of

respect series may that global Now redundant streamlining balance of our include international investing, over plan comprehensive closing on XXXX. efforts offices, review actions eliminating to our with of of operations operations, based reorganizing on of the and markets, we our a

Our growth operations coming in and unprofitable years cannot support international in this profitability objectives markets.

to and activities total XXXX. these modest results While in second are impact reduce a half on are XXXX, our represent expected expenses expenses year will annualized revenue the in operating our of our the in materially reduce it

direct footprint we recall, markets higher international in like our restructuring EMEA. Domenic may markets opportunity global interest including and resources you countries As America and smaller, XXXX, less in commercial these in our a North our you divesting on as additional reinvesting those entity flow implemented financial areas profitable our of on profitable additional a in initiatives, sustainably working as future. expense to detail support optimize are operating well where in of the profile becoming focus cash provide go-forward and key we will to

clearence highly contouring call XXX(k) clearances Before clearance the areas its on clinical an The body with early differentiated market of our workstation new customers. stronger provide size and and April, of new further have increase use product lipolysis the energy abdomen making an to Domenic, include wanted indication workstation ultimately This by efficiency the use I commercialization. and RF the flanks areas increasing we the even and output market an and for commercial to I and single expands to of progress in over and energy in offers the the announced the clinical results validation, BlissMAX new end for are new expanded a by maximum we for to turn revenue provide with XX%, you body which body physicians addition back our BlissMAX and been will of flexibility output. believe notable to increased during versatility has in initial to this strong the been utility of indications BlissMAX sales the development, treatments, In regulatory update more in the response non-invasive RF launch. contouring receipt we

to continue growth of U.S. the XXXX. U.S. of in strong sales contributions to the drive We total expect to Bliss and company in BlissMAX outside

to Finally, skin of and and We in our resurfacing submission. XX the progress proud platform for have and non-surgical with the during recent engaging we clinical of been excision continued our submission for regulatory the development, strategy indication months FDA advance applications. robotic-technology aesthetic medical March for made XXX(k) we Aime, the of have tissue announced the general our are in review

to extremely has clinicians, we different the differentiated process parallel has it predictability In skin new that clinical to Aime strategy a the true indications believe for changing innovation potential speed, market by been very for Aime The upgrade aesthetic customers. is me, also path It indication Aime and of made have and and introducing way the resurfacing, to platform, treatments to designed excision secure for for platform safety in excuse to prospects today. look the bringing support to medical - We the that the indications are available towards procedures important cost effective via to for the submitting forward specific continue progress the clinical any clinical tissue our from to are level of is bring numerous on aesthetics that the compelling, and device remember a and Aime this general face. for unique just technology. disruptive to we market performed products currently making a

wrinkles This our for enhance specific expand wrinkles. the patients treatment the growth using safety first announced enrolling of profile. clinical We pursuing study for patient investigation will will moderate in long-term submission and and are indications addressable of facial study market XX We XXX(k) clinical our study. treatment cheeks, April evaluating an our which IDE opportunity busy for treating to for severe are of sets further and [indiscernible] the to efficacy our treatments annual and Aime support

financial turn second me our discuss will a our Domenic financial Now Domenic? with of detailed XXXX that, quarter Penna over who and provide balance review condition our let call sheet, guidance. to results updated the Della and

Domenic Penna

Dom. you, Thank

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

focus million as in a revenue operating in foreign was The to were quarter compared The of driven driven and total margin period. basis. $X.X $X.X $X.X results company's by million margin well XXXX. $XX.X items for change are compared operating of Gross my was gross quarter changes avoidance decrease prepared to an to marketing growth-related or Gross $XX million million million or XX% in increase of unless expenses. in administrative profit reported XXXX. increased GAAP expenses, as and $X.X and on of research basis an X% development by otherwise expenses, of For million. a or the XX% the depreciated U.S. or of changes by $XX.X the mix second sales change doubt, quarter in X% of XX.X% second all on a the remarks year-over-year partially the and in of on will increase in noted, was XXXX currencies, relative XX% in dollar by expenses which the expenses million to Total in general offset second in

In reserve government benefit months include quarter to impacted accounts $X.X debt by addition, which forgiveness did June in the months XXXX. XXXX, guidance assistance gain a million for a the assumed. in not of X $X.X to .In what in XXXX. a also X expenses our $X operating had of additional an period GAAP bad of included year repeat prior ended which fact, million debt the million second XX, not due The our compared recovery expense non-cash OpEx reactivation GAAP of included COVID-XX, expenses loans, prior did our bad XX, June on ended operating

Excluding and $X efforts to the better expenses environment. million or prudently in non-cash recovery this operating high of gain as year, believe in both periods, X% reflects manage expenses debt the as our inflation bad year-over-year. well non-GAAP our our expense increased the impacts last current We

commercial In initiatives, the for to support we growth of in our BlissMAX Aime. of addition, in are our our development, regulatory the and investments strategic launch we making key programs continue clinical prioritize including

a earlier, operating generation. global mentioned expenses Dom and implemented reduce As of cash initiatives improve our series our operations, our we've to streamline

second of these While to enhance these expect realize in we the early to half financial activities intended of benefits multiyear XXXX. initiatives our profile, are

second now significantly the in flow operating half cash Specifically, $XX expect risks cash $XX million we assumed quarter GAAP the minimizing sales, of $XXX which compared approximately second a review $XX XXXX we by OpEx our prior for Total Net face the the operating to million or quarter the share We second million $X.X GAAP of full stockholders $XX.X of while guidance, to XXXX range million this our million $X.X income $X.XX million. XXXX. of million of XXXX. to improved economic quarter in high year loss to the for the quarter expenses million loss adjusted second to setting. compared of system was in to Returning compared results. had million prioritizing per the million for compared financial inflation of quarter for second EBITDA attributable was of of quarter in second second EBITDA income $X.X XXXX Adjusted to to for XXXX. of the $X.X loss net was $X.X of

a reconciliation release. in EBITDA loss loss of a full As earnings we to provided GAAP adjusted press reminder, have net our our

the to Turning sheet. balance

is compared As used of period. obligations ended June months XXXX. compared June of company flat year operations cash and respectively, XX, was and prior $XX.X equivalents the XX the total Cash and of the to December million XX, $XX.X million $XX.X $XX.X which as had debt to X million million, approximately for of XXXX, $XX.X in million cash

our of ensure initiative, as investments our advances to given is prioritized and through and we to chain challenges. As inventory move ongoing recent use demand to cash meet directly realities related suppliers to of the supply which to XXXX, date on discussed customer calls, strategic ability the

We to through expect trends XXXX. working as improved capital we continue move

our review guidance. of Turning updated to a

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

like would considerations assumptions the and following growth profitability we our underlying targets. help the For to offer XXXX modeling understand to investors purposes, driving

mix two First, more from in our following, of shifting comes in sales sale total driver strategic drive of reflects the range flow roughly sales. thirds our the initiative versus revision updated cash our our of the revenue cash specifically from total towards the revenue to largest systems, range, our change subscription guidance the representing

XXXX. on X% on QX of incremental initiatives. million margin of compared shift the cash of guidance in in The XXXX in half results which of remaining total range XXXX also our prior year-over-year $XX expense has gross $XXX expenses We softer-than-expected improvement revised prioritize The of expectations key headwinds sales Dom our towards our XXXX, certain bad guidance impact million an our reflects we As combination impact million. the second and range in It growth strategic revenue range in based conversion our from mentioned early $XX our international as our representing to from the are X% of the third The streamline revenue of we distributor over expect and represent we compared specifically earlier, to XXXX, management operations, to savings the we second to the global expect gross gross includes the initiatives changes expect of our range global benefits was year the assumptions XX% second area. expenses realized to changes margins implemented flow the to the margins of as this cash million respect to transition half roughly comes the while for expected strategic the not together expectations GAAP estimate our to our support to operating in exchange contemplated our to the in justifies operating XXXX. the total reflects we reflect our investments in discussed million XXXX. updated our in With well million operations, our compared inflationary making debt $XX to a approximately direct of which one sales guidance rates efforts also expense expense quarter markets the now approximately of to approximately to order $X margins revision now second continues strategic initiatives prudent during the in prior impacts the sales range - the in continued period. $X model updated XX% prior the impact of of have P&L half in gross prior of supporting XXXX, streamline of to for calls, GAAP our growth from change to mix, now year-over-year

on considerations $X to earnings interest of to initiatives to other $XX multiyear on expect approximately shared variables reduction higher these expect by $X.X realize our our rate previously, to XXXX. were profile rate financial million There and million debt. million call. modeling in approximately designed last assumptions Importantly, year GAAP our we enhance are interest material expense compared operating we no full driven a expense now thus of changes on basis We

expect stock We shares million, to million comp to million. of XX average non-cash noncash and G&A of continue approximately weighted $X.X $X.X be approximately outstanding

includes to each attractive we questions. will we your on call non-dilutive revenue for the are infusion third reported of not Finally, million respect range the typically that, range guidance that interest the agreements way balance current These $XX our potential the now , not will quarter. full are financing partners total subscription By factoring the represents of With our from in in With sheet cash and sheet. reminder, discussion part on believe the $XX year to receivable the revenue more our non-dilutive receivables of updated collateralized, we current a interested XXXX accounts secure to accounts total in than assumption and are potential quarter trade million. receivable do open with of $XX be company. efforts bear to as option Operator? agreement an for operator, financing our million balance long-term

Operator

with from with come will your the Thalmann. question first our And Jeffrey Instructions] line Cohen proceed question. [Operator Please you. Ladenburg Thank of

Jeffrey Cohen

Ross. Domenic Dom, you and are How morning, doing? Good

Dom Serafino

We're Jeff. good. morning, Good

Domenic Penna

Good morning.

Jeffrey Cohen

force dive on is, on into was far sales of X% force representing many one It bit where - U.S. as And in that the sales little U.S. guess disruption? could I a as how advancing geography you you individuals? within a the first territory? the the are question and new

Dom Serafino

Yes.

So, thank Jeff. Ross… you, on, Hold to

Ross Portaro

problem… No

Dom Serafino

reasons, specifics the Just of not for geography. - to the competitive going for we're reasons get into competitive

continue We of number it region. the of was late desires overall will reps. the say sort consistency the in we the Once the leader issue, business. impact that the impact we fit disappointed And particular did in grow really and the with to sales quarter. the performance company's that direction were of it with It didn't this did significantly identified unfortunately to

majority I it's are identify we'll did comfortable comfortable I'm during show strong individuals the this important to that and particular think period the we right of region very under of feel XXXX. has growth we homogenized, we of said, as very team territory. a them, with region, that build we feel now to get and able Now XX% was very the particular time if has forward running at that will feet of half the really contribute the now that The you go say team U.S. pipeline. be that on continued in team, market will, year-over-year back difficult the has replaced that significant outside And and the been and their a certainly based that leadership to entire exited happy very been these do this in to where

Jeffrey Cohen

margins you latter about it in to and like QX, sounds little talk the bit on challenges? held a up but It why going do of the second us looks half. to supply the rather but Okay. your bit you out it impact there the back Got some expect about like part impact quarter challenges Could have didn't it you - a year? well. for chain it. little you And Can talk what's

Dom Serafino

that. handle will You

Domenic Penna

is we're of sorry, the half terms is the Jeff, anticipating more what quarter second the So - same in FX. of in second

$X U.S. we FX had QX major impact most with So million a depreciating roughly vis-a-vis the in a currencies dollar.

XXX that So points. expect and about impact exchange is of basis the continue, to we worth

basis to In we're points. between between and thirdly, And have have impact XXX of basis expect mix XXX then an XXX an impact addition, to inflation XX we expecting points. and of

we experienced is in collectively QX. points relative that basis about XXX the So to XX%

Now in relation I insight to offer additional split. can versus the subscription cash

for down pulled but half, the we been second guidance hair the revenue of down side So not in - necessarily guidance the our the business. pulled that has

strong, perform the a ARTAS you still the we've hedged and fully that's ARTAS inflationary have the margins you in then impact subscription looking bit slight impacted and side, one So basis to lever which when down that's of which approximately second is half. pull of of managed how in very because not side pretty we're cash you slightly particular, business, of is the But hold business impact, XXX but up the is And because is to anyway. ARTAS the lower sort than points. it a that we've the date, balance mix where at how continuing

Jeffrey Cohen

X.X% the debt reflected on And recovery is where? Okay. bad

Domenic Penna

experienced million quarter bad second So repeat not a the quarter the of in $X.X debt the of expense XXXX. recovery relates in to we did which that second XXXX

in QX a activation a a of in then So actually were the one-off we and onetime and XXXX customers Many XXXX, of lot hundred bad them on some were recovery COVID the half first and is because it dramatic of experienced of impact particular, debt those that to benefit QX, And the negative realized expense able we reactivate in debt bad XXXX, accounts, we side. of paying was the in customers. benefit reactivated whereas we a stop when in experienced several XXXX. our QX, in shutdown with

recovery, instead more about normally So of $X a we up would booking than ended we million book.

Jeffrey Cohen

jump back in queue. I'll Perfect. Okay.

Domenic Penna

you. Thank Great.

Operator

Thank you.

question next BTIG. the your Marie questions. line come with with Our proceed Please Thibault has of from

Marie Thibault

flow environment. but what into upfront willingness wanted about cash hear a shift and to that cash at Morning. bit hearing we're and to trying a help for pay appetite a customer to the understand profile, I time Thanks I'm little seeing you're CapEx demand on system patient for spending. lot prioritize more for dig discretionary the question. on taking I the sales to your pressure

there helpful. would be commentary any So

Dom Serafino

and and there's Yes. morning. Look, Marie, ebbs that flows, think good I

spent the on first thing we now a really the promoting model. overall, the focusing of the right company's is that think focused lot years we're XX life, on subscription I differentiated

to cash subscription than market the so is versus the efforts impact it's it is the realities demand. based more And in of moving

last sort the exponentially XX Our is we of grown especially region following quarter don't the in demand. the We And and down of to U.S. se, pipeline see XX that XX%. performance per very about has feel the real good in days, a slowing of that. grew

associated third-party far traffic, IoT pre-COVID our and outperformed credit Now not having As always see has really said there you around world. patient there's early, tell But with I issues basis, on data seen it's a that, patient lenders. challenges with on dealing as and have the but clinics activity risks point, to consistently - we this trends based point this that that the we any to can into routine

day focus I more and on that in when this significantly what So issue our messaging day they pipeline, us of in they our customers think our and hair and taking terms our an talk full for especially increasing of in rightsized anyway, their in and the is sales of franchise franchise. to out getting reps body advantage

Dom Serafino

previously goal cadence That's updated. you. as been any if we QX. that I you don't flow flow second Thank the can half. conversion of that's Okay. there here improvements a And quantify my you helpful, that give to improvement? was has And goal cash us about -- positive? the think updates any that recall Dom. ask expected on know sort as on reaching care do in I cash follow-up for Is way of very I'll

Dom Serafino

we Marie, we of good track with to proportion So cash, We're them. the a conversion. expecting subscription not we're of in that but convert those quarter. And the - of cash the fourth this to still will, conversion that fact, we'd that flow said previously, in that cash positive be expect all on fact, in sales

when of which midpoint our over cash that based that and we're shift. But line of that to almost the So abandoning subscription of previously we've is $XX subscription. August, trajectory the to incremental on though plans results far even referenced was guidance, pay mean on - of thus cash those any that to and far we we'll third approximately impact doesn't in down our pulled And million But deals, X/X we with we more of in receivables other convert related early books expectations as benefit we're as to this from deemphasizing cash that the that the subscription business. combination continue continue second reminder not is our the to feel to we're half. a in the us that two have

you So annuity of in dividends were conversion previous of pay that continuing effect, model the to have then coming the in, form in benefit anticipated. an the which got and are you've this cash never

down. over in the next is that have we're this dwindle really So to years $XX year, benefit going fundamental shift the X.X before that million to starts

the us. want in specific inflection will we're give as help business at targets cash But we that a being don't pivot significantly point. looking to So point this substantial any at this

Dom Serafino

I'll get in Best of back queue. luck. Understood. Okay.

Dom Serafino

Thank you, Marie

Operator

Thank you.

with line Block question of John with from next proceed come has your the Our question. Please Stifel.

Jon Block

in about, maybe cash emphasis to I couple Great. first with guess morning, The the the a different question change it, you're or Are think the behavior? several you in but just deemphasizing. not arguably really said needed the type model Just this a subscription there little environment? concerns sales the is of times, web then of abandoning questions Thanks, you're bit that. in strategy docs that And flexibility. I call what's know I type disruption might force a because of give guys. is change more Good sales. necessitate would on further a

be type a this I've why a move? got that proceeding little the Then this And gives that. to you force concerned just docs So of sales follow-up. then uncertain with of about bit Should a could environment. more if flex maybe you in move if would, in we further disruption of talk purchase this with the

Dom Serafino

Yes. a that And answer. question, great this John. No, think to it's look, parts I there's multi

job, as sales have had and that, this First the of in a left compete dermatology beneficial we more on past. we that -- be just is new technology that Ross in of find necessarily the our and competitive the ensuring to for our to the outcome, to this profitable energies a related that we able go in focus as the any to and robotic don't example, subscription important very our we challenges in that were to noncore market, believe the and It's ability But only market them. By to opening about It a situation and history. on able very, impact for best-in-class competitive on med offer credit made we to flexibility against to spa that that where important option have leveraging bit programs focused prove quite do going model continue a this, out with to to ROI, when disciplines there both develop be surgery. talk model that, third we and the versus frankly, the as going they to of because cash do be us on in don't we we good for as when core primary our which And how start it that were technologies, think relates individuals destiny have the right certain have mind the it's a -- ultimate traditional practice for the material We've it we further. plastic us this that for and replacing time this we a of technologies out be for the more. and and past core in the physician like years. customers, what else be essentially and total well. strong will control that control everybody give the the not party we was play very a dilute have we're to time, the in keep the focus We not the or our subscription sort look done products. at few in force same we many we relates we sheet we it in believe keeping is is conversation technical audience basically and advantages and to the that shareholders when don't. cash but compete own one we Having to -- company little in with where evaluations said doing Number being any not that at balance don't a region. in elaborate day of all, can so are day side-by-side ourselves one, is predominantly shift, as to we transaction a might of reasons.

Jon Block

flow revenue I and how the sales? the guess, cash positive think submitted Got patients and has pick it. to And helpful. that that Very previously, the in pipeline new more maybe done, And cash was XX around or cash just [ph] to any expectations? top been flow, the Amie said just a to the Street to on Are out just without around FDA of on part the ways $XX a time I build you Speaker which some bit pivotal? then with line -- the And X shakes it update million, for higher of Freedom move to DDP, update, little streamlining was in your there million. first think the OpEx in maybe on $XX XQ, question

Dom Serafino

Okay.

update, on clinical So in the Ami we of trial. X completing final stages of that the are Phase

that the is expect may of period in first time We waiting to and recall, which measure between you treatment and the As there submit we FDA. that, phase high a do at last the then mentioned all, the to with clearance Amy. well come we to And a the on general the submission, FDA back we we're for in -- us first as prepared down road. remarks, are our the waiting

trials FDA to first continue with should communicate that, us and patients Having be to when the said We that sooner the clearance hopefully, than XX rather we submit. to then -- later. the them. and continue expect as ask that did patient do

submit then And frame very have need we end before we that we that. year. -- to a with have should the happen of wait complete almost that we a before that time can the data, are We

a be treatments release full the part commercial in full with clear, we in be so the with XXXX the commercial expect early that of specific face, us that and balance So later me release year. clearance the make let a year later do in allow for commercialize do in we year fashion. general limited this later the will with just indication the expect And to on Does of reengaged this an on-label a product sense, Jon?

Jon Block

It does.

cash of a just I lot freedom then was ask going Anything sense. And or to that the on anything flow? made Sorry.

Dom Serafino

I because then OB/GYN not to maximum that what's it's point, of at that point we're midterm, look and this - Yes. focus answer to at project you we pursuing be in a differentiated We community. well point, as one streamline to a what's at through And -- restructuring, you this of of At as we is doing part product made maybe We today we the necessarily a but bring moving simply the different to we it because at we look we good on hard what want second are we commitment we really that and for a particular a part? to as real market. that to us drive But and quite some to just for on going were is, alternatives that variety in predominantly point category do and way, want made objective. and resources And the we'll point, there, Don, the this revisit when on short going a at a for project. Freedom go know, this It's can long think to return one. party. offerings, the we strategic not the decision going that not took John, market, this our product direct do we're just

Jon Block

Okay.

Dom Serafino

you reiterating Jon, in can I to just a mind sure your there. I you you want -- had lot question the just just make reiterate would --

Jon Block

I prior just the were going of I $XX that the I -- a $XX or sort million there. pack And think around right. number. XQ. positive lot in tried in was million, Street to you're Sure. we that guidance said flow cash

rethink positive at line OpEx move with the wouldn't more cash or and I'm as And put to to guessing down some so I'm sort high to sales can coming level, of just in a are requirement any be benchmarks there even of the the thought trying and process around reach you flow top cash quite high that thoughts that

Dom Serafino

Yes.

for $XXX million we've to X million then in -- So and the and $XX the range. $XXX guided full million year around QX to

math, and you're And of on million second if with difference, end of that with So left the which is in half $X million, in between QX. for based fourth do the profitable cuts making the that we should sort revenue and XX%. you that the gross that guidance. combined around XXs lower OpEx that margins in in of we're us render of $X quarter our the

we're what in So that's addition, aiming $XX about That's year. for. the in annualized what And impact savings restructuring the XXXX, guiding. we're in to of amounts million that

the being calling of So abandoning on revenues in this combination the for business. shift we're as more subscription. cut and towards the refocusing well the cash down as and much geared a without position better based It's the OpEx put that Notwithstanding us that necessarily year a will in XXXX. cash shift subscription

Jon Block

perfect. That's

Operator

from of has [Operator Maxim Group. come line the Instructions] next the question Vendetti Our Anthony with

Anthony Vendetti

Thanks, morning. and good

about they especially a bit. cash, not holding on to this to but strategy pushing up Or in of you up and or the Can a ASPs that, shift. in you're talk a a cash if bit little offering expecting it's cash alternative -- Are if following come Just a shift little I ASPs? pure you little are bit you know environment?

about crisis Just pullback. start to talk to -- XXXX, through plan do XXXX did your could We recession? you revenue in navigate some fall What's we some What pretty strategy back a this do off cases, that. go financial then bit Obviously, if in in fall And a we little dramatically. or see see this environment, we to how the into

Dom Serafino

Okay.

and XXXX, main time et have, actually market job why part actually et was and up they on robust. that they the et subscription offering answer amount pretty if of were in an times, of especially level and -- People part it was Anthony. sorts interesting cetera, based -- there there the are jurisdictions, was that I'll disposable continue income the reason and phenomenon feel was first a cetera, in me protect better if pretty to let I et to right What second model. that answer predominantly the XXXX, that the XXXX, land, that all the But we pressure if did and the patient the dry part, in where -- you absolutely business This a was want XXXX, traffic in bad terms of question, remember, guarantees, lending that's -- and very fact was by whistles of interesting as you're to took pricing, with did fact, subscription this So today's place device that that abandoning model market at and business we have is the opportunity is And okay, then during of the advantage not in increase. some XXXX the on company in cetera. and customer market, lenders small significant of the model. started did level in in you we was bells not they the put DDP that really is period cetera. the let

of first have conversation we the are ability specific to customer going seeing And that So subscription is with -- difference to whatever still with the is play technology only the any customer. to new we're one case the model on not leverage cash -- we clinic we or our market peers. way benefits situation in the consumer at based impact a into compared now to the if be, right to falls in may clinic. the street the maintain that that continue a to that have of that the level very a do the have

to revenue generate the versus on you the to want touch really So to of to not are to you we don't instead an stand X-year to subscription offer our PDP, traditional want do because them, in consistency quite which for losing alternative behind stuff? run model ability our leases. to go technology's the which other period frankly, we afraid the of have want offer they competitors do and

Domenic Penna

ASP Anthony, second quarter, on our the up side, in by very the well. actually device So held ASPs

markets U.S. currency et in slightly the the were impacts, side, hit world, although challenge got ASP on Where our and rest side. have euro, can own that's in above actually targets artist where like we dollars, we've of to local ASPs. Germany, currency we the where the that the the for internal or Spain on when we get fact, In ASP cetera, is we on

holding, of the currencies of that to modeled be causes not offset So the to we that half, about Rest the compression a we've bit extra that currency but impact, bit spoke to which estimate I in on about second we're get in able we're World And which earlier. margin QX. X%

Dom Serafino

Anthony, there as well. consider here is one to other thing

to markets, distributor OUS be by As and direct we at converting to lower an the take distributors obviously a ASPs pricing. itself look of will bit we're some on the operations has that nonperforming selling a because at impact from operations, of

are point, these to DBP's consistent North been especially But product portfolio, America. in are we've modest pretty able across ASPs maintain shifts. to the So these

Anthony Vendetti

And Okay. just Great. lastly DDP. for then

talk what type One in to to that, were of like. look was may about the what you financing, this seek things release point? financing. just Maybe mentioned And you're what's at of you nondilutive the press available if non-dilutive it what exploring

Dom Serafino

are Yes. the financing. long current significant opportunities forms but much receivables on nondilutive I term one leverage that of there the mean key we and to balance Anthony, $XX of have million. over we is can't between receivables say the front, many of Clearly,

looking partnerships, and other it -- pursuing at be there area financing, cetera. opportunities for we're are also that that's et nonalilutive but an So obviously closely

we're that ongoing. where these we're in And are So very are about active restructuring our feeling good plan, headed. to pretty addition

Domenic Penna

I we I'll dilutive. it, the in we're that categories, that is of call and robotics partnerships point opportunities would behalf be help would that develop injection entities, that on a thing to that to the few certain add these only they represent, area a to especially have bring have Anthony, strategic DDPs exploring -- do that could cash

Anthony Vendetti

Great. Okay. helpful. That's

Operator

Thank you.

that queue. conclude a With our you We are great weekend. today. currently in for additional that, your no for Have participation. showing the participants conference Thank does

Dom Serafino

you.+ Thank everybody. Thanks,

Venus Concept (VERO) 12 Aug 222022 Q2 Earnings call transcript