Establishment Labs Holdings Inc. (ESTA) Earnings

Management highlights

### Product Innovation and Market Expansion - Minimally invasive breast augmentation options are expanding the total market: they attract new patients who previously declined surgery, reduce patient consideration time from years to months/days, and command a premium price. Preserve, the company's minimally invasive procedure, carries a 2x price premium over traditional procedures in the U.S., and surgeons charge 30-50% more for Preserve than traditional augmentations, with patients willing to pay the premium. - Preserve adoption is outpacing expectations: the company ended Q2 with over 300 trained and certified U.S. surgeons, 50% above its original full-year target, with multiple training pathways available. Reduced downtime from Preserve has also helped increase summer procedure volumes, a traditionally slow season for the business. - The company's GEM product, a safer alternative to traditional Brazilian butt lifts, is in clinical development and targets an untapped market. The company is also advancing smaller implant sizes for the U.S. market and a breast reconstruction indication submission to the FDA. ### U.S. Commercial Adoption - The U.S. is the company's fastest growing region and primary growth engine. The company surpassed 100,000 Motiva implants sold in the U.S. in under 21 months post-launch, and exceeded 2,000 active accounts by the end of Q2. - Growth is increasingly driven by higher utilization within existing accounts: many early adopter high-volume surgeons have converted most of their augmentation practice to Motiva, and 75% of surgeons report patients actively requesting implants by brand name, with 93% of those requests for Motiva — an unprecedented level of consumer demand in the aesthetic implant category. ### Global OUS Performance - The company's investments in leadership and resources for direct OUS markets have driven strong broad-based growth: Europe delivered 16% YoY growth with particularly strong results in Italy, Germany, and the UK; Argentina maintained positive momentum and Brazil remained stable, with growth in both markets driven by the minimally invasive platform. - Demand across OUS markets remained stable during the quarter despite macroeconomic and geopolitical uncertainty, and the company has limited exposure to the most volatile regions, supported by a highly diversified global business.

Guidance

- The company increased its full-year total revenue guidance to a range of $269 to $271 million, driven by stronger than expected first half performance and ongoing business momentum. - Full-year global minimally invasive platform revenue is expected to exceed the prior guidance of over $35 million, and approach ~15% of total full-year company revenue. - The company reaffirmed historical industry seasonality: Q3 is expected to be the softest quarter due to summer vacation patterns, while Q4 will remain the strongest quarter of the year. The U.S. business is expected to remain strong in Q3, while OUS business will follow normal seasonal trends. - Management expects 2027 full-year revenue growth of approximately 25% year-over-year. - No material revenue contribution from the breast reconstruction indication is expected before 2027, and no material U.S. revenue contribution from GEM is expected before 2028.

Segment performance

Total company revenue for Q2 was $67.5 million, a 31.7% increase year-over-year (YoY). - United States segment: Q2 revenue was $24.7 million, representing 140.9% YoY growth, and contributed 36.6% of total company revenue, up from 20% YoY. - Outside the United States (OUS) segment: Q2 revenue was $42.8 million, representing 4.4% YoY growth, and contributed 63.4% of total company revenue. - Minimally invasive platform segment: Q2 revenue was $12.1 million, performing ahead of original expectations, and contributed ~17.9% of total Q2 revenue.

Risks & headwinds

- Macroeconomic and geopolitical uncertainty persists across multiple global regions, though the company's exposure to the most volatile markets is limited. - The ongoing conflict in the Middle East has resulted in significantly lower order volumes than historical levels, and this soft demand is expected to continue for the remainder of the year. The Middle East contributes less than 5% of total company revenue, and no spillover impact to other global markets has been observed to date. - Regulatory approval timelines for new products (including reconstruction and GEM) are ultimately controlled by the FDA and other global regulators, creating uncertainty around commercial launch timing. - The company must balance ongoing investment in its innovation pipeline (minimally invasive platform expansion, reconstruction, GEM) with maintaining cost discipline to continue expanding profitability and operating leverage.

Analyst Q&A

• Q: Analyst asked for updates on the GEM development program, including potential commercial launch timelines for OUS and the U.S. /

  A: GEM is a differentiated safer alternative to traditional Brazilian butt lifts. The company is running a clinical study in Costa Rica, and plans to conduct an early commercial experience in Latin America in the second half of next year. Regulatory pathways for the U.S. and Europe are still being finalized, and GEM is not expected to contribute material revenue in the U.S. before 2028.

• Q: Analyst asked if Preserve certification lifts overall Motiva market share at trained surgeon accounts, and what long-term U.S. volume share could ultimately go to Preserve. /

  A: Management confirmed strong interest in Preserve among trained surgeons, many of whom view it as the future of breast augmentation. Preserve creates significant new revenue opportunities for surgeons, so its share of both overall volumes and Motiva penetration at trained accounts is expected to grow over time, though no specific long-term split was provided.

• Q: Analyst asked for an update on the FDA regulatory process for the breast reconstruction indication, including approval timeline expectations. /

  A: The company has received routine questions from the FDA and is currently responding. The FDA has started BMO audits of clinical study sites, a normal late-stage step that indicates progress. Approval timing is ultimately up to the FDA, but management does not plan for material reconstruction revenue until 2027.

• Q: Analyst asked if the Middle East conflict impacted international business during the quarter. /

  A: Solid 4.4% overall OUS YoY growth was achieved, led by 16% growth in direct European markets. Only the Middle East saw material softening, with order volumes well below historical levels due to the conflict, and this weakness is expected to persist through year-end. The Middle East makes up less than 5% of total revenue, and no spillover impact to other markets has been observed.

• Q: Analyst asked how SG&A and R&D spending will trend for the rest of the year, given multiple ongoing investment priorities. /

  A: Management confirmed that operating expenses are well leveraged, with only the one-time restructuring and debt refinancing charges boosting Q2 operating spend. No major unexpected increases in spending are anticipated for the remainder of the year, as the company is pacing its innovation pipeline appropriately and continuing to drive operating leverage as revenue grows.