ESTABLISHMENT LABS HOLDINGS INC. Q3 FY2024 earnings call

• FDA approval of Motiva Implants on September 26 was a watershed moment; U.S. launch exceeded expectations with over 250 accounts onboarded and over 70 placing orders within 3 weeks of launch.
• Strengthened balance sheet with $50 million equity raise and amendment to credit facility, giving pro forma cash position of $114 million and access to additional $25 million until end of 2025.
• Reduced operating expenses and cash loss; cash loss in 3Q was $14.9 million, down over 60% from year ago; EBITDA loss improved to $7 million from over $16 million last year.
• Decommissioned B15 manufacturing facility, moving capacity to other facilities in Costa Rica to drive cost savings.
• Mia Femtech showing positive trends with 3-year data showing no complications, 40% of women choosing Mia not seeking traditional breast augmentation, and expansion to 29 cities with 78 certified surgeons.
• China on track to achieve targets with strategic financing of up to $50 million from CBC Group affiliate to fund commercial activities and innovation pipeline.

Revenue in the third quarter of 2024 totaled $40.2 million. Regionally, sales in Europe, Middle East and Africa were approximately 49% of the global total; Asia Pacific, 27%; Latin America, 24%; and North America was 1%. Gross profit for the third quarter was $25.7 million or 63.9% of revenue compared to $26.1 million or 67.7% of revenue for the same period in 2023.

• Updated revenue guidance for the year to $165 million to $168 million.
• Expect U.S. revenue to exceed $35 million in 2025.
• Plan for 5% OUS growth in 2025, starting with conservative outlook to build expense base for EBITDA positive quarter in 2025.
• Anticipate gross margins to be meaningfully higher in 2025 due to U.S. launch and new products.

• Short-term supply challenges due to decommissioning of manufacturing facility, expected to abate in first quarter of 2025.
• Macroeconomic pressures affecting market demand in some regions, particularly Latin America and Brazil.
• Regulatory and market adoption risks for new products like Mia Femtech and Ergonomix2.

Q: On the U.S. launch, what does the $30M-$35M+ expectation for next year contemplate in terms of ramp and momentum?

A: Thanks, Allen. Quality of sales reps, speed of onboarding new accounts (15-20 per day), and market shift due to technology differentiation support conviction in reaching $35M next year.

Q: On 2025 OUS growth commentary of 5%, is it current business minus U.S. 4Q $3M and growing mid-single digits? Why mid-single digits?

A: Yes, it's a conservative first cut for 2025 to build expense base for EBITDA positive quarter; starting conservative to reach profitability targets.

Q: Progress on China and $50M investment? How does $50M investment help ramp Motiva in China?

A: China on track to achieve targets; $50M investment from CBC Group affiliate to fund commercial activities, innovation pipeline, and bring Ergonomix2 and Mia to China.

Q: Non-LatAm markets, Europe and APAC? Direct vs distributor; are distributors at normalized inventory levels?

A: EMEA markets stabilizing with growth, APAC stabilizing with room for improvement; no structural change in demand, macroeconomic pressures affect access in some regions, but growth expected in EMEA and APAC.

Q: Short-term supply challenges, impact on near-term demand?

A: Moving capacity to other facilities; supply challenges will be worked through without major impact on near-term demand, expected to abate in first quarter.

Q: Mia 3-year data and FDA pathway? Any discussions with FDA on Mia?

A: Barcelona showcased Mia's 3-year data showing no complications; working with regulatory team to have conversation with FDA regarding Mia and Ergonomix2 via supplemental PMA pathway.

Q: Sales force build in U.S. and next catalysts?

A: Will add more sales reps throughout 2025 as account base expands; next catalysts include breast reconstruction approval, Ergonomix2 platform, and continued innovation in breast tissue preservation.