Vivos Therapeutics, Inc. Q4 FY2024 earnings call

• In 2024, revenue increased by 9% to $15 million, with product revenue up 26% and operating expenses reduced by 21%, leading to a 35% reduction in operating loss.
• Expanded into the Middle East, gaining regulatory approvals for several markets and seeing higher-than-forecast demand.
• Launched a new marketing and distribution strategy in June 2024 with a strategic alliance with Rebis Healthcare, offering a full spectrum of OSA treatments.
• Pilot testing showed Vivos trained personnel closing over 70% of OSA patients into Vivos treatment with top line revenue of over $4,500 per case and contribution margins up to 50%.
• Repurposed the medical integration division into an M&A team negotiating potential acquisitions of sleep health care providers, with over 2,500 AASM accredited sleep testing and treatment centers in the US as potential targets.

In 2024, Vivos Therapeutics recorded total revenue of $15 million, compared to $13.8 million in 2023. Product revenue increased by 26% to $7.9 million from the sale of 16,182 oral appliance arches and guides, up from $6.3 million in 2023 from 8,240 units. Service revenue decreased by $400,000 due to fewer VIP enrollments. Product revenue contributed approximately 52% of total revenue in 2024, while service revenue contributed 48%, shifting from the prior 60% service and 40% product split.

• Expect 2025 to be materially better than 2024 in terms of top line revenue and net profits.
• Revenue from the Rebis alliance to accelerate in the second and third quarters of 2025.
• Other product lines are also expected to grow, with one large customer expecting to triple orders in 2025.
• Contributions from affiliations and acquisitions will be provided as specific transactions are announced.

Q: What is the incentive for Rebis Healthcare in the alliance?

A: Rebis sees an improvement in patient care quality, an opportunity to differentiate their services, and a new profit stream. They have over 90,000 patients in their database with many potential candidates for Vivos treatment.

Q: How is the M&A team deployed?

A: The M&A team is scouring the nation for sleep testing and treatment centers, with leads showing high interest. The reception from these groups has been very positive, with more interest than the team can currently handle.

Q: How does 2025 compare to 2024 in terms of revenue?

A: 2025 is expected to be materially better, with revenue from the Rebis alliance accelerating in the second and third quarters. Other product lines are also expected to grow.

Q: How does $4,500 revenue from a patient work through the income statement?

A: Revenue from appliances will continue to come through, with COGS including the cost of the appliance and any affiliate payments. The new model exacerbates the shift from service to product revenue.

Q: What gates the speed of converting potential customers at sleep centers?

A: The main gate is finding trained dentists. There is a ready pool of interested dentists, and manufacturing, staffing, and software are in place to meet demand. Patients are presented with treatment options, and 70-80% choose Vivos treatment when given a choice.

Q: What is the scale of M&A acquisitions and their impact?

A: Sleep centers are typically mildly profitable but become wildly profitable when combined with Vivos' high-margin treatment. The M&A team is negotiating with centers that test and treat nearly 8,500 newly diagnosed OSA patients per month, with expected accretive and profitable opportunities.