8-K: Apyx Medical Reports Mixed Preliminary Revenue Results for Q4 and Full Year 2024

Apyx Medical announced preliminary revenue results for Q4 and full year 2024, showing a decrease in total revenue year-over-year despite growth in the Advanced Energy segment quarter-over-quarter.

Summary

• Apyx Medical reported preliminary revenue for the fourth quarter of 2024, with total revenue expected to be between $14.1 and $14.3 million, a decrease of 4% to 3% year-over-year.
• Advanced Energy revenue is expected to be between $12.0 and $12.2 million, which is relatively flat year-over-year.
• OEM revenue is expected to be approximately $2.1 million, a decrease of 17% year-over-year.
• For the full year 2024, total revenue is expected to be between $48.0 and $48.2 million, an 8% decrease year-over-year.
• Advanced Energy revenue for the full year is expected to be between $38.5 and $38.7 million, an 11% decrease year-over-year.
• OEM revenue for the full year is expected to be approximately $9.5 million, a 6% increase year-over-year.
• The company saw a 25% quarter-over-quarter increase in Advanced Energy sales in Q4 2024.
• U.S. capital sales improved in the second half of 2024, with generator unit sales doubling compared to the first half of the year.
• Apyx Medical plans to launch its new AYON Body Contouring System in the second half of 2025, pending FDA clearance.

Sentiment

Score: 5

Explanation: The sentiment is neutral to slightly negative due to the overall revenue decline, but there are positive signs in the Advanced Energy segment and the upcoming product launch. The mixed results and forward-looking statements balance the sentiment.

Positives

• The Advanced Energy segment experienced a significant 25% increase in sales quarter-over-quarter in Q4 2024.
• U.S. capital sales improved in the second half of 2024, with generator unit sales doubling compared to the first half.
• Full year OEM revenue grew by 6% year-over-year.
• The company is planning to launch the AYON Body Contouring System in the second half of 2025, which could drive future growth.

Negatives

• Total revenue for Q4 2024 is expected to decrease by 4% to 3% year-over-year.
• OEM revenue for Q4 2024 is expected to decrease by 17% year-over-year.
• Total revenue for the full year 2024 is expected to decrease by 8% year-over-year.
• Advanced Energy revenue for the full year 2024 is expected to decrease by 11% year-over-year.

Risks

• The company's actual financial results are subject to completion of year-end financial closing and audit procedures.
• The company faces risks related to regulatory approvals, including FDA clearance for new products.
• Supply chain disruptions, component shortages, and manufacturing disruptions could impact the company's performance.
• Changes in economic, business, or demographic conditions could affect the company's results.
• Geopolitical events could impact the company's financial performance.
• The company is subject to risks related to pending or threatened litigations, claims, disputes, or investigations.

Future Outlook

The company anticipates launching the AYON Body Contouring System in the second half of 2025, pending FDA clearance, and expects this to position them as a leader in surgical aesthetics and capitalize on market dynamics.

Management Comments

• We are pleased with our financial performance in the fourth quarter of 2024, as we delivered over 25% sales growth in our Advanced Energy segment on quarter-over-quarter basis, and exceeded expectations, said Charlie Goodwin, President and Chief Executive Officer.
• In the back half of the year, we saw improved U.S. capital sales characterized by a doubling of generator unit sales versus the first half of 2024 and strong U.S. single use handpiece sales.
• We are excited to build interest in our new AYON Body Contouring System, which we expect to launch in the second half of 2025 pending FDA clearance.
• AYON positions us as a leader in surgical aesthetics and enables us to capitalize on improving market dynamics, particularly with the increase in demand for treatments to address loose and lax skin, due in part to GLP-1 drugs resulting in significant patient weight loss.
• We look forward to strengthening our partnership with surgeons and providing them a better tool to treat these patients.

Industry Context

The announcement highlights the increasing demand for treatments addressing loose and lax skin, potentially driven by the use of GLP-1 drugs for weight loss, which is a growing trend in the surgical aesthetics market. The launch of the AYON system is aimed at capitalizing on this trend.

Comparison to Industry Standards

• While Apyx Medical experienced a decrease in overall revenue year-over-year, the 25% quarter-over-quarter growth in the Advanced Energy segment is a positive sign, suggesting potential for future growth.
• Companies like InMode and Cutera, which also operate in the aesthetic medical device market, have shown strong growth in recent quarters, indicating a generally positive market environment for these types of technologies.
• However, the decrease in OEM revenue for Apyx Medical contrasts with some competitors who have seen growth in this area, suggesting potential challenges in their OEM partnerships.
• The launch of the AYON system is a strategic move to compete with other body contouring technologies, such as those offered by Allergan and Merz, and will be a key factor in determining Apyx Medical's future performance.

Stakeholder Impact

• Shareholders may react negatively to the overall revenue decline, but positively to the growth in the Advanced Energy segment and the upcoming product launch.
• Employees may be impacted by the company's performance and future growth plans.
• Customers may benefit from the new AYON Body Contouring System.
• Suppliers may be affected by changes in the company's production and sales volumes.
• Creditors will be monitoring the company's financial performance.

Next Steps

• Apyx Medical plans to release its final fourth quarter and full year 2024 results in March 2025.
• The company will focus on the launch of the AYON Body Contouring System in the second half of 2025, pending FDA clearance.

Key Dates

Keywords

Apyx Medical, Renuvion, Advanced Energy, OEM, AYON Body Contouring System, Helium Plasma, Revenue, Medical Devices, Surgical Aesthetics, FDA Clearance