Establishment Labs reported 33.9% year-over-year revenue growth in the third quarter, with U.S. sales more than doubling. The medical technology company also said it generated positive operating cash flow and free cash flow for the first time in a quarter, and raised its full-year revenue guidance.
The quarter’s results came alongside product and commercial expansion, including additional FDA-approved Motiva implant sizes and a wider U.S. sales footprint.
Key details
-
Revenue reached $72.0 million, up from $53.8 million a year earlier. U.S. revenue rose 119% to $26.0 million, while revenue outside the U.S. increased 9.7% to $46.0 million.
-
Minimally invasive platform revenue grew 124% year over year to about $9 million. The company said growth in the U.S. business and this platform supported adjusted gross margin, while stronger-than-expected sales through overseas distributors added revenue and gross profit dollars at lower margins.
-
Gross margin was 69.1% on a GAAP basis, compared with 70.1% a year earlier. The quarter included $1.3 million in inventory charges tied to restructuring. Excluding those charges, adjusted gross margin was 70.8%, an improvement of 0.7 percentage points from the prior year.
-
Operating expenses increased to $52.3 million from $41.7 million. Excluding litigation costs and restructuring and transition charges, adjusted operating expenses were $49.6 million, equal to 68.8% of revenue, down from 77.6% a year earlier.
-
The company recorded a GAAP net loss of $10.7 million, or 35 cents per share, compared with a loss of $11.1 million, or 38 cents per share, in the prior-year quarter. Adjusted EBITDA was $6.4 million, or 8.9% of revenue, up from $1.2 million, or 2.2% of revenue.
-
Operating cash flow was about $7.7 million and free cash flow was $5.1 million. Establishment Labs called this its first quarter with positive free cash flow. It ended September with $75.8 million in cash and cash equivalents.
-
Full-year revenue guidance was raised, though the announcement did not provide the revised guidance range or target.
-
Product offerings are expanding. The FDA approved additional, smaller Motiva implant sizes for the U.S. market. The company also announced larger implant sizes for its minimally invasive platform, broadening the options it offers through that platform.
-
U.S. commercial reach grew to more than 2,100 accounts, and more than 400 plastic surgeons had been trained on Preservé, the company’s minimally invasive platform.
-
The company announced a new supply agreement with NuSil to support manufacturing capacity and future growth. It also said the FDA’s review of Motiva for breast reconstruction was progressing in line with expectations; the announcement did not say that approval had been granted.
The results show a sharp increase in U.S. sales and improved adjusted profitability, alongside the company’s first positive quarterly free cash flow. The reconstruction review remains underway, while the additional implant sizes and expanded surgeon training indicate continued efforts to broaden the U.S. market for its products.