Apyx Medical Corp: Q4 2024 Earnings Call - A Deep Dive

The Q4 2024 earnings call for Apyx Medical Corp (NASDAQ: APYX) was a rollercoaster of financial revelations and strategic maneuvers. The company reported a net loss of $4.6 million, a significant improvement from the $9.6 million loss in the same period last year. This turnaround was driven by a combination of increased revenue, cost-saving measures, and strategic initiatives that position Apyx Medical for future growth.



The earnings call highlighted several key factors contributing to the improved financial performance. Total revenue for the fourth quarter of 2024 was $14.2 million, driven by positive momentum in U.S. capital equipment and single-use handpiece sales growth. Advanced Energy revenue exceeded expectations at $12.1 million, which was roughly flat year-over-year but increased by more than 30% compared to the third quarter of 2024. This growth was driven by strong generator unit sales and U.S. single-use handpiece sales.

One of the most significant strategic initiatives announced during the call was the submission of a 510(k) premarket notification to the U.S. FDA for the AYON Body Contouring System™. This submission was completed approximately 90 days ahead of schedule and is expected to launch in the back half of 2025, pending FDA clearance. The AYON system is an all-in-one platform that integrates advanced modalities to perform multiple functions seamlessly, including removing unwanted fat, enhancing tissue contraction, and addressing a full range of patient needs from contouring to aesthetic enhancement. This innovation positions Apyx Medical to capture a growing market segment, particularly among patients using GLP-1s and those seeking treatment for loose skin post-weight loss.

The company also implemented a cost-saving restructuring program that included an organizational reduction in force, reducing its U.S. workforce by nearly 25%. This restructuring is estimated to result in annualized future cost savings of approximately $4.3 million. The company incurred pre-tax charges of approximately $0.6 million in the fourth quarter of 2024, mostly represented as one-time severance expenditures and other employee termination benefits. The company has identified over $4.0 million of additional cost savings and currently anticipates operating expenses to be below $40.0 million in 2025.



The earnings call also provided insights into the company's financial position and strategic initiatives. Apyx Medical strengthened its balance sheet by closing a $7.0 million registered direct offering with a healthcare-focused fund and amending its credit agreement with Perceptive Credit Holdings IV, LP. This amendment significantly reduced the Advanced Energy revenue covenants and added a maximum operating expense covenant of $40.0 million and $45.0 million for 2025 and 2026, respectively. These financial maneuvers are expected to provide the company with greater financial flexibility and stability.

The company's CEO, Charlie Goodwin, highlighted the significant progress made in ramping up the direct-to-consumer marketing program for the Renuvion system, which has delivered significant reach, views, and positive PR beyond expectations. This marketing effort, combined with the AYON system's capabilities, positions Apyx Medical to become the standard of care for these patients, thereby driving long-term growth and market share expansion.

In conclusion, the Q4 2024 earnings call for Apyx Medical Corp was a testament to the company's resilience and strategic foresight. The improved financial performance, strategic initiatives, and cost-saving measures position Apyx Medical for future growth and success in the medical devices sector. Investors and stakeholders should keep a close eye on the company's progress as it navigates the challenges and opportunities ahead.