Establishment Labs Holdings CEO Caldini Filippo Buys 2,850 Shares at $35.2/Share

Establishment Labs Holdings Inc. (ESTA) has announced that Director and Chief Executive Officer, Caldini Filippo, has made a purchase of 2,850 shares at a price of $35.20 per share on August 11, 2023.

Establishment Labs Holdings Inc. (ESTA) has recently released its Q2 2025 earnings report, providing insights into the company's performance during the second quarter of the fiscal year. The report highlights both positive and negative trends, with a particular focus on the impact of the U.S. market entry.

The company reported a 16% year-over-year (YoY) increase in revenue, reaching $51.3 million. This growth was primarily driven by the first full U.S. sales, which amounted to $10.3 million, representing 20% of the total revenue. The gross margin expanded to 68.8%, up from 65.6% in the previous year, leading to a 22% increase in gross profit to $35.3 million [1].

However, the operating expenses jumped by 29% to $49.4 million, with a significant increase in sales, general, and administrative (SG&A) expenses of 35% and a 5% decrease in research and development (R&D) expenses. This resulted in an operating loss of $14.1 million, up from $9.3 million in the previous year. The net loss narrowed slightly to $16.6 million, down from $17.2 million in the previous year, but the six-month loss deepened to $37.3 million [1].

The company's cash burn accelerated, with operating cash outflow increasing to $39.5 million from $25.3 million in the previous year. The cash balance fell to $54.6 million from $90.3 million at the end of the previous year. Short-term inventory funding of $5 million was tapped, and the total debt stood at $221.1 million. Shareholders’ equity slid to $22.8 million from $53.1 million as the accumulated deficit widened to $482 million [1].

Geographically, the company's revenue was distributed as follows: EMEA 47%, LATAM 19%, APAC 15%, and North America 20%. The single-source supplier Avantor supplied 47.5% of H1 purchases, with accounts payable increasing by 25% to $55.8 million [1].

The U.S. launch has been a significant driver of top-line growth and margin expansion, but persistent losses, rising SG&A expenses, and higher working capital needs are straining liquidity. The company's balance sheet is highly leveraged, with long-term debt of $221 million against equity of $22.8 million. This high leverage limits flexibility for further capacity additions or marketing spend. The company may need additional financing if the cash burn persists [1].

The report also highlights the need for the company to manage its inventory more effectively, as the inventory build-up could tie up cash and increase obsolescence concerns. The company's reliance on a single supplier, Avantor, for silicone (47% of purchases), exposes production to pricing and continuity risks [1].

In summary, while Establishment Labs Holdings Inc. has made significant strides in the U.S. market, the company faces challenges related to liquidity, inventory management, and supplier risks. Investors should closely monitor the company's financial health and its ability to secure additional financing to sustain growth.

References:
[1] https://www.stocktitan.net/sec-filings/ESTA/10-q-establishment-labs-holdings-inc-quarterly-earnings-report-f5b62c55b133.html