Allurion's Q3 2025 Earnings Call: Contradictions Emerge on GLP-1 Pricing Strategy, PMA Timeline, and International Revenue Projections

Date of Call: November 12, 2025

Financials Results

• Revenue: $2.7M, down 50% YOY (Q3 2024: $5.4M)
• Gross Margin: 49% of revenue ($1.3M), compared to 58% ($3.1M) in Q3 2024 (included $0.1M restructuring costs)
• Operating Margin: Operating loss $9.6M, narrowed 22% YOY; adjusted loss from operations $6.9M (excl. $2.7M one-time), narrowed ~39% YOY

Guidance:

• Expect sequential revenue growth in Q4 versus Q3 and continued top-line growth into 2026 as clinics adopt GLP-1 combination therapy.
• Advancing FDA PMA in final review stages (no additional human data requested); preparing for a U.S. launch.
• Restructuring balance sheet to be debt-free via debt-for-convertible-preferred exchange and a $5M private placement to strengthen cash.
• Onboarding distributors focused on comprehensive obesity care and accelerating R&D/manufacturing with strategic partner (longer-term drug-eluting balloon development).

Business Commentary:

* FDA Approval Process and Milestones: - Allurion Technologies passed crucial milestones in the FDA approval process for the Allurion Smart Capsule, including completing acceptance and filing reviews, successful pre-approval inspection, Bioresearch Monitoring (BIMO) inspection, and a positive Day-100 meeting with no additional human clinical data requested. - These developments signify the company's commitment to quality, readiness for the U.S. market, and progress towards potential FDA approval.

• Revenue and Restructuring Impact:
• Revenue in Q3 was $2.7 million, reflecting a restructuring focused on accounts promoting metabolically healthy weight loss with low-dose GLP-1s.

• Despite restructuring and seasonal factors, revenue remained stable, indicating successful strategic adjustments and potential growth opportunities.

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• Operational Efficiency and Cost Reduction:

• Operating expenses decreased by 29% year-over-year to $10.9 million, and adjusted operating expenses decreased by 42% to $8.4 million.

• Improved efficiencies from restructurings and strategic focus resulted in reduced costs and a narrowed operating loss.

• Debt restructuring and Financial Position:

• Allurion plans to be debt-free by exchanging all outstanding debt for convertible preferred equity and raising funds through a private placement.
• This transaction strengthens the company's financial position, with participation from key existing stockholders and strategic partners, enhancing its ability to achieve future catalysts and increase shareholder value.

Sentiment Analysis:

Overall Tone: Positive

• Management highlighted passing FDA pre-approval and BIMO inspections with no observations and that FDA did not request additional human clinical data; they expect Q4 sequential growth and continued 2026 revenue growth, are restructuring to be debt-free and closed a private placement to strengthen the balance sheet.

Q&A:

• Question from Joshua Jennings (TD Cowen): How are you taking learnings from the international strategy to focus on accounts that offer comprehensive obesity care and how is that informing potential U.S. commercial strategy? Any update on how Allurion plans to attack the U.S. market once approval is in hand?
  Response: Apply international learnings by targeting U.S. clinics and distributors that integrate GLP-1s and comprehensive care, mapping and partnering with accounts that will adopt combination therapy ahead of launch.

• Question from Joshua Jennings (TD Cowen): Can you help us think about progression from here for modeling Q4 and 2026 — how could international revenues shape up over the next 12 to 24 months?
  Response: Expect sequential Q4 growth and continued top-line growth into 2026 as more clinics and distributor partners embrace GLP-1 combination therapy and GLP-1 price declines increase uptake and subsequent churn.

• Question from Joshua Jennings (TD Cowen): Any details on timelines for transforming the Smart Capsule into a platform (drug-eluting balloon) and other pipeline elements?
  Response: Platform work is underway (drug-eluting and longer-duration balloons) as a longer-term project; reinitiating development for up-to-12-month balloons and exploring multiple payloads, but no specific commercial timelines provided.

Contradiction Point 1

U.S. GLP-1 Price Reduction and Impact on Allurion Strategy

It involves the expectations regarding the impact of U.S. GLP-1 price reduction on Allurion's strategy, which is crucial for revenue projections and market positioning.

How will international revenues shape up over the next 12 to 24 months as we model 4Q 2026? - Joshua Jennings(TD Cowen)

2025Q3: The Trump administration's initiatives to reduce GLP-1 prices in the U.S. should also boost Allurion's potential. - Shantanu Gaur(CEO)

How will low-dose GLP-1s combined with Allurion Gastric Balloon affect overall obesity care costs in the short-, medium-, and long-term? - Joshua Thomas Jennings(TD Cowen)

2025Q2: GLP-1s are less expensive abroad, making them less of a barrier to adoption when combined with the Allurion Program. In the U.S., prices are expected to come down over time. - Shantanu K. Gaur(CEO)

Contradiction Point 2

Expansion of GLP-1 Use and Its Impact on Allurion's Strategy

It pertains to the expectations regarding the expansion of GLP-1 use and its impact on Allurion's strategy, which is essential for market penetration and revenue growth.

How do you see international revenues evolving over the next 12 to 24 months as we model 4Q 2026? - Joshua Jennings(TD Cowen)

2025Q3: We're seeing continued growth in direct and distributor markets where combination therapy and GLP-1s are embraced. - Shantanu Gaur(CEO)

How do you view the cost-effectiveness of the combo therapy in the medium to long term, and would you add any thoughts on this? - Joshua Thomas Jennings(TD Cowen)

2025Q2: GLP-1s alone are not cost-effective due to high prices. By combining therapies and lowering GLP-1 doses, the approach should become more cost-effective and clinically effective. - Shantanu K. Gaur(CEO)

Contradiction Point 3

U.S. Regulatory Pathway and PMA Submission

It raises questions about the timeline and progress of the regulatory process for Allurion's product in the United States, which is crucial for market access and revenue growth.

What are the key milestones for Allurion's U.S. regulatory progress this year? - Matthew Taylor(Jefferies)

2025Q3: The submission of the PMA is the immediate next step. - Shantanu Gaur(CEO)

What are the key assumptions behind the $30 million revenue guidance for 2025? - Matthew Taylor(Jefferies)

2024Q4: We've made significant progress on the PMA pathway and intend to submit it no later than mid-2025. - Shantanu Gaur(CEO)

Contradiction Point 4

GLP-1 Market Maturity and International Revenue Growth

It involves differing perspectives on the impact of GLP-1 market maturity on international revenue growth, which is a critical factor in Allurion's business strategy.

How do you expect international revenues to progress over the next 12 to 24 months, particularly as we model 4Q 2026? - Joshua Jennings(TD Cowen)

2025Q3: We're seeing continued growth in direct and distributor markets where combination therapy and GLP-1s are embraced. - Shantanu Gaur(CEO)

Are you seeing continued momentum in Q1 for mature GLP-1 markets? - Joshua Jennings(TD Cowen)

2024Q4: We are seeing continued momentum in regions with mature GLP-1 markets. - Shantanu Gaur(CEO)

Contradiction Point 5

International Revenue Projections

It involves changes in projections for international revenue growth, which are critical for understanding the company's global expansion strategy and financial outlook.

How will international revenues progress over the next 12 to 24 months as we model 4Q 2026? - Joshua Jennings (TD Cowen, Research Division)

2025Q3: We're seeing continued growth in direct and distributor markets where combination therapy and GLP-1s are embraced. We expect sequential growth in 2026, driven by more GLP-1 utilization as prices drop, increasing churn rates. - Shantanu Gaur(CEO)

How is regional momentum progressing with the new marketing strategy? - Jason Wittes (ROTH Capital Partners)

2025Q1: As we continue to expand our B2B2C marketing strategy and hire new sales reps, we expect revenues to steadily ramp as the year goes on. - Shantanu Gaur(CEO)