Venus Concept Q3 2025: Contradictions in Robotic Adoption, Tariff-Driven Margin Pressures, and Economic Uncertainty

Date of Call: November 13, 2025

Financials Results

• Revenue: $13.8M, down $1.2M or 8% YOY
• EPS: $-12.14 per share (net loss), compared to $-13.10 per share in prior year
• Gross Margin: 64%, compared to 66.1% in the prior year

Guidance:

• Company is not providing full-year 2025 financial guidance.
• Targeting sequential revenue growth in Q4, aided by a limited U.S. commercial launch of Venus NOVA in December.
• U.S. introduction of Venus NOVA expected to contribute to the company's long-term growth profile.
• Proceeds from the pending sale of Venus Hair expected to strengthen the balance sheet and fund strategic growth initiatives.

Business Commentary:

• Energy-Based Device Sales Growth:
• Venus Concept reported a 2% growth in sales of energy-based devices (EBD) on a year-over-year basis in Q3.

• The growth was driven by strong execution from the team, despite a challenging environment.

• Total Revenue Decline:

• The company's total revenue declined by 8% year-over-year in the third quarter.

• This decline was primarily attributed to softness in the Hair Restoration business due to customer financing pressures and economic uncertainty.

• Venus Hair Business Challenges:

• The Venus Hair business experienced a 12% decrease in product systems revenue.

• This was caused by uncertainty related to the pending sale of the Venus Hair business to MHG Co. Ltd. and challenges with closing the transaction.

• Balance Sheet and Financial Condition Improvement:

• Venus Concept significantly improved its balance sheet through debt-to-equity exchanges and increased financing capacity under its bridge loan facility.

• These improvements were supported by transactions totaling $11.5 million in converted debt and $3.9 million in equity capital market transactions.

• Venus NOVA Launch and Strategic Initiatives:

• The company announced 510(k) clearance for Venus NOVA, a next-generation multi-application platform.
• This launch is part of the company's turnaround strategy and anticipated to contribute to long-term growth, with a limited commercial launch planned for December.

Sentiment Analysis:

Overall Tone: Neutral

• Management reported stabilization in EBD sales (EBD sales +2% YOY) and a new product launch (Venus NOVA) while acknowledging total revenue declined 8% YOY and a substantial net loss of $22.6M. They highlighted balance sheet improvements (cash $5.9M; debt ~$30.1M) and pursuit of the Venus Hair sale to strengthen liquidity.

Contradiction Point 1

Economic Conditions and Robotic System Adoption

It highlights the contrasting views on the impact of economic conditions on the adoption of robotic systems in the Venus Hair business, which could influence investor decisions and financial projections.

How have economic and credit market conditions affected robotic adoption in the Venus Hair business? - Venus Concept Inc. Investor

2025Q3: Economic uncertainty, tight credit markets, and customer financing pressures have been significant challenges. Adoption of robotic systems in the Venus Hair business has been affected. - Rajiv Kanishka De Silva(CEO & Director)

Can you provide an overview of the second quarter results and operating developments? - Operator

2025Q2: Importantly, the sequential growth performance in the second quarter was consistent with the expectations outlined on our first quarter call. Sequential growth was driven by mid-teens growth in both the U.S. and international markets and was fueled primarily by 20% growth in total systems and subscription revenue. - Rajiv Kanishka Liyanaarchchie De Silva(CEO & Director)

Contradiction Point 2

Impact of U.S. Tariffs on Gross Margin

It involves differing explanations for the impact of U.S. tariffs on gross margin, which is crucial for financial forecasting and investor confidence.

What is the impact of US tariffs on gross margin? - Venus Concept Inc. Investor

2025Q3: The decrease in gross margin is primarily attributable to the impact of U.S. tariffs on our devices imported into the U.S. market. This has contributed to a gross margin of 64% of revenue in the third quarter, down from 66.1% in the previous year. - Domenic Penna(Executive VP & CFO)

Can you provide a review of Q2 financial results and an update on the balance sheet and financial condition? - Domenic Della Penna

2025Q2: We reported total revenue of $15.7 million, down $0.9 million or 5% year-over-year. The decrease in total revenue by region was driven by an 18% decrease year-over-year in international revenue, offset partially by a 5% increase year-over-year in United States revenue. - Domenic Della Penna(Executive VP & CFO)

Contradiction Point 3

Impact of U.S. Tariffs on Gross Margin

It involves changes in financial forecasts, specifically regarding the impact of U.S. tariffs on gross margins, which are critical indicators for investors.

What is the impact of U.S. tariffs on gross margin? - Venus Concept Inc. Investor

2025Q3: The decrease in gross margin is primarily attributable to the impact of U.S. tariffs on our devices imported into the U.S. market. This has contributed to a gross margin of 64% of revenue in the third quarter, down from 66.1% in the previous year. - Domenic Penna(CFO)

How will recent and proposed tariffs impact your business in 2025? - Thomas McGovern (Maxim Group)

2025Q1: Our energy-based business sources from Israel, with tariffs potentially impacting up to 10%. This could lead to a 1-1.5% gross margin impact in 2025 and 2-2.5% in 2026. Including robotics, the impact is similar: 1-2% in 2025 and 2-2.5% in 2026. - Domenic Della Penna(CFO)

Contradiction Point 4

Economic Uncertainty and Tariff Impact

It involves differing perspectives on the impact of economic uncertainty and tariffs on the company's operations and sales, which can influence investor confidence.

How have economic conditions and tight credit markets affected robotic system adoption in the Venus Hair business? - Venus Concept Inc. Investor

2025Q3: Economic uncertainty, tight credit markets, and customer financing pressures have been significant challenges. Adoption of robotic systems in the Venus Hair business has been affected. Additionally, there's an increased level of uncertainty due to the pending sale of the Venus Hair business to MHG Co. Ltd. - Rajiv Kanishka De Silva(CEO & Director)

How will tariffs impact your business in 2025? - Thomas McGovern (Maxim Group)

2025Q1: The real disruption is the economic uncertainty around the world due to tariff uncertainties, causing distributors to be more hesitant in their purchasing patterns. - Rajiv De Silva(CEO)

Contradiction Point 5

Impact of Economic Conditions on Venus Hair Business

It highlights the conflicting perspectives on the impact of economic conditions and tight credit markets on the Venus Hair business, affecting investor perceptions of the company's financial health and strategic direction.

How have economic conditions and tight credit markets affected robotic system adoption in the Venus Hair business? - Venus Concept Inc. Investor

2025Q3: Economic uncertainty, tight credit markets, and customer financing pressures have been significant challenges. Adoption of robotic systems in the Venus Hair business has been affected. - Rajiv Kanishka De Silva(CEO & Director)

Can you describe the normalized business profile after the strategic shift, considering macroeconomic conditions? - Marie Thibault (BTIG)

2024Q4: Despite macroeconomic challenges, structural changes in the business are behind us. Expect performance improvements in 2025, with less decline compared to prior years. - Rajiv Kanishka De Silva(CEO)