Apyx Medical Corporation Common Stock 2026 Q2 Earnings Call

Welcome everyone to our second quarter 2026 earnings call. Representing the company on the call are Charlie Goodwin, Chief Executive Officer, and Matt Hill, Chief Financial Officer of Apyx. Before we begin, I would like to remind everyone that our remarks and responses to your questions today may contain forward-looking statements that are based on the current expectations of management and involve inherent risks and uncertainties that could cause actual results to differ materially from those indicated, including, without limitation, those identified in the Risk Factors section of our most recent annual report on Form 10-K, our most recent 10-Q filing, and the company's other filings with the Securities and Exchange Commission. Such factors may be updated from time to time in our filings with the SEC, which are available on our website.

We undertake no obligation to publicly update or revise our forward-looking statements as a result of new information, future events, or otherwise. This call will also include references to certain financial measures that are not calculated in accordance with generally accepted accounting principles or GAAP. We generally refer to these as non-GAAP financial measures. Reconciliations of those non-GAAP financial measures to the most comparable measures calculated and presented in accordance with GAAP are available in the earnings press release on the investor relations portion of our website. I would now like to turn the call over to Mr. Charlie Goodwin, Apyx Medical's President and Chief Executive Officer.

Please go ahead. Thank you, Jeremy.

Thank you all for joining us today. Per our usual format on these quarterly calls, I will begin with a review of our performance over the past several months and then turn the call over to Matt for a review of our second quarter 2026 financial results, along with our guidance for full year 2026. We will then open the call for questions. Let me begin with a review of a few key highlights from our second quarter 2026 performance. We reported quarterly revenue of $13.9 million compared to $11.4 million in the same period last year, an increase of 22%. This growth was driven by a 28% increase in sales of our surgical aesthetics products to $12.4 million for the second quarter, primarily attributable to sales of our AYON Body Contouring System, increased revenue generator sales internationally, and increased volume of single-use hand pieces domestically.

This marks our fourth consecutive quarter of AYON sales following its full commercial launch in September 2025, and we are pleased to see increasing awareness of and demand for the platform across the U.S. market. U.S. surgeons are increasingly recognizing the value of our integrated all-in-one body contouring platform, which combines the core technologies they rely on every single day into a single streamlined system. We believe the growing adoption reinforces AYON's differentiated value proposition. We recently took another important step in expanding AYON's capabilities during the quarter when we received expanded 510(k) clearance from the FDA to add power liposuction to the platform. Power liposuction uses a reciprocating cannula to support more efficient fat removal while reducing the physical effort required of the surgeon. Since receiving clearance, we conducted a limited commercial launch of the reusable power liposuction handpiece with key surgeons in targeted geographies.

Based on positive feedback, we commenced initial commercial shipments in June 2026. Overall, the sales and interest that we are seeing in AYON comes at an important time for the body contouring market. As we have discussed on prior calls, the continued rapid adoption of GLP-1 medications is reshaping the patient population and creating what we believe will be a meaningful long-term opportunity for our business. While these therapies are helping a growing number of patients achieve significant weight loss, many are left with loose or lax skin that cannot be adequately addressed through non-surgical treatments. Once these patients reach or approach their target weight, we believe many will seek procedures to address skin laxity, excess fat, and overall body contouring in a more comprehensive manner.

AYON seamlessly combines advanced fat removal technologies, Renuvion's tissue contraction and electrosurgical capabilities, and empowers surgeons to deliver the most comprehensive body contouring treatments for patients while positioning Apyx to address this growing market. We believe in science-based medicine, and our clinical strategy is an important part of establishing that value proposition. During the quarter, a retrospective study of 113 patients showed that a combination procedure using Renuvion and liposuction was associated with statistically significantly higher patient satisfaction, lower rates of abdominoplasty and surgical revision, and comparable complication rates versus procedures that use liposuction alone. These findings are important because they suggest that Renuvion may help surgeons deliver a more satisfying aesthetic outcome while potentially reducing the need for more invasive or follow-on procedures without increasing the observed complication rate. We also reported data from a prospective study evaluating a single-session treatment combining Avéli and Renuvion.

The study demonstrated visible improvements in cellulite and skin laxity, including measurable reductions in dimple volume, surface area, and depth. In a subset of patients, histological analysis also showed increases in collagen and elastin through 180 days, providing evidence of progressive tissue remodeling following treatment. In addition, these peer-reviewed publications add to the clinical foundation supporting Renuvion and demonstrate its potential value across a broader range of aesthetic body contouring procedures. The publications reinforce the important point that as patients' needs become more complex, surgeons increasingly require technologies that can address not only fat removal, but also skin quality, laxity, and structural factors that influence the final aesthetic result. We also took the opportunity this quarter to build broader awareness of our platform, showcasing Renuvion and AYON at Miami Swim Week through our Body by Apyx showcase.

The event featured real Renuvion patients sharing their treatment journeys and walking the runway, allowing us to highlight the aesthetic outcomes and the self-confidence those patients gained from their procedures. This year's event underscored the progress we have made since last summer. At that time, AYON was still in the early stages of its commercial journey. This year, we returned with a commercially available platform supported by growing physician engagement, real-world experience, and enhanced capabilities through the FDA clearance of power liposuction, which has resulted in AYON gaining traction across the market. Together, those milestones reflect the disciplined execution of our commercial strategy and reinforce the foundation of the opportunity ahead. These accomplishments demonstrate the progress we are making in executing our commercial strategy and reinforce our confidence in the long-term opportunity for our cohesive platform of AYON and Renuvion.

Before I wrap up, I would like to briefly touch on a recent announcement that Stavros Vizirgianakis has been appointed Executive Chairman of our Board of Directors. Over the past two years, Stavros has become an increasingly important partner to both our board and management team. He has been deeply engaged in helping shape our strategic priorities, supporting key financing initiatives, and strengthening our operational focus and providing valuable guidance as we execute our commercial strategy. Formalizing his role as Executive Chairman recognizes the level of involvement he already has within the company and reflects our shared commitment to creating long-term shareholder value. Stavros brings decades of leadership experience, an extensive industry network, and a proven track record of building and growing healthcare businesses. I look forward to continuing to work closely with him as we execute on the significant opportunities ahead for Apyx.

I will now turn the call over to Matt for a review of our second quarter 2026 financial results in more detail, along with our financial guidance for 2026.

Thank you, Charlie. Before I get started, please note that all references to our second quarter financial results will be on a GAAP and a year-over-year basis, unless noted otherwise. As Charlie mentioned, total revenue for the second quarter of 2026 increased 22% to $13.9 million, compared to $11.4 million in the prior year period. Revenue for the surgical aesthetics segment increased 28%, or $2.7 million, to $12.4 million, compared to $9.7 million for the prior year period. This growth was driven by sales of AYON, increased sales of generators internationally, and increased volume of single-use handpieces domestically. Turning to the OEM segment, sales decreased 12%, or approximately $0.2 million, to $1.5 million for the second quarter of 2026, compared to $1.7 million for the second quarter of 2025. The decrease in OEM sales was due to a decrease in sales volume to existing customers.

With the increased focus on surgical aesthetics, we continue to expect our OEM segment revenue will decrease for the year. This trend will continue over time. Domestic revenue increased 21% year-over-year to $9.4 million, and international revenue increased 24% year-over-year to $4.5 million for the second quarter of 2026. Gross profit for the second quarter 2026 increased 25% to $8.9 million, compared with $7.1 million in the prior year period. Gross profit margin for the second quarter 2026 increased to 63.9%, compared to 62.3% in the prior period. The increase in gross margin was primarily attributable to mix between our segments, with surgical aesthetics comprising a higher percentage of total sales and product mix within our OEM segment. This was partially offset by tariffs that began affecting us in the second half of 2025.