0001688757-25-000060
SEC filingRevenue grew 14% YoY to $92.7M, driven by US launch, but net loss widened to $37.3M on higher SG&A.
For the six months ended June 30, 2025, revenue grew 14.0% to $92.7 million from $81.3 million in the prior year, driven primarily by the U.S. commercial launch of Motiva Implants following FDA approval in September 2024. Gross profit increased to $63.1 million from $53.3 million, and gross margin expanded 250 bps to 68.1%, aided by higher average selling prices in the U.S. market. Despite revenue growth, operating loss deepened to $31.1 million from $18.2 million, as SG&A expenses surged 36.0% to $83.9 million due to investments in sales infrastructure, personnel, and marketing. Net loss widened to $37.3 million from $33.4 million, partially offset by a $7.8 million unrealized foreign currency gain.
Regionally, the U.S. market contributed $16.5 million in revenue during H1 2025, with over 1,000 accounts established. EMEA revenue increased 9.2% year-over-year, driven by strong direct market performance. Latin America declined 5.0%, though Brazil showed signs of stabilization. Asia-Pacific fell 35.0%, primarily due to China distributor destocking after initial 2024 purchases. The revenue mix shift toward the U.S. is a key driver of margin improvement.
Management expects overall operating expenses to increase in 2025 compared to 2024, reflecting continued investment in U.S. commercialization and R&D. Gross margins should benefit from U.S. revenue growth. R&D spending will remain elevated due to the post-approval study (estimated $4-5 million over ten years) and product development. No specific revenue guidance was provided, but the company believes its cash and operations will sustain liquidity for at least 12 months.
As of June 30, 2025, the company held $1.1M in cash equivalents (down from $3.0M at year-end 2024). Total debt stood at $226.1M, comprising $221.4M under the Oaktree Credit Agreement (Tranches A-C plus accrued PIK interest) and $5.0M drawn from a short-term inventory funding agreement with RTW entities at 12% annual interest. Inventory increased to $94.7M ($13.4M on consignment), while deferred revenue totaled $2.9M. The company had a $21.7M payable to its sole silicone supplier, Avantor.
No material purchase commitments were disclosed beyond the Oaktree loan obligations (maturity April 2027) and the short-term funding facility (initial 4-month term). The company has an option to purchase adjacent land in Costa Rica for $2.8M. Operating lease commitments total $6.1M with a weighted-average remaining term of 3.0 years.
No share buybacks or dividends were authorized or paid. Capital expenditures of $2.4M for PP&E and $0.7M for intangible assets were incurred during H1 2025 (from the cash flow statement, not explicitly in notes). The Oaktree debt principal remained unchanged; the only new debt was the $5M draw under the inventory funding agreement. The weighted-average interest rate on the Oaktree loan is 9.1% (10.4% effective), with all interest paid in cash.
The company operates as a single segment. H1 2025 revenue by geography: EMEA $45.4M, Asia-Pacific $14.3M, Latin America $16.6M, North America $16.3M. North America revenue surged due to FDA approval of Motiva Implants in September 2024. The company continues to rely on one sole supplier for medical-grade silicone, with purchases of $23.4M in H1 2025 representing 47.5% of total purchases.
CFO remained negative at -$39.5M, widening from -$25.3M in the prior year, driven by a net loss of $37.3M and adverse working capital changes (notably inventory build of $15.6M and accounts receivable increase of $3.7M). Capex was modest at $2.4M, down from $4.1M, indicating reduced capital intensity. Free cash flow (CFO less capex) was -$41.9M, not explicitly stated but implied. No capital returns (buybacks or dividends) were executed. Financing activities provided $4.9M, primarily from short-term borrowings ($5.0M), offsetting some of the cash burn.
Anomalies include a large unrealized foreign currency gain of $9.5M (favorable to operating cash flow but non-cash) and a $1.5M non-cash interest expense. The significant inventory increase ($15.6M) and accounts payable surge ($11.4M) reflect growth and supplier timing. Overall, cash generation remains negative with reliance on external financing.