0001437749-26-015652
SEC filingRevenue and gross profit grew significantly year-over-year, and operating and net losses narrowed, reflecting the impact of higher Surgical Aesthetics sales — particularly from the AYON commercial launch — though the company continues to report net losses and negative operating cash flow.
Revenue for Q1 FY2026 was $12.5M, an increase of 32.4% compared to $9.4M in Q1 FY2025. This growth was driven by increased Surgical Aesthetics sales, specifically from the commercial launch of AYON in Q3 2025, higher international generator sales, and increased volume of single-use handpieces in both domestic and international markets. The increase in OEM sales was due to higher sales volume to existing customers.
Gross profit increased 39.9% to $7.9M, and gross margin expanded to 63.5% from the prior year period. This improvement is primarily attributable to the mix between segments — with Surgical Aesthetics representing a higher percentage of total sales — and favorable product mix within the OEM segment. All related expenses are recorded as cost of sales, and therefore no segment-specific operating expenses are incurred.
Operating income improved to -$911K from -$3.1M, and net income improved to -$2.1M from -$4.2M. Diluted EPS improved to -$0.05 from -$0.10. These improvements were primarily due to the reduction in operating loss, which itself was driven by the increase in Surgical Aesthetics sales. While OEM segment sales increased for the quarter, management has stated that with the increased focus on Surgical Aesthetics, OEM segment revenue is expected to decrease for FY2026 and that this trend will continue over time.
Net cash used in operating activities improved to -$572K from -$702K, consistent with the reduction in operating loss. Capital expenditures were $60K, resulting in free cash flow of -$632K. The company continues to incur recurring net losses and cash outflows from operations and anticipates that losses will continue in the near term. This ongoing cash use reflects the company’s continued investment in commercializing AYON amid a competitive landscape where growing competition and policy pressure are driving prices down and shifting market dynamics toward volume and access.