Venus Concept outlines $20M hair business sale while targeting core aesthetics growth amid challenging environment

Earnings Call Insights: Venus Concept Inc. (VERO) Q2 2025

MANAGEMENT VIEW

* CEO Rajiv Kanishka Liyanaarchchie De Silva reported "15% growth on a quarter-over-quarter basis in Q2, driven by strong execution from the team in a continued challenging environment." He noted sequential growth in both the U.S. and international markets, led by "20% growth in total systems and subscription revenue." Year-over-year, U.S. sales saw 5% growth, while international sales declined 18%.
* De Silva stated, "Cash system sales in the U.S. represented 65% of total U.S. system sales in the second quarter compared to 58% last year," reflecting strategic movement toward higher quality revenues.
* De Silva announced the sale of the Venus Hair business to Meta Health Group for $20 million in cash. He said, "We believe this transaction strengthens Venous Concept by allowing us to focus on our global medical aesthetics business, which we expect will improve revenue growth, lower operating expenses, enhance the cash flow profile of the business and accelerate the path to long-term sustainable profitability and growth."
* The CEO highlighted a focus on core product lines in the U.S., including Bliss MAX, Versa Pro, and Viva MD, as well as plans for launching the next body device by early 2026.
* CFO Domenic Della Penna stated, "We reported total revenue of $15.7 million, down $0.9 million or 5% year-over-year." He added, "Gross profit decreased $2.4 million or 20% to $9.4 million compared to the second quarter of 2024."

OUTLOOK

* The company is not providing full year 2025 financial guidance due to "active dialogue with existing lenders and investors, ongoing evaluation of strategic alternatives with various interested parties to maximize shareholder value and current market conditions impacted by trade disruptions."
* Management reiterated its focus on evolving the portfolio, managing cash burn through disciplined cost management, and launching a new body device by early 2026.

FINANCIAL RESULTS

* Venus Concept reported total revenue of $15.7 million, a 5% year-over-year decline.
* Gross profit was $9.4 million, down 20% compared to the prior year period, with gross margin at 60.1% versus 71.5% in Q2 2024. The decline was attributed to "customer uncertainty about economic stability, tighter third-party lending practices," and international headwinds, as well as supply disruptions from the Israel-Iran conflict.
* Operating expenses rose 6% to $18.5 million, with GAAP operating loss at $9.0 million versus $5.6 million the prior year. Net loss attributable to stockholders was $11.7 million or $8.03 per share, compared to $20.0 million or $30.93 per share in Q2 2024.
* Cash and cash equivalents as of June 30, 2025, were $4.9 million, and total debt obligations stood at approximately $34.3 million.
* The company exchanged $17.5 million of subordinated convertible notes for preferred stock and raised $3.9 million in equity capital transactions.

Q&A

* NOT_APPLICABLE: The company did not host a Q&A session this quarter, citing international travel conflicts. All investor questions are directed to the company's investor inquiries email.

SENTIMENT ANALYSIS

* Analysts' sentiment cannot be assessed due to the absence of a Q&A session this quarter.
* Management's tone during the prepared remarks appeared confident, emphasizing sequential growth and strategic progress but acknowledging ongoing macroeconomic headwinds and operational challenges. De Silva described the operating environment as "continued challenging" and highlighted a disciplined approach to cash management.
* Compared to the previous quarter, management maintained a similar level of cautious optimism, but the absence of a live Q&A limited visible stress or defensive responses.

QUARTER-OVER-QUARTER COMPARISON

* Sequential revenue growth of 15% was reported for Q2, in line with expectations announced in Q1. Year-over-year revenue decline improved from 22% in Q1 to 5% in Q2, with U.S. sales returning to growth while international sales weakened further.
* Gross margin improved to 60.1% from 54.2% in Q1, despite still being below the prior year period.
* Operating expenses increased slightly from $18.3 million to $18.5 million. Net loss narrowed compared to Q1 ($11.7 million vs. $12.4 million), while adjusted EBITDA loss increased relative to Q1.
* Strategic focus shifted with the announced $20 million Venus Hair divestiture, signaling an increased commitment to core medical aesthetics.
* The Q1 call featured a live Q&A, with analyst questions centering on international tariffs, delayed sales, and new product launches. In contrast, Q2 had no Q&A, reducing transparency into analyst sentiment and immediate management reactions.

RISKS AND CONCERNS

* Management cited ongoing challenges including "customer financing pressures, economic uncertainty, high interest rates, tighter credit markets and uncertainty related to proposed tariffs."
* International business remains exposed to macroeconomic headwinds and tariffs impacting distributor demand.
* Supply disruptions from the Israel-Iran conflict affected production.
* The company is managing risk through cost containment, prioritization of core products, and the recent divestiture to focus resources.

FINAL TAKEAWAY

Venus Concept delivered sequential growth in Q2 2025 amid persistent macroeconomic and operational headwinds, highlighted by the $20 million sale of the Venus Hair business to sharpen focus on its core aesthetics portfolio. Management emphasized improved balance sheet health, ongoing cost discipline, and upcoming product launches as the company seeks to return to sustainable growth, while not providing full-year guidance due to market uncertainties and active strategic review.

Read the full Earnings Call Transcript [https://seekingalpha.com/symbol/vero/earnings/transcripts]

MORE ON VENUS CONCEPT

* Venus Concept Inc. (VERO) Q2 2025 Earnings Call Transcript [https://seekingalpha.com/article/4813879-venus-concept-inc-vero-q2-2025-earnings-call-transcript]
* Venus Concept prices $3.45M in direct offering, warrants; shares up over 29% [https://seekingalpha.com/news/4456281-venus-concept-prices-345m-in-direct-offering-warrants-shares-up-over-29]
* Venus Concept to sell Venus Hair business for $20M, stock soars 50% [https://seekingalpha.com/news/4456162-venus-concept-to-sell-venus-hair-business-for-20m-stock-soars-50]
* Seeking Alpha’s Quant Rating on Venus Concept [https://seekingalpha.com/symbol/VERO/ratings/quant-ratings]
* Historical earnings data for Venus Concept [https://seekingalpha.com/symbol/VERO/earnings]