Ladies and gentlemen, good morning, and welcome to the Apyx Medical First Quarter 2025 Earnings Conference Call. At this time all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Jeremy Feffer from LifeSci Advisors. Please go ahead.

Thank you, and welcome, everyone, to our first quarter 2025 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, and thank you all for joining us today. Per our usual format on these quarterly calls, I will be providing a review of our performance in the first quarter of 2025, and then I will turn the call over to Matt for a review of our first quarter financial results as well as our full year 2025 guidance. We will then open the call for your questions. Let me start with a review of our first quarter performance. We reported total revenue of $9.4 million for the quarter, a decrease of 8% compared to $10.2 million for the same period last year. While sales of our OEM products decreased as expected, sales of our advanced energy products increased 6% to $7.9 million for the first quarter of 2025 compared with last year’s period. This reflects a building trend we have seen over the past year with stronger sales of single-use handpieces in the United States. We also continue to see demand for capital equipment stabilize with increases year-over-year for two consecutive quarters in the U.S. We believe this speaks to the benefits offered by Renuvion as the only FDA-cleared device for use after liposuction as well as its ability to treat loose and lax skin. Digging further into our financial performance for the quarter, I want to point out that our team delivered these solid top line results somewhat define the industry. We also implemented significant cost-cutting measures and a restructuring program that rightsized our operations just six months ago. I think these initial results show this program is achieving its attended outcomes of reducing cost, reducing cash burn and speaks to the dedication of our commercial strategy and vision for Apyx. Matt and I are very appreciative of everyone’s effort, and I am truly excited about…

Thanks, Charlie. Before I get started, please note that all references to first quarter financial results will be on a GAAP and year-over-year basis, unless otherwise noted. As Charlie mentioned, total revenue for the first quarter 2025 decreased 7.9% to $9.4 million compared to $10.2 million in the prior year period. Revenue for the Advanced Energy segment increased 5.8% to $7.9 million as a result of increased volume of single-use handpieces domestically, domestic and international sales of upgrades of the Apyx One Console and domestic sales of new generators. These increases were partially offset by lower average selling price of generators to domestic customers and a general decrease in international sales. OEM segment sales decreased 44.7% or approximately $1.2 million for the first quarter of 2025 when compared to the first quarter of 2024. The decrease in OEM sales was due to decrease in sales volume to existing customers, excluding Symmetry Surgical under our 10-year generator manufacturing and supply agreement. Domestic revenue decreased 3.4% year-over-year to $6.7 million, and international revenue decreased 17.7% year-over-year to $2.7 million. As a reminder, there’s somewhat of a seasonality to the Medical Device business, where quarterly revenue is normally the lowest in Q1 and Q3 and the highest in Q2 and Q4. Gross profit for the first quarter of 2025 decreased to $5.7 million compared with the $5.9 million in the prior year period. Gross profit margin for the first quarter of 2025 was 60.1% compared to 58.1% in the prior year period. The increase in gross profit margins was primarily attributable to the mix between our segments with Advanced Energy comprising a higher percentage of total sales and geographic mix within our Advanced Energy segment with domestic sales comprising a higher percentage of total sales. These increases were partially offset by a decrease…

Thank you. [Operator Instructions] First question comes from Matt Hewitt with Craig-Hallum Capital Group. Please go ahead.

Good morning. Thank you for taking the questions. Obviously, it’s nice to hear that you’re seeing some stability on the generator side. One of the opportunities with the AYON platform was that for the practices to obtain one of those, they’re going to have to kind of get in queue. And to do that, you were going to give priority to those that had upgraded to the Apyx One Console. How is that progressing? Are you seeing customers enroll for that? And what does the pipeline look on that side?

Yes. Thanks, Matt. I appreciate the question. Look, we’re not going to comment on the pipeline for AYON yet. We’re still waiting for clearance from the FDA. And so we’ll have plenty of time to update everybody on AYON and what’s going on there. But obviously, the announcement of AYON gives doctors and clinicians a huge impetus to upgrade to the Apyx One because of the excitement around AYON. And so we’re very happy with what we’re seeing in the marketplace regarding that.

Yes. And I apologize. I could have been a little more clear. I was asking about the Apyx One Console, the upgrades to just get in queue for AYON. I was just curious if you were seeing increased demand for the Apyx One ahead of that?

Yes. No, that is actually what I tried to answer. And the answer to that is we’re happy with what we’re seeing for that is the upgrade – is people upgrading to the Apyx One and waiting for AYON.

Got it. All right. And then as far as there was going to be a soft launch later this year. I think last call, you had kind of mentioned that you kind of had a list, but have you kind of solidified the list of practices that will be receiving AYON? And are they getting set up? Kind of walk through the process once you do receive approval from the FDA, what that kind of first batch of KOLs, what that will look like?

Yes. So we do. We have that list all solidified. We’ve got 20 AYON ambassadors throughout the United States that are ready to go once we get clearance. Obviously, we would install the systems, get them and their staff trained on everything, and then they would obviously start performing cases and give us feedback and all of that. And that clock starts when we get clearance and then when we get everything installed and ready to go, but we are making great progress with all of that. And now it’s just a matter of waiting.

Understood. And one last one, and I know you touched on this a little bit in your prepared remarks, but obviously, front of mind for a lot of investors recently has been tariffs. Maybe just remind everyone where you’re obtaining your products from and what, if anything, would need to be done to mitigate any potential tariff impact? Thank you.

Yes. No, thanks, Matt. So look, we get – we’ve got a supply chain where we get parts from all over the world. But one of the advantages that we have as a company is we have manufacturing both in the United States, and we have manufacturing both in Sofia, Bulgaria. So based on what the environment is and what the best path for us, we can adjust manufacturing between the two facilities. And so we do have a little bit of flexibility when it comes to that.

That’s great. Thank you.

Next question comes from Sam Eiber with BTIG. Please go ahead.

Hey, Good morning, Charlie, Matt. Thanks for taking the questions here. Maybe I can just follow up on the last question on tariffs. And obviously, I know there’s a lot of moving parts here. But I guess as currently contemplated today, any way to size the impact to margins at this point?

So if you – if Matt’s prepared remarks, he talked that we’re still expecting gross margins to be around 60% for the entire year. I think that’s what we said at the beginning of the year. And all of that would impact everything that we know right now based on the current situation.

Okay. So it sounds like pretty minimal impact at this point. And then maybe I can use my follow-up here on just how you’re thinking about investments to support the AYON launch. Obviously, I know you’re keeping a close eye on cash burn and operating expenses. But how are you positioning investments to support this launch while also preserving capital here?

Yes. Look, obviously, expense control and cash management is incredibly important to us, but it’s not at the expense of the AYON launch and everything that we’ve contemplated into our budget and the investments that we’re making is there to support AYON and to be able to grow that. And remember, we think that AYON is a huge differentiator for us at Apyx Medical and makes us a true partner for the surgeons. And we’ve got plans for how not only are we going to use capital to build new AYONs but obviously, part of the social strategy to talk about that and everything else. So it’s always been contemplated in there. We are going to do our best to keep managing expenses and managing our cash burn. But like I said, it won’t be at the expense of the launch of AYON.

Okay. Very good. Thanks for taking the questions.

You bet.

There are no further questions. Please continue.

Thank you, everyone.

Ladies and gentlemen, this concludes today’s conference call. Thank you for your participation. You may now disconnect.