Third Quarter 2026 Earnings Conference Call - EVOLUS INC

Explicit Guidance:

• FY2025 Revenue: Reaffirmed at $330 million to $337 million, representing 11–13% growth over 2025; implies sequential Q4 step-up reflecting normal seasonality.
• FY2025 Gross Margin: Reaffirmed at 67% to 67.5%.
• FY2025 Operating Expenses: Updated non-GAAP range to $210 million to $213 million (prior: $212M–$216M), representing flat to 2% growth over 2025; includes $1.5M option payment for hair growth program.
• FY2025 EBITDA Margin: Reaffirmed at low to mid-single digits.
• FY2026 Revenue: Assumes 0% contribution from Evelisse Sculpt; excludes specific numerical forecast but implies continued mid-teens growth in second half vs. high single-digits in first half.
• FY2028 Financial Objectives: Reaffirmed annual revenue target of $450 million to $500 million and adjusted EBITDA margins of 13% to 15%.
• Hyaluronic Acid (HA) Contribution: Expected to contribute 10% to 12% of full-year 2025 revenue (U.S. Evelisse + European Esteem).

Business-Segment Outlook:

• U.S. Injectable Pipeline (Evelisse):
  • Evelisse Sculpt: Anticipated FDA approval in Q4 2026; commercial launch expected in Q1 2027.
  • Evelisse Lips: PMA submission planned before year-end 2025; launch anticipated in early 2028.
  • Profilo (IPSA Partnership): U.S. development and commercialization underway; expected approval and market entry around 2030 (long-term horizon); no upfront or milestone payments.
  • Hair Growth: Early-stage option agreement acquired; aims for 3-month treatment interval; human data assessment required before potential acquisition; approval/launch timeline post-2030.
• Portfolio Strategy: Plan to introduce three additional products over the next four years (Sculpt, Lips, and one undefined asset), moving beyond the current Juvau/Evelisse base.
• International Expansion: Exclusive rights to Evelisse/Estem portfolio now cover all markets where Jouveau/Nusiva are offered (including Canada, Australia, New Zealand) following August CIMITASE agreement expansion.
• Customer Base & Adoption: Cumulative customer base exceeds 19,000; added 500+ new accounts in Q3; 1.6 million Avalis Rewards members (23% YoY growth); 70% patient repeat rate.
• Market Growth Expectations: Filler market expected to grow in mid-single to high single-digits through 2027; Toxin market expected to flatten and return to growth in 2027.

Market and Competitive Outlook:

• Demand Trends: Global aesthetics market deemed healthy; consumers prioritizing beauty despite softer confidence.
• GLP-1 Tailwinds: Broader adoption of GLP-1 therapies expected to drive new patients into aesthetic practices, creating additional treatment needs post-weight loss.
• Competitive Positioning: Evidenced by Evelisse growing ~40% in the quarter vs. market flat to single-digit growth; Juvau growing >11% YoY in U.S. and globally, outpacing market rates.
• Portfolio Bundling: Introduction of a Q4 pilot to bundle Juvau and Evelisse more closely; mid-term goal to capture higher-value accounts seeking comprehensive injectable portfolios.

Macro / Industry Outlook:

• Tariffs: Following official September guidance, no tariff impact expected on Juvau; inventory levels to be gradually reduced to normal.
• Regulatory: FDA "untitled letter" received regarding a single Instagram post for Juvau; resolved with no impact on promotion or business operations.
• Seasonality: Q4 expected to show a 25–30% sequential revenue step-up from Q3 (historically low) due to normal seasonality.

Strategic Initiatives:

• New Product Launches: Scheduled pipeline includes Evelisse Sculpt (2026 approval/2027 launch), Evelisse Lips (2025 submission/2028 launch), and Profilo (post-2030).
• R&D & M&A: Active in discussions for biostimulators; disciplined approach to acquisition terms; hair growth option pending human data success.
• Commercial Infrastructure: Leveraging existing customer base and digital capabilities to support multi-product injectable portfolio; focusing on clinical education and consumer loyalty programs to deepen clinic partnerships.
• Capital Allocation: Maintaining access to $120 million in non-dilutive capacity for pipeline development; balance between expense discipline and investment in commercial priorities.

Risks and Headwinds to Outlook:

• Pipeline Execution: Approval timelines (e.g., Sculpt in Q4 2026, Lips submission in 2025) and potential regulatory delays remain key risks.
• Commercial Conversion: Dependence on successful conversion of "twilers" (Evelisse) to adopters and integration into clinic workflows.
• Competitive Dynamics: Potential market shifts or competitor acquisitions in adjacent categories (e.g., skincare) could alter competitive landscape, though company remains focused on injectables.
• Inventory Management: Prior inventory build-up for Juvau safety stock resolved, but future supply chain dynamics remain a factor.
• Regulatory Uncertainty: Ongoing FDA reviews and potential future regulatory feedback on marketing materials.

Management Tone on the Future:

• Confidence Level: High confidence in FY2025 trajectory and 2028 objectives, citing four consecutive quarters of positive adjusted EBITDA and successful operating leverage.
• Strategic Clarity: Management emphasizes a shift from "single-product" to "global performance beauty company" with a durable commercial foundation.
• Caveats: Acknowledges that Q3 is seasonally slower; emphasizes that Q4 results will validate the full-year guidance; notes that Q2 2027 and beyond depend on successful product launches and portfolio expansion.
• Discipline: Reiterated commitment to "financial discipline" balancing growth investments with margin improvement.