Establishment Labs Holdings Inc.

Good morning. Welcome to Establishment Lab's first quarter 2026 earnings call. At this time, all participants will be in listen-only mode. At the end of this call, we will open the line for a question and answer session, and instructions will follow at that time. As a reminder, today's call is being recorded. I will now turn the call over to Malavika William, Global Head of Corporate Communications and Marketing. Please go ahead.

Thank you, Operator, and thank you everyone for joining us. With me today is Peter Caldini, our Chief Executive Officer, and Sondra Harris, our Chief Financial Officer. Following our prepared marks, we'll take your questions. Before we begin, I would like to remind you that comments made by management during this call will include forward-looking statements within the meaning of federal securities law. These include statements of Establishment Labs' financial outlook and the company's plans and timing for product development and sales. These forward-looking statements are based on management's current expectations and involve risks and uncertainties. For a discussion of the principal risk factors and uncertainties that may affect our performance or cause actual results to differ materially from these statements, I encourage you to review our most recent annual and quarterly reports on Form 10-K and Form 10-Q, as well as other SEC filings, which are available on our website at establishmentlabs.com. I'd also like to remind you that our comments may include certain non-GAAP financial measures with respect to our performance, including but not limited to sales results, which can be stated on a constant currency basis or EBITDA, which we disclose on an adjusted EBITDA basis. Reconciliations to comparable GAAP financial measures for non-GAAP measures, if available, may be found in today's press release, which is available on our website. The content of this conference call contains time-sensitive information, accurate only as of the date of this live broadcast, May the 6th, 2026. Except as required by law, Establishment Labs undertakes no obligation to revise or otherwise update any statement to reflect events or circumstances after the date of this call. With that, it is my pleasure to turn the call over to Peter.

Good morning and thank you for joining us. Q1 2026 was a strong start to the year with $59.9 million in revenue and adjusted EBITDA of $1.2 million, representing revenue growth of 45% over Q1 2025. The U.S. business continued to outperform with $19.6 million of revenue, a growth of 216% over Q1 2025. and quarter-over-quarter growth of 13.3%. It's worth noting that Q1 is a seasonally light quarter for breast augmentation and reconstruction, so to grow quarter-over-quarter is a testament to the strength and acceleration of our U.S. launch. Outside the U.S., we delivered 15% growth driven by strong execution on both our direct and distributor markets. Our minimally invasive platform is showing immense promise as well, generating $9.1 million in revenue in Q1. At the same time, we had our third quarter of positive adjusted EBITDA. Our gross margin improved by 350 basis points in Q1 2026 to 70.7%, up from 67.2% in Q1 2025. We refinance our credit facility and expect to reach cash flow positive in the second half of the year. Our increasing profitability is demonstrating the operational leverage in our business, as well as our ability to generate meaningful earnings per share in the coming years. We continue to be conservative as we forecast our business due to the geopolitical landscape, as well as our hyper focus on achieving and scaling a cash flowing positive business. As such, we are raising our guidance to $266.5 to $268.5 million, up from a previous range of $264 to $266 million. Our confidence comes from the strong start we are having in Q2. We are setting new weekly highs in our U.S. order counts. We expect our growth to continue throughout 2027 as well. As we've mentioned our prior calls, there is a good likelihood we may be included in several indices, beginning with the Russell 2000. As we're seeing increased interest from firms that benchmark to these indices, we thought it would be helpful to provide an overview for those being introduced to our company for the first time. The robust growth we reported this quarter is a reflection of our work since 2011. Establishment Labs is a woman's health company focused on transforming breast aesthetics and reconstruction through innovation. Since the moratorium on breast implants in the US was imposed in 1992, this category has seen very little meaningful innovation, and as a result, patient behavior, surgeon adoption, and overall market growth has remained relatively static. Establishment Labs was founded on the belief that a deep investment in science could fundamentally improve existing technology and provide better options for women. From the beginning, we reexamined every aspect of the breast implant, from surface technology to manufacturing, leveraging advances in material science, biomedical engineering, and device design, This work is reflected in a robust intellectual property portfolio with more than 200 patents issued and pending worldwide. In 2015, we brought on Dr. Robert Langer to lead our scientific advisory board. Bob Langer is one of the most accomplished scientists of the 21st century, and his contributions are behind the founding of several prominent companies. His work at MIT continues to impact science at the highest levels. Our partnership resulted in a seminal paper for plastic surgery. Published in Nature Biomedical Engineering in 2021, this paper focused on breast implant surface technologies and highlighted that the 4-micron surface, which was intentionally designed to enhance biocompatibility, consistently demonstrated low inflammations. These results explain how Motiva implants outperform the category. The U.S. FDA clinical trial matched both our research findings and clinical data from around the world and is quite frankly game-changing. All these data points show device-related complication rates at new industry lows, including capsular contraction rates of less than 1%. To put this in perspective, the FDA trials for competitive products have device-related complications rates that are upward to 20%, and in some cases, the complication rates far exceed 20%. Perhaps most interesting is our extended global warranty data. With over 49,000 warranties sold and only 377 claims submitted, the resulting complication rate is less than 1%. We publish this data annually on our post-market surveillance report and are the only company in the industry that publicly shares this information, which you can find readily available on our company website. Fear of complications are one of the top barriers for patients when considering a breast augmentation. Having a product that has an outstanding safety profile helps to diminish that concern and provides extra peace of mind for both patients and surgeons. Less complications leads to happy patients and more referrals, which is the lifeblood for any plastic surgery practice. The significant technology moat that has been established is enhanced by our R&D pipeline of continuous innovation. Not only do we believe that we can take a substantial majority of breast implant market in time, we also believe we can significantly expand the market from where it is today. That is best evidenced by the launch of our Motiva minimally invasive platform. We have two minimally invasive procedures in market right now, Mia and Preserve. A third is currently in development called Gem and is a revolutionary advancement for gluteal augmentation that should offer a safer, more predictable alternative to the Brazilian butt lift. Both Mia and Preserve are available outside the United States with their presence in more than 45 markets globally. While MIA is not yet available in the United States, we recently introduced PreservA to the U.S. market. Both are built on tissue-preserving practices, which establishment labs has pioneered, and they allow for the use of minimal anesthesia while preserving the patient's native breast tissue, nipple sensation, and chest muscles. Mia features the Motiva Ergonomics 2 diamond shaped implant, which has a unique shape that allows for greater projection than a conventional round implant, as the shape creates more projection with less volume. It also includes a proprietary shell, which allows insertion through the smallest incision possible within the Motiva portfolio. These characteristics make for a true scarless breast augmentation, done by a small incision in the underarm. This procedure is meant for patients looking for a subtle enhancement with one to two cup size increase. PreservA can feature either the Motiva Ergonomics 1 or 2 implants and accommodates both primary breast augmentation and primary breast augmentation mastopexy, offering patients smaller scars tucked under the breast crease and allows for larger sizes to be used. The launch of minimally invasive techniques into any specialty almost always dramatically increases the market. For example, there were approximately 95,000 total knee arthroplasty procedures in 1991. Between 2000 and 2005, minimally invasive knee procedures became the standard. And by 2010, there were approximately 250,000 procedures annually. In 2025 alone, This number rose to approximately 1.3 million, an increase of close to 14 times. This kind of growth exists in other major procedure types as well, such as LASIK eye surgery and fat reduction. In the United States, our minimally invasive technologies command a premium over two times higher than traditional breast augmentation. And if our overseas growth is any indication, we can expect that minimal invasive will create significant market expansion and be a meaningful driver of growth. The value proposition for patients is well-defined. Smaller scars, minimal anesthesia, preservation of tissue and sensation, and a faster recovery, combined with the safety and performance benefits of Metiva. Our initial three-year study on Mia was published in the Aesthetic Surgery Journal in October 2025 and showed no device-related complications. Like our FDA trial data, this is game-changing. It's clear that this procedure is fundamentally different from what has come before. Many women no longer view this as the traditional breast augmentation they once knew and but rather as a more accessible, almost lunchtime procedure where they can return to normal social activities within hours. Women that have never considered breast augmentation before are now getting the procedure, and we are expanding the market. RealSelf, a popular online platform for aesthetic patients, published last week that breast augmentation page views were up 45% from Q4, and that breast implant revision page views were up 89%, indicating that patients' interest in the category is surging. Not only do our patients benefit, our minimal invasive platform also has the potential to increase surgeon productivity, allowing surgeons to run two operating rooms, one where the patient is being prepped or the room is being cleaned, and the other where the surgeon is operating. We had one plastic surgeon that started surgery at 6 a.m., and by 10.30 a.m., he had completed 10 minimal invasive surgeries. Scheduling a minimally invasive procedure a day like this can generate more than two times additional revenue for a practice. The introduction of our minimal invasive platform enhances the Motiva portfolio, creating a clear good, better, best framework. This allows the plastic surgeon to address a broader range of patient needs across the aesthetics outcomes, lifestyle consideration, and price points. This portfolio approach is not just about product breadth. It enables us to expand the category, increase procedure volumes, and drive higher value per procedure while giving surgeons the flexibility to tailor their solutions to each patient. Patients are now engaging with surgeons very differently than before. In a category where it was historically very unusual for patients to ask about implant brands, 78% of surgeons now report being asked for a brand by name. And in those cases, 93% of the time, that brand is Motiva. And now, just 18 months into our US launch, we are seeing the next step. Patients are not only asking for Motiva, they are actively seeking out surgeons who are trained in minimally invasive procedures. We expect to see a similar dynamic as we enter breast reconstruction in the United States, an opportunity that is equal in size to the breast augmentation market. We submitted Motiva implants to the US FDA for approval in primary and revision breast reconstruction in December 2025 and are currently progressing through the review process. I hope that reintroduction to our business was helpful and that the context explains our success to date. The US remains the most important driver for our growth. Motiva continues to be one of the fastest launches in the history of breast aesthetics, and we continue to expand our footprint, recently surpassing 1,700 accounts. We are seeing increased adoption from higher volume surgeons who have moved beyond initial evaluation and are now fully committed to Motiva. This is reflected in our order growth, where we have experienced 30% increase in average orders since the end of Q4. We officially launched our minimally invasive platform in the United States in March, and the response has been exceptional. While we initially trained surgeons on Preserve in our campus in Costa Rica, early demand was so strong we began training in the United States as well. This has allowed us to train surgeons at a much faster rate, and we have now certified more than 260 surgeons in the U.S. For context, our goal was to train 200 surgeons by the end of 2026 and we soared past that number by the end of the first quarter. Those trained have shown a strong intent to purchase and we have seen relatively quick adoption with the first procedures being performed shortly after training. A surgeon in the Northeast recently shared that he began offering Preserve after being trained and promoted the procedure on social media. He now has 50 Preserve cases scheduling Q2 at a 30% premium to his traditional breast augmentation price. Another surgeon in Southern California was thrilled that Preserve has completely changed her practice and that she is consistently seeing patients that had previously deferred surgery due to the concerns around anesthesia and recovery. When you remove historic barriers, you bring new patients into the market. A recent Preserve patient who is a Pilates instructor got her procedure done on a Saturday, went to dinner with friends that night, and was back teaching Pilates on Monday. This kind of recovery is traditionally unheard of, and for the first time, patients are truly returning to normal activity with a minimal downtime. In a recent survey conducted with 94 Preserve patients, three months post-surgery, 98% stated that they experienced minimal disruption to their daily lives, with 95% satisfied or extremely satisfied with the results. In addition, 15% of patients said they were new to the category and had not considered breast augmentation until they learned about Preserve. 84% of the present-day patient surveys said they were willing to pay a premium for the benefits of the procedure, with 99% saying that they would choose this procedure again. Outside the United States, our business continues to perform well. We delivered approximately 15% growth with strong performance across our direct markets, which continues to be a major focus area for us. Our minimally invasive platform continues to be a key driver for growth globally. It is interesting that surgeons generally view the two procedures as complements to each other, and all MEA accounts are offering Preserve, showcasing the value of a minimally invasive portfolio approach that provides patients options to meet their aesthetic goals. Preserve continues to attract surgeons to the overall Motiva portfolio. In our OUS markets, we are seeing strong growth across European direct markets, including the UK, Germany, Nordics, and our newly acquired Benelux affiliate. Continued stabilization in Latin America with solid performance in Argentina due to the adoption of the Motiva minimally invasive platform. as well as steady demand across all our distributor markets. Our exposure to the Middle East remains less than 5% of total revenue, limiting risk from regional volatility. In our U.S. and OUS markets, we expect growth to continue to accelerate into 2027. We also expect to continue the innovation pipeline by expansion in breast reconstruction in the United States, which effectively doubles our addressable market. gaining CE mark for ZEN temperature, marking our entrance into biosensing capabilities, introducing smaller sizes to our U.S. product matrix, and thus expanding our reach within existing counts, continue to develop our pipeline, including GEM, our gluteal augmentation solution. We also plan to submit for Health Canada medical device license for expansion in the Canadian market. As part of our overall strategy, we are taking steps to secure our future growth. This includes our signed agreement with Oak Tree that refinances our debt and enhances our financial flexibility. And finally, we are in active conversations with NuSil, our silicone supplier, as we both look to establish a long-term agreement. We've had strong working relationship with Nusil for the last 15 years, and our ongoing conversations are very focused on what we can accomplish together as partners. I will now turn the call over to Sandra.