Apyx Medical Corporation Aktie

[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 third quarter 2026 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 these 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 begin with a review of our performance over the past several months, and then turn the call over to Matt for a review of our third quarter 2026 financial results, along with our guidance for the full year 2026. We will then open the call for your questions. Let me begin with a review of a few key highlights from our third quarter 2026 performance. We delivered another quarter of strong year-over-year growth with total revenue of $14 million, an increase of 9% compared with the third quarter of 2025. Growth was driven primarily by sales of AYON in the United States and Renuvion outside the United States, reflecting continued demand for our body contouring technologies. For the 3 and 9 months ended September 30, 2026, our Surgical Aesthetics segment grew over 17% and 26%, respectively, as compared to the same periods last year.

We are pleased by the progress we have made with AYON in the 1 year since its full commercial launch. During this time, we have continued to build awareness of the platform and demonstrate the value of bringing fat removal, closed-loop contouring, Renuvion tissue contraction, and electrosurgical capabilities together in 1 integrated system. We are building on a foundation with the broader commercial rollout of AYON's power liposuction capability consistent with the plans we outlined last quarter. Power liposuction uses a reciprocating cannula to support more efficient fat removal while reducing the physical effort required of the surgeon. We estimate approximately 70% of plastic surgeons use power liposuction, making this an important addition that broadens AYON's appeal. Therefore, the recent clearance and commercial launch of power liposuction was a pivotal catalyst in driving AYON's adoption. While the rollout remains in the early stages, feedback from surgeons has been very positive.

PowerLipo was designed directly into every AYON, and activation requires only a simple software update and the purchase of the handpiece and cannula. Clinicians can seamlessly deploy the full clinical AYON solution with no downtime. The legacy liposuction products on the market haven't moved the needle on safety and efficacy in 2 decades. The AYON system was designed by surgeons to specifically close these clinical gaps. By embedding next-generation safety and workflow optimization into a single, elegant system, we believe AYON establishes a new benchmark for surgical performance. It is uniquely positioned to be the global standard of care for plastic surgeons. Renuvion remains central to our strategy, both as a standalone system and as an integrated part of AYON. Its tissue contraction capability complements fat removal, helping surgeons address skin laxity that remains after liposuction or significant weight loss.

Continued demand for AYON and Renuvion reflects the value surgeons see in having these complementary technologies available for their patients. Our commercial strategy is supported by our continued commitment to building clinical evidence. Last quarter, we discussed studies reporting higher patient satisfaction and lower rates of abdominoplasty and surgical revision with Renuvion plus liposuction compared with liposuction alone, as well as improvements in cellulite appearance and skin laxity following combined Avéli and Renuvion treatment. In September, we added to this evidence with a prospective study evaluating Renuvion's effect on biological markers associated with skin quality published in Plastic and Reconstructive Surgery – Global Open. The study enrolled 7 patients undergoing facelift surgery with 6 completing the 6-month follow-up. Tissue analysis at the visit showed 30% greater elastin fiber density and 34% less inflammation in treated tissue compared to untreated control areas. All 6 patients reported improvements in skin quality and satisfaction with their outcomes.

These findings add direct human tissue evidence supporting the improvements surgeons and patients have observed with Renuvion and reinforce the value of evaluating tissue quality alongside tissue contraction. We believe this is an important consideration in body contouring where achieving the desired results depends not only on removing the fat, but also addressing the quality and laxity of the skin that remains. Looking ahead, the continued adoption of GLP-1 medications is reshaping the body contouring patient population and creating what we believe is a meaningful long-term opportunity for our business. While these therapies are helping a growing number of patients achieve substantial weight loss, many are left with loose or lax skin and residual areas of fat that they want to address. As these patients reach or approach their target weight, we believe many will seek procedures that address these concerns more comprehensively. By combining advanced fat removal with Renuvion's tissue contraction capabilities, Apyx positions us to help surgeons meet these needs. Our focus remains on transitioning this opportunity into broader adoption through continued commercial execution.

Before I turn the call over to Matt, I want to recognize the Apyx team. We have successfully achieved our product development, regulatory, and sales goals, all while maintaining strict cost discipline. To that end, I am pleased to report that on a cumulative trailing 12-month basis, the company has achieved positive EBITDA. Now I will turn the call over to Matt for a review of our third quarter 2026 financial results in more detail along with our financial guidance for 2026.

Thanks, Charlie. Before I get started, please note that all references to our third quarter financial results will be on a GAAP and a year-over-year basis unless noted otherwise. As Charlie mentioned, total revenue for the third quarter of '26 increased 9% to $14 million compared to $12.9 million in the prior year period. Revenue for the Surgical Aesthetics segment increased 17% or $1.9 million, to $13 million, compared to $11.1 million for the prior year period. This growth was driven by sales of AYON as we commenced our commercial launch in the third quarter of '25 and increased sales of generators internationally. These increases were partially offset by decreases in domestic sales of standalone generators and sales of single-use handpieces globally. Turning to the OEM segment, sales decreased 41.5% or approximately $0.7 million, to $1.1 million, for the third quarter of '26 compared to $1.8 million for the third quarter of '25. The decrease in OEM sales was due to a decrease in sales volume to existing customers.

With the increased focus on Surgical Aesthetics, we expect OEM segment revenue will decrease for the year. Domestic revenue increased 4% year-over-year to $9.7 million, and international revenue increased 22% year-over-year to $4.3 million for the third quarter of 2026. Gross profit for the third quarter of '26 increased 9% to $9 million, compared with $8.3 million in the prior year period. Gross profit margin for the third quarter of '26 decreased to 64.2% compared to 64.4% in the prior year period. The decrease is primarily attributable to geographic mix with international sales comprising a higher percentage of total sales and product mix within both the Surgical Aesthetics and OEM segments. These decreases were partially offset by an increase due to mix between our segments with Surgical Aesthetics comprising a higher percentage of total sales.

Operating expenses increased to $9.6 million for the third quarter of '26 compared to $9.1 million for the prior year period. The increase was mostly driven by a $0.4 million increase in salaries and related costs and a $0.2 million increase in selling, general, and administrative expenses, which was partially offset by a $0.2 million decrease in professional services.

Loss from operations was $0.6 million, compared with a loss from operations of $0.8 million for the third quarter of 2025. Net loss attributable to shareholders was $1.8 million, or $0.04 per share, for the third quarter of '26, compared with $2 million or $0.05 per share in the prior year period. Adjusted EBITDA was $0.4 million for the third quarter of '26, compared to an adjusted EBITDA loss of $0.1 million for the third quarter of '25. As a reminder, we provided detailed reconciliation from net loss attributable to stockholders to non-GAAP adjusted EBITDA in our earnings press release.

For the 3 months ended September 30, 2026, net cash used in operating activities was $1.6 million compared to $3.5 million used in the prior year period. The decrease was primarily due to changes in working capital, combined with a reduction in net loss. As of September 30, 2026, the company had cash and cash equivalents of $25.8 million.

We have maintained a solid cash position, managing to an average cash burn of approximately $2 million a quarter this year, providing substantial flexibility to support our ongoing operations and execute our strategic plan. As you can see from our financial performance, we're very focused on growing the top line while prudently holding the line on operating expenses. Our continued focus on operating discipline, cash management, and financial performance positions us to navigate our upcoming obligations while maintaining our commitment to long-term value creation.

Turning to our 2026 guidance, we're reaffirming our full-year revenue guidance in the range of $59 million to $60 million compared with $52.8 million reported for the year ended December 31, 2025. Our guidance continues to assume Surgical Aesthetics segment revenue in the range of $54 million to $55 million, compared with approximately $45.3 million for 2025, and OEM revenue of approximately $5 million, compared with approximately $7.5 million for 2025. In addition, we now expect gross margins in the range of 63% to 64% and updated our total operating expense targets in the range of $41 million to $42.5 million for the full year. Previously, we stated operating expenses would be less than $45 million.

This completes our prepared remarks. Charlie and I will now open the call for questions. Operator.

[Operator Instructions] Your first question comes from the line of Alex Fuhrman with Loop Capital Markets. Please go ahead.

Can you talk a little bit more about the lower operating expense target for the year and what's driving the improved profitability here? Obviously, it sounds like very strong demand here, especially with the addition of power lipo here, but would love to get a better understanding of the improved profitability here as well.

Yes. No, I appreciate the question. Look, we've stated that we want to get this business to profitability as quickly as we can, and we're very proud of the effort that the team has put forward. For the last trailing 4 quarters, we're actually EBITDA positive. And so we've done a very good job of growing the top line, but also managing the bottom line. And you're seeing the growth go straight to the bottom line, and that's why you get the improvement. We had always stated at the beginning of the year that we weren't going to spend more than $45 million, and obviously through the first 3 quarters, we're way under that. And so now we just tightened that range of what we will spend between now and the end of the year.

Okay, that's really helpful. And then, obviously, not trying to get you to give us formal guidance for next year or anything, but just can you give us a little bit of understanding of just how to frame up where you are in the rollout of the new all-in-one system? Is that expected to be a continued tailwind into the first half of next year?

Well, I would say that the tailwind for all-in-one is for multiple years. Remember, we're just getting started in the United States. We actually just got PowerLipo out to everybody that had bought it. And so we think that AYON will have growth for a lot of years to come. And the other side of that is right now we are only selling it in the United States. And obviously we're working on registration in a lot of the key markets outside the United States and would expect to have those at some point to be able to start selling AYON on a worldwide basis. Doctors all over the world are seeing AYON at the show. They're talking about it. They're hearing about it. And, you know, we're just excited to get it registered and to get it out there.

Yes, that'll be really exciting to see that. Thank you, Charlie, and congratulations again on the strong results.

Thanks, Alex.

Your next question comes from the line of Sam Eiber with BTIG. Please go ahead.

Maybe just following up on that last question, are there any key markets we should be looking out for in terms of timelines when AYON might get the necessary regulatory approvals? I know Renuvion has been doing well in certain markets, but curious if you're able to give us any timelines on AYON and some of the larger OUS markets you play in today.

Yes, timelines. The answer to that is no. Obviously, when we get registration in some of these key areas, we'll obviously let the market know if it's important. But obviously the markets that we were really after and really want right away are obviously Europe, the Middle East, and then key countries in Latin America. And those key countries in Latin America are namely Brazil, Colombia, and Mexico.

Okay, very good. Fair enough. And then maybe I can just use a follow-up question here on what's resonating maybe more with some of the doctors that have adopted AYON at this point. Is it more so the clinical benefits that they're seeing? Is it the economics on the faster procedures and greater patient throughput? Or maybe it's a combination of the two, but curious what you're hearing from the field.

Yes, it's all of the above. Doctors are really noticing the technological advances in the liposuction, and the doctors that see it and have it are talking a lot about it. They are seeing that their patients actually recover faster because they have less bruising and less downtime from traditional lipo that they were using before. And so there's definitely that clinical aspect of it, and having the integrated system for fat transfer and everything else is key to them. And there are doctors that are using it to actually bring in new patients and talk to patients that they've got the latest and greatest technology and are able to either convert more patients into having procedures with them or even in some cases charging more for those procedures because they're using the latest and greatest technology. And then there's the whole efficiency piece for the doctors and their teams where they're able to save time and do that. And so Apyx has a lot of drivers for the doctors, their patients, and their practices.

It's now our job on the commercial side to make sure that everybody understands that—the doctors themselves, their staff, and the patients also. So we've still got work to do from a worldwide basis, but we are even more excited as we sit here today that we think that AYON will be the standard of care for body contouring all over the world. It really is being received that well in the field.

Okay, very good. Thanks for taking the questions, guys.

Your next question comes from the line of Tollef Kohrman with Craig-Hallum. Please go ahead.

So for AYON growth, how much of that was competitive conversions? And then for my second question, could you speak to the pipeline of PowerLipo? Thank you very much.

Yes, so I'll do the second one first. So PowerLipo, we were able to fill all the orders of PowerLipo just within the end of this last quarter. So everybody that had a PowerLipo system could actually get their handpiece, at least 1 of them. And I think now we've been able to get everybody all of theirs since then. And now is the first time that if you actually bought an AYON today, you could actually get PowerLipo with it. Okay. So that's the first one. As far as new customers, if you look at where we've done so far, about 75% of our AYON sales have been to existing Renuvion customers and about 25% to brand-new customers that have never been part of Apyx.

Great. Thank you.

Your next question comes from the line of Danny Stauder with Citizens JMP. Please go ahead.

I wanted to ask on fourth quarter, how should we be thinking about capital versus handpiece mix in terms of what's implied for fourth quarter sales? And as we think out to 2027, what's a good way to frame that, just considering some of the puts and takes we saw in 2026? Thank you.

Yes, so if you look at handpieces in particular, it's always tough to look at it on a quarter-by-quarter basis. We obviously look at it on a year-by-year basis because it depends on whether some large customers when they place their order to where it is. And so for the first 3 quarters from a handpiece perspective, we're right where we thought we were going to be, and we would expect Q4 obviously to be a very good handpiece quarter because that's where the greatest number of procedures are done in Q4 as opposed to Q3. So we think that Q4 will be a good handpiece quarter as well as a good capital quarter. It's always our best capital quarter. And so we're looking for both of those things to happen.

As far as the comparison in Q4, remember that last year we started pre-selling AYON in May when we got approval. And so we were selling AYONs basically for over half of a year, and we didn't actually ship those AYONs until Q3 and Q4. So from a comparison basis, there were 6 months of sales that were put into the last quarter, basically. So from a comparison, it's not an apple-to-an-apple comparison on a regular quarter, but that's the last quarter of this. And then as we move into '27, obviously the comparisons will be a lot easier to go after.

That's really helpful. Thank you. And then just 1 follow-up on some of the terms of the international opportunity. Just in terms of AYON, could you talk about those markets? I mean, is that 70% of plastic surgeons using power lipo, is that consistent abroad? And is there any reason that AYON might be more or less attractive in some of these international markets, just depending on the different trends and idiosyncratic characteristics there? Thank you.

Yes, no, it's a good question because there are some differences there. Power lipo is about the same. That is not different. But what is different in Europe especially and in various other countries is a lot of the liposuctions are done in the hospital setting and done by teams of doctors. And that makes Apyx even that much more of a value to the doctors and their teams because of the simultaneous activation. Remember, you can do up to 4 things at the same time with AYON. So that simultaneous activation is a huge benefit in places like Europe where doctors and their teams do that. The other side of it, too, is because they're done in the hospital, a lot of the reconstructive doctors can be using AYON also. And that is an area that, quite honestly, they weren't really using Renuvion before. Now they're going to get exposure to Renuvion, too, on the reconstructive market. And so the reconstructive market is obviously an upside for us all over the world because it's really not a market that we have called on before. So there are some differences outside the United States because of where the body contouring procedures are done.

Great. Thanks so much for the question. Thank you.

Your next question comes from the line of Yi Chen with H.C. Wainwright. Please go ahead.

Good morning, this is Katie on for Yi. Thinking about AYON, for the systems that were installed earlier in the launch, do you find that customers are adopting the full workflow or selectively using different pieces of it, using Renuvion tissue contraction in a greater proportion of their cases? And what kind of gives you a clue that one of these customers is going to be a broader utilizer versus more selective?

Yes, so the answer to that is yes, more doctors are using the full suite of AYON, where we're seeing that especially is on the 2 different liposuctions. There's a lot of doctors that only used power liposuction and didn't have ultrasonic liposuction, and now we're seeing them use the ultrasonic liposuction also because it is a great tool for them to use in these procedures. So we are seeing that. As far as the Renuvion usage, as I stated earlier, about 75% of the AYONs that we've sold have been to Renuvion customers, and obviously they were using Renuvion before, and so that utilization is basically the same that it was. But where we are obviously seeing an uptick in Renuvion and them using the whole system is into the 25% of those that are new customers, new to Apyx. And we know that they're using Renuvion obviously because they're buying handpieces.

Quick follow-up, you had at 1 point mentioned a mechanism paper that will be published for Renuvion. Do you guys have any update on that?

Yes, that paper was—I don't think it was a mechanism paper. I think it was the paper that we highlighted in the prepared remarks. It was for skin quality. And if you look at Renuvion, we have done a very good job of publishing and talking about Renuvion for skin retraction, okay, and that is obviously very important, skin tightening. It's used after liposuction, it's used in body contouring, and that will remain obviously important. But we've done 2 other studies that show versatility of Renuvion itself, and 1 is the pretreatment of areas before fat transfer. And if you pre-treat the area with Renuvion before fat transfer, we have papers that show up to 40% higher retention of the fat graft. And so that is incredibly important when you're doing fat transfer.

And then the last part of that was the study that just came out in September that talked about skin quality. And that skin quality is incredibly important and we think is going to be a driver for Renuvion and new users for Renuvion because the skin is your largest organ. And as you're doing the skin tightening, what actually helps is if the quality of your skin can get better. And in this study, we had over a 30% improvement of elastin and about the same improvement in inflammation, and that improves the quality of the skin. And there hasn't been anything that has shown an improvement in elastin out there. So we think that that is going to be a very important paper for us and to keep talking about how Renuvion will keep being a driver of this business for many years to come also.

Thank you very much.

Your next question comes from the line of Jeremy Pearlman with Maxim Group. Please go ahead.

Just firstly, are there any remaining investments that are either planned or required to support AYON now that you've moved into the full commercial launch?

Yes. Now that we've made full commercial launch, now we've made all the investments that we're going to make for that. The only thing that we have ever mentioned before is, as I alluded to on 1 of the other questions, there is an opportunity in the reconstructive space, in the hospitals, in the United States, and we need to figure out how we're going to actually do that—more on that when it comes. But as far as investments come for this year, that is all baked into what we're doing. And then we've stated that getting to profitability for this company is incredibly important for us, and we're going to do it as fast as we can.

Okay, understood. And then just another question relating, maybe you can help us understand some of the divergence between domestic revenue grew this year only 4% and then international was 22% this quarter. So is that just because of the way that, you know, the winding down of the OEM business and then the transition from the limited to the full commercial launch, which is a timing issue and due? Should we expect that gap to be covered up by the domestic revenue going forward? Thanks.

Yes. So if you remember from our guidance, we've given guidance for the year that we will grow the Surgical Aesthetics business 20%, and we're at 26%, I think, after 3 quarters. And so what you're seeing in the U.S. business is, as I stated last year when we launched AYON, we got approval in May, and we started to sell AYON units that we could not ship until September, October, November, and December. So when you're looking at a comparison, all of the months that we've had before September, there was no AYON in that number. And now you're getting AYON in that number for September, October, November, and December. And that's why the growth rate appears to be going down. It is from a mathematical point of view, but we were selling AYONs all last year and shipped them all just in 4 months. So that's really the difference and why you're seeing that now in the third quarter.

And then obviously in the fourth quarter, you'll see that the growth rate in the United States won't be as high either because of those comparisons of AYON that were shipped in October, November, and December. As far as outside the United States, that still remains to—especially Korea has been having a very good year, their first year, obviously, launching Renuvion. And that's where a lot of the growth is from outside the United States.

Okay. Thank you for answering my question. I'll hop back in the queue.

I am showing no further questions at this time. This concludes our question-and-answer session. I will now hand the conference back to Charlie Goodwin for his closing comments.

Thank you, everybody, for joining us today. We are pleased with the momentum in the business this quarter and look forward to executing on the expanded commercial strategy we discussed as we continue to build market share for the AYON platform. I appreciate the continued support of our shareholders, our staff, and thank you all for joining the call today. Thank you.

Today's conference call for Apyx Medical has now concluded. Thank you for your participation. You may now disconnect.

This live transcript is auto-generated without human intervention or review.

Good afternoon, ladies and gentlemen, and welcome to the Apyx Medical 2Q '26 Earnings Conference Call. [Operator Instructions ] This call is being recorded on Thursday, August 6, 2026. I would now like to turn the conference over to Jeremy Feffer, LifeSci Advisors. Please go ahead.

Thank you, and welcome, everyone, to our second quarter 2026 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. For our usual format on these quarterly calls, I will begin with a review of our performance over the past several months and then turn the call over to Matt for a review of our second quarter 2026 financial results, along with our guidance for full year 2026. We will then open the call for questions. Let me begin with a review of a few key highlights from our second quarter 2026 performance.

We reported quarterly revenue of $13.9 million compared to $11.4 million in the same period last year, an increase of 22%. This growth was driven by a 28% increase in sales of our Surgical Aesthetics products to $12.4 million for the second quarter, primarily attributable to sales of our AYON Body Contouring System, increased Renuvion generator sales internationally and increased volume of single-use handpieces domestically. This marks our fourth consecutive quarter of AYON sales following its full commercial launch in September of 2025, and we are pleased to see increasing awareness of and demand for the platform across U.S. market.

U.S. surgeons are increasingly recognizing the value of our integrated all-in-one body contouring platform, which combines the core technologies they rely on every single day into a single streamlined system. We believe the growing adoption reinforces AYON's differentiated value proposition. We recently took another important step in expanding AYON's capabilities during the quarter when we received expanded 510(k) clearance from the FDA to add power liposuction to the platform. Power liposuction uses a reciprocating cannula to support more efficient fat removal while reducing the physical effort required of the surgeon.

Since receiving clearance, we conducted a limited commercial launch of the reusable power liposuction handpiece with key surgeons in targeted geographies. Based on positive feedback, we commenced initial commercial shipments in June of 2026. Overall, the sales and interest that we are seeing in AYON comes at an important time for the body contouring market. As we have discussed on prior calls, the continued rapid adoption of GLP-1 medications is reshaping the patient population and creating what we believe will be a meaningful long-term opportunity for our business.

While these therapies are helping a growing number of patients achieve significant weight loss, many are left with loose or lax skin that cannot be adequately addressed through nonsurgical treatments. Once these patients reach or approach their target weight, we believe many will seek procedures to address skin laxity, excess fat and overall body contouring in a more comprehensive manner. AYON seamlessly combines advanced fat removal technologies, Renuvion's tissue contraction and electrosurgical capabilities and empower surgeons to deliver the most comprehensive body contouring treatments for patients while positioning Apyx to address this growing market.

We believe in science-based medicine and our clinical strategy is an important part of establishing that value proposition. During the quarter, a retrospective study of 113 patients showed that a combination procedure using Renuvion and liposuction was associated with statistically significantly higher patient satisfaction, lower rates of abdominoplasty and surgical revision and a comparable complication rate versus procedures that use liposuction alone. These findings are important because they suggest that Renuvion may help surgeons deliver a more satisfying aesthetic outcome while potentially reducing the need for more invasive or follow-on procedures without increasing the observed complication rate.

We also reported data from prospective study evaluating a single session treatment combining Avéli and Renuvion. The study demonstrated visible improvements in cellulite and skin laxity, including measurable reductions in dimple volume, surface area and depth. In a subset of patients, histological analysis also showed increases in collagen and elastin through 180 days, providing evidence of progressive tissue remodeling following treatment. Together, these peer-reviewed publications add to the clinical foundation supporting Renuvion and demonstrate its potential value across a broader range of aesthetic body contouring procedures.

In addition, the publications reinforce the important point that as patients' needs become more complex, surgeons increasingly require technologies that can address not only fat removal, but also skin quality, laxity and structural factors that influence the final aesthetic result. We also took the opportunity this quarter to build broader awareness of our platform, showcasing Renuvion and AYON at Miami Swim Week through our Body by Apex showcase. The event featured real Renuvion patients sharing their treatment journeys and walking the runway, allowing us to highlight the aesthetic outcomes and the self-confidence those patients gain from their procedures.

This year's event underscored the progress we have made since last summer. At that time, AYON was still in the early stages of its commercial journey. This year, we returned with a commercially available platform supported by growing physician engagement, real-world experience and enhanced capabilities through the FDA clearance of power liposuction, which has resulted in AYON gaining traction across the market. Together, those milestones reflect the disciplined execution of our commercial strategy and reinforce the foundation of the opportunity ahead.

These accomplishments demonstrate the progress we are making in executing our commercial strategy and reinforce our confidence in the long-term opportunity for our cohesive platform of AYON and Renuvion. Before I wrap up, I would like to briefly touch on our recent announcement that Stavros Vizirgianakis has been appointed Executive Chairman of our Board of Directors. Over the past 2 years, Stavros has become an increasingly important partner to both our Board and management team. He has been deeply engaged in helping shape our strategic priorities, supporting key financing initiatives and strengthening our operational focus and providing valuable guidance as we execute our commercial strategy.

Formalizing his role as Executive Chairman recognizes the level of involvement he already has within the company and reflects our shared commitment to creating long-term shareholder value. Stavros brings decades of leadership experience and extensive industry network and a proven track record of building and growing health care businesses. I look forward to continuing to work closely with him as we execute on the significant opportunities ahead for Apyx. I will now turn the call over to Matt for a review of our second quarter 2026 financial results in more detail, along with our financial guidance for 2026.

Thank you, Charlie. Before I get started, please note that all references to our second quarter financial results will be on a GAAP and year-over-year basis, unless noted otherwise. As Charlie mentioned, total revenue for the second quarter of '26 increased 22% to $13.9 million compared to $11.4 million in the prior year period. Revenue for the Surgical Aesthetics segment increased 28% or $2.7 million to $12.4 million compared to $9.7 million for the prior year period.

This growth was driven by sales of AYON, increased sales of generators internationally and increased volume of single-use handpieces domestically. Turning to the OEM segment. Sales decreased 12% or approximately $0.2 million to $1.5 million for the second quarter of '26 compared to $1.7 million for the second quarter of '25. The decrease in OEM sales was due to a decrease in sales volume to existing customers. With the increased focus on surgical aesthetics, we continue to expect our OEM segment revenue will decrease for the year, and this trend will continue over time.

Domestic revenue increased 21% year-over-year to $9.4 million and international revenue increased 24% year-over-year to $4.5 million for the second quarter of '26. Gross profit for the second quarter '26 increased 25% to $8.9 million compared with $7.1 million in the prior year period. Gross profit margin for the second quarter of '26 increased to 63.9% compared to 62.3% in the prior year period. The increase in gross margin was primarily attributable to mix between our segments with Surgical Aesthetics comprising a higher percentage of total sales and product mix within our OEM segment.

This was partially offset by tariffs that began affecting us in the second half of 2025. Operating expenses increased to $10.7 million for the second quarter of '26 compared to $9.7 million for the prior year period. The increase was driven by $1.0 million increase in selling, general and administrative expenses and $0.3 million increase in salaries and related costs, partially offset by a $0.3 million decrease in professional services. Loss from operations was $1.8 million compared with a loss from operations of $2.6 million for the second quarter of '25.

Net loss attributable to stockholders was $3.2 million or $0.07 per share for the second quarter of '26 compared with $3.8 million or $0.09 per share in the prior year period. Adjusted EBITDA loss was $0.7 million for the second quarter of '26 compared to an adjusted EBITDA loss of $2.0 million in the second quarter of '25. As a reminder, we provide a detailed reconciliation from the net loss attributable to stockholders to non-GAAP adjusted EBITDA in our earnings press release. For the 3 months ended June 30, 2026, net cash used in operating activities was $3.5 million compared to $1.2 million used in the prior year period.

The increase was primarily due to changes in working capital, partially offset by a reduction in operating loss. As of June 30, 2026, the company had cash and cash equivalents of $27.6 million. We believe, based on our projections, including uptake of the AYON platform, working capital management and our strict cost controls, we expect to maintain sufficient liquidity into 2028. We are focused on growing sales, managing expenses and getting to cash flow positive as quickly as possible. Turning to our 2026 guidance.

We are reaffirming our full year total revenue guidance in the range of $59.0 million to $60.0 million compared with $52.8 million reported for the year ended December 31, 2025. Our guidance continues to assume Surgical Aesthetics segment revenue in the range of $54.0 million to $55.0 million compared with approximately $45.3 million for 2025, and OEM revenue of approximately $5.0 million compared with approximately $7.5 million for 2025. In addition, we continue to expect gross margins in the range of 62% to 63% and total operating expenses not to exceed $45.0 million for the full year. This completes our prepared remarks. Charlie and I will now open the call for questions. Operator?

[Operator Instructions] We will now take our first question, and this comes from Dave Turkaly from Citizens.

Charlie, I got -- I think I have a bunch of questions. I want to ask that you may not want to answer, but let me just start off by asking you in terms of the users that you're hitting with the new AYON product, are there non-Renuvion folks? And any people sort of like outside of your core plastic docs?

Yes. So the answer to the first part of the question is yes. We are getting people that have never used Renuvion before that are buying the AYON platform. So that is the first part of your question. And the second part of your question is, for the most part, it's all plastic or cosmetics that are doing, obviously, bodies and seeing these GLP-1 patients coming into their practice. Those are the people who are acquiring AYON right now.

Great. I think we all understand like the footprint difference of having kind of an all-in-one option, but it seems like there's some other benefits. You mentioned Power Lipo, but even with your ultra Lipo and some of the other features that could save the physician's time. So I was wondering if you could just maybe walk us through that quickly.

Yes. It's a good question because what you see from the outside is just the fact that everything is put together in a nice streamlined package, but that really is the least important part of the story. The most important part of the story is that every technology that is in AYON is better than the existing technologies that exist today. And remember, the liposuction that we have for the ultrasonic liposuction, that has been out since we originally launched AYON, but we just got approval for the power-assisted piece in May of this last year.

And the power-assisted piece is a very important part of AYON because that is the part that defines and sculpts the body and actually removes the fat or puts the fat back into other areas, and that is the part that takes the longest in the procedure. So the ultrasonic separates the fat and then the Power Assist comes in and takes the fat out. And then through our closed-loop contouring, you can put it back in.

But let's not forget that in the quarter, we just did a soft launch in the quarter, and we got feedback from the physicians. That feedback was incredibly well received on the Power Lipo product. In fact, it was exceptional. And then we only started to ship to a very few units in June, okay? So we still have work to do as far as building Power Lipo handpieces and getting them out to customers that are still waiting for them.

And the next question comes from Alex Fuhrman from Lucid Capital Markets.

Congratulations on another strong quarter of double-digit growth. I wanted to ask about gross margin. It was up very nicely year-over-year in the first and second quarter this year. It looks like the guidance implies that it's going to come in a little bit sequentially. Can you talk a little bit about what's driving that? It seems like the mix shift to surgical aesthetics has certainly been helping things, and that's expected to continue. So any color on what's driving that change in gross margin would be helpful.

Yes. Look, I don't know that it is too much of a change. There's always a mix in there between international and OUS and U.S. And so I don't know that fundamentally that there's any change. It has overperformed the first 2 quarters, which is obviously very nice. We're very happy with that. But remember, we're in the process of rolling out the Power Lipo right now.

And obviously, the first ones of anything that you make are going to be the most expensive ones, and you're going to see that get better and better as time goes on as manufacturing has more throughput as we get better at making them and all of those things. And so when we're looking at the second half, remember, we're just gearing up on the Power Lipo handpiece. And so there's -- we're looking at that and making sure that we're able to deliver and do the things that we need to do there.

The next question comes from Matthew Hewitt from Craig-Hallum.

This is Tollef Kohrman on for Matt Hewitt. So for Power Lipo, is that at all embedded into the guidance?

When you say embedded into the guidance, yes. I mean, Power Lipo is always something that we had anticipated to have in the back half of the year. And yes, it is in the guidance.

Okay. And then are you guys expecting any tariff refunds this year?

We are in the process of going through that. We would expect to receive some, and we don't really have any idea exactly what that would be at this time. And if we did get any tariff refunds, they are not in the current guidance that is out there now.

And the next question comes from Yi Chen from H.C. Wainwright.

Could you remind us how many AYON systems have been placed since launch? And if a customer purchased the system today, do they -- do you expect all of them to purchase it with the power liposuction attachment?

Yes. So we have not given the number of AYON that are in the market. So I will not be able to give you that number today. But we would expect that the vast majority of people who are buying an AYON would have a power Lipo would have Power Lipo with it. I would say north of 95% of people would have Power Lipo with it.

So adding the power liposuction does increase recurring handpiece revenue, right? Or it just primarily improved the platform's competitiveness?

Well, so both. But remember, the Power Lipo handpiece is and probes are reusable with a useful life. So -- and they're measured in hours. So the handpieces would need to be replaced over time. Typically, a busy practice would go through 2, 3, 4 handpieces a year and then the probes, obviously, with them, too. So they are reusable, but they have a useful life.

Okay. And I don't know if you have some preliminary data you can share with us that for surgeons that purchased the AYON system, what is the average first year or second year recurring consumable revenue?

Yes. So the -- we have talked about the procedure reoccurring revenue. There is obviously the Renuvion handpiece. And then there is about an extra $100 of tubings and canisters per case that would be recurring on the AYON system.

[Operator Instructions] No further questions that came through at this time. I will now turn the call over back to Charlie Goodwin. Please go ahead, sir.

Yes. I'd like to thank everybody for attending the call today. We're very pleased with the momentum in the business this quarter, and we look forward to the full commercial launch of power liposuction in the third quarter as the next step in building our AYON platform. We appreciate all the support we have received from our shareholders during this time, and I can't thank you all enough. Have a good night.

Thank you. This concludes our conference call for today. Thank you all for participating. You may now disconnect.

Ladies and gentlemen, good morning, and welcome to Apex Medical First Quarter 2026 Earnings Conference Call. As a reminder, this conference is being recorded.

It is now my pleasure to introduce your host, Jeremy Pepper from LifeSci Advisors. Please go ahead.

Thank you, and welcome, everyone, to our first quarter 2026 earnings call. Representing the company on the call are Charlie Goodwin, Chief Executive Officer; and Matt Hill, Chief Financial Officer of AFIX.

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. For our usual format on these quarterly calls, I will begin with a review of our performance over the past several months and then turn the call over to Matt for a review of our first quarter 2026 financial results, along with our updated guidance for full year 2026. We will then open the call for your questions.

Let me begin with a review of a few key highlights from our first quarter 2026 performance. We reported total quarterly revenue of $12.5 million compared to $9.4 million in the same period last year. This growth was driven by a 36% increase in sales of our surgical aesthetics products to $10.7 million for the first quarter, which was primarily attributable to the continued strong sales ramp of our Aon body contouring system in the U.S., demand for single-use handpieces worldwide and increase in Renuvion generator sales internationally.

This represents our second full quarter of AAON sales following its full commercial launch in September 2025. Notably, while demand from our existing generator and Renuvion customer base continues to be strong, we are also generating a steady increase in engagement from new accounts, reflecting growing market awareness of AAON and increasing confidence in the breadth of its capabilities. Importantly, we continue to believe adoption remains in the early stages.

Over these past several months, I have been very pleased by how the commercial program for AAON has quickly ramped up activity. Our team has risen to the occasion and executed a disciplined, high-quality launch focused on training and workflow integration to achieve customer success. We are also pleased the release of AON has coincided so well with the continued rapid adoption of GLP-1s.

As of early 2026, roughly 1 in 8 U.S. adults report have taken a GLP-1 according to KFF health tracking polls and RAN reports. While approximately 6% of adults are currently using them, projections indicate that demand will continue to grow with estimates suggesting around 30 million Americans could be using GLP-1 treatments by 2030. The rapid weight loss that occurs using these drugs can lead to significant loose and lax skin that can only be effectively managed using a surgical intervention, and we believe Renuvion and AON are the most advanced and effective method for treating loose and lax skin through body contouring.

In addition to our revenue growth, we remain proud of the lean operating structure we implemented just over a year ago, which has materially reduced our operating expenses and cash burn. Those changes have strengthened our financial position and given us the flexibility to selectively reinvest in high-return growth initiatives, including the continued rollout of AON and our broader surgical aesthetic strategy.

Through the launch of AAON, we have expanded our customer relationships beyond individual technologies to a more comprehensive presence in the surgical suite, supporting a wider range of procedures and workflows. As I have mentioned previously, this is a groundbreaking body contouring offering designed by leading surgeons to address many of the challenges and limitations of existing systems. AAON is differentiated by its ability to integrate multiple core body contouring modalities on a single platform. allowing surgeons to streamline procedures, reduce equipment complexity and support optimal patient outcomes.

As a result, we are seeing strong market receptivity reinforcing our view that AAON is addressing a meaningful unmet need and adoption remains in the early stages. Building on this success and expanding upon the AAON suite of offerings even further, we anticipate FDA 510 clearance for the AON platform to include power liposuction sometime this quarter.

This is a core modality in modern body contouring procedures, and this clearance meaningfully expands AAON's functionality so that it now supports multiple advanced fat removal modalities on one platform. Importantly, we believe this further differentiates AAON in the market and broadens its addressable customer base. When cleared, our strategy for bringing the power liposuction functionality live, our team is implementing a limited commercial launch of power liposuction with highly targeted early adopters.

Over the coming months, this program will serve as a critical proving ground to refine training, optimize utilization and evaluate the end-to-end customer experience. As we did with our AAON system in advance of its full launch, we will take a disciplined approach before scaling commercial implementation. We look forward to sharing further updates on this program as this program progresses.

Looking beyond the U.S., we have tremendous opportunities following key regulatory approvals over just the past few quarters, including Renuvion in Asia. In South Korea, we experienced solid interest around the Apyx One console and single-use handpieces immediately following our regulatory approval in December of 2025.

As a reminder, South Korea represents an attractive market for surgical aesthetics and early customer interest and initial purchase activity reinforce our confidence in the long-term opportunity there. While it is still in the early stages, the initial customer demand for our generators and handpieces exceeded expectations, and we look forward to building on this initial momentum.

To summarize, our long-term vision is simple: to walk into every surgical center and see an AN at the center of the operating room, I believe we are off to an excellent start.

I will now turn the call over to Matt for a review of our first quarter 2026 financial results in more detail, along with our updated financial guidance for 2026.

Thank you, Charlie. Before I get started, please note that all references to our first quarter financial results will be on a GAAP and a year-over-year basis, unless noted otherwise. As Charlie mentioned, total revenue for the first quarter of '26 increased 32% to $12.5 million compared to $9.4 million in the prior year period. Revenue for Surgical Aesthetics segment increased 36% or $2.8 million to $10.7 million compared to $7.9 million for the prior year period.

As Charlie referenced, this growth was driven by sales of AON as we commenced our commercial launch towards the end of the third quarter of 2025, increased sales of generators internationally and increased volume of single-use handpieces in both domestic and international markets. These increases were partially offset by decreases in domestic sales of generators.

Turning to the OEM segment. Sales increased 14% or approximately $0.2 million to $1.8 million for the first quarter of '26 compared to $1.5 million for the first quarter of '25. The increase in OEM sales was due to increases in sales volumes to existing customers, while OEM segment sales increased for the 3-month period with an increased focus on surgical aesthetics, we expect the OEM segment revenue will decrease for the year and that this trend will continue over time.

Domestic revenue increased 20% year-over-year to $8.1 million and international revenue increased 63% year-over-year to $4.4 million for the first quarter of 2026. As a reminder, the medical device industry typically experiences some seasonality with revenue trends generally lowest in the first and the third quarters and strongest in the second and fourth.

Gross profit for the first quarter '26 increased 40% to $7.9 million compared with $5.7 million in the prior year period. Gross profit margin for the first quarter of '26 increased to 63.5% compared to 60.1% in the prior year period. The increase in gross margin for the 3 months ended March 31, 2026, from the prior year period is primarily attributable to mix between our segments with the surgical aesthetics comprising a higher percentage of total sales and product mix within our OEM segment.

This was partially offset by geographic mix with international sales comprising a higher percentage of total sales and tariffs that began affecting us in the second half of 2025. Operating expenses were relatively flat year-over-year with $8.8 million for the first quarter of '26 compared to $8.7 million for the prior year period.

This was due to a combined $0.3 million increase in selling, general and administrative expenses and salaries and related costs, which was offset by a combined $0.2 million decrease in research and development and professional services expenses. Loss from operations was $0.9 million compared with a loss from operations of $3.1 million for the first quarter of 2025.

Net loss attributable to stockholders was $2.1 million or $0.05 per share for the first quarter of '26 compared with $4.2 million or $0.10 per share in the prior year period. Adjusted EBITDA loss was $0.3 million for the first quarter of '26 compared to an adjusted EBITDA loss of $2.4 million in the first quarter of '25.

As a reminder, we provide a detailed reconciliation from net loss attributable to stockholders to non-GAAP adjusted EBITDA loss in our earnings press release. For the 3 months ended March 31, 2026, cash used in operating activities decreased to $0.6 million compared to $0.7 million used in the prior year period. As of March 31, 2026, the company had cash and cash equivalents of $31.1 million.

We believe based on our projections, including the uptake of the AON platform, working capital management and our strict cost controls will yield cash through 2027. Turning to our '26 guidance. For the 12 months ended December 31, 2026, we announced an upward revision to our expected total revenue to be in the range of $59 million to $60 million, up from the previous guidance of $57.5 million to $58.5 million. This is compared with $52.8 million reported for the year ended December 31, 2025.

Our revenue guidance assumes Surgical Aesthetics segment revenue in the range of $54 million to $55 million, up from the previous guidance of $53 million to $54 million. This is compared with approximately $45.3 million reported for the year ended December 31, 2025. OEM revenue is now expected to be approximately $5 million, up from the previous guidance of $4.5 million.

This is compared with approximately $7.5 million for the year ended December 31, 2025. We now, depending on product and geographic mix, anticipate gross margins of approximately 62% to 63% for the year and total operating expenses not to exceed $45 million.

This completes our prepared remarks. Shelley and I will now open the call for questions.

Your first question comes from David Perklich from Citizens.

Congrats on the quarter and the guide. Charlie, just upfront really quick. I heard Matt say the U.S. generator sale decrease. And I noticed in the press release, you kind of pulled out a comment that said ION was not part of the sale. I just want to be clear because it seems like everything was really strong. Can you explain that detail that's there, like exactly what you're saying in the press release?

Yes. Yes, it's a good question, Dave. Basically, when we're selling AOs now, we're counting those as AN sales and not generator sales, even though if they're a brand-new customer, they would have a generator with them or if they're an RS 3 upgrade, they would need to upgrade to the Apyx One. We don't capture those generators separately. We count it all as an Aon sale now. So more than anything else, it's just the geography. You're going to see that in the U.S. as we continue more people are going to buy full Aon systems as opposed to just buying generators as they were before.

And then as we look -- obviously, OUS was really strong. You called out South Korea. Will you bring AN there? I think Apyx One is there right now, but is that the plan? And any color on sort of OUS rollout with that system?

Yes. If you look at the international business, it was a good, obviously, quarter for the international business. And as Matt and I both said, it was strength on handpieces, both from an international and a domestic perspective, but new generator sales and new upticks in South Korea, in particular, for outside the United States. And yes, we are working on registering AON outside the United States, obviously.

And so we will be working on various countries throughout this year. And as we make progress on that, we will obviously let the investors know of what we're doing there. But yes, we plan to have AAON registered everywhere in the world at some point in time.

Next question comes from Sam Eiber from BTIG.

Charlie, maybe a 2-part question on AN. First, maybe I can get your thoughts on where you think we are in this rollout in the launch. It sounds like maybe you're starting to expand beyond the existing group of Renuvion accounts. And then just as a follow-up there on power assisted liposuction, nice to hear that you're expecting label expansion this quarter. Has that been an impediment at all toward adoption? And with the label, could we expect some inflection thereafter? And how important is that going to be for surgeons?

Yes. No, it's a good question, and there's a lot in there. I'll try to unpack it for you. It's a multi-tiered question for sure. When we're talking about the existing Renuvion customers upgrading to AN, we've actually just started with that. So that is a whole huge group of people that we have that could upgrade to Aon. And then obviously, to your point, it brings in a whole bunch of people that don't even have Renuvion at this time that could upgrade to that.

And so we are -- if we're looking at AN sales in the United States, and this is a baseball game, we're just in the top of the first inning. We're just basically getting started with this. As regards to power lipo, yes, to answer your question directly, there are people that are waiting for power lipo before they get Aon because some doctors do not use ultrasonic liposuction. They only use power liposuction.

So if you look at the market, you've got groups of doctors that use both ultrasonic and power. You've got doctors that use ultrasonic by itself and not power. And then you've got doctors that use power liposuction and not ultrasonic. And obviously, the doctors that use only power liposuction are waiting for that label and that product to be available before they would get AON.

So from our perspective, power lipo is a huge indication for us and a huge approval because it rounds out the liposuction capabilities of AON that give doctors both modalities on the system as it is today. So we do see it as being very significant.

Okay. That's really helpful. Maybe I can just use my follow-up here on the demand environment. It sounds like consumables globally were up in the quarter. you guys have this tailwind with the GLP-1 wave that's coming in. But obviously, I know there's some geopolitical tensions, macroeconomic dynamics in the current environment. Just curious what you're seeing out in the field for underlying procedure demand at this moment.

Yes. I don't think there's any question that people that have been on these drugs and have lost the weight that they want to lose are looking for solutions to help their body. And yes, there is a lot of noise out there on the geopolitical front. There's no question about that. But from a demand perspective, we're still seeing patients coming into practices and wanting these procedures.

Next question comes from Alex Fuhrman from Lucid Capital Markets.

Congratulations on a really strong start to the year. It sounds like most of the AAON customers have been skewing towards new customers if you're only just starting to sell as an upgrade to your long-standing customers. Curious, Charlie, what kinds of clinics has it been resonating the most with? And are there practices that you had a hard time getting into when it was just Renuvion that are now taking another look with the full all-in-one?

Yes. So I actually want to just clarify one thing. So far, all the Aons that we've sold, probably about 80% of them have been to Renuvion -- existing Renuvion customers. But if you look at the total base of Renuvion customers, we still have a long ways to go before we upgrade all of them, okay?

And to answer your question about the new customers that weren't Renuvion customers before or APyx customers before, to answer your question, yes, it is a huge help having Aon because now you're talking about the entire body contouring procedure. You're talking about adding technologies that increase efficiency for the doctor and their staff lower patient -- lower procedure times for the patient, which is huge because they're less time under anesthesia. And we're even being told anecdotally from doctors that the outcomes are better for the patient. So yes, it is helping us immensely get into practices that we weren't in before for sure.

Okay. That's really helpful. And then you referenced a study earlier in the call that suggested about 1 in 8 Americans have taken a GLP-1. Obviously, your business is doing very well here at a time when GLP-1 adoption is growing. Do you have any sense just kind of anecdotally, customers having a Renuvion treatment? I mean, do you feel like there's more than 1 in 8 or about that share that have taken a GLP-1? Just curious if that's been kind of a driver of the business or what you're hearing from your surgeons?

Yes. And we follow like Google searches and things like that, too, about what consumers are looking for and what they're seeing. And if you take a look at Google searches and you go over the last 12 months, one of the biggest increases is on loose skin. And so yes, we are seeing patients that are coming to the doctors' practices and they're asking for solutions for that.

And it is -- if you look at, I think, the 3 biggest things in Google searches that are looking for right now, it's loose skin, body contouring and liposuction still. So people are looking for these solutions. They're taking these drugs. They're losing the weight. And obviously, they've got loose and la skin after that. So we are seeing this in the marketplace. And I think that's that's why we're seeing the strength that we're seeing and the growth that we're having is because we think that the technologies and solutions that we're helping doctors with are squarely in the sights of what the patients are looking for.

Next question would be from Matt Hewitt from Craig-Hallum.

This is Tollef Kohrman on for Matt Hewitt. Congrats on a great quarter. So what's the assumed tariff impact embedded in the guide? And how should we think about any potential changes in the policy going forward?

Yes. Look, I don't know about changes in the guide. We're anticipating that the tariffs are going to remain throughout the rest of the year, and they're factored in there from, obviously, a cost and a gross profit point of view. So I mean, could things change and we have different tariffs? Absolutely. But one of the advantages that we have is that we manufacture both in Sofia, Bulgaria and Clearwater, Florida. And so we've been able to minimize the tariff impact so far to the business. But it is something that we're always looking at and finding the best way to keep our costs as low as they possibly can be.

Excellent. And then earlier in the call, you cited you wanted to place AN outside of the U.S., specifically everywhere. Just can you give a time line in key specific countries you're looking at right now?

So I can't give a time line, unfortunately, because I would -- anything I would give you would be wrong because it takes time in each individual country. But obviously, there's major places that we'd like to have AAON registered from a body contouring perspective. Obviously, all of Europe, we'd like to have it there. When we're looking at Latin America, we'd be looking at countries like Brazil and Colombia that do a lot of body contouring. We'd obviously be looking at the Middle East because there's a lot of business there and then key markets in Asia. So those would be the big areas that we'd be looking for AON.

Ladies and gentlemen, this concludes our question-and-answer session. I would now hand the conference over to Charlie Goodwin for his closing comments.

Thank you, everybody, for attending the call. I want to really thank the entire Apyx Medical team for their tireless dedication and execution as we move into mid-2026 with tremendous energy and momentum towards driving growth. We appreciate all the support we have received from our customers and shareholders during this time. Thank you very much.

Thank you. The conference of Apyx Medical has concluded. Thank you for your participation. You may now disconnect your line.

Good morning, ladies and gentlemen, and welcome to the Apyx Medical Fourth Quarter and Full Year 2025 Earnings Conference Call. [Operator Instructions]

I would now like to turn the conference call over to Jeremy Feffer, LifeSci Advisors. Please go ahead.

Thank you, and welcome, everyone, to our fourth quarter and full year 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 these 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 begin with a review of our performance over the past several months and then turn the call over to Matt for a review of our fourth quarter and full year 2025 financial results, along with our guidance for full year 2026. We will then open the call for your questions. Let me begin with a review of a few key highlights from our fourth quarter and full year 2025 performance. We reported a record revenue of $19.2 million compared to $14.2 million in the same period last year. This growth was driven by a 38% increase in sales of our surgical aesthetics products to $16.7 million for the fourth quarter, which was primarily attributable to sales of our AYON body contouring system. As many of you are aware, the fourth quarter represents the first full quarter of AYON sales following its full commercial launch in September of '25.

As a result, this is a very telling moment for us as a company as we begin to see the market excitement we have discussed over the past several quarters meaningfully reflected in our financial results. Looking back since unveiling AYON approximately one year ago when it was submitted for FDA clearance, we have seen a steady and consistent rise in market interest. Following market clearance in May of 2025, we initiated a soft launch that generated overwhelmingly positive feedback from the early adopters, and it quickly became clear to our team that this system was special and positioned us to have significant impact on the future of aesthetic surgery market. I am excited to report that this positive feedback has translated into strong market demand and sales following full launch, and we continue to ramp our operations to meet this demand. As I have mentioned previously, our team was well prepared for the full commercial launch, including strong preorders generated during soft launch.

To date, the launch of AYON and the level of incoming interest from customers submitting orders has exceeded our expectations across every metric. As we look at the market's reaction to AYON, it is clear that the reception aligns with what this technology is designed to deliver, and we believe its adoption curve is still in the very early stages. AYON is a groundbreaking body contouring system designed by leading surgeons to address many of the challenges and limitations of existing systems. Unlike most systems on the market, which are limited to single function, AYON seamlessly integrates fat removal, closed-loop contouring, tissue contraction and electrosurgical capabilities, empowering surgeons to deliver the most comprehensive body contouring treatments available. With advanced features such as LIFT Technology for real-time adjustments and Renuvion for enhanced tissue contraction, AYON sets a new standard in surgical care by streamlining procedures and maximizing patient outcomes.

The result is a system that combines precision, versatility and innovation in an all-in-one platform, offering surgeons an unmatched return on investment. Importantly, the plastic surgery market has not seen a device with this level of advancement in many years. When we first introduced AYON and talked about the initial capabilities, we also committed to submitting a follow-up 510(k) for label expansion to include power liposuction. During the fourth quarter, our team submitted this follow-up application. Since then, we have engaged in productive discussions with the FDA. And based on this progress, we now anticipate receiving market clearance in mid-2026. Achieving market clearance for power liposuction will further strengthen AYON's position as the first fully integrated body contouring system, positioning it as the new gold standard in surgical aesthetics. Importantly, upon receiving clearance, we will be able to activate this function on systems already in the field. We will also be able to launch our power-assisted liposuction handpieces and continue to expand our revenue.

With these continued enhancements to the platform and the strong feedback we are receiving from surgeons, AYON is well positioned to capitalize on the broader shifts occurring in the aesthetics market. At the same time, the market itself continues to evolve. Over the past year, we have seen the space begin to emerge from a period of softer demand and that renewed momentum we are seeing today looks very different from what drove the market just 5 years ago. As I have said on previous calls, one of the biggest new drivers of this shift is the rapid adoption of GLP-1 drugs for weight loss. A growing number of these patients are experiencing skin laxity after significant weight loss and after patients achieve their weight loss goals, we believe they will be seeking treatments for the resulting loose and lax skin. This is where GLP-1 headwinds turn into tailwinds for companies uniquely positioned to provide the tools for those treatments like Apyx Medical.

Our Renuvion system, which is available as both a stand-alone offering and an integrated component of AYON has proven to be an exceptional treatment option for this type of skin laxity. We believe Renuvion is best-in-class and should be considered the new standard of care, particularly for patients experiencing loose or lax skin after rapid weight loss. With more than 15 million people currently on GLP-1 drugs in the U.S. alone, we believe we are still in the early innings of a powerful market shift. Apyx is uniquely positioned to help meet this demand and lead the aesthetics market into the next phase of growth. I will close this thought by highlighting that the shift in patient results as well as the financial resources they are putting towards treatments being driven by the widespread adoption of GLP-1 drugs are unlike anything the weight loss and plastic surgery markets have experienced in recent history.

This shift represents a tremendous opportunity, and we are very fortunate to already have a solution in our portfolio that delivers best-in-class durable outcomes for these patients. As we look to take full advantage of this momentum behind our business, we are actively strengthening our commercial organization by acquiring high-caliber sales talent aligned with our next phase of growth. These new team members are expected to increase our ability to build market share as well as deepen our ability to support surgeons through training, onboarding and practice development, which we know are critical to accelerating market adoption. To be clear, these investments will be measured and aligned with our growth trajectory of our business. As a reminder, it is just over a year ago that we successfully implemented significant cost reduction and restructuring, and we have no plans to reverse the progress achieved through that effort. We are proud of the restructuring efforts that have resulted in leaner operating structure and meaningfully reduced our cash burn.

These improvements strengthened our overall financial health, giving us the flexibility to invest in AYON and our broader growth strategy with confidence. It is encouraging to reflect on the positive outcome driven by our team's dedication and perseverance. I will close my comments by saying how pleased I am by the progress we have made over these past several months since the launch in September. We believe we have just scratched the surface of the overall market for AYON, and we look forward to realizing our long-term vision of walking into almost every surgical practice and seeing an AYON system at the center of the operating room.

I will now turn the call over to Matt to review our fourth quarter and full year 2025 results in more detail, along with our financial guidance for 2026.

Thank you, Charlie.

Before I get started, please note all references to fourth quarter and full year financial results will be on a GAAP and year-over-year basis, unless noted otherwise. As Charlie mentioned, total revenue for the fourth quarter '25 increased 35% to $19.2 million compared to $14.2 million in the prior year period. Revenue for the Surgical Aesthetics segment increased 38% or $4.6 million to $16.7 million compared to $12.1 million for the prior year period. As Charlie referenced, this growth was driven by sales of AYON as the company commenced its commercial launch in September and increased volume of single-use handpieces in both domestic and international markets. These increases were partially offset by decreases in domestic sales of generators, including upgrades to the Apyx One Console, where the purchase of AYON was not part of the net sale and upgrades to the Apyx One Console in international markets.

Overall, Surgical Aesthetics sales domestically increased by nearly 50% from the prior year period. Turning to the OEM segment, sales increased 16% or approximately $0.3 million to $2.5 million for the fourth quarter of '25 compared to $2.1 million for the fourth quarter of '24. The increase in OEM sales was due to an increase in sales volume to existing customers, including Symmetry Surgical under our 10-year generator manufacturing and supply agreement. Domestic revenue increased 42% year-over-year to $15 million and international revenue increased 15% year-over-year to $4.2 million. As a reminder, the medical device industry typically experienced some seasonality with revenue trends generally lowest in the first and third quarters and strongest in the second and fourth. Gross profit for the fourth quarter '25 increased to $12 million compared with $9 million in the prior year period.

Gross profit margin for the fourth quarter '25 decreased to 62.6% compared to 63% in the prior year period. Operating expenses were flat year-over-year at $12 million for the fourth quarter '25 as well as the prior year period. There were certain shifts in the underlying expenses with $0.2 million decreases for selling, general and administrative expenses and research and development expenses, which were offset by $0.2 million increases in salaries and related costs and professional service expenses. Income from operations was $11,000 compared with a loss from operations of $3 million in the fourth quarter of '25. Net loss attributable to stockholders was $1.3 million or $0.03 per share for the fourth quarter of '25 compared with $4.6 million or $0.12 per share in the prior year period. Adjusted EBITDA was $0.7 million compared to an adjusted EBITDA loss of $2.2 million in the fourth quarter of '24. As a reminder, we provide a detailed reconciliation from net loss attributable to stockholders to non-GAAP adjusted EBITDA loss in our earnings press release.

For the 3 months ended December 31, 2025, cash used in operating activities decreased to $2.5 million compared with $2.9 million used in the prior year period. For the year ended December 31, 2025, cash used in operating activities decreased to $8 million compared to $18.7 million used in the prior year period. We were pleased with the cash and working capital management in the full year 2025 with cash burn returning to a lower but more normalized rate in the back half of the year as a result of the impact of changes in working capital as a result of AYON's launch. As of December 31, 2025 and 2024, the company had cash and cash equivalents of $31.7 million. We believe based on our projections, including the uptake of the AYON platform, working capital management and our continued strict cost controls, we will yield cash through 2027.

Turning to our 2026 guidance. For the 12 months ended December 31, 2026, we expect total revenue in the range of $57.5 million to $58.5 million. This reflects approximately a 9% to 11% increase as compared to the full year of 2025. This is the result of an increase in sales in our Surgical Aesthetics segment and a decrease in sales in our OEM segment. Our revenue guidance assumes Surgical Aesthetics segment revenue in the range of $53 million to $54 million. This reflects a 17% to 19% increase compared to 2025 OEM revenue is expected to come in at approximately $4.5 million as compared to $7.5 million for 2025. This decrease continues to reflect our decision to focus our resources on the Surgical Aesthetics segment. We now anticipate gross margins of approximately 61% to 62% for the year and total operating expenses not to exceed $45 million. As Charlie mentioned, we are pleased to see the result of our cost-cutting measures taken in the fourth quarter of 2024 in our current numbers. We believe the company performance in 2025 reflects the great team we have here at Apyx.

To summarize, in just one year, this team submitted for and received FDA clearance and subsequently launched a groundbreaking new product into a space with significant headwinds. Despite that backdrop, we delivered 10% overall sales growth and 17% growth in Surgical Aesthetics, achieving record sales in the fourth quarter. And we accomplished this while simultaneously reducing operating expenses to $39.5 million, down from $48.2 million in 2024 and $53.7 million in 2023. As a result, we are excited to report positive EBITDA in the fourth quarter. Now we are projecting continued growth into 2026 as we continue to manage our expenses. It is indeed an exciting time here for Apyx.

This completes our prepared remarks. Charlie and I will now open the call for questions.

Operator?

[Operator Instructions] Your first question is from Dave Turkaly from Citizens.

Congrats. Charlie, I think I heard some commentary about a handpiece and CapEx sales, but I was wondering if we might be able to get a little more color maybe just even domestically. Obviously, we know the aesthetic growth rate in the quarter. But I was wondering if you could maybe give us color, I would imagine maybe capital is growing faster given AYON, but -- could you comment on directionally, which is growing faster and then maybe if CapEx is seeing a price uptick?

When you say CapEx, do you mean handpieces? What do you mean by CapEx?

Capital, capital equipment. Just -- system sales.

Yes. Look, our growth in the fourth quarter was definitely driven by AYON, and that was our focus as a company. It was our focus as a sales team, especially in the United States was driving AYON systems. The whole organization was working hard to produce systems, and we were selling systems. And obviously, that was the driver of growth in the fourth quarter for us. Domestically, we grew almost 50% in the U.S., and I think it was 38% as a total company. And so it was on the back of AYON. It was on the back of this revolutionary platform for sure.

And I guess just as a follow-up, any pricing commentary that you give on that? I think you're able to sell that given the components at a higher price. But also sort of looking for maybe some commentary around new customers. Are you seeing is it mostly repeat folks that are upgrading to AYON that you know? Or is it -- any color on how many new customers are interested in the system?

Yes. So it is a combination of both. It is a combination of people who already have the Renuvion platform, whether it be an Apyx One generator or an RS3 generator that would upgrade to AYON. And that was, I would say, probably about 80% of our sales in the fourth quarter, but there were still about 20% of new customers that were both new to the Renuvion platform and obviously, the AYON platform. that purchased AYON. And so we're seeing a nice mix of both for sure, and we would expect that to continue. As far as pricing goes, we haven't actually talked about the specific pricing other than the list price of AYON is about $360,000, and that is simply the list price of the Apyx One generator, plus all the competitors' components that make up AYON.

And remember, we've said that we're able to bring it to the market at a much greater value buying it together than all the separate pieces. So there is a value proposition for the doctors to get an integrated system, along with the benefits that they get from the technologies that are in AYON and along with the benefits that they and their staff get from a workflow benefit of AYON.

Your next question is from Sam Eiber from BTIG.

Congrats on a nice finish to the year. Charlie, sitting here, I guess, 6 months into the AYON launch, I guess, what's been going well? What's going better than expectations? What are some things that maybe you have to fine-tune? Would just love any updates on, I guess, what you're hearing from customers and then from the commercial reps out in the field?

Yes. No, it's a great question. And the great news is it's all good news. The customers love AYON. The one thing that they would like to have with AYON is the power-assisted handpiece, which we expect that definitely here in the first half of the year because that completes the liposuction portion of AYON. And so there is no question that there are a lot of people that want the power-assisted portion. But the feedback from AYON itself has exceeded every expectation that we have had. The launch has gone incredibly well. Sure, there's been a couple of minor hiccups along the way, but the team has done an incredible job of dealing with those and making sure that everybody is happy with the system. And like we said in the prepared remarks that every metric that we had has been there and then some with AYON.

And remember, there is nothing like this system in the marketplace today. And so really haven't ran into a single surgeon that hasn't thought it's a great idea, hasn't really liked it and is going to consider how to bring this into their practice. And so we are just getting started. When you said 6 months, it's been 6 months since we basically got approval. But remember, we didn't start shipping the product until September. And like I said, we're still waiting on the power-assisted handpiece to get that into the hands of the doctors to complete the liposuction offering for AYON.

Yes. Very good. And maybe just a quick follow-up for Matt. I guess just thinking about the gross margin guidance, relative to 2025. Is it fair to think of that maybe is a little conservative considering the mix coming from OEM is going to be a little bit lighter next year? Just love to hear the puts and takes to the gross margin guidance.

Sam, great question. Yes, any time we're giving guidance, we're trying to be as conservative as possible. It will depend on -- the levers are the lower margins coming out of OEM as compared to the higher margins coming out of the Surgical Aesthetics segments, offset by sales mix geographically. So if we have higher sales in China, full year sales in China in 2026 as well. So there will be some geographic mix.

Your next question is from Alex Fuhrman from Lucid Capital Markets.

Congratulations on the strong AYON launch and a strong year in 2025. I wanted to ask about the new salespeople that you're adding. Can you talk a little bit about how you're dividing territory and incentivizing the sales force? And where do you see the most opportunity to leverage these new hires?

Yes. No, I appreciate the question. So as far as territories go, what we've done is we've just made some change in basically with some of the people that we have had. The nice thing with AYON is it definitely puts us in a position of strength as a company to go out and get some of the top talent in the industry. And obviously, we brought John Featherstone in to help us with that. And for the -- if you look at the aesthetics industry and especially the surgical side of aesthetics, I don't know if there's a more exciting product or platform than AYON to be selling in the marketplace today. And so it really does put us in a strength as a company. We are no longer just a one technology company, but we've got a whole suite of offerings for body contouring.

And quite frankly, as we talked in the prepared remarks, with the change in the patient population and with the adoption of the GLP-1 drugs and the weight loss associated with that and the loose and lax skin as a result of that, body contouring becomes a huge part of the doctor's practice. And we think that AYON and Renuvion are uniquely positioned to help them with the tools to be able to take care of these patients. And so from our perspective, it's a perfect time to be out there getting the absolute best sales talent in the industry to execute this and to drive it for many years to come.

And your next question is from Matt Hewitt from Craig-Hallum.

This is Tollef Kohrman on for Matt Hewitt. Can you remind us what countries AYON is approved in? And what your plans are for further expansion there?

You asked about AYON specifically, correct?

Yes.

Yes. So right now, it's just the United States. There are a couple of countries outside the United States that take FDA. And obviously, it would be registered in there. There's a couple in the Middle East. and the Caribbean, believe it or not. But other than that, we're still -- we still will this year be trying to register it in a lot of key countries outside the United States with obviously Europe, Brazil and Colombia being high on that list. So as we've talked about before, we are just getting started with this. And obviously, we've got a lot of areas throughout the world to get this registered and to get it sold in.

Awesome. And then with the liposuction label expansion now expected midyear, did you incorporate any contribution this year? Or does that represent upside?

We typically do not forecast, if you will, for stuff that we don't have. So obviously, we will still be selling AYON consoles and those consoles were obviously implied in the guidance, if you will. But the handpieces itself, those will be on an upside basis.

Your next question is from Kyle Bauser from ROTH Capital Partners.

Maybe just on console sales. So obviously, AYON was a very big reason for the strong results to the end of the year last year. Just curious, going forward, are the majority of console sales AYON? Or are they still Renuvion? Just trying to get a sense of what that mix is or what you anticipated.

Yes. So we actually still sell Renuvion only even in the United States where we have AYON. So if somebody just wants to acquire the skin tightening portions for their practice, we will obviously sell them stand-alone Renuvion. And obviously, outside the United States, we don't have AYON registered, and so we are selling stand-alone Renuvion outside the United States. And so we will always have both available to the marketplace because it's such an important part, especially to treat these new patients, the Renuvion handpiece. But as far as mix goes, in the U.S., I would imagine that more and more people will be acquiring Renuvion through AYON, if I had to guess. But outside the United States, it's obviously right now just Renuvion only.

Okay. Got it. That's helpful. And then, Matt, in your prepared remarks, sorry if I missed it, you mentioned something about 2027. I believe it was about being cash flow positive. Correct me if I'm wrong, just -- and related to that, what are some assumptions that we'll want to keep an eye on in order to kind of achieve reaching cash flow generation?

Great question, Kyle. So from a perspective of cash flow, what we said is that we would have -- we would have cash through 2027, but the plan is that we would be cash flow positive no later than the fourth quarter of 2026.

There are no further questions at this time. I will now hand the call back over to Charlie Goodwin for the closing remarks.

Thank you, everybody, for attending the call. I want to thank the entire Apyx Medical team for their dedication and tireless execution throughout 2025 and as we enter what is expected to be an exciting period of growth for 2026 as we see our plan turn into reality. We appreciate all the support we have received from our shareholders during this time, and thank you all for attending today's call. Thank you.

Thank you. Ladies and gentlemen, the conference has now ended. Thank you all for joining. You may all disconnect your lines.

Good morning, ladies and gentlemen, and welcome to the Apyx Medical Third Quarter 2025 Earnings Conference Call. [Operator Instructions] This call is being recorded on Thursday, November 6, 2025.

I would now like to turn the conference over to Jeremy Feffer, LifeSci Advisor. Please go ahead, sir.

Thank you, and welcome, everyone, to our third 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. For our usual format on these quarterly calls, I will start with a review of our performance over the past several months, and then I will turn the call over to Matt for a review of our third quarter financial results as well as our updated full year 2025 guidance. We will then open the call for your questions.

But before I jump into the numbers, I'm excited to share an important update about the evolution of our company and our continued commitment to innovation and meaningful outcomes for our customers and their patients. With the development, clearance and launch of the AYON Body Contouring System, one thing has become clear, our identity and the way we present this segment of our business must evolve to reflect who we are today and where we are going tomorrow. That is why we are officially announcing the rebranding of our Advanced Energy segment, which will now be identified as Surgical Aesthetics. This is not just about a new name, it's about better aligning our brand with our mission and the durable and transformational results that our surgical products deliver.

Let me begin with a review of our third quarter performance. We reported total revenue of $12.9 million, compared to $11.5 million in the same period last year. This growth was driven by a $1.8 million increase in sales of our Surgical Aesthetics products to $11.1 million for the third quarter. This is the result of an increase in U.S. sales of over 30% for the quarter and reflects initial sales from our commercial launch of our AYON Body Contouring System during the quarter as well as increased volume of single-use handpieces in both domestic and international markets.

Overall, the AYON soft launch, which took place throughout much of the summer and the full commercial launch in September have been overwhelmingly successful. We are thrilled with the market feedback we're receiving, which has translated in both presales and now initial deliveries, which I will get into more in a moment. I want to note that this growth was offset slightly by a decline in our OEM revenue.

For the third quarter, we reported $1.8 million, down from $2.2 million in the same period last year. This decline was anticipated and is due to reduced sales volumes to existing customers, including Symmetry Surgical under our 10-year generator manufacturing and supply agreement. Strategically, we have shifted our focus and manufacturing resource from OEM towards our Surgical Aesthetics segment, particularly the AYON launch as we believe this segment represents the future of the company.

It is worth highlighting that we made this tremendous progress while emerging from the significant cost reduction and restructuring announced in November 2024. I am proud to share that these efforts have resulted in a leaner operating structure and a meaningful reduction in our cash burn. These improvements have strengthened our overall financial health, giving us the flexibility to invest in AYON and our broader growth strategy with greater confidence.

While restructurings are always challenging, I want to express my sincere gratitude to the employees here at Apyx. It is encouraging to reflect on the positive outcome driven by our team's dedication and perseverance.

Let me now provide a more detailed overview of our progress. It is amazing to think that only about 6 months ago, we received FDA clearance for the AYON system and soon after began to realize the significant impact this system could have on the market. For those who may not be fully up to date, let me provide a brief overview of AYON and why it's generating such a strong market response and why we believe it will help shape the future of aesthetic surgery.

AYON is a groundbreaking body contouring system designed by leading surgeons to address many of the challenges and limitations they experience with current systems in the market. And please keep in mind that most existing systems on the market are limited to a single function while AYON seamlessly integrates fat removal, closed-loop contouring, tissue contraction and electrosurgical capabilities, empowering surgeons to deliver the most comprehensive body contouring treatments available. With advanced features like LIFT technology for real-time adjustments and Renuvion for enhanced tissue contraction, AYON sets a new standard in surgical care, streamlining procedures and maximizing patient outcomes. The result is a system that combines precision, versatility and innovation in an all-in-one platform with unmatched return on investment.

And don't just take our word for it. As part of our soft launch, we initiated an ambassador program with key opinion leaders in critical geographies throughout the U.S. Many of these leading surgeons are now actively discussing how AYON delivers consistent and reliable performance with several of them contributing at our workshops and clinical symposia supporting the broader commercial launch. The feedback has been incredible from the start, which we attribute to the system really filling a void in the market that nothing else has come close to addressing.

Just last month, we hosted a virtual KOL event for investors and analysts featuring comments from world-renowned general and plastic surgeon, Dr. Paul Vanek. We were fortunate to have Dr. Vanek share several case studies using the AYON system, followed by his general insights on the system's functionality and its potential impact on surgical practices. I encourage any of you that missed this event to visit our events page on our company website to listen to the replay, which is just a very compelling overview of the AYON capabilities.

One of the key points raised during the KOL event was the importance of AYON's integration with Renuvion. Our innovative, minimally invasive surgical solution for treating loose and lax skin. Renuvion provides durable transformational outcomes and is rapidly gaining traction among surgeons. We believe it represents the best-in-class option for treating loose skin and should be considered the new standard of care, particularly for patients experiencing skin laxity after significant weight loss, including those using GLP-1 medications.

This expanding patient population presents a tremendous opportunity. With more than 15 million people currently on GLP-1 drugs in the U.S. alone, we're still in the early innings of this powerful market shift. We believe Apyx is uniquely positioned to meet this demand and help lead aesthetic market into the next phase of growth.

As I have said before, the major shifts in the market with the rapid adoption of GLP-1s are unlike anything that we have seen in recent history, and Renuvion has proven to be an exceptional treatment option for the skin laxity experienced by many of these patients. Combined with AYON's other features, we believe Apyx is further differentiated and has elevated our position in the surgical aesthetics market, thereby making us the trusted surgical partner in the next era of aesthetic care.

As I mentioned earlier, the full U.S. launch of AYON began in September and has been highly successful to date. Our team was well positioned following the soft launch earlier this summer and strong interest quickly translated into preorders ahead of the launch. I believe the launch and overall interest in AYON has exceeded all of my expectations across every metric. I look forward to realizing our long-term vision of walking into almost every surgical practice and seeing an AYON system at the center of the operating room.

When we first introduced the AYON and talked about the initial capabilities, one of the commitments we made was the submission of an additional 510(k) to the FDA for the label expansion of AYON to include power liposuction. I am pleased that early last month, our team submitted this follow-up application and anticipate receiving clearance in Q1 of '26. This is an important update as receiving market clearance for power liposuction will solidify AYON's position as the first fully integrated body contouring system, positioning AYON as the new gold standard in surgical aesthetics. I think it is important to note that upon receiving clearance from the FDA, we will be able to activate this function on AYON systems already in the field.

While we are still in the early stages of the launch, the market excitement is quickly turning into orders for AYON. As a result, we are updating our revenue targets for 2025, which Matt will detail in a moment.

I will now turn the call over to Matt for a review of the third quarter 2025 financial results in more detail, along with our updated financial guidance for 2025.

Thank you, Charlie. Before I get started, please note that all references to third quarter financial results will be on a GAAP and a year-over-year basis unless noted otherwise.

As Charlie mentioned, total revenue for the third quarter '25, increased 12% to $12.9 million, compared to $11.5 million in the prior year period. Revenue for Surgical Aesthetics segment increased 19% or $1.8 million to $11.1 million compared to the $9.3 million last year. As Charlie referenced, this growth was driven by sales of AYON as we commenced our commercial launch during the quarter and an increased volume of single-use handpieces in both domestic and international markets. These increases were partially offset by decreases in domestic sales of generators, including upgrades to the Apyx One console, where the purchase of AYON was not part of the sale and upgrades to the Apyx One console in international markets.

Turning to the OEM segment. Sales decreased 18% or approximately $0.4 million to $1.8 million for the third quarter of '25, compared to $2.2 million for the third quarter of '24. The decrease in OEM sales was due to a decrease in the sales volume to existing customers, including Symmetry Surgical under our 10-year generator manufacturing and supply agreement. Domestic revenue increased 20% year-over-year to $9.3 million, and international revenue decreased 4% year-over-year to $3.5 million. As a reminder, the medical device industry typically experienced some seasonality with revenue trends generally the lowest in the first and third quarters and strongest in the second and fourth.

Gross profit for the third quarter '25 increased to $8.3 million, compared with $7 million in the prior year period. Gross profit margin for the third quarter '25, increased to 64.4%, compared to 60.5% in the prior year period.

With respect to tariffs, we continue to monitor trade policy and tariff announcements, including the recent executive orders issued by the U.S. Federal Administration regarding tariffs on imports from various countries. At this time, the overall impact on our business related to these or any other tariffs that may be imposed remains uncertain and depends on multiple factors.

Operating expenses decreased to $9.1 million for the third quarter '25, compared to $10.6 million in the prior year period. The decrease in operating expenses was driven by a $0.6 million decrease in selling, general and administrative expenses, a $0.3 million decrease in research and development expenses, a $0.3 million decrease in salaries and related costs and a $0.2 million decrease in professional services expenses. We are pleased to see the results of the cost-cutting measures taken in the fourth quarter of '24 in our current numbers.

Loss from operations decreased $2.8 million or 77% to $0.8 million. Net loss attributable to stockholders was $2 million, or $0.05 per share for the third quarter '25, compared to $4.7 million, or $0.14 per share in the prior year period. Adjusted EBITDA loss decreased 96% to $0.1 million, compared to $2.4 million in the third quarter of '24. As a reminder, we provide a detailed reconciliation from net loss attributable to stockholders to non-GAAP adjusted EBITDA loss in our earnings press release.

For the 3 months ended September 30, 2025, cash used in operating activities decreased to $3.5 million, compared to $4.4 million used in the prior year period. For the 9 months ended September 30, 2025, cash used in operating activities decreased to $5.5 million, compared to $15.1 million used in the prior year period. We are pleased with the cash and working capital management in the first 9 months of 2025 with cash burn returning to a lower but more normalized rate in the back half of the year as a result of the impacting changes in working capital as a result of the AYON launch.

As of September 30, 2025, the company had cash and cash equivalents of $25.1 million, compared to $31.7 million as of December 31, 2024. We believe, based on our cash projections, including the uptake of the AYON platform, working capital management and our strict cost controls, we will yield cash through 2027.

Turning to a review of our '25 guidance, which we updated in our third quarter 2025 financial results press release issued earlier today. For the 12 months ending December 31, 2025, we expect total revenue in the range of $50.5 million to $52.5 million, up from our previous range of $50 million to $52 million. We believe this increase shows the strength of the AYON ongoing commercial launch, especially when you look back at our original guidance of $47.6 million to $49.5 million for '25 or compared to the $48.1 million for the year ended December 31, '24.

Our revenue guidance assumes Surgical Aesthetics segment revenue in the range of $43 million to $45 million, up from the previous guidance of $42 million to $44 million. Again, since we initiated the soft launch of AYON this summer, we have increased expectations for our original guidance of $39.1 million to $41 million. In addition, this is compared to the $38.6 million for the year ended December 31, 2024, reflecting current trends.

OEM revenue is expected to come in at approximately $7.5 million, down from the previous guidance of $8 million as the company focused resources on the Surgical Aesthetics segment, this is compared to the $9.5 million for the year ended December 31, 2024. For the purposes of clarity, we increased the guidance in the Surgical Aesthetics segment by $1 million and decreased the guidance in the OEM segment by $0.5 million from the guidance previously provided in our second quarter conference call. We now anticipate gross margins of approximately 61% for the year and total operating expenses not to exceed $40 million.

This completes our prepared remarks. Charlie and I will now open the call for questions. Operator?

[Operator Instructions] Your first question comes from Dave Turkaly with Citizens.

Congrats on the launch and the spending progress. I just had a clarification one upfront here. I know you said the generator sales were down, but I don't think I actually understood the explanation for why that wasn't. You said something about AYON, but I just want to clarify that upfront, if I could.

Yes. So look, we're changing, obviously, the way that we classify things because AYON obviously has to have an Apyx One generator. And if you think of our customer base, we have customers that already have an Apyx One generator, they can actually just buy the rest of AYON and have their existing Apyx One generator integrated into AYON. And then we have an installed base of RS3 generators. They need to upgrade to an Apyx One generator and then buy the rest of AYON. And then obviously, if they don't have any of our Renuvion technology, they would need to buy all of AYON that would include an Apyx One and an AYON with it. And so we're obviously classifying those as just AYON sales even though they have an Apyx One in them.

Got it. And then trying to think about the gross margin impact from this. I haven't -- I don't know that you publicly commented on sort of the ASPs or what the uptick might be here. But I guess I'm imagining that the handpiece and the capital might be premium to what you were selling in the past. And as we're looking forward, I don't know if you are comfortable giving any commentary, but I imagine there has to be a significant gross margin uptick if that is the case. And I don't know if you can give any color as we're all trying to look to the out years now, but how significant or how much of an uptick do you anticipate as this rollout continues?

Yes. No, thanks for the question, Dave, but you probably know what my answer is going to be in that we're not giving guidance out from either a revenue or a gross margin point of view. The only thing that I would say to that, just to give you a little bit of color is we've always said that the Surgical Aesthetics business, obviously, especially in the U.S., has the highest gross margins anywhere. So the more we sell here of that, the better it is for the entire company. But we're not going to give any color or any guidance on what that is right now.

The next question comes from Sam Eiber with BTIG.

So clearly, a really exciting opportunity on AYON and getting devices out in the market. But I want to ask maybe about on the consumable side and maybe some pull-through you can get on higher device utilization because of all the new capabilities that AYON has. So I guess my question is, should we also expect a big uptake in consumables in addition to capital sales next year?

So I think the uptake would come back from selling new units to people who don't have Renuvion technology today. I think for customers that are upgrading to Renuvion, they're using, obviously Renuvion after their liposuction procedures today. So I don't know that you would necessarily see an uptick from the existing base. But obviously, adding new customers will certainly help that. We had a good third quarter from a consumable standpoint, both in the United States and internationally. And obviously, we're always focused on driving utilization. So as we add more customers, that's going to be the greatest driver of utilization in the future.

Okay. That's helpful. Maybe I can ask a follow-up on the latest you're just seeing in the market environment. Just getting a sense of any changes to demand trends, GLP-1 dynamics at play? Would just your latest thoughts on the market at this point.

Yes. Look, I think it's consistent with what we've talked about before is we've always said that we believe the market has been disrupted from the GLP-1 drugs. We think that companies that have technologies that address skin laxity and address body contouring and are focused on the surgical side of things are going to be where the action is at. And we obviously think the technologies that we have with AYON and Renuvion are going to be very well suited to this marketplace as we keep moving forward and as more people are taking these drugs and having the side effects from these drugs and then wanting to have treatment from these.

I think the other side of it is it was McKinsey that just came out with the study that 63% of these patients that are on the GLP-1 drugs are new to aesthetics. And so I think we're just going to see -- I think we're in the early innings of this drug. And I think over the next decade, it's going to be a very good time to be a plastic surgeon in the world. That's for sure.

The next question comes from Alex Fuhrman with Lucid Capital Markets.

Congratulations on a really nice quarter and the launch of AYON. I wanted to ask you, Charlie, how much of your growth in the quarter was driven by the single-use handpieces? And what's really driving that? Are you seeing more lipo procedures being performed or better attach rates for Renuvion, or are you perhaps starting to see more stand-alone uses of Renuvion as well?

Yes. So I think the one thing that the quarter-by-quarter is always a tougher way to look at it. As you know, I think last quarter, we were down a bit. This quarter, we were really strong, both the United States and internationally in the growth of handpieces. And I think the answer to your question is all of the above.

So we're obviously seeing new doctors come in to adopt the technology for the first time. We're seeing a higher attach rate from patients that are coming into doctor's office and requesting Renuvion. And so after a body contouring procedure, they're going to use that. And then we are seeing it used on a stand-alone basis. And so I think the answer is all of the above for that.

And again, as people are looking for solutions to take care of their loose and lax skin, especially following the treatment of GLP-1s, I think this is a trend that's going to play out for a lot of years to come.

The next question comes from Matt Hewitt with Craig-Hallum.

Charlie, congratulations on the strong quarter. Maybe -- and I apologize if I missed this, but talking a little bit about the pipeline. So obviously, you've gotten the initial launch out. Customers have adopted and are utilizing the platform. You've done some KOL events. They're helping kind of spread the word. Are you seeing that pipeline not just grow, but maybe you're reaching an inflection point where it's accelerating faster? And if so, how are you able to kind of get those implementations done with the team? Have you had to add to that team to meet the demand or anything -- any color along those lines would be helpful.

Yes. Obviously, we increased our guidance by $1 million for Surgical Aesthetics in the fourth quarter. And so -- and you can see what that -- obviously, you can do the math and translate to see what that works out to in the fourth quarter from a revenue perspective. And obviously, that is on the back of AYON and our expectations for AYON.

As far as pipeline, I'm not going to comment too much about that, but the team has done an amazing job of get shoring up the supply chain, getting the supply chain to where it needs to be and being able to take advantage of the interest and the orders that we're getting with that we're getting with AYON.

As far as the installations go, we've got a third party that is helping us do that. And so that is taking away some of the burden from the existing employees. And -- but we're doing a really good job as a company of being able to make these to get them installed and to get the doctors trained and get their staff trained and get them up and running. And so it's been a very, very good rollout of a new product and especially a product with this much technicality and sophistication in it, and the team has just done an amazing job of that.

That's great. And maybe -- and I realize it's early days and you're focused on the U.S. market and rightfully so. But how should we be thinking about cadence of rolling AYON out internationally? Are there maybe 1 or 2 geographies that you'd like to target for '26? And remind us what that process is to bring AYON to the masses outside of the U.S.

Yes. No, it's a good question, Matt. And we're not going to get specific on that on today's call. But obviously, we want to have AYON registered everywhere in the world because it's not just a product for the United States. It's a product for every surgeon worldwide. Some of the bigger focus markets, obviously, would be Europe, the Middle East, Brazil, Latin America, some other countries in Latin America. Europe is all together. So Europe, you just need a CE mark. And once you get one, you get them all. There are some countries in the Middle East that actually accept FDA. And so obviously, those we would probably start sometime next year there.

And then each individual country has its own registration process, and we'll be starting those processes in a lot of the countries. So we'll talk more about that when we get into '26 and we start doing that. And you're right, our focus right now for the third quarter and the fourth quarter is solely on the United States.

At this point, there are no further questions. I will now turn the call over to Charlie Goodwin for closing remarks. Please go ahead, sir.

Thank you, everybody, for attending the call. I want to thank the entire Apyx team for their dedication and tireless execution over the past 3 months. It has been an exciting time for the company as we see our plan turn into reality. We appreciate all the support we've received from our shareholders during this time, and I thank you all for attending.

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

Good afternoon, and welcome to the Apyx Medical Virtual KOL event. [Operator Instructions] As a reminder, this call is being recorded, and a replay will be made available on the Apyx Medical website following the conclusion of the event.

I'd now like to turn the call over to your host, Charlie Goodwin, President and CEO of Apyx Medical. Please go ahead, Charlie.

Thanks, Tara, and thank you for everybody who's taking time today to join us on this call. It is my pleasure to have you here, and it is my pleasure to have Dr. Vanek here as our KOL, and I'm sure you'll find what he has to say, very exciting.

Next slide, please. All right, next slide. A brief agenda of what we'll do today is, obviously, there's an introduction from me. We'll talk about the commercial launch of AYON. The majority of the time will be spent with Dr. Vanek, and he will be talking about his experience with AYON, and then we'll conclude the meeting and then open the call for Q&A at the end.

Next. So at Apyx Medical, we actually view ourselves as the leader in surgical aesthetics. And surgical aesthetics is different from all other forms of aesthetics because in surgery, we actually believe that, that is the only thing that really provides durable and transformational results for patients. And the market is uniquely changed because of the GLP-1 drugs for weight loss.

There are a ton of patients now that have lost a lot of weight, and they need to have -- they got loose and lax skin and they need to have a solution for that. And the AYON body contouring system along with Renuvion, we believe, provides the best technologies and the best tools to help the doctors achieve those needs.

We just did get approval for AYON in May of 2025. We have successfully conducted a soft launch with key surgeons in multiple geographies all over the United States. And the results so far have been overwhelmingly positive for the performance of the technology and the console in their ORs.

In September, we had said that we would start commercially selling the AYON to other doctors, and we actually have started that and are continuing that here in the fourth quarter. And then most recently, we just announced that we did file our 510(k) for the power-assisted handpiece portion of AYON that we had said that we would do, and we would expect to have that clearance sometime in the first quarter of 2026.

Next slide, please. And just a reminder of the market and what is going on in procedures and a little bit in consumer behavior now. We think that AYON is uniquely positioned to lead this market and capture this tremendous growth that is coming from post-weight loss patients.

And if you look at McKinsey, they talk about the GLP-1 therapies are going to exceed $100 billion by 2030. 44% of GLP-1 users spend between $2,000 and $5,000 on aesthetics, which is a 25% increase in their spend. And really important is about 63% of these patients are new to aesthetics post weight loss. And it is going to be a growing patient population for plastic surgeons to come.

I think that the next decade is going to be one of the best decades that plastic surgeons have ever seen addressing the needs of these patients. But technology has actually lagged behind the industry. And if you look at body contouring technology, there has really not been any significant improvement in some of these technologies in over 20 years. And these procedural shifts are great that are happening is because a lot of patients now will need some kind of combination treatment. And that is a combination of surgical incisional surgery and body contouring surgery. And so these procedures now are more complicated.

And if you look at just the ISAPS' data from last year, it shows that liposuction procedures actually declined by 10.7%, but surgical lifts were up in the 20s. And that makes all the sense in the world because the amount of laxity that these patients have is going to, in a lot of times, require some form of surgical intervention, some kind of skin incision. And a lot of times, it's accompanied by body contouring or by liposuction. And skin tightening now is the number one requested treatment post weight loss.

And again, I talked about these combination treatments, and I think Dr. Vanek actually has a couple of patients that he's going to show that on later, and you can see the dramatic results from these procedures, but you can also see the complexity in getting these patients to where they need and want to be.

And out of the GLP-1 users, 72% report loose skin as their top concern. And people are looking for a natural look versus a total transformational change and 57% seek treatment within 6 months post weight loss.

Next slide, please. So this is AYON. And this is what we have launched, and I'd like you to formally meet her. And I would like to talk a little bit about what is in AYON from a technology point of view. There is nothing like it on the marketplace that is completely revolutionary. There is nothing that exists to have this surgical console on the marketplace today.

And if you're looking at the top left of AYON, that is your traditional Bovie generator. It has monopolar and bipolar up at the top left. If you move to the top right, that is your Renuvion portion of it for skin tightening. Renuvion still remains the brains, if you will, of AYON and the Apyx One generator is that -- is the center of that.

And then if you go to the console down below, it has infiltration, aspiration. It has ultrasound-assisted liposuction, and it has a closed loop for contouring. And that is what is approved today. And as I mentioned earlier, we filed the 510(k) for the power-assisted portion of that. And the 2 buttons on the right that don't have anything to them yet, those are the buttons where there can be 2 power-assisted handpieces in AYON.

And I think it's important to note that we designed AYON, but we didn't actually -- we developed AYON, but we actually didn't design AYON. AYON was actually designed by a group of plastic surgeons, some top surgeons from all over the world that went through every existing technology that is out there today, and told us what they needed and wanted to have improved in a body contouring system, in a surgical system.

And our engineers and our development team did an incredible job of developing this and taking care of all of these things. And everything that is in AYON from a technology point of view, the ultrasound-assisted liposuction, the closed loop for contouring, the infiltration, the aspiration, everything is best-in-class from a single technology perspective. And then everything is integrated into one surgical console and the surgical workflow for the doctor and his team is second to none.

Not only can you perform individual tasks, but you can actually have simultaneous technologies going on at the same time. If you have a team that is performing this, if it is just you, then you just use each individual technology, but it is designed to be the most advanced surgical system for aesthetic surgery on the market today. And there is not a surgical procedure that the doctor cannot do with this system.

Next slide, please. And the feedback that we have gotten from clinicians, and you're going to hear from one of them here in a few minutes, has been anything short of remarkable for AYON. I can't even begin to tell you how proud I am of the team that put this together. And the performance of AYON has been spectacular. In fact, I would go as far to say I have been in the medical device space for 30 years, and I have launched a tremendous amount of products and technologies, and I have never had one that has been as exciting as this and the doctors have just been static about the performance of AYON.

There's a comment on here that there is no other machine like this. It is the next generation of body contouring. We have doctors that are calling it a Ferrari. We're having doctors that are calling it a Rolls-Royce, a Lamborghini. You name it, the accolades are there and the technology is unique and special. And I think that Dr. Vanek will talk a little bit about that because he used to be a KOL for one of the competing technologies for over 16 years. So the feedback has been incredible.

Next slide. And the summer has been incredibly busy for us at Apyx. We've been all over talking about AYON showing AYON, having doctors in the room listening to it and the interest from the community has been spectacular. And so it is my pleasure right now to introduce for today's call, Dr. Paul Vanek. Dr. Vanek is double board-certified plastic surgeon. He's recognized by both the American Board of Surgery and the American Board of Plastic Surgery. He brings extensive training and experience across all areas of surgery and has a particular expertise in breast augmentation, advanced liposuction techniques, facial rejuvenation, laser skin treatments and comprehensive skin care.

He earned his medical degree with distinction in research from the University of Rochester School of Medicine, where he also served as Chief Resident in General Surgery. Dr. Vanek then completed fellowship in plastic surgery at the University of Michigan. And currently, Dr. Vanek serves as President and CEO of Mentor Plastic Surgery & MedSpa, a practice he founded nearly 30 years ago, although it doesn't look possible if you're looking at him. During this time, he has been voted best of the best in plastic surgery 5 times by readers of the News-Herald in addition. Dr. Vanek has pioneered and implemented cutting-edge technologies, leading to the publication of multiple clinical papers and the development of innovative medical products.

It is my pleasure to turn the call over to Dr. Vanek. Dr. Vanek, thank you very much.

Thank you so much, Charlie, what a gracious introduction. I want to start by thanking you all for your attention today. My general background includes research fellowships in biophysics at Cal Berkeley at the B-field unit in microwave radiation and radiowave research.

Bioelectromagnetics has been integrated into my life before I got into medical school. During medical school, I worked in animal labs and published articles in bioelectromagnetics. And this has led me directly to my enthusiasm for something that was on the theoretical horizon, but didn't manifest until the Apyx company put together this most incredible platform.

I have to say, as a person who's been a background in electromagnetics in surgery since the '80s, there is nothing more exciting than when 2015 hit and they rolled out this incredible system called Renuvion. Then it was called J-Plasma. Even the 1.0 handpieces, which were now in the 2.0 development of handpiece delivery, the 1.0 handpieces were so efficacious in tightening in an environment in which patients were clamoring for something more, but there was nothing on the horizon for over 20 years since the advent of ultrasound-assisted liposuction in its third generation.

Now in fourth generation, the Apyx UAL system is the first step of a great innovation in tightening the body and collaborating with the regular surgery of plastic surgery. Then the add-on, the secret sauce is the UAL surgery, then the Renuvion helium plasma.

So when you look at my practice in the Midwest, I've been in practice since '96. There have been a lot of changes based upon the last years of the advent of GLP-1s and GIP inhibitors. As you saw in the slides that Charlie shared with us, in my practice, it's about 60%. And depending upon who you survey around the country, the penetration of these drugs is ubiquitous in our society because people are looking for weight loss avenues. But in the wake of the weight loss or even before they've achieved their weight loss permanent goals, they often initiate the inquiry about what am I going to do with this loose skin, my arms, my neck, my breast, my abdomen, my thighs. And that's where my practice has been for a long time.

So I have a practice that has a nurse practitioner. I have an OR team of a PA, a circulator, a scrub. I have board-certified anesthesiology. So I have a crack team that's very familiar with the paradigm of body contouring and facial rejuvenation surgery.

My most common procedures have been UAL-associated body contouring. And once the Renuvion paradigm came on the market, it was something me and a host of other busy liposuction doctors that did body contouring and neck and face rejuvenation. We grabbed on to it once it demonstrated efficacy. So us early adopters have been encouraged by the kind of science commitment that Apyx has demonstrated with over 90 publications that show things like are there worsening outcomes with using this energy. And the clear definition in a publication I authored last year was that we add Renuvion with our Apyx UAL, and we have no differences in adverse events, meaning the risks of surgery are not enhanced by adding something that's revolutionary.

That sole conclusion was pretty evident to those of us who are already using it before we codified it with science. But essentially, the surgical methods, when you go to the next slide, you look in the operating room and you see that we -- the surgeons have pieced together this technology, that technology and other technology and their time consuming to set up. They are a bit dizzying to initiate, but when we can put it all together with the tower that you saw a few minutes ago in one harmonious device, it's wheeled into the operating room. It plugs in, in 2 centers with regular AC power, and it gives me a complete suite of treatment parameters in which I can execute the entire case from that. Of course, there's instrumentation and expertise, and there are the staff members that are the scrubs and the circulators that get everything ready. But in terms of simplifying the start-up, all those individual pieces of material that you see is stacked up on different trays, boxes, carts. They are a thing of the past now that AYON is on the market.

So the nonsurgical methods that we have that are -- the patients are clamoring for, "Can you please put this device on my skin and can I walk out looking 30 pounds lighter and 30 years younger." That is something that is a market niche because people have the hope that nonoperative methods are going to take their loose skin and their post weight loss body problems and have the magic trick that, that's going to work.

But those freezing techniques, the radiowave techniques, the ultrasonic external techniques, they do not -- simply do not perform to the level of the patient satisfaction that they have set as expectations nor clearly the clinicians that have experience with these devices. Those devices have a niche for spa events and for modest enhancement, but they have nothing to do with what's actually happening in the major body contouring post weight loss patient. That's the strike zone of my practice.

Right down the middle strike zone, patients come in. They need complex procedures for arm lifts, neck lifts, facelifts, tummy tucks, breast lifts, thigh lifts. But now we can say the skin we took away is no better than the skin we left behind. We've been saying that for 40 years in body contouring. But with the advent of the AYON, Renuvion UAL, the efficiency of the fat dissolution. I mean you essentially say, well, what's UAL. Ultrasound-assisted liposuction means I pass a 3-millimeter probe that selectively pops my fat cell, bursts it in situ, changes the fat geography, I can then evacuate that reliably with very low blood loss and then I follow on immediately with a helium plasma revolution through another small 3-millimeter cannula that's passed smoothly under the skin.

In doing so, it creates results that you're going to see in our next slide. In a single procedure, we're able to take a patient who does not have the best body habitus but who's had her 48-year-old 3 children. She says, "This is my 1-year follow-up, use my selfies and tell a woman that she really can restore her body to incredible harmony and make herself really love her body."

This is an example of what's called high definition in which we sculpted the abdomen musculature with the advent of ultrasonic liposuction. We do a tummy tuck to tighten her muscles and remove some skin that was disillusioned by 3 children. And then we add the -- again, the secret sauce is the AYON, Renuvion helium plasma. That is the true method of taking loose skin and restoring it to what you're seeing in these pictures before and after. These are 1-year follow-ups. Along the way, they have no increased risks or no increased duration of recovery from a regular traditional surgery, but they're getting the kind of transcend picture that my colleagues and I across the country are achieving.

Go to the next slide, please. This is -- this next patient is the first person in the Midwest that had the true suite deployed in a single surgery. On the right picture in her own view is her 6-week follow-up. So the person who says they may be skeptical, you can say to yourself, well, there's no way that, that's the same person, except it is. I did it yesterday, too, a person who's 61 years old, I circumferentially treated her body. I used the suite of energies and then the technology of really reinstilling fat in another area that we call Brazilian butter cliff.

But the AYON Apyx technology gives me every tool at my disposal to bring the state-of-the-art from what you see of taking her skin above her belly button, treating that 3-dimensionally with UAL, infusion of fluid, safely evacuating her fat layer and then transcendly taking the AYON helium plasma and treating her skin so she gets that circumference.

I have many other patients in this circumstance that have achieved these goals. But really, the investor for you that are thinking is this the real deal? I can assure you as a person who's been in this market since 1989 that this is the real deal. We have waited for something like this and the performance of this is never underperformed in patients -- excuse me, in clinicians that are in this vertical. We totally see this and say, I got to get that as soon as they can get it. So I talk to patients and doctors all over the country at this point because I have a robust practice.

But what we're really responding to is the GLP-1 patient. This patient lost her weight on her own, lost 83 pounds, but she's stuck in this body now. But the GLP-1s that we see are a very persistent presence in our market. Our American Society has said to us all, we want to be thinner, but we can't get there because we have a lot of pressures on our diet and on our lifestyle that are in our food chain that are precluding us from making a difference.

But the GLP and GIP administration, including on the horizon, even a pill that's got efficacy across the board, my patients are coming as a pipeline, either in the wake of using GLPs or they're seeking a solution that they're not finding with their current insurance paradigm. So they're coming directly to my practice to have GLP-1s by me supervised, and they may be 6 months, 12 months, 2 years out from the pipeline of having surgery, but they already know when they show up at 350 pounds that if they -- should they get to their ideal body weight that they're going to have some negative consequences that before did not have a very good solution. We just did amputation procedures that had hopefully properly placed scars, but we could never do anything about their severe laxity. And so this example is just one of many in my practice that have manifested these kind of transformations.

In my practice, about 40% of my patients are using GLP-1s. We suspend them for 2 weeks prior to surgery. Many patients after this transformation may go to micro-dosing, but their concept is once they've reestablished their relationship with food, we often wean them off because they so love their body, they say, "I'm not going back." So GLP-1s can be a postoperative use or the patients are so delighted with their new body habitus that they may just wean themselves off. So there are off-ramps for GLPs. But in general, the patients' desires are, "I want to never go back to where I was." And so GLPs are an integral portion of my perioperative discussion.

When we see that search terms for SEO, patients are no longer naive to the notion that they have both search terms direct type into top line Google, but they have an awareness that these devices, these drugs are not utilized. And so goes it with UAL and AYON and Renuvion, top search terms are, they're finding me because they type the word Renuvion into Google, and I'm a local user.

When they see other things that are consequences like Ozempic face, Ozempic buttock, that is a consequence, not of the drug per se, but of the actual outcome of the drug, which is to deflate this body into the degree you see on the picture on the left. But the tightening manifestation is how -- what is my solution for this body.

So what I see is the experience of the system. I've done -- the last 7 weeks, I have done 9 major body procedures. This procedure took 8 hours. I have a practice that does not involve Renuvion or AYON, but I have other patients that are looking at their side breast and say, "I want to tighten the skin there when they get a breast augmentation," or they have a rhinoplasty and says, "Can you do something about my neck." So I use this agent under their neck in a minimally invasive way through 3 small incisions. I use it on the arms to get the arms that were loose to take away the redundancy and then use UAL and AYON on the arms.

So each procedure that has been so fantastically explosive growth, except for liposuction. Liposuction has gone down because people are disillusioned with the notion that if I suck up my fat, I'm going have hanging skin. Now the paradigm is we can take that hanging skin and we can make it tightened with FDA approval with an indication of a device that's very reliable. So combining these procedures with traditional procedural plastic surgery and UAL and Renuvion helium plasma tightening has been something we've never been able to offer patients with such authority or with such self-assurance that you really can get the results that are seeing right in front of your eyes.

The impact on my practice has been an efficiency. The UAL that I've had as a traditional previous user of another technology, I see that about a 60% enhancement in my speed of getting to clinical endpoint. If you know what I mean is I have to use time on target with the device that oscillates with ultrasound. It took a certain amount of minutes, let's say, 10 per zone. Now I'm down to 3 to 4 minutes per zone because of my UAL intraoperative time. What does that mean? Shorter procedure times. I'm getting this result that's so transcendent.

And then I add on top of it the manifestation of the helium plasma effects. They're just making such an impact on my patient. And the patient is so grateful. They say, "I just don't even believe that I was going to get here. And that 2 weeks ago, you told me I could do this." You can look on Mentor Plastic Surgery on Instagram, and you can see these patient testimonials that are up there.

And if you type in or search other UAL Renuvion users, they have equally marvelous. I don't want to say that I'm the king of the world, but I have such a regard for the technology that Apyx has brought to me, and they also onboard us, they teach us how to use it. We collaborate, we're talking to each other, talk about a commitment to as a business partner to make us successful. I have to say that Apyx from the jump has been a collaborative physician with a private practitioner like me.

The general feedback I get, my staff is happy, the technology is easy to turn over in terms of its cleaning and sterilization. There are no issues with it. The support from this company is incredible. The representatives that are responsive, the resources I have at my fingertips have made an incredible impact on my practice.

My staff onboarding for how to market it to my patients, soup to nuts, this patient has been a business partner since we engaged 9 years ago, and I've had such an incredible run with this. I -- my enthusiasm is a sincere Eagle Scout appeal to those of you who think is this company, what they say, you can ask anybody who's onboarded this synergy, they just say it's transformative.

Now I can talk all day on this. So I'm going to open this up if Charlie would like to come back, and we can go back and forth with some system elements or any clinical decision or any business discussion that's germane to this conversation.

Dr. Vanek, thank you very much. Thank you for all of your comments and I'm still amazed by that picture that is up on the screen right now that just shows how difficult these procedures are and how transformative they are in the right hands. That's for sure.

We'll go ahead and take questions, and we'll answer anybody's questions that you have right now.

Great. Thank you, Charlie and Dr. Vanek. [Operator Instructions]

If there's not one that comes directly to mind, I'm happy to say that with the onboard of the power lipo add-on, I am enthusiastically awaiting that. I'm anticipating its launch in the first quarter of the year. Yesterday, I did a case with fat transfer to the buttocks and using a power lipo material, we are able to use that technology to both take out fat, process it in real time and reinstill it in another body area. So having a state-of-the-art ergonomic power lipo device, which I held in my hand in the recent American Society of Plastic Surgery meeting, I had that in my hands in New Orleans just this past weekend. So I'm very enthusiastic about its implementation.

Thanks, Dr. Vanek. So we have a question from Sam Eiber of BTIG.

Thank you for putting this KOL event together and for sharing your thoughts, the picture you're showing right now is -- looks very transformational. And Dr. Vanek, if I'm listening right, it sounds like a lot of that is being driven by maybe some of the changes on the UAL technology. So would love to hear your thoughts on maybe if that's the case, is it more of a function of the UAL being more powerful? What else is driving such dramatic changes versus maybe some more legacy UAL technologies?

I would say to you, because of the LIFT technology, we modify or I should say, the software modifies itself as we're administering the power. It senses the impedance change in the fat as it's having ultrasonic dissolution. Because of that, we're able to be -- we're able to reach the endpoint.

Now Charlie, I will defer to you as to what I can disclose in terms of proprietary information as to what is the direct reason. But the short answer to you, Sam, is when I see that the end clinical endpoint on this UAL goes more efficiently, I'm actually more efficiently eliminating fat, which is the density -- 5 densities: fat, blood vessels, nerves, collagen and lymphatics. If I can more efficiently reduce this, it leaves behind for me these other stromal elements that we have left behind safely, have selectively preserved them so that those are the recipient energies for the efficiency and delivery of the radiofrequency helium plasma.

That energy of their helium plasma heats the tissue to a certain temperature in 0.41 -- 0.04 seconds and doesn't cook them or make them destroyed. If I can more efficiently remove the resistors of electronic energy and radiofrequency helium plasma, I can more efficiently, and I see it in this picture, having done a lot of cases with the other UAL technology and getting this case as its first one. This is the first one that's now 7 weeks out. I know for a fact that the previous UAL interaction and the previous RF helium plasma energy gets a certain amount. But this is a whiz-bang outcome because -- and I'm attributing it to the efficacy of the UAL component. So your insightful observation, Sam, is exactly on point as a surgical scientist. Would you like to add to that, Charlie?

Yes, Sam, it's a great question, and Dr. Vanek is exactly right in his explanation. Because the LIFT technology is more efficient than traditional ultrasonic technologies, it actually does less damage to the surrounding tissues and because it uses less heat to separate the fat like Dr. Vanek was talking about, and that makes the fibroseptal network more intact. And because that is now more intact and more receptive to Renuvion, it actually does a better job of tightening the skin. So it's a combination of both technologies actually working better that are allowing the surgeons to have these kind of results because of that. But it is a direct function of the improvements that we made in the ultrasonic technology that lead to this being able to use better. So Dr. Vanek was right on, and you didn't disclose anything that you weren't supposed to. So it's all good there.

Very good. Maybe I can just ask a follow-up here, and I'll leave it open to both of you. But in terms of capturing more, I guess, practice economics versus before with just Renuvion because you have the added capabilities of fat removal and along with tissue contraction and electrosurgical capabilities, wondering what device utilization can maybe look like going forward now that you have AYON and you can essentially do more procedures versus maybe before when you just had Renuvion.

Okay. So there's 2 components to this answer. If I don't mind jumping in. Is that okay, Charlie?

Please.

The first component is there's an efficiency in time motion of having one car drive into the garage than having 5 cars driving in and working on the same element or 5 mechanics. So the tower itself is an efficiency in time motion. Then the execution component with the UAL as I'm seeing it is more efficient in time motion. The integrated components are more efficient. The patient selection is a bit broader, so my funnel is a little bigger. The patients are auto selecting for a practice like mine that is energy-based, and they're very wisdom to the idea that old-fashioned liposuction is essentially so 2003, which is the advent of the ultrasonic energy of the third generation. We're in the fourth generation now.

Fourth is that the volume driver for my practice -- in my own personal practice has gone up because now I have these 2 components of UAL state-of-the-art and especially Renuvion. So the market position has been enhanced because of my availability to the state of the art. So it self-perpetuates. The surgeons recognize its efficacy. They promote it in their own channels. But then that results in search engine optimization that has patients now searching top line Google search for the Renuvion helium plasma concept and where to find it. So there's multi-levels in which I've had a practice funnel enhancement.

Yes. And the other thing, too, Sam, that we're hearing from other doctors is because of the LIFT technology, because of its working more efficiently and Dr. Vanek already alluded to the time savings having with that, but because it goes through tissue easier, the patients are having less bruising, less pain and quicker recoveries also, and so that obviously helps in everything because as patients start to talk about these procedures and these technologies and have better experiences with them where they have less downtime, they have less pain, they have faster healing that just brings more patients to Dr. Vanek's office and other users' office that want to have the same results and want to have it because the issue is that to have this kind of transformation, the only way that you can do that is in the hands of a plastic surgeon.

That's a true statement. We have a lot of posers in this country. There's no cream that does this. There's no exercise. I mean the patients come in with great recrimination to say, "Look what has happened to me." And they used to have no solution, but this technological innovation, combined with plastic surgical technology and expertise, can make this kind of transformation happen in every ZIP code in the United States and around the world.

Our next question comes from Matt Hewitt at Craig-Hallum.

Thank you for hosting this event. And Paul, thank you very much for your time. Maybe first off, you've talked about the time efficiencies and some of the other areas. But from a practice perspective, are you finding that it is making you more efficient where maybe you've got less people in the room when you're performing a procedure on someone or you're able to get more patients in during the day. What else are you seeing?

All of the above. For example, a patient that used to have a small problem that said, "I can't do anything for that." In the scope of putting them through an entire larger procedure, let's just say a person has some loose skin under their chin or neck that I'd say, "Look, the RF devices, the ultrasound devices externally, they're not going to get to what you want." And we didn't have a modality of treatment that would bring them into that next interval of improvement.

I'm able to do that in the office now under local anesthetic. It was unavailable until 2016, 2015. So that's one throughput interval. Because of Ohio revised code, there's a specificity of the amount of staff you have in a typical operating room. So that is not per se a requirement, but I'm not needing an assistance to do these cases that's with an innovation, you often need technical support or as you're alluding to, Matt, you're needing more something. This does not need more something. All the something is in the tower. The device is a unit. You just plug in the hand piece and it's ready to go. It's intuitive to use, so there's not a long ramp-up or learning curve for people that have some reluctance in the world of energy distribution to tissues, we clearly help you steward this onboarding with both the trainers as well as complete availability of KOLs like me in the country. We're willing to take calls because I think we're true believers.

The final portion of it is my staff can with a straight face say your procedure may have a slightly longer procedure time because of the energy administration, but it does not result in an increased time duration of recovery. So those time savings that patients say, "Okay, I have to go through more to get more." The answer is you get to go through more about the same to get more. And that proposition essentially says to the patient, this makes total sense. I should be in a practice that has a Renuvion RF device in it. And if I'm -- my competitors that don't even have it implemented, they're not in the game. They're not in the same sphere of discussion, SEO search engine, research and top line explosive growth in body contouring that we're experiencing with these energy devices. I hope I answered your question, Matt.

Absolutely. That's very helpful. And then maybe just one follow-up. And I realize it's early days since we started using AYON. But what types of procedures? Is it across your entire platform? Or have you focused at least early on in a very specific subset of the procedures you offer to your practice?

Well, let's be clear. I've been using this device since 2016. So this is not early days for me. I published the largest series of abdominoplasties with UAL and Renuvion in the world. So that's a 7-year data analysis. My colleagues and I around the country have been using this for years. So this is the first of its kind in which the whole unit has put together. It's early days for the UAL performance. And as a KOL for other ultrasound energy devices, I have a great deal of Gestalt understanding of how that device works and an understanding of its physics. So seeing its performance from the very first cases, as you alluded to, seeing it so performed is extremely exciting for me, who's got a lot of objectivity and scientific skepticism to see it work like this is very exciting. I know next is more cases because people look at what's going on at those of us who are plugged into the world of bioelectromagnetics and plastic surgery.

Our next question comes from Alex Fuhrman at Lucid Capital Markets.

Charlie, you mentioned you've seen a lot of interest in the AYON system, maybe the most you've seen in anything in your career. I'm curious who you've really been seeing the most interest from and who's actually been placing orders? Is it mostly customers of yours that already have the Apyx generator in place and understand the value of Renuvion or has it been a lot of new customers that you're talking to here?

Yes. No, thanks, Alex, it's a good question. So if you look at the customers that we have sold units to between now and the end of the year, there's 3 buckets of customers. The first one is people who already had an Apyx One and just want to get the rest of Renuvion. There's another group of customers that had our previous generation RS3 that need to upgrade to the Apyx One and then get the rest of AYON. And then there's obviously customers that don't have any of our technologies and want an AYON system. And I would say if you put the first 2 of those together, we're probably at about 80% of our existing customers so far and probably about 20% of people who did not have our technology at all. That's probably about where it comes out to in the sales that we've had so far.

Okay. That's really helpful, Charlie. And then how should we think about the pending application here for the handheld power lipo. It seems to me like that's a pretty big value-add for the new system here. So are physicians that are buying it today, are they going out on a limb a little bit, assuming that this is going to be ready for use in Q1? Are you talking to a lot of physicians that maybe will be ready to pull the trigger after that approval goes through?

Yes. Look, I think that you've got -- first, the power assist handpiece is truly important. I think Dr. Vanek talked about it, the importance of retreating the fat and getting the fat out after you separate it with UAL. They either do it with a power-assisted handpiece or they do it with straight suction. And a lot of the top body contouring doctors all over the world use the power-assisted device to get that out. So there's no question that the power assist is complete, if you will, the body contouring system of Renuvion.

That being said, we sold quite a few without anybody even seen what the power assist looked like and I think it was partially because we, as a company, Dr. Vanek talked about dealing with us as a company, we believe in evidence-based medicine. We've always tried to treat our customers as true surgical partners because if their surgical business grows, so does ours. And so there was a level of trust there. But as Dr. Vanek also mentioned, we just came back, both of us were in New Orleans this past weekend at Plastic Surgery at the meeting and we had our power-assist handpieces available for doctors to see and put in their hands and to basically show them obviously, with the sign that we don't have, that it's pending FDA approval, and it's not available yet, and we can't sell them yet or take orders for them yet or anything like that, but the doctors got to see what we have done.

And I think there's also just a sense from the surgeon community that we didn't design this. This was designed by the top body contouring doctor all over the world that came up with the things that they did not like or care for or needed improvement on the existing technologies and power assist, obviously, was one of those. And so I think there's a level of comfort, if you will, from a lot of the top doctors because they know who these doctors are and they know that they are very good body contouring surgeons, and they're comfortable with the work that they're going to do and the improvements that are going to be made for this and everything else on the system when you look at it is state of the art. Dr. Vanek showed in his slide what the OR looked like before. You can see that looks archaic in so many different ways when you compare it to the sophistication, the elegance, the everything that goes with AYON.

And so I just think that there are a lot of people that are willing to go, "All right, I will buy this now. I will wait for it. We're not going to charge them anything to activate their power-assisted handpiece when it comes because that's not the way that we work. And so I just think that there's a lot of people that are willing to get in line and to get the system now knowing that when they get this, it's going to be what they expect. And in most cases, everything has exceeded their expectations.

I'd like to jump in with one more thing besides that answer, Charlie. This power-assisted device, once you have it in your hand as a surgeon, it is not an also-ran. You think about something that's emerging, they took the best of the best, the ideas of the best top surgeons, but they also discarded some of the elements that are the source of frustration and failure for devices that have up to a 30% disability rate.

What I mean is the device you have has a 1 in 3 chance of breaking down today, which is an incredible uncertainty and frustration. So those devices have chronically been the underperformance metric, the underperformance touch point for having to have lots of backups and a lot of time motion wasted. The way the mechanics are this device, I've spoken with the engineers, we've reviewed things, this thing is a very exciting innovation, and it doesn't have the failure points that the other power-assisted devices have suffered from. So I want to congratulate out loud to the engineers and developers and what an incredible innovation this is going to have when it does deploy.

Our next question comes from Dave Turkaly at Citizens JMP.

I just wanted to clarify something here. So it sounds like this is for kind of the emerging heavy-lifting patients. And I just wanted to get your thoughts, Dr. Vanek on some of the other technologies out there, whether they be ultrasound or RF or laser based. Do you use any of those things maybe like people that don't have as much of a problem or do you have any of those other technologies? And do you plan to keep those for maybe a separate class of patients?

That's an insightful question, Dave. The following way is to think of it: There are certain technologies that rise and fall as they emerge for either they have intellectual property that sounds promising. I have trialed and utilized many technologies over the last 30 years. Most of the time, when I implement one, it is after I've seen the biophysics and electromagnetics interaction with tissue, either a scientific basis, not purely the empiric clinical result. And what I mean in a little sarcasm is a claim of a box does not mean the box does it when you get it in your hands.

But that being said, for example, you enumerated laser lipo. Laser lipo has some very significant negatives in that. It overheats the tissue and is fraught with higher theoretical and actual complication rates. So that was the device that wasn't so smart when it was implemented. Even though it sounded like the whiz-bang of laser this or laser that. Lasers have an incredible position in my practice for skin resurfacing and as a KOL for Sciton. I can attribute to a great deal of outcome improvement with lasers.

But other devices that are radiofrequency, monopolar, bipolar ultrasound combined with needle distribution, all these devices, I have great familiarity with. Some of them are implemented in my practice. Some of them never made the cut for implementation because of either their practical discussion with other users in advance of my deploying them or their theoretical descriptions and energy and bioelectromagnetics did not seem to meet the threshold. But since the advent of helium plasma, it theoretically met the criterion of my own for implementation.

Number two, it practically met my implementation because when I saw it used in person and saw the technical and clinical scientific descriptions, it immediately said this will work, and it did work. On my first case that I saw, it looked like a 2-month follow-up on a previous liposuction patient because the UAL device used was the traditional one and then the RF energy that was used on it made the patient right in the operating room look like they've recovered 2 months of post-op therapy. So it is an amazing innovation that since its time of deployment has really performed as -- even better performed than I expected. That's why I implemented immediately.

Yes. And Dave, just so you know, Dave, the other thing too, is Dr. Vanek is showing some pretty incredible before and afters, but AYON can be used on anybody that is having a surgical procedure. So it doesn't have to be this dramatic or this, as you said, heavy lifting. It can be on your standard run of body contouring patient also because there's not a surgical procedure that it can't do, and you would still use those advanced technologies to get the best result because again, remember, the patient is going to have less bruising, quicker healing, less down time all of that. But it's only for a surgical perspective. Obviously, none of the noninvasive treatments, that's a different story. We're only talking surgery here.

Yes, thank you for cleaning it up for me, Charlie. Every patient that sees me that wants a little nip or tuck, some of them can be done in the office like we did before, but now I can give them more tightening. So a person who's BMI is darn near perfect, but has a little laxity. I'm able to just use the AYON, Renuvion portion of it and don't even have to take any fat out. So I have every tool in my pallet as a painter of making their body go from here to there. If they're darn near perfect, we can enhance them in a very minimally invasive way with great efficacy and confidence.

Just one quick follow-up. You said -- I think I heard you say 8 hours. I was not aware of the plastic surgeons that spend that kind of OR time, but I think you said you've done 9 major patients so far. I guess as you look at this, is that -- I imagine those are again heavy lifting, but like what sort of an average time you had expected -- like how many patients could you see or what the average time that you would think would be reasonable for surgeon like yourself?

It's reasonable to do one case on one person for 8 hours because I can do 7 ZIP codes in the same surgery with safety and low blood loss, and they go home and I saw her the next morning. So she's walking in her own power. So to be clear about case duration and anesthesia, I can do a one-hour procedure on someone's abdomen or a one-hour procedure on their flanks. So each zone is dependent -- the time duration is depending somewhat on their BMI and their tissue characteristics. But some cases can be done awake under local.

The case you're seeing in this shot here is something that's done surgically in the operating room for patient satisfaction and safety. The case duration that patients are looking for means, I can use this device on all parts of her body. She's actually going to come back she said and do her arms after this. So they're also the spectacle of transformation, means, "Oh, I can do my arms too?" "Yes, come back in a couple of weeks, we'll do your arms." That's a quick turnaround, Dave.

So we're going to move to questions from the webcast. So I'll turn it over to Jeremy Feffer at LifeSci Advisors to read those.

I'll probably take one here. There are a couple of questions here asking about how AYON compares to Inmode's BodyTite in terms of clinical outcomes, patient experience and ease of use for practitioners. Are there specific advantages or limitations that stand out in real-world feedback?

Well, hold on, before I let Dr. Vanek answer that question, I just want to delineate though, between BodyTite and AYON because AYON doesn't actually compete with BodyTite. AYON is a complete surgical platform. BodyTite is a modality that's used to tighten skin, that uses RF to tighten skin. So BodyTite competes with Renuvion -- the Renuvion portion, but it doesn't have anything to do with anything, any of the rest of AYON. And so I'll let Dr. Vanek take the rest. I just wanted to delineate that portion of it.

I'm glad you did that so what should I say, diplomatically and expertly. I don't want to get into the realm of knocking other modalities. But my friends and I who deployed BodyTite have had a great deal of disappointment in that. It was rolled out as a device you could delegate in most states because it's a radio frequency needle device.

But then the reality of it is it can really only be used because it's so painful to administer that the only way to use it is essentially in the operating room anyway. So the notion of having it as a spa treatment or a topical local procedure that is then administered to a patient with comfort, ease and great efficacy has, I think, substantially underperformed.

So the tightening they see is not to the degree that you can when you have a helium plasma interaction with soft tissue. It's nowhere in any way, as Charlie said, does it do anything with the fat layer and its appearance. It does give some skin tone improvements after the recovery, but it doesn't give -- what I think is so manifest in front of your eyes is such a substantial intervention.

The last thing is it just can't do -- based on the theory of physics and tissue interaction, it doesn't have the bioelectromagnetic position to do what plasma does to interstitial tissue. It just doesn't have the ability. So it has a market niche. It has a cache. It has a lot of marketing in terms of its claim, but its performance, I think, is just not in the same category especially if you line it up directly with Renuvion outcome and BodyTite best-of-class outcomes. So it's almost self-evident that it's a device that's in the business unit or in the sphere body contouring, but that's where the rest of it is, is the show horse and a donkey.

So maybe one more. I think we have time for one more here. Dr. Vanek, for patients expressing interest in body contouring, how many of these are existing patients? Or are they new to your practice? Do you see this AYON really as being a driver of new volumes to your practice?

That's a great question. That's a question that I can straight up answer. It's been a direct driver of volume to my practice. There are patients who have lost weight that I may have done one thing on them 5 years ago. And because they have a contact with my practice, they say, "Oh, tell me about the AYON and Renuvion." Now the AYON is only months old. The Renuvion has been present in my practice. So I have gotten a surge of individual patients that come back and say, "Oh, you have this. I wanted my legs done. I did my arms 3 years ago." So the -- like I said earlier, the top line Google search for Ozempic face, Ozempic buttock, there's explosive growth in the search engine awareness of tightening procedures. So the laxity terminology, if you look at the curves, there's -- it's almost 3x higher more searches for that kind of outcome.

And when I'm positioned in the market to have Renuvion, it absolutely puts me in a position of driving patients into my practice, which then the whole algorithm of, do you want to lose more weight? Okay, we'll put you on GLP-1s. Do you want to -- have you reached your body goal endpoints? All right, we're going to talk about treating your laxity. This availability has been a tremendous boon to my practice in general.

When my friends and on boards that I've heard as a KOL, I get to talk to these people who are implementing this technology in their practice. They have a great enthusiasm for what they're able to achieve that they could not achieve before. And we've been chasing it for my whole careers. This is my 30th year in practice.

Dr. Vanek, thank you for that. I think we are now at the top of the hour. Charlie, I'll turn it back to you for closing remarks.

No, I would just like to thank everybody for their time today, for their interest in Apyx. I'd especially like to thank Dr. Vanek for his time. And thank you to the LifeSci group for putting this all together. I appreciate everybody's support, and we're just going to keep focusing on letting everybody know about this wonderful technology, and keep bringing this to surgeons all over the world. So thank you all for your time, and thanks to everybody at Apyx for doing everything that you do to make all of this possible. I appreciate it a lot.