Cutera Announces Second Quarter 2022 Financial Results

Rhea-AI Summary

Cutera, Inc. (Nasdaq: CUTR) reported second-quarter 2022 revenue of $64.2 million, reflecting a 10% year-over-year increase. This growth was supported by strong demand in capital equipment and consumables. Despite a GAAP net loss of $47.3 million and increased operating expenses of $45.1 million, the company maintains its 2022 revenue guidance of $255 million to $260 million. Key developments include the successful initial launch of its AviClear treatment for acne, with over 50 devices activated. The company anticipates adding more than 100 AviClear devices in Q3 2022.

Positive

• Second-quarter revenue increased by 10% year-over-year, reaching $64.2 million.
• Successful launch of AviClear, treating over 100 new patients.
• Management reiterated full-year revenue guidance of $255 million to $260 million despite foreign exchange headwinds.

Negative

• GAAP net loss of $47.3 million, impacted by a non-recurring charge of $34.4 million.
• Operating expenses increased significantly to $45.1 million from $31.7 million year-over-year.

Record second-quarter revenue driven by ongoing momentum in Capital Equipment and Consumable Product segments

Over one hundred new patients treated during the first quarter of AviClear’s availability

Management reiterates full-year revenue guidance despite $15 million of annual foreign exchange headwinds

BRISBANE, Calif.--(BUSINESS WIRE)-- Cutera, Inc. (Nasdaq: CUTR) (“Cutera” or the “Company”), a leading provider of aesthetic and dermatology solutions, today reported financial results for the second quarter ended June 30, 2022.

Second Quarter 2022 Financial and Operational Highlights

• Consolidated revenue of $64.2 million driven by strength in capital equipment and consumable product demand.
• Over 50 AviClear devices were placed and activated during the first quarter of the product’s limited commercial release.
• Gross margin of 54.6% in the quarter, compared to 57.7% in the prior-year period.
  • Excluding the 190 basis point impact from the AviClear program and foreign exchange headwinds of approximately 180 basis points, the gross margin would have been 58.3%.
• Operating expenses were $45.1 million in the quarter, compared to $31.7 million in the prior-year period. Operating expenses during the period included $7.0 million in AviClear program spending in addition to $2.4 million of ERP implementation expenses.
• GAAP Net loss was $47.3M, inclusive of a non-recurring charge of $34.4 million for the extinguishment of 50% of the 2026 convertible notes.
• Adjusted EBITDA was a loss of $1.6 million, compared to a gain of $6.8 million in the prior-year period.
  • Excluding AviClear program impacts of $7.5 million in the quarter and foreign exchange headwinds of $2.4 million over the prior year period, comparable adjusted EBITDA would have been $8.3 million.
• Completed $240 million in convertible debt financing, ending the quarter with $278.2 million in cash, cash equivalents, and marketable securities on the balance sheet after retiring $69.1 million in convertible notes due 2026.

Key Revenue Metrics	Three Months Ended June 30, 2022		% Change 2022 Vs 2021		Constant Currency			Key Profit Metrics	Three Months Ended June 30, 2022		Constant Currency
Capital Equipment	$43.7		23	%	27	%		GAAP Margin %	54.6	%	56.4	%
Skincare	$9.6		-18	%	-6	%		Non-GAAP Margin %	55.6	%	57.4	%
Consumables	$5.3		20	%	23	%		Adjusted EBITDA	($1.6	)	$0.7
Service	$5.6		-17	%	-13	%		Adjusted EBITDA Margin %	-2.5	%	1.2	%
Recurring	$20.6		-11	%	-2	%
Total Revenue	$64.2		10	%	15	%
Key Revenue Metrics	Six Months Ended June 30, 2022		% Change 2022 Vs 2021		Constant Currency			Key Profit Metrics	Six Months Ended June 30, 2022		Constant Currency
Capital Equipment	$80.2		25	%	29	%		GAAP Margin %	54.7	%	56.3	%
Skincare	$21.3		-12	%	-1	%		Non-GAAP Margin %	55.7	%	57.2	%
Consumables	$9.2		25	%	28	%		Adjusted EBITDA	($5.4	)	($1.5	)
Service	$11.6		-10	%	-7	%		Adjusted EBITDA Margin %	-4.5	%	-1.2	%
Recurring	$42.1		-5	%	2	%
Total Revenue	$122.2		13	%	18	%

“I am excited by the momentum we continue to see in our core business, as prior investments in our sales force drove strong results in capital and consumables product segments in North America, Europe, and Australia/New Zealand in particular. Our team is further encouraged by the resiliency and strength of underlying demand trends in the marketplace,” commented Dave Mowry, Chief Executive Officer of Cutera, Inc. “During the quarter, our team achieved the successful launch of AviClear, our first-mover product for the treatment of acne. In the first three months of our limited commercial release of AviClear, we were able to validate successful clinical outcomes in the hands of our customers, verify patient satisfaction with AviClear post-treatment patient survey data, and onboard dozens of practices in the use of the AviClear Laser as they look to provide their patients with a drug-free solution for acne while enhancing the profitability of their practices. We are looking forward to expanding the footprint of new AviClear practices during the next phase of the limited commercial release and significantly ramping the utilization of the device.”

2022 Outlook

Management is reiterating its 2022 revenue guidance of $255 million to $260 million, entirely absorbing the impact of the unprecedented foreign exchange headwinds of $15 million, implying constant currency growth of 17% to 19%. This guidance does not include revenue from our AviClear device as we continue with its limited commercial release. The company plans to add over 100 new AviClear devices into the market during the course of the third quarter of 2022. Based on current AviClear trends, management expects to move into a full commercial launch by the end of the current calendar year.

Conference Call

The Company’s management will host a conference call to discuss these results and related matters today at 1:15 p.m. PT (4:15 p.m. ET). Participating in the call will be Dave Mowry, Chief Executive Officer, and Rohan Seth, Chief Financial Officer.

To participate in the conference call, dial 1-800-319-4610 (domestic) or + 1-631-891-4304 (international).

The call will also be a webcast and can be accessed from the Investor Relations section of Cutera’s website at http://www.cutera.com/. The webcast replay of the call will be available at the same site approximately one hour after the end of the call.

About Cutera, Inc.

Brisbane, California-based Cutera is a leading provider of aesthetic and dermatology solutions for practitioners worldwide. Since 1998, Cutera has been developing innovative, easy-to-use products that harness the power of science and nature to enable medical practitioners to offer safe and effective treatments to their patients. For more information, call +1-415-657-5500 or 1-888-4CUTERA or visit www.cutera.com.

*Use of Non-GAAP Financial Measures

In this press release, in order to supplement the Company’s condensed consolidated financial statements presented in accordance with Generally Accepted Accounting Principles, or GAAP, management has disclosed certain non-GAAP financial measures for the statement of operations and net income (loss) per diluted share. Non-GAAP adjustments include stock-based compensation, depreciation, amortization, executive and other non-recurring severance costs, customer relationship management (“CRM”) and enterprise resource planning (“ERP”) system costs, non-recurring legal and litigation costs, and the loss on extinguishment of convertible notes. From time to time in the future, there may be other items that we may exclude if the Company believes that doing so is consistent with the goal of providing useful information to investors and management. The Company has provided a reconciliation of each non-GAAP financial measure used in this earnings release to the most directly comparable GAAP financial measure. The Company has not provided a reconciliation of non-GAAP guidance measures to the corresponding GAAP measures on a forward-looking basis due to the potential significant variability, limited visibility, unpredictability, or unique non-recurring nature of the items. Forward-looking non-GAAP measures include adjusted EBITDA. The Company defines adjusted EBITDA as earnings before interest, taxes, depreciation and amortization, stock-based compensation, executive and other non-recurring separation costs, customer relationship management and enterprise resource planning system costs, non-recurring legal and litigation costs, and losses on the extinguishment of convertible notes.

Company management uses these measurements as aids in monitoring the Company’s ongoing financial performance from quarter to quarter, and year to year, regularly and for benchmarking against other similar companies. Non-GAAP financial measures used by the Company may be calculated differently from, and therefore may not be comparable to, similarly titled measures used by other companies. These non-GAAP financial measures should be considered along with, but not as alternatives to, the operating performance measure as prescribed by GAAP. Non-GAAP financial measures for the statement of operations and net income per diluted share exclude the following:

Non-cash expenses for stock-based compensation. The Company has excluded the effect of stock-based compensation expenses in calculating its non-GAAP operating expenses and net income measures. Although stock-based compensation is a key incentive offered to the Company's employees, the Company continues to evaluate its business performance excluding stock-based compensation expenses. The Company records stock-based compensation expenses related to grants of options, employee stock purchase plans, and performance and restricted stock. Depending upon the size, timing, and terms of the grants, this expense may vary significantly but will recur in future periods. The Company believes that excluding stock-based compensation better allows for comparisons to its peer companies;

Depreciation and amortization. The Company has excluded depreciation and amortization expense in calculating its non-GAAP operating expenses and net income measures. Depreciation and amortization are non-cash charges to current operations;

Executive and other non-recurring severance costs. We have excluded costs associated with the resignation of our former Executive Officers in calculating our non-GAAP operating expenses and net income measures. We exclude these and other non-recurring employee separation costs because we believe that these items do not reflect future operating expenses;

Customer Relationship Management. We have excluded CRM system costs related to direct and incremental costs incurred in connection with our multi-phase implementation of a new CRM solution and the related technology infrastructure costs. We exclude these costs because we believe that these items do not reflect future operating expenses and will be inconsistent in amounts and frequency making it difficult to contribute to a meaningful evaluation of our operating performance;

Enterprise Resource Planning. We have excluded ERP system costs related to direct and incremental costs incurred in connection with our multi-phase implementation of a new ERP solution and the related technology infrastructure costs. We exclude these costs because we believe that these items do not reflect future operating expenses and will be inconsistent in amounts and frequency making it difficult to contribute to a meaningful evaluation of our operating performance;

Non-recurring legal and litigation costs. We have excluded costs incurred related to third-party litigation and disputes, that are non-recurring; and

Loss on extinguishment of convertible notes. We have excluded the loss on extinguishment of convertible notes. We excluded this loss because we believe it is non-recurring.

The Company believes that excluding all of the items above allows users of its financial statements to better review and assess both current and historical results of operations.

Safe Harbor Statement

Certain statements in this press release, other than purely historical information, are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). These statements include but are not limited to, Cutera’s plans, objectives, strategies, financial performance and outlook, product launches and performance, trends, prospects, or future events and involve known and unknown risks that are difficult to predict. As a result, the Company’s actual financial results, performance, achievements, or prospects may differ materially from those expressed or implied by these forward-looking statements. In some cases, you can identify forward-looking statements by the use of words such as “may,” “could,” “seek,” “guidance,” “predict,” “potential,” “likely,” “believe,” “will,” “should,” “expect,” “anticipate,” “estimate,” “plan,” “intend,” “forecast,” “foresee” or variations of these terms and similar expressions or the negative of these terms or similar expressions. Forward-looking statements are based on management's current, preliminary expectations and are subject to risks and uncertainties, which may cause Cutera's actual results to differ materially from the statements contained herein. These statements are not guarantees of future performance, and stockholders should not place undue reliance on forward-looking statements. There are several risks, uncertainties, and other important factors, many of which are beyond the Company’s control, that could cause its actual results to differ materially from the forward-looking statements contained in this press release, including those described in the “Risk Factors” section of Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, the Registration Statement on Form S-8 and other documents filed from time to time with the United States Securities and Exchange Commission by Cutera.

All information in this press release is as of the date of its release. Accordingly, undue reliance should not be placed on forward-looking statements. Cutera undertakes no obligation to update publicly any forward-looking statements to reflect new information, events, or circumstances after the date they were made, or to reflect the occurrence of unanticipated events. If the Company updates one or more forward-looking statements, no inference should be drawn that it will make additional updates with respect to those or other forward-looking statements. Cutera's financial performance for the second quarter ended June 30, 2022, as discussed in this release, is preliminary and unaudited, and subject to adjustment.

	CUTERA, INC.
	CONDENSED CONSOLIDATED BALANCE SHEETS
	(in thousands)
	(unaudited)
				June 30,				December 31,
				2022				2021
	Assets
	Current assets:
		Cash and cash equivalents		$	75,050			$	164,164
		Marketable investments			203,126				-
		Accounts receivable, net			32,148				31,449
		Inventories, net			45,410				39,503
		Other current assets and prepaid expenses			17,579				14,545
			Total current assets		373,313				249,661
	Property and equipment, net				24,470				3,019
	Deferred tax asset				698				778
	Goodwill				1,339				1,339
	Operating lease right-of-use assets				13,771				14,627
	Other long-term assets				9,801				10,169
	Restricted cash				700				700
			Total assets	$	424,092			$	280,293
	Liabilities and Stockholders' Equity
	Current liabilities:
		Accounts payable		$	25,365			$	7,891
		Accrued liabilities			47,539				54,100
		Operating leases liabilities			2,714				2,419
		Deferred revenue			10,098				9,490
			Total current liabilities		85,716				73,900
	Deferred revenue, net of current portion				1,429				1,335
	Operating lease liabilities, net of current portion				12,368				13,483
	Convertible notes, net of unamortized debt issuance costs				299,856				134,243
	Other long-term liabilities				849				763
			Total liabilities		400,218				223,724
	Stockholders’ equity:
		Common stock			20				18
		Additional paid-in capital			144,628				114,724
		Accumulated other comprehensive loss			(183	)			-
		Accumulated deficit			(120,591	)			(58,173	)
			Total stockholders' equity		23,874				56,569
			Total liabilities and stockholders' equity	$	424,092			$	280,293

CUTERA, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(unaudited)
			Three Months Ended								Six Months Ended
			June 30,				June 30,				June 30,				June 30,
			2022				2021				2022				2021
Products			$	58,589			$	51,812			$	110,655			$	95,363
Service				5,635				6,777				11,583				12,894
Total net revenue				64,224				58,589				122,238				108,257
Products				25,899				20,892				48,811				39,224
Service				3,281				3,908				6,595				7,534
Total cost of revenue				29,180				24,800				55,406				46,758
		Gross profit		35,044				33,789				66,832				61,499
		Gross margin %		54.6	%			57.7	%			54.7	%			56.8	%
Operating expenses:
	Sales and marketing			27,001				18,410				51,945				33,478
	Research and development			6,859				4,850				13,358				8,962
	General and administrative			11,248				8,461				24,750				15,826
		Total operating expenses		45,108				31,721				90,053				58,266
(Loss) income from operations				(10,064	)			2,068				(23,221	)			3,233
Interest and other (expense) income, net
Amortization of debt issuance costs				(298	)			(215	)			(517	)			(267	)
Interest on convertible notes				(1,149	)			(778	)			(1,927	)			(969	)
Loss on extinguishment of convertible notes				(34,423	)			-				(34,423	)			-
Gain on extinguishment of PPP loan				-				7,185				-				7,185
Other expense, net				(1,528	)			(392	)			(2,283	)			(1,415	)
(Loss) income before income taxes				(47,462	)			7,868				(62,371	)			7,767
Income tax (benefit) expense				(186	)			122				47				380
Net (loss) income			$	(47,276	)		$	7,746			$	(62,418	)		$	7,387
Net (loss) income per share:
	Basic		$	(2.53	)		$	0.43			$	(3.39	)		$	0.41
	Diluted		$	(2.53	)		$	0.39			$	(3.39	)		$	0.40
Weighted-average number of shares used in per share calculations:
	Basic			18,700				17,862				18,392				17,815
	Diluted			18,700				22,453				18,392				20,855

CUTERA, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
			Three Months Ended								Six Months Ended
			June 30,				June 30,				June 30,				June 30,
				2022				2021				2022				2021
Cash flows from operating activities:
Net (loss) income			$	(47,276	)		$	7,746			$	(62,418	)		$	7,387
Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities:
	Stock-based compensation			4,733				2,919				8,776				4,765
	Depreciation and amortization			502				346				929				707
	Amortization of contract acquisition costs			567				458				1,219				1,003
	Amortization of debt issuance costs			298				215				517				267
	Impairment of capitalized cloud computing costs			-				-				-				182
	Change in deferred tax asset			39				6				80				51
	Provision for excess and obsolete inventories			200				506				558				699
	Provision for credit losses			217				274				409				492
	Loss (gain) on sale of property and equipment			49				(23	)			63				(82	)
	PPP loan forgiveness			-				(7,185	)			-				(7,185	)
	Change in right-of-use asset			670				-				1,308				604
	Loss on extinguishment of convertible notes			34,423				-				34,423				-
Changes in assets and liabilities:
	Accounts receivable, net			804				(2,026	)			(1,108	)			(4,433	)
	Inventories, net			(5,524	)			(443	)			(18,059	)			(6,657	)
	Other current assets and prepaid expenses			2,577				1,483				(3,034	)			(77	)
	Other long-term assets			(686	)			(1,220	)			(1,071	)			(1,720	)
	Accounts payable			9,016				1,179				14,771				(474	)
	Accrued liabilities			(889	)			(369	)			(6,878	)			9,653
	Operating lease liabilities			(664	)			33				(1,272	)			(530	)
	Deferred revenue			463				(334	)			702				166
		Net cash provided by (used in) operating activities		(481	)			3,565				(30,085	)			4,818
Cash flows from investing activities:
Acquisition of property and equipment				(7,917	)			(269	)			(8,238	)			(370	)
Disposal of property and equipment				-				19				-				71
Purchase of marketable securities and long-term investments				(129,251	)			-				(203,309	)			-
		Net cash used in investing activities		(137,168	)			(250	)			(211,547	)			(299	)
Cash flows from financing activities:
Proceeds from exercise of stock options and employee stock purchase plan				1,288				1,501				1,439				1,897
Purchase of capped call				(31,671	)			-				(31,671	)			(16,134	)
Proceeds from issuance of convertible notes				240,000				-				240,000				138,250
Payment of issuance costs of convertible notes				(6,956	)			-				(6,956	)			(4,717	)
Extinguishment of convertible notes				(45,777	)			-				(45,777	)			-
Taxes paid related to net share settlement of equity awards				(1,784	)			(452	)			(4,234	)			(1,451	)
Payments on capital lease obligation				(133	)			(96	)			(283	)			(211	)
		Net cash provided by financing activities		154,967				953				152,518				117,634
Net increase (decrease) in cash, cash equivalents and restricted cash				17,318				4,268				(89,114	)			122,153
Cash, cash equivalents, and restricted cash at beginning of period				58,432				164,932				164,864				47,047
Cash, cash equivalents, and restricted cash at end of period			$	75,750			$	169,200			$	75,750			$	169,200

	CUTERA, INC.
	CONSOLIDATED FINANCIAL HIGHLIGHTS
	(in thousands, except percentage data)
	(unaudited)
					Three Months Ended								% Change		Six Months Ended								% Change
					June 30,				June 30,				2022 Vs		June 30,				June 30,				2022 Vs
					2022				2021				2021		2022				2021				2021
	Revenue By Geography:
			North America		$	32,239			$	26,786			+20.4%		$	61,092			$	49,084			+24.5%
			Japan			15,174				17,421			-12.9%			32,677				33,976			-3.8%
			Rest of World			16,811				14,382			+16.9%			28,469				25,197			+13.0%
			Total Net Revenue		$	64,224			$	58,589			+9.6%		$	122,238			$	108,257			+12.9%
			International as a percentage of total revenue			49.8	%			54.3	%					50.0	%			54.7	%
	Revenue By Product Category:
		Systems
			- North America		$	25,232			$	19,888			+26.9%		$	47,939			$	36,673			+30.7%
			- Rest of World (including Japan)			18,421				15,680			+17.5%			32,228				27,215			+18.4%
			Total Systems			43,653				35,568			+22.7%			80,167				63,888			+25.5%
		Consumables				5,298				4,432			+19.5%			9,201				7,357			+25.1%
		Skincare				9,638				11,812			-18.4%			21,287				24,118			-11.7%
			Total Products			58,589				51,812			+13.1%			110,655				95,363			+16.0%
		Service				5,635				6,777			-16.9%			11,583				12,894			-10.2%
			Total Net Revenue		$	64,224			$	58,589			+9.6%		$	122,238			$	108,257			+12.9%
					Three Months Ended										Six Months Ended
					June 30,				June 30,						June 30,				June 30,
					2022				2021						2022				2021
	Pre-tax Stock-Based Compensation Expense:
			Cost of revenue		$	500			$	434					$	959			$	578
			Sales and marketing			1,638				522						2,214				1,243
			Research and development			1,067				307						2,047				608
			General and administrative			1,528				1,656						3,556				2,336
					$	4,733			$	2,919					$	8,776			$	4,765

	CUTERA, INC.
	RECONCILIATION OF GAAP CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
	TO NON-GAAP CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
	(in thousands, except per share data)
	(unaudited)
					Three Months Ended June 30, 2022																							Three Months Ended June 30, 2021
					GAAP				Depreciation and Amortization			Stock-Based Compensation			ERP Implementation			Legal - Lutronic			Loss on Extinguishment of Convertible Notes			Non-GAAP				GAAP				Depreciation and Amortization			Stock-Based Compensation			CRM and ERP Implementation			Severance (RIF)			Legal - Lutronic			Other Adjustments			Non-GAAP
	Net revenue				$	64,224				-			-			-			-			-		$	64,224			$	58,589				-			-			-			-			-					$	58,589
	Cost of revenue					29,180				(161	)		(500	)		-			-			-			28,519				24,800				(138	)		(434	)		-			-			-			346			24,574
			Gross profit			35,044				161			500			-			-			-			35,705				33,789				138			434			-			-			-			(346	)		34,015
			Gross margin %			54.6	%																		55.6	%			57.7	%																					58.1	%
	Operating expenses:
		Sales and marketing				27,001				(793	)		(1,638	)		-			-			-			24,570				18,410				(600	)		(522	)		-			(638	)		-			-			16,650
		Research and development				6,859				(68	)		(1,067	)		-			-			-			5,724				4,850				(45	)		(307	)		-			-			-			-			4,498
		General and administrative				11,248				(46	)		(1,528	)		(2,385	)		(242	)		-			7,047				8,461				(21	)		(1,656	)		(407	)		-			(290	)		-			6,087
			Total operating expenses			45,108				(907	)		(4,233	)		(2,385	)		(242	)		-			37,341				31,721				(666	)		(2,485	)		(407	)		(638	)		(290	)		-			27,235
	(Loss) income from operations					(10,064	)			1,068			4,733			2,385			242			-			(1,636	)			2,068				804			2,919			407			638			290			(346	)		6,780
	Interest and other expense, net																																																		-
	Amortization of debt issuance costs					(298	)			-			-			-			-			-			(298	)			(215	)			-			-			-			-			-			-			(215	)
	Interest on convertible notes					(1,149	)			-			-			-			-			-			(1,149	)			(778	)			-			-			-			-			-			-			(778	)
	Loss on extinguishment of convertible notes					(34,423	)			-			-			-			-			34,423			-				-				-			-			-			-			-			-			-
	Gain on extinguishment of PPP loan					-				-			-			-			-			-			-				7,185				-			-			-			-			-			(7,185	)		-
	Other expense					(1,528	)			-			-			-			-			-			(1,528	)			(392	)			-			-			-			-			-			-			(392	)
	Total interest and other (expense) income, net					(37,398	)			-			-			-			-			34,423			(2,975	)			5,800				-			-			-			-			-			(7,185	)		(1,385	)
	(Loss) income before income taxes					(47,462	)			1,068			4,733			2,385			242			34,423			(4,611	)			7,868				804			2,919			407			638			290			(7,531	)		5,395
	Income tax (benefit) expense					(186	)			-			-			-			-			-			(186	)			122				-			-			-			-			-			-			122
	Net (loss) income				$	(47,276	)		$	1,068		$	4,733		$	2,385		$	242		$	34,423		$	(4,425	)		$	7,746			$	804		$	2,919		$	407		$	638		$	290		$	(7,531	)	$	5,273
	Net (loss) income per share:
		Basic			$	(2.53	)																	$	(0.24	)		$	0.43																					$	0.30
	Weighted-average number of shares used in per share calculations:
		Basic				18,700																			18,700				17,862																						17,862
		Operating expenses as a % of net revenue
					GAAP																			Non-GAAP				GAAP																						Non-GAAP
		Sales and marketing				42.0	%																		38.3	%			31.4	%																					28.4	%
		Research and development				10.7	%																		8.9	%			8.3	%																					7.7	%
		General and administrative				17.5	%																		11.0	%			14.4	%																					10.4	%
						70.2	%																		58.2	%			54.1	%																					46.5	%

	CUTERA, INC.
	RECONCILIATION OF GAAP CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
	TO NON-GAAP CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
	(in thousands, except per share data)
	(unaudited)
					Six Months Ended June 30, 2022																							Six Months Ended June 30, 2021
					GAAP				Depreciation and Amortization			Stock-Based Compensation			ERP Implementation			Legal - Lutronic			Loss on Extinguishment of Convertible Notes			Non-GAAP				GAAP				Depreciation and Amortization			Stock-Based Compensation			CRM and ERP Implementation			Severance (RIF)			Legal - Lutronic			Other Adjustments			Non-GAAP
	Net revenue				$	122,238				-			-			-			-			-		$	122,238			$	108,257				-			-			-									-		$	108,257
	Cost of revenue					55,406				(237	)		(959	)		-			-			-			54,210				46,758				(300	)		(578	)		-			-			-			346			46,226
			Gross profit			66,832				237			959			-			-			-			68,028				61,499				300			578			-			-			-			(346	)		62,031
			Gross margin %			54.7	%																		55.7	%			56.8	%																					57.3	%
	Operating expenses:
		Sales and marketing				51,945				(1,613	)		(2,214	)		-			-			-			48,118				33,478				(1,278	)		(1,243	)		(182	)		(638	)		-			-			30,137
		Research and development				13,358				(113	)		(2,047	)		-			-			-			11,198				8,962				(84	)		(608	)		-			-			-			-			8,270
		General and administrative				24,750				(184	)		(3,556	)		(6,361	)		(496	)		-			14,153				15,826				(48	)		(2,336	)		(477	)		-			(691	)		-			12,274
			Total operating expenses			90,053				(1,910	)		(7,817	)		(6,361	)		(496	)		-			73,469				58,266				(1,410	)		(4,187	)		(659	)		(638	)		(691	)		-			50,681
	(Loss) income from operations					(23,221	)			2,147			8,776			6,361			496			-			(5,441	)			3,233				1,710			4,765			659			638			691			(346	)		11,350
	Interest and other expense, net
	Amortization of debt issuance costs					(517	)			-			-			-			-			-			(517	)			(267	)			-			-			-			-			-			-			(267	)
	Interest on convertible notes					(1,927	)			-			-			-			-			-			(1,927	)			(969	)			-			-			-			-			-			-			(969	)
	Loss on extinguishment of convertible notes					(34,423	)			-			-			-			-			34,423			-				-				-			-			-			-			-			-			-
	Gain on extinguishment of PPP loan					-				-			-			-			-			-			-				7,185				-			-			-			-			-			(7,185	)		-
	Other expense					(2,283	)			-			-			-			-			-			(2,283	)			(1,415	)			-			-			-			-			-			-			(1,415	)
	Total interest and other (expense) income, net					(39,150	)			-			-			-			-			34,423			(4,727	)			4,534				-			-			-			-						(7,185	)		(2,651	)
	(Loss) income before income taxes					(62,371	)			2,147			8,776			6,361			496			34,423			(10,168	)			7,767				1,710			4,765			659			638			691			(7,531	)		8,699
	Income tax expense					47				-			-			-			-			-			47				380				-			-			-			-			-			-			380
	Net (loss) income				$	(62,418	)		$	2,147		$	8,776		$	6,361		$	496		$	34,423		$	(10,215	)		$	7,387			$	1,710		$	4,765		$	659		$	638		$	691		$	(7,531	)	$	8,319
	Net (loss) income per share:
		Basic			$	(3.39	)																	$	(0.56	)		$	0.41																					$	0.47
	Weighted-average number of shares used in per share calculations:
		Basic				18,392																			18,392				17,815																						17,815
		Operating expenses as a % of net revenue
					GAAP																			Non-GAAP				GAAP																						Non-GAAP
		Sales and marketing				42.5	%																		39.4	%			30.9	%																					27.8	%
		Research and development				10.9	%																		9.2	%			8.3	%																					7.6	%
		General and administrative				20.2	%																		11.6	%			14.6	%																					11.3	%
						73.6	%																		60.2	%			53.8	%																					46.7	%

	CUTERA, INC.
	RECONCILIATION OF NET LOSS TO ADJUSTED EBITDA
	(in thousands)
	(unaudited)
				Three Months Ended				Six Months Ended
				June 30, 2022
	Net loss			$	(47,276	)		$	(62,418	)
	Adjustments:
		Stock-based compensation			4,733				8,776
		ERP implementation cost			2,385				6,361
		Interest and other expense, net			37,398				39,150
		Depreciation and amortization			1,068				2,147
		Legal - Lutronic			242				496
		Income tax (benefit) expense			(186	)			47
			Total adjustments		45,640				56,977
	Adjusted EBITDA			$	(1,636	)		$	(5,441	)

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20220804005393/en/

Cutera, Inc.

Greg Barker

VP, Corporate FP&A

415-657-5500

IR@cutera.com

Source: Cutera, Inc.

FAQ

What are the financial results for Cutera for Q2 2022?

Cutera reported Q2 2022 revenue of $64.2 million, a 10% increase from the previous year.

What is Cutera's revenue guidance for 2022?

The company maintains its revenue guidance of $255 million to $260 million for 2022.

How did AviClear perform in its initial launch?

AviClear had over 50 devices placed and activated in its first quarter, treating over 100 new patients.

What was Cutera's net loss for Q2 2022?

The company reported a GAAP net loss of $47.3 million in Q2 2022.

What factors impacted Cutera's gross margin in Q2 2022?

The gross margin of 54.6% was affected by AviClear program expenses and foreign exchange headwinds.