Ladies and gentlemen, good morning, and welcome to Apyx Medical First Quarter 2026 Earnings Conference Call. Operator provided instructions were given. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Jeremy Feffer from LifeSci Advisors. Please go ahead.

Thank you, and welcome, everyone, to our first quarter 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 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 AYON body contouring system in the U.S., demand for single-use handpieces worldwide and increased Renuvion generator sales internationally. This represents our second full quarter of AYON 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 AYON 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 AYON 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 AYON has coincided so well with the continued rapid adoption of GLP-1s. As of early 2026, roughly 1 in 8 U.S. adults report having taken a GLP-1 according to KFF health tracking polls and RAND 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 AYON 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 AYON and our broader surgical aesthetic strategy. Through the launch of AYON, 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. AYON 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 AYON is addressing a meaningful unmet need and adoption remains in the early stages. Building on this success and expanding upon the AYON suite of offerings even further, we anticipate FDA 510(k) clearance for the AYON platform to include power liposuction sometime this quarter. This is a core modality in modern body contouring procedures, and this clearance meaningfully expands AYON's functionality so that it now supports multiple advanced fat removal modalities on one platform. Importantly, we believe this further differentiates AYON in the market and broadens its addressable customer base. When cleared, our strategy for bringing the power liposuction functionality live is to implement a limited commercial launch 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 AYON 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 it 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 AYON 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 AYON 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 three-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 three months ended March 31, 2026, from the prior year period is 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 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 three 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 AYON platform, working capital management and our strict cost controls, that we will have 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. Charlie and I will now open the call for questions.

Operator provided instructions were given. Your first question comes from David Turkaly from Citizens.

Congrats on the quarter and the guide. Charlie, just upfront, really quick: I heard Matt say the U.S. generator sales decreased. And I noticed in the press release you pulled out a comment that said where AYON 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, it's a good question, Dave. Basically, when we're selling AYONs now, we're counting those as AYON 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 RS3 upgrade, they would need to upgrade to the Apyx One. We don't capture those generators separately. We count it all as an AYON 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 AYON 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 AYON there? I think Apyx One is there right now, but is that the plan? And any color on the OUS rollout with that system?

If you look at the international business, it was a good quarter for the international business. 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. Yes, we are working on registering AYON outside the United States. We will be working on various countries throughout this year. As we make progress on that, we will let investors know what we're doing. We plan to have AYON registered in key international markets over time.

Your next question comes from Sam Eiber from BTIG.

Charlie, maybe a two-part question on AYON. First, can I get your thoughts on where you think we are in this rollout and the launch? It sounds like maybe you're starting to expand beyond the existing group of Renuvion accounts. And as a follow-up 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? How important is that going to be for surgeons?

That's a good question. It's a multi-tiered question, so I'll try to unpack it. When we're talking about the existing Renuvion customers upgrading to AYON, we've actually just started with that. So that is a whole large group of people that could upgrade to AYON. And then, as you pointed out, it brings in a whole bunch of people that don't even have Renuvion at this time who could upgrade to it. If we're looking at AYON sales in the United States, and this is a baseball analogy, we're just in the top of the first inning. We're just getting started with this. Regarding power liposuction, there are people that are waiting for power lipo before they get AYON 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, groups that use ultrasonic by itself and not power, and groups that use power liposuction and not ultrasonic. The doctors that use only power liposuction are waiting for that label and product to be available before they would get AYON. From our perspective, power lipo is a huge indication for us because it rounds out the liposuction capabilities of AYON and gives doctors both modalities on the system as it is today. We do see it as being very significant.

Okay. That's really helpful. Maybe I can 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, there are geopolitical tensions and macroeconomic dynamics in the current environment. What are you seeing out in the field for underlying procedure demand at this moment?

I don't think there's any question that people who have been on these drugs and lost the weight they want are looking for solutions to help their bodies. Yes, there is a lot of noise on the geopolitical front, but from a demand perspective, we're still seeing patients coming into practices and wanting these procedures. We follow consumer behavior such as Google searches, and over the last 12 months one of the biggest increases has been searches for 'loose skin.' We're seeing patients come to doctors' practices asking for solutions for that. If you look at the three biggest things people are searching for right now, it's loose skin, body contouring and liposuction. People are taking these drugs, they're losing weight, and they have loose and lax skin afterward. We are seeing this in the marketplace, which is why we're seeing the strength and growth we're having. We think our technologies and solutions are squarely aligned with what patients are seeking.

Your 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 AYON customers have been skewing toward existing customers if you're only just starting to sell it as an upgrade to your long-standing customers. Curious, Charlie, what kinds of clinics has it been resonating with the most? 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?

I want to clarify one thing. So far, of the AYONs that we've sold, probably about 80% have been to existing Renuvion customers. But if you look at the total base of Renuvion customers, we still have a long way to go before we upgrade all of them. Regarding new customers that weren't Renuvion customers before, having AYON is a huge help because now you're talking about the entire body contouring procedure. You're adding technologies that increase efficiency for the doctor and their staff and lower procedure times for the patient, which is significant because they're less time under anesthesia. We're even being told anecdotally by doctors that outcomes are better for the patient. So yes, it is helping us immensely get into practices that we weren't in before.

That's really helpful. 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, anecdotally, from your customers about the share of their patients who have taken a GLP-1? Do you feel like there's more than 1 in 8 or about that share that have taken a GLP-1? Is that been a driver of the business or what are you hearing from surgeons?

We do follow consumer behavior such as Google searches, and over the last 12 months searches related to loose skin have increased significantly. We're seeing patients coming to doctors' practices asking for solutions. The increase in interest for loose skin and body contouring correlates with the number of people taking GLP-1s and losing weight. Anecdotally, surgeons are seeing patients who have taken these drugs and are seeking body contouring solutions. That demand is a clear contributor to the growth we're seeing.

Your next question comes from Matt Hewitt from Craig-Hallum.

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

We're anticipating that the tariffs will remain throughout the rest of the year, and they're factored into the guide from both a cost and gross profit point of view. Could things change and result in different tariffs? Absolutely. One advantage we have is that we manufacture both in Sofia, Bulgaria and Clearwater, Florida, and that has helped us minimize the tariff impact so far. We are always looking for the best ways to keep our costs as low as possible.

Earlier in the call, you said you wanted to place AYON outside of the U.S., specifically everywhere. Can you give a timeline and key specific countries you're looking at right now?

I can't give a precise timeline because approvals and registrations take time in each individual country. Major places we'd like to have AYON registered include all of Europe, Latin America—countries like Brazil and Colombia that do a lot of body contouring—the Middle East, and key markets in Asia. Those are the primary regions we're focusing on for AYON registration.

Operator provided instructions were given. 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 toward 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.