Evolus outlines $700M 2028 revenue target and cost realignment amid market softness

 

• CEO David Moatazedi reported that "our second quarter results came in below expectations, reflecting one of the most challenging market environments we've seen in recent years. Jeuveau experienced its first-ever year-over-year decrease since launch more than 6 years ago." He stated that procedural volumes across the U.S. toxin category decelerated further in the second quarter, and the slowdown was especially acute in the final two weeks of the quarter. Moatazedi highlighted that, despite these headwinds, "we continue to gain market share through the first half of the year and are beginning to see early signs of positive momentum entering the third quarter."
• The company conducted a survey with nearly 200 U.S. customers that indicated "a meaningful rebound in patient volume in the second half of the year," with most practices expecting growth of more than 10%.
• Evolus revised its 2025 revenue outlook to $295 million to $305 million, representing 11% to 15% growth over 2024, and reset non-GAAP operating expense guidance to $208 million to $213 million, implementing over $25 million in cost savings. Moatazedi explained these were "intentional, long-term changes that allow us to rebalance resources toward customer-facing areas of the business."
• The U.S. launch of Evolysse generated $9.7 million in revenue, which Moatazedi described as "the strongest first-quarter filler launch in over a decade." The company raised Evolysse’s full-year revenue contribution expectation to 10% to 12%.
• International expansion continues, with the recent launch of Nuceiva in France and activity in nine markets outside the U.S.
• Moatazedi said, "We remain on track to achieve $100 million in international revenue by 2028."
• Chief Medical Officer Rui Avelar discussed a new independent study, stating, "Jeuveau and Dysport had the fastest onset" and "Jeuveau demonstrated the greatest effect" at day 30 and "the longest duration" at day 180 among four FDA-approved neurotoxins. Feedback on Evolysse continues to be positive, described as "very efficient in providing corrections when injected and results in a natural look."
• Moatazedi reported global net revenue of $69.4 million for the quarter, with $59.7 million from toxin revenue and $9.7 million from HA gels revenue. Reported gross margin was 65.3%, with an adjusted margin of 66.5%.

Outlook

• Evolus projects total net revenues for 2025 between $295 million and $305 million, reflecting 11% to 15% growth over 2024.
• The company expects Evolysse to contribute 10% to 12% of total revenue for 2025.
• Full-year non-GAAP operating expense guidance is now $208 million to $213 million, targeting at least $25 million in annualized savings.
• Evolus maintains its long-term target of $700 million in revenue and 20% non-GAAP operating income margins by 2028. Management stated these projections are based on "continued performance in our neurotoxin business, both in the U.S. and internationally, along with an increasing contribution from our novel line of injectable hyaluronic acid gels."

Financial Results

• Second quarter global net revenue was $69.4 million. Toxin revenue accounted for $59.7 million and HA gels revenue $9.7 million.
• Reported gross margin was 65.3% and adjusted gross margin was 66.5%.
• GAAP operating expenses for the quarter were $55.5 million; non-GAAP operating expenses were $54 million.
• Non-GAAP operating loss was $7.9 million.
• Cash at quarter-end was $61.7 million, down from $67.9 million at the end of Q1, primarily due to inventory purchases ahead of increased tariffs.

Q&A

• Annabel Eva Samimy, Stifel, asked about the drivers of reduced demand and the specifics behind the late-quarter slowdown, as well as Evolysse inventory. Moatazedi responded that "procedural demand declined high single digits" and that the slowdown was not driven by competition. He added, "we do believe that the initial portion of revenue had a stocking element as well as a pull-through."
• Marc Harold Goodman, Leerink Partners, pressed for clarity on the improvement in July versus the June slowdown. Moatazedi explained that "accounts will place larger orders in order to maintain their status... That's where we did not see those accounts placing orders as they had in historical at the historic levels."
• Navann Ty Dietschi, BNP Paribas, inquired about toxin demand trends and achieving Jeuveau revenue targets. Moatazedi cited third-party data confirming a "high single-digit decline" in procedural volume and described promotional adjustments to support pull-through.
• Uy Sieng Ear, Mizuho, asked about drivers of the anticipated rebound and revenue phasing. Moatazedi said, "we see an incremental improvement sequentially in the toxin market," but warned that consumer headwinds remain.
• Serge D. Belanger, Needham, questioned consumer sentiment and pricing changes. Moatazedi noted the unique challenges for consumers earning $150,000 or less and stated, "we haven't seen any sort of price increases related to the tariffs yet."
• Douglas Dylan Tsao, H.C. Wainwright, asked for reconciliation between lowered guidance and early Q3 improvement. Moatazedi clarified, "we see an incremental improvement in the third quarter relative to what we saw in the end of the second quarter."
• Sam Shimon Eiber, BTIG, asked about Evolysse's go-to-market strategy and the path to 2028 targets. Moatazedi emphasized the positive launch metrics and kept the 2028 outlook unchanged despite current headwinds.

Quarter-over-Quarter Comparison

• In Q1 2025, Evolus reaffirmed guidance of $345 million to $355 million revenue, projecting 30% to 33% growth, with Evolysse contributing 8% to 10%. In Q2, guidance was reset to $295 million to $305 million, down to 11% to 15% growth, and Evolysse contribution increased to 10% to 12%.
• Q2 introduced over $25 million in operating expense savings and a leaner cost structure, compared to a higher Q1 expense outlook.
• Market commentary shifted from confidence in robust growth despite industry headwinds in Q1 to a more circumspect tone in Q2, triggered by the first decline in Jeuveau demand since launch and a sudden drop in late-quarter procedural volumes.
• Analysts' focus shifted from competitive positioning and launch execution in Q1 to dissecting the reasons for revised guidance and probing the sustainability of new business drivers in Q2.
• Management's sentiment evolved from assertive confidence in Q1 to a more defensive and measured outlook in Q2, emphasizing cost controls and incremental improvement.

https://www.msn.com/en-us/money/companies/evolus-outlines-700m-2028-revenue-target-and-cost-realignment-amid-market-softness/ar-AA1JYyXh