Good afternoon and good evening. Thank you, everyone, for joining us today. Welcome to Sisram Medical Ltd's First Half 2025 Earnings Call. This is Qin Peng from Citi Securities, and joining me today is our Chief Analyst, Yifan Zhu. I would like to introduce our speakers on the call. With us today on the line are Mr. Yi Liu, Sisram Medical Ltd's Chairman, Mr. Lior Dayan, Sisram Medical Ltd's Chief Executive Officer, Mr. Jiahong Li, Sisram Medical Ltd's Chief Financial Officer, and Ms. Qianli Fang, Sisram's Secretary of the Board. Management will start with an overview of the business development for the first half year of 2025, and following the prepared marks, we will open the call for a Q&A session. With that, I would like to turn the call over to Mr. Lior, Sisram Medical Ltd's Chief Executive Officer. Please go ahead. Thank you.
Good morning, everybody. Thank you for joining our call today. I'm happy to provide an update on the ongoing success during the first half of 2025, which has marked a pivotal step in our evolution from an energy-based leader to a true holistic ecosystem partner in medical aesthetics. Today, we are proud to be actually the only one player integrating energy-based devices, injectables, advanced skin imaging, and personalized skincare into one synergistic ecosystem, fully supported by a robust operational infrastructure. This unique business model positions us to deliver comprehensive end-to-end solutions for aesthetic care providers worldwide, setting a new standard of care that is smarter, more personalized, and ultimately more valuable for patients. This ecosystem serves also as a powerful business tool for clinics, enhancing patient retention and maximizing lifetime value.
A key milestone supporting this vision was the successful North American launch of the Universe Skin by Alma, the world's first AI-assisted skincare system. Bringing personalization to the forefront of patient care, Alma's intelligent new system, powered by a proprietary analysis software, acts as a virtual AI assistant for the modern clinic. In less than a minute, it performs a smart skin analysis and generates a personalized skincare formulation on site, tailored to each patient's unique profile and concerns. This groundbreaking solution seamlessly extends the impact of aesthetic care beyond clinic and into each patient's routine, enabling clinics to deepen engagement, strengthen retention, and maximize lifetime value. In parallel, we saw strong global momentum for our Alma iQ, our next-generation intelligent skin analysis platform. Integrated seamlessly with our premium and energy-based devices, Alma iQ enhances diagnostic accuracy, improves treatment planning, and enriches the entire patient experience.
Beyond technologies, we've also made meaningful progress in building the commercialization infrastructure for our injectables portfolio in key regions, ensuring successful market entry and scaling across key markets. As part of this extension, we continue advancing our partnership with Alura, an innovative injectable featuring a first-of-its-kind combination of hyaluronic acid and biostimulator compounds. This reflects Sisram's role as a leading platform for bringing next-generation aesthetic innovations to the market. Looking ahead, we're also laying a groundwork for the highly anticipated launch of Daxxify, the world's first peptide-powered botulinum toxin in mainland China. This includes building a dedicated sales force and finalizing go-to-market preparations to ensure a successful introduction in the months ahead. Meanwhile, our core energy-based devices segment continues to deliver robust performance, driven by the sustained success of Alma Harmony and Alma Hybrid.
Both platforms continue to exceed expectations with better-than-expected performance and market demand, reinforcing our position as a global leader in advanced aesthetics and medical solutions. Alma Harmony today, Alma's most popular platform, is an innovative multi-application system designed to treat a wide range of skin conditions across diverse patient profiles. It continues to break new order records and generate a strong halo effect across our broader product portfolio. With Alma Hybrid, our award-winning platform designed for elite medical aesthetics practitioners, also maintained strong momentum, delivering double-digit growth for the third consecutive year. The group performance for the first half of 2025 includes revenue of $165.5 million, which decreased about 1.9% compared to the corresponding period. The overall decrease was primarily attributed to the challenging market conditions of high interest rates and weakened consumer spending in North America.
Amid microeconomic headwinds, Sisram continued to demonstrate exceptional resilience, supported by our diverse geographic presence, robust product portfolio, and strong brand equity. During this time, our international sales channels grew by 7.1% year-over-year. Notably, our performance in the Asia-Pacific region, a strategic growth engine for Sisram, stood out, delivering double-digit growth of 17.6%, driven by sustained momentum in Thailand and South Korea, as well as strong contributions from our injectables portfolio. Alma Thailand, launched last year, continues on a strong growth path and is now emerging as a strategic hub for our injectables business across Southeast Asia. Our 12 direct operations worldwide provide us with business superiority in key regions, robust market access, and the ability to execute our strategy effectively on a global scale.
This unmatched presence enables us to offset regional challenges and confidently invest in growth initiatives while maintaining our solid position in the industry. Sisram Medical Ltd is entering the second half of the year with strong momentum, driven by sustained consumer confidence and growing demand for our recent launches. With geopolitical headwinds beginning to ease, we are regaining pace in regions where certain activities have previously delayed. Combined with year-over-year increase in new order volumes, we expect a stronger performance in the second half of 2025 in terms of both revenue and net income. Looking ahead, we will strategically focus on strengthening corporate leadership in Asia-Pacific and North America, our key growth engines. In North America, momentum is fueled by the successful launch of Universe Skin by Alma and continued strong demand for Sisram Medical Ltd energy-based device medical solutions.
In the Asia-Pacific markets, we anticipate major milestones in the injectables segment, including the highly anticipated launch of Daxxify, the first peptide-powered botulinum toxin in mainland China. We actively advance the launch and market ramp-up of the two energy-based devices in China, further strengthening its competitive position in the premium aesthetic segment. We will also prioritize accelerating sales of Revanese, a dermal filler collection across the United Kingdom, Ireland, Germany, Austria, Switzerland, Australia, and of course, New Zealand, as well as expanding our flagship biostimulator Profhilo in China, Hong Kong, Thailand, India, and Israel. In parallel, we advance the commercialization of Alura in Israel and other strategic regions. Lastly, Sisram will continue expanding its unique wellness ecosystem by deepening its high-value synergistic offerings, committed to helping clinics build close relationships with end consumers through various channels and technologies we are to launch.
In line with this commitment, we will continue providing dedicated support to ensure the ongoing success and operational excellence of our partners. As always, I want to thank our global team for their continued excellence and our shareholders for their trust as we shape the future of aesthetics and move forward together on this journey. Now, I would like to hand over the speech to Mr. Jiahong Li, our CFO .
Thank you, Lior. A good day, everyone. For the first half of 2025, we delivered a revenue of $165.5 million, representing a slight decline of 1.9% compared to the previous year. Part of June revenue was delayed due to shipment constraints caused by regional tensions. Still, international markets grew by 7.1% year-over-year, partially offsetting the ongoing challenges in North America. This shows the momentum in our international expansion and the strength of our direct market strategy. Growth in international markets was mainly driven by our core medical energy-based devices segment, supported by continued execution of our strategic initiatives, including AI-powered diagnostics tools-based treatments and injectables. Our performance in APAC was another bright spot. Revenue in the region rose 17.6%, led by particularly strong performance in Thailand and South Korea. Gross profit margin came in at 60%, down 2.4 percentage points year-over-year.
This was mainly due to product mix shifted towards professional high-end products with higher material costs, given the best-in-class specifications, as well as a lower revenue contribution from North America. Adjusted net profit was $12 million, down 28.1% year-over-year. We ended the period with $60.1 million cash and cash equivalent, maintaining a strong financial position. By segment, medical aesthetics products remain our largest revenue contributor, generating $137.7 million, or 83.2% of the total revenue. Injectables increased 218.1% to $14.4 million, representing 8.7% of the total revenue compared to just about 2.7% a year ago. This is pretty much a 6% increase. This growth was broad-based across all markets where we operate in injectables, showing the success of our strategy and the expansion of our direct sales network. On the operations side, we focused on optimizing production to meet diverse global demand.
Despite the geographic tensions in June, we safeguarded our assets, ensured business continuity, and showed resilience and adaptability. Looking ahead, we are preparing for the launch of two flagship EBD products: Daxxify in mainland China and expanding our AI-powered combination therapy globally. In short, the first half of 2025 demonstrated our ability to perform in a challenging environment. With North America remaining under pressure, growth in APAC and other international markets, combined with disciplined execution and innovative product launches, proves the strength of our business model. We remain committed to sustainable growth, operational efficiency, and long-term shareholder value. Thank you.
Thank you, Mr. Li. We are ready for the Q&A session. I would like to remind our listeners, while you are asking the question, please state your name and organization before asking the question. First, I would like to start with two questions, two warm-up questions.
The first is regarding the APAC area. We see the APAC area achieved the highest growth rate among the global regions. What is the main reason and driver for the good performance? If we break down by countries, like for Thailand and South Korea, how did you achieve the high growth? For Japan, how is the progress of our new direct sale channel construction in that area? That's my first question. Thank you.
Thank you very much for that question. Let me pick that one. First of all, it's true. Most of the growth we saw in countries like Thailand and South Korea, as mentioned, each country has different reasons for that growth. Thailand is with the introduction over there with Profhilo, significant growth. Very good preparation has been done towards the launch of Profhilo and came out with a very, very strong penetration to this market. This is the beginning. Of course, regarding South Korea, which is a direct operation existing within our portfolio of direct offices for the last few years, we started the concept of lifting using titanium, and it's coming across very, very well in Asia. I think that was the second growth which really created a big change in demand that you're reflecting. About Japan, Japan is really still in early stages.
We're still in the penetration level and building that force in this great nation which has a lot of potential down the road.
Yeah. Okay, that's very clear. Thank you. My second question is regarding our direct sales. In the first half of this year, what is the proportion of our direct sales? In other markets, is there any other markets that we are still going to develop as a direct office? That's my second question. Thank you.
About the ratio of direct operation versus indirect operation, we're talking about 85% of the business was towards direct operation. It was a slight decrease from the period before because there was a shift of fulfillment revenue that came to distributors versus what we had in North America. We can touch base later on one of the questions, I guess, would be about the North American operation. That's the reason for the shift. We expect the ratio of direct business to grow back again as North America business would be expected to grow down the road. You had another question about other direct operations. We do not see right now in the near future the reason to go into other new direct operations. The current 12 direct operations that we have, together with additional more than 80 indirect countries, give us a very good hold of the global markets.
That's a very, very important advantage that the company has working in different geographies. Our work right now is to establish and execute our ecosystem into the direct markets we're active at to the full max potential, giving full value to the clinics. To some degree, we're also doing that in indirect markets like Alma iQ, which was introduced in already several of the international markets which were not direct. The 12 direct offices that we have is what we're going to be utilizing within the near future.
Okay. Thank you very much. I will open questions for our investors. Our first question is from Mr. Dai from CMSHK.
Hi, thank you for taking my question. I have two questions. First, on the North America performance, what are the main reasons for the decrease in the region? Did you see any sign of weak consumer spending? What are the actions in the second half of 2025 we can see or may get a stronger result? That's my first question. The second question is on margin. We noted the year-on-year contractions in the gross profit margin. Could you please quantify the main contributors to this pressure? More specifically, we'd like to be interested in the impact of product mix shift, perhaps towards more system versus consumables, or the effect of pricing and promotional activities in key markets, or any headwinds from input costs, inflation, or logistics.
Looking ahead, do you see this as a new run rate for gross profit margin, or do you anticipate some normalization in the second half? Thank you.
Hey, Warren, thank you very much for your question. Definitely a very important part that is going to be riding this session. North America has a significant and very important part of our business. In general, in this industry, North America takes a very important place in this space from revenue, from profit, and also from brand. It is true that two elements played a role in this space that had an impact on business in general. One would be the high level of interest rate that hasn't been going down yet. By the way, not only in the U.S. and also in other markets, but definitely in the U.S., you can see also an impact on consumer spending. The outcome of this has a few aspects. One is a slowdown of closing a deal, or maybe before you could close a deal within two weeks.
Here you have a longer process where the account can get approval for getting the loan or the leasing. Some may not get approved. That's a cycle that is taking a bit longer. There are potentially concerns regarding consumer demand, like metrics, global metrics, micro are showing kind of a degrade of that. This is kind of one of the reasons we could see a delay in order processing. The way for us to deal with that as a technology company is by being able to introduce new technologies. For those that can't afford to acquire and buy equipment during this time, having a distinguished technology, for example, Alma Hybrid, for example, Alma Harmony, or Alma iQ, the new diagnostic tool.
Later on, when we're going to speak about H2, the introduction of the Universe Skin with AI, these are kind of the tools that give us the approach to be able to maintain our position in the market and still overcome challenges of the financials I described. This is one very important point. About your question regarding the gross margin, one of the shifts that we had to deal with is with the current existing backlog that we had. Once we saw that we had a delay in closing deals because of all the elements I described, we shifted to push some of the backlog that we had to distributors' orders. Distributor orders normally would have a little bit less gross margin. This is really temporary, again, because, as I mentioned, regarding the U.S.-specific situation.
Also, margin-wise, we had another trend happening, which is a good trend, but normally it's being balanced with various product combinations. Following the launch of Alma Harmony, which is a very sophisticated device, more expensive, but also cost-wise, together with Alma Hybrid, once the mix of these specific products that normally would go to professionals, derms, or plastic surgeons, they would have a slightly lower gross margin compared to maybe traditional radiofrequency devices, which normally would have a higher gross margin. This is, again, on a specific given timeframe. Once, as we believe, the economical macro structure will change, we will be in a different position and up and ready.
Thanks. Oh, that's very clear. I have no further questions.
Okay. Thank you, Warren.
Okay. Our next question is from UBS, Mr. Cho. Please go ahead. Thank you.
Yeah. Thank you. Hi, Yi and Lior. This is Nate from UBS. I also have two questions. Firstly, it's really on Profhilo. I think we had a good success in Thailand in the first half. We're very looking forward to its launch in China. I'm wondering what is the current progress in terms of registration and also in terms of launching a timeline. The second question is, we did see the lawsuit between Revance and Allergan about the patent. Could you also share a bit more on will it have any influence on our launch of Daxxify in China? Thank you.
Sure, Nate. Thank you for the question. I'll start and pass on to Mr. Li. If you could elaborate about the status of the study and also Daxify. Specifically for Thailand, Thailand wasn't actually, it's not the first market we're launching Profhilo. We are pretty much experienced, and specifically in Asian markets, Asian skin. The interaction of Profhilo with Asian skin is super, super unique. We had great success coming in Hong Kong, taking major market share, not only in Hong Kong, also in India. Coming to Thailand after a couple of years of experience helped us to really launch that in a very, very professional fashion. Therefore, the results. I would like to give Chinese the ability to address the other parts of your question regarding the study and also Daxify.
Okay. Thank you, Lior. For the Profhilo in China, currently, we're advancing the phase three clinical trial for the facial indication. We're aiming to reach the clinical endpoint as soon as possible. Our injectable team is getting ready for the commercialization of Daxxify. That will be the first product of our injectable products launched in China, and the next one will be Profhilo. In general, that's our plan for the following two years. Regarding the lawsuit you mentioned between Revance and Allergan, since we are not in a position to comment, just based on the public information, we can see that the lawsuit is not a final decision yet. We are also following and monitoring the progress. On the other hand, there's no influence to the commercialization of Daxxify in China. We are fully committed to the commercial launch in China for Daxxify. Yeah. Thank you.
Very clear. Thank you very much.
Okay. Thank you. Our next question is from Ms. Du from Tianfeng Securities. Please go ahead.
Oh, okay. Good evening. Thanks for giving the chance to ask questions. I'm Du Chunju from Tianfeng Securities, and I have two questions. The first one, as we know, the geopolitical tensions in the Middle East, it will affect investors' decisions, which can also be seen in the stock price. Do you have any plans for new factories in other regions, and what is the progress? The second question is about our new product, Daxxify. What's the expected sale of Daxxify in 2025 and future, and what is the growth rate that we can expect? That's my two questions.
Okay. Thank you very much. I will address the first question regarding the geopolitical tensions and the impact in our business. It is very important to mention, even though the stressful geopolitical tension that we have faced during Q2, the manufacturing site was continuing to work all the time. I think most of the impact we had faced came really up in the last week and a half, two weeks of June, the end of the quarter. That is where the limitation of flights were out there. That was one of the reasons we saw an increase of the backlog at the end of June, which was fulfilled immediately during July and later on in August as well. In general, the company continued to work all the time.
However, in addition, for different reasons, more actually from a regulation aspect and being able to launch products in major markets like mainland China, we are looking into several projects to have localization so that we'll be able to have a fast track in mainland China. The fact that we are part of the Fosun family is a very, very important element, especially the Fosun Pharma part. This is from that angle. This is about fulfillment. Coming to the second question, if I may, I would like Ms. Qianli Fang to address.
Regarding the commercial launch of Daxxify, we are really excited that we are getting to the final stage of preparation for the commercial launch, and we expect to launch in H2 2025. Regarding, you know, in general, the launch and the plan, I think we're expecting for this kind of superstar products in China, in general, for the three to five years, we can aim to achieve, let's say, ¥1 billion to ¥2 billion accumulated for these products only. Also, the growth rate in the first, let's say, three to five years will be high, especially the first two years. We are aiming to very high growth rates. Later on, the CAGR may be going down a little bit.
However, I think this product has a very long life cycle, so we will try to maintain a relatively high ASP in the market and also do a lot of investment in the branding and also the education to the doctors and the end-user market. All the preparation work is on schedule, and we are waiting for the official launch for the products in China. Yeah.
Thank you for your detailed answer. I don't have any other questions. Thank you.
Okay, thank you.
Okay. Thank you. Our next question is from Ms. Li from Guangfa Securities. Our next question is from Ms. Ma from Sealand Securities. Ms. Ma, please go ahead.
Thank you for taking my questions. I got two questions. The first one is, as Sisram expanded their injectable offerings, there are many HA products such as Profhilo, Revance, Helula, and so on. What's the difference among those HA products? The second question is, are there any other plans for business development? Will we have any financing plan for this BD? Thank you.
Thank you for that question. It's a big one. I will try to be very clear and, if needed, to explain further. Please, please don't be shy. First of all, regarding the injectable segment, as you know, we are the only medical company that has that offering of energy-based devices together with the injectables, which I will address in a second, in the relevant markets, together with skincare that is supported with AI, together with a home device that physicians' clinics could offer to their patients. Altogether, we're building a very, very unique ecosystem that has great clinical value, but also business value. Clinic value because some indications would need different types of technologies in order to really show a difference to the patient.
In Asia, it's very clear and easy to speak about neck treatments or panda eyes where you know you might use some skincare or you want to use an energy-based device or from a topography point of view of the skin, an injectable. We are actually the only company that is aiming to be able to offer this to the patient through the hands of our customers. When we speak about injectables, there are different areas. There are neotoxins, and the ones we have mainly in China, in mainland China, is the Daxxify, which is a unique peptide-driven, unique neotoxin. Then you have traditional volumetric fillers. For example, the product that we use from Prelenium, which is Revanese. There are the biostimulators such as Profhilo from IPSA, our partner for a couple of years.
We are also a home for incubation of startups such as Alura, which has a totally new technology, hybrid filler, which is a combination between a volumetric gentle filler together with the impact of biostimulator. Here you can see that we are utilizing our channel and the physicians that we are working with in order to bring unique technologies to the market. To answer your question regarding the difference between the different technologies. Regarding business development, we just launched in the United States Universe Skin together with a supportive TrueAI. Not an easy exercise regulation-wise, being able to be the first medical company that has AI to support physicians when they give recommendations to the patient, creating a real tailor-made solution for the patient. That's a very, very powerful part.
Together with Alma iQ, just a few months before that was introduced in order to support the whole consultation of the physician with the patient. Not only that, it also connects that consultation to our lasers so that the physician can show the patient what kind of a procedure technology he's going to use within the clinic. The whole consultation becomes very, very clear. This is how we use technologies in order to enhance the whole process. These kinds of collaborations are, in our eyes, a development which is with third parties to enrich the offering that we have within the clinic.
Okay. Thank you. Thank you for answering the question. Thank you.
Okay. Thank you. Next question is from Ms. Li from Guangfa Securities. Please go ahead. Thank you.
Thank you. This is Li from Guangfa Securities. Thank you for taking my questions. My first question is what is the guidance on revenue and net profit for 2025? My second question is we see that the Universe Skin by Alma launched in the U.S. What are the functions and the differentiations of Universe Skin by Alma? Thank you.
Thank you, Li. First, regarding the guidance, the one part we feel very comfortable to speak about when we're looking at the second half of this year, taking in consideration that the macroeconomics at this point hasn't changed, meaning what we spoke before earlier in the call about the interest rate in the States and consumer demand, or maybe the economy right now specifically in mainland China and other markets, tension in Europe. There are a lot of stories out there. However, we believe, and I will explain why, that we would expect a growth on top line and bottom line as compared to the first half. This is something we can clearly say. The reason for that would be from various reasons. First is, as you can note on the release, our in-orders, the new orders that came within the first half were high.
We have backlogs that we are planning to fulfill, like I mentioned earlier, within this quarter. That would be number one. Number two is the new product launches. Some of them were just launched in the States, for example, and in the international markets. The Alma Harmony, the Alma iQ, the diagnostic tool we spoke about, Universe Skin together with AI was just launched in the States during June, coming July. That's a new dimension. Of course, as Ms. Qianli Fang was speaking about down the road during the year, the Daxxify launch, that's another part which would give us another kick in the market. That is kind of the reasons why we believe the second half would be in a higher scale than the first one.
Thank you for your detailed response. I have no further questions. Thank you.
You're welcome, Li.
Okay. Thank you, Lior. Thank you, management. Let's see if there are any more questions. If not, I think we could conclude the meeting today. Thank you for joining us today. We appreciate everyone's participation. If you have any further questions, you can reach our company's investor relations team. You can also find the contact on the company's website. Looking forward to continuing dialogues. Thank you, Lior. Thank you, the management. That's for our call. Have a great day. Thank you, everyone.
Thank you. Thank you very much.