Okay. All right. Good afternoon, everyone. Welcome to the Evolus session. It is our pleasure to have Dave Moatazedi, CEO. We actually have the whole team here. Dave Moatazedi, CEO, Rui Avelar, CMO, and Tatjana Mitchell, CFO. As you know, Evolus is an aesthetics-only company, coining performance beauty, I guess, is what you phrased. It is our pleasure to have you here after six, almost seven years after your first launch of Jeuveau. Maybe you can first give us the overview of the company, and we can launch into Q&A.
Sure. Thank you again for having us. It is great to be here. Just a little bit of background on Evolus. We have been a commercial stage company, as you pointed out, for the last seven years. Our flagship product, Jeuveau, has really led the way for us as we established our beachhead in the United States We are the fastest-growing toxin for a handful of years in the U.S., and we are the first company since the market leaders arrived to achieve a double-digit market share in the space. Over the last 18 months, we have diversified the company in multiple ways beyond a single product. One is we introduced a new line of hyaluronic acid fillers, brand new to the entire world. We introduced it first here in the U.S., called Evolysse.
Just the first two formulations in our first year on the market, a couple more coming over the next few years. We have also built out our international business, which is now representing a bigger portion of our overall revenue mix. We said we expect it to be 10% of revenue this year. In that international business, we have also expanded with our HA products. We call them the Estyme line of products that we introduced in Europe in the second quarter. We are just a couple quarters into that launch as well. A lot of really exciting growth opportunities for the company, which enable us to partner more closely with clinicians around our cash pay platform. We have seen really healthy growth as you look at the third quarter across all of those areas. We are excited about the future, I guess would be the last thing.
We have a pipeline that has three new products we plan to introduce over the next four years, and we think all of those present a meaningful opportunity to partner more closely with clinicians as our portfolio starts to capture the key areas that they are using these injectable products. That makes the overall portfolio value proposition more meaningful.
Great. So, maybe before we start anything, you can talk about the state of the aesthetics market, maybe characterize the aesthetics demand, particularly the demand that you're seeing in the toxins versus the fillers. We hear a lot of conflicting statements from different parties, so maybe you can give us your take on it.
Yeah. I think we're in a very healthy aesthetic market. Start with the consumer. You have consumer demand for health, wellness, beauty categories. You look across the sectors, it's been very strong this year. Going down to our target demographic, which is a consumer earning about $100,000 or more in household income, that consumer is very strong, and we don't see that slowing. You saw that evidenced by the toxin market growing, we believe, sort of in this upper single-digit range in the third quarter. Both market leaders reported positive growth in their toxin business. I think those are all very strong signs that the market continues to be really healthy. Then beyond that, the filler market was really the question last year.
It had a couple challenging years, driven by some negative consumer sentiment, and that was compounded by a bit of slowing in demand as well. What we're seeing is that market starting to turn around. I would say it's stabilized this year.
It's roughly flat, growing maybe slightly. Obviously, we have a launch product in that market.
We're approaching the mid-single-digit market share, so we're seeing really healthy growth. I think it's a very positive sign that the market's now turning in HAs, and we believe that sets up really nicely for the next several years.
Just on the filler growth, is it more a factor of consumer health, or is it a factor of changing trends? Now going into it a couple years as it's turning around, what do you think is coming out of that?
Yeah. There's likely a few things happening. Number one is the consumer is looking for a more natural look. What that means is when they're going in and they're getting hyaluronic acid products, which is still the number one use of fillers or hyaluronic acid gels, they're just getting less volume per treatment than what you were seeing post-COVID in the boom, where patients were coming in and getting multiple syringes. So, we believe that in actual patient volume, the market might be up closer to mid to high single digits.
It's in volume of units that you're seeing the market call roughly flattish. So, that's a really positive sign. The second thing we're seeing consistently as we're talking to clinics and we're doing research is that the GLP-1 patient is absolutely entering the clinic. They're referencing volume loss as one of the key areas that they're particularly concerned about. Obviously, HAs are the only solution that provide an immediate replacement of volume in the clinic. So, that positions HAs really well to benefit from that. Lastly, it's worth noting that Evolysse is still the only hyaluronic acid with a mention of GLP-1s in our label.
That's really important, not only because we can market that to the consumer, but when you think about our cash pay co-branded media strategy, where as you purchase more, you get our investment back into the clinic to advertise, we now have billboards and different media solutions around Evolysse that target that segment. We've heard very positive feedback on that. It's still early days, but we know this is a big tailwind for the category. To be able to invest early days as we build the Evolysse brand is meaningful for these accounts.
Yeah. One of the things obviously is a new product. It's clear that you're going to have above-market growth, but you've been able to maintain above-market growth for not only Evolysse, because you're launching, but because of with Jeuveau, which is six or seven years, I've lost track, it's six or seven years already in the market. How have you been able to maintain that above-market growth? It's pretty surprising for a company.
Yeah. Well, I'd start with Jeuveau's an incredible product.
It's the first product that conducted a phase III head-to-head trial against a market leader. To date, to my knowledge, no other phase III head-to-head trial's been done, that supported the fact that Jeuveau is a high-quality brand. Separately, last year, there was a stimulus for the brand as well, because independently, a clinician out of University of Pennsylvania published a head-to-head study of toxins that validated what we observed in our phase III trials, and that was published in JAMA. I can reference a number of clinicians that have come to me and said, "You know, I hesitated to trial Jeuveau, but once I read that article, I had to revisit this." So, you take the evidence of the phase III trial, now this JAMA article, and there's more coming over time that continue to support that this is a high-quality brand.
And if you just step back for a minute, I often hear questions around, oh, there's all sorts of new toxin entrants. You have to keep in mind, if you own an aesthetic practice, this is your gateway procedure. If you're going to try a new product, you need to be confident that the product is going to be effective and it's going to produce reproducible results. The reason why Jeuveau's in its seventh year and continuing to grow at such a healthy rate is because it's a high-quality product.
Now, we also believe that because of our cash pay strategy, where we make the injector the centerpiece in the equation, where we invest heavily in medical education, we'll train nearly 16,000 clinicians, we invest in the co-branded media, then we have our consumer rewards program, which is approaching nearly 2 million consumers, of which almost 70% have come back in for repeat treatment, which signals again that the consumer's happy with the product. All of these are foundational elements that keep the business really healthy and strong. We're excited about what Jeuveau can do going forward, because the product has continued to outperform what we expected going into it.
Hmm. On the flip side, for Evolus, obviously you're a new entrant in the market, and the filler market is pretty crowded. What has your strategy been there? Like, what has been the resonating message to sort of rise above the fillers?
Sure.
The other fillers.
Yeah. I will let Rui talk a little bit about the technology. I think that is the starting point.
Because we looked at over 100 hyaluronic acid fillers around the world before we made the decision to partner with Symatese, and I think that is the starting point to this conversation.
And you are like, "Oh, there could be 100 fillers in the market.
Just like with Jeuveau five years from now, you will look back and say, "Why is Evolus so successful?
Yeah.
I believe it all starts here with the product, and Rui should.
Yeah. I think it really anchors to the concept of going back to natural. As Dave has highlighted in the past, we made an active kind of statement that this filler is a hyaluronic acid, which is important to make that distinction as opposed to just using a one-term filler. If you think about why hyaluronic acid gels do so well is because they're full hyaluronic acid. Hyaluronic acid is this amazing molecule that was designed by mother nature. It's a natural compound. In a word, what resonates well with HCPs and to the patients that hear about it is, the manufacturing technology used for this does a really good job preserving that natural HA structure. That's kind of the opening line, and it works really well with this theme of natural.
When you reduce it to what happens clinically, the feedback we were getting when we were doing diligence was, it's a really efficient material. In other words, you get a lot of correction for a little bit of gel. It's a very dynamic gel, which is what you want. As you move different parts of your face, you don't want something to look out of place. It wants to be dynamic. Those are all virtues that have really come out when they've been used clinically. The nuance for the injector, so our customer, whenever you get an HA injectable, they ask you, "How do I use this?" What they mean by that is, sometimes when you inject, these gels will continue to absorb water over time. So, you have to compensate for that by under-correcting so that the gels will swell over time.
Some gels have a lot of what's called free hyaluronic acid, so when you inject, over the course of the next few weeks, a lot of it'll go away. So, you have to under-correct. Basically, our gel, the feedback we got back was, "We really like the precision of this gel, in that you correct to your optimal correction. You don't have to compensate at all, over-compensate or under-compensate." That's another virtue that's really come out when we've put this into the hands of injectors. So, we've been really happy with that performance and the consistent feedback we've gotten.
Yeah. Part of your strong filler growth this quarter is also because you are starting from ground zero, injecting, not over-injecting, not over-filling and having to correct from that. Just starting from scratch, and you are following the new trends.
That is right.
Okay. After a solid Q3, how are you coming out of Q3, and what gives you confidence into Q4 that you are going to close the year off very strongly and maybe set up for 2027? I know you are not giving your guidance, but like, how is it set up for-
Yeah. As you mentioned, we had a strong Q3, and in fact, year to date through Q3, we grew 14% top line.
We actually reduced our operating expenses by a bit. It has been a really good year for us, and we look to continue this momentum into Q4. We have reaffirmed our guidance, so on revenue, it is the $330 million-$337 million, and that is 11%-13% revenue growth. We also reaffirmed our gross margin guidance, our adjusted EBITDA guidance, which is low to mid-single digit for adjusted EBITDA as a percent of revenue. Really what we are looking at is this momentum coming from the first three quarters and into Q4. As you know, Q4 is the biggest quarter seasonally. In fact, today is a big day. We are sitting here on 11/11, and Evolus has claimed 11/11 as Jeuveau 11's Day for a number of years now.
Did you bring any samples by any chance?
You are so busy today, but if you were not, there are hundreds of practices across the country doing 11/11 events today, Jeuveau events, and there are thousands of patients getting treated, and we have supported that through marketing and event kits. It is certainly driving pull-through. It illustrates that importance of Q4, and we have invested this Q4 as we have every quarter-
Great.
-to drive that revenue.
Great. I think one of the other, I guess, metrics we're looking at is profitability. So you've now had four quarters of profitability, and just trying to understand how much of that is the operating leverage versus just growth and cost controls. How is that all materializing for you, and do you see this as being sustainable-
Yeah.
-at this stage?
That's a good question. If you take a step back, if you look at what we have built over a number of years now is this commercial platform, right? It includes not only the sales and the marketing teams, but also the medical education, which Rui runs. We have a very robust technology platform that is used by our customers and consumers. We have the loyalty program for customers as well as a consumer rewards program. All of this is in place, and we are now selling a portfolio. As we add additional products, we're able to leverage this platform. As we launch Sculpt, for example, of course, we will invest in that launch, but we don't need to rebuild commercial capabilities or build new ones.
You can already see with Evolus in 2026, you mentioned, right, we had the four quarters of adjusted EBITDA profitability. It's a proof point. It's a significant proof point that we're able to add to the bag for the reps, that we're able to leverage all these commercial capabilities, both in the U.S. and internationally, to drive revenue, but also drive substantial operating leverage.
Yeah. Maybe you can share some metrics with us regarding how much the Evolus launch has helped your Jeuveau penetration. I know that one of the interesting dynamics is that some patients, sorry, some injectors are capped in the amount of Jeuveau they can purchase because of other loyalty programs that they have. But how has that changed the percent penetration in each of the specific practice? Because now you have your own loyalty program with Evolus and Jeuveau contributing.
Yeah. Dave, do you want to take a shot?
Sure.
Or bundling program, rather.
Yep.
I would say as a starting point, the Jeuveau being well-established enabled Evolysse to gain immediate trial. You could see that in just five quarters since launch, over 3,500 facilities have now purchased Evolysse, and our reorder rates are tracking closer to now Jeuveau levels with Evolysse, which shows that not only are we getting it in the door, but we're seeing really healthy reorder patterns. All of that despite the fact that we only have our first two formulations, and we're competing in a market against three established families of fillers that have their full line. We think there's an incredible opportunity in front of us because of the comments Rui made around the differentiation of the gels.
As Evolysse Sculpt enters, which we believe will be the flagship product next year, and the lip product the following year, this rounds out our portfolio and gives us deeper engagement with these clinics on the HA side, where we consistently hear, "Give us your Sculpt product, get us the mid-face product, and we can move our filler business over to you entirely.
Where it's hard, we can't do that today because you don't have that mid-face option for us. That's such an important part of this market. For some manufacturers, the mid-face gel might represent as much as half of the value of their HA revenue, just to give you some level of context for how meaningful Sculpt is. We're excited about what we're doing today. We're excited about the feedback we're getting, and we're equally as excited about what the new product launches will do for the overall portfolio.
Now, getting back to what does that mean for Jeuveau, in the front half of the year, we introduced a portfolio rebate for our accounts, and those accounts that participated in that program, they were the fastest-growing part of our business, which is an early signal that customers want to partner with us more closely when we have the full line, and that is where you're going to see robust growth going forward. That evolution of our portfolio and the way we partner with them is going to be something to watch really closely. For competitive reasons, we don't get in all the details of how we navigate through the portfolio, but it's well-known that that is how the established players protect market share, through those bundles.
We see it as an opportunity for us to become an entrant that can become a more meaningful partner to these clinics.
How much more do you have to penetrate in your present accounts that you're working with? I mean, I think you're in, what was the last number? It was 19,000 accounts. How much more Jeuveau penetration can you get from those versus needing to add more accounts?
Yeah. That goes back to your growth question around Jeuveau. We see incredible potential to go deeper within existing accounts, where let's just say on average we track at roughly in the 20s market share with Jeuveau. When you talk to clinics who have that sort of usage of Jeuveau, that would generally make us a number two option in the clinic, that they would love to make Jeuveau a bigger part. In order to do that, they would have to be able to move more of their HA business over to us to unlock that Jeuveau share. Otherwise, it's punitive to those clinics to increase their Jeuveau share because their price on their other products would go up with the competitive set. We see a lot of ways to navigate through it. Adding new accounts is a long game for us.
You've seen over the last seven years, we consistently add 500 or more accounts per quarter, and that's why we've been able to build our account base up to 19,000. We have a very systematic approach to this, and there's a protocol for when we bring on new accounts, how we want to engage them with the company so they can learn about our cash-pay advantage. It's music to my ears when I hear from investors that they'll talk to clinics and they'll say, "What makes Evolus different?" What you'll generally hear back is, "They have great products, and they just do business differently because they're a cash-pay business." That is what we've been building, and that wasn't well understood the first couple of years. That is the moat that differentiates this company, and we're continuing to build now products around that.
I think probably what's underappreciated is our entire pipeline are injectable products that go into the same hands that are using Jeuveau that will be using these future brands. The entire value proposition is built around that injector as the core focus of ours, and we think that drives more loyalty across our portfolio as we execute on it.
Great. Can you talk about how your new bundling program works with the Evolus co-branding program that you have? First of all, maybe you can share what the Evolus program is, because that is also a unique proposition, but how does now the bundling program work in tandem with that?
Sure. If we think about the bundling, we are still very early if you compare to our competitors who are in a scale of one to 10, at a nine or a 10. We are still very early in that bundling, where we are really offering a growth rebate, and we ran it as a six-month program in the first half of the year, and we are repeating that now in the second half, and also piloting something for kind of the next level of accounts. It really is complementary to the Evolus program, where based on the level of purchasing, our accounts are earning benefits, including the co-brand media.
Okay. Just to describe the co-branding, is it still as utilized as it was prior to starting the bundling program? Are various injectors aiming to get onto the co-branding program as much as they had been a year ago?
Yeah, and it continues to evolve, as you can imagine. For example, when we introduced Evolysse, it does have GLP-1 on the label.
We were able to run CTV campaigns that are local with the practices, including Evolysse and that GLP-1 component. There is always evolution in it, but the practices do look to earn that benefit.
The one thing I would say for those of you who live in and around this area, if you took the subway, you probably would have seen some of our Evolus ads in partnership with some of the clinics we work with. If you drove in from outside the city, you probably would have seen some of our billboards that mentioned GLP-1s on your way in. If you go onto social media right now, there is, as Tatjana pointed out, hundreds of practices that are directly advertising our 11th day, because it is the single biggest event of the year. The noise is amplified all around, but it is always specific to a clinic partnering with our brand, going after a consumer, and it is only growing.
Got it. Maybe you can also talk about how your consumer, your Evolus Rewards program, which is the consumer program, how is that different from what others are offering right now?
Yeah, so the Evolus Rewards program was the first SMS-based program.
Many of you belong to airline programs, and you know you go online, you have to fill out a long sheet of information in order to enroll. We wanted to make it frictionless, so it is all text-based. It takes seconds to enroll in our rewards program. What is unique about it is, once you get treated and you earn $40 off every treatment, whether you are getting Jeuveau or Evolysse, you get $40 off each of those brands. Once you have hit a window between treatments, for Jeuveau it is 90 days, we will send them a reminder to go back into that clinic. It is a co-branded text with our brand and the clinic that they went to go back in and earn the $40 rewards. It is unique in that it is simple to execute because it is SMS-based.
The credit at the account level happens all through our digital platform, so it is frictionless. Importantly, we are the only ones that are advertising that clinic back to that consumer, which is really important to these small business owners, that they know that it is not just a Jeuveau benefit, it is a Jeuveau benefit in that clinic that they want that consumer going back to it. We believe that is why you are seeing nearly 70% reorder rates, because clinics like our program. It aligns with their goals.
Mm-hmm. I want to go to Sculpt for a minute, and the Evolysse line. I know that Form and Smooth have been the two products that you have available right now, and I think in the past you have said it probably covers 80%-90% of procedures, but Sculpt is really probably going to drive more of it. Can you sort of explain the disconnect there? How 50% of revenues comes from a mid-face injector. Help us understand the dynamic there a little bit, and how important Sculpt is to the story.
Rui.
Rui.
Okay.
That is you.
Oh, 50% market share, okay. Sculpt does something that the other products don't do in our portfolio. It has a much more of a projection. This HA is, to use a layman's term, it's a harder material, and it's a very elastic material, so you can create this projection. It's just an engineering that isn't in the other products. When we talk to folks, Form is kind of the product in the middle, which is why we always position it as the most versatile. It kind of sits right in the middle of that spectrum of more elastic, harder, softer, more liquid-like. Form's right in the middle. You can flex it up or down. We believe once Sculpt comes in, at least the word that we've gotten from a lot of folks is, they're looking for something with a higher projection.
I think what you're going to see is Form will take on other duties. We don't see any cannibalization in that way. We just see it being used and continue to grow in different ways. I'll give you an example. We talked about GLP-1s. One of the things that we find is when you're looking for someone who's trying to address the mid-face, create a kind of a jawline or create a higher arch, that Sculpt product fits really well. Obviously, for GLP-1, people will think intuitively that that's your go-to. That's kind of a starvation state, and one of the things that we get pretty consistently is a number of those patients have really poor skin quality, or their skin just is of a nature of a tone that Sculpt would actually be too robust.
Now what we're actually finding is Form actually for some patients is just absolutely right for some of those patients. So it's just kind of a market that will continue to expand in terms of utility and usage.
Okay. You just talked about skin quality, so that's a good segue to the new product that you've brought in that's still in development, but what can you tell us about Profhilo?
Profhilo.
Am I saying that correctly?
I'm not sure.
Profhilo.
Depends on what part of the world you're in, right?
Depends on what part of the world you're in, you're right.
If we're Italian, it's definitely the way you said it.
Exactly. Just to use the same language, the HAs that we have right now, the Evolysse Estyme line, they're cross-linked, and they're engineered to do structural things. Profhilo is not cross-linked with a traditional cross-linker. The chemistry there is very different. It's really unique. They intertwine high molecular weight HA with low molecular weight, and they use these very kind of weaker hydrogen bonds. The reason that's important is you're not trying to create structure. What you're trying to do is leverage HA's ability to absorb water. The best way to describe the distinction between Profhilo and the Evolysse line is, Evolysse is for volume, erase wrinkles, create mid-face. Profhilo is meant to hydrate your skin from within. Think about that basil plant that you may have at home. You forget to water it. When you water it comes back to life. That's what Profhilo does.
It's put into the dermis, and its engineering is to bring water and kind of rejuvenate the tissue. Then there's other benefits. It'll stimulate collagen, elastin, a bunch of different things. But it fits really nicely within our portfolio and is complementary, because we didn't have a product that did that. The last comment I'll make is, if you go to Europe, you'll find that this is the market leader when you look at skin quality. We just came back from ASDS, and it's really interesting to see how many derms have been very excited about bringing this. The other comment was how many derms shared with us that Profhilo is one of the products that patients come in asking for that they actually hadn't heard of. So it's gotten a lot of interest.
Interesting. I guess one other area, and you're not in it, but how does the movement towards biostimulators affect your opportunity, and do you need to be in the biostimulator market now, or are you okay with the skin quality and the Evolysse line for the time being?
From a pipeline, we always said you need a botulinum toxin first as an anchor, and then you need a really good HA line, which is what we got. From a BD perspective, we spoke of interest in skin quality. We've just done that one. Hair, we just announced that one. We've expressed interest in biostimulators. Biostimulators are a really important part. They do something. By their very nature, they stimulate collagen. We've seen the market swing from HAs, got to move away from them, to biostimulators. What you're going to see, our prediction is, it'll swing back to the middle. HAs correct. You get tissue and volume correction that biostimulators just can't do. It's an immediate gratification. Having said that, biostimulators have a role because sometimes you want to stimulate the collagen. There's absolutely a role there.
We remain really interested in that space, and like we've done our approach with other BD opportunities, we're looking for the right asset, and that chemistry exists. The chemistry that's out there right now is 25 years old, and it's well-established. It does well. We think there's an opportunity to potentially improve on that, so we continue to look for the right biostimulator at the right deal structure.
Got it. While we're talking about the pipeline, you might as well talk about the hair rejuvenation.
Sure. From our lens, if we were going to enter into hair, we had some very strict criteria. One was we wanted to work with compounds that are known to grow hair, so take the drug risk out of the program. Two, we really wanted it to be locally administered. In other words, it had to be a procedure, needs to be locally injected by our providers. We didn't really want to compete with the telemedicine or prescription. Three, we really were looking for a timing interval that made sense. Our patients like to come in every three to four months, so we were trying to look for a platform that would lend itself to bringing the patients back every three to four months, and that's effectively what we've done.
We now have a deal where we are working with known small molecules, and we are creating formulations right now, and we are trying to create a formulation that elutes over the course of about three to four months. In other words, the patient comes in, and our customer, the injector, does a procedure every three or four months, complements their cadence of seeing patients. Then the nice thing we like about it is we think we have mitigated a lot of the risk because we would not trip into a full development program until we actually see the human data, which we anticipate is around end of 2028.
Okay. Okay. Well, you just brought up 2028, so why don't you tell us about the guidance and whether it is on track for 2028? Have any of the assumptions for underlying growth given you reason to rethink the 2028 guidance? I know that it was brought down at the beginning of the year based on growth rates. Has that sort of shifted a little bit as the market is sort of recovering?
Yeah. It is interesting. As we set out that guidance in the beginning of this year, we said we are going to see the toxin market have a healthy growth, mid-single digits, perhaps high single digits, and that is exactly what we are seeing. Then the filler returned to flat, maybe slight growth. Again, that is exactly what we are seeing. So, in terms of the market, it is very supportive. Then the big components of that 2028 guide are, of course, the launch of Evolysse Sculpt, which we expect in 2027. That, as we talked about, addresses 40%-50% of the market, and then rounding it out with Evolysse Lips in 2028. In international as well, we just got the rights to Estyme in Canada, Australia, and New Zealand. We expect that approval to happen by 2028.
So effectively in 2028, you see us selling the full portfolio, toxin, fillers, in all of our geographies. So that is an important year for us. Then 2027 is a transition to that.
Okay. What should we be watching out for to see that everything is on track?
Yeah. It's the same performance metrics that we've been outlining. Clearly, the base business, we expect it to continue to grow at a healthy rate. The international business will continue to be a key growth driver for us. Not just base Evolus, but the introduction of Sculpt is a meaningful boost in the arm for our growth rate. But just recognize we're launching it in the first quarter. It's going to take time to ramp it up, to build that confidence. But interestingly, we mentioned Europe, where we launched all four HAs at the same time. Within a quarter, Sculpt became the leader in terms of the product that clinicians started using. So it stands on its own. It's very clear that that's our flagship product. So we're really excited to introduce that. Of course, we'll be updating on metrics around that once we get approval.
So maybe Sculpt launches a little faster than you're saying. Okay. No comment. All right. I think that's all we have time for, so thank you very much for your time. I guess we'll be watching for the approval.
All right. Thank you very much.