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| So if you look at what we did, Q4 from a procedure perspective was exactly what we thought and handpieces were up strong, especially in the U.S |
| Our sales performance in the fourth quarter enabled us to return to double-digit revenue growth on a full year basis in 2023 |
| I'm pleased that our team was able to accomplish each of these four objectives during the course of the year |
| However, we also saw strong contributions from sales of our OEM products, which increased 22% year-over-year to $2.5 million |
| Our recently launched Micro Handpiece represents another benefit to adopting Apyx One and for practices though, that are focused on those procedures |
| From a product standpoint, our advanced energy sales growth was driven by double-digit growth in sales of both generators and handpieces, which increased by more than 25% and 10%, respectively |
| Goodwin So we are pleased with the progress that we've made this past year in upgrading existing users |
| specifically, our Advanced Energy sales growth was fueled primarily by sales of our handpieces which increased by more than 35% year-over-year, reflecting an uptick in utilization-based demand |
| With respect to key assumptions of our Advanced Energy segment, while the environment remains challenging, we are pleased that customer utilization remains strong and we expect growth in sales of our handpieces driven by demand from both existing customers and new users globally will help offset the impact of slower generator sales in 2024 |
| We expect to see improving trends in the second half of this year |
| generator sales growth benefited from sales of our next-generation generator system, the Apyx One console to existing customers |
| Despite the continuation of this challenging market environment over the near term, we believe we are better positioned than we have ever been and the level of regulatory, clinical and customer support for our technology has never been higher |
| In summary, the 15% year-over-year growth that we saw in Global Advanced Energy revenue was driven by double-digit growth in sales of both generators and handpieces due to growth in global generator sales and U.S |
| Relative to our expectations, we were pleased with our handpiece sales performance in the fourth quarter |
| We saw the strong sequential improvements relative to the third quarter, which was consistent with the guidance-related assumptions that we articulated on our last earnings call |
| First, to secure additional clinical indications for use addressing the remaining limitations of the FDA safety communication and improving our ability to market our technology |
| We still believe that our handpiece business is strong, and that will continue to be strong throughout the year |
| Lastly, we enhanced our balance sheet condition and financial flexibility |
| With global generator sales increasing by more than 25% year-over-year, fueled by growth in the U.S |
| With the progress made on all of these fronts, we believe that we are well positioned to expand our presence in the global cosmetic surgery market and with $44 million of cash and equivalents at year-end, we believe we are sufficiently capitalized to fund our initiatives as we continue to target achieving sustainable and profitable growth in the future |
| And in addition to our revenue performance, our continued focus on controlling our expenses, positions us to deliver improvements in our annual net loss attributable to stockholders and adjusted EBITDA loss of 19% and 13%, respectively, along with significant reduction in cash used in operations this past year |
| Turning to our fourth quarter operational highlights, we made notable progress in several key areas during the quarter, introducing new products, raising awareness in the market, strengthening our balance sheet, and enhancing our team |
| and expanded the territory of some of our top performers to improve the overall productivity of our sales team |
| Moreover, we believe the longer-term outlook for our addressable market remains compelling |
| As market conditions improve, we look forward to capitalizing on the multibillion dollar addressable market opportunity as well as the favorable long-term tailwinds in our industry by helping surgeons and patients appreciate Renuvion's ability to achieve their desired outcomes |
| In addition to the Apyx One's enhanced features, the Renuvion Micro Handpiece represents another important benefit to adopting our next-generator -- next-generation generator system |
| As I mentioned earlier, the progress made by our team in 2023 enhanced our strategic and financial positioning with new clinical indications, new products, increased market awareness for Renuvion's safety and efficacy, and improved balance sheet and financial conditions |
| We were pleased to leverage the progress we've made as an organization over the course of 2023 to negotiate this new facility, which expanded our access to capital and at more favorable terms |
| We also saw double-digit growth in U.S |
| But based on the feedback we've heard from surgeons, we continue to believe that this represents a very long -- huge long-term tailwind |
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| As we shared in our preliminary earnings release in January, our Advanced Energy sales performance fell short of the guidance we provided on our third quarter earnings call, which had called for Advanced Energy revenue in the fourth quarter of at least $13.3 million |
| The capital equipment environment in the fourth quarter proved to be more challenging than we had anticipated with more prospective customers delaying investments given continued concerns related to broader macroeconomic uncertainty as well as the financing environment |
| As we shared on our last earnings call, our guidance has assumed that the capital equipment environment would remain similarly challenged in the fourth quarter |
| With respect to generator sales, as a reminder, during the third quarter we observed softness in the overall market for cosmetic surgery capital equipment with more prospective customers delaying capital equipment purchases citing broader macroeconomic uncertainty and high interest rates |
| And our expectations for Q1 also reflect continued headwinds in this capital purchasing environment that we have there |
| And the year-over-year margin largely reflects the headwinds related to our anticipated revenue mix |
| customers decreased slightly year-over-year as demand for capital equipment in the cosmetic surgery market continued to be impacted, which I will discuss in further detail shortly |
| For avoidance of doubt, our first quarter is challenged by the impact of this dynamic, along with the seasonal purchasing patterns that we have experienced in prior years |
| From a perspective of Q4, our gross margins in Q4 were down to 60.9% |
| We believe that the capital equipment purchasing environment continues to be challenging |
| This performance was largely offset by sales of our handpieces, which decreased more than 15% year-over-year |
| That said, our guidance still implies that our generator sales will be slower due to the challenging environment because, obviously, those doctors have to have a capital purchase also |
| The decrease in our gross margin was driven primarily by changes in the product mix within our Advanced Energy segment as well as lower average selling prices due to changes in our customer mix, higher material and inbound shipping costs to manufacture our inventory, and additional reserves on inventories as a result of lower-than-expected sales |
| For the 12 months ending December 31, 2024, we expect total revenue in the range of $49.7 million to $52.9 million, representing a decrease of approximately 5% to growth of approximately 1% |
| And OEM revenue of approximately $8.1 million to $8.3 million representing a decrease of 10% to 7% |
| Second, total operating expenses of approximately $52 million, down approximately 3% year-over-year |
| And in the interest of transparency, we said at the low end of our full year revenue guidance contemplated a roughly 40% decrease in Advanced Energy in Q1 versus Q4 of 2023 |
| Our total revenue guidance range assumes Advanced Energy revenue of $41.6 million to $44.6 million representing a decrease of approximately 4% to growth of approximately 3% |
| On the sales side, we implemented several planned departures within our team of direct sales reps in the U.S |
| They're just unsure of what the environment is going to be, and it's -- and they're unsure to make capital purchases in this time |
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