Establishment Labs Holdings Inc. (NASDAQ:ESTA) Q4 2022 Earnings Call Transcript

Raj Denhoy: Yes. It’s an interesting — or a good question, right? Because there’s a lot of layers to how you get to $500 million for us over time. And the number of permutations that can get you there is infinite, right? When we look at a number like that though, and all the different supports we have underneath it, Juan Jose mentioned, it’s not only well supported, it could even be proven conservative over time. But in terms of breaking out individual contributions to that number, I think it’s a little bit early for us to do that. As we get further into it, we’ll certainly provide more visibility into what contributes to it and then ultimately also kind of how we look at the margin profile over time as we move through that. So, we’ll be providing more over time on that number.

Operator: Thank you. And our next question comes from Neil Chatterji with B. Riley Securities. Please state your question.

Neil Chatterji: Hi, guys. Thanks for taking the questions. Maybe since we haven’t touched on it yet in Q&A, just curious if you could provide maybe some additional color just on the kind of traction you’re seeing with Flora for the breast recon market and maybe the pipeline that you’re planning for that market?

Juan Jose Chacon-Quiros: Yes, of course. I’m glad you asked about breast reconstruction, because it is, to us, one of the most important things. This is such an underpenetrated market globally, and Flora is the first of a series of technologies that we will bring to market to make sure that we democratize access to breast recon. What we mean by that is that the current market may be considered of appropriate size in the United States, but when you look at outside of the United States, if you were to take those same access numbers and move that to the rest of the world, that market would be substantially higher. Now when we look at Flora, we continue to make gains quarter-to-quarter. However, this is a market that is based on tenders.

It takes time. There are regions around the world that do this on an annual and even biannual basis. So, we have to wait for them as they happen. However, we do plan to make sure over the next few years that we become the market leaders in breast reconstruction as we see it today. But more than that, that we are able to create the kind of market that we see in the United States for breast reconstruction.

Neil Chatterji: Great. Thanks for that. And maybe just one quick follow-up. Maybe you’ve already kind of talked about the launch partner for Mia, but just kind of curious how might that launch partner in Japan kind of serve as a model for future clinics that you’re either prospecting or targeting?

Juan Jose Chacon-Quiros: I think, Seishin is a great model for what you will see in the future, because you’re talking about the chain of 10 clinics with marketing assets, with a professional staff on the business side that can scale this to the right level. So, we will be looking for partners like Seishin around the world. And again, it’s not a buy-sell relationship. This is a true partnership.

Neil Chatterji: Great. Thanks. I’ll just hop back in the queue.

Operator: Thank you. Our next question comes from Marie Thibault with BTIG. Please state your question.

Sam Eiber: Hey, good afternoon, Juan Jose and Raj. This is Sam Eiber on for Marie. Thanks for taking the questions here. Maybe I can start on OpEx cadence for this year, and I appreciate the commentary on the outlook for this year. But maybe in terms of cadence, would we expect maybe some leverage more towards the back half of the year? It sounds like maybe you’re front-loading some investments here. And then, as you get the contribution on the top-line, that’s when we might start to see leverage towards the back half and then more so in ’24?