Cutera, Inc. (NASDAQ:CUTR) Q3 2023 Earnings Call Transcript

Taylor Harris: Sure. So on the capital price, the list price, Jon, is going to be over $100,000. We’re not ready to predict what the ASP is going to be. I will say that it’s going to be lower in this initial phase where we’re going out to existing customers that will be when we go new. And the reason for that is pretty simple. You had customers already buy into their device through lease payments as well as the higher cost treatment sessions. So that’s the current thought on the ASP on capital. And then it’s a good question on utilization and would there be different incentives. But really, what we know and our team knows that for anyone to be — any customer to be viable long term, whichever model they’re on, they’re going to need support, and they’re going to need to see utilization of the device. So I think that there — for the sake of growth, there is going to be the incentive to — for us to help customers succeed no matter what business model they’re under.

Jonathan Block: Good enough. And the second part we’re trying to be one of my typical squeeze 2 in the world. But to the first one, I’m pretty sure I heard you on 2024 revenues down versus the revised ’23. Maybe just a clarity question. Is that inclusive of skincare or sort of taking skincare out of the equation? I guess I was asking that an all way. And then Taylor, you did a great job laying out the challenges, and I thought you were very transparent about that on what needs to get done. But I mean, it was a lot. And at the same time, you’re trying to take down the employee count by 25%. And seemingly, we have a lot of the sales force intact. So your conviction that you can do those 2 things simultaneously, get that longtime of critical things done within the organization, and do it with just a much smaller employee [indiscernible]

Taylor Harris: Absolutely. I’ll start on the 2024 revenue. So the revenue does include a stub period of skincare. So just as you think about 2024 relative to ’23, skin care will be lower than in ’23 and it goes away because it’s a partial year, and it goes away after mid-June. With the core business, we’re assuming that the business trends from the second half of this year are reflective of the operating environment for next year, which just means you’re going to have a difficult comp year-over-year in the first half of next year. So that business would also be down year-over-year. But then we’ve got AviClear, which we’re excited about with our new offering, driving growth. So that’s just directionally the way we thought about the different parts of the business.

And then John, I got — I’ll tell you on your question regarding the challenges and what at the same time, having a reduced workforce, I feel really good about where the organization is. The — and this doesn’t show up right now in the numbers that we’re reporting. But if you could be here, I think you could feel the energy. So the operations team, for example, are — they’re totally committed to getting Cutera back to great operational performance. And that includes the people who have been here for a while as well as some of the new people. So this is a mountain they’re ready to go climb. And the same would be true in all other parts of the company. And a lot of what we did in the restructuring was to address some complexities that didn’t need to be in our business that created confusion or lack of accountability.

So we’ve consolidated functions, creating a single point of accountability. And I think that there really is a renewed energy because there’s clarity of priority and clarity of ownership, and everybody knows that what they do can and will have an impact on the success of the company and we’re also really rallying around the success of the customer. So — yes, it is something that we are keeping our eye on absolutely, but I feel really good about right now.

Operator: The next question is from Margaret Kaczor with William Blair.