ZELTIQ Aesthetics First-Quarter Results: Strong Improvement

ZELTIQ Aesthetics, Inc.

Friday afternoon, April 29, Zeltiq reported first-quarter revenues of $30.9 million (up 55%), $2.4 million above the Street’s estimate of $27.9 million.

While both system and consumable sales were higher than our estimates, consumable sales drove the lion’s share of the beat. This is an encouraging signal—and one investors have been anxiously awaiting—as management’s investments in its business are clearly paying off.

System placements were 179 in the first quarter, 19 above our estimate, with 114 coming from the United States and 65 from outside the United States. Both the U.S. and OUS results outperformed our estimates, suggesting that the company is seeing strong and durable demand globally. System revenue grew 31% in the quarter, to $14.5 million.

In the United States, management suggested that it is seeing more accounts purchase a second system, a sign that clinicians are investing in growing their CoolSculpting practices, both through unmet patient demand and due to the recent launch of the CoolSmooth applicator.

The CoolSmooth applicator is a flat applicator, which expands the market into previously untreatable areas such as the outer thigh. However, the tissue is cooled less effectively, resulting in a longer treatment time of two hours, double that of a traditional treatment. Many clinicians are seeing this as an opportunity to treat patients in multiple areas with two systems.

Internationally, the company is increasing its efforts in its direct and indirect countries, which are driving the incremental demand. Zeltiq has not invested aggressively to date and its early success this year is encouraging.

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