Third Quarter 2026
Filed Oct 29, 2026Revenue Increases 33.9% to $72.0 Million, Driven by 119% U.S. Growth; Achieves First Quarter of Positive Operating and Free Cash Flow and Raises Full-Year Revenue Guidance
Third-quarter revenue grew 33.9%, U.S. revenue increased 119.0%, adjusted operating expenses improved to 68.8% of revenue from 77.6%, and the company generated its first positive quarter of operating and free cash flow while raising full-year revenue guidance.
Key metrics
shortened, hover for the filing’s print| Metric | Value | q/q | y/y |
|---|---|---|---|
| Revenue, three months ended September 30 (in thousands)GAAP | $71.99M | – | 33.9% |
| Revenue, nine months ended September 30 (in thousands)GAAP | $199.4M | – | – |
| U.S. revenue, three months ended September 30GAAP | $26M | – | 119.0% |
| OUS revenue, three months ended September 30GAAP | $46M | – | 9.7% |
| Minimally invasive revenue, three months ended September 30GAAP | approximately $9 million | – | 124.0% year over year |
| Cost of revenue, three months ended September 30 (in thousands)GAAP | 22.28M | – | – |
| Cost of revenue, nine months ended September 30 (in thousands)GAAP | 59.65M | – | – |
| Gross profit, three months ended September 30 (in thousands)GAAP | $49.71M | – | – |
| GAAP gross margin, three months ended September 30GAAP | 69.1% | – | – |
| Gross profit, nine months ended September 30 (in thousands)GAAP | $139.8M | – | – |
| GAAP gross margin, nine months ended September 30GAAP | 70.1% | – | – |
| Adjusted gross profit, three months ended September 30 (in thousands)non-GAAP | $50.97M | – | – |
| Adjusted gross margin, three months ended September 30non-GAAP | 70.8% | – | up 70 basis points year over year |
| Adjusted gross profit, nine months ended September 30 (in thousands)non-GAAP | $141.0M | – | – |
| Adjusted gross margin, nine months ended September 30non-GAAP | 70.7% | – | – |
| Sales, general and administrative expense, three months ended September 30 (in thousands)GAAP | 48.02M | – | – |
| Research and development expense, three months ended September 30 (in thousands)GAAP | 4.31M | – | – |
| Total operating expenses, three months ended September 30 (in thousands)GAAP | $52.34M | – | – |
| Total operating expenses as a percentage of revenue, three months ended September 30GAAP | 72.7% | – | – |
| Adjusted total operating expenses, three months ended September 30 (in thousands)non-GAAP | $49.55M | – | – |
| Adjusted total operating expenses as a percentage of revenue, three months ended September 30non-GAAP | 68.8% | – | an improvement of 880 basis points |
| Total operating expenses, nine months ended September 30 (in thousands)GAAP | $153.2M | – | – |
| Adjusted total operating expenses, nine months ended September 30 (in thousands)non-GAAP | $145.3M | – | – |
| Loss from operations, three months ended September 30 (in thousands)GAAP | −2.62M | – | – |
| Loss from operations, nine months ended September 30 (in thousands)GAAP | −13.42M | – | – |
| Interest expense, three months ended September 30 (in thousands)GAAP | 6.81M | – | – |
| Net loss, three months ended September 30 (in thousands)GAAP | −$10.71M | – | – |
| Basic and diluted net loss per share, three months ended September 30GAAP | $ (0.35) | – | – |
| Net loss, nine months ended September 30 (in thousands)GAAP | −$35.84M | – | – |
| Basic and diluted net loss per share, nine months ended September 30GAAP | $ (1.19) | – | – |
| Adjusted EBITDA, three months ended September 30 (in thousands)non-GAAP | $6.38M | – | – |
| Adjusted EBITDA margin, three months ended September 30non-GAAP | 8.9% of revenue | – | – |
| Adjusted EBITDA, nine months ended September 30 (in thousands)non-GAAP | $12.81M | – | – |
| Net cash used in operating activities, three months ended September 30 (in thousands)GAAP | $7.70M | – | – |
| Free cash flow, three months ended September 30 (in thousands)non-GAAP | $5.07M | – | – |
| Net cash used in operating activities, nine months ended September 30 (in thousands)GAAP | −$13.21M | – | – |
| Free cash flow, nine months ended September 30 (in thousands)non-GAAP | −$21.45M | – | – |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| U.S.Expanded the U.S. commercial footprint to more than 2,100 accounts, with more than 400 plastic surgeons trained on Preservé. | $26M | – | 119.0% |
| OUSStronger-than-anticipated OUS distributor sales contributed incremental revenue and gross profit dollars at lower margins. | $46M | – | 9.7% |
| Minimally invasive platformThe company announced larger implant sizes for the minimally invasive platform, broadening treatment options and the potential patient population. | approximately $9 million | – | 124.0% year over year |
Amounts quoted below without a unit are in thousands, as in the filing’s tables. Per-share figures are as printed.
Full-Year 2026 outlook
- Revenuemore than $274 million
- Gross marginapproximately 70.7%
- Operating expenses$195 million to $200 million
- NotePositive Adjusted EBITDA for the full year.
What drove it
- Revenue growth was driven by 119.0% growth in U.S. revenue.
- Higher-margin U.S. business and the minimally invasive platform supported adjusted gross margin.
- The company received FDA approval for additional smaller Motiva implant sizes.
- FDA review of Motiva for breast reconstruction was progressing in line with expectations.
- A new supply agreement with NuSil was announced to support long-term manufacturing capacity and future growth.
Concerns
- GAAP gross margin was 69.1%, compared with 70.1% in the prior-year period.
- The quarterly mix included stronger-than-anticipated OUS distributor sales, which the company said generated lower margins.
- GAAP net loss remained $ (10,709) (in thousands), and interest expense was 6,809 (in thousands) for the quarter.
- Note payable, net increased to 267,820 (in thousands) at September 30, 2026 from 247,522 (in thousands) at December 31, 2025.
- Nine-month net cash used in operating activities was $ (13,214) (in thousands) and nine-month free cash flow was $ (21,449) (in thousands).
What to watch
- Delivery of full-year revenue of more than $274 million.
- Adjusted gross margin performance against guidance of approximately 70.7% as OUS distributor mix affects margin.
- Adjusted operating expenses within the $195 million to $200 million full-year range.
- Sustained positive operating cash flow and free cash flow after the first positive quarter in the company’s history.
- Commercial adoption of Preservé and progress of Motiva for breast reconstruction through FDA review.
Balance sheet and cash flow
- Cash and cash equivalents were $ 75,812 (in thousands) at September 30, 2026, compared with $ 75,572 (in thousands) at December 31, 2025.
- Note payable, net was 267,820 (in thousands) at September 30, 2026, compared with 247,522 (in thousands) at December 31, 2025.
- Total assets were $ 358,876 (in thousands) at September 30, 2026, compared with $ 357,167 (in thousands) at December 31, 2025.
- Total liabilities were 343,282 (in thousands) at September 30, 2026, compared with 333,620 (in thousands) at December 31, 2025.
- Total shareholders’ equity was 15,594 (in thousands) at September 30, 2026, compared with 23,547 (in thousands) at December 31, 2025.
- Net cash used in investing activities was $ (2,626) (in thousands) for the three months ended September 30, 2026 and $ (8,235) (in thousands) for the nine months ended September 30, 2026.
- Net cash (used in) provided by financing activities was (99) (in thousands) for the three months ended September 30, 2026 and 22,500 (in thousands) for the nine months ended September 30, 2026.
Analysis
Establishment Labs reported third-quarter revenue of $72.0 million, up 33.9% from $53.8 million in the prior-year period. U.S. revenue increased 119.0% to $26.0 million, materially outpacing 9.7% OUS growth to $46.0 million. Minimally invasive revenue increased 124.0% year over year to approximately $9 million. The company linked U.S. commercial progress to an expansion to more than 2,100 accounts and more than 400 plastic surgeons trained on Preservé.
Mix produced both favorable and unfavorable margin effects. Growth in the higher-margin U.S. business and minimally invasive platform supported adjusted gross margin of 70.8%, up 70 basis points year over year. However, GAAP gross margin was 69.1%, down from 70.1%, and included $1.3 million of restructuring-related inventory charges. Stronger-than-anticipated OUS distributor sales added revenue and gross profit dollars but carried lower margins.
Operating leverage improved significantly. GAAP operating expenses were $52.3 million versus $41.7 million, while adjusted operating expenses were 68.8% of revenue compared with 77.6% in the prior-year period. The company narrowed its GAAP operating loss to $2.6 million and its net loss to $10.7 million. Adjusted EBITDA rose to $6.4 million, or 8.9% of revenue, from $1.2 million, or 2.2% of revenue.
Cash generation was the key milestone in the quarter. Net cash used in operating activities was reported as $7.7 million for the quarter, and free cash flow was $5.1 million, described as the first positive quarter in the company’s history. Cash and cash equivalents were $75.8 million at September 30, 2026, while note payable, net was 267,820 (in thousands). For the nine-month period, net cash used in operating activities remained $13.2 million and free cash flow remained negative at $21.4 million.
Management raised full-year 2026 revenue guidance to more than $274 million from previous guidance of $269 million to $271 million. It maintained adjusted operating-expense guidance of $195 million to $200 million and guided to approximately 70.7% adjusted gross margin, citing the higher-than-anticipated OUS distributor-sales mix. The company also expects positive adjusted EBITDA for the full year.
Management, verbatim
Third-quarter results reflect strong global revenue growth, increasing operating leverage and an important milestone in cash generation as we invest in innovation and commercial expansion.
Peter Caldini, Chief Executive Officer
We enter 2027 with a strong financial foundation and with significant opportunities and growth ahead of us, especially in minimally invasive and reconstruction. We expect fiscal 2027 to deliver growth of 25% and positive cash flow, setting the stage for many years to come.
Peter Caldini, Chief Executive Officer
Not in the filing
stated, not guessed- Previous-release outlook was not provided, so no comparison of actual results with prior guidance is included.
- Tax-rate guidance was not provided.
- GAAP operating-income guidance was not provided.
- No share-repurchase or dividend activity was reported.
- Prior-quarter comparisons were not reported for the presented metrics.
- Prior-year dollar figures for U.S. revenue, OUS revenue, and minimally invasive revenue were not reported.
AlphAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.