Vivos Therapeutics, Inc. (VVOS) Q3 2025 Earnings Call Transcript
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
Overview
The earnings call presents a mixed picture. While there is a significant revenue growth and expansion plans, concerns remain about cash flow and profitability due to ongoing net losses and high expenses. The Q&A section reveals optimism for future growth but lacks specific timelines for breakeven, which could worry investors. The slight decrease in gross margin and the substantial net loss further contribute to a neutral sentiment. Without market cap data, the impact on stock price is uncertain, but the lack of clear guidance tempers the positive elements.
Key Financial Performance
Revenue for Q3 2025 $6.8 million, a 76% increase year-over-year from $3.9 million in Q3 2024. The increase was driven by $2.7 million in service revenue and $200,000 in product revenue, primarily due to the acquisition of Sleep Center of Nevada (SCN) and new treatment center revenue.
Revenue for 9 months ended September 30, 2025 $13.6 million, a 20% increase year-over-year from $11.3 million in the same period in 2024. The increase was due to $2.8 million in sleep testing services and $1.6 million in new treatment center revenue, offset by a $2.6 million decrease in VIP enrollment revenue from the legacy business model.
Cost of Sales for Q3 2025 $2.8 million, an 87% increase year-over-year from $1.5 million in Q3 2024. The increase was due to higher costs associated with integrating SCN, including $0.5 million for appliance fees, $400,000 for SCN operations, $300,000 for treatment center support costs, and $100,000 for software and medical reporting services.
Gross Profit for Q3 2025 $3.9 million, an increase of $1.6 million year-over-year. This was due to a $2.9 million increase in revenue, offset by a $1.3 million increase in cost of sales.
Gross Margin for Q3 2025 58%, a slight decrease from 60% in Q3 2024, due to higher cost of sales as a percentage of revenue.
General and Administrative Expenses for 9 months ended September 30, 2025 $19.2 million, a 42% increase year-over-year from $13.5 million in the same period in 2024. The increase was driven by $2 million in SCN operations costs, $1.6 million in professional fees, $1.1 million in salaries and wages, $600,000 in infrastructure costs, and $200,000 in equipment repairs and maintenance.
Net Loss for Q3 2025 $5.4 million, reflecting higher costs associated with the business model pivot.
Net Loss for 9 months ended September 30, 2025 $14.3 million, reflecting increased costs from the SCN acquisition and the strategic pivot.
Cash and Cash Equivalents as of September 30, 2025 $3.1 million, with total liabilities of $23.1 million and stockholders' equity of $2.5 million.
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Operating Highlights
FDA Clearance: Vivos CARE oral medical devices are the only oral appliances in the world FDA-cleared to treat severe OSA in adults and moderate to severe OSA in children.
Clinical Effectiveness: Vivos' oral medical devices have been shown to resolve OSA symptoms completely in adults after 10 months of treatment, with no need for further intervention.
Market Expansion in Nevada: Acquisition of Sleep Center of Nevada (SCN) has led to the establishment of Sleep and Airway Medicine Centers (SAMC) in Las Vegas, driving significant revenue growth.
New Collaboration Model: Vivos has developed a refined affiliation model for sleep centers, with the first agreement executed with MISleep LLC in Michigan, expected to be operational by December 2025.
Revenue Growth: Revenue increased 76% year-over-year to $6.8 million in Q3 2025, driven by SCN acquisition and new treatment centers.
Cost Management: Higher costs were incurred due to SCN integration, including staff compensation, software, and medical reporting services.
Strategic Pivot: Shifted focus from reliance on dentists to direct affiliations or acquisitions of medical sleep practices, validated by SCN's success.
Future Initiatives: Plans for 2026 include expanding diagnostic and treatment services, launching a pediatric OSA program, and collaborating with specialty medical groups.
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Risk or Challenges
Revenue dependency on SCN acquisition: The company's revenue growth is heavily reliant on the acquisition of Sleep Center of Nevada (SCN). This dependency poses a risk if SCN's operations face challenges or fail to meet expectations.
Increased operational costs: The integration of SCN and the expansion of facilities and teams have led to significantly higher operational costs, which have impacted profitability and increased net losses.
Credentialing delays for new providers: The onboarding and credentialing process for new dental providers and nurse practitioners is lengthy, taking 2-6 months, which limits the company's ability to meet patient demand and generate revenue efficiently.
Insurance coverage challenges: Many patients do not have full insurance coverage for Vivos treatments, leading to out-of-pocket expenses that could deter potential customers and limit revenue growth.
High patient demand exceeding capacity: The current patient demand exceeds the company's operational capacity, leading to long wait times for appointments and potential loss of patient interest.
Dependence on third-party referrals: The company relies on referrals from third-party medical practices, such as cardiology groups, which could be disrupted if these relationships weaken or end.
Regulatory compliance risks: The company must ensure compliance with state and federal healthcare laws, especially as it expands its collaboration and acquisition models, which could pose legal and operational risks.
Cash flow and profitability concerns: The company continues to experience significant cash burn and net losses, raising concerns about its ability to achieve profitability in the near term.
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Guidance & Outlook
Revenue Growth: The company anticipates continued revenue growth driven by the acquisition of Sleep Center of Nevada (SCN) and the expansion of diagnostic and treatment services. Revenue growth is expected to outpace expenses in the coming quarters as new teams are deployed and operational efficiencies are realized.
Expansion Plans: Vivos plans to expand its Sleep and Airway Medicine Centers (SAMC) in Nevada and other markets. The company is also working on onboarding additional licensed and credentialed providers to meet patient demand, with full deployment expected in early 2026.
Market Penetration: The company aims to address a larger portion of the OSA patient market, including legacy SCN patients and new referrals from cardiology and other specialty practices. Vivos is also exploring collaboration models with sleep centers not interested in acquisition.
New Initiatives: Planned initiatives for 2026 include the rollout of a pediatric OSA program, expansion of diagnostic and therapy services, and collaborations with specialty medical groups to treat patients with comorbid OSA.
Financial Outlook: The company expects its new business model to be highly accretive to top-line revenue growth, reduce cash burn, and move closer to profitability. The refined affiliation model is expected to be scalable and replicable across multiple markets.
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Shareholder Return Plan
The selected topic was not discussed during the call.
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Key Q&A
Q:How should we model sales for the next few quarters with the new acquisition?
A:The company expects top-line revenues to continue growing as they are not yet at full capacity. The addition of dental providers and nurse practitioners will drive revenue growth. As these providers are licensed and credentialed, revenue growth is expected to increase dramatically. The company is currently carrying additional expenses due to hiring in advance, but these will be rationalized as revenues grow.
Q:What is the time gap between upfront investment in personnel and revenue benefits?
A:There is a ramp period of 3 to 6 months depending on how quickly doctors are licensed and credentialed. Revenue generation can start before reaching full optimization, but it takes about 6 months to achieve optimal revenue levels.
Q:What are the expected operating expenses for the next quarter or the quarter after?
A:At steady state, SAMC operations are expected to have contribution margins of 50% to 60%. The company anticipates maintaining this model and expanding teams to meet excess demand in each market.
Q:Can you provide an update on the goal for cash flow breakeven?
A:The goal is to achieve cash flow breakeven, which is tied to generating profit at the practice level from SAMC centers. The company has expanded its infrastructure to handle growth, and as more affiliations and acquisitions are completed, they expect to get closer to cash flow breakeven. However, no specific timeline was provided.
Q:Under the new business model and with rising revenues, how should investors view the company now and in 6 months?
A:The company has settled on a scalable and replicable model that aligns with its technological advantages. They expect continued growth and profitability, with the potential for expansion into new markets. Investors should monitor the progress of new affiliations and deployments as indicators of future growth.
Q:How does the recognition of revenue differ between various models?
A:For acquisitions like SCN, revenue is captured at the point of product shipment and includes OSA diagnostic and treatment revenue. For contractual alliances, revenue is captured from appliance sales as principal, with fees or profit-sharing arrangements depending on the agreement.
Q:Review of Unclear Management Responses
A:The management avoided providing a specific timeline for achieving cash flow breakeven, using vague language like 'not too far down the road' and 'the closer we will be' without offering concrete details.
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Earnings Word Cloud
The most frequently occurring keywords in this quarter's earning call
CEO thought
Constantine conference
General month
OSA Treatment
OSA sleep
SCN OSA
SCN affiliate
SCN appliance
SCN goal
SCN kind
SCN loss
SCN message
SCN treatment
SEC Form
Treatment patient
VIP legacy
Vegas treatment
acquisition SCN
acquisition alliance
acquisition stage
affiliate alliance
appliance lifeline
assumption Constantine
cost sale
decrease VIP
equity financing
expense
hiring
increase cost
increase service
investment SCN
legacy model
month cost
month increase
product increase
sale month
section website
service SCN
service product
side
testing service
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The earnings call reveals mixed financial performance, with declining total revenue and gross margins, and an increase in operating loss. While there are positive developments, such as the SCN acquisition and potential revenue growth, the company's financial health is concerning, with significant cash burn and increased operational expenses. The Q&A section highlighted management's vague responses regarding financial impact, raising concerns. Given these factors, the stock price is likely to react negatively in the short term, with a potential decline between -2% to -8%.
VVOS Report
Frequently Asked Questions
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