Establishment Labs, the maker of Motiva breast implants, is the only company in the United States with a breast implant approved after 2013, and the most recent quarter shows that exclusive regulatory position converting into scale. The company is in the middle of a commercial inflection in the world's largest breast implant market, a market that had seen essentially no new entrant for over a decade.
The tension underneath the growth is the balance sheet. A secured term loan of roughly $265 million carried at a cost near nine percent a year against a company whose stockholders' equity is only about $22 million means the equity sits on top of a capital structure that consumes a meaningful share of every incremental unit of profit. Adjusted EBITDA turned positive in the quarter at a 70.6 percent gross margin, which moves the argument from survival to scaling.
The second-quarter print delivered $67.5 million of revenue, up roughly 32 percent year over year. Full-year revenue guidance was raised to a range near $270 million. The question the next four quarters resolve is whether U.S. volume growth outruns the cash interest drag on the debt.