APYX Q3 2025: Aon Launch Drives 19% Surgical Aesthetics Growth, Margin Leverage in Focus
Aon’s commercial debut propelled APYX’s surgical aesthetics segment to double-digit growth and margin expansion, marking a strategic pivot away from OEM. With GLP-1-driven demand tailwinds and a leaner cost base, APYX is positioned to capitalize on a rapidly evolving aesthetics market, though execution on international rollout and label expansion will be key investment watchpoints into 2026.
Summary
- Platform Shift Accelerates: Aon’s launch redefines APYX’s growth profile and segment focus.
- Margin Leverage Emerges: Cost discipline and mix shift drive improved profitability and cash burn reduction.
- GLP-1 Tailwind Expands TAM: Skin laxity demand from weight loss drugs underpins multi-year growth runway.
Performance Analysis
APYX delivered 12% total revenue growth in Q3, led by a 19% gain in its surgical aesthetics segment, now representing over 85% of company sales. The segment’s momentum stemmed from the full commercial launch of the Aon body contouring system, which integrates fat removal, tissue contraction, and electrosurgical capabilities—a significant step up from legacy single-function devices. U.S. sales surged over 30%, while international sales of consumables also contributed, though overall international revenue dipped 4% due to seasonality and generator upgrade cycles.
Profitability inflected meaningfully: gross margin expanded to 64.4% (from 60.5% YoY) as higher-margin surgical aesthetics outpaced OEM, and operating expenses fell sharply, reflecting the restructuring executed in late 2024. Cash burn improved, with operating cash outflows down both quarter-on-quarter and year-to-date. The OEM segment, now less than 15% of revenue, declined as expected, with management intentionally reallocating resources to the higher-growth, higher-margin core.
- Segment Mix Shift: Surgical aesthetics now dominates revenue, diluting OEM’s historical drag on growth and margin.
- Consumables Uptick: Single-use handpiece sales rose on new customer adds and higher attach rates, reinforcing recurring revenue potential.
- Operating Leverage: Cost reductions and mix benefits drove a 77% reduction in operating loss and a 96% decrease in adjusted EBITDA loss.
With cash and equivalents at $25.1M and burn moderating, management reiterated confidence in funding operations through 2027, assuming continued Aon adoption and disciplined working capital management.
Executive Commentary
"The full US launch of Aon began in September and has been highly successful to date. Our team was well positioned following soft launch earlier this summer and strong interest quickly translated into pre-orders ahead of the launch. I believe the launch and overall interest in Aon has exceeded all of my expectations across every metric."
Charlie Goodwin, President and Chief Executive Officer
"We are pleased with the cash and working capital management in the first nine months of 2025, with cash burn returning to a lower but more normalized rate in the back half of the year as a result of the impacting changes in working capital as a result of the Aon launch."
Matt Hill, Chief Financial Officer
Strategic Positioning
1. Aon Platform Launch and Segment Rebranding
APYX’s rebranding of “advanced energy” to “surgical aesthetics” signals a decisive shift to procedure-centric, premium technology, with Aon positioned as an all-in-one solution for body contouring. This move aligns the business with secular demand for comprehensive, minimally invasive aesthetic procedures, distancing the company from lower-growth OEM manufacturing.
2. GLP-1-Driven Demand Expansion
GLP-1 medications (weight loss drugs) are creating a new, large cohort of patients with skin laxity, and APYX’s Renuvion solution is being positioned as the standard of care for this indication. Management cited that 63% of GLP-1 patients are new to aesthetics, underscoring a long runway for market penetration and procedure volume growth.
3. Consumables and Recurring Revenue Model
Growth in single-use handpiece sales is directly tied to Aon adoption and increased procedure volumes, with both new customer adds and higher attach rates driving utilization. This supports a more predictable, higher-margin recurring revenue stream, a key business model evolution for medical device companies.
4. Cost Structure Reset and Cash Management
The 2024 restructuring delivered immediate leverage—operating expenses fell, cash burn improved, and gross margins rose. Management is now balancing investment in Aon commercialization with disciplined cost controls, targeting sustainable profitability and self-funding growth through 2027.
5. Regulatory and International Expansion Pipeline
Aon’s label expansion for power liposuction is pending FDA clearance in Q1 2026, which would unlock new use cases and reinforce platform differentiation. International rollout is targeted for 2026 and beyond, with Europe, Middle East, and Latin America as priorities, though timelines depend on regulatory pathways and market readiness.
Key Considerations
APYX’s Q3 marks a strategic inflection point as the company pivots from OEM manufacturing to a branded, procedure-driven platform in surgical aesthetics. The Aon launch is being met with robust demand, but the company’s ability to scale, expand internationally, and maintain margin discipline will determine long-term value creation.
Key Considerations:
- Platform Adoption Curve: Early Aon uptake is strong, but sustaining momentum and converting pipeline to installations will be critical as initial demand is absorbed.
- Consumable Utilization: Growth in single-use handpieces hinges on both new customer acquisition and increased procedure frequency among existing users.
- Label Expansion Milestones: FDA clearance for power liposuction in Q1 2026 could catalyze further adoption and ASP (average selling price) uplift.
- International Rollout Readiness: Execution risk remains as APYX navigates country-specific regulatory hurdles and local market development outside the U.S.
Risks
Execution on Aon’s commercialization, timely regulatory approvals, and international expansion are key risks, as is maintaining cost discipline while scaling. Any slowdown in GLP-1-driven demand or competitive responses could temper the growth trajectory. Tariff volatility and supply chain constraints also remain potential headwinds, though currently manageable per management’s commentary.
Forward Outlook
For Q4 2025, APYX guided to:
- Total revenue of $50.5M to $52.5M (raised from previous guidance)
- Surgical aesthetics segment revenue of $43M to $45M (up $1M from prior guidance)
For full-year 2025, management raised guidance and expects:
- Gross margin of approximately 61%
- Total operating expenses not to exceed $40M
Management highlighted:
- “We believe, based on our cash projections, including uptake of the Aon platform, working capital management, and our strict cost controls, we will yield cash through 2027.”
- “Upon receiving clearance from the FDA, we will be able to activate [power liposuction] function on Aon systems already in the field.”
Takeaways
APYX’s Q3 results and Aon’s early commercial success validate its strategic pivot to branded surgical aesthetics, with margin and cash improvements supporting a more durable growth model.
- Platform Leverage: Aon’s integrated system and Renuvion synergy position APYX at the nexus of new demand from GLP-1 patient cohorts, enabling both capital and consumable revenue growth.
- Margin and Cash Focus: Operational discipline is translating into tangible financial improvements, but sustaining this as scale increases will require vigilant execution.
- Growth Catalysts Ahead: Key watchpoints include FDA clearance for power liposuction, international market entry, and continued consumable pull-through as installed base expands.
Conclusion
APYX’s Q3 2025 marks a pivotal transition, with Aon’s launch catalyzing a shift to high-margin, recurring revenue and a clear strategy to leverage secular aesthetics demand. The company’s next phase will be defined by its ability to scale the platform, execute on regulatory and geographic expansion, and maintain financial discipline as growth accelerates.
Industry Read-Through
APYX’s rapid pivot from OEM to branded surgical aesthetics mirrors a broader industry trend toward procedure-centric, platform-based models with recurring consumable revenue. The impact of GLP-1 weight loss drugs is reshaping demand patterns for both capital equipment and aftercare, elevating solutions that address skin laxity and comprehensive body contouring. Competitors and adjacent medtech firms should note the importance of integrating advanced features and building KOL-driven adoption strategies to capture share in this expanding TAM. Margin leverage and cash flow discipline remain critical as companies navigate early-stage growth and operational scale-up in a dynamic regulatory and reimbursement environment.