Establishment Labs Q2 2026 earnings: U.S. growth lifts gross margin

Establishment Labs (NASDAQ: ESTA) reported Q2 2026 revenue of $67.5 million, up 31.7% year over year from $51.3 million, while diluted net loss per share narrowed to $0.39 from $0.57. Motiva USA revenue reached $24.7 million, helping lift gross margin to 70.6% and adjusted EBITDA to positive $3.7 million.

Core financial results

Revenue growth substantially outpaced operating expense growth during the quarter. Gross profit increased faster than revenue as a favorable geographic and channel mix—including expansion of the higher-margin U.S. business and minimally invasive platform—added 1.8 percentage points to gross margin.

Operating expenses increased 5.3% on a GAAP basis, compared with revenue growth of 31.7%. Excluding debt refinancing and restructuring charges, management said adjusted operating expenses rose 2.0%, resulting in a significantly narrower operating loss.

Adjusted EBITDA is a non-GAAP measure; the remaining figures in the table are reported under GAAP.

U.S. and minimally invasive products drove the mix improvement

Motiva USA generated $24.7 million of revenue, up from $10.3 million a year earlier and approximately 140% higher. U.S. sales also increased 26% from Q1 2026 and accounted for nearly 37% of total quarterly revenue.

Revenue from the minimally invasive platform was $12.1 million. Establishment Labs did not provide a year-earlier comparison for this product category, but management identified its accelerating adoption—along with the expanding U.S. business—as a major contributor to the improved sales mix and gross margin.

Total company revenue increased 12.8% sequentially from Q1, indicating that the second-quarter expansion was not solely a year-over-year comparison effect.

Operating leverage improved, but cash flow remains negative

Q2 operating expenses included $2.2 million of debt refinancing and restructuring charges, compared with $0.5 million a year earlier. Even before excluding these items, the gap between revenue and expense growth produced a meaningful reduction in the operating loss.

However, positive adjusted EBITDA did not translate into GAAP profitability. Unadjusted EBITDA remained negative at $2.3 million, while adjusted EBITDA excluded stock-based compensation, foreign exchange losses, refinancing expenses, and restructuring charges. Interest expense also increased to $7.0 million from $6.0 million and accounted for most of the difference between the $4.3 million operating loss and the $11.7 million net loss.

Cash generation improved but had not turned positive. For the first six months of 2026—not the second quarter alone—net cash used in operating activities was $20.9 million, compared with $39.5 million in the prior-year period. Capital expenditures were $5.5 million, leaving an approximately $26.4 million cash outflow after capital spending.

Cash and equivalents ended June at $71.2 million, up $16.5 million year over year and $3.1 million from Q1, but down $4.4 million from December 2025. Net notes payable increased to $261.7 million from $247.5 million at year-end following refinancing activity, including $265.0 million of new Oaktree borrowing, $246.4 million of repayments, and $10.0 million of financing fees during the first half.

Full-year revenue guidance

Establishment Labs raised both ends of its 2026 revenue guidance by $2.5 million. The new midpoint is $270.0 million, approximately 0.9% above the previous midpoint of $267.5 million.

With first-half revenue of $127.4 million, the updated range implies approximately $141.6 million to $143.6 million of revenue in the second half. CEO Peter Caldini attributed the increase to global execution, market-share gains, and adoption of the minimally invasive platform, and said the company expects strong growth in the second half of 2026 and throughout 2027 alongside an eventual move to positive free cash flow.

Recent insider transactions

The supplied transaction data show a May 2026 indirect sale by a greater-than-10% owner and three reported purchases by the CEO and a director in August 2025. The table excludes compensation-related stock awards and does not imply any conclusion about the insiders’ outlook.

Risks investors should monitor

• Dependence on favorable business mix: U.S. and minimally invasive sales supported both revenue growth and margin expansion. Slower adoption in either area could affect two key performance drivers at once.
• Interest expense and leverage: Establishment Labs remained loss-making under GAAP, with $7.0 million of quarterly interest expense and $261.7 million of net notes payable at quarter-end.
• Cash flow conversion: First-half operating cash flow remained negative despite positive adjusted EBITDA, while capital spending added to the cash outflow.
• Second-half execution: Reaching the updated full-year guidance requires approximately $141.6 million to $143.6 million of second-half revenue, above the first-half total of $127.4 million.

Summary

Establishment Labs’ Q2 2026 results showed improving operating leverage as rapid U.S. expansion and minimally invasive product adoption lifted revenue and gross margin while adjusted EBITDA turned positive. The main follow-up questions are whether the company can sustain its favorable sales mix, deliver the second-half revenue required by its raised guidance, and convert improving operating performance into positive cash flow while managing its interest and debt burden.