Apyx Medical Q2 2026 earnings: Surgical Aesthetics growth narrows losses

Apyx Medical (NASDAQ: APYX) reported Q2 2026 revenue of $13.9 million, up 22.1% year over year, while its GAAP diluted loss per share improved to $0.07 from $0.09. Surgical Aesthetics drove the revenue increase and supported a higher gross margin, but operating cash use rose because of working-capital changes.

Core financial results

For the quarter ended June 30, gross profit grew faster than revenue as Surgical Aesthetics represented a larger share of sales. The improved mix helped gross margin expand to 63.9%, despite a partial offset from tariffs that began affecting Apyx in the second half of 2025.

Higher operating expenses absorbed part of the additional gross profit, but the operating loss, net loss attributable to stockholders and adjusted EBITDA loss all narrowed from the prior-year quarter.

Adjusted EBITDA is a non-GAAP measure that excludes items including interest, taxes, depreciation and amortization, stock-based compensation and certain nonrecurring items.

Business and segment performance

Surgical Aesthetics generated nearly all of the company’s quarterly growth. Its revenue increased by $2.7 million, driven by AYON sales, higher international generator sales and increased domestic volume of single-use handpieces. Lower domestic sales of standalone generators provided a partial offset.

OEM revenue declined because of lower sales volume to existing customers. Management expects OEM revenue to fall for the full year and indicated that the decline is likely to continue as Apyx focuses more heavily on Surgical Aesthetics.

AYON remained central to the company’s expansion strategy. During the quarter, Apyx received expanded FDA 510(k) clearance covering power liposuction, began a limited launch of the reusable power liposuction handpiece with selected surgeons and made initial commercial shipments in June 2026.

Better margins narrowed losses, but working capital increased cash use

Gross profit increased by approximately $1.8 million, exceeding the roughly $1.0 million increase in operating expenses. That relationship explains why the operating loss narrowed even though total operating expenses rose to $10.7 million from $9.7 million.

The expense increase included an additional $1.0 million of selling, general and administrative spending and $0.3 million of salary-related costs, partly offset by a $0.3 million reduction in professional services. Other expense remained approximately $1.1 million, including $1.4 million of interest expense.

The improvement in reported losses did not translate into stronger operating cash flow. Cash used in operations increased to $3.5 million from $1.2 million, which management attributed primarily to working-capital changes, partly offset by the smaller operating loss. Inventory rose to $10.7 million at June 30 from $8.6 million at the end of 2025, while accounts receivable declined to $13.6 million from $16.8 million.

Apyx ended the quarter with $27.6 million in cash and cash equivalents, down from $31.7 million at December 31, 2025. Net long-term debt was $35.3 million, compared with $34.8 million at year-end.

FY2026 guidance

Apyx reaffirmed its full-year guidance rather than changing its targets. The outlook assumes continued growth in Surgical Aesthetics, supported by AYON, alongside a substantial reduction in OEM revenue.

With first-half revenue of $26.4 million, Apyx would need approximately $32.6 million to $33.6 million of second-half revenue to reach its full-year target. This places considerable importance on AYON adoption and continued growth in consumables and international generator sales during the remainder of 2026.

Recent insider transactions

The supplied insider data shows no purchase or sale transactions during the most recent six-month period, while reporting several derivative-security conversions and one stock award. The only reported open-market purchases in the two-year data were two CFO transactions completed in August 2024.

These records describe the transactions but do not, by themselves, establish insiders’ views about Apyx’s future performance.

Risks investors need to watch

• Second-half execution: Reaching the reaffirmed annual revenue range requires approximately $32.6 million to $33.6 million of revenue in the second half, making AYON adoption an important factor in the outlook.
• Cash consumption and debt: Operating cash use increased despite narrower losses. Apyx held $27.6 million in cash against $35.3 million of net long-term debt at quarter-end.
• Tariff pressure: Improved sales mix lifted gross margin, but tariffs remained a partial offset and could limit further margin expansion.
• OEM contraction: OEM revenue fell 12% in the quarter, and management expects both a full-year decline and continued weakness over time.

Summary

Apyx Medical’s second-quarter results reflected growth in Surgical Aesthetics, particularly from AYON, along with better gross margin and narrower operating and adjusted EBITDA losses. The main counterweight was higher operating cash use tied to working capital. The next phase of the 2026 outlook depends on whether AYON and related Surgical Aesthetics products can deliver the higher second-half revenue implied by the reaffirmed full-year guidance while the company controls expenses and cash consumption.