Thank you for standing by. This is the conference operator. Welcome to the Cutera, Inc. Third Quarter 2022 Results Conference Call. As a reminder, all participants are in listen-only mode, and the conference is being recorded. After the presentation, there will be an opportunity to ask questions. To join the question queue, you may press star, then one on your telephone keypad. Should you need assistance during the conference call, you may signal an operator by pressing star, then zero. The discussion today includes forward-looking statements. These forward-looking statements reflect management's current forecast or expectation of certain aspects of the company's future business, including, but not limited to, any financial guidance provided for modeling purposes. Forward-looking statements are based on current information that is, by its nature, dynamic and subject to change. Forward-looking statements include, among others, statements regarding financial guidance, regulatory approvals, productivity improvements, and plans to introduce new products and expand into additional geographies. For words that may identify forward-looking statements, we encourage you to refer to the safe harbor statement in our press release earlier today. All forward-looking statements are subject to risks and uncertainties, including those risk factors described in section entitled Risk Factors in our Form 10-K as filed with the Securities and Exchange Commission and updated on our Form 10-Q subsequently filed. Cutera also cautions you to not place undue reliance on forward-looking statements, which speak only as of the date they are made. Cutera undertakes no obligation to update publicly any forward-looking statements to reflect new information, events, or circumstances or to reflect the occurrence of unanticipated events. Future results may differ materially from management's current expectations. In addition, we will discuss non-GAAP financial measures, including results on an adjusted basis. We believe these financial measures can facilitate a more complete analysis and greater transparency into Cutera's ongoing results of operations, particularly when comparing underlying results from period to period. Please refer to the reconciliation from GAAP to non-GAAP measures in our earnings release. These non-GAAP financial measures should be considered along with, but not as alternatives to, the operating performance measures prescribed by GAAP. With that, I would like to turn the conference over to David Mowry, CEO of Cutera. Please go ahead. Thank you, operator. Good afternoon, and welcome to Cutera's Third Quarter 2022 Earnings Call. We are glad that you're with our view on the underlying market fundamentals as well as other leading indicators of the health of our business before referencing some operational highlights and sharing our thoughts on Cutera's Third Quarter 2022 performance. I will then pass the call to Rohan, who will provide you with greater detail of our financial results as well as our updated 2022 financial guidance before handing the call back to me to make a few final comments on the business. Following our prepared remarks, we will then turn the call over to the operator who will then open up the call to your questions. Starting first with some high-level observations of the aesthetic market seems appropriate given the macroeconomic environment and the amount of discussion and speculation that we have heard from other market observers and participants. Cutera continues to remain vigilant in regards to the broader economic and market conditions impacting the environment in which we operate. We rely upon a set of leading indicators from our customers, which we believe will alert us to the potential future disruptions in our business should they occur. We regularly review certain qualitative metrics, including patient treatment traffic, clinical appointment cancellation rates, and overall practice scheduling metrics to help calibrate ourselves and inform our plans. In early August, during our second quarter earnings call, we indicated that we believed that the underlying treatment and procedure volumes were steady and that the customer demand for capital remained strong even in light of typical third-quarter seasonality. Indeed, these trends continued through August and September, enabling a strong core business performance for Cutera with noteworthy year-over-year growth rates in both our capital equipment sales as well as our consumable product sales. Looking at these same metrics as we move deeper into the fourth quarter of 2022, our current view is that the treatment volumes remain intact and mostly unchanged from the rates we saw in the third quarter of 2022. Practice performance indicators such as patient queues, appointment cancellation rates, also continue to track with prior quarter rates, instilling confidence in the core capital equipment and consumable run rates as we bring in the full year results. A final data point for consideration on the health of our business comes from our annual Cutera University Clinical Forum or CUCF. This is being held in Southern California this coming weekend. Our 2022 CUCF enrollment has already eclipsed 600 attendees. This is up more than 35% from the high-water mark of any previous year. This level of interest is especially telling in light of the requirement for non-faculty customers to pay for their admission and cover their own expenses. Sticking with macroeconomics, I would be remiss not to mention the ongoing effects of our business from the dramatic weakening of the Japanese yen. Japan represents the second-largest market for Cutera behind North America. Since the beginning of 2022, the yen has lost approximately 30% of its value versus the US dollar, putting significant pressure on our results in Japan as well as the overall financial performance of the company. The yen's rapid devaluation has significantly reduced top-line revenues from Japan with lower currency exchange rates, as well as creating some moderate dampening of consumer demand from the regional economic environments within Japan. While we have been able to source some additional top-line growth from other areas in our business to offset this impact on revenue, we have been unable to absorb the full impact that this devaluation has caused on our profitability. We're also looking beyond Japan and remain watchful in other areas being impacted by macroeconomic or sociopolitical challenges. We are working with our partners across our distribution markets to keep them current on accounts receivable, as well as proactively addressing and scheduling deliveries to avoid unwanted deal exposure. Additionally, we remain vigilant to many European countries in light of the ongoing conflict in the Ukraine and the increasing pressure on the euro and British pound. Nevertheless, we harbor a few concerns for these regions based upon current trends and the extent of our business exposure in these areas. Now turning to some positive news, Cutera's Third Quarter 2022 performance. During the period, total revenue for the third quarter was $62.8 million, representing approximately 17% growth on a constant currency basis. This result was driven by strong capital and consumable product sales. Our results were further bolstered by the contribution of more than $1 million from our AviClear product, our new acne product and procedure, with 2 quarters of limited commercial release in North America now under our belt. Specific to capital equipment, we benefited from the constructive underlying market fundamentals previously mentioned, posting 32% capital equipment constant currency growth over third quarter of 2021. North America delivered 23% capital equipment constant currency growth and posted sequential growth over the second quarter of 2022. A first for this business in the seasonally slower third quarter. International capital equipment constant currency growth of 50% was also noteworthy, as each of the international regions delivered strong year-over-year capital equipment constant currency growth, reflecting contributions from the continued sales process improvements and sales team development efforts ongoing in each of our direct sales geographies. Recurring revenue defined as the combination of skincare, consumable product, AviClear and field service was $21.8 million in the period. This performance reflects a significant decrease from prior year when an announced skincare price increase led to pre-buying activity within third quarter 2021. A portion of the skincare decline was offset by strong consumable product sales in the period, up 43% on a constant currency basis, excluding AviClear. Shifting now to acne. As mentioned earlier, we are two quarters into the limited commercial release and are pleased with the performance of our business as well as the learnings we have been able to gather from our customers and their patients. During the third quarter of 2022, our actual placement activity gained momentum as we slightly outpaced our previous commitment of 100 additional active placements in the period. Our plan would have expanded the total number of active AviClear units to 150. At the close of third quarter 2022, we actually had greater than 160 active devices in the field, treating over 600 new patients throughout the period as patient volumes ramped steadily over the quarter, generating procedure revenues of approximately $1 million. Moving to fourth quarter 2022, we remain committed to our plan of adding an additional 200 active AviClear devices in the period and increasing the active install base to greater than 360 units exiting fiscal year 2022. With that, let me turn the call over to Rohan to provide some additional color on our financial performance. Thank you, Dave. As I review my prepared remarks, I want to note that I will be discussing some non-GAAP results. A complete reconciliation of GAAP to non-GAAP is included in our earnings release. We encourage listeners and readers to review our non-GAAP metrics in conjunction with the GAAP results as contained in this earnings release. Total revenue for the third quarter was $62.8 million compared to $57.4 million for the same period in 2021, representing an increase of approximately 9%. During the quarter, we continued to face meaningful foreign currency headwinds, and our constant currency revenue growth was approximately 17%. Our skincare segment was particularly impacted by negative foreign currency fluctuation in the yen, down 36% as reported and down 21% in constant currency. Based on current exchange rates, we expect that we will continue to face ongoing challenges from foreign currency for the foreseeable future. As I mentioned last quarter, and as a result of the continuing churn in the foreign exchange markets, we hedged 50% of our projected cash flows from Japan in the third quarter and have expanded our hedge positions through the end of 1Q 2023. The mark-to-market gains or losses from these hedges are reflected in the other income and expense line of our income statement and are immaterial. Third quarter North American capital equipment revenue of $25.4 million increased 23% over the prior year. International capital equipment revenue for the third quarter was $15.6 million, up 36% as reported and up 50% in constant currency from the third quarter of 2021. Recurring revenue defined as our consumables, global service, skincare, and AviClear product lines was $21.8 million in the third quarter, down 13% as reported and down 2% in constant currency. The decrease over the prior year was driven by skincare revenue of $9.4 million, down 36% as reported and down 21% in constant currency, as well as services revenue of $6.3 million, down 6% as reported and down 1% in constant currency. As Dave mentioned, the skincare results in Q3 2021 were abnormally high due to customers stocking up ahead of the telegraphed price increase in September 2021. These declines were partially offset by growth in our consumables product, excluding AviClear, up 35% as reported and 43% in constant currency. non-GAAP gross profit for the third quarter of fiscal 2022 was $34.8 million with a gross margin of 55.4%, representing a decrease of approximately 290 basis points compared to the same period last year. Excluding 130 basis points impact due to the acne program and a 240 basis points impact from foreign exchange headwinds, the non-GAAP gross margin in the third quarter would have been 59.1%, an approximately 80 basis points improvement over the prior year. While we did experience supply chain and macroeconomic inflationary pressures during the quarter, we were able to offset them with ongoing cost improvement initiatives as well as continued leverage of our fixed cost base. Total non-GAAP operating expenses for the third quarter of 2022 were $36.8 million compared to $28.4 million for the same period last year. Included within this number are $7.7 million in expenses related to AviClear. Non-GAAP sales and marketing expenses for the third quarter of 2022 were $23.9 million compared to $17.9 million for the same period last year, driven by continued expansion in our sales force, higher commissions, increased travel, as well as $6.3 million in expenses associated with AviClear. Non-GAAP R&D expenses for the third quarter of 2022 were $5.8 million compared to $4.7 million for the same period last year, driven by increased investments in AviClear and additional clinical studies. Finally, non-GAAP G&A expenses for the third quarter of 2022 were $7.1 million compared to $5.7 million in the same period last year, driven by an expansion in our headcount. For the third quarter of 2022, our non-GAAP operating income, which we refer to as Adjusted EBITDA, was a loss of $2 million compared to a profit of $5.1 million in the prior year period. As anticipated, our investment in AviClear was the most significant driver of EBITDA decline on a year-over-year basis. Excluding acne program impacts of $7.9 million for the third quarter of 2022 and foreign exchange headwinds over the prior year of $3.1 million, Adjusted EBITDA would have been $9.1 million. As I mentioned earlier, embedded within non-GAAP OpEx, we had $7.7 million in spending on our acne program, 80% of which is in sales and marketing investments, with most of the remainder in R&D. Finally, there were no material or significant changes to our tax position. Turning now to our balance sheet. We ended the quarter with $250.8 million of cash and marketable securities compared to $278.2 million at the end of the second quarter. Embedded within this $27 million sequential decrease are $11 million in inventory investments and $3 million in supplier advances to secure the necessary parts needed for the next couple of quarters of increased production, a commitment we've made to our suppliers given the relatively low volume but high value-added nature of our product portfolio. In light of the positive findings in our limited commercial release, we now plan to accelerate our North American full commercial release this month and anticipate investing an additional $20 million in Q4. As a reminder, our innovative AviClear business model trades a much lower capital revenue inflow for significantly higher procedure fees over the life of the device. This is a compelling financial arrangement, but one which requires a heavier upfront financial commitment on our part. Accordingly, over the course of 2023, we will move from cash consumption to cash generation as the active install base expands and overall treatment revenues outpace the investments in new placements. With this in mind, we established the funding and capital structure earlier in the year to ensure we had a clear pathway and the adequate capital required to achieve our goals. Before I turn the call back over to Dave, I would like to provide you with an update on our outlook for the full year of 2022. While we are encouraged by our third quarter results, we also continue to be faced with previously noted foreign exchange headwinds in the core business. We are reiterating total 2022 guidance despite unprecedented foreign exchange rate declines in Japan, Europe, Britain and Australia. The full year impact of these foreign exchange headwinds is expected to be more than $17 million, implying a constant currency growth of 18%-20%. Moving on to Adjusted EBITDA. Per Dave's comments earlier, and given our favorable findings from the limited commercial release, we are accelerating our full North American launch to November and making the necessary AviClear sales and marketing investments ahead of 2023. FX pressures have worsened during the third quarter and continue to trend unfavorably in early fourth quarter. In light of our previous projections, we now expect full year FX impacts on Adjusted EBITDA to be more than $12 million. In considering all of these factors, we are revising our full year Adjusted EBITDA guidance to be in the range of breakeven to -$5 million. With that, I will now pass the call back over to Dave. Thank you, Rohan. I am pleased with the continued momentum as demonstrated by our performance during the third quarter of 2022. Frankly, I am much more encouraged by what still lies ahead for Cutera. To be clear, our focus on acne was never only about a product. It has always been about a bigger strategic outcome for the business. The AviClear device and our AviClear business model are enabling true transformation of Cutera. First, we are engaging medical derms in their space and effectively expanding our core customer group. Second, we access a new and expansive total addressable market with long term growth of what we expect to be a more recession resistant procedure. Third, we have begun to shift to more procedural revenue channels, better aligning our interests with that of the practice. Finally, we have gained line of sight into how these model changes can and will accelerate the evolution of Cutera's financial profile to include improving margins and visibility. Based upon the performance during our limited commercial release of AviClear and the ability for us to see and validate impact on these critical factors, we are now confident in expanding to a full North American launch of the AviClear product. Going forward, we expect to continue to grow our acne market participation over time through the expansion of treatment indications, the addition of new customer channels, and the inclusion of new geographies serviced by the AviClear product. Beyond AviClear, our core business has never been better positioned with the right people, scalable processes, and an innovative new product portfolio with new product introductions to be delivered over the next eighteen months. The next year and a half will be an exciting, fulfilling, and exceptionally busy time for us at Cutera as we work as one team to deliver upon our goals. With that, I'd like to turn the call over to the operator and open the call to your questions. Operator? Thank you. We will now begin the question- and- answer session. To join the question queue, you may press star, then one on your telephone keypad. You will hear a tone acknowledging your request. If you are using a speakerphone, please pick up your handset before pressing any keys. To withdraw your question, please press star then two. We will pause for a moment as callers join the queue. Our first question comes from Jonathan Block of Stifel. Please go ahead. Great, thanks. Hey, Dave. Hey, Rohan. Maybe Dave, the first question. You know, your AviClear boxes are just running ahead of our early thoughts. Maybe talk about what changes with the full launch this month. Will every rep now have it as part of their sales quota? Then, you know, maybe a tack on there. Are there any early high-level thoughts around utilization per AviClear box as we enter 2023? I'll wait for my follow-up. Thanks. All right. Great questions, Jonathan, and thanks for those. I think, you know, in terms of expectations, I wanna be very careful not to let people get out too far in front of us. As everyone knows, and I think we've said a few times, that as you place a box, there's kind of a lead time to the activation of that box. While we may be going more broadly with the entire sales team to start to place these boxes and validate certain customers and make sure that they have access to the product, you know, we wanna be very careful not to think that these boxes become active almost overnight. There's still quite a bit to move through to get these to be active. They have to be installed, then we have to show up and train the clinical staff on how to use it effectively and efficiently, and then we have to show back up and bring on the kind of back office administrative functions to make sure they then understand how to enroll patients and then process. The last thing, you know, we've always talked about is, in most cases, these practices have a lead time of new patients and when they can bring them on. I just wanna be careful that while we're pulling the trigger now to start looking at and placing new boxes a little bit more broadly, the activation of those boxes are probably more of a first quarter impact than they are a fourth quarter impact. In regards to, like, what we expect, you know, we are expecting to start to think more broadly, knowing what we've proven to ourselves during the limited commercial release. Like, we are gonna look at other places and other opportunities to place these boxes, but we also wanna be very, very thoughtful not to do so in a way that harms the long-term utilization of the boxes that are out there. I'm not gonna give you a number to target around utilization, but I think, you know, we kinda think about it in a very broad manner that, you know, we don't wanna be placing it at clinics that aren't gonna be seeing a volume of patients that would support, you know, a kind of a number of three or so more new patients a month, right? Many of them need to ramp, some of them are already there, some of them need to learn how to use it and deploy it in their practice. There's quite a bit of work that still need to be done. I think the reason we moved to full launch is 'cause we now understand what that work looks like, and I think we now know what it takes to kind of execute upon those things. Got it. Very helpful, Dave. Maybe as sort of a good segue into my second question, if you can talk about where you are from a sales infrastructure standpoint. I believe you hired a good amount of reps over the past 18 months. I mean, we're obviously seeing the results. Your capital was phenomenal in Q3 2022. AviClear is now in full launch. Do you need more capital reps? Do you need a specialized sales force, you know, for AviClear utilization to go ahead and drive that? Maybe just talk about any plans on the infrastructure standpoint, as I'm sure you wanna properly support, you know, the existing 350 boxes this year and then ramping into 2023. Thanks, guys. Yeah. Another great question. I guess the way I would coach my answer around that question is this way: We have an expanded customer base that need different things. As we think about servicing those customers and surrounding those customers, we're gonna need to provide different customers with different support. As we think about scaling, you know, we have to think about not just scaling the number of just more of the same, we have to think about making sure that we're bringing the right talent to the right locations to do the right things in each of those accounts. Like I said earlier, I think from the limited commercial release, we understand that. What might be a med derm may need different help and different support than what an aesthetic practitioner may need. We think we understand those things. I think we just need to continue to grow into them as we move forward. You're right, we did add a number of what we call key account managers over the last year and a half. I think those people, you know, I think we've told the people a number before of around 40 of those. You know, we're gonna continue to look at them and make sure that we scale to a point where they're not only keeping pace with the new accounts we add, but they're able to kinda keep helping existing accounts continue to hit their utilization targets. That'll be the balancing act for the better part of 2023. It's likely we'll need to add more as our placements increase, and we hope to drive greater, you know, effectivity or productivity of those boxes in each practice. Got it. Perfect, guys. Thanks very much, and then I'll follow up offline. Great. Our next question comes from Louise Chen of Cantor Fitzgerald. Please go ahead. Hi, guys. This is Wayne on for Louise. Congrats on the quarter, and thank you for taking our questions. Maybe two from us. First is that, I know it's been only 6 months since the AviClear got approved and has limited commercial release. What are the physicians feedback you have received so far? And could you provide us with your latest thoughts on the market opportunity and peak sales? It's probably a bit too early to discuss about this, but what's your plan for outside of North America? Thank you. Boy, you didn't take any time. You went right for it, huh? That's a great question, Wayne, and we appreciate that. Look, I'm gonna parry on a couple of those points that I don't think we're prepared to get out in front of yet. I will tell you the physician feedback has been phenomenal. I think there's a number of folks that have interviewed physician users. I think the commentary continues to be exceptionally strong. We were just at the Fall Clinical Meeting where we released our 12-month follow-up, which was outstanding and continues to show improvement over the 6-month data. We're exceptionally proud of the clinical outcomes, and I think the physicians are coming on board more and more to understanding this needs to be part of their practice as they evolve. We're pleased with that. That being said, I think we still need to figure out how to make sure that we can put it into their practice effectively. Many of them treat patients in seven-minute cycles as normal derms, and we have to figure out how do we help them put a half-hour treatment package together, that allows them to still treat that patient without being disrupted to their practice flow. We have some work to do, as I said to Jon earlier, and we're gonna continue to work through that. I think getting to a peak volume, I don't think is something we're prepared to kinda talk to yet. I'll pass on that a little bit. I do think that there's a huge demand that's out there for us. I think there's a lot of opportunity, but it's gonna take a while for us to really achieve that peak number. I think as we evolve and gain more insights, we'll be able to share more insights with the investment community. In terms of outside North America, you know, we're not in a position to mention that yet, but I will tell you that, you know, both myself and Rohan and even our Chairman, Dan Plants, we've traveled through many countries around the world. We're gonna continue to look at and evaluate where we think we have the greatest opportunity for expansion and where we think we can have an opportunity for contribution both on the top and bottom line and make those decisions at the right time with the right support. At that point, I don't think I'm willing to comment any further. Got it. Thank you so much. All right. Congrats again. Thank you. Once again, if you have a question, please press star then one. Our next question comes from George Sellers of Stephens, Inc. Please go ahead. Thanks for taking the question, and congrats on a great quarter. I wanna follow up with AviClear and maybe some feedback you're hearing from some physicians on the demographics and the patient population that they're targeting in these early stages, maybe in terms of age and acne severity. You know, are they going after the younger teenager at this point and the more severe acne? Or just any feedback you have from physicians at this stage. George, it's a great question. I'll be really careful to first state and stipulate to the audience that AviClear is approved for all skin types in all severities, so mild, moderate, and severe, and skin types I through VI, where we get relatively the same outcomes for all skin types across those categories. It's been a rather remarkable and quite frankly rewarding outcome to see at 12 months the clarity that these people are achieving using AviClear. That said, you know, I think in certain demographics, in certain geographies, we see a higher propensity for young professional women to be treated. I think generally speaking, these are folks that are probably more opposed to the contraindications associated with isotretinoin. You know, you obviously have concerns about, I'll say, birth defect with isotretinoin. You have concerns on the contraindication of alcohol consumption while on the drug. There are challenges with people that have been on it two or three times previously, at that point in their evolution, and I think they're probably a little bit more frustrated and fed up. By the same token, we see in more of the suburban environments, a high propensity of parents to be taking their teenage or adolescent children for treatment. I wanna be careful not to just kinda lump it into what we think the number one demographic is. I think there's opportunities for a full coverage, and the results we see certainly stipulate that basically all folks that are treated see rather dramatic improvement. We're not gonna kind of favor one over the other. I think the demographics of where certain aesthetic practices are versus where med derm practices are may drive a kind of change in the patient population. Okay. That's helpful. Thank you for that context. Given this economic backdrop and expectations for next year and in the context of the cost to the patient for this treatment, you know, what are you doing to sort of mitigate some of the issues and concerns of a weakening consumer? I guess, how are you thinking about the impact of a potential deterioration in the underlying market? Thank you for the time. Well, I think that's a great question. First of all, I'd just tell you that while we do believe that acne is probably quite a bit more recession resistant than, you know, a brow lift or wrinkle reductions, et cetera, and we do feel like this kind of opportunity is something that is obviously come to us at the right time through a lot of hard work and effort on our part. That said, you know, we recognize that there's always gonna be economic pressures, and we've priced the device and the procedure in a way for our physicians, and we've given our physicians certain market data to allow them to price their procedures to the customer. I think that's all been market based and not, obviously, in the backdrop of recession. Nevertheless, we think that this is a little bit more recession-proof, as I had indicated. Beyond that, we've done some other things. You may recall that when we launched this, we came out with a financing plan that physicians were able to kind of help finance the program through CareCredit. We've taken that one step further, and maybe I can have Rohan just speak to the new program that we'll be rolling out as part of our national full launch in North America. Yeah. No, thank you, Dave. Very rightly said that we do expect that this will be, you know, even though it's patient pay, a lot more recession resistant than other aesthetic procedures, given the medical conditions that it treats. George, to answer your question on patient financing, we're gonna be launching a program here in the upcoming weeks that'll allow the patients to finance this procedure at $99 a month, over a period of 36 months, in our partnership with CareCredit. We think that'll be one of the steps in helping us unlock this market and the value that this can create for our shareholders. Yeah. What's really amazing is that we were able to establish this as an exclusive arrangement for us in this treatment segment, if you will. We're really happy about not only having this, extending it to the patients, but also what it does for us competitively to differentiate and lock out some thoughts or some bugs. I think it's been well crafted and couldn't be happier with the partnership we're establishing with CareCredit. Okay. That's really helpful. Thank you both for the time. I appreciate it. Great. This concludes the question and answer session. I would like to turn the conference back over to Mr. Mowry for any closing remarks. Thank you, Ariel. I appreciate all the support we've got from you today. What I would like to leave people with is just some final comments. First of all, I wanna thank you for your continued support and interest in Cutera. We're really excited with what we're doing here and could not be more excited for what the future holds for the company. We look forward to giving you an update in late February 2023 on our full year results and look forward to catching up at that time. All the best. This concludes today's conference call. You may disconnect your lines. Thank you for participating and have a pleasant day.