• Revenue: $1.9 million for Q1 2024, a decrease of 15% year-over-year.

• Gross Profit: $1.2 million for Q1 2024, with a gross margin increase to 60% from 54% in Q1 2023.

• Operating Expenses: Reduced by 51% in Q1 2024 compared to Q1 2023.

• Net Working Capital: Approximately $4.4 million at the end of Q1 2024.

• Cost Reductions: Totaling approximately $8 million in 2024, a 55% reduction from the previous year.

• EBITDA Loss: Non-GAAP adjusted EBITDA loss of $2.1 million in Q1 2024, improved from a loss of $5.3 million in Q1 2023.

• Sales and Marketing Expenses: Decreased by 53% to $1 million in Q1 2024 from $2.2 million in Q1 2023.

• General and Administrative Expenses: Decreased by 56% to $1.9 million in Q1 2024 from $4.2 million in Q1 2023.

• Research and Development Expenses: Maintained at $500,000 in Q1 2024, consistent with Q1 2023.

• Warning! GuruFocus has detected 8 Warning Signs with RSLS.

Release Date: May 15, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Reshape Lifesciences Inc (NASDAQ:RSLS) has implemented strategic cost reductions leading to a projected 55.4% decrease in operating expenses for 2024 compared to the previous year.

• The launch of Lap-Band 2.0 FLEX is progressing well with positive initial surgeon feedback, indicating potential growth in this product line.

• Reshape Lifesciences Inc (NASDAQ:RSLS) has enhanced its digital marketing strategies, utilizing AI and targeted campaigns to improve lead generation and patient engagement.

• The company has successfully reduced its core operating expenses by approximately $24 million or 75% between 2022 and 2024, demonstrating effective cost management.

• Reshape Lifesciences Inc (NASDAQ:RSLS) continues to explore strategic M&A opportunities to expand its portfolio and enhance shareholder value.

Negative Points

• Revenue for the first quarter of 2024 decreased by 15% compared to the same period in 2023, primarily due to a decrease in sales volume influenced by the adoption of GLP-1 drugs.

• The company experienced a significant reduction in workforce, which could impact operations and morale.

• Despite cost reductions, Reshape Lifesciences Inc (NASDAQ:RSLS) reported a net working capital of approximately $4.4 million, which may pose challenges in sustaining long-term operations without additional funding.

• The pause of the ReShape care program to reevaluate and secure partnerships may delay potential revenue and growth from this service.

• The company faces intense competition in the obesity treatment market, particularly from non-surgical alternatives like GLP-1 receptor agonists, which could limit the growth of surgical solutions like the Lap-Band.