Apyx Medical Corporation (APYX): Business Model Canvas [11-2024 Updated]

In the fast-evolving landscape of medical technology, Apyx Medical Corporation (APYX) stands out with its unique approach to surgical solutions. This blog post delves into the Business Model Canvas of Apyx, highlighting its strategic key partnerships, innovative value propositions, and diverse revenue streams. Discover how Apyx is redefining the standards of patient care and engagement in the medical device industry.

Apyx Medical Corporation (APYX) - Business Model: Key Partnerships

Collaborations with healthcare providers

Apyx Medical Corporation has established collaborations with various healthcare providers to enhance the adoption of its innovative technologies. These partnerships facilitate clinical trials and real-world studies, which are crucial for validation and further development of their products. For instance, Apyx collaborates with hospitals and surgical centers to integrate the Renuvion technology into their aesthetic and surgical offerings, thereby expanding market reach.

Partnerships with medical device distributors

Apyx Medical Corporation relies on partnerships with medical device distributors to enhance product accessibility. In 2024, the company reported that approximately 32.2% and 30.8% of total revenues for the three and nine months ended September 30, 2024, respectively, were generated from international sales. The partnerships with distributors are essential for penetrating new markets, particularly in regions where Apyx aims to increase its footprint.

Distributor	Region	Sales Contribution (%)	Key Products Distributed
Symmetry Surgical	North America	14.5%	Renuvion Devices
Various International Distributors	Europe, Asia	32.2%	Single-use handpieces, Generators

Agreements with OEM customers like Symmetry Surgical

Apyx Medical has entered into significant agreements with Original Equipment Manufacturer (OEM) customers, most notably with Symmetry Surgical. This 10-year generator manufacturing and supply agreement has been crucial in augmenting Apyx's revenue streams. For the nine months ended September 30, 2024, sales from the OEM segment increased by 14.5% compared to the previous year, reaching approximately $7.37 million. Apyx's OEM relationships not only bolster revenue but also enhance product development through shared expertise and resources.

OEM Partner	Agreement Duration	Sales Contribution (2024, $ million)	Products Supplied
Symmetry Surgical	10 years	7.37	Generators, Surgical Instruments

Apyx Medical Corporation (APYX) - Business Model: Key Activities

Research and development of medical devices

Apyx Medical Corporation invests significantly in research and development (R&D) to innovate and improve its medical devices. For the nine months ended September 30, 2024, the company reported R&D expenses of approximately $3.96 million, representing a decrease of 1.8% compared to $4.04 million for the same period in 2023. These expenses accounted for 11.7% of total sales during this period, down from 10.7% in the previous year.

Manufacturing of advanced energy systems

Apyx Medical manufactures advanced energy systems tailored for surgical and aesthetic applications. The company generated $26.51 million in sales from its Advanced Energy segment for the nine months ended September 30, 2024, down 15.2% from $31.25 million in the same period in 2023. The gross profit from this segment was approximately $20.40 million, reflecting a gross margin of 60.2%. The decrease in sales was attributed to lower average selling prices and reduced domestic sales.

Marketing and sales efforts to expand market reach

To broaden its market reach, Apyx Medical has intensified its marketing and sales initiatives. The company recorded total sales of $33.88 million for the nine months ended September 30, 2024, down 10.1% from $37.69 million in 2023. International sales represented approximately 30.8% of total revenues for the same period, an increase from 26.6% in the prior year. The company’s marketing strategy focuses on leveraging partnerships and enhancing product visibility in over 60 countries.

Key Activity	2024 (9 Months Ended Sept 30)	2023 (9 Months Ended Sept 30)	Change (%)
R&D Expenses	$3.96 million	$4.04 million	-1.8%
Advanced Energy Sales	$26.51 million	$31.25 million	-15.2%
Total Sales	$33.88 million	$37.69 million	-10.1%
International Sales Percentage	30.8%	26.6%	+4.2%

Apyx Medical Corporation (APYX) - Business Model: Key Resources

Skilled workforce in engineering and manufacturing

Apyx Medical Corporation employs a skilled workforce critical for its operations in engineering and manufacturing. The company experienced a decrease in salaries and related expenses, which totaled approximately $3.5 million for the three months ended September 30, 2024, compared to $4.5 million in the same period of 2023, reflecting a 22.6% decrease. For the nine months ending September 30, 2024, these expenses amounted to $12.9 million, down from $14.3 million in the prior year, marking a 10.1% reduction.

Proprietary technology in energy-based surgical systems

Apyx Medical specializes in energy-based surgical systems, particularly through its proprietary technology. The company reported sales of $11.5 million for the three months ended September 30, 2024, with the Advanced Energy segment contributing $9.3 million and the OEM segment $2.2 million. However, total sales decreased by 4.1% from the previous year. Research and development expenses associated with these technologies were approximately $1.1 million for the three months ended September 30, 2024, down from $1.4 million in the same period of 2023.

Strong brand recognition in the medical device industry

Apyx Medical has established a strong brand presence in the medical device market, which is reflected in its international sales, accounting for approximately 32.2% of total revenues for the three months ended September 30, 2024, compared to 27.8% for the same period in 2023. The company has sold products in over 60 countries, emphasizing its global reach and brand recognition.

Resource Type	Description	Current Value	Change from Previous Year
Skilled Workforce	Salaries and related expenses	$3.5 million (Q3 2024)	-22.6%
Proprietary Technology	Sales from Advanced Energy segment	$9.3 million (Q3 2024)	-5.6%
Brand Recognition	International sales as a percentage of total revenue	32.2% (Q3 2024)	+4.4%

Apyx Medical Corporation (APYX) - Business Model: Value Propositions

Innovative energy-based surgical solutions

Apyx Medical Corporation specializes in advanced energy-based surgical solutions, particularly in the fields of aesthetic surgery and surgical specialties. Their flagship product, the Apyx One Console, utilizes R.F. (radiofrequency) energy for various surgical applications. As of September 30, 2024, the Advanced Energy segment generated $26.5 million in sales, accounting for approximately 77.5% of total company revenues.

Enhanced patient outcomes through advanced technology

The company emphasizes improved patient outcomes through its unique technology. For instance, their R.F. energy devices are designed to minimize thermal damage to surrounding tissues, thereby enhancing recovery times and overall patient satisfaction. A notable statistic is that the gross profit margin in this segment was 60.2% for the nine months ended September 30, 2024, down from 65.9% in the prior year, reflecting both competitive pricing pressures and the company's commitment to maintaining quality.

Comprehensive support and training for healthcare professionals

Apyx Medical provides extensive training and support to healthcare professionals to ensure optimal use of their products. This includes in-person training sessions and ongoing customer support. As part of their operational strategy, the company reported a decrease in selling, general, and administrative expenses to $14.0 million for the nine months ended September 30, 2024, down from $15.5 million in the previous year, indicating efficient management of resources while continuing to support their customer base.

Value Proposition	Details	Financial Impact
Innovative Energy-based Surgical Solutions	Apyx One Console for R.F. surgical applications	Advanced Energy segment sales: $26.5 million (77.5% of total revenues)
Enhanced Patient Outcomes	Minimized thermal damage; quicker recovery	Gross profit margin: 60.2% (down from 65.9% YoY)
Comprehensive Support and Training	In-person training and ongoing support	SG&A expenses: $14.0 million (down from $15.5 million YoY)

Apyx Medical Corporation (APYX) - Business Model: Customer Relationships

Direct engagement with healthcare professionals

Apyx Medical Corporation focuses on establishing strong relationships with healthcare professionals through direct engagement strategies. This includes participation in medical conferences and trade shows where the company showcases its advanced energy products. For example, Apyx reported total sales of approximately $11.5 million for the three months ended September 30, 2024, with a significant portion attributed to its Advanced Energy segment, which generated $9.3 million in sales.

Ongoing support and training for users

The company places a high emphasis on providing ongoing support and training for users of its products. In 2024, Apyx invested in training programs aimed at ensuring healthcare professionals are well-versed in the operation of their products. This initiative is reflected in the decrease of professional services expenses, which amounted to $1.6 million for the three months ended September 30, 2024, down from $1.8 million in the same period of the previous year.

Training Program	Cost (in thousands)	Participants	Feedback Score (out of 10)
Product Operation	150	200	9.2
Clinical Applications	120	150	8.8
Sales Techniques	100	100	9.0

Feedback loops for product improvement and development

Apyx Medical actively engages in feedback loops to enhance product development. The company collects user feedback through surveys and direct communication channels, which inform their research and development efforts. Research and development expenses for the nine months ended September 30, 2024, were approximately $4.0 million, reflecting a strategic commitment to product innovation. This feedback mechanism is crucial for adapting products to meet the evolving needs of healthcare professionals.

Apyx Medical Corporation (APYX) - Business Model: Channels

Direct sales to hospitals and clinics

Apyx Medical Corporation utilizes a direct sales model targeting hospitals and clinics as a primary channel for distributing its products. For the nine months ended September 30, 2024, domestic sales totaled approximately $23.5 million, representing a 15.2% decrease compared to $27.7 million during the same period in 2023. This decline was attributed to lower sales of generators and fewer upgrades to the Apyx One Console.

Online platforms for product information and ordering

Apyx Medical maintains a web platform that provides comprehensive product information and facilitates online ordering. This channel serves as a crucial touchpoint for customers seeking information about Apyx's advanced energy products. In 2024, international sales accounted for approximately 32.2% of total revenues, highlighting the effectiveness of online platforms in reaching a global customer base.

Participation in medical trade shows and conferences

Participation in medical trade shows and conferences is a key strategy for Apyx Medical to showcase its products and connect with potential clients. These events allow Apyx to demonstrate its innovative technologies and network with healthcare professionals. For the nine months ended September 30, 2024, trade show-related costs were part of the selling, general, and administrative expenses, which totaled approximately $14.0 million, reflecting a 9.4% decrease from $15.5 million in the prior year.

Sales Channel	Sales Amount (in thousands)	Change (%)
Domestic Sales	$23,459	-15.2%
International Sales	$10,421	+3.9%
Total Sales	$33,880	-10.1%

As of September 30, 2024, Apyx Medical's cash and cash equivalents stood at approximately $28.0 million, down from $43.7 million at the end of 2023.

Apyx Medical Corporation (APYX) - Business Model: Customer Segments

Hospitals and Surgical Centers

Apyx Medical Corporation serves hospitals and surgical centers with its advanced energy products, primarily the Apyx One Console and associated handpieces. The company reported total sales of $11.5 million for the three months ended September 30, 2024, with an Advanced Energy segment revenue of $9.3 million. This reflects a decrease of 5.6% compared to $9.8 million in the same period of the previous year.

During the nine months ended September 30, 2024, Advanced Energy sales amounted to $26.5 million, down from $31.2 million in 2023, representing a 15.2% decline. The company noted that the decrease was influenced by lower sales of generators in both domestic and international markets due to economic uncertainty in the capital equipment market.

Aesthetic and Reconstructive Surgery Markets

The aesthetic and reconstructive surgery markets are significant customer segments for Apyx Medical. The company has positioned its products to cater to the needs of surgeons in these fields. As of September 30, 2024, international sales represented approximately 32.2% of total revenues, indicating a growing footprint in global aesthetic markets. The total revenue for the nine months ended September 30, 2024, was $33.9 million, which is a 10.1% decrease from $37.7 million in the prior year.

Apyx Medical's aesthetic products have seen fluctuations in demand, particularly due to shifts in consumer spending and market dynamics. The company reported a decrease in average selling prices of generators, which has affected overall revenue from this segment.

OEM Partners and Distributors

Apyx Medical collaborates with OEM partners and distributors to extend its market reach. The OEM segment generated $2.2 million in sales during the three months ended September 30, 2024, reflecting a 2.8% increase from $2.1 million in the prior year. For the nine months ended September 30, 2024, OEM sales reached $7.4 million, up 14.5% from $6.4 million.

This growth can be attributed to increased volume sales to existing customers under long-term agreements, such as the partnership with Symmetry Surgical. Apyx Medical's strategy to strengthen relationships with OEM partners is critical for expanding its distribution channels and enhancing product availability in various markets.

Customer Segment	Three Months Sales (2024)	Three Months Sales (2023)	Change (%)	Nine Months Sales (2024)	Nine Months Sales (2023)	Change (%)
Advanced Energy	$9.3 million	$9.8 million	-5.6%	$26.5 million	$31.2 million	-15.2%
OEM	$2.2 million	$2.1 million	+2.8%	$7.4 million	$6.4 million	+14.5%
Total Sales	$11.5 million	$12.0 million	-4.1%	$33.9 million	$37.7 million	-10.1%

Apyx Medical Corporation (APYX) - Business Model: Cost Structure

Research and Development Expenditures

For the three months ended September 30, 2024, Apyx Medical Corporation reported research and development expenses of $1,142,000, a decrease of 18.9% compared to $1,409,000 during the same period in 2023. For the nine months ended September 30, 2024, the total research and development expense was $3,963,000, down 1.8% from $4,037,000 in 2023. The percentage of sales represented by R&D expenses was 9.9% for the three months and 11.7% for the nine months in 2024, compared to 11.8% and 10.7% in the respective prior year periods.

Period	R&D Expense (in thousands)	Percentage of Sales
Q3 2024	$1,142	9.9%
Q3 2023	$1,409	11.8%
9M 2024	$3,963	11.7%
9M 2023	$4,037	10.7%

Manufacturing and Operational Costs

Apyx Medical's manufacturing and operational costs are reflected in the cost of sales, which amounted to $4,533,000 for the three months ended September 30, 2024, an increase of 13.4% from $3,998,000 in Q3 2023. For the nine-month period, costs rose to $13,484,000, up 4.9% from $12,857,000 in 2023. The gross profit for the three months was $6,954,000, representing a gross margin of 60.5%, down from 66.6% in the prior year. For the nine months, gross profit was $20,396,000 with a gross margin of 60.2%, down from 65.9%.

Period	Cost of Sales (in thousands)	Gross Profit (in thousands)	Gross Margin
Q3 2024	$4,533	$6,954	60.5%
Q3 2023	$3,998	$7,978	66.6%
9M 2024	$13,484	$20,396	60.2%
9M 2023	$12,857	$24,830	65.9%

Sales and Marketing Expenses

Sales and marketing expenses for the three months ended September 30, 2024, amounted to $4,291,000, a decrease of 11.4% from $4,841,000 in Q3 2023. For the nine months ended September 30, 2024, these expenses totaled $14,026,000, down 9.4% from $15,474,000 in 2023. The percentage of sales attributed to selling, general, and administrative expenses (SG&A) was 37.4% for the three months and 41.4% for the nine months in 2024, compared to 40.4% and 41.1% in the respective prior year periods.

Period	SG&A Expense (in thousands)	Percentage of Sales
Q3 2024	$4,291	37.4%
Q3 2023	$4,841	40.4%
9M 2024	$14,026	41.4%
9M 2023	$15,474	41.1%

Apyx Medical Corporation (APYX) - Business Model: Revenue Streams

Sales of medical devices and equipment

Apyx Medical Corporation generates revenue primarily through the sale of its advanced energy medical devices and equipment. For the three months ended September 30, 2024, total sales amounted to $11.487 million, a decrease of 4.1% compared to $11.976 million for the same period in 2023. The sales breakdown is as follows:

Segment	Sales (in thousands)	Change (%)
Advanced Energy	$9,288	(5.6)
OEM	$2,199	2.8

For the nine months ended September 30, 2024, total sales were $33.880 million, down 10.1% from $37.687 million in the same period of 2023. The detailed sales figures for the nine-month period are:

Segment	Sales (in thousands)	Change (%)
Advanced Energy	$26,507	(15.2)
OEM	$7,373	14.5

International sales represented approximately 32.2% of total revenues for the three months ended September 30, 2024, compared to 30.8% for the nine months ended September 30, 2024. This indicates a growing global market presence as the company sells products in over 60 countries.

Service contracts and support agreements

Apyx Medical also earns revenue through service contracts and support agreements associated with its medical devices. These agreements often provide ongoing maintenance, support, and training for customers, ensuring continued usage and customer satisfaction. While specific revenue figures from service contracts are not delineated in the financial statements, they form a crucial component of the company's overall revenue strategy, enhancing customer retention and generating steady cash flow.

Revenue from OEM partnerships and collaborations

The OEM segment is a significant contributor to Apyx Medical’s revenue model. For the three months ended September 30, 2024, OEM sales reached $2.199 million, reflecting a 2.8% increase from the previous year's $2.140 million. Over the nine-month period, OEM sales increased by 14.5% to $7.373 million from $6.439 million in 2023. This growth is largely attributed to increased sales volume to existing partners, such as Symmetry Surgical, under their long-term manufacturing and supply agreement.

The following table summarizes the revenue streams for Apyx Medical Corporation:

Revenue Stream	Sales (in thousands) Q3 2024	Sales (in thousands) Q3 2023	Change (%)
Advanced Energy	$9,288	$9,836	(5.6)
OEM	$2,199	$2,140	2.8
Total Revenue	$11,487	$11,976	(4.1)

Overall, Apyx Medical Corporation’s revenue streams reflect a diverse business model focused on direct sales of medical devices, recurring service contracts, and strategic OEM partnerships, which collectively support the company's financial performance and market growth strategies.

Updated on 16 Nov 2024

Resources:

1. Apyx Medical Corporation (APYX) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Apyx Medical Corporation (APYX)' financial performance, including balance sheets, income statements, and cash flow statements.
2. SEC Filings – View Apyx Medical Corporation (APYX)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.