0001628280-24-047301 | 10-Q | XBRL Viewer

Stockholders' Equity and Stock-based Compensation Expense

9 Months Ended

Sep. 30, 2024

Share-Based Payment Arrangement [Abstract]

Stockholders' Equity and Stock-based Compensation Expense

Stockholders’ Equity and Stock-based Compensation Expense

The Company’s equity incentive plans are broad-based, long-term programs intended to attract and retain talented employees and align stockholder and employee interests. The 2019 Equity Incentive Plan (the “2019 Plan”) and the 2023 Inducement Equity Plan (the “2023 Plan”) provides for the grant of incentive stock options, non-statutory stock options, restricted stock units (“RSUs”), performance stock units (“PSUs”), and other stock or cash awards.

Activity under the Company's equity incentive plans is summarized as follows:



			Shares Available for Grant
Balance, December 31, 2023			3,554,537
Change in shares available to be granted			149,374
Options and stock awards granted			(3,551,991)
Stock awards canceled / forfeited / expired			186,125
Options canceled / forfeited / expired			2,475,368
Elimination of fungible share ratio			196,320
Balance, September 30, 2024			3,009,733

The equity plans deduct the shares available for issuance by the gross number of shares for which an award is exercised or vests, not the net number of shares actually issued upon exercise, in the event the exercise price is paid in shares of the Company's common stock or shares are withheld to satisfy tax withholding obligations. Any RSU or PSU shares granted on or after July 13, 2023, and before July 15, 2024, were counted against the shares available for grant at a ratio of 1.65 shares for every one share granted. At the Company’s Annual Stockholder Meeting on July 15, 2024, the Company’s stockholders voted to eliminate this fungible share ratio.

At the Company’s Annual Stockholder Meeting on July 15, 2024, the Company’s stockholders voted to increase the total number of shares of common stock available for issuance under the 2019 Plan by 2,395,273 shares. The 2023 Plan was terminated effective July 15, 2024, and had 2,245,901 shares available for issuance at that date.

On May 22, 2024, the Company’s Compensation Committee approved a modification of the vesting targets related to three PSU grants and one stock option grant issued to senior management employees. The original vesting targets were based on the closing price of the Company’s common stock. These targets were modified to targets based on the Company’s market capitalization. The incremental stock compensation expense related to this modification was not material.

On July 15, 2024, the Company’s stockholders approved a repricing of all outstanding stock option grants. A total of 2,159,425 stock options consisting of 265 grants attributable to 114 different employees and directors were repriced to an exercise price of $1.54, the closing price of the Company’s common stock on July 15, 2024. The weighted average exercise price of these stock option grants prior to repricing was $9.25. The stock options repriced are included in the total options granted and total options cancelled within the option roll-forward as of September 30, 2024. The incremental stock compensation expense related to this modification was $0.7 million, comprising $0.1 million related to vested shares, which was immediately expensed, and $0.6 million related to unvested shares, which will be recognized as expense over the remaining vesting period of the original grants,


	Options Outstanding
	Number of Stock Options Outstanding	Weighted Average Exercise Price		Weighted Average Remaining Term (in Years)
Balance, December 31, 2023	1,282,240	$	17.97	8.21
Options granted	3,424,252	$	1.73
Options exercised	—	$	—
Options canceled / forfeited / expired	(2,475,368)	$	9.52
Balance, September 30, 2024	2,231,124	$	2.42	7.18


	Stock Awards Outstanding
	Number of Awards Outstanding	Weighted Average Grant Date Fair Value per Share
Balance, December 31, 2023	909,862	$	20.46
Stock awards granted	127,739	$	2.13
Awards vested	(280,414)	$	22.41
Stock awards canceled / forfeited / expired	(186,125)	$	25.41
Balance, September 30, 2024	571,062	$	13.91

Stock-based Compensation Expense

Stock-based compensation expense by financial statement line item recognized during the nine months ended September 30, 2024 and 2023 was as follows (in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
Cost of revenue	$	102	$	(19)	$	394	$	706
Sales and marketing	1,089		593		1,335		3,024
Research and development	285		(178)		854		930
General and administrative	365		1,220		2,960		1,892
Total stock-based compensation expense	$	1,841	$	1,616	$	5,543	$	6,552

Balance Sheet Details (Tables)

9 Months Ended

Sep. 30, 2024

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Schedule of Inventories

Inventories consist of the following (in thousands):


	September 30, 2024		December 31, 2023
Raw materials	$	40,804	$	36,970
Work in process	4,816		889
Finished goods	11,288		24,741
Total	$	56,908	$	62,600

Long-term inventories consist of the following (in thousands):


	September 30, 2024		December 31, 2023
Raw materials	$	16,610	$	8,672
Work in process	271		2,049
Finished goods	11,783		5,562
Total	$	28,664	$	16,283

Schedule of Other Current Assets and Prepaid Expenses

Other current assets and a prepaid expenses consist of the following (in thousands):


	September 30, 2024		December 31, 2023
Deposits with vendors	$	4,778	$	9,501

Prepayments	4,894		3,819
Sale tax and VAT receivable	2,870		6,307
Other	300		225
Total	$	12,842	$	19,852

Schedule of Property and Equipment, Net

Property and equipment, net consists of the following (in thousands):


	September 30, 2024		December 31, 2023
AviClear devices	$	25,999	$	38,490

Machinery and equipment	5,546		4,944
Office equipment and furniture	1,815		1,884
Leasehold improvements	1,438		1,010
Assets under construction	653		1,274
	35,451		47,602
Less: Accumulated depreciation	(11,930)		(10,327)
Property and equipment, net	$	23,521	$	37,275

Schedule of Accrued Liabilities

Accrued liabilities consist of the following (in thousands):


	September 30, 2024		December 31, 2023
Bonus and payroll-related accruals	$	12,598	$	13,949
Accrued interest	3,736		1,304
Product warranty	3,549		2,593
Sales and marketing accruals	3,291		4,929
Accrued sales tax	2,810		6,325
Liability for inventory in transit	1,456		5,461
Jabil settlement obligation, net	—		8,908
Other accrued liabilities	8,532		11,586
Total	$	35,972	$	55,055

Leases - Cash Paid for Amounts Included in the Measurement of Lease Liabilities (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023
Leases [Abstract]
Operating cash flow, Finance lease	$ 108	$ 62
Financing cash flow, Finance lease	582	386
Operating cash flow, Operating lease	$ 995	$ 2,449

Commitments and Contingencies - Narrative (Details) - USD ($) $ in Thousands	May 31, 2024	Sep. 30, 2024	Dec. 31, 2023
Loss Contingencies [Line Items]
Inventory purchase obligation		$ 1,200
Pending Litigation
Loss Contingencies [Line Items]
Payments for legal settlements	$ 5,750
Accrued litigation liabilities		$ 2,600	$ 3,300

- Definition

Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table.

+ References + Details

Condensed Consolidated Statements of Changes In Stockholders' Deficit - USD ($) $ in Thousands	Total	Common Stock	Additional Paid-in Capital	Accumulated Deficit	Accumulated Other Comprehensive Loss
Beginning Balance (in shares) at Dec. 31, 2022		19,668,603
Beginning Balance at Dec. 31, 2022	$ (15,181)	$ 20	$ 125,406	$ (140,513)	$ (94)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of common stock for employee purchase plan (in shares)		51,786
Issuance of common stock for employee purchase plan	711		711
Exercise of stock options (in shares)		42,234
Exercise of stock options	612		612
Issuance of common stock in settlement of restricted and performance stock units, net of shares withheld for employee taxes (in shares)		186,180
Issuance of common stock in settlement of restricted and performance stock units, net of shares withheld for employee taxes	(3,273)		(3,273)
Stock-based compensation expense	6,552		6,552
Net change in unrealized gain on available-for-sale investments	94				94
Net loss	(105,600)			(105,600)
Ending Balance (in shares) at Sep. 30, 2023		19,948,803
Ending Balance at Sep. 30, 2023	(116,085)	$ 20	130,008	(246,113)	0
Beginning Balance (in shares) at Dec. 31, 2022		19,668,603
Beginning Balance at Dec. 31, 2022	(15,181)	$ 20	125,406	(140,513)	(94)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net loss	$ (162,800)
Ending Balance (in shares) at Dec. 31, 2023	19,960,622	19,960,622
Ending Balance at Dec. 31, 2023	$ (171,830)	$ 20	131,496	(303,346)	0
Beginning Balance (in shares) at Jun. 30, 2023		19,901,600
Beginning Balance at Jun. 30, 2023	(73,801)	$ 20	128,014	(201,839)	4
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of common stock for employee purchase plan (in shares)		0
Issuance of common stock for employee purchase plan	0		0
Exercise of stock options (in shares)		33,000
Exercise of stock options	465		465
Issuance of common stock in settlement of restricted and performance stock units, net of shares withheld for employee taxes (in shares)		14,203
Issuance of common stock in settlement of restricted and performance stock units, net of shares withheld for employee taxes	(87)		(87)
Stock-based compensation expense	1,616		1,616
Net change in unrealized gain on available-for-sale investments	(4)				(4)
Net loss	(44,274)			(44,274)
Ending Balance (in shares) at Sep. 30, 2023		19,948,803
Ending Balance at Sep. 30, 2023	$ (116,085)	$ 20	130,008	(246,113)	0
Beginning Balance (in shares) at Dec. 31, 2023	19,960,622	19,960,622
Beginning Balance at Dec. 31, 2023	$ (171,830)	$ 20	131,496	(303,346)	0
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Exercise of stock options (in shares)	0
Issuance of common stock in settlement of restricted and performance stock units, net of shares withheld for employee taxes (in shares)		217,095
Issuance of common stock in settlement of restricted and performance stock units, net of shares withheld for employee taxes	$ (110)		(110)
Stock-based compensation expense	5,543		5,543
Net change in unrealized gain on available-for-sale investments	0
Net loss	$ (86,477)			(86,477)
Ending Balance (in shares) at Sep. 30, 2024	20,177,717	20,177,717
Ending Balance at Sep. 30, 2024	$ (252,874)	$ 20	136,929	(389,823)	0
Beginning Balance (in shares) at Jun. 30, 2024		20,108,406
Beginning Balance at Jun. 30, 2024	(215,671)	$ 20	135,114	(350,805)	0
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of common stock in settlement of restricted and performance stock units, net of shares withheld for employee taxes (in shares)		69,311
Issuance of common stock in settlement of restricted and performance stock units, net of shares withheld for employee taxes	(26)		(26)
Stock-based compensation expense	1,841		1,841
Net change in unrealized gain on available-for-sale investments	0
Net loss	$ (39,018)			(39,018)
Ending Balance (in shares) at Sep. 30, 2024	20,177,717	20,177,717
Ending Balance at Sep. 30, 2024	$ (252,874)	$ 20	$ 136,929	$ (389,823)	$ 0

Segment Reporting

9 Months Ended

Sep. 30, 2024

Segment Reporting [Abstract]

Segment Reporting

Segment reporting is based on the “management approach,” following the method that management organizes the Company’s reportable segments for which separate financial information is made available to, and evaluated regularly by, the chief operating decision maker in allocating resources and in assessing performance. The Company’s chief operating decision maker ("CODM") is its Chief Executive Officer ("CEO"), who makes decisions on allocating resources and assessing performance.

In the three months ended December 31, 2023, the Company concluded a realignment of its operating segments to further drive its long-term strategic objectives. At the direction of the CEO, management reorganized its management reporting structure and began to manage its operations under one segment structure. The CEO, in making operating decisions, reviews consolidated financial information, accompanied by disaggregated information about revenues by geography and product. All of the Company’s principal operations and decision-making functions are located in the United States. Substantially all of the Company's long-lived assets are located in the United States.

The Company reassessed its reportable segments in the fourth quarter of fiscal year 2023 and determined it had one consolidated reportable segment beginning in the three months ended December 31, 2023.

The following table presents a summary of revenue by geography and product category for the three and nine months ended September 30, 2024 and 2023 (in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
Revenue mix by geography:
United States	$	12,043	$	21,526	$	38,870	$	69,630
Japan	3,420		11,529		14,847		37,247
Asia, excluding Japan	5,911		3,440		16,104		14,494
Europe	4,317		3,864		13,913		14,477
Rest of the World	6,809		6,119		21,936		26,981
Total consolidated revenue	$	32,500	$	46,478	$	105,670	$	162,829
Revenue mix by product category:
Systems	$	23,024	$	27,600	$	71,184	$	101,404
Consumables	4,218		6,248		13,330		20,186
Skincare	—		7,141		4,200		24,695
Total product revenue	27,242		40,989		88,714		146,285
Service	5,258		5,489		16,956		16,544
Total consolidated revenue	$	32,500	$	46,478	$	105,670	$	162,829

- Definition

The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments.

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+ Details

Leases - Maturities of Operating Lease Liabilities (Details) - USD ($) $ in Thousands	Sep. 30, 2024	Dec. 31, 2023
Leases [Abstract]
Remainder of 2024	$ 1,998
2025	4,117
2026	4,076
2027	3,304
2028	325
2029 and thereafter	148
Total lease payments	13,968
Less: imputed interest	2,185
Present value of lease liabilities	$ 11,783	$ 11,328

Fair Value of Financial Instruments (Details) - USD ($) $ in Thousands	Sep. 30, 2024	Dec. 31, 2023	Dec. 31, 2022	May 31, 2022	Mar. 31, 2021
Convertible Senior Notes Due 2026 \| Convertible notes
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Interest rate (in percent)	2.25%				2.25%
Convertible Senior Notes Due 2028 \| Convertible notes
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Interest rate (in percent)	2.25%			2.25%
Convertible Senior Notes Due 2029 \| Convertible notes
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Interest rate (in percent)	4.00%		4.00%
Money market funds \| Level 1 \| Fair Value, Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash equivalents:	$ 51,248	$ 123,387

Segment Reporting - Schedule of Revenue (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Disaggregation of Revenue [Line Items]
Total net revenue	$ 32,500	$ 46,478	$ 105,670	$ 162,829
Total product revenue
Disaggregation of Revenue [Line Items]
Total net revenue	27,242	40,989	88,714	146,285
Systems
Disaggregation of Revenue [Line Items]
Total net revenue	23,024	27,600	71,184	101,404
Consumables
Disaggregation of Revenue [Line Items]
Total net revenue	4,218	6,248	13,330	20,186
Skincare
Disaggregation of Revenue [Line Items]
Total net revenue	0	7,141	4,200	24,695
Service
Disaggregation of Revenue [Line Items]
Total net revenue	5,258	5,489	16,956	16,544
United States
Disaggregation of Revenue [Line Items]
Total net revenue	12,043	21,526	38,870	69,630
Japan
Disaggregation of Revenue [Line Items]
Total net revenue	3,420	11,529	14,847	37,247
Asia, excluding Japan
Disaggregation of Revenue [Line Items]
Total net revenue	5,911	3,440	16,104	14,494
Europe
Disaggregation of Revenue [Line Items]
Total net revenue	4,317	3,864	13,913	14,477
Rest of the World
Disaggregation of Revenue [Line Items]
Total net revenue	$ 6,809	$ 6,119	$ 21,936	$ 26,981

Leases

9 Months Ended

Sep. 30, 2024

Leases [Abstract]

Leases

Lessee

The Company is a party to certain operating and finance leases for vehicles, office space and storage facilities. The Company’s material operating leases consist of office space, as well as storage facilities and finance leases consist of automobile leases. The Company’s leases generally have remaining terms of one to 7 years, some of which include options to renew the leases for up to five years. The Company leases space for operations in the United States, Japan, Belgium, France, and Spain.

The Company determines if a contract contains a lease at inception. Operating lease assets and liabilities are recognized at the lease commencement date. Operating lease liabilities represent the present value of lease payments not yet paid. Operating lease assets represent the right to use an underlying asset and are based upon the operating lease liabilities adjusted for prepayments or accrued lease payments, initial direct costs, lease incentives, and impairment of operating lease assets. To determine the present value of lease payments not yet paid, the Company estimates the incremental secured borrowing rates corresponding to the maturities of the leases. The Company based the rate estimates on prevailing financial market conditions, credit analysis, and management judgment.

Tenant incentives used to fund leasehold improvements are recognized when earned and reduce the Company’s right-of-use asset related to the lease. These are amortized through the right-of-use asset as reductions of expense over the lease term.

Supplemental balance sheet information related to leases was as follows (in thousands):


Leases	Classification	September 30, 2024		December 31, 2023
Assets
Right-of-use assets	Operating lease right-of-use assets	$	10,593	$	10,055
Finance lease	Property and equipment, net	1,094		2,516
Total leased assets		$	11,687	$	12,571


Liabilities	Classification	September 30, 2024		December 31, 2023
Operating lease liabilities
Operating lease liabilities, current	Operating lease liabilities	$	3,386	$	2,441
Operating lease liabilities, non-current	Operating lease liabilities, net of current portion	8,397		8,887
Total Operating lease liabilities		$	11,783	$	11,328

Finance lease liabilities
Finance lease liabilities, current	Accrued liabilities	$	672	$	825
Finance lease liabilities, non-current	Other long-term liabilities	569		1,064
Total Finance lease liabilities		$	1,241	$	1,889

Lease costs during the three and nine months ended September 30, 2024 and 2023 (in thousands) was as follows:


		Three Months Ended September 30,				Nine Months Ended September 30,
Lease costs	Classification	2024		2023		2024		2023
Finance lease cost	Amortization expense	$	246	$	209	$	770	$	507
Finance lease cost	Interest for finance lease	$	33	$	23	$	112	$	61
Operating lease cost	Operating lease expense	$	1,083	$	921	$	3,145	$	2,701

Cash paid for amounts included in the measurement of lease liabilities during the nine months ended September 30, 2024 and 2023 was as follows (in thousands):


		Nine Months Ended September 30,
Cash paid for amounts included in the measurement of lease liabilities	Classification	2024		2023
Operating cash flow	Finance lease	$	108	$	62
Financing cash flow	Finance lease	$	582	$	386
Operating cash flow	Operating lease	$	995	$	2,449

Operating leases

Maturities of operating facility leases were as follows as of September 30, 2024 (in thousands):


As of September 30, 2024	Amount
Remainder of 2024	$	1,998
2025	4,117
2026	4,076
2027	3,304
2028	325
2029 and thereafter	148
Total lease payments	13,968
Less: imputed interest	2,185
Present value of lease liabilities	$	11,783

Finance Leases

As of September 30, 2024, the Company was committed to minimum lease payments for vehicles leased under long-term non-cancelable finance leases as follows (in thousands):


As of September 30, 2024	Amount
Remainder of 2024	$	239
2025	697
2026	424
2027	16
Total lease payments	1,376
Less: imputed interest	135
Present value of lease liabilities	$	1,241

Weighted-average remaining lease term and discount rate, as of September 30, 2024, were as follows:


Lease Term and Discount Rate	September 30, 2024
Weighted-average remaining lease term (years)
Operating leases	3.2
Finance leases	1.8
Weighted-average discount rate
Operating leases	5.6	%
Finance leases	9.5	%

Lessor - AviClear

Lessor revenue

The Company leases the AviClear device to customers and receives a fixed annual license fee over the term of the arrangement and variable revenue related to the number of treatments performed by the lessee. The contractual term of the lease agreement is three years with a one-year auto-renewal feature. Certain lease agreements' terms in excess of one year can be terminated without financial penalty, and these agreements are accounted for as having a lease term of one year. The AviClear lease agreements are accounted for as operating leases. The fixed annual license fee is recognized evenly throughout the period of the lease agreement on a straight-line basis. The treatment revenue is recognized in the period the lessee has the ability to perform the patient treatment.

The following table summarizes the amount of operating lease income included in product revenue in the accompanying condensed consolidated statements of operations (in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
AviClear operating lease license fee revenue	$	476	$	1,324	$	2,069	$	3,916
AviClear operating lease revenue	517		2,565		2,418		8,504
Total AviClear revenue	$	993	$	3,889	$	4,487	$	12,420

The AviClear device being leased has an estimated useful life of seven years.

The following is the minimum future lease payments as of September 30, 2024, under non-cancelable operating leases, assuming the minimum contractual lease term (in thousands):


As of September 30, 2024	Amount
Remainder of 2024	$	3,267
2025	2,265
Total	$	5,532

Practical Expedients

The Company elected to apply a practical expedient to operating leases and elected not to separate lease and nonlease components as long as the lease and at least one nonlease component have the same timing and pattern of transfer. As such, updates or upgrades on a when-and-if available basis to the AviClear device are combined with the operating lease revenue. The combined component is being accounted for under ASC 842. Additionally, the Company made an accounting policy election to present AviClear revenue net of sales and other similar taxes.

Capitalized sales commissions

Sales commissions related to obtaining AviClear lease agreements are accounted for as initial direct costs and are capitalized and amortized on a straight-line basis over the lease term. Amortization expenses for these assets were $0.3 million and $1.2 million for the three and nine-month periods ended September 30, 2024, and $1.2 million and $3.5 million for the comparative periods ended September 30, 2023, and were included in sales and marketing expense on the Company’s condensed consolidated statement of operations. Total capitalized commissions as of September 30, 2024, and December 31, 2023, were $1.6 million and $2.7 million, respectively, and are included in other long-term assets on the Company’s condensed consolidated balance sheet.

Lease installment costs

The Company capitalizes fulfillment costs incurred before AviClear lease commencement and these costs include freight, installation, and training costs. Amortization expenses for these assets were $0.4 million and $1.3 million for the three and nine-month periods ended September 30, 2024 and $0.7 million and $1.7 million for the comparative periods ended September 30, 2023, and were included in cost of revenue on the Company’s condensed consolidated statement of operations. Total lease installment costs as of September 30, 2024, and December 31, 2023, were $0.7 million and $2.1 million, respectively, and are included in other long-term assets on the Company’s condensed consolidated balance sheet.

Leases

Lessee

Supplemental balance sheet information related to leases was as follows (in thousands):


Leases	Classification	September 30, 2024		December 31, 2023
Assets
Right-of-use assets	Operating lease right-of-use assets	$	10,593	$	10,055
Finance lease	Property and equipment, net	1,094		2,516
Total leased assets		$	11,687	$	12,571


Liabilities	Classification	September 30, 2024		December 31, 2023
Operating lease liabilities
Operating lease liabilities, current	Operating lease liabilities	$	3,386	$	2,441
Operating lease liabilities, non-current	Operating lease liabilities, net of current portion	8,397		8,887
Total Operating lease liabilities		$	11,783	$	11,328

Finance lease liabilities
Finance lease liabilities, current	Accrued liabilities	$	672	$	825
Finance lease liabilities, non-current	Other long-term liabilities	569		1,064
Total Finance lease liabilities		$	1,241	$	1,889

Lease costs during the three and nine months ended September 30, 2024 and 2023 (in thousands) was as follows:


		Three Months Ended September 30,				Nine Months Ended September 30,
Lease costs	Classification	2024		2023		2024		2023
Finance lease cost	Amortization expense	$	246	$	209	$	770	$	507
Finance lease cost	Interest for finance lease	$	33	$	23	$	112	$	61
Operating lease cost	Operating lease expense	$	1,083	$	921	$	3,145	$	2,701

Cash paid for amounts included in the measurement of lease liabilities during the nine months ended September 30, 2024 and 2023 was as follows (in thousands):


		Nine Months Ended September 30,
Cash paid for amounts included in the measurement of lease liabilities	Classification	2024		2023
Operating cash flow	Finance lease	$	108	$	62
Financing cash flow	Finance lease	$	582	$	386
Operating cash flow	Operating lease	$	995	$	2,449

Operating leases

Maturities of operating facility leases were as follows as of September 30, 2024 (in thousands):


As of September 30, 2024	Amount
Remainder of 2024	$	1,998
2025	4,117
2026	4,076
2027	3,304
2028	325
2029 and thereafter	148
Total lease payments	13,968
Less: imputed interest	2,185
Present value of lease liabilities	$	11,783

Finance Leases

As of September 30, 2024, the Company was committed to minimum lease payments for vehicles leased under long-term non-cancelable finance leases as follows (in thousands):


As of September 30, 2024	Amount
Remainder of 2024	$	239
2025	697
2026	424
2027	16
Total lease payments	1,376
Less: imputed interest	135
Present value of lease liabilities	$	1,241

Weighted-average remaining lease term and discount rate, as of September 30, 2024, were as follows:


Lease Term and Discount Rate	September 30, 2024
Weighted-average remaining lease term (years)
Operating leases	3.2
Finance leases	1.8
Weighted-average discount rate
Operating leases	5.6	%
Finance leases	9.5	%

Lessor - AviClear

Lessor revenue

The following table summarizes the amount of operating lease income included in product revenue in the accompanying condensed consolidated statements of operations (in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
AviClear operating lease license fee revenue	$	476	$	1,324	$	2,069	$	3,916
AviClear operating lease revenue	517		2,565		2,418		8,504
Total AviClear revenue	$	993	$	3,889	$	4,487	$	12,420

The AviClear device being leased has an estimated useful life of seven years.

The following is the minimum future lease payments as of September 30, 2024, under non-cancelable operating leases, assuming the minimum contractual lease term (in thousands):


As of September 30, 2024	Amount
Remainder of 2024	$	3,267
2025	2,265
Total	$	5,532

Practical Expedients

Capitalized sales commissions

Lease installment costs

Leases

Lessee

Supplemental balance sheet information related to leases was as follows (in thousands):


Leases	Classification	September 30, 2024		December 31, 2023
Assets
Right-of-use assets	Operating lease right-of-use assets	$	10,593	$	10,055
Finance lease	Property and equipment, net	1,094		2,516
Total leased assets		$	11,687	$	12,571


Liabilities	Classification	September 30, 2024		December 31, 2023
Operating lease liabilities
Operating lease liabilities, current	Operating lease liabilities	$	3,386	$	2,441
Operating lease liabilities, non-current	Operating lease liabilities, net of current portion	8,397		8,887
Total Operating lease liabilities		$	11,783	$	11,328

Finance lease liabilities
Finance lease liabilities, current	Accrued liabilities	$	672	$	825
Finance lease liabilities, non-current	Other long-term liabilities	569		1,064
Total Finance lease liabilities		$	1,241	$	1,889

Lease costs during the three and nine months ended September 30, 2024 and 2023 (in thousands) was as follows:


		Three Months Ended September 30,				Nine Months Ended September 30,
Lease costs	Classification	2024		2023		2024		2023
Finance lease cost	Amortization expense	$	246	$	209	$	770	$	507
Finance lease cost	Interest for finance lease	$	33	$	23	$	112	$	61
Operating lease cost	Operating lease expense	$	1,083	$	921	$	3,145	$	2,701

Cash paid for amounts included in the measurement of lease liabilities during the nine months ended September 30, 2024 and 2023 was as follows (in thousands):


		Nine Months Ended September 30,
Cash paid for amounts included in the measurement of lease liabilities	Classification	2024		2023
Operating cash flow	Finance lease	$	108	$	62
Financing cash flow	Finance lease	$	582	$	386
Operating cash flow	Operating lease	$	995	$	2,449

Operating leases

Maturities of operating facility leases were as follows as of September 30, 2024 (in thousands):


As of September 30, 2024	Amount
Remainder of 2024	$	1,998
2025	4,117
2026	4,076
2027	3,304
2028	325
2029 and thereafter	148
Total lease payments	13,968
Less: imputed interest	2,185
Present value of lease liabilities	$	11,783

Finance Leases

As of September 30, 2024, the Company was committed to minimum lease payments for vehicles leased under long-term non-cancelable finance leases as follows (in thousands):


As of September 30, 2024	Amount
Remainder of 2024	$	239
2025	697
2026	424
2027	16
Total lease payments	1,376
Less: imputed interest	135
Present value of lease liabilities	$	1,241

Weighted-average remaining lease term and discount rate, as of September 30, 2024, were as follows:


Lease Term and Discount Rate	September 30, 2024
Weighted-average remaining lease term (years)
Operating leases	3.2
Finance leases	1.8
Weighted-average discount rate
Operating leases	5.6	%
Finance leases	9.5	%

Lessor - AviClear

Lessor revenue

The following table summarizes the amount of operating lease income included in product revenue in the accompanying condensed consolidated statements of operations (in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
AviClear operating lease license fee revenue	$	476	$	1,324	$	2,069	$	3,916
AviClear operating lease revenue	517		2,565		2,418		8,504
Total AviClear revenue	$	993	$	3,889	$	4,487	$	12,420

The AviClear device being leased has an estimated useful life of seven years.

The following is the minimum future lease payments as of September 30, 2024, under non-cancelable operating leases, assuming the minimum contractual lease term (in thousands):


As of September 30, 2024	Amount
Remainder of 2024	$	3,267
2025	2,265
Total	$	5,532

Practical Expedients

Capitalized sales commissions

Lease installment costs

Deferred Revenue - Summary of Deferred Service Contract Revenue (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Change in Contract with Customer, Liability [Roll Forward]
Beginning balance	$ 10,305	$ 14,007	$ 11,916	$ 13,498
Add: Payments received from current period sales	4,037	5,005	14,317	15,140
Less: Revenue recognized from current period sales	(1,166)	(405)	(4,317)	(4,902)
Less: Revenue recognized from beginning balance	(2,368)	(5,499)	(9,394)	(10,628)
Pending lease cancellations	(737)	0	(2,451)	0
Ending balance	$ 10,071	$ 13,108	$ 10,071	$ 13,108

Revenue	9 Months Ended
Revenue	Sep. 30, 2024
Revenue from Contract with Customer [Abstract]
Revenue	Revenue Revenue is recognized upon transfer of control of promised products or services to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for promised goods or services. The Company’s performance obligations are satisfied either over time or at a point in time. Revenue from performance obligations that are transferred to customers over time accounted for approximately 11% and 13%, respectively, of the Company's total revenue for the three and nine months ended September 30, 2024, and 13% and 10% for the three and nine months ended September 30, 2023. The Company has certain system sale arrangements that contain multiple products and services. For these bundled sale arrangements, the Company accounts for individual products and services as separate performance obligations if they are distinct. The Company’s products and services are distinct if a customer can benefit from the product or service on its own or with other resources that are readily available to the customer, and if the Company’s promise to transfer the products or service to the customer is separately identifiable from other promises in the sale arrangements. The Company’s system sale arrangements can include all or a combination of the following performance obligations: the system and software license (considered one performance obligation), system accessories (hand pieces), training, AviClear license agreements, other accessories, extended service contracts, marketing services, and time and materials services. For the Company’s system sale arrangements that include an extended service contract, the period of service commences at the expiration of the Company’s standard warranty offered at the time of the system sale. The Company considers the extended service contracts terms in the arrangements that are legally enforceable to be performance obligations. Other than extended service contracts and marketing services, which are satisfied over time, the Company generally satisfies all performance obligations at a point in time. Systems, system accessories (hand pieces), service contracts, training, and time and materials services are also sold on a stand-alone basis. For contracts with multiple performance obligations, the Company allocates the transaction price of the contract to each performance obligation on a relative standalone selling price basis. Nature of Products and Services Systems Systems revenue is generated from the sale of systems and from the sale of upgrades to existing systems. A system consists of a console that incorporates a universal graphic user interface, a laser or other energy-based module, control system software and high voltage electronics, as well as one or more hand pieces. In certain applications, the laser or other energy-based module is contained in the hand piece, rather than within the console. The Company offers customers the ability to select the system that best fits their practice at the time of purchase and then to cost-effectively add applications to their system as their practice grows. This provides customers the flexibility to upgrade their systems whenever they choose and provides the Company with a source of additional Systems revenue. The system or upgrade and the right to use the embedded software represent a single performance obligation as the software license is integral to the functionality of the system or upgrade. For systems sold directly to end-customers that are credit approved, revenue is recognized when the Company transfers control to the end-customer, which occurs when the product is shipped to the customer or when the customer receives the product, depending on the nature of the arrangement. When collectability is not established in advance of receipt of payment from the customer, revenue is recognized upon the later of the receipt of payment or the satisfaction of the performance obligation. For systems sold through credit approved distributors, revenue is recognized at the time of shipment to the distributor. The Company leases certain AviClear devices to customers and receives a fixed annual license fee over the term of the arrangement and variable lease income related to treatments performed by the lessee. In the fourth quarter of 2023, the Company announced a change in the AviClear business strategy and moved towards a direct sales model rather than a leasing model, whereby certain existing lessees were offered an option to purchase the leased AviClear device. The Company classifies its lease income and direct sales as product revenue and classifies the AviClear lease contracts as operating leases for the devices under the leasing model. The fixed annual license fee is recognized evenly over the period of the lease contract on a straight-line basis. The treatment fee is recognized as consumable revenue in the period the treatment protocol is initiated. The Company's payment terms for its system consoles and other accessories require payment within 30 days of shipment. Certain international distributor arrangements allow for longer payment terms. Consumables and other accessories The Company classifies its customers' purchases of replacement cycles for truSculpt and truFlex, as well as replacement hand pieces, xeo and truSculpt 3D hand pieces, AviClear treatment fee revenue, and single use disposable tips applicable to Secret PRO, and Secret RF as Consumable revenue. The Secret PRO, Secret DUO, and Secret RF products' single use disposable tips must be replaced after every treatment. The Company’s systems offer multiple hand pieces and applications, which allow customers to upgrade their systems. Revenue for consumables and other accessories is recognized when products are shipped to customers. Skincare products The Company generated revenue from the distribution of skincare products, which were manufactured by ZO Skin Health, Inc. (“ZO”), and sold in the Japanese market to medical offices and licensed physicians. The Company warranted that the skincare products are free of significant defects in workmanship and materials for 90 days from shipment. The Company acted as the principal in this arrangement, as the Company determined the price to charge customers for the skincare products and controlled the products before they were transferred to the customer. The Company recognized revenue for skincare products at a point in time upon shipment. On February 28, 2024, the Company entered into a termination agreement with ZO, which terminated all agreements related to the distribution by the Company of ZO’s products in Japan, as disclosed in Note 1. During the three months ended September 30, 2024, revenue from the distribution of skincare products was nil due to the termination of all agreements. Extended service contract The Company offers post-warranty services to its customers through extended service contracts that cover parts and labor for a term of one to three years. Service contract revenue is recognized over time, using a time-based measure of progress, as customers benefit from the service throughout the service period. The Company also offers services on a time and materials basis for systems and detachable hand piece replacements. Revenue related to services performed on a time and materials basis is recognized when performed. Training Sales of systems to customers include training on the use of the system to be provided within 90 days of purchase. The Company considers training a separate performance obligation as customers can immediately benefit from the training, and training is also sold separately from systems. The Company recognizes revenue for training when the training is provided. Significant Judgments The Company determines standalone selling price (“SSP”) for each performance obligation as follows: •Systems: The SSPs for systems are based on directly observable sales in similar circumstances to similar customers. •Extended warranty/Service contracts: SSP is based on observable price when sold on a standalone basis to similar customers. Deferred Sales Commissions Incremental costs of obtaining a contract related to the sale of a system, which consist primarily of commissions and related payroll taxes, are capitalized, and amortized on a straight-line basis over the expected period of benefit, except for costs that are recognized when the product is sold. The Company uses the portfolio method to recognize the amortization expense related to these capitalized costs related to initial contracts and such expense is recognized over a period associated with the revenue of the related portfolio, which is generally two to three years. Total capitalized commissions as of September 30, 2024 and December 31, 2023 were $1.8 million and $2.4 million, respectively, and are included in other long-term assets on the Company’s condensed consolidated balance sheet. Amortization expense for these assets was $0.4 million and $1.4 million during the three and nine months ended September 30, 2024, respectively, and $0.6 million and $1.9 million for the three and nine months ended September 30, 2023, respectively. The amortization related to these capitalized costs is included in sales and marketing expense on the Company’s condensed consolidated statement of operations.

- Definition

The entire disclosure of revenue from contract with customer to transfer good or service and to transfer nonfinancial asset. Includes, but is not limited to, disaggregation of revenue, credit loss recognized from contract with customer, judgment and change in judgment related to contract with customer, and asset recognized from cost incurred to obtain or fulfill contract with customer. Excludes insurance and lease contracts.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 9
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147479806/606-10-50-9

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 10
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147479806/606-10-50-10

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 15
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147479806/606-10-50-15

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 12
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147479806/606-10-50-12

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 12
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147479806/606-10-50-12

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 12
-Subparagraph (c)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147479806/606-10-50-12

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 12
-Subparagraph (d)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147479806/606-10-50-12

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 12
-Subparagraph (e)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147479806/606-10-50-12

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 13
-Subparagraph (b)(2)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147479806/606-10-50-13

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Name Accounting Standards Codification
-Topic 606
-Publisher FASB
-URI https://asc.fasb.org/606/tableOfContent

+ Details

Leases - Lease Costs (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
Leases - Lease Costs (Details) - USD ($) $ in Thousands	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Leases [Abstract]
Finance lease cost, Amortization expense	$ 246	$ 209	$ 770	$ 507
Finance lease cost, Interest for finance lease	33	23	112	61
Operating lease cost	$ 1,083	$ 921	$ 3,145	$ 2,701

Debt (Tables)

9 Months Ended

Sep. 30, 2024

Debt Disclosure [Abstract]

Schedule of Convertible Notes

The following table presents the outstanding principal amount and carrying value of the Company’s Convertible Notes (in thousands):


	September 30, 2024		December 31, 2023
Notes due in 2026
Outstanding principal amount	$	69,125	$	69,125
Unamortized debt issuance costs	(724)		(1,084)
Carrying Value	$	68,401	$	68,041

Notes due in 2028
Outstanding principal amount	$	240,000	$	240,000
Unamortized debt issuance costs	(4,796)		(5,714)
Carrying Value	$	235,204	$	234,286

Notes due in 2029
Outstanding principal amount	$	120,000	$	120,000
Unamortized debt issuance costs	(3,183)		(3,632)
Carrying Value	$	116,817	$	116,368

Convertible notes, net	$	420,422	$	418,695

Stockholders' Equity and Stock-based Compensation Expense (Tables)

9 Months Ended

Sep. 30, 2024

Share-Based Payment Arrangement [Abstract]

Schedule of Activity under the 2019 Plan

Activity under the Company's equity incentive plans is summarized as follows:



			Shares Available for Grant
Balance, December 31, 2023			3,554,537
Change in shares available to be granted			149,374
Options and stock awards granted			(3,551,991)
Stock awards canceled / forfeited / expired			186,125
Options canceled / forfeited / expired			2,475,368
Elimination of fungible share ratio			196,320
Balance, September 30, 2024			3,009,733


	Options Outstanding
	Number of Stock Options Outstanding	Weighted Average Exercise Price		Weighted Average Remaining Term (in Years)
Balance, December 31, 2023	1,282,240	$	17.97	8.21
Options granted	3,424,252	$	1.73
Options exercised	—	$	—
Options canceled / forfeited / expired	(2,475,368)	$	9.52
Balance, September 30, 2024	2,231,124	$	2.42	7.18


	Stock Awards Outstanding
	Number of Awards Outstanding	Weighted Average Grant Date Fair Value per Share
Balance, December 31, 2023	909,862	$	20.46
Stock awards granted	127,739	$	2.13
Awards vested	(280,414)	$	22.41
Stock awards canceled / forfeited / expired	(186,125)	$	25.41
Balance, September 30, 2024	571,062	$	13.91

Schedule of Stock-based Compensation Expense

Stock-based compensation expense by financial statement line item recognized during the nine months ended September 30, 2024 and 2023 was as follows (in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
Cost of revenue	$	102	$	(19)	$	394	$	706
Sales and marketing	1,089		593		1,335		3,024
Research and development	285		(178)		854		930
General and administrative	365		1,220		2,960		1,892
Total stock-based compensation expense	$	1,841	$	1,616	$	5,543	$	6,552

Cash, Cash Equivalents, Restricted Cash and Marketable Investments	9 Months Ended
	Sep. 30, 2024
Cash and Cash Equivalents [Abstract]
Cash, Cash Equivalents, Restricted Cash and Marketable Investments	Cash, Cash Equivalents, Restricted Cash and Marketable Investments The Company determines the appropriate classification of its investments in marketable securities at the time of purchase and re-evaluates such designation at each balance sheet date. The Company’s marketable securities have been classified and accounted for as available-for-sale securities. Investments with remaining maturities of more than one year are viewed by the Company as available to support current operations and are classified as current assets under the caption marketable investments in the accompanying consolidated balance sheets. Investments in available-for-sale debt securities are measured at fair value under the guidance in ASC 320. Credit losses on impaired available-for-sale debt securities are recognized through an allowance for credit losses. Under ASC 326, credit losses recognized on an available-for-sale debt security should not reduce the net carrying amount of the available-for-sale debt security below its fair value. Any changes in fair value unrelated to credit are recognized as an unrealized gain or loss in other comprehensive income. The Company's cash, cash equivalents, and restricted cash were $59.0 million and $143.6 million as of September 30, 2024 and December 31, 2023, respectively. There were no marketable investments as of those dates. There was $1.4 million of restricted cash as of September 30, 2024.

Stockholders' Equity and Stock-based Compensation Expense - Narrative (Details) $ / shares in Units, $ in Millions			9 Months Ended
	Jul. 15, 2024 grant employeeAndDirector $ / shares shares	May 22, 2024 grant	Sep. 30, 2024 USD ($) $ / shares shares	Jul. 14, 2024 $ / shares	Dec. 31, 2023 $ / shares shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Tax withholding ratio			1.65
Stock options (in shares) \| shares	2,159,425		3,009,733		3,554,537
Number of grants \| grant	265
Number of different employees and directors \| employeeAndDirector	114
Weighted average exercise price (in dollars per share) \| $ / shares	$ 1.54		$ 2.42	$ 9.25	$ 17.97
Incremental stock compensation expense \| $			$ 0.7
Incremental stock compensation expense related to vested shares \| $			0.1
Incremental stock compensation expense related to unvested shares \| $			$ 0.6
Performance Stock Units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Modification of vesting targets, number of grants \| grant		3
Employee Stock Option
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Modification of vesting targets, number of grants \| grant		1
2019 Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Additional shares authorized (in shares) \| shares	2,395,273
2023 Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares authorized (in shares) \| shares	2,245,901

Debt - Outstanding Debt and Carrying Value (Details) - USD ($) $ in Thousands	Sep. 30, 2024	Dec. 31, 2023	Jun. 01, 2022
Debt Instrument [Line Items]
Unamortized debt issuance costs	$ (8,703)	$ (10,430)
Convertible notes
Debt Instrument [Line Items]
Carrying Value	420,422	418,695
Convertible Senior Notes Due 2026 \| Convertible notes
Debt Instrument [Line Items]
Outstanding principal amount	69,125	69,125
Unamortized debt issuance costs	(724)	(1,084)
Carrying Value	68,401	68,041	$ 69,100
Convertible Senior Notes Due 2028 \| Convertible notes
Debt Instrument [Line Items]
Outstanding principal amount	240,000	240,000
Unamortized debt issuance costs	(4,796)	(5,714)
Carrying Value	235,204	234,286
Convertible Senior Notes Due 2029 \| Convertible notes
Debt Instrument [Line Items]
Outstanding principal amount	120,000	120,000
Unamortized debt issuance costs	(3,183)	(3,632)
Carrying Value	$ 116,817	$ 116,368

- Definition

Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table.

+ References

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Reference 26: http://www.xbrl.org/2009/role/commonPracticeRef
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Reference 27: http://www.xbrl.org/2009/role/commonPracticeRef
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+ Details

- Definition

Amount of unamortized debt discount (premium) and debt issuance costs.

+ References + Details

- Definition

Amount, after deduction of unamortized premium (discount) and debt issuance cost, of long-term debt. Excludes lease obligation.

+ References + Details

Balance Sheet Details - Inventories (Details) - USD ($) $ in Thousands	Sep. 30, 2024	Dec. 31, 2023
Inventories
Raw materials	$ 40,804	$ 36,970
Work in process	4,816	889
Finished goods	11,288	24,741
Total	56,908	62,600
Inventories valuation	900	13,000
Long-term inventories
Raw materials	16,610	8,672
Work in process	271	2,049
Finished goods	11,783	5,562
Total	28,664	16,283
Inventories valuation	$ 40,300	$ 12,800

Revenue (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
Revenue (Details) - USD ($) $ in Thousands	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023	Dec. 31, 2023
Disaggregation of Revenue [Line Items]
Typical payment receipt, period post shipment			30 days
Total net revenue	$ 32,500	$ 46,478	$ 105,670	$ 162,829
Training provided with sale of system, period			90 days
Deferred sales Commission
Disaggregation of Revenue [Line Items]
Capitalized contract costs	$ 1,800		$ 1,800		$ 2,400
Minimum
Disaggregation of Revenue [Line Items]
Extended service contract term			1 year
Capitalized costs, expected period of benefit	2 years		2 years
Maximum
Disaggregation of Revenue [Line Items]
Extended service contract term			3 years
Capitalized costs, expected period of benefit	3 years		3 years
Japan
Disaggregation of Revenue [Line Items]
Total net revenue	$ 3,420	11,529	$ 14,847	37,247
Sales and marketing
Disaggregation of Revenue [Line Items]
Amortization expense	400	600	1,400	1,900
Service
Disaggregation of Revenue [Line Items]
Total net revenue	5,258	5,489	$ 16,956	16,544
Service \| Minimum
Disaggregation of Revenue [Line Items]
Extended service contract term			1 year
Service \| Maximum
Disaggregation of Revenue [Line Items]
Extended service contract term			3 years
Skincare
Disaggregation of Revenue [Line Items]
Total net revenue	$ 0	$ 7,141	$ 4,200	$ 24,695
Skincare \| Japan
Disaggregation of Revenue [Line Items]
Sale of third-party product, warranty period			90 days
Transferred over Time \| Service
Disaggregation of Revenue [Line Items]
Revenue from performance obligations transferred to customers, percent	11.00%	13.00%	13.00%	10.00%

Net Loss Per Share (Tables)

9 Months Ended

Sep. 30, 2024

Earnings Per Share [Abstract]

Schedule of Computation of Basic and Diluted Net Loss

The following table sets forth the computation of basic and diluted net loss and the weighted average number of shares used in computing basic and diluted net loss per share (in thousands, except per share data):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
Numerator:
Net loss used in calculating net loss per share, basic	$	(39,018)	$	(44,274)	$	(86,477)	$	(105,600)
Denominator:
Weighted average shares of common stock outstanding used in computing net loss per share, basic	20,154		19,932		20,079		19,858
Dilutive effect of incremental shares and share equivalents:
Convertible notes	—		—		—		—
Options	—		—		—		—
RSUs	—		—		—		—
PSUs	—		—		—		—
ESPP	—		—		—		—
Weighted average shares of common stock outstanding used in computing net loss per share, diluted	20,154		19,932		20,079		19,858
Net loss per share:
Net loss per share, basic	$	(1.94)	$	(2.22)	$	(4.31)	$	(5.32)
Net loss per share, diluted	$	(1.94)	$	(2.22)	$	(4.31)	$	(5.32)

Schedule of Antidilutive Securities Excluded from Computation of Loss Per Share

The following numbers of shares outstanding, prior to the application of the treasury stock method and the if-converted method, were excluded from the computation of diluted net loss per common share for the periods presented because including them would have had an anti-dilutive effect (in thousands):


	Three Months Ended September 30,		Nine Months Ended September 30,
	2024	2023	2024	2023
Capped call	10,780	10,780	10,780	10,780
Convertible notes	8,697	8,697	8,697	8,697
Options	2,206	1,381	2,206	1,381
RSUs	407	756	407	756
PSUs	164	240	164	240
ESPP	—	72	—	72
Total	22,254	21,926	22,254	21,926

Product Warranty

9 Months Ended

Sep. 30, 2024

Product Warranties Disclosures [Abstract]

Product Warranty

The Company has a direct field service organization in North America (including Canada). Internationally, the Company provides direct service support in Australia, Austria, Belgium, France, Germany, Hong Kong, Japan, the Netherlands, New Zealand, Spain, and Switzerland. In several other countries, where the Company does not have a direct presence, the Company provides service through a network of distributors and third-party service providers.

After the original warranty period, maintenance and support are offered on an extended service contract basis or on a time and materials basis. The Company estimates cost to repair or replace products under standard warranty at the time of sale. Costs incurred in connection with extended service contracts are generally recognized at the time when costs are incurred.

The following table provides the changes in the product warranty accrual for the three and nine months ended September 30, 2024 and 2023 (in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
Beginning Balance	$	3,010	$	3,104	$	2,593	$	3,254
Add: Accruals for warranties issued during the period	1,596		1,076		4,215		3,626
Less: Settlements made during the period	(1,057)		(1,388)		(3,259)		(4,088)
Ending Balance	$	3,549	$	2,792	$	3,549	$	2,792

Segment Reporting (Tables)

9 Months Ended

Sep. 30, 2024

Segment Reporting [Abstract]

Schedule of Revenue by Geography

The following table presents a summary of revenue by geography and product category for the three and nine months ended September 30, 2024 and 2023 (in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
Revenue mix by geography:
United States	$	12,043	$	21,526	$	38,870	$	69,630
Japan	3,420		11,529		14,847		37,247
Asia, excluding Japan	5,911		3,440		16,104		14,494
Europe	4,317		3,864		13,913		14,477
Rest of the World	6,809		6,119		21,936		26,981
Total consolidated revenue	$	32,500	$	46,478	$	105,670	$	162,829
Revenue mix by product category:
Systems	$	23,024	$	27,600	$	71,184	$	101,404
Consumables	4,218		6,248		13,330		20,186
Skincare	—		7,141		4,200		24,695
Total product revenue	27,242		40,989		88,714		146,285
Service	5,258		5,489		16,956		16,544
Total consolidated revenue	$	32,500	$	46,478	$	105,670	$	162,829

Net Loss Per Share - Computation of Basic and Diluted Net Loss (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Numerator:
Net loss used in calculating net loss per share, basic	$ (39,018)	$ (44,274)	$ (86,477)	$ (105,600)
Denominator:
Weighted average shares of common stock outstanding used in computing net loss per share, basic (in shares)	20,154	19,932	20,079	19,858
Dilutive effect of incremental shares and share equivalents:
Weighted average shares of common stock outstanding used in computing net loss per share, diluted (in shares)	20,154	19,932	20,079	19,858
Net loss per share:
Net loss per share, basic (in dollars per share)	$ (1.94)	$ (2.22)	$ (4.31)	$ (5.32)
Net loss per share, diluted (in dollars per share)	$ (1.94)	$ (2.22)	$ (4.31)	$ (5.32)
Convertible notes
Dilutive effect of incremental shares and share equivalents:
Dilutive effect of share-based payment arrangements (in shares)	0	0	0	0
Options
Dilutive effect of incremental shares and share equivalents:
Dilutive effect of share-based payment arrangements (in shares)	0	0	0	0
RSUs
Dilutive effect of incremental shares and share equivalents:
Dilutive effect of share-based payment arrangements (in shares)	0	0	0	0
PSUs
Dilutive effect of incremental shares and share equivalents:
Dilutive effect of share-based payment arrangements (in shares)	0	0	0	0
ESPP
Dilutive effect of incremental shares and share equivalents:
Dilutive effect of share-based payment arrangements (in shares)	0	0	0	0

Leases - Non-cancellable Operating Lease Income (Details) $ in Thousands	Sep. 30, 2024 USD ($)
Leases [Abstract]
Remainder of 2024	$ 3,267
2025	2,265
Total	$ 5,532

Summary of Significant Accounting Policies (Policies)	9 Months Ended
Summary of Significant Accounting Policies (Policies)	Sep. 30, 2024
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Description of Operations and Principles of Consolidation	Description of Operations and Principles of Consolidation Cutera, Inc. (“Cutera” or the “Company”) develops, manufactures, distributes, and markets energy-based product platforms for medical practitioners, enabling them to offer treatments to their customers. In addition, the Company distributes Secret PRO and Secret RF systems and consumables. The Company currently markets the following system platforms: AviClear, enlighten, excel HR, excel V/V+, truSculpt, Secret PRO, Secret DUO, Secret RF, xeo, and xeo+ — each of which enables medical practitioners to perform procedures including treatment for acne, body contouring, skin resurfacing and revitalization, hair and tattoo removal, removal of benign pigmented lesions, and vascular conditions. Several of the Company’s systems offer multiple hand pieces and applications, providing customers the flexibility to upgrade their systems. The sale of systems, hand pieces, upgrade of systems, and leasing and direct sales of AviClear devices (collectively “Systems” revenue); replacement hand pieces, truSculpt cycle refills, truFlex cycle refills, AviClear treatment fees, and single use disposable tips applicable to Secret systems (collectively “Consumables” revenue) are collectively classified as “Products” revenue. In addition to Products revenue, the Company generates revenue from the sale of post-warranty service contracts and service parts and labor for the repair and maintenance of products that are out of warranty, all of which are collectively classified as “Service” revenue. The Company generated revenue from the distribution of skincare products, which were manufactured by ZO Skin Health, Inc. (“ZO”), and sold in the Japanese market. On February 28, 2024, the Company terminated this distribution agreement. The Company’s corporate headquarters and U.S. operations are located in Brisbane, California, where the Company conducts manufacturing, warehousing, research and development, regulatory, sales and marketing, service, and administrative activities. The Company also maintains regional distribution centers (“RDCs”) in select locations across the United States. These RDCs serve as forward warehousing for systems and service parts in various geographies. The Company markets, sells and services the Company’s products through direct sales and service employees in North America (including Canada), Australia, New Zealand, Austria, France, Germany, Hong Kong, Japan, Switzerland, the United Kingdom and the Republic of Ireland. Sales and services outside of these direct markets are made through a worldwide distributor network in over 32 countries. The condensed consolidated financial statements include the accounts of the Company and its subsidiaries after elimination of intercompany transactions and balances.
Liquidity and Management's Plans	Liquidity and Management’s Plans When preparing financial statements, management has the responsibility to evaluate if the Company has adequate liquidity to continue to operate for at least the next twelve months. In performing this assessment, management considered the Company's current financial condition and liquidity sources, including current funds, forecasted future cash flows and unconditional obligations due over the next twelve months. In addition, management evaluated the history of the Company's financial performance, and determined that the Company has had a historic trend of operating losses, which continues to have an unfavorable impact on the Company's overall liquidity. Most recently, the Company reported net losses of $86.5 million for the nine months ended September 30, 2024, and $162.8 million for the year ended December 31, 2023. These factors, among others, raise substantial doubt regarding the Company’s ability to continue as a going concern for a period of one year from the issuance of these condensed consolidated financial statements. The accompanying condensed consolidated financial statements are prepared in accordance with generally accepted accounting principles applicable to a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. Accordingly, the condensed consolidated financial statements do not include any adjustments relating to the recoverability and classification of asset carrying amounts or the amount and classification of liabilities that may result should the Company be unable to continue as a going concern. The Company’s continued operations will depend on several factors, including but not limited to, growth of revenues from its revised business model for AviClear, which entails transitioning from a lease model to a direct sales model, maintaining or increasing revenues from sales of legacy systems, consumables and services, achieving cost savings as a result of workforce reductions implemented in the fourth quarter of 2023 and second quarter of 2024, and implementing further cost savings initiatives, restructuring of supplier and manufacturing relationships, and initiatives to improve inventory and receivables management. Failure to increase revenue, achieve cost savings, raise additional financing or re-finance the existing convertible notes when they become due, would adversely affect the Company’s ability to achieve its intended business objectives. There can be no assurances that financing will be available on terms favorable to the Company, if at all, and delays may occur in completing the operating activities.
Basis of Presentation	Basis of Presentation In the opinion of the Company, the accompanying unaudited condensed consolidated financial statements included in this report reflect all adjustments necessary for a fair statement of its condensed consolidated balance sheets as of September 30, 2024 and December 31, 2023, and its condensed consolidated statements of operations, condensed consolidated statements of comprehensive loss, condensed consolidated statements of changes in stockholders' deficit, and condensed consolidated statements of cash flows, for the three and nine months ended September 30, 2024, and 2023, respectively. The December 31, 2023 condensed consolidated balance sheet was derived from audited financial statements, but does not include all disclosures required by generally accepted accounting principles in the United States of America (“GAAP”). The results for interim periods are not necessarily indicative of results for the entire year or any other interim period. All intercompany accounts and transactions have been eliminated upon consolidation. The accompanying condensed consolidated financial statements should be read in conjunction with the Company’s previously filed audited financial statements and the related notes thereto included in the Company’s annual report on Form 10-K for the year ended December 31, 2023, filed with the Securities and Exchange Commission (the “SEC”) on May 10, 2024.
Reclassification	Reclassification The Company reclassified the AviClear revenue category disclosed in the Note 14 Segment Reporting previously recorded as a separate revenue stream between systems and consumables revenue. Corresponding reclassifications of prior period amounts have been made in the Company's Note 14 Segment Reporting to conform to the current period presentation. These reclassifications had no effect on the reported net loss.
Risks and Uncertainties	Risks and Uncertainties The Company's future results of operations involve a number of risks and uncertainties. Factors that could affect the Company's future operating results and cause actual results to vary materially from expectations include, but are not limited to, rapid technological change, continued acceptance of the Company's products, stability of global financial markets, cybersecurity breaches and other disruptions that could compromise the Company’s information or results, business disruptions that are caused by natural disasters or pandemic events, management of international activities, competition from substitute products and larger companies, the Company's ability to obtain and maintain regulatory approvals, government regulations and oversight, patent and other types of litigation, the Company's ability to protect proprietary technology from counterfeit versions of the Company's products and its intellectual property rights generally, the successful execution of new product launches, the continuation of strategic relationships, such as the Company's distribution of third-party products, and dependence on key individuals.
Accounting Policies	Accounting Policies These unaudited condensed consolidated financial statements are prepared in accordance with the rules and regulations of the SEC applicable to interim financial statements. While these statements reflect all normal recurring adjustments that are, in the opinion of management, necessary for fair presentation of the results of the interim period, they do not include all of the information and footnotes required by GAAP for complete financial statements. The Company uses the same accounting policies in preparing quarterly and annual financial statements.
Recently Issued Accounting Pronouncements Not Yet Adopted by the Company	Recently Issued Accounting Pronouncements Not Yet Adopted by the Company In December 2023, the FASB issued ASU No. 2023-09, “Income Taxes (Topic 740) - Improvements to Income Tax Disclosures,” to enhance the transparency and usefulness of income tax disclosures. The update requires enhancements to the annual rate reconciliation, including disclosure of specific categories and additional information for reconciling items meeting a quantitative threshold. The update also requires disclosure of income taxes paid disaggregated by federal, state and foreign taxes, and individual jurisdictions meeting a quantitative threshold. The amendments in this update are effective for public business entities for annual periods beginning after December 15, 2024, and may be adopted on a prospective or retrospective basis. Early adoption is permitted. The Company is currently evaluating the effect that the updated standard will have on the Company's financial statement disclosures. In November 2023, the FASB issued ASU No. 2023-07, “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures,” which will require the Company to disclose segment expenses that are significant and regularly provided to the Company’s chief operating decision maker (“CODM”). In addition, ASU 2023-07 will require the Company to disclose the title and position of its CODM and how the CODM uses segment profit or loss information in assessing segment performance and deciding how to allocate resources. The amendments are effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. The Company is currently evaluating the effect that the updated standard will have on the Company's financial statement disclosures. In March 2024, the U.S. Securities and Exchange Commission ("SEC") adopted the final rule under SEC Release No. 33-11275, The Enhancement and Standardization of Climate-Related Disclosures for Investors. This rule will require registrants to disclose certain climate-related information in registration statements and annual reports. The disclosure requirements will not apply before the Company's fiscal year beginning January 1, 2025. However on April 4, 2024, the SEC issued an order staying the rule pending the completion of an ongoing judicial review. The Company is monitoring SEC developments and evaluating the final rule to determine its impact on the Company's disclosures.
Leases	Leases The Company incurred costs to fulfill its lease agreement obligations with its AviClear device lessees. These costs consisted of freight, installation, and training. In addition to these mobilization costs, the Company incurred commission costs associated with the placement of the AviClear device. The Company capitalized commission costs and made a policy election to capitalize the mobilization costs.
Use of Estimates	Use of Estimates The preparation of condensed consolidated financial statements in conformity with GAAP requires the Company’s management to make estimates and assumptions that affect the amounts reported of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the accompanying notes, and the reported amounts of revenue and expenses during the reported periods. Actual results could differ materially from those estimates. On an ongoing basis, management evaluates its estimates, including those related to warranty obligations, sales commissions, allowance for credit losses, sales allowances, valuation of inventories, fair value of goodwill, impairment testing for long-lived assets, implicit and incremental borrowing rates related to the Company’s leases, variables used in calculating the fair value of the Company's equity awards, expected achievement of performance-based vesting criteria and management performance bonuses, the standalone selling price of the Company's products and services, the period of benefit used to capitalize and amortize contract acquisition costs, variable considerations, recoverability of deferred tax assets, and effective income tax rates. Management bases estimates on historical experience and on various other assumptions that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities.
Distribution of Third-Party Products	Distribution of Third-Party Products The Company generated revenue from the distribution of skincare products, which were manufactured by ZO Skin Health, Inc. (“ZO”), and sold in the Japanese market. In the three and nine months ended September 30, 2024, revenue from the distribution of skincare products was nil and $4.2 million, respectively. In the nine months ended September 30, 2023, revenue from the distribution of skincare products was $24.7 million, representing 15% of the Company’s consolidated revenue. On February 28, 2024, the Company and its Japanese subsidiary, Cutera KK, entered into a termination agreement (the “Termination Agreement”) with ZO USA and its Japanese subsidiary, ZO Skin Health GK (“ZO Japan” and together with ZO USA and their affiliates, “ZO”), which, among other things, (i) terminates all agreements related to the distribution by the Company of ZO’s products in Japan effective immediately, (ii) provides for the orderly transition of the distribution of ZO products to ZO, (iii) transfers certain Company employees dedicated to the distribution of ZO products to ZO, (iv) transfers certain customer contracts related to ZO products from the Company to ZO and (v) transfers certain inventory and assets related to the distribution of ZO products from the Company to ZO. The Termination Agreement requires ZO to pay the Company $5.75 million within three business days of the execution of the Termination Agreement and make a second payment of $5.75 million, less any offsets under the Termination Agreement (including, but not limited to, 42.2% of the Company’s net revenue for sales of ZO products under the Distribution Agreement between January 1, 2024 and February 28, 2024), upon the earlier of (a) the completion the transition of regulatory and distribution activities such that ZO is able to fulfill product orders by customers in Japan, as determined by ZO and the Company, and (b) June 14, 2024. The Company received the first payment of $5.75 million on February 29, 2024, and received a second payment of $2.37 million on April 1, 2024, which was net of $1.6 million in amounts owed by Cutera. In the three months ended March 31, 2024, the Company recorded a net gain of $9.7 million resulting from the early termination proceeds received and transfer of certain assets and liabilities as gain on early termination of distribution agreement on the Company's condensed consolidated statement of operations. On July 31, 2024, the Company announced a strategic partnership with L’Oréal Japan Co. to exclusively promote, market, sell and distribute select SkinCeuticals products to medical and physician-led clinics in Japan. Under the terms of the agreement, the partnership will initially span three years, with options for renewal. Cutera plans to introduce the SkinCeuticals product line to customers in Japan during the fourth quarter of 2024 and expects the financial impact of the distribution agreement to be immaterial in 2024. The Company generates revenue from the distribution of the Secret systems, which are manufactured by ilooda Co. Ltd. (“ilooda”). The Company is the exclusive distributor for all systems sold in the United States, Canada, the United Kingdom; the exclusive distributor for certain systems in France, and Spain; and the non-exclusive distributor for systems sold in Austria and Germany. In the nine months ended September 30, 2024, and September 30, 2023, revenue from the distribution of Secret products represented 7% and 13%, respectively, of the Company’s consolidated revenue. The Company‘s ilooda distribution agreement expires in June 30, 2026.

Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands	Sep. 30, 2024	Dec. 31, 2023
Statement of Financial Position [Abstract]
Allowance for credit loss, current	$ 19,251	$ 9,878
Unamortized debt issuance costs	$ 8,703	$ 10,430
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock authorized (in shares)	50,000,000	50,000,000
Common stock issued (in shares)	20,177,717	19,960,622
Common stock outstanding (in shares)	20,177,717	19,960,622

- Definition

Amount of unamortized debt discount (premium) and debt issuance costs.

+ References + Details

Leases - Narrative (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
Leases - Narrative (Details) - USD ($) $ in Millions	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023	Dec. 31, 2023
Lessee, Lease, Description [Line Items]
Operating leases renewal terms (up to)	5 years		5 years
Finance leases renewal terms (up to)	5 years		5 years
Lease term (in years)	3 years		3 years
Duration of autorenewal features			1 year
Sales and marketing
Lessee, Lease, Description [Line Items]
Amortization expense	$ 0.4	$ 0.6	$ 1.4	$ 1.9
AviClear Device
Lessee, Lease, Description [Line Items]
Cloud computing arrangement expected contract renewals (in years)	7 years		7 years
Capitalized Cloud Computing Set-up Cost
Lessee, Lease, Description [Line Items]
Capitalized contract costs	$ 1.6		$ 1.6		$ 2.7
Capitalized Cloud Computing Set-up Cost \| Sales and marketing
Lessee, Lease, Description [Line Items]
Amortization expense	0.3	1.2	1.2	3.5
Lease Installment Costs
Lessee, Lease, Description [Line Items]
Capitalized contract costs	0.7		0.7		$ 2.1
Lease Installment Costs \| Sales and marketing
Lessee, Lease, Description [Line Items]
Amortization expense	$ 0.4	$ 0.7	$ 1.3	$ 1.7
Minimum
Lessee, Lease, Description [Line Items]
Remaining lease terms of operating leases	1 year		1 year
Remaining lease terms of finance leases	1 year		1 year
Maximum
Lessee, Lease, Description [Line Items]
Remaining lease terms of operating leases	7 years		7 years
Remaining lease terms of finance leases	7 years		7 years

Condensed Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Net revenue:
Total net revenue	$ 32,500	$ 46,478	$ 105,670	$ 162,829
Cost of revenue:
Total cost of revenue	30,687	40,021	83,794	108,657
Gross profit	1,813	6,457	21,876	54,172
Operating expenses:
Sales and marketing	18,928	25,808	63,269	88,591
Research and development	4,353	4,592	13,817	16,844
General and administrative	14,749	17,004	31,951	47,448
Gain on early termination of distribution agreement	0	0	(9,708)	0
Total operating expenses	38,030	47,404	99,329	152,883
Loss from operations	(36,217)	(40,947)	(77,453)	(98,711)
Interest and other expense, net:
Amortization of debt issuance costs	(580)	(561)	(1,726)	(1,670)
Interest expense on convertible notes	(3,071)	(2,939)	(8,969)	(8,836)
Interest income	768	2,288	3,248	6,946
Other income (expense), net	575	(1,948)	(1,128)	(2,564)
Total interest and other expense, net	(2,308)	(3,160)	(8,575)	(6,124)
Loss before income taxes	(38,525)	(44,107)	(86,028)	(104,835)
Income tax expense	493	167	449	765
Net loss	$ (39,018)	$ (44,274)	$ (86,477)	$ (105,600)
Net loss per share:
Basic (in dollars per share)	$ (1.94)	$ (2.22)	$ (4.31)	$ (5.32)
Diluted (in dollars per share)	$ (1.94)	$ (2.22)	$ (4.31)	$ (5.32)
Weighted-average number of shares used in per share calculation:
Basic (in shares)	20,154	19,932	20,079	19,858
Diluted (in shares)	20,154	19,932	20,079	19,858
Products
Net revenue:
Total net revenue	$ 27,242	$ 40,989	$ 88,714	$ 146,285
Cost of revenue:
Total cost of revenue	27,991	36,586	75,045	98,696
Service
Net revenue:
Total net revenue	5,258	5,489	16,956	16,544
Cost of revenue:
Total cost of revenue	$ 2,696	$ 3,435	$ 8,749	$ 9,961

Net Loss Per Share - Narrative (Details)	9 Months Ended
Net Loss Per Share - Narrative (Details)	Sep. 30, 2024 shares
Convertible Senior Notes Due 2026 \| Convertible notes
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Debt convertible to common shares (in shares)	8,696,792

Summary of Significant Accounting Policies (Details) $ in Thousands					2 Months Ended	3 Months Ended			9 Months Ended		12 Months Ended
	Jul. 31, 2024	Apr. 01, 2024 USD ($)	Feb. 29, 2024 USD ($)	Feb. 28, 2024 USD ($)	Feb. 28, 2024 USD ($)	Sep. 30, 2024 USD ($) country	Mar. 31, 2024 USD ($)	Sep. 30, 2023 USD ($)	Sep. 30, 2024 USD ($) country	Sep. 30, 2023 USD ($)	Dec. 31, 2023 USD ($)
Capitalized Contract Cost [Line Items]
Number of countries in which entity operates \| country						32			32
Net loss						$ 39,018		$ 44,274	$ 86,477	$ 105,600	$ 162,800
Total net revenue						32,500		46,478	105,670	162,829
Percent net revenue reduction to termination fee receivable					42.20%
Proceeds from termination fees		$ 2,370	$ 5,750
Termination fee offset		$ 1,600
Gain on early termination of distribution agreement						0	$ 9,700	0	9,708	0
Strategic partnership, term of contract	3 years
Jabil settlement obligation, net						0			0		8,908
Settlement Agreement, Non-Renewal Of Manufacturing Service Agreement
Capitalized Contract Cost [Line Items]
Settlement agreement, amount awarded to other party				$ 19,500
Settlement agreement, amount awarded from other party				1,300
Settlement Agreement, Non-Renewal Of Manufacturing Service Agreement \| Receipt of Inventories
Capitalized Contract Cost [Line Items]
Settlement agreement, amount awarded to other party				13,500
Settlement Agreement, Non-Renewal Of Manufacturing Service Agreement \| Purchased Equipment
Capitalized Contract Cost [Line Items]
Settlement agreement, amount awarded to other party				300
Settlement Agreement, Non-Renewal Of Manufacturing Service Agreement \| Compensation for Previously Incurred Expenses
Capitalized Contract Cost [Line Items]
Settlement agreement, amount awarded to other party				5,700
Settlement Agreement, Non-Renewal Of Manufacturing Service Agreement \| Compensation for Previously Incurred Expenses \| Cost of revenue
Capitalized Contract Cost [Line Items]
Settlement agreement, amount awarded to other party											5,700
Within three business days of execution of agreement
Capitalized Contract Cost [Line Items]
Termination fee receivable				5,750	$ 5,750
Between January 1st And February 28th
Capitalized Contract Cost [Line Items]
Termination fee receivable				$ 5,750	$ 5,750
Skincare
Capitalized Contract Cost [Line Items]
Total net revenue						0		$ 7,141	$ 4,200	$ 24,695
ZO Skin Health \| Revenue Benchmark \| Customer Concentration Risk
Capitalized Contract Cost [Line Items]
Concentration risk, percentage										15.00%
Ilooda Co. Ltd. \| Revenue Benchmark \| Customer Concentration Risk
Capitalized Contract Cost [Line Items]
Concentration risk, percentage									7.00%	13.00%
Mobilization Costs
Capitalized Contract Cost [Line Items]
Capitalized contract costs						700			$ 700		2,100
Capitalized Cloud Computing Set-up Cost
Capitalized Contract Cost [Line Items]
Capitalized contract costs						$ 1,600			$ 1,600		2,700
Accrued liabilities
Capitalized Contract Cost [Line Items]
Jabil settlement obligation, net											19,500
Litigation settlement receivable											$ 15,100

Segment Reporting - Narrative (Details)	9 Months Ended
Segment Reporting - Narrative (Details)	Sep. 30, 2024 segment
Segment Reporting [Abstract]
Number of operating segments	1
Number of reportable segments	1

Balance Sheet Details - Schedule of Property and Equipment, Net (Details) - USD ($) $ in Thousands	Sep. 30, 2024	Dec. 31, 2023
Property, Plant and Equipment [Line Items]
Property and equipment, gross	$ 35,451	$ 47,602
Less: Accumulated depreciation	(11,930)	(10,327)
Property and equipment, net	23,521	37,275
AviClear devices
Property, Plant and Equipment [Line Items]
Property and equipment, gross	25,999	38,490
Machinery and equipment
Property, Plant and Equipment [Line Items]
Property and equipment, gross	5,546	4,944
Office equipment and furniture
Property, Plant and Equipment [Line Items]
Property and equipment, gross	1,815	1,884
Leasehold improvements
Property, Plant and Equipment [Line Items]
Property and equipment, gross	1,438	1,010
Assets under construction
Property, Plant and Equipment [Line Items]
Property and equipment, gross	$ 653	$ 1,274

Income Taxes (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
Income Taxes (Details) - USD ($) $ in Thousands	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Income Tax Disclosure [Abstract]
Income tax benefit	$ (500)		$ (400)
Income tax expense	$ 493	$ 167	$ 449	$ 765

- Definition

Amount of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 270
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (i)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482964/270-10-50-1

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 32
-Subparagraph (ee)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482810/280-10-50-32

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 12
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482685/740-10-50-12

Reference 4: http://www.xbrl.org/2003/role/exampleRef
-Topic 740
-SubTopic 10
-Name Accounting Standards Codification
-Section 55
-Paragraph 231
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482663/740-10-55-231

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Topic 250
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 9
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147483443/250-10-50-9

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SAB Topic 6.I.7)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147479360/740-10-S99-1

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Topic 250
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 8
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147483443/250-10-50-8

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 10
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482685/740-10-50-10

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 22
-Subparagraph (h)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482810/280-10-50-22

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Topic 944
-SubTopic 220
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.7-04(9))
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147477250/944-220-S99-1

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Name Accounting Standards Codification
-Section 45
-Paragraph 2
-Subparagraph (a)
-SubTopic 20
-Topic 740
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482659/740-20-45-2

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(h))
-SubTopic 10
-Topic 235
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147480678/235-10-S99-1

+ Details

Cover - shares	9 Months Ended
Cover - shares	Sep. 30, 2024	Nov. 08, 2024
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Sep. 30, 2024
Document Transition Report	false
Entity File Number	000-50644
Entity Registrant Name	Cutera, Inc.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	77-0492262
Entity Address, Address Line One	3240 Bayshore Blvd.
Entity Address, City or Town	Brisbane
Entity Address, State or Province	CA
Entity Address, Postal Zip Code	94005
City Area Code	415
Local Phone Number	657-5500
Title of 12(b) Security	Common Stock ($0.001 par value)
Trading Symbol	CUTR
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		20,185,926
Entity Central Index Key	0001162461
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Document Fiscal Period Focus	Q3
Document Fiscal Year Focus	2024

Debt

9 Months Ended

Sep. 30, 2024

Debt Disclosure [Abstract]

Debt

Convertible notes, net of unamortized debt issuance costs

The following table presents the outstanding principal amount and carrying value of the Company’s Convertible Notes (in thousands):


	September 30, 2024		December 31, 2023
Notes due in 2026
Outstanding principal amount	$	69,125	$	69,125
Unamortized debt issuance costs	(724)		(1,084)
Carrying Value	$	68,401	$	68,041

Notes due in 2028
Outstanding principal amount	$	240,000	$	240,000
Unamortized debt issuance costs	(4,796)		(5,714)
Carrying Value	$	235,204	$	234,286

Notes due in 2029
Outstanding principal amount	$	120,000	$	120,000
Unamortized debt issuance costs	(3,183)		(3,632)
Carrying Value	$	116,817	$	116,368

Convertible notes, net	$	420,422	$	418,695

Issuance of convertible notes due in 2026

In March 2021, the Company issued $138.3 million aggregate principal amount of 2026 Notes in a private placement offering. In May 2022, the Company entered into privately-negotiated exchange agreements with certain holders of the Company’s outstanding 2026 Notes. Following the exchange, approximately $69.1 million in aggregate principal amount of the 2026 Notes remained outstanding.

The 2026 Notes bear interest at a rate of 2.25% per year payable semiannually in arrears on March 15 and September 15 of each year. Upon conversion, the 2026 Notes will be convertible into either cash, shares of the Company’s common stock or a combination thereof, at the Company’s election. The Convertible notes are presented as Convertible notes, net of unamortized debt issuance costs, on the condensed consolidated balance sheet. The aggregate proceeds from the offering were approximately $133.6 million, net of issuance costs, including initial purchaser fees.

Each $1,000 principal amount of the 2026 Notes is initially convertible into 30.1427 shares of the Company’s common stock, which is equivalent to a conversion price of approximately $33.18 per share. The conversion rate for the 2026 Notes is subject to adjustment for certain events as set forth in the indenture governing the 2026 Notes. The 2026 Notes will mature on March 15, 2026, unless earlier converted, redeemed, or repurchased in accordance with the terms of the 2026 Notes.

Issuance of convertible notes due in 2028

In May 2022, the Company issued $240.0 million aggregate principal amount of 2028 Notes. A total of $230.0 million of aggregate principal amount of 2028 Notes was issued in a private placement offering and concurrently with this private placement, the Company entered into a purchase agreement with Voce Capital Management LLC ("Voce"), an entity affiliated with J. Daniel Plants, the Company’s former Executive Chairperson, pursuant to which the Company issued to Voce $10.0 million aggregate principal amount of 2028 Notes on the same terms and conditions. The 2028 Notes are presented as Convertible notes, net of unamortized debt issuance costs, on the condensed consolidated balance sheet. The aggregate proceeds from the offering of 2028 Notes were approximately $232.4 million, net of issuance costs, including initial purchaser fees.

The 2028 Notes bear interest at a rate of 2.25% per year payable semiannually in arrears on June 1 and December 1 of each year, beginning on December 1, 2022. Upon conversion, the 2028 Notes will be convertible into either cash, shares of the Company’s common stock or a combination thereof, at the Company’s election. Each $1,000 principal amount of the 2028 Notes is initially convertible into 18.9860 shares of the Company’s common stock, which is equivalent to an initial conversion price of approximately $52.67 per share. The conversion rate for the 2028 Notes is subject to adjustment for certain events as set forth in the indenture governing the 2028 Notes. The 2028 Notes will mature on June 1, 2028, unless earlier converted, redeemed, or repurchased in accordance with the terms of the 2028 Notes.

Issuance of convertible notes due in 2029

In December 2022, the Company issued $120.0 million aggregate principal amount of 2029 Notes in a private placement offering. The 2029 Notes bear interest at a rate of 4.00% per year payable semiannually in arrears on June 1 and December 1 of each year. Upon conversion, the 2029 Notes will be convertible into either cash, shares of the Company’s common stock or a combination thereof, at the Company’s election. The convertible notes are presented as Convertible notes, net of unamortized debt issuance costs, on the condensed consolidated balance sheet. The aggregate proceeds from the offering were approximately $115.8 million, net of issuance costs, including initial purchaser fees.

Each $1,000 principal amount of the 2029 Notes is initially convertible into 17.1378 shares of the Company’s common stock, which is equivalent to a conversion price of approximately $58.35 per share. The conversion rate for the 2029 Notes is subject to adjustment for certain events as set forth in the indenture governing the 2029 Notes. The 2029 Notes will mature on June 1, 2029, unless earlier converted, redeemed, or repurchased in accordance with the terms of the 2029 Notes.

2026 Notes exchange

In May 2022, the Company entered into privately-negotiated exchange agreements with certain holders of the Company’s outstanding 2026 Notes with respect to the exchange of $45.8 million in cash (excluding $0.3 million in cash for the payment of accrued interest) and 1,354,348 shares of common stock for $69.1 million in aggregate principal amount of the Company’s outstanding 2026 Notes (the “2026 Notes Exchange”). Immediately following the closing of the 2026 Notes Exchange, approximately $69.1 million in aggregate principal amount of the 2026 Notes remained outstanding.

Conversion and other features

2026 Notes:

Holders may convert their 2026 Notes at their option prior to the close of business on the business day immediately preceding December 15, 2025, in multiples of $1,000 principal amount, only under the following circumstances:

•During any fiscal quarter (and only during such fiscal quarter), if the last reported sale price of the common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on and including, the last trading day of the immediately preceding fiscal quarter, is greater than or equal to 130% of the conversion price for the 2026 Notes on each applicable trading day;

•During the five-business day period after any five consecutive trading day period (the “measurement period”) in which the “trading price” per $1,000 principal amount of 2026 Notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price of the Company's common stock and the conversion rate on each such trading day;

•The Company calls such 2026 Notes for redemption, at any time prior to the close of business on the second scheduled trading day immediately preceding the redemption date; or

•Upon the occurrence of specified corporate events.

On or after December 15, 2025, and until the close of business on the second scheduled trading day immediately preceding the maturity date, holders may convert all or any portion of their 2026 Notes, in multiples of $1,000 principal amount, at the option of the holder regardless of the foregoing circumstances.

The circumstances described in the bullets of the paragraph above were not met during the third quarter of 2024. As of September 30, 2024, the 2026 Notes are not convertible. The 2026 Notes may become convertible in future periods. Upon any conversion requests of the 2026 Notes, the Company would be required to pay or deliver, as the case may be, cash, shares of its common stock, or a combination of cash and shares of its common stock, at the Company’s election with respect to such

conversion requests. To the extent there are any conversion requests during the twelve months ending September 30, 2025, the Company intends to settle such conversion requests in shares of common stock. Therefore, as of September 30, 2024, the 2026 Notes have been included as Long-term debt on the condensed consolidated balance sheet.

On or after March 20, 2024, the Company may redeem for cash all or any portion of the 2026 Notes, at the Company’s option, if the last reported sale price of the Company’s common stock has been at least 130% of the conversion price then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period (including the last trading day of such period) ending on, and including, the trading day immediately preceding the date on which the Company provides notice of redemption at a redemption price equal to 100% of the principal amount of the 2026 Notes to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date. If the Company elects to redeem fewer than all of the outstanding 2026 Notes, at least $50.0 million aggregate principal amount of 2026 Notes must be outstanding and not subject to redemption as of the relevant redemption notice date.

If a specified corporate event occurs, 2026 Note holders have the option to require the Company to repurchase any portion or all of their 2026 Notes in $1,000 principal increments for cash. The price for such repurchase is calculated as 100% of the principal amounts of 2026 Notes, plus accrued and unpaid interest to the day immediately preceding the Fundamental Change repurchase date. Additionally, holders of the 2026 Notes who convert in connection with a fundamental change are, under certain circumstances, entitled to an increase in conversion rate.

The 2026 Notes are general senior unsecured obligations that rank senior to any of the Company’s indebtedness that is explicitly subordinated to the 2026 Notes. The 2026 Notes have equal rank in right of payment with all existing and future unsecured indebtedness that is not subordinated to the 2026 Notes (including the 2028 Notes and 2029 Notes). The 2026 Notes will be junior to any of the Company’s secured indebtedness to the extent of the value of the assets securing such indebtedness.

The estimated fair value of the 2026 Notes was approximately $21.7 million as of September 30, 2024, which the Company determined through consideration of market prices. The fair value measurement is classified as Level 2, as defined in Note 3.

2028 Notes:

Holders may convert their 2028 Notes at their option, in multiples of $1,000 principal amount, only under the following circumstances:

•During any fiscal quarter commencing after the fiscal quarter ending on September 30, 2022 (and only during such fiscal quarter), if the last reported sale price of the common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on and including, the last trading day of the immediately preceding fiscal quarter, is greater than or equal to 130% of the conversion price for the 2028 Notes on each applicable trading day;

•During the five-business day period after any five consecutive trading day period (the “measurement period”) in which the “trading price” per $1,000 principal amount of 2028 Notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price of the Company's common stock and the conversion rate on each such trading day;

•The Company calls such 2028 Notes for redemption, at any time prior to the close of business on the second scheduled trading day immediately preceding the redemption date; or

•Upon the occurrence of specified corporate events.

On or after March 1, 2028, and until the close of business on the second scheduled trading day immediately preceding the maturity date, holders may convert all or any portion of their 2028 Notes, in multiples of $1,000 principal amount, at the option of the holder regardless of the foregoing circumstances.

The circumstances described in the bullets in the paragraph above were not met during the third quarter of 2024. As of September 30, 2024, the 2028 Notes are not convertible. The 2028 Notes may become convertible in future periods. Upon any conversion requests of the 2028 Notes, the Company would be required to pay or deliver, as the case may be, cash, shares of its common stock, or a combination of cash and shares of its common stock, at the Company’s election with respect to such conversion requests. To the extent there are any conversion requests during the twelve months ending September 30, 2025, the Company intends to settle such conversion requests in shares of common stock. Therefore, as of September 30, 2024, the 2028 Notes have been included as long-term debt on the condensed consolidated balance sheet.

The Company may not redeem the 2028 Notes prior to June 5, 2025. On or after June 5, 2025, the Company may redeem for cash all or any portion of the 2028 Notes, at the Company’s option, if the last reported sale price of the Company’s common stock has been at least 130% of the conversion price then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period (including the last trading day of such period) ending on, and including, the trading day immediately preceding the date on which the Company provides notice of redemption at a redemption price equal to 100% of the principal amount of the 2028 Notes to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date. If the Company elects to redeem fewer than all of the outstanding 2028 Notes, at least $100.0 million aggregate principal amount of 2028 Notes must be outstanding and not subject to redemption as of the relevant redemption notice date.

If a specified corporate event occurs, note holders have the option to require the Company to repurchase any portion or all of their 2028 Notes in $1,000 principal increments for cash. The price for such repurchase is calculated as 100% of the principal amounts of 2028 Notes, plus accrued and unpaid interest to the day immediately preceding the Fundamental Change repurchase date. Additionally, holders of the 2028 Notes who convert in connection with a fundamental change are, under certain circumstances, entitled to an increase in conversion rate.

The 2028 Notes are general senior unsecured obligations that rank senior to any of the Company’s indebtedness that is explicitly subordinated to the 2028 Notes. The 2028 Notes have equal rank in right of payment with all existing and future unsecured indebtedness that is not subordinated to the 2028 Notes (including the 2026 Notes and 2029 Notes). The 2028 Notes will be junior to any of the Company’s secured indebtedness to the extent of the value of the assets securing such indebtedness.

The estimated fair value of the 2028 Notes was approximately $39.0 million as of September 30, 2024, which the Company determined through consideration of market prices. The fair value measurement is classified as Level 2, as defined in Note 3.

2029 Notes:

Holders may convert their 2029 Notes at their option prior to the close of business on the business day immediately preceding March 1, 2029 in multiples of $1,000 principal amount, only under the following circumstances:

•During any fiscal quarter commencing after the fiscal quarter ending March 31, 2023 (and only during such fiscal quarter), if the last reported sale price of the common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on and including, the last trading day of the immediately preceding fiscal quarter, is greater than or equal to 130% of the conversion price for the 2029 Notes on each applicable trading day;

•During the five-business day period after any five consecutive trading day period (the “measurement period”) in which the “trading price” per $1,000 principal amount of 2029 Notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price of the Company's common stock and the conversion rate on each such trading day;

•The Company calls such 2029 Notes for redemption, at any time prior to the close of business on the second scheduled trading day immediately preceding the redemption date; or

•Upon the occurrence of specified corporate events.

On or after March 1, 2029, and until the close of business on the second scheduled trading day immediately preceding the maturity date, holders may convert all or any portion of their 2029 Notes, in multiples of $1,000 principal amount, at the option of the holder regardless of the foregoing circumstances.

The circumstances described in the bullets of the paragraph above were not met during the third quarter of 2024. As of September 30, 2024, the 2029 Notes are not convertible. The 2029 Notes may become convertible in future periods. Upon any conversion requests of the 2029 Notes, the Company would be required to pay or deliver, as the case may be, cash, shares of its common stock, or a combination of cash and shares of its common stock, at the Company’s election with respect to such conversion requests. To the extent there are any conversion requests during the twelve months ending September 30, 2025, the Company intends to settle such conversion requests in shares of common stock. Therefore, as of September 30, 2024, the 2029 Notes have been included as Long-term debt on the consolidated balance sheet.

The Company may not redeem the 2029 Notes prior to December 5, 2025. On or after December 5, 2025, the Company may redeem for cash all or any portion of the 2029 Notes, at the Company’s option, if the last reported sale price of the Company’s common stock has been at least 130% of the conversion price then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period (including the last trading day of such period) ending on, and including, the trading day immediately preceding the date on which the Company provides notice of redemption at a

redemption price equal to 100% of the principal amount of the 2029 Notes to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date. If the Company elects to redeem fewer than all of the outstanding 2029 Notes, at least $100.0 million aggregate principal amount of 2029 Notes must be outstanding and not subject to redemption as of the relevant redemption notice date.

If a specified corporate event occurs, 2029 Note holders have the option to require the Company to repurchase any portion or all of their 2029 Notes in $1,000 principal increments for cash. The price for such repurchase is calculated as 100% of the principal amounts of 2029 Notes, plus accrued and unpaid interest to the day immediately preceding the Fundamental Change repurchase date. Additionally, holders of the 2029 Notes who convert in connection with a fundamental change are, under certain circumstances, entitled to an increase in conversion rate.

The 2029 Notes are general senior unsecured obligations that rank senior to any of the Company’s indebtedness that is explicitly subordinated to the 2029 Notes. The 2029 Notes have equal rank in right of payment with all existing and future unsecured indebtedness that is not subordinated to the 2029 Notes (including the 2026 Notes and 2028 Notes). The 2029 Notes will be junior to any of the Company’s secured indebtedness to the extent of the value of the assets securing such indebtedness.

The estimated fair value of the 2029 Notes was approximately $21.5 million as of September 30, 2024, which the Company determined through consideration of market prices. The fair value measurement is classified as Level 2, as defined in Note 3.

Certain Covenants for the Convertible Notes

Pursuant to the terms of the indentures that govern the Convertible Notes, the Company is required to file with U.S. Bank Trust Company, National Association (the “Trustee”), as trustee under each of the indentures governing the Convertible Notes, within 15 days after the same are required to be filed with the SEC (giving effect to any grace period provided by Rule 12b-25 under the Exchange Act), copies of any annual report on Form 10-K or quarterly reports on Form 10-Q that the Company is required to file with the SEC pursuant to Section 13 or 15(d) of the Exchange Act. To the extent the Company elects, the sole remedy for an event of default under the indenture governing a series of Convertible Notes relating to its failure to comply with this obligation (which shall occur upon failure by the Company for 60 days after receipt of written notice from the Trustee or the holders of 25% in aggregate principal amount the Convertible Notes of such series to comply with this obligation) shall, for the first 360 days after the occurrence of such an event of default, consist exclusively of the right for the holders of Convertible Notes of such series to receive additional interest on their Convertible Notes at a rate equal to (i) 0.25% per year for each day during the first 180 days after the occurrence and during the continuance of such event of default and (ii) 0.50% per year for each day from, and including, the 181st day to, but excluding, the 360th day after the occurrence and during the continuance of such event of default. On the 361st day after such event of default, if not previously cured or waived, the Convertible Notes of the applicable series shall be subject to acceleration pursuant to the terms of the indenture governing the Convertible Notes of such series. In the event the Company does not elect to pay additional interest on a series of Convertible Notes prior to the occurrence of an event of default relating to the Company’s failure to comply with this obligation, or the Company elects to make such payment but does not pay the additional interest on such Convertible Notes when due, the Convertible Notes of such series shall be immediately subject to acceleration at the election of either the Trustee or the holders of at least 25% in aggregate principal amount of the Convertible Notes of such series.

Additionally, if at any time during the six-month period beginning on, and including, the date that is six months after the last date of original issuance of a series of Convertible Notes, the Company fails to timely file any document or report that it is required to file with the SEC pursuant to Section 13 or 15(d) of the Exchange Act, as applicable (after giving effect to all applicable grace period thereunder and other than reports on Form 8-K), or the Convertible Notes of such series are not otherwise freely tradable pursuant to Rule 144 as promulgated under the Securities Act of 1933, as amended, the Company shall pay additional interest on such Convertible Notes at a rate of 0.50% per year for each day during such period for which the Company’s failure to file has occurred and is continuing or such Convertible Notes are not otherwise freely tradable pursuant to Rule 144. Additional interest pursuant to the foregoing accrued on the outstanding principal amount of the 2029 Notes from November 24, 2023 to the one-year anniversary of the last date of original issuance of the 2029 Notes on December 12, 2023 was not material.

The Convertible Notes contain additional customary operating covenants, which include restrictions on the Company’s ability to undergo a merger or consolidation transaction, or transfer or lease substantially all of the consolidated properties and assets of the Company. The Convertible Notes do not contain any financial covenants or restrictions on the payment of dividends, the issuance of other indebtedness or the issuance or repurchase of securities by the Company.

Capped Call Transactions

In connection with the issuance of each series of the Convertible Notes, the Company entered into capped call transactions with certain option counterparties. The capped call transactions are generally intended to reduce the potential dilution of the Company's common stock upon any conversion or settlement of the applicable series of Convertible Notes or to offset any cash payment the Company is required to make in excess of the principal amount upon conversion of the applicable series of Convertible Notes, as the case may be, with such reduction or offset subject to a cap based on the cap price. If the market price per share of the Company’s common stock exceeds the cap price of the applicable capped call transactions, then the Company’s stock would experience some dilution and/or such capped call transactions would not fully offset the potential cash payments, in each case, to the extent the then-market price per share of its common stock exceeds the applicable cap price.

In connection with the offering of the 2026 Notes, the Company purchased from the option counterparties capped call options that in the aggregate relate to the total number of shares of the Company's common stock underlying the convertible notes, with a strike price equal to the conversion price of the convertible notes and with an initial cap price equal to $45.535, which represented a 75% premium over the last reported sale price of the Company's common stock of $26.02 per share on March 4, 2021, with certain adjustments to the settlement terms that reflect standard anti-dilution provisions. The capped call transactions expire over 40 consecutive scheduled trading days ended on March 12, 2026. The capped calls were purchased for $16.1 million.

In connection with the offering of the 2028 Notes, the Company purchased from the option counterparties capped call options that in the aggregate related to the total number of shares of the Company's common stock underlying the 2028 Notes sold to the initial purchasers in the offering of 2028 Notes, with a strike price equal to the conversion price of the 2028 Notes and with an initial cap price equal to $82.62, which represents a 100% premium over the last reported sale price of the Company's common stock of $41.31 per share on May 24, 2022, with certain adjustments to the settlement terms that reflect standard anti-dilution provisions. These capped call transactions expire over 40 consecutive scheduled trading days ended on May 30, 2028. The capped calls were purchased for $32.0 million, net of issuance costs.

In connection with the offering of the 2029 Notes, the Company purchased from the option counterparties capped call options that in the aggregate related to the total number of shares of the Company's common stock underlying the 2029 Notes sold to the initial purchasers in the offering of 2029 Notes, with a strike price equal to the conversion price of the 2029 Notes and with an initial cap price equal to $99.21, which represents a 100% premium over the last reported sale price of the Company's common stock of $49.66 per share on December 7, 2022, with certain adjustments to the settlement terms that reflect standard anti-dilution provisions. These capped call transactions expire over 40 consecutive scheduled trading days ended on May 30, 2029. The capped calls were purchased for $25.1 million, net of issuance costs.

The Company evaluated the capped call transactions under authoritative accounting guidance and determined that they should be accounted for as a separate transaction and classified as a net reduction to Additional paid-in capital within stockholders’ equity with no recurring fair value measurement recorded.

The Company early adopted ASU 2020-6, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging— Contracts in Entity’s Own Equity (Subtopic 815-40) on January 1, 2021. In accordance with Subtopic 470-20 and 815-40, as revised by ASU 2020-6, the Company records the convertible notes in long-term debt with no separation between the Notes and the conversion option. Each reporting period, the Company will determine whether any criteria is met for the note holders to have the option to redeem the Notes early, which could result in a change in the classification of the Notes to current liabilities.

Debt Issuance Cost

The issuance costs related to the Convertible Notes are presented in the condensed consolidated balance sheet as a direct deduction from the carrying amount of the Convertible Notes. The issuance costs are amortized using an effective interest method basis over the term of the Convertible Notes. The effective interest rates on the 2026 Notes, 2028 Notes, and 2029 Notes are 2.98%, 2.82%, and 4.63%, respectively. Interest expense for the three month periods ended September 30, 2024 and 2023, including the amortization of debt issuance cost, totaled approximately $3.7 million and 3.5 million respectively.

Loan and Security Agreement

On July 9, 2020, the Company entered into a Loan and Security Agreement with Silicon Valley Bank for a four-year secured revolving loan facility (“SVB Revolving Line of Credit”) in an aggregate principal amount of up to $30.0 million. The Revolving Line of Credit, originally set to mature on July 9, 2024, was terminated by the Company on April 3, 2024.

- Definition

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 6
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147481544/470-10-50-6

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 6
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147481544/470-10-50-6

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 405
-SubTopic 40
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (d)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147477092/405-40-50-1

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Topic 405
-SubTopic 40
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (a)(3)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147477092/405-40-50-1

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Topic 405
-SubTopic 40
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (a)(2)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147477092/405-40-50-1

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Topic 405
-SubTopic 40
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (a)(1)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147477092/405-40-50-1

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Topic 405
-SubTopic 40
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
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-Publisher FASB
-URI https://asc.fasb.org/1943274/2147477092/405-40-50-1

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1B
-Subparagraph (h)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147481139/470-20-50-1B

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 235
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(c))
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147480678/235-10-S99-1

Reference 10: http://fasb.org/us-gaap/role/ref/legacyRef
-Topic 470
-Name Accounting Standards Codification
-Publisher FASB
-URI https://asc.fasb.org/470/tableOfContent

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Topic 835
-SubTopic 30
-Name Accounting Standards Codification
-Section 45
-Paragraph 2
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482925/835-30-45-2

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1B
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147481139/470-20-50-1B

Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1B
-Subparagraph (g)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147481139/470-20-50-1B

Reference 14: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1B
-Subparagraph (i)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147481139/470-20-50-1B

Reference 15: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
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Reference 16: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
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Reference 17: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
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-Publisher FASB
-URI https://asc.fasb.org/1943274/2147481139/470-20-50-1C

Reference 18: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
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-Name Accounting Standards Codification
-Section 50
-Paragraph 1E
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-Publisher FASB
-URI https://asc.fasb.org/1943274/2147481139/470-20-50-1E

Reference 19: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
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-Name Accounting Standards Codification
-Section 50
-Paragraph 1I
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147481139/470-20-50-1I

Reference 20: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
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-Name Accounting Standards Codification
-Section 50
-Paragraph 1I
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147481139/470-20-50-1I

Reference 21: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1I
-Subparagraph (d)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147481139/470-20-50-1I

+ Details

Net Loss Per Share

9 Months Ended

Sep. 30, 2024

Earnings Per Share [Abstract]

Net Loss Per Share

As of September 30, 2024, the Company’s Convertible Notes were potentially convertible into 8,696,792 shares of common stock.

The denominator for diluted net loss per share does not include any effect from the capped call transactions the Company entered into concurrently with the issuances of convertible notes, as this effect would be anti-dilutive. In the event of conversion of a convertible note, shares delivered to the Company under the capped call will offset the dilutive effect of the shares that the Company would issue under the convertible notes. In the nine months ended September 30, 2024 and September 30, 2023, the if-converted method was not applied as the effect would have been anti-dilutive.

For the nine months ended September 30, 2024 and September 30, 2023, a basic loss per common share and diluted loss per common share are the same in each period as the inclusion of any potentially issuable shares would be anti-dilutive.


	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
Numerator:
Net loss used in calculating net loss per share, basic	$	(39,018)	$	(44,274)	$	(86,477)	$	(105,600)
Denominator:
Weighted average shares of common stock outstanding used in computing net loss per share, basic	20,154		19,932		20,079		19,858
Dilutive effect of incremental shares and share equivalents:
Convertible notes	—		—		—		—
Options	—		—		—		—
RSUs	—		—		—		—
PSUs	—		—		—		—
ESPP	—		—		—		—
Weighted average shares of common stock outstanding used in computing net loss per share, diluted	20,154		19,932		20,079		19,858
Net loss per share:
Net loss per share, basic	$	(1.94)	$	(2.22)	$	(4.31)	$	(5.32)
Net loss per share, diluted	$	(1.94)	$	(2.22)	$	(4.31)	$	(5.32)


	Three Months Ended September 30,		Nine Months Ended September 30,
	2024	2023	2024	2023
Capped call	10,780	10,780	10,780	10,780
Convertible notes	8,697	8,697	8,697	8,697
Options	2,206	1,381	2,206	1,381
RSUs	407	756	407	756
PSUs	164	240	164	240
ESPP	—	72	—	72
Total	22,254	21,926	22,254	21,926

Fair Value of Financial Instruments (Tables)

9 Months Ended

Sep. 30, 2024

Fair Value Disclosures [Abstract]

Schedule of Financial Assets Measured and Recognized at Fair Value on a Recurring Basis

As of September 30, 2024, financial assets measured and recognized at fair value on a recurring basis and classified under the appropriate level of the fair value hierarchy as described above were as follows (in thousands):

September 30, 2024

Level 1

Cash equivalents:

Money market funds

51,248

As of December 31, 2023, financial assets and liabilities measured and recognized at fair value on a recurring basis and classified under the appropriate level of the fair value hierarchy as described above were as follows (in thousands):

December 31, 2023

Level 1

Cash equivalents:

Money market funds

123,387

Leases - Maturities of Finance Leases Liabilities (Details) - USD ($) $ in Thousands	Sep. 30, 2024	Dec. 31, 2023
Leases [Abstract]
Remainder of 2024	$ 239
2025	697
2026	424
2027	16
Total lease payments	1,376
Less: imputed interest	135
Present value of lease liabilities	$ 1,241	$ 1,889

Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023
Cash flows from operating activities
Net loss	$ (86,477)	$ (105,600)
Adjustments to reconcile net loss to net cash used in operating activities:
Stock-based compensation	5,543	6,552
Depreciation and amortization	5,464	5,225
Amortization of contract acquisition costs	3,882	7,085
Amortization of discount on convertible notes and debt issuance costs	1,726	1,670
Accretion of discount on investment securities and investment income, net	0	1,048
Deferred tax assets	(11)	62
Provision for credit losses	9,740	5,488
Changes in assets and liabilities:
Accounts receivable	232	(9,755)
Inventories	3,259	1,781
Other current assets and prepaid expenses	7,010	4,352
Other long-term assets	(472)	(5,642)
Accounts payable	(11,880)	(4,735)
Accrued liabilities	(18,704)	(10,963)
Operating leases, net	(83)	(44)
Deferred revenue	(1,845)	(390)
Net cash used in operating activities	(82,616)	(103,866)
Cash flows from investing activities
Acquisition of property and equipment	(1,390)	(30,642)
Proceeds from disposal of property and equipment	63	0
Proceeds from maturities of marketable investments	0	193,903
Purchase of marketable investments	0	(23,467)
Net cash provided by (used in) investing activities	(1,327)	139,794
Cash flows from financing activities
Proceeds from exercise of stock options and employee stock purchase plan	0	1,323
Taxes paid related to settlement of equity awards	(110)	(3,273)
Payments on finance lease obligations	(582)	(386)
Net cash used in financing activities	(692)	(2,336)
Net increase (decrease) in cash, cash equivalents and restricted cash	(84,635)	33,592
Cash, cash equivalents, and restricted cash at beginning of period	143,612	146,624
Cash, cash equivalents, and restricted cash at end of period	58,977	180,216
Supplemental non-cash operating, investing, and financing activities:
Assets acquired under finance lease	0	1,428
Assets acquired under operating lease	2,749	57
Acquisition of property and equipment	0	6,503
Transfer of property and equipment to inventory	10,925	928
Supplemental disclosure of cash flow information:
Cash paid for interest	6,764	6,509
Cash paid for income taxes	$ 1,601	$ 1,160

Net Loss Per Share - Antidilutive Securities Excluded From Computation of Earnings Per Share (Details) - shares shares in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities (in shares)	22,254	21,926	22,254	21,926
Capped call
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities (in shares)	10,780	10,780	10,780	10,780
Convertible notes
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities (in shares)	8,697	8,697	8,697	8,697
Options
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities (in shares)	2,206	1,381	2,206	1,381
RSUs
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities (in shares)	407	756	407	756
PSUs
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities (in shares)	164	240	164	240
ESPP
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities (in shares)	0	72	0	72

Leases - Lease Information (Details)	Sep. 30, 2024
Weighted-average remaining lease term (years)
Operating leases	3 years 2 months 12 days
Finance leases	1 year 9 months 18 days
Weighted-average discount rate
Operating leases	5.60%
Finance leases	9.50%

Stockholders' Equity and Stock-based Compensation Expense - Activity of Stock Awards Outstanding Under the 2019 Plans (Details)	9 Months Ended
	Sep. 30, 2024 $ / shares shares
Number of Awards Outstanding
Stock awards canceled / forfeited / expired (in shares)	(186,125)
Stock awards
Number of Awards Outstanding
Beginning balance (in shares)	909,862
Stock awards granted (in shares)	127,739
Awards vested (in shares)	(280,414)
Stock awards canceled / forfeited / expired (in shares)	(186,125)
Ending balance (in shares)	571,062
Weighted Average Grant Date Fair Value per Share
Beginning balance (in dollars per share) \| $ / shares	$ 20.46
Stock awards granted (in dollars per share) \| $ / shares	2.13
Awards vested (in dollars per share) \| $ / shares	22.41
Stock awards canceled / forfeited / expired (in dollars per share) \| $ / shares	25.41
Ending balance (in dollars per share) \| $ / shares	$ 13.91

Balance Sheet Details - Schedule of Other Current Assets and Prepaid Expenses (Details) - USD ($) $ in Thousands	Sep. 30, 2024	Dec. 31, 2023
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Deposits with vendors	$ 4,778	$ 9,501
Prepayments	4,894	3,819
Sale tax and VAT receivable	2,870	6,307
Other	300	225
Other current assets and prepaid expenses	$ 12,842	$ 19,852

Cash, Cash Equivalents, Restricted Cash and Marketable Investments - Narrative (Details) - USD ($)	Sep. 30, 2024	Dec. 31, 2023	Sep. 30, 2023	Dec. 31, 2022
Cash and Cash Equivalents [Abstract]
Cash, cash equivalents, and restricted cash	$ 58,977,000	$ 143,612,000	$ 180,216,000	$ 146,624,000
Marketable investments	0	0
Restricted cash	$ 1,363,000	$ 0

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Sep. 30, 2024	Dec. 31, 2023
Current assets:
Cash and cash equivalents	$ 57,614	$ 143,612
Accounts receivable, net of allowance for credit losses of $19,251 and $9,878, respectively	33,150	43,121
Inventories	56,908	62,600
Other current assets and prepaid expenses	12,842	19,852
Total current assets	160,514	269,185
Long-term inventories	28,664	16,283
Property and equipment, net	23,521	37,275
Deferred tax assets	590	579
Restricted cash	1,363	0
Goodwill	1,339	1,339
Operating lease right-of-use assets, net	10,593	10,055
Other long-term assets	7,834	11,575
Total assets	234,418	346,291
Current liabilities:
Accounts payable	7,949	19,829
Accrued liabilities	35,972	55,055
Operating lease liabilities	3,386	2,441
Deferred revenue	8,382	10,422
Total current liabilities	55,689	87,747
Deferred revenue, net of current portion	1,689	1,494
Operating lease liabilities, net of current portion	8,397	8,887
Convertible notes, net of unamortized debt issuance costs of $8,703 and $10,430, respectively	420,422	418,695
Other long-term liabilities	1,095	1,298
Total liabilities	487,292	518,121
Commitments and Contingencies (Note 12)
Stockholders’ deficit:
Common stock, $0.001 par value; authorized: 50,000,000 shares; issued and outstanding: 20,177,717 and 19,960,622 shares at September 30, 2024 and December 31, 2023, respectively	20	20
Additional paid-in capital	136,929	131,496
Accumulated deficit	(389,823)	(303,346)
Total stockholders’ deficit	(252,874)	(171,830)
Total liabilities and stockholders’ deficit	$ 234,418	$ 346,291

Stockholders' Equity and Stock-based Compensation Expense - Activity Of Options Outstanding Under the 2019 Plans (Details) - $ / shares	9 Months Ended	12 Months Ended
	Sep. 30, 2024	Dec. 31, 2023
Shares Available for Grant
Beginning balance (in shares)	3,554,537
Change in shares available to be granted (in shares)	3,424,252
Stock awards canceled / forfeited / expired (in shares)	186,125
Options canceled / forfeited / expired (in shares)	2,475,368
Elimination of fungible share ratio (in shares)	196,320
Ending balance (in shares)	3,009,733	3,554,537
Number of Stock Options Outstanding
Beginning balance (in shares)	1,282,240
Options granted (in shares)	3,424,252
Options exercised (in shares)	0
Options canceled / forfeited / expired (in shares)	(2,475,368)
Ending balance (in shares)	2,231,124	1,282,240
Weighted Average Exercise Price
Beginning balance (in dollars per share)	$ 17.97
Options granted (in dollars per share)	1.73
Options exercised (in dollars per share)	0
Options canceled / forfeited / expired (in dollars per share)	9.52
Ending balance (in dollars per share)	$ 2.42	$ 17.97
Weighted Average Remaining Term (in Years)
Weighted average remaining term (in years)	7 years 2 months 4 days	8 years 2 months 15 days
RSUs
Shares Available for Grant
Change in shares available to be granted (in shares)	149,374
Options and stock awards granted (in shares)	(3,551,991)
Number of Stock Options Outstanding
Options granted (in shares)	149,374

Balance Sheet Details - Accrued Liabilities (Details) - USD ($) $ in Thousands	Sep. 30, 2024	Dec. 31, 2023
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Bonus and payroll-related accruals	$ 12,598	$ 13,949
Accrued interest	3,736	1,304
Product warranty	3,549	2,593
Sales and marketing accruals	3,291	4,929
Accrued sales tax	2,810	6,325
Liability for inventory in transit	1,456	5,461
Jabil settlement obligation, net	0	8,908
Other accrued liabilities	8,532	11,586
Total	$ 35,972	$ 55,055

Stockholders' Equity and Stock-based Compensation Expense - Stock-based Compensation Expense By Department (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total stock-based compensation expense	$ 1,841	$ 1,616	$ 5,543	$ 6,552
Cost of revenue
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total stock-based compensation expense	102	(19)	394	706
Sales and marketing
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total stock-based compensation expense	1,089	593	1,335	3,024
Research and development
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total stock-based compensation expense	285	(178)	854	930
General and administrative
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total stock-based compensation expense	$ 365	$ 1,220	$ 2,960	$ 1,892

- Definition

Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 718
-SubTopic 10
-Name Accounting Standards Codification
-Section 35
-Paragraph 1D
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147480483/718-10-35-1D

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 718
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-Name Accounting Standards Codification
-Section 35
-Paragraph 3
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147480483/718-10-35-3

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 718
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (a)(1)
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-URI https://asc.fasb.org/1943274/2147480429/718-10-50-2

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
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-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (a)(2)
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Reference 5: http://www.xbrl.org/2003/role/disclosureRef
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-Section 50
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-Subparagraph (a)(3)
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Reference 6: http://www.xbrl.org/2003/role/disclosureRef
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Reference 7: http://www.xbrl.org/2003/role/disclosureRef
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Reference 8: http://www.xbrl.org/2003/role/disclosureRef
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Reference 9: http://www.xbrl.org/2003/role/disclosureRef
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Reference 12: http://www.xbrl.org/2003/role/disclosureRef
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Reference 13: http://www.xbrl.org/2003/role/disclosureRef
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Reference 14: http://www.xbrl.org/2003/role/disclosureRef
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Reference 18: http://www.xbrl.org/2003/role/disclosureRef
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Reference 26: http://www.xbrl.org/2003/role/disclosureRef
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Reference 27: http://www.xbrl.org/2003/role/disclosureRef
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+ Details

Deferred Revenue

9 Months Ended

Sep. 30, 2024

Revenue from Contract with Customer [Abstract]

Deferred Revenue

The Company records deferred revenue when revenue is to be recognized subsequent to invoicing. For extended service contracts, the Company generally invoices customers at the beginning of the extended service contract term. The Company’s extended service contracts typically have one to three-year terms. Deferred revenue also includes payments for training not yet delivered.

The following table provides changes in the deferred revenue balance for the three and nine months ended September 30, 2024 and 2023 (in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
Beginning balance	$	10,305	$	14,007	$	11,916	$	13,498
Add: Payments received from current period sales	4,037		5,005		14,317		15,140
Less: Revenue recognized from current period sales	(1,166)		(405)		(4,317)		(4,902)
Less: Revenue recognized from beginning balance	(2,368)		(5,499)		(9,394)		(10,628)
Pending lease cancellations	(737)		—		(2,451)		—
Ending balance	$	10,071	$	13,108	$	10,071	$	13,108

Approximately 83% of the Company’s deferred revenue balance of $10.1 million as of September 30, 2024 will be recognized over the next 12 months.

The fixed annual license fees received related to the AviClear contracts are deferred and recognized over the annual lease periods. The AviClear deferred license fee balance included in the total deferred revenue balance at September 30, 2024, and December 31, 2023 was $0.5 million and $2.1 million, respectively.

Costs for extended service contracts were $1.6 million and $4.8 million for the three and nine months ended September 30, 2024, respectively, and were $2.1 million and $5.8 million for the three and nine months ended September 30, 2023, respectively, and were recorded in cost of revenue on the condensed consolidated statements of operations

Leases - Supplemental Balance Sheet Information (Details) - USD ($) $ in Thousands	Sep. 30, 2024	Dec. 31, 2023
Assets
Right-of-use assets	$ 10,593	$ 10,055
Finance lease	$ 1,094	$ 2,516
Finance Lease, Right-of-Use Asset, Statement of Financial Position [Extensible Enumeration]	Property and equipment, net	Property and equipment, net
Total leased assets	$ 11,687	$ 12,571
Operating lease liabilities
Operating lease liabilities, current	3,386	2,441
Operating lease liabilities, non-current	8,397	8,887
Total Operating lease liabilities	11,783	11,328
Finance lease liabilities
Finance lease liabilities, current	$ 672	$ 825
Finance Lease, Liability, Current, Statement of Financial Position [Extensible Enumeration]	Accrued liabilities	Accrued liabilities
Finance lease liabilities, non-current	$ 569	$ 1,064
Finance Lease, Liability, Noncurrent, Statement of Financial Position [Extensible Enumeration]	Other long-term liabilities	Other long-term liabilities
Total Finance lease liabilities	$ 1,241	$ 1,889

Leases - Operating Lease Income (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
AviClear operating lease license fee revenue
Disaggregation of Revenue [Line Items]
Operating lease income	$ 476	$ 1,324	$ 2,069	$ 3,916
Operating Lease, Lease Income, Statement of Income or Comprehensive Income [Extensible Enumeration]			Total net revenue	Total net revenue
AviClear operating lease revenue
Disaggregation of Revenue [Line Items]
Operating lease income	517	2,565	$ 2,418	$ 8,504
Operating Lease, Lease Income, Statement of Income or Comprehensive Income [Extensible Enumeration]			Total net revenue	Total net revenue
Total AviClear revenue
Disaggregation of Revenue [Line Items]
Operating lease income	$ 993	$ 3,889	$ 4,487	$ 12,420
Operating Lease, Lease Income, Statement of Income or Comprehensive Income [Extensible Enumeration]			Total net revenue	Total net revenue

- Definition

Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table.

+ References + Details

Deferred Revenue (Tables)

9 Months Ended

Sep. 30, 2024

Revenue from Contract with Customer [Abstract]

Schedule of Deferred Service Contract Revenue

The following table provides changes in the deferred revenue balance for the three and nine months ended September 30, 2024 and 2023 (in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
Beginning balance	$	10,305	$	14,007	$	11,916	$	13,498
Add: Payments received from current period sales	4,037		5,005		14,317		15,140
Less: Revenue recognized from current period sales	(1,166)		(405)		(4,317)		(4,902)
Less: Revenue recognized from beginning balance	(2,368)		(5,499)		(9,394)		(10,628)
Pending lease cancellations	(737)		—		(2,451)		—
Ending balance	$	10,071	$	13,108	$	10,071	$	13,108

Product Warranty - Schedule of Warranties (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Movement in Standard Product Warranty Accrual [Roll Forward]
Beginning Balance	$ 3,010	$ 3,104	$ 2,593	$ 3,254
Add: Accruals for warranties issued during the period	1,596	1,076	4,215	3,626
Less: Settlements made during the period	(1,057)	(1,388)	(3,259)	(4,088)
Ending Balance	$ 3,549	$ 2,792	$ 3,549	$ 2,792

Deferred Revenue - Narrative (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023	Jun. 30, 2024	Dec. 31, 2023	Jun. 30, 2023	Dec. 31, 2022
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Deferred revenue balance, amount	$ 10,100		$ 10,100
Deferred revenue balance	10,071	$ 13,108	10,071	$ 13,108	$ 10,305	$ 11,916	$ 14,007	$ 13,498
Costs for extended service contracts	1,600	$ 2,100	$ 4,800	$ 5,800
Minimum
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Extended service contract term			1 year
Maximum
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Extended service contract term			3 years
Service \| Minimum
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Extended service contract term			1 year
Service \| Maximum
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Extended service contract term			3 years
Deferred License Fee
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Deferred revenue balance	$ 500		$ 500			$ 2,100
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-10-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Deferred revenue balance, percentage	83.00%		83.00%
Expected timing of satisfaction, period	12 months		12 months

Summary of Significant Accounting Policies	9 Months Ended
Summary of Significant Accounting Policies	Sep. 30, 2024
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Summary of Significant Accounting Policies	Summary of Significant Accounting Policies Description of Operations and Principles of Consolidation Cutera, Inc. (“Cutera” or the “Company”) develops, manufactures, distributes, and markets energy-based product platforms for medical practitioners, enabling them to offer treatments to their customers. In addition, the Company distributes Secret PRO and Secret RF systems and consumables. The Company currently markets the following system platforms: AviClear, enlighten, excel HR, excel V/V+, truSculpt, Secret PRO, Secret DUO, Secret RF, xeo, and xeo+ — each of which enables medical practitioners to perform procedures including treatment for acne, body contouring, skin resurfacing and revitalization, hair and tattoo removal, removal of benign pigmented lesions, and vascular conditions. Several of the Company’s systems offer multiple hand pieces and applications, providing customers the flexibility to upgrade their systems. The sale of systems, hand pieces, upgrade of systems, and leasing and direct sales of AviClear devices (collectively “Systems” revenue); replacement hand pieces, truSculpt cycle refills, truFlex cycle refills, AviClear treatment fees, and single use disposable tips applicable to Secret systems (collectively “Consumables” revenue) are collectively classified as “Products” revenue. In addition to Products revenue, the Company generates revenue from the sale of post-warranty service contracts and service parts and labor for the repair and maintenance of products that are out of warranty, all of which are collectively classified as “Service” revenue. The Company generated revenue from the distribution of skincare products, which were manufactured by ZO Skin Health, Inc. (“ZO”), and sold in the Japanese market. On February 28, 2024, the Company terminated this distribution agreement. The Company’s corporate headquarters and U.S. operations are located in Brisbane, California, where the Company conducts manufacturing, warehousing, research and development, regulatory, sales and marketing, service, and administrative activities. The Company also maintains regional distribution centers (“RDCs”) in select locations across the United States. These RDCs serve as forward warehousing for systems and service parts in various geographies. The Company markets, sells and services the Company’s products through direct sales and service employees in North America (including Canada), Australia, New Zealand, Austria, France, Germany, Hong Kong, Japan, Switzerland, the United Kingdom and the Republic of Ireland. Sales and services outside of these direct markets are made through a worldwide distributor network in over 32 countries. The condensed consolidated financial statements include the accounts of the Company and its subsidiaries after elimination of intercompany transactions and balances. Liquidity and Management’s Plans When preparing financial statements, management has the responsibility to evaluate if the Company has adequate liquidity to continue to operate for at least the next twelve months. In performing this assessment, management considered the Company's current financial condition and liquidity sources, including current funds, forecasted future cash flows and unconditional obligations due over the next twelve months. In addition, management evaluated the history of the Company's financial performance, and determined that the Company has had a historic trend of operating losses, which continues to have an unfavorable impact on the Company's overall liquidity. Most recently, the Company reported net losses of $86.5 million for the nine months ended September 30, 2024, and $162.8 million for the year ended December 31, 2023. These factors, among others, raise substantial doubt regarding the Company’s ability to continue as a going concern for a period of one year from the issuance of these condensed consolidated financial statements. The accompanying condensed consolidated financial statements are prepared in accordance with generally accepted accounting principles applicable to a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. Accordingly, the condensed consolidated financial statements do not include any adjustments relating to the recoverability and classification of asset carrying amounts or the amount and classification of liabilities that may result should the Company be unable to continue as a going concern. The Company’s continued operations will depend on several factors, including but not limited to, growth of revenues from its revised business model for AviClear, which entails transitioning from a lease model to a direct sales model, maintaining or increasing revenues from sales of legacy systems, consumables and services, achieving cost savings as a result of workforce reductions implemented in the fourth quarter of 2023 and second quarter of 2024, and implementing further cost savings initiatives, restructuring of supplier and manufacturing relationships, and initiatives to improve inventory and receivables management. Failure to increase revenue, achieve cost savings, raise additional financing or re-finance the existing convertible notes when they become due, would adversely affect the Company’s ability to achieve its intended business objectives. There can be no assurances that financing will be available on terms favorable to the Company, if at all, and delays may occur in completing the operating activities. Basis of Presentation In the opinion of the Company, the accompanying unaudited condensed consolidated financial statements included in this report reflect all adjustments necessary for a fair statement of its condensed consolidated balance sheets as of September 30, 2024 and December 31, 2023, and its condensed consolidated statements of operations, condensed consolidated statements of comprehensive loss, condensed consolidated statements of changes in stockholders' deficit, and condensed consolidated statements of cash flows, for the three and nine months ended September 30, 2024, and 2023, respectively. The December 31, 2023 condensed consolidated balance sheet was derived from audited financial statements, but does not include all disclosures required by generally accepted accounting principles in the United States of America (“GAAP”). The results for interim periods are not necessarily indicative of results for the entire year or any other interim period. All intercompany accounts and transactions have been eliminated upon consolidation. The accompanying condensed consolidated financial statements should be read in conjunction with the Company’s previously filed audited financial statements and the related notes thereto included in the Company’s annual report on Form 10-K for the year ended December 31, 2023, filed with the Securities and Exchange Commission (the “SEC”) on May 10, 2024. Reclassification The Company reclassified the AviClear revenue category disclosed in the Note 14 Segment Reporting previously recorded as a separate revenue stream between systems and consumables revenue. Corresponding reclassifications of prior period amounts have been made in the Company's Note 14 Segment Reporting to conform to the current period presentation. These reclassifications had no effect on the reported net loss. Risks and Uncertainties The Company's future results of operations involve a number of risks and uncertainties. Factors that could affect the Company's future operating results and cause actual results to vary materially from expectations include, but are not limited to, rapid technological change, continued acceptance of the Company's products, stability of global financial markets, cybersecurity breaches and other disruptions that could compromise the Company’s information or results, business disruptions that are caused by natural disasters or pandemic events, management of international activities, competition from substitute products and larger companies, the Company's ability to obtain and maintain regulatory approvals, government regulations and oversight, patent and other types of litigation, the Company's ability to protect proprietary technology from counterfeit versions of the Company's products and its intellectual property rights generally, the successful execution of new product launches, the continuation of strategic relationships, such as the Company's distribution of third-party products, and dependence on key individuals. Accounting Policies These unaudited condensed consolidated financial statements are prepared in accordance with the rules and regulations of the SEC applicable to interim financial statements. While these statements reflect all normal recurring adjustments that are, in the opinion of management, necessary for fair presentation of the results of the interim period, they do not include all of the information and footnotes required by GAAP for complete financial statements. The Company uses the same accounting policies in preparing quarterly and annual financial statements. Recently Issued Accounting Pronouncements Not Yet Adopted by the Company In December 2023, the FASB issued ASU No. 2023-09, “Income Taxes (Topic 740) - Improvements to Income Tax Disclosures,” to enhance the transparency and usefulness of income tax disclosures. The update requires enhancements to the annual rate reconciliation, including disclosure of specific categories and additional information for reconciling items meeting a quantitative threshold. The update also requires disclosure of income taxes paid disaggregated by federal, state and foreign taxes, and individual jurisdictions meeting a quantitative threshold. The amendments in this update are effective for public business entities for annual periods beginning after December 15, 2024, and may be adopted on a prospective or retrospective basis. Early adoption is permitted. The Company is currently evaluating the effect that the updated standard will have on the Company's financial statement disclosures. In November 2023, the FASB issued ASU No. 2023-07, “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures,” which will require the Company to disclose segment expenses that are significant and regularly provided to the Company’s chief operating decision maker (“CODM”). In addition, ASU 2023-07 will require the Company to disclose the title and position of its CODM and how the CODM uses segment profit or loss information in assessing segment performance and deciding how to allocate resources. The amendments are effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. The Company is currently evaluating the effect that the updated standard will have on the Company's financial statement disclosures. In March 2024, the U.S. Securities and Exchange Commission ("SEC") adopted the final rule under SEC Release No. 33-11275, The Enhancement and Standardization of Climate-Related Disclosures for Investors. This rule will require registrants to disclose certain climate-related information in registration statements and annual reports. The disclosure requirements will not apply before the Company's fiscal year beginning January 1, 2025. However on April 4, 2024, the SEC issued an order staying the rule pending the completion of an ongoing judicial review. The Company is monitoring SEC developments and evaluating the final rule to determine its impact on the Company's disclosures. Leases The Company incurred costs to fulfill its lease agreement obligations with its AviClear device lessees. These costs consisted of freight, installation, and training. In addition to these mobilization costs, the Company incurred commission costs associated with the placement of the AviClear device. The Company capitalized commission costs and made a policy election to capitalize the mobilization costs. The Company determined to cease new leases of the AviClear device in 2023 and, therefore the Company no longer incurs and capitalizes additional mobilization costs and commission costs related to placements of the AviClear device, which were recorded in other long-term assets on the Company's condensed consolidated balance sheets and were amortized over the expected lease term. The amortization of the remaining mobilization costs and amortization of deferred commission costs are recorded in cost of revenue and sales and marketing, respectively, in the Company's condensed consolidated statement of operations. Total capitalized mobilization costs were $0.7 million and $2.1 million as of September 30, 2024 and December 31, 2023, respectively. Total capitalized commissions as of September 30, 2024, and December 31, 2023, were $1.6 million and $2.7 million, respectively, and are included in other long-term assets on the Company’s condensed consolidated balance sheet. Use of Estimates The preparation of condensed consolidated financial statements in conformity with GAAP requires the Company’s management to make estimates and assumptions that affect the amounts reported of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the accompanying notes, and the reported amounts of revenue and expenses during the reported periods. Actual results could differ materially from those estimates. On an ongoing basis, management evaluates its estimates, including those related to warranty obligations, sales commissions, allowance for credit losses, sales allowances, valuation of inventories, fair value of goodwill, impairment testing for long-lived assets, implicit and incremental borrowing rates related to the Company’s leases, variables used in calculating the fair value of the Company's equity awards, expected achievement of performance-based vesting criteria and management performance bonuses, the standalone selling price of the Company's products and services, the period of benefit used to capitalize and amortize contract acquisition costs, variable considerations, recoverability of deferred tax assets, and effective income tax rates. Management bases estimates on historical experience and on various other assumptions that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Distribution of Third-Party Products The Company generated revenue from the distribution of skincare products, which were manufactured by ZO Skin Health, Inc. (“ZO”), and sold in the Japanese market. In the three and nine months ended September 30, 2024, revenue from the distribution of skincare products was nil and $4.2 million, respectively. In the nine months ended September 30, 2023, revenue from the distribution of skincare products was $24.7 million, representing 15% of the Company’s consolidated revenue. On February 28, 2024, the Company and its Japanese subsidiary, Cutera KK, entered into a termination agreement (the “Termination Agreement”) with ZO USA and its Japanese subsidiary, ZO Skin Health GK (“ZO Japan” and together with ZO USA and their affiliates, “ZO”), which, among other things, (i) terminates all agreements related to the distribution by the Company of ZO’s products in Japan effective immediately, (ii) provides for the orderly transition of the distribution of ZO products to ZO, (iii) transfers certain Company employees dedicated to the distribution of ZO products to ZO, (iv) transfers certain customer contracts related to ZO products from the Company to ZO and (v) transfers certain inventory and assets related to the distribution of ZO products from the Company to ZO. The Termination Agreement requires ZO to pay the Company $5.75 million within three business days of the execution of the Termination Agreement and make a second payment of $5.75 million, less any offsets under the Termination Agreement (including, but not limited to, 42.2% of the Company’s net revenue for sales of ZO products under the Distribution Agreement between January 1, 2024 and February 28, 2024), upon the earlier of (a) the completion the transition of regulatory and distribution activities such that ZO is able to fulfill product orders by customers in Japan, as determined by ZO and the Company, and (b) June 14, 2024. The Company received the first payment of $5.75 million on February 29, 2024, and received a second payment of $2.37 million on April 1, 2024, which was net of $1.6 million in amounts owed by Cutera. In the three months ended March 31, 2024, the Company recorded a net gain of $9.7 million resulting from the early termination proceeds received and transfer of certain assets and liabilities as gain on early termination of distribution agreement on the Company's condensed consolidated statement of operations. On July 31, 2024, the Company announced a strategic partnership with L’Oréal Japan Co. to exclusively promote, market, sell and distribute select SkinCeuticals products to medical and physician-led clinics in Japan. Under the terms of the agreement, the partnership will initially span three years, with options for renewal. Cutera plans to introduce the SkinCeuticals product line to customers in Japan during the fourth quarter of 2024 and expects the financial impact of the distribution agreement to be immaterial in 2024. The Company generates revenue from the distribution of the Secret systems, which are manufactured by ilooda Co. Ltd. (“ilooda”). The Company is the exclusive distributor for all systems sold in the United States, Canada, the United Kingdom; the exclusive distributor for certain systems in France, and Spain; and the non-exclusive distributor for systems sold in Austria and Germany. In the nine months ended September 30, 2024, and September 30, 2023, revenue from the distribution of Secret products represented 7% and 13%, respectively, of the Company’s consolidated revenue. The Company‘s ilooda distribution agreement expires in June 30, 2026. Termination of Manufacturing Service Agreement In November 2023, the Company communicated its intention not to renew its existing manufacturing service agreement (“Manufacturing Service Agreement”) with Jabil Inc. (“Jabil”), a third-party manufacturing provider that manufactured excel V+ and AviClear devices for the Company. At the time of the communication of non-renewal, the Company concluded that it would have an obligation to purchase unshipped inventory from Jabil. The Company subsequently received claims from Jabil related to other amounts associated with the termination and entered into settlement discussions with Jabil. On February 28, 2024, the Company and Jabil signed a settlement agreement (“Settlement Agreement”) for the non-renewal of its existing Manufacturing Service Agreement. The Settlement Agreement provided for a payment by Cutera to Jabil of $19.5 million, to be offset by $1.3 million in amounts owed by Jabil. The $19.5 million payment to Jabil relates to the Company's receipt of $13.5 million of inventories, $0.3 million of equipment, and the payment of $5.7 million for expenses either previously incurred by Jabil or associated with the non-renewal of the Manufacturing Services Agreement. The Company recorded the net balance of the $19.5 million payment owed to Jabil and the $15.1 million aggregate of inventories, equipment, and other amounts owed to Cutera, in accrued liabilities on the consolidated balance sheet at December 31, 2023. The $5.7 million for expenses incurred by Jabil was recorded in cost of revenue on the consolidated statements of operations in the twelve months ended December 31, 2023. As of September 30, 2024, all amounts owed to Jabil have been paid and inventories have been received.

Debt - Narrative (Details)		1 Months Ended			3 Months Ended		9 Months Ended
Debt - Narrative (Details)	Jul. 09, 2020 USD ($)	Dec. 31, 2022 USD ($) $ / shares	May 31, 2022 USD ($) day $ / shares $ / item shares	Mar. 31, 2021 USD ($) day $ / shares $ / item	Sep. 30, 2024 USD ($)	Sep. 30, 2023 USD ($)	Sep. 30, 2024 USD ($) day	Dec. 31, 2023 USD ($)	Dec. 07, 2022 $ / shares	Jun. 01, 2022 USD ($)	May 24, 2022 $ / shares	Mar. 04, 2021 $ / shares
Convertible Senior Notes Due 2026
Debt Instrument [Line Items]
Convertible debt, conversion ratio							0.0301427
Cap price (in dollars per per share) \| $ / item				45.535
Premium over stock price (percent)				75.00%
Stock price (in dollars per share) \| $ / shares												$ 26.02
Capped-call transaction term, consecutive trading days \| day				40
Purchase of capped call				$ 16,100,000
Convertible Senior Notes Due 2026 \| Common Stock
Debt Instrument [Line Items]
Conversion price (in dollars per share) \| $ / shares				$ 33.18
Convertible Senior Notes Due 2028
Debt Instrument [Line Items]
Convertible debt, conversion ratio							0.018986
Cap price (in dollars per per share) \| $ / item			82.62
Premium over stock price (percent)			100.00%
Stock price (in dollars per share) \| $ / shares											$ 41.31
Capped-call transaction term, consecutive trading days \| day			40
Purchase of capped call			$ 32,000,000.0
Convertible Senior Notes Due 2028 \| Common Stock
Debt Instrument [Line Items]
Conversion price (in dollars per share) \| $ / shares			$ 52.67
Convertible Senior Notes Due 2029
Debt Instrument [Line Items]
Cap price (in dollars per per share) \| $ / item			99.21
Premium over stock price (percent)			100.00%
Stock price (in dollars per share) \| $ / shares									$ 49.66
Capped-call transaction term, consecutive trading days \| day			40
Purchase of capped call			$ 25,100,000
Convertible Senior Notes Due 2029 \| Common Stock
Debt Instrument [Line Items]
Conversion price (in dollars per share) \| $ / shares		$ 58.35
Loan and Security Agreement \| Silicon Valley Bank \| Revolving Credit Facility
Debt Instrument [Line Items]
Debt instrument term	4 years
Maximum borrowing capacity	$ 30,000,000.0
Convertible notes
Debt Instrument [Line Items]
Carrying amount					$ 420,422,000		$ 420,422,000	$ 418,695,000
Number of days to file annual report					15 days		15 days
Number of days, written notice					60 days		60 days
Percentage of note holders					0.25		0.25
Number of days with additional interest, after default					360 days		360 days
Interest expense					$ 3,700,000	$ 3,500,000
Convertible notes \| Convertible Senior Notes Due 2026
Debt Instrument [Line Items]
Notes issued				$ 138,300,000
Carrying amount of convertible debt				$ 69,100,000
Interest rate (in percent)				2.25%	2.25%		2.25%
Proceeds from convertible notes, net of unamortized debt issuance costs				$ 133,600,000
Cash exchanged			45,800,000
Payment of accrued interest			300,000
Extinguishment of debt			$ 69,100,000
Shares issued in debt conversion (in shares) \| shares			1,354,348
Carrying amount					$ 68,401,000		$ 68,401,000	68,041,000		$ 69,100,000
Incremental repurchase amount					1,000		$ 1,000
Redemption threshold percentage of stock price trigger							130.00%
Redemption threshold trading days \| day							20
Redemption threshold consecutive trading days \| day							30
Redemption price, percentage							100.00%
Required outstanding amount not subject to redemption					50,000,000.0		$ 50,000,000.0
Effective interest rate during period (in percent)							2.98%
Convertible notes \| Convertible Senior Notes Due 2026 \| Occurrence of Fundamental Change
Debt Instrument [Line Items]
Incremental repurchase amount					1,000		$ 1,000
Redemption price, percentage							100.00%
Convertible notes \| Convertible Senior Notes Due 2026 \| Level 2
Debt Instrument [Line Items]
Convertible debt at fair value					21,700,000		$ 21,700,000
Convertible notes \| Convertible Senior Notes Due 2026, First Conversion Trigger
Debt Instrument [Line Items]
Conversion threshold trading days \| day							20
Threshold consecutive trading days \| day							30
Conversion threshold percentage of stock price trigger							130.00%
Convertible notes \| Convertible Senior Notes Due 2026, Second Conversion Trigger
Debt Instrument [Line Items]
Incremental repurchase amount					$ 1,000		$ 1,000
Conversion threshold trading days \| day							5
Threshold consecutive trading days \| day							5
Conversion threshold percentage of stock price trigger							98.00%
Convertible notes \| Convertible Senior Notes Due 2028
Debt Instrument [Line Items]
Notes issued			$ 240,000,000
Interest rate (in percent)			2.25%		2.25%		2.25%
Proceeds from convertible notes, net of unamortized debt issuance costs			$ 232,400,000
Additional principal			10,000,000
Carrying amount					$ 235,204,000		$ 235,204,000	234,286,000
Incremental repurchase amount					1,000		$ 1,000
Redemption threshold percentage of stock price trigger							130.00%
Redemption threshold trading days \| day							20
Redemption threshold consecutive trading days \| day							30
Redemption price, percentage							100.00%
Required outstanding amount not subject to redemption					100,000,000		$ 100,000,000
Effective interest rate during period (in percent)							2.82%
Convertible notes \| Convertible Senior Notes Due 2028 \| Occurrence of Fundamental Change
Debt Instrument [Line Items]
Incremental repurchase amount					1,000		$ 1,000
Redemption price, percentage							100.00%
Convertible notes \| Convertible Senior Notes Due 2028 \| Voce Capital Management LLC
Debt Instrument [Line Items]
Notes issued			$ 230,000,000
Convertible notes \| Convertible Senior Notes Due 2028 \| Level 2
Debt Instrument [Line Items]
Convertible debt at fair value					39,000,000.0		$ 39,000,000.0
Convertible notes \| Convertible Senior Notes Due 2028, First Conversion Trigger
Debt Instrument [Line Items]
Conversion threshold trading days \| day							20
Threshold consecutive trading days \| day							30
Redemption threshold percentage of stock price trigger							130.00%
Convertible notes \| Convertible Senior Notes Due 2028, Second Conversion Trigger
Debt Instrument [Line Items]
Incremental repurchase amount					$ 1,000		$ 1,000
Conversion threshold trading days \| day							5
Threshold consecutive trading days \| day							5
Conversion threshold percentage of stock price trigger							98.00%
Convertible notes \| Convertible Senior Notes Due 2029
Debt Instrument [Line Items]
Notes issued		$ 120,000,000
Interest rate (in percent)		4.00%			4.00%		4.00%
Proceeds from convertible notes, net of unamortized debt issuance costs		$ 115,800,000
Convertible debt, conversion ratio							0.0171378
Carrying amount					$ 116,817,000		$ 116,817,000	$ 116,368,000
Incremental repurchase amount					1,000		$ 1,000
Redemption threshold percentage of stock price trigger							130.00%
Redemption threshold trading days \| day							20
Redemption threshold consecutive trading days \| day							30
Redemption price, percentage							100.00%
Required outstanding amount not subject to redemption					100,000,000		$ 100,000,000
Effective interest rate during period (in percent)							4.63%
Convertible notes \| Convertible Senior Notes Due 2029 \| Occurrence of Fundamental Change
Debt Instrument [Line Items]
Incremental repurchase amount					1,000		$ 1,000
Redemption price, percentage							100.00%
Convertible notes \| Convertible Senior Notes Due 2029 \| Level 2
Debt Instrument [Line Items]
Convertible debt at fair value					$ 21,500,000		$ 21,500,000
Convertible notes \| Convertible Senior Notes Due 2029, First Conversion Trigger
Debt Instrument [Line Items]
Conversion threshold trading days \| day							20
Threshold consecutive trading days \| day							30
Conversion threshold percentage of stock price trigger							130.00%
Convertible notes \| Convertible Senior Notes Due 2029, Second Conversion Trigger
Debt Instrument [Line Items]
Conversion threshold trading days \| day							5
Threshold consecutive trading days \| day							5
Conversion threshold percentage of stock price trigger							98.00%
Convertible notes \| Convertible Senior Notes, Additional Interest, Up To 180 Days
Debt Instrument [Line Items]
Interest rate (in percent)					0.25%		0.25%
Convertible notes \| Convertible Senior Notes, Additional Interest, 181 Days - 360 Days
Debt Instrument [Line Items]
Interest rate (in percent)					0.50%		0.50%

Product Warranty (Tables)

9 Months Ended

Sep. 30, 2024

Product Warranties Disclosures [Abstract]

Schedule of Product Warranty Liability Accrual

The following table provides the changes in the product warranty accrual for the three and nine months ended September 30, 2024 and 2023 (in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
Beginning Balance	$	3,010	$	3,104	$	2,593	$	3,254
Add: Accruals for warranties issued during the period	1,596		1,076		4,215		3,626
Less: Settlements made during the period	(1,057)		(1,388)		(3,259)		(4,088)
Ending Balance	$	3,549	$	2,792	$	3,549	$	2,792

Commitments and Contingencies	9 Months Ended
Commitments and Contingencies	Sep. 30, 2024
Commitments and Contingencies Disclosure [Abstract]
Commitments and Contingencies	Commitments and Contingencies The Company is named from time to time as a party to other legal proceedings, product liability, intellectual property disputes, commercial disputes, employee disputes, and contractual lawsuits. A liability and related charge are recorded to earnings in the Company’s consolidated financial statements for legal contingencies when the loss is considered probable and the amount can be reasonably estimated. The assessment is re-evaluated each accounting period and is based on all available information, including discussion with outside legal counsel. If a reasonable estimate of a known or probable loss cannot be made, but a range of probable losses can be estimated, the low-end of the range of losses is recognized if no amount within the range is a better estimate than any other. If a material loss is reasonably possible, but not probable and can be reasonably estimated, the estimated loss or range of loss is disclosed in the notes to the consolidated financial statements. The Company expenses legal fees as incurred. Certain of the cases below are still in the preliminary stages, and the Company is not able to quantify the extent of its potential liability, if any, other than as described. The outcome of litigation is inherently unpredictable and subject to significant uncertainties. If any of these matters are resolved adversely to the Company, this could have a material adverse effect on its business, financial condition, results of operations, and cash flows. In addition, defending these legal proceedings is likely to be costly, which may have a material adverse effect on the Company's financial condition, results of operations and cash flows, and may divert management's attention from the day-to-day operations of its business. On January 31, 2020, the Company filed a lawsuit against Lutronic Aesthetics (“Lutronic”) in the United States District Court for the Eastern District of California. Lutronic employs numerous former Cutera employees. The complaint against Lutronic generally alleges claims for (1) misappropriation of trade secrets in violation of state and federal law; (2) violation of the Racketeer Influenced and Corrupt Organizations Act ("RICO"); (3) interference with contractual relations; (4) interference with prospective economic advantage; (5) unfair competition; and (6) aiding and abetting. On March 13, 2020, the court entered a temporary restraining order ("TRO") against Lutronic generally prohibiting it from using or disseminating the Company's confidential, proprietary, or trade secret information. The order also prohibited Lutronic, for two years, from using such information for the purpose of soliciting, or conducting business with, certain specified customers. On April 9, 2020, the parties stipulated to the entry of a preliminary injunction providing for the same relief afforded by the TRO. On August 4, 2022, Cutera filed a second amended complaint. In addition to the above referenced claims, Cutera alleged claims for violation of the Lanham Act, unlawful business practices, false advertising and trademark infringement. On April 27, 2023, Lutronic filed a complaint for trade libel, intentional interference with prospective economic advantage, misappropriation of trade secrets and unfair business practices against Cutera in California State Court. On May 31, 2024 (the “Settlement Date”), Cutera reached a settlement agreement with Lutronic, regarding all outstanding litigation and arbitration matters involving the parties, Larry Laber and James Bartholomeusz. Under the terms of the settlement agreement, Lutronic agreed to pay Cutera $5.75 million within thirty days of the Settlement Date and was recorded as a credit in General and Administrative expenses. Both parties agreed to the dismissal with prejudice of all pending actions and a mutual release, but denied all allegations of wrongful acts or omissions alleged in the pending actions against each party and agreed that the settlement was not an acknowledgement of any liability, fault, part or present wrongdoing, or violation of any law, rule, regulation or policy by either party or their respective affiliates, representatives or agents. As of July 3, 2024, all cases were officially dismissed. As of September 30, 2024, and December 31, 2023, the Company had accrued $2.6 million and $3.3 million, respectively, related to various pending commercial and product liability lawsuits. The Company does not believe that a material loss in excess of accrued amounts is reasonably likely. As of September 30, 2024, the Company had $1.2 million of non-cancelable inventory purchase obligations associated with two vendors and due in 2024.

Leases (Tables)

9 Months Ended

Sep. 30, 2024

Leases [Abstract]

Schedule of Supplemental Balance Sheet Information

Supplemental balance sheet information related to leases was as follows (in thousands):


Leases	Classification	September 30, 2024		December 31, 2023
Assets
Right-of-use assets	Operating lease right-of-use assets	$	10,593	$	10,055
Finance lease	Property and equipment, net	1,094		2,516
Total leased assets		$	11,687	$	12,571


Liabilities	Classification	September 30, 2024		December 31, 2023
Operating lease liabilities
Operating lease liabilities, current	Operating lease liabilities	$	3,386	$	2,441
Operating lease liabilities, non-current	Operating lease liabilities, net of current portion	8,397		8,887
Total Operating lease liabilities		$	11,783	$	11,328

Finance lease liabilities
Finance lease liabilities, current	Accrued liabilities	$	672	$	825
Finance lease liabilities, non-current	Other long-term liabilities	569		1,064
Total Finance lease liabilities		$	1,241	$	1,889

Weighted-average remaining lease term and discount rate, as of September 30, 2024, were as follows:


Lease Term and Discount Rate	September 30, 2024
Weighted-average remaining lease term (years)
Operating leases	3.2
Finance leases	1.8
Weighted-average discount rate
Operating leases	5.6	%
Finance leases	9.5	%

Schedule of Lease Costs

Lease costs during the three and nine months ended September 30, 2024 and 2023 (in thousands) was as follows:


		Three Months Ended September 30,				Nine Months Ended September 30,
Lease costs	Classification	2024		2023		2024		2023
Finance lease cost	Amortization expense	$	246	$	209	$	770	$	507
Finance lease cost	Interest for finance lease	$	33	$	23	$	112	$	61
Operating lease cost	Operating lease expense	$	1,083	$	921	$	3,145	$	2,701

Cash paid for amounts included in the measurement of lease liabilities during the nine months ended September 30, 2024 and 2023 was as follows (in thousands):


		Nine Months Ended September 30,
Cash paid for amounts included in the measurement of lease liabilities	Classification	2024		2023
Operating cash flow	Finance lease	$	108	$	62
Financing cash flow	Finance lease	$	582	$	386
Operating cash flow	Operating lease	$	995	$	2,449

Schedule of Maturities of Facility Leases

Maturities of operating facility leases were as follows as of September 30, 2024 (in thousands):


As of September 30, 2024	Amount
Remainder of 2024	$	1,998
2025	4,117
2026	4,076
2027	3,304
2028	325
2029 and thereafter	148
Total lease payments	13,968
Less: imputed interest	2,185
Present value of lease liabilities	$	11,783

Schedule of Minimum Finance Lease Payments

As of September 30, 2024, the Company was committed to minimum lease payments for vehicles leased under long-term non-cancelable finance leases as follows (in thousands):


As of September 30, 2024	Amount
Remainder of 2024	$	239
2025	697
2026	424
2027	16
Total lease payments	1,376
Less: imputed interest	135
Present value of lease liabilities	$	1,241

Schedule of Operating Lease Income

The following table summarizes the amount of operating lease income included in product revenue in the accompanying condensed consolidated statements of operations (in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
AviClear operating lease license fee revenue	$	476	$	1,324	$	2,069	$	3,916
AviClear operating lease revenue	517		2,565		2,418		8,504
Total AviClear revenue	$	993	$	3,889	$	4,487	$	12,420

Schedule of Minimum Future Lease Payments

The following is the minimum future lease payments as of September 30, 2024, under non-cancelable operating leases, assuming the minimum contractual lease term (in thousands):


As of September 30, 2024	Amount
Remainder of 2024	$	3,267
2025	2,265
Total	$	5,532

Condensed Consolidated Statements of Comprehensive Loss - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Statement of Comprehensive Income [Abstract]
Net loss	$ (39,018)	$ (44,274)	$ (86,477)	$ (105,600)
Other comprehensive income (loss):
Net change in unrealized gain on available-for-sale investments, net of tax	0	(4)	0	94
Other comprehensive income, net of tax	0	(4)	0	94
Comprehensive loss	$ (39,018)	$ (44,278)	$ (86,477)	$ (105,506)

- Definition

Amount after tax of increase (decrease) in equity from transactions and other events and circumstances from net income and other comprehensive income, attributable to parent entity. Excludes changes in equity resulting from investments by owners and distributions to owners.

+ References + Details

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

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+ Details

Fair Value of Financial Instruments

9 Months Ended

Sep. 30, 2024

Fair Value Disclosures [Abstract]

Fair Value of Financial Instruments

The Company measures certain financial assets at fair value, including cash and cash equivalents.

The fair value hierarchy contains the following three levels of inputs that may be used to measure fair value, in accordance with ASC 820:

•Level 1 inputs, which include quoted prices in active markets for identical assets or liabilities;

•Level 2 inputs, which include observable inputs other than Level 1 inputs, such as quoted prices for similar assets or liabilities, quoted prices for identical or similar assets or liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the asset or liability. When sufficient quoted pricing for identical securities is not available, the Company uses market pricing and other observable market inputs for similar securities obtained from various third-party data providers. These inputs either represent quoted prices for similar assets in active markets or have been derived from observable market data; and

•Level 3 inputs, which include unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the underlying asset or liability. Level 3 assets and liabilities include those whose fair value measurements are determined using pricing models, discounted cash flow methodologies, or similar valuation techniques, as well as significant management judgment or estimation.

In determining fair value, the Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible as well as considering counterparty credit risk in its assessment of fair value.

September 30, 2024

Level 1

Cash equivalents:

Money market funds

51,248

December 31, 2023

Level 1

Cash equivalents:

Money market funds

123,387

The Company's cash and cash equivalents, accounts receivable, and accounts payable are reflected on the accompanying consolidated balance sheets at cost, which approximated estimated fair value due to short-term nature of such accounts, using Level 1 inputs.

See Note 13. Debt for the carrying amount and estimated fair value of the Company’s 2.25% Convertible Senior Notes due 2026 (the “2026 Notes”), the 2.25% Convertible Senior Notes due 2028 (the “2028 Notes”), and the 4.00% Convertible Senior Notes due 2029 (the “2029 Notes”).

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

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+ Details

Income Taxes	9 Months Ended
Income Taxes	Sep. 30, 2024
Income Tax Disclosure [Abstract]
Income Taxes	Income Taxes For the three and nine months ended September 30, 2024, the Company's income tax expense was $0.5 million and $0.4 million respectively, compared to income tax expense of $0.2 million and $0.8 million respectively, for the three and nine months ended September 30, 2023. The Company's income tax expense for the nine months ended September 30, 2024 and 2023 is due to income taxes in foreign jurisdictions. The Company continues to maintain a full valuation allowance on its U.S. deferred tax assets.

- Definition

The entire disclosure for income tax.

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-URI https://asc.fasb.org/1943274/2147480990/946-20-50-13

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Topic 235
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(h)(2))
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147480678/235-10-S99-1

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-Name Accounting Standards Codification
-Publisher FASB
-URI https://asc.fasb.org/740/tableOfContent

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 14
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482685/740-10-50-14

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 21
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482685/740-10-50-21

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 17
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482685/740-10-50-17

Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 2
-Subparagraph (SAB Topic 11.C)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147479360/740-10-S99-2

Reference 14: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 30
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482603/740-30-50-2

+ Details

Balance Sheet Details

9 Months Ended

Sep. 30, 2024

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Balance Sheet Details

Inventories

Inventories consist of the following (in thousands):


	September 30, 2024		December 31, 2023
Raw materials	$	40,804	$	36,970
Work in process	4,816		889
Finished goods	11,288		24,741
Total	$	56,908	$	62,600

The Company regularly reviews its inventories to identify items that may no longer be sellable due to age, damage, or shifts in customer demand. Inventory excess and obsolescence expense and inventory write off expense are included in cost of goods in the Company's condensed consolidated statements of operations. The Company will continue to evaluate its inventories and make adjustments as necessary to reflect market conditions.

Valuation adjustments for excess and obsolete short-term inventory, reflected as a reduction of inventories at September 30, 2024 and December 31, 2023, were $0.9 million and $13.0 million, respectively.

Other current assets and prepaid expenses

Other current assets and a prepaid expenses consist of the following (in thousands):


	September 30, 2024		December 31, 2023
Deposits with vendors	$	4,778	$	9,501

Prepayments	4,894		3,819
Sale tax and VAT receivable	2,870		6,307
Other	300		225
Total	$	12,842	$	19,852

Long-term inventories

The Company’s long-term inventories relate parts for device manufacturing, not expected to be sold in the twelve months ended September 30, 2025. Long-term inventories consist of the following (in thousands):


	September 30, 2024		December 31, 2023
Raw materials	$	16,610	$	8,672
Work in process	271		2,049
Finished goods	11,783		5,562
Total	$	28,664	$	16,283

Valuation adjustments for excess and obsolete long-term inventory, reflected as a reduction of long-term inventories at September 30, 2024 and December 31, 2023, were $40.3 million and $12.8 million, respectively.

Property and Equipment, net

Property and equipment, net consists of the following (in thousands):


	September 30, 2024		December 31, 2023
AviClear devices	$	25,999	$	38,490

Machinery and equipment	5,546		4,944
Office equipment and furniture	1,815		1,884
Leasehold improvements	1,438		1,010
Assets under construction	653		1,274
	35,451		47,602
Less: Accumulated depreciation	(11,930)		(10,327)
Property and equipment, net	$	23,521	$	37,275

In November 2023, the Company introduced a new business model for AviClear, providing for the purchase of the device upfront. From the FDA approval in April 2022 through October 2023, AviClear devices were leased to customers, and parts and devices not yet placed in service were recorded as property and equipment on the consolidated balance sheet, and further categorized as assets under construction. As a result of the new business model, the Company has determined to classify AviClear parts and devices not currently leased as inventories. AviClear devices currently leased continue to be classified as property and equipment on the consolidated balance sheet.

The Company identified indicators of impairment during the nine months ended September 30, 2024, including a decline in financial results and market capitalization. The Company evaluated its long-lived assets, including property and equipment, for potential impairment and concluded that an impairment was not required. An impairment may potentially result in partial or full write-down of these balances. The Company will continue to monitor financial results and market capitalization. Should the financial results continue to deteriorate, an impairment of long-lived assets, including property and equipment, may become reasonably possible.

Accrued Liabilities

Accrued liabilities consist of the following (in thousands):


	September 30, 2024		December 31, 2023
Bonus and payroll-related accruals	$	12,598	$	13,949
Accrued interest	3,736		1,304
Product warranty	3,549		2,593
Sales and marketing accruals	3,291		4,929
Accrued sales tax	2,810		6,325
Liability for inventory in transit	1,456		5,461
Jabil settlement obligation, net	—		8,908
Other accrued liabilities	8,532		11,586
Total	$	35,972	$	55,055