Allurion Revenue Drops 71 Percent in Q2

Key Points

• Revenue (GAAP) was $3.4 million in Q2 2025, missing GAAP revenue expectations by 34.7% and Revenue was $3.4 million, missing expectations by 34.7% and down 71.2% compared to Q2 2024 (GAAP).

• Operating expenses declined 48% year-over-year, narrowing the operating loss by 24.7% compared to Q2 2024.

• Management withdrew financial guidance after a major strategic pivot toward GLP‑1 therapy and the U.S. market.

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Allurion Technologies (NYSE:ALUR), a medical device company focused on non-surgical weight loss solutions, released its second quarter 2025 results on August 13, 2025. The headline was a sharp revenue drop to $3.4 million (GAAP) in Q2 2025, well below the $5.18 million GAAP consensus estimate and last year’s $11.8 million (GAAP) revenue. This shortfall reflected distribution partner changes, strategic pivots, and region-specific disruptions. Despite implementing aggressive cost controls that trimmed operating expenses by nearly half year-over-year, the company posted a $7.0 million operating loss, although that was an improvement from $9.3 million in Q2 2024. The quarter was marked by operational shifts, regulatory milestones, and management’s decision to withdraw forward guidance as it repositions for future growth.

Source: Analyst estimates provided by FactSet. Management expectations based on management's guidance, as provided in Q2 2025 earnings report.

The Business and Strategic Focus

Allurion Technologies develops medical devices and digital solutions for weight loss. Its flagship product is the Allurion Balloon, a swallowable gastric balloon designed to help patients lose weight without surgery or anesthesia. The company integrates this device with a mobile app and a connected scale, using artificial intelligence to guide patients through behavioral change and remote monitoring as part of the Allurion Program.

Success for the business hinges on three factors: the safety and efficacy of its products, obtaining regulatory clearance in major markets, especially the United States, and building strong partnerships with healthcare providers. Protecting its intellectual property and differentiating from competitors through digital integration and data-driven care are also core to its growth strategy.

Quarter in Review: Disruption, Refocusing, and Cost Cuts

The period saw Allurion face significant revenue disruption, driven by major changes in how it sells its products. The company began moving away from underperforming distributors and instead focused on channel partners that better align with evolving trends in obesity care, notably providers familiar with GLP-1 therapy. GLP-1 agonists are medications, like semaglutide, targeting appetite regulation, and are increasingly part of obesity management. Management noted that the company’s sales slumped as it restructured these distribution relationships. Additionally, the company temporarily suspended sales in France, further impacting revenue.

Despite lower sales volume, gross profit margin held steady at 74% of revenue (GAAP), similar to the prior year’s 76% (GAAP). In absolute terms, however, gross profit (GAAP) shrank drastically alongside sales. Allurion responded by executing cost reductions across the board, cutting sales and marketing expenses by 64.1%, research and development by 58.1%, and general and administrative costs by 28.8% year over year (GAAP).

The narrowing of the operating loss (GAAP) from $9.3 million to $7.0 million reflects these aggressive cost measures, but negative operating leverage persisted due to the steep drop in revenue. Cash and cash equivalents stood at $12.7 million, raising the importance of managing burn rates if the current sales trends persist. The company also flagged upcoming restructuring charges of about $1.5 million expected in Q3 2025 as it continues to align expenses with the new strategy.

On the regulatory front, the company achieved a notable milestone: the acceptance of its Pre-Market Authorization (PMA) application by the U.S. Food and Drug Administration for the Allurion Balloon, which is the key U.S. regulatory pathway for medical devices. Allurion also submitted protocols for a new combination therapy that pairs its device with low-dose GLP-1 medications, aiming to create a differentiated “drug-eluting balloon” and expand its addressable market. Strategic partnerships were advanced with a focus on joint development, production, and commercialization opportunities related to these new therapeutic concepts.

Looking Ahead: Guidance Withdrawn and Future Catalysts

Given the new strategic direction, the company is re-evaluating guidance for 2025. This leaves near-term expectations uncertain as the company completes its restructuring, finalizes distributor transitions, and awaits regulatory outcomes.

Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.

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