Vivos Therapeutics (VVOS -5.04%), the medical technology firm developing non-surgical treatments for obstructive sleep apnea (OSA), reported its second-quarter 2025 results on August 20, 2025. The central news was a strategic shift following its acquisition of The Sleep Center of Nevada, alongside a move away from dentist-driven sales and toward direct alliances with medical providers. Revenue landed at $3.8 million, yet down from the prior year, and gross margin fell sharply to 55%, with expenses rising due to integration and financing costs. Management flagged these as expected transition results, leaving the period defined by a business in flux and growing financial pressures.
| Metric | Q2 2025 | Q2 2025 Estimate | Q2 2024 | Y/Y Change |
|---|---|---|---|---|
| EPS (GAAP) | ($0.55) | ($0.38) | ($0.60) | 8.3 percentage points improvement |
| Revenue (GAAP) | $3.8 million | $3.36 million | $4.1 million | (7.3%) |
| Gross Profit | $2.1 million | $2.7 million | (22.2%) | |
| Gross Margin | 55.0% | 65.0% | (10.0 pp) | |
| Operating Expenses | $7.0 million | $4.6 million | 52.2% |
Source: Analyst estimates provided by FactSet. Management expectations based on management's guidance, as provided in Q1 2025 earnings report.
What does Vivos Therapeutics do? Business model and recent focus
Vivos Therapeutics develops and markets oral appliances designed to treat obstructive sleep apnea, a condition where a person’s airway frequently collapses or becomes blocked during sleep. Its proprietary approach, branded as the "Vivos Method," is a non-surgical alternative aimed at repositioning and expanding the airway, targeting adults and children who are unsuitable or non-compliant with traditional continuous positive airway pressure (CPAP) therapies. The company's treatment platform is cleared by the U.S. Food and Drug Administration for moderate to severe OSA, which helps set it apart in a crowded market.
Recently, Vivos has pivoted from a model focused on dentists, instead building alliances with sleep centers and other medical providers. This strategy seeks to establish direct access to OSA patients, aiming to increase device adoption and create multiple sources of revenue, including diagnostics and appliance sales. The ability to demonstrate consistent patient preference and effectiveness, secure broad insurance coverage, and deepen relationships with sleep-focused healthcare groups are key to the company’s success.
Quarter in review: Financial and operational events
This quarter marked a seismic shift for Vivos, centered around the acquisition of The Sleep Center of Nevada (SCN), which closed on June 10, 2025. The deal was meant to demonstrate the new model in practice. In the 20 days post-acquisition, SCN supplied approximately $500,000 in diagnostic revenue (GAAP), and Vivos highlighted that appointment backlogs suggest strong patient demand. However, the company served less than 40% of the patients in this early stage at SCN locations, indicating capacity bottlenecks that need attention.
Revenue declined nearly 7.3% compared to the same period in 2024, reflecting lower enrollment and service fees as legacy dentist programs wound down. The drop in service revenue was anticipated by management, as Vivos shifted efforts to patient alliances and absorption of SCN operations. This transition, while planned, meant a smaller top line (GAAP revenue) than last year.
Gross profit and margin (GAAP) both fell sharply. The margin dropped ten percentage points to 55.0% as the company rolled out discounted prices and shifted the mix of its business toward diagnostic revenue, which typically yields lower margins. The company-wide margin now trails prior expectations. From a product perspective, no new FDA clearances or clinical data were introduced this period, but the company maintained its lead in regulatory status for severe OSA appliances.
Operating expenses increased sharply, up 52% year-over-year. Much of this was attributed to professional costs tied to the SCN deal, debt and equity financing, and the infrastructure required to integrate and run sleep centers. Some of these costs were described as non-recurring, but base expense levels are now structurally higher as more patient centers are added. But the headline loss per share (GAAP) was improved from the prior year because the company issued more shares, not due to improved operating results.
Looking ahead: Guidance and investor focus
Management did not offer any clear guidance for the coming quarter or the full year. There were comments in previous quarters forecasting cash flow breakeven from the SCN acquisition by the end of 2025, but the current results show only modest contributions so far and a need for further ramp-up in both served patients and converted treatment sales.
VVOS does not currently pay a dividend. For investors, the primary areas to watch are the pace of scaling direct patient access at new and existing centers, how quickly higher-value treatment sales build on early diagnostic revenue, and whether gross margins recover as the business evolves away from legacy operations. Liquidity pressures and ongoing operating losses remain central financial risks as the transition continues.
Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.
