Evolus, Inc. (EOLS)

Item 2.    Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion contains management’s discussion and analysis of our financial condition and consolidated results of operations and should be read together with the unaudited condensed consolidated financial statements and the related notes thereto included in Part I, Item 1 of this Quarterly Report on Form 10-Q and in conjunction with our Annual Report on Form 10-K for the year ended December 31, 2025 and other documents previously filed with the SEC. This discussion contains forward-looking statements that reflect our plans, estimates and beliefs and involve numerous risks and uncertainties, including but not limited to those described in Item 1A “Risk Factors” in Part II of this Quarterly Report on Form 10-Q. Actual results may differ materially from those contained in any forward-looking statements. You should carefully read “Special Note Regarding Forward-Looking Statements” and Item 1A “Risk Factors” in Part II of this Quarterly Report on Form 10-Q.

Overview

We are a global performance beauty company delivering breakthrough products with a customer-centric approach in the cash-pay aesthetic market. Our current commercial product portfolio includes Jeuveau® (prabotulinumtoxinA-xvfs) and Evolysse®, a collection of injectable hyaluronic acid, or HA, gels. We currently sell Jeuveau® in the United States, Canada, certain European countries and Australia. We currently sell Evolysse® Form and Evolysse® Smooth in the United States and four Evolysse® products in Europe. We anticipate two additional Evolysse® products, Evolysse® Sculpt and Evolysse® Lips, to be approved in the United States in 2026 and 2027, respectively.

Our primary market is the cash-pay aesthetic market, which consists of medical products that consumers pay for directly out of pocket. Our customers are aesthetic practitioners who are properly licensed to deliver our products. By avoiding the regulatory burdens that accompany reimbursed products and pursuing an aesthetic-only non-reimbursed product strategy, we create flexibility to deliver a unique value proposition to our customers. We utilize this flexibility to drive customer adoption through programs such as our consumer loyalty program, co-branded marketing programs, portfolio bundles, promotional events and pricing strategies.

Recent Key Developments

On July 7, 2026, we entered into a License, Supply and Distribution Agreement, or the IBSA Agreement, with IBSA Institut Biochimique SA, or IBSA. Under the IBSA Agreement, IBSA granted us an exclusive right and license to develop, commercialize and distribute Profhilo®, an injectable hyaluronic acid product for skin-quality applications, in the United States for use in the aesthetics and dermatological fields. The IBSA Agreement does not require us to make any upfront payment or milestone payments to IBSA. We anticipate commercialization of Profhilo® in the United States in 2030, subject to regulatory approval.

On August 3, 2026, we entered into a series of agreements with Symatese that amended and expanded our commercialization rights under our agreements with Symatese. Under these agreements, we have added exclusive rights to commercialize the full line of Evolysse® injectable HA gel products in Europe, and in the new territories of Canada, Australia and New Zealand. As a result, we now hold exclusive rights to commercialize Evolysse® in every market where we have commercialized Jeuveau®. Under these agreements, we are required to make aggregate upfront payments of €1.4 million and may be required to make additional payments of up to €2.9 million upon receipt of certain regulatory approvals and completion of certain registration processes. We anticipate commercialization in these new territories in 2028, subject to applicable regulatory approvals.

Market Trends and Uncertainties

Macroeconomic conditions in the United States remain mixed and uncertain, with moderating inflation and continued economic expansion offset by muted job growth, weaker consumer confidence, and evolving tariff and trade policy developments. Geopolitical tensions, including ongoing conflicts in the Middle East, add further uncertainty through potential disruptions to global energy markets, supply chains, and transportation networks, which could contribute to energy price volatility and heightened inflationary pressures. Collectively, these conditions may reduce discretionary spending by consumers and purchasing decisions by our customers, and, if they persist or worsen, could adversely affect the demand for our products.

U.S. tariff policy remains fluid and subject to change. Tariffs applicable to our products will increase our costs and, absent mitigation, adversely affect our gross margin and operating results. However, the ultimate impact remains uncertain given the volatility and evolving scope of U.S. and foreign trade policies. During the second quarter of 2026, Evolysse®, which we

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import from the European Union, was subject to a temporary 10% tariff. On July 24, 2026 those tariffs expired, and were replaced by a new 10% tariff on Evolysse® under Section 301 of the Trade Act of 1974.

Separately, beginning September 29, 2026, Jeuveau®, a biologic that is manufactured in South Korea, could be subject to a 15% tariff under Section 232 of the Trade Expansion Act of 1962, depending on how the applicable rules are interpreted and applied. We have increased inventory purchases in advance of the potential Jeuveau® tariff and are evaluating other mitigation measures while we monitor additional guidance on the scope and implementation of the tariffs, including the availability and conditions of exemptions.

Following the U.S. Supreme Court’s invalidation of tariffs previously imposed under the International Emergency Economic Powers Act, or IEEPA, we submitted claims for refunds of certain tariffs previously paid. The amount and timing of any refunds remain uncertain.

As of June 30, 2026, the majority of our debt outstanding represents a long-term loan bearing variable rates of interest (see Note 7. Long-Term Debt in the Notes to the Condensed Consolidated Financial Statements in Part I, Item 1 of this Quarterly Report on Form 10-Q for additional information). Changes in market interest rates will affect the interest expense incurred from this outstanding debt instrument, increasing or decreasing our interest expense in future periods. Additionally, changes in market interest rates may affect the interest rate and corresponding interest expense on any new issuance of short-term and long-term debt securities. See Part I, Item 3 of this Quarterly Report on Form 10-Q for more information.

Results of Operations

Comparison of the Three Months Ended June 30, 2026 and 2025

The following table summarizes our consolidated results of operations for the periods indicated:

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Net Revenues

We currently operate one reportable segment, and our net product revenues are derived from the sale of Jeuveau® and Evolysse®. Net revenues consist of gross revenues, net of adjustments primarily relating to customer rebates, rewards associated with consumer loyalty program, and co-branded marketing programs. Revenues are recognized when the control of the promised goods is transferred to the customer in an amount that reflects the consideration allocated to the related performance obligations and to which we expect to be entitled in exchange for those products or services.

Net revenues increased by $14.7 million, or 21.2%, to $84.1 million in the three months ended June 30, 2026 from $69.4 million in the three months ended June 30, 2025, primarily due to higher Jeuveau® sales. Net revenues in the three months ended June 30, 2026 and 2025 each contained $0.7 million of service revenue from sales of Jeuveau® through a distribution partner in Canada. We anticipate our continued sales growth will depend on (i) our ability to grow our customer base and to increase purchases by our current customers in the competitive aesthetic market, (ii) the continued success of Evolysse® Form and Evolysse® Smooth products in the United States, (iii) the success of the commercial launch of Evolysse® injectable HA gel collection in Europe and (iv) the regulatory approval for the Evolysse® Sculpt and Evolysse® Lips products in the United States.

Cost of Goods Sold

Cost of goods sold primarily consists of inventory cost, amortization of intangible asset relating to distribution right and certain royalties. Cost of goods sold increased by $2.8 million, or 11.8%, to $26.9 million in the three months ended June 30, 2026 from $24.1 million in the three months ended June 30, 2025, primarily attributable to higher volumes of products shipped to customers, partially offset by a reduction in cost of goods sold of $1.1 million resulting from the recognition of IEEPA tariff refunds. We anticipate that our cost of goods sold will fluctuate due to changes in product and geographic mix and the impact of current and threatened tariffs.

Gross Profit Margin

Our gross profit margin was 68.0% and 65.3% in the three months ended June 30, 2026 and 2025, respectively. The recognition of IEEPA tariff refunds provided a 1.2 percentage point increase in gross profit margin in the three months ended June 30, 2026. We anticipate that our gross profit margin will fluctuate due to changes in product and geographic mix, the effect of current and threatened tariffs, and the impact of promotional and incentive programs on our average selling prices.

Selling, General and Administrative

Selling, general and administrative expenses increased by $0.4 million, or 0.7%, to $57.1 million in the three months ended June 30, 2026 from $56.7 million in the three months ended June 30, 2025, primarily resulting from increased personnel-related costs. Selling, general and administrative expenses may fluctuate in the future primarily driven by potential changes in marketing strategies, launches of new products and international expansion.

Research and Development

Research and development expenses were $1.9 million in the three months ended June 30, 2026 and remained relatively consistent with that in the three months ended June 30, 2025. We expect our research and development expenses to increase, if and when, we develop additional product candidates and pursue regulatory approvals.

Revaluation of Contingent Royalty Obligation Payable to Evolus Founders

The change in the fair value of the contingent royalty obligation payable to the Evolus Founders is recorded in operating expenses in each reporting period. In the three months ended June 30, 2026 and 2025, we recognize

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Overview

We are a global performance beauty company delivering breakthrough products with a customer-centric approach in the cash-pay aesthetic market. Our current commercial product portfolio includes Jeuveau® (prabotulinumtoxinA-xvfs) and Evolysse™, a collection of injectable hyaluronic acid (“HA”) gels. We currently sell Jeuveau® in the United States, Canada, certain European countries and Australia, and, in April 2025, we launched Evolysse™ Form and Evolysse™ Smooth in the United States, which are indicated for wrinkles and folds, such as nasolabial folds, in adults. We expect to launch all four Evolysse™ products in Europe in the second quarter of 2026 and anticipate two additional Evolysse™ products, Evolysse™ Sculpt and Evolysse™ Lips, to be approved in the United States in 2026 and 2027, respectively.

Our primary market is the cash-pay aesthetic market, which consists of medical products that consumers pay for directly out of pocket. Our customers are aesthetic practitioners who are properly licensed to deliver our products. By avoiding the regulatory burdens that accompany reimbursed products and pursuing an aesthetic-only non-reimbursed product strategy, we create flexibility to deliver a unique value proposition to our customers. We utilize this flexibility to drive customer adoption through programs such as our consumer loyalty program, co-branded marketing programs, portfolio bundles, promotional events and pricing strategies.

Market Trends and Uncertainties

The global economy has experienced heightened volatility and disruptions, including enacted and threatened tariffs. While inflation in the United States is moderating, job growth has been muted, and consumer confidence has generally been weakening.

Recently enacted tariffs by the United States have adversely affected and potentially will continue to adversely affect overall consumer sentiment and discretionary spending. As a result, lower consumer sentiment and discretionary spending have negatively impacted aesthetic procedures and our sales and may negatively impact our sales in the future if consumer discretionary spending does not improve. We cannot reasonably estimate the financial impact of current and threatened tariffs by the United States on our future financial condition, results of operations or cash flows.

As of December 31, 2025, the majority of our debt outstanding represents a long-term loan bearing variable rates of interest (see Note 7. Term Loans in the Notes to the Consolidated Financial Statements in Part II, Item 8 of this Annual Report on Form 10-K for additional information). Changes in market interest rates will affect the interest expense incurred from this outstanding debt instrument, increasing or decreasing our interest expense in future periods. Additionally, changes in market interest rates may affect the interest rate and corresponding interest expense on any new issuance of short-term and long-term debt securities. See Item 7A “Quantitative and Qualitative Disclosure About Market Risk” of this Annual Report for more information.

Recent Key Developments

On March 3, 2026, we entered into a Loan and Security Agreement (the “Revolving Credit Facility”) with Eclipse Business Capital LLC, providing for a $30.0 million asset-based revolving credit facility with an accordion feature of up to $10.0 million. The Revolving Credit Facility matures in three years and requires a minimum utilization of $10.0 million. Borrowings under the Revolving Credit Facility bear interest at adjusted term SOFR (subject to a floor of 2.0%) plus 4.25%, subject to potential downward adjustments. The Revolving Credit Facility is secured by a first priority lien on substantially

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all of our assets and is guaranteed by us and our subsidiaries. See “Liquidity and Capital Resources - The Revolving Credit Facility” and Note 15. Subsequent Events in the Notes to the Consolidated Financial Statements in Part II, Item 8 of this Annual Report on Form 10-K for additional information.

In the third quarter of 2025, we performed a strategic cost structure optimization, and, in connection with the restructuring initiative, $1.4 million of restructuring related costs were incurred.

In August 2025, we announced the submission of Premarket Approval Application (“PMA”) to the U.S. Food and Drug Administration (“FDA”) for Evolysse™ Sculpt. We anticipate that the FDA’s review will follow the standard PMA process, with approval expected in the second half of 2026.

In May 2025, we entered into an Amended and Restated Loan Agreement (the “A&R Loan Agreement”) with Pharmakon (as defined below), which amends and restates the Prior Pharmakon Loan Agreement. Under the A&R Loan Agreement, Pharmakon agreed to make a senior secured term loan to us in an aggregate principal amount of up to $250.0 million to be funded in three tranches, comprised of an initial $150.0 million tranche funded upon the execution of the A&R Loan Agreement and two additional tranches of up to $50.0 million each, available at our election (collectively, the “New Pharmakon Term Loans”) with a scheduled expiration date of December 31, 2026.

In April 2025, we launched Evolysse™ Form and Evolysse™ Smooth in the United States.

Results of Operations

Comparison of the Years Ended December 31, 2025 and 2024

The following table summarizes our results of operations for the periods indicated:

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Net Revenues

We currently operate one reportable segment, and our net product revenues are derived from the sale of Jeuveau® and, beginning in April 2025, from the sale of Evolysse™. Net revenues consist of gross revenues net of adjustments primarily relating to customer rebates, rewards associated with consumer loyalty program, and co-branded marketing programs. Revenues are recognized when the control of the promised goods is transferred to the customer in an amount that reflects the consideration allocated to the related performance obligations and to which we expect to be entitled in exchange for those products or services.

Net revenues increased by $30.9 million, or 11.6%, to $297.2 million for the year ended December 31, 2025 from $266.3 million for the year ended December 31, 2024, primarily due to the launch of Evolysse™ in the United States and an increase in revenues from sales of Jeuveau®. Net revenues during the year ended December 31, 2025 and 2024 contained $2.2 million and $2.0 million of service revenue, respectively, from sales of Jeuveau® through a distribution partner in Canada. We anticipate our continued sales growth will depend on (i) our ability to grow our customer base and to increase purchases by our current customers in the competitive aesthetic market, (ii) the continued success of Evolysse™ Form and Evolysse™ Smooth products in the United States, (iii) the success of the commercial launch of Evolysse™ injectable HA gel collection in Europe and (iv) the regulatory approval for the Evolysse™ Sculpt and Evolysse™ Lips products in the United States.

Cost of Goods Sold

Cost of goods sold primarily consists of inventory cost, amortization of intangible asset relating to distribution right and certain royalties. Cost of goods sold increased by $16.1 million, or 19.2%, to $100.1 million for the year ended December 31, 2025 from $84.0 million for the year ended December 31, 2024 primarily due to an increase in the volume of both Jeuveau® and Evolysse™ sold. We anticipate that our cost of goods sold will fluctuate in line with changes in revenues and threatened tariffs.

Gross Profit Margin

Our gross profit margin was 66.3% and 68.5% for the years ended December 31, 2025 and 2024, respectively. We anticipate that our gross profit margin will fluctuate due to changes in product and geographic mix, as well as the impact of promotional and incentive programs on our average selling prices.

Selling, General and Administrative

Selling, general and administrative expenses increased by $22.8 million, or 11.5%, to $220.8 million for the year ended December 31, 2025 from $198.0 million for the year ended December 31, 2024, primarily due to higher personnel costs relating to our commercial activities and training for the launch of Evolysse™. Selling, general and administrative expenses may fluctuate in the future primarily driven by potential changes in marketing strategies, launches of new products and international expansion.

Research and Development

Research and development expenses increased by $0.4 million, or 4.4%, to $9.6 million for the year ended December 31, 2025 from $9.2 million for the year ended December 31, 2024. The increase was primarily attributable to increased clinical operations. We expect our research and development expenses to continue to increase if and when we develop further product candidates and as we pursue regulatory approvals.

Revaluation of Contingent Royalty Obligation Payable to Evolus Founders

The change in the fair value of the contingent royalty obligation payable to the Evolus Founders is recorded in operating expenses in each reporting period. For the years ended December 31, 2025 and 2024, we recognized an unrealized gain of $6.4 million and an unrealized loss of $7.2 million, respectively. Changes to the fair value of the contingent royalty obligation payable to Evolus Founders are driven by changes in management assumptions relating to revenue forecasts, the discount rate used, and the timing of cash flows.

Depreciation and Amortization

Depreciation and amortization increased by $2.0 million, or 85.5%, to $4.3 million for the year ended December 31, 2025 from $2.3 million for the year ended December 31, 2024, primarily due to an increase in amortization of internal-use software and depreciation of leasehold improvements.

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Restructuring Costs

Restructuring costs were $1.4 million for the year ended December 31, 2025. No restructuring costs were incurred in the same period of the prior year. Restructuring costs were primarily related to one-time separation benefits incurred in connection with our strategic cost structure optimization.

Non-Operating Expense, Net

Non-operating expense, net, increased by $2.3 million, or 14.8%, to $17.8 million for the year ended December 31, 2025 from $15.5 million for the year ended December 31, 2024, primarily due to higher outstanding indebtedness, higher amortization of debt discount and issuance costs, and lower interest income from the Company’s cash and cash equivalents, partially offset by lower average interest rates of our outstanding indebtedness. Interest on the New Pharmakon Term Loans is based on a variable interest rate, which we expect will

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