Core Insights - AirSculpt Technologies, Inc. reported first-quarter results for 2025, indicating a focus on returning to growth through strategic initiatives and cost management [1][2]. Financial Performance - Case volume for Q1 2025 was 3,076, a decline of 17.9% from 3,746 in Q1 2024 [6][22]. - Revenue decreased by 17.3% to $39.4 million from $47.6 million in the same quarter of the previous year [6][17]. - The company reported a net loss of $2.8 million compared to a net income of $6.0 million in Q1 2024 [6][17]. - Adjusted EBITDA was $3.8 million, down from $7.3 million in Q1 2024, with an adjusted EBITDA margin of 9.5% compared to 15.4% [6][22]. Strategic Initiatives - The CEO expressed confidence in the company's transformation efforts and highlighted the early benefits from a new go-to-market strategy, which has improved lead volumes and revenue decline [2]. - The company is focusing on increasing lead generation, consultations, and case conversions through enhanced marketing and sales efforts [2]. - AirSculpt is piloting a standalone skin tightening service, which has garnered increasing interest, positioning the company to capitalize on this opportunity [2]. Liquidity and Cash Flow - As of March 31, 2025, the company had $5.6 million in cash and cash equivalents, down from $8.2 million at the end of 2023 [5][19]. - Operating cash flow for Q1 2025 was $0.9 million, a decrease from $3.4 million in Q1 2024 [5][21]. 2025 Outlook - The company projects full-year 2025 revenue between $160 million and $170 million, with adjusted EBITDA guidance of approximately $16 million to $18 million [4][6].

Core Viewpoint - Palo Alto Networks has launched Prisma AIRS™, a comprehensive AI security platform aimed at protecting the entire AI ecosystem, including applications, agents, models, and data, in response to the rapid adoption of AI across enterprises [1][2]. Group 1: AI Adoption and Security Needs - Enterprises are increasingly deploying AI applications and large language models (LLMs) across various functions, which drives innovation but also creates security vulnerabilities [2]. - There is a critical need for a comprehensive AI security platform to effectively protect AI initiatives and prevent security incidents [2]. Group 2: Features and Capabilities of Prisma AIRS - Prisma AIRS offers capabilities such as AI model scanning for vulnerabilities, posture management for security risks, AI red teaming for automated penetration testing, runtime security against various threats, and AI agent security against new threats [6]. - The platform is designed to provide continuous visibility and real-time insights into AI usage, helping organizations identify potential security issues [4]. Group 3: Strategic Enhancements and Future Plans - Palo Alto Networks plans to enhance Prisma AIRS through the acquisition of Protect AI, a leader in securing AI usage, which is expected to close by the first quarter of fiscal 2026 [4].

Company Overview - AirSculpt Technologies, Inc. is an industry leader in premium body contouring procedures [1] - The company offers a next-generation body contouring treatment that emphasizes comfort and precision, available exclusively at its offices [3] Financial Results Announcement - AirSculpt will report its first quarter 2025 financial results before market open on May 2, 2025 [1] - A conference call will follow the financial results announcement on the same day at 8:00 a.m. Eastern Time [1] Conference Call Details - The conference call can be accessed via a toll-free domestic number or an international number, using a specific conference ID [2] - A live webcast of the conference call will be available on the investor relations section of the AirSculpt website, with a replay accessible for approximately 90 days [2]

Group 1 - AirSculpt Technologies, Inc. (AIRS) has been added to the Zacks Rank 5 (Strong Sell) List due to a 121.7% downward revision in the Zacks Consensus Estimate for its current year earnings over the last 60 days [1] - The Carlyle Group Inc. (CG) is also on the Zacks Rank 5 (Strong Sell) List, with an 8.4% downward revision in the Zacks Consensus Estimate for its current year earnings over the last 60 days [1] - Cars.com Inc. (CARS) has seen a 12.9% downward revision in the Zacks Consensus Estimate for its current year earnings over the last 60 days, leading to its inclusion in the Zacks Rank 5 (Strong Sell) List [2]

Group 1 - AirSculpt Technologies, Inc. (AIRS) has been added to the Zacks Rank 5 (Strong Sell) List due to a 121.7% downward revision in the consensus estimate for its current year earnings over the last 60 days [1] - Eagle Bancorp, Inc. (EGBN) is also on the Zacks Rank 5 (Strong Sell) List, with a 5.3% downward revision in the consensus estimate for its current year earnings over the last 60 days [1] - First Foundation Inc. (FFWM) has seen a 60% downward revision in the consensus estimate for its current year earnings over the last 60 days, categorizing it under Zacks Rank 5 (Strong Sell) [2]

Group 1 - Avanos Medical, Inc. (AVNS) has been added to the Zacks Rank 5 (Strong Sell) List due to a 31.8% downward revision in the Zacks Consensus Estimate for its current year earnings over the last 60 days [1] - AirSculpt Technologies, Inc. (AIRS) is also on the Zacks Rank 5 (Strong Sell) List, with a significant 121.7% downward revision in the Zacks Consensus Estimate for its current year earnings over the last 60 days [1] - Amphastar Pharmaceuticals, Inc. (AMPH) has seen a 23.5% downward revision in the Zacks Consensus Estimate for its current year earnings over the last 60 days, placing it in a similar position [2]

Financial Data and Key Metrics Changes - For Q4 2024, revenue totaled $39.2 million, a decline of 17.7% from Q4 2023, with case volume down 16.7% year-over-year [13][33] - Adjusted EBITDA was $1.9 million or 4.7% of revenue, compared to $10.1 million or 21.2% of revenue in the same quarter last year [16][38] - For the full year, revenues were $180.4 million, a decline of 7.9% from fiscal 2023, with adjusted EBITDA of $20.7 million and an adjusted EBITDA margin of 11.5% [18][39] Business Line Data and Key Metrics Changes - Same-store revenue declined 22.6% year-over-year in Q4 2024, reflecting challenges in the aesthetics market [13][33] - The percentage of patients using financing for procedures was 50%, down from 53% in previous quarters [34] Market Data and Key Metrics Changes - The company operates in a $11 billion total addressable market in the U.S. [11] - The consumer backdrop remains challenging, impacting sales across the aesthetics space [14] Company Strategy and Development Direction - The company aims to enhance its culture and align on a singular vision while improving its go-to-market strategy to drive consistent revenue growth [20] - Five key priorities include marketing to drive consumer interest, sales to convert leads, new services to tap into demand, customer experience improvements, and technology enhancements [20][28] Management's Comments on Operating Environment and Future Outlook - Management acknowledges that Q4 2024 was a challenging period but remains confident in the strategy to restore growth and profitability [44] - The company expects Q1 same-store revenue performance to mirror Q4 2024 trends, with sequential improvement anticipated as marketing spend increases [30][42] Other Important Information - The company has paused new center openings to focus on improving same-center performance [29] - A revised credit agreement enhances the company's ability to invest in the business during the transformation [31][41] Q&A Session Summary Question: Can you provide more color on sequential growth expectations? - Management expects to see a similar seasonal trend with sequential improvement in same-store performance year-over-year, anticipating Q2 to be higher than Q1 [51] Question: What are the liquidity improvement actions being taken? - The company drew down on its revolving credit facility to maintain marketing efforts while facing challenges in Q4 results [56] Question: Can you elaborate on the marketing spend versus customer acquisition cost (CAC)? - The elevated CAC was driven by lower case volumes and reduced lead volumes due to decreased marketing spend [62] Question: What is the status of the cost savings program? - The company has executed a $3 million annual savings plan primarily from corporate headcount reductions, with benefits expected to start in Q1 [67] Question: Can you provide specifics on new marketing efforts? - The company is utilizing a combination of paid search and social marketing, with a focus on returns-based approaches and testing new channels like online video [72] Question: What are the plans for new services, particularly skin tightening? - The company plans to pilot skin tightening as a standalone service, capitalizing on consumer interest and trends [76]

Financial Data and Key Metrics Changes - For Q4 2024, revenue totaled $39.2 million, a decline of 17.7% from Q4 2023, with case volume down 16.7% year-over-year [13][33] - Adjusted EBITDA was $1.9 million or 4.7% of revenue, compared to $10.1 million or 21.2% of revenue in the same quarter last year [16][38] - For the full year, revenues were $180.4 million, a decline of 7.9% from fiscal 2023, with adjusted EBITDA of $20.7 million and an adjusted EBITDA margin of 11.5% [18][39] Business Line Data and Key Metrics Changes - Same-store revenue declined 22.6% year-over-year in Q4 2024, reflecting challenges in the aesthetics market [13][33] - The average spend per procedure remained between $12,000 and $13,000, indicating a longer conversion time from leads to cases, increasing from approximately 45 days to closer to 60 days in the second half of 2024 [14][15] Market Data and Key Metrics Changes - The percentage of patients using financing for procedures was 50%, down from 53% in previous quarters, indicating a shift in consumer behavior [34] - The company operates in a $11 billion total addressable market in the U.S., highlighting significant growth potential despite current challenges [11] Company Strategy and Development Direction - The company aims to enhance its culture and align on a singular vision while improving its go-to-market strategy to drive consistent revenue growth [20][29] - Five key priorities include marketing to drive consumer interest, improving sales processes, introducing new services, enhancing customer experience, and leveraging technology [20][28] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenging consumer backdrop affecting sales across the aesthetics space and emphasized the need for internal corrections [14][12] - The company expects Q1 2025 same-store sales performance to mirror Q4 2024 trends, with an anticipated sequential improvement as marketing spend increases [30][42] Other Important Information - The company has paused new center openings to focus on improving same-center performance and has amended its credit agreement to enhance investment flexibility [29][31] - Cash flow from operations for the year was $11.4 million, down from $24 million in fiscal 2023, with gross debt outstanding at $75.8 million [41] Q&A Session Summary Question: Can you provide more color on sequential growth expectations? - Management expects to see a similar seasonal trend with sequential improvement in same-store performance year-over-year, particularly in Q2 [51] Question: What are the liquidity improvement actions being taken? - The company drew down on its revolving credit facility to maintain marketing efforts while facing challenges in Q4 results [56] Question: How should we think about marketing spend versus customer acquisition cost (CAC)? - The elevated CAC was driven by lower case volumes and reduced lead volumes due to decreased marketing spend, but improvements in marketing strategy are expected to lower CAC in the future [62] Question: Can you elaborate on the cost savings program? - The company has executed a $3 million annual savings plan primarily through reductions in corporate headcount not aligned with the current strategy, with benefits expected to start in Q1 [67] Question: What specifics can you share about new marketing efforts? - The company is combining traditional paid search with new initiatives like online video and social marketing, focusing on a returns-based approach to optimize spending [72]

Financial Performance - For the year ended December 31, 2024, the company generated $180.4 million in revenue, a decline of approximately 7.9% compared to $195.9 million in 2023[21]. - For the year ended December 31, 2024, the company generated approximately $180 million in revenue, reflecting a 7.9% decline compared to approximately $196 million in 2023[36]. - The company has experienced rapid growth but has limited operating experience at its current scale, which may strain resources and affect financial performance[94]. - The company may face challenges in generating sufficient cash flow from operations to meet debt service obligations, which could adversely affect its financial condition[165]. - Macroeconomic trends, including rising inflation and interest rates, may adversely impact the company's financial condition and results of operations[91]. Operational Highlights - The company performed 14,036 body contouring procedures in 2024, showcasing its operational scale[18]. - The company operates 32 centers across 20 U.S. states, Canada, and the United Kingdom as of March 14, 2025[18]. - As of March 14, 2025, the company operates 32 centers across 20 U.S. states, Canada, and the United Kingdom, with an average revenue per case of $12,849 in 2024[34]. - The company plans to expand its footprint by opening new centers in North America, with over 200 potential locations identified[43]. - The company plans to open five new centers in 2024, focusing on densely populated and affluent metropolitan and suburban regions[104]. Marketing and Customer Acquisition - The company focuses on optimizing marketing investments and improving sales strategies to stabilize revenue growth[22]. - Total advertising costs for the year ended December 31, 2024, were $33.4 million, with approximately 90% allocated to digital advertising[53]. - Customer acquisition costs were approximately $3,130 per customer in 2024[54]. - The company has a catalog of over 250,000 "before and after" photos to showcase treatment outcomes, supporting its marketing efforts[42]. - In 2024, approximately 52% of cases involved patients securing third-party financing, enhancing affordability and driving sales growth[56]. Competitive Landscape - The company competes in the body contouring market against traditional liposuction providers, which typically require longer recovery times[60]. - The body contouring market is highly competitive, with numerous competitors offering alternative solutions that could limit demand for the AirSculpt procedure[111]. - The competitive landscape includes non-surgical fat reduction methods, which are gaining traction in the market[60]. - The company faces risks related to competition, including the potential for competitors to develop safer or more effective solutions[85]. Regulatory and Compliance Issues - Regulatory scrutiny in states like California, Massachusetts, and New York is increasing, potentially impacting the company's structure and operations[70]. - The company emphasizes the importance of maintaining necessary licenses and compliance with healthcare regulations to ensure operational profitability[73]. - The company is subject to various federal and state laws related to healthcare fraud and abuse, and violations could result in significant penalties[88]. - Changes in laws and regulations related to telehealth could adversely affect the company's ability to provide virtual consultations, potentially increasing operational costs[128][129]. Management and Strategy - The company hired a new CEO, Yogi Jashnani, in January 2025, to drive revenue growth through strategic initiatives[23]. - The management team includes experienced leaders with backgrounds in healthcare and private equity, supporting the company's growth strategy[37]. - The company is implementing cost-saving initiatives and revenue growth strategies in response to a decline in revenue during the 2024 fiscal year[90]. - The long-term growth strategy includes opportunistic expansion by opening new centers, although many centers are relatively new and may not generate comparable revenue[96]. Risks and Challenges - The company faces challenges in maintaining profitability levels for newly opened centers, which may not achieve expected sales or profitability[106]. - The ongoing military conflict between Russia and Ukraine has negatively impacted the global economy, potentially affecting the company's financial condition and operations[118]. - Economic downturns could adversely impact consumer spending on discretionary services, including cosmetic procedures, affecting the company's financial condition[146]. - The company may face increased scrutiny and regulation regarding data privacy and security, which could limit its ability to use social media for brand awareness[126]. Intellectual Property and Technology - The patent portfolio includes two issued U.S. utility patents and one pending U.S. utility patent application, with expectations for patents to expire in 2033 or later[57]. - The patent prosecution process is complex and costly, and the company may not be able to maintain or enforce all necessary patents, affecting its ability to commercialize new technologies[200]. - Changes in patent laws or their interpretation could diminish the company's ability to protect its inventions and may lead to increased costs[203]. - The company may become involved in costly intellectual property litigation, which could interfere with its ability to market and perform its services[209]. Financial Obligations and Debt - As of December 31, 2024, total outstanding indebtedness under the senior credit facility was approximately $75.8 million, consisting of $70.8 million in term loans and $5.0 million drawn on the revolving credit facility[155]. - The company is required to maintain a minimum liquidity of $3 million as of March 31, 2025, increasing to $7.5 million thereafter[158]. - The Consolidated Fixed Charge Coverage Ratio must be no less than 0.50x and 1.10x for the fiscal quarters ending March 31, 2025, and June 30, 2025, respectively[158]. - The company has pledged substantially all of its assets as security under the Term Loan and Revolving Credit Facility, which could be at risk if unable to meet debt obligations[162]. Human Resources - As of December 31, 2024, the company employed approximately 389 full-time employees and 33 part-time employees, along with contracts with about 97 surgeons[77]. - The ability to recruit and train qualified surgeons is essential for the successful operation of new centers[108]. - The company faces intense competition for surgeons from other cosmetic treatment centers, which could hinder its ability to implement business strategies successfully[131][132]. Cybersecurity and Data Management - Cybersecurity threats pose significant risks to the company's operations, potentially leading to data breaches and operational disruptions[186]. - The company is highly dependent on information technology networks and systems to securely process sensitive data, including individually identifiable health information (IIHI) and personally identifiable information (PII)[192]. - Security breaches could lead to significant costs for investigation, containment, remediation, and compliance with breach notification laws, potentially harming the company's reputation and financial condition[196]. - The company has implemented administrative, physical, and technological safeguards to address cybersecurity risks, but these measures may not adequately protect against all potential threats[194].

Company Performance - AirSculpt Technologies, Inc. reported a quarterly loss of $0.08 per share, missing the Zacks Consensus Estimate of $0.02, and compared to earnings of $0.01 per share a year ago, representing an earnings surprise of -500% [1] - The company posted revenues of $39.18 million for the quarter ended December 2024, surpassing the Zacks Consensus Estimate by 0.48%, but down from $47.61 million year-over-year [2] - Over the last four quarters, the company has not surpassed consensus EPS estimates, and has topped consensus revenue estimates twice [2] Stock Performance - AirSculpt Technologies shares have declined approximately 43.4% since the beginning of the year, while the S&P 500 has decreased by -6.1% [3] - The current Zacks Rank for AirSculpt Technologies is 5 (Strong Sell), indicating expected underperformance in the near future [6] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $0.06 on revenues of $50.67 million, and for the current fiscal year, it is $0.23 on revenues of $202.18 million [7] - The trend for estimate revisions ahead of the earnings release has been unfavorable, which may impact future stock performance [6] Industry Context - The Technology Services industry, to which AirSculpt Technologies belongs, is currently ranked in the top 27% of over 250 Zacks industries, suggesting a favorable industry outlook [8]