Core Insights - The South Korean cosmetic surgery industry is experiencing rapid growth, particularly in non-invasive procedures such as injectables and laser treatments, which are becoming increasingly popular among consumers [4][13][14] - New injectables like "Rejuran," which uses salmon DNA to enhance skin elasticity, are gaining traction, showcasing the innovative nature of the industry [5][14] - The competitive landscape in South Korea allows for a wide variety of injectables and treatments, often at lower costs compared to other countries, leading to a surge in demand [13][14] Industry Trends - The use of injectables in South Korea has become a mainstream practice, with many clinics offering a plethora of options, including "pink injections" and various types of botulinum toxin [14][19] - There is a notable difference in the regulatory environment between South Korea and the United States, with South Korea allowing more experimental procedures and a broader range of products available to consumers [13][14] - The trend towards non-invasive procedures reflects a shift in consumer preferences, as many seek less painful and lower-risk alternatives to traditional surgeries [13][15] Consumer Behavior - Consumers in South Korea are increasingly viewing cosmetic procedures as a routine part of self-care, leading to a normalization of injectables and other treatments [16][19] - The pressure to conform to beauty standards is significant, with individuals often feeling compelled to undergo procedures to meet societal expectations [16][19] - Despite the risks associated with cosmetic procedures, many consumers accept these as part of the experience, indicating a complex relationship with beauty and self-image [14][19] Medical Practices - The prevalence of cosmetic procedures has raised concerns about safety and the potential for medical errors, with reports of increasing complaints related to cosmetic surgeries [14][15] - Surgeons in South Korea often perform multiple procedures in a day, which may increase the likelihood of mistakes, highlighting the need for careful consideration of patient safety [14][15] - Some medical professionals advocate for a more cautious approach, encouraging patients to reconsider unnecessary procedures and emphasizing the importance of informed decision-making [19][20]

Financial Data and Key Metrics Changes - Total revenue for the second quarter of 2025 was $7.7 million, down 9% compared to 2024, primarily due to challenges in the international environment [20] - Global recurring revenue was $5.1 million, a decline of 4% year-over-year [20] - Gross profit for the quarter was $4.3 million, representing 56% of revenue, down from $5 million in the same period of 2024 [21] - Total operating expenses increased to $6.5 million, up roughly $1 million from the prior year [22] - Adjusted EBITDA for the second quarter was a loss of $762,000 [23] Business Line Data and Key Metrics Changes - XTRAC gross domestic recurring billings were $4.7 million, a decline of 2% compared to the prior year [20] - Equipment revenue was $2.5 million, down 18% versus 2024, affected by international market challenges [20] - The installed base of TheraClear X devices reached 161 units, up from 117 at the end of 2024 [11] Market Data and Key Metrics Changes - International revenue was $2.6 million, a decline of 15% compared to the prior year, impacted by trade disruptions in China and distributor challenges in Korea [12] - The domestic market has approximately 18 million patients with atopic dermatitis, indicating a significant potential market for the company's products [19] Company Strategy and Development Direction - The company is focused on expanding its addressable market to 30 million patients by leveraging newly expanded CPT codes for various skin conditions [6] - The Elevate360 consulting model aims to improve revenue for clinics and the company by optimizing the use of XTRAC lasers [7] - The company is pursuing litigation against LaserOptik for false advertising, which could result in significant damages [14][33] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about future growth opportunities due to expanded reimbursement eligibility and the potential tripling of the patient population [26] - There is caution regarding the impact of tariffs on international business, particularly in China [26] - The company anticipates a stronger second half of 2025, although uncertainties remain due to tariffs [28][30] Other Important Information - The company has submitted economic data to support potential increases in reimbursement rates for its codes [6] - Recent peer-reviewed studies support the efficacy of excimer laser therapy, expanding its potential applications [17][18] - The company is actively engaging with CMS and the AMA to secure temporary G codes for expanded indications [54][61] Q&A Session Summary Question: Expectations for the international business in the second half of the year - Management expects the second half to be similar to the prior year but cautioned that tariffs could significantly impact results [28][30] Question: Details on the lawsuit and expected damages - The expected damages from the lawsuit against LaserOptik are in the eight-digit range, with legal expenses mostly behind the company [32][33][39] Question: Metrics on Elevate360 consulting services impact - Clinics that completed the Elevate360 process showed higher revenue in Q2 compared to the previous year, with some experiencing significant growth [62] Question: Status of TheraClear devices and revenue growth - The focus remains on XTRAC devices due to their higher revenue potential, while TheraClear revenue is growing but remains small [70]