AirSculpt Technologies(AIRS) - 2025 Q3 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Revenue for Q3 was $35 million, a decline of 17.8% compared to the prior year quarter, with same-store revenue down approximately 22% [13] - Cases declined 15.2% to 2,780, with same-store cases down approximately 20% [13] - Average revenue per case was $12,587, a decline of approximately 3% from the prior year quarter [14] - Adjusted EBITDA was $3 million, down from $4.7 million in the prior year quarter, with an adjusted EBITDA margin of 8.7% compared to 11% [15] - Net loss for the quarter was $9.5 million, with an adjusted net loss of $2.4 million, or $0.04 per diluted share [15] Business Line Data and Key Metrics Changes - The introduction of skin tightening services has seen a lift in demand, but many clients require additional procedures for loose skin beyond what skin tightening can address [8][26] - The company is expanding its service offerings to include skin excisions and removals, which are currently in pilot [26] Market Data and Key Metrics Changes - Global GLP-1 prescriptions have grown at approximately 38% annually between 2022 and 2024, with total sales expected to reach $100 billion by 2030 [6] - 63% of GLP-1 patients are seeking aesthetic treatments post-use, indicating a new consumer base for the company [7] Company Strategy and Development Direction - The company is focusing on three key areas: introducing new services to capture the GLP-1 opportunity, enhancing sales and marketing strategies, and maintaining financial discipline [4][12] - The strategy includes adapting marketing spend to align with revenue trends and prioritizing initiatives that drive higher conversion rates [8] Management's Comments on Operating Environment and Future Outlook - Management noted that while Q3 revenue was lower than expected, it reflects timing rather than a change in business trajectory [4] - The company updated its annual outlook, expecting 2025 revenue of approximately $153 million, down from previous guidance of $160 million to $170 million [10][19] Other Important Information - The company announced the appointment of Michael Arthur as the new CFO starting January 2026, succeeding Dennis Dean [11] - The closure of the London center was confirmed as part of a strategic review, as it was the only unprofitable center [10][17] Q&A Session Summary Question: Can you elaborate on the cost-cutting measures taken by line and their sustainability? - Management indicated that cost controls have primarily focused on SG&A, with ongoing efforts to identify additional savings [22][23] Question: What is the uptake of the standalone skin tightening service and plans for expansion? - Management noted that while demand for skin tightening is evident, many clients require additional procedures, leading to the introduction of skin excisions [25][26] Question: What happened regarding the timing issue in Q3? - Management explained that while leads and consultations remained strong, consumer hesitance to purchase impacted revenue [31][32] Question: How will marketing strategies shift to target the GLP-1 user segment? - Management confirmed that messaging will be tailored to GLP-1 users, focusing on addressing loose skin and uneven weight loss [34][36]