AirSculpt Technologies(AIRS) - 2023 Q2 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Revenue for Q2 2023 was $55.7 million, a 12.2% increase year-over-year, driven by a 13% increase in case volumes due to the addition of six de novo centers [16][22] - Average revenue per case was approximately $13,300, a 1.1% decrease year-over-year but a 700% increase from Q1 2023, attributed to procedure mix [17] - Adjusted EBITDA was $14.6 million, compared to $14 million in the prior year, with an adjusted EBITDA margin of 26.2%, a decline of 190 basis points year-over-year [19][20] Business Line Data and Key Metrics Changes - The company has performed over 40,000 procedures historically and is now offering AirSculpt in three countries, with the recent introduction of AirSculpt Lift, a facial fat transfer procedure [6][7] - The new AirSculpt Lift procedure is expected to broaden the company's offerings and competitive moat, with significant benefits over artificial fillers [7][8] Market Data and Key Metrics Changes - The broader filler market is valued at over $4 billion, expanding the total addressable market (TAM) for AirSculpt to over $11 billion [6] - The company expects to open at least six new locations in 2024, with a global opportunity of around 500 locations, indicating a 20x increase over the current fleet [13][50] Company Strategy and Development Direction - The strategy focuses on strengthening the AirSculpt brand, accelerating store openings, and enhancing profitability as the business scales domestically and internationally [8] - The company is also focused on improving operational capabilities and cost management, targeting $2.5 million in cost savings for 2023 [15][20] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about achieving the upper end of the 2023 revenue guidance range of $187 million to $192 million, driven by strong first-half performance and de novo centers [22] - The company anticipates mid-single-digit same-store growth in the second half of 2023, moving beyond the COVID-related noise in comp calculations [18][25] Other Important Information - The liquidity position remains strong, with a cash position of $20.8 million and undrawn revolver of $5 million [20][21] - The company has made significant progress in hiring, with a robust referral network among surgeons and a strong in-house recruiting team [40] Q&A Session Summary Question: What are the expectations for same-store case growth moving forward? - Management expects mid-single-digit growth for the back half of the year, acknowledging the impact of pent-up demand from the previous year [25] Question: What is the rationale for ramping up the number of centers? - The company feels confident in ramping up to six new centers due to operational capabilities and a clear pathway for expansion [27] Question: How do GLP-1 prescriptions impact patient demographics? - Management sees GLP-1 weight loss drugs as complementary to AirSculpt, creating a tailwind for demand as patients seek body contouring after weight loss [32] Question: How is the hiring environment for new centers? - The company has improved its hiring process, successfully recruiting surgeons and utilizing allied health professionals to broaden the workforce [39][40] Question: What is the pricing and uptake for the new AirSculpt Lift procedure? - The procedure can be done alongside other AirSculpt procedures, with pricing between $1,500 and $2,000 per area, and is expected to become meaningful in revenue in 2024 [46][47]