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AirSculpt Technologies(AIRS) - 2023 Q4 - Earnings Call Transcript
AIRSAirSculpt Technologies(AIRS)2024-02-27 15:18
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Financial Data and Key Metrics - Revenue for Q4 2023 was 47.6million,a1747.6 million, a 17% increase YoY, driven by the addition of five de novo centers [18] - Adjusted EBITDA for Q4 2023 was 10.1 million, a 27.9% increase YoY, with a margin improvement of 180 basis points to 21.2% [20] - Full-year 2023 revenue was 196million,a16196 million, a 16% increase YoY, meeting expectations, while adjusted EBITDA was 43.2 million, an 11.2% increase YoY, slightly below the updated guidance of at least 45million[9]−AveragerevenuepercaseforQ42023was45 million [9] - Average revenue per case for Q4 2023 was 12,937, a 6.1% increase YoY, with rates expected to range between 12,000and12,000 and 13,000 [18] - Customer acquisition cost (CAC) for Q4 2023 was approximately 2,600percase,upfrom2,600 per case, up from 2,300 in the prior year due to increased brand awareness investments [19] Business Line Data and Key Metrics - The company opened five new centers in 2023, the highest number in its history, contributing to revenue growth [4] - Same-store revenue performance for Q4 2023 was -1.7%, below expectations, representing about one procedure per location per month [7] - The company expanded its product and service offerings by adding AirSculpt Lift, a facial fat transfer procedure [5] - The company's TAM (Total Addressable Market) was quantified at 9billion,withpotentialforhundredsofAirSculptcentersglobally[5]MarketDataandKeyMetrics−Thecompany′sbrandawarenessgrewby309 billion, with potential for hundreds of AirSculpt centers globally [5] Market Data and Key Metrics - The company's brand awareness grew by 30% YoY, driven by brand-building activities [5] - The company is expanding into new markets, including Birmingham, Michigan; Deerfield, Illinois; Kansas City, Kansas; White Plains, New York; and Columbus, Ohio, with a sixth location to be announced later [12] - The company is focusing on multi-site markets, such as Chicago and New York, to leverage scale and operational efficiency [12] Company Strategy and Industry Competition - The company's strategy focuses on strengthening the AirSculpt brand, accelerating store openings, and enhancing profitability both domestically and internationally [6] - The company plans to open six de novo centers in 2024, with a focus on same-store growth and improving patient acquisition efforts [10][12] - The company is transitioning to an enterprise-wide Salesforce CRM implementation to improve sales and marketing processes and patient experience [14] - The company is focusing on cost management, with a goal of delivering 5 million in-year savings for 2024, while reinvesting savings into growth initiatives [15] Management Commentary on Operating Environment and Future Outlook - Management is optimistic about the company's future, citing a 9billionTAMandthepotentialforsignificantgrowth[10]−ThecompanyexpectsarobustseasoninQ12024,withperformancebuiltintothe2024outlook[8]−Managementhighlightedtheimportanceofbrandawarenessinvestments,whichareexpectedtodrivelong−termbenefitsdespiteshort−termcostimpacts[32]OtherImportantInformation−Thecompanyhassafelycompletedover50,000procedures,withpatientsafetyandwell−beingasatoppriority[5]−Thecompany′sleverageratioattheendofQ42023was1.4x,withgrossdebtoutstandingat9 billion TAM and the potential for significant growth [10] - The company expects a robust season in Q1 2024, with performance built into the 2024 outlook [8] - Management highlighted the importance of brand awareness investments, which are expected to drive long-term benefits despite short-term cost impacts [32] Other Important Information - The company has safely completed over 50,000 procedures, with patient safety and well-being as a top priority [5] - The company's leverage ratio at the end of Q4 2023 was 1.4x, with gross debt outstanding at 72.9 million [22] - The company's 2024 revenue guidance is approximately 220million,representinga12220 million, representing a 12% increase YoY, with adjusted EBITDA guidance of 50 million, a 15.6% increase YoY [23] Q&A Session Summary Question: Response to the short-seller report - Management dismissed the short-seller report as containing inaccuracies and misleading information, emphasizing the company's commitment to patient safety and transparency [26] Question: Seasonality and pricing impact on Q4 2023 - Management noted no significant seasonality or discounting impact on Q4 2023 rates, with average revenue per case remaining consistent [28][30] Question: Brand awareness investment timing - Management explained that the decision to accelerate brand awareness investments in Q4 2023 was driven by strong demand, with the investment seen as a long-term benefit despite short-term cost impacts [32] Question: Variances from IPO forecasts - Management acknowledged softer same-store revenue growth and higher-than-expected corporate and brand awareness investments compared to the original IPO model [35] Question: Market expansion concerns - Management expressed confidence in the new markets, citing strong performance in recent openings and the potential for multi-site market expansion [38] Question: Pricing strategy - Management indicated that pricing is complex due to the bespoke nature of procedures but sees potential for future pricing adjustments, though no immediate changes are planned [43] Closing Remarks - Management thanked participants and expressed optimism for the company's future [46]