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01/10 16:34
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call presents a negative outlook, with reduced revenue guidance, declining financial performance, and high leverage limiting flexibility. Despite some cost-cutting measures, the revenue and EBITDA have decreased, and the company faces challenges with new services. The Q&A highlighted uncertainties in cost savings and service expansion, with management providing vague responses. Given these factors, a negative stock price movement is likely, reflecting the company's current financial struggles and market uncertainties.
Revenue for the quarter $35 million, a 17.8% decline versus the prior year quarter. The decline is attributed to a 15.2% decrease in cases to 2,780 and a 3% decline in average revenue per case to $12,587.
Same-store revenue Down approximately 22% year-over-year. This reflects a decrease in same-store cases by approximately 20%.
Cost of services Decreased by $2.9 million compared to the prior year period, but as a percentage of revenue, it increased to 42.5% from 41.8%.
Selling, general and administrative expenses Decreased by $6 million compared to the same period in fiscal 2024. This reflects cost management activities and reductions in equity-based compensation.
Customer acquisition cost Approximately $3,100 per case, up from $2,900 in the prior year quarter.
Adjusted EBITDA $3 million, down from $4.7 million in the prior year quarter. Adjusted EBITDA margin was 8.7%, down from 11% in the prior year quarter. The decline is due to revenue decreases.
Net loss for the quarter $9.5 million. Adjusted net loss was $2.4 million or $0.04 per diluted share.
Noncash impairment charge $4.6 million related to the Salesforce technology project, as certain components will not be used.
Loss related to London facility closure Approximately $2.3 million, primarily due to impairment of long-term assets. Additionally, $1 million was recorded in selling, general and administrative expenses for accelerated amortization of the right-of-use asset.
Revenue at London center $400,000 for the quarter, with an adjusted EBITDA of negative $150,000. For the 9 months ended September 30, 2025, revenue was $1.4 million with an adjusted EBITDA of negative $600,000.
Cash flow from operations A use of $225,000 compared to an increase of $1.8 million in the third quarter of 2024.
Cash and gross debt As of September 30, 2025, cash was $5.4 million and gross debt outstanding was $57.9 million.
Introduction of new services: AirSculpt is introducing new services to capture the GLP-1 market opportunity, including skin tightening procedures and additional treatments for loose skin. These services are complementary to their core body contouring business and aim to address the side effects of GLP-1 medications.
GLP-1 market opportunity: The company is targeting the growing demand for aesthetic procedures among GLP-1 patients, with 63% of these patients seeking treatments post-use. This represents a significant new consumer base for AirSculpt.
Cost management: Year-to-date, AirSculpt has achieved over $3 million in annualized cost savings, net of investments in new growth initiatives.
Debt reduction: The company has repaid nearly $18 million of debt year-to-date, focusing on strengthening its balance sheet.
Closure of London center: AirSculpt closed its unprofitable London center to focus resources on North American locations, which show greater growth potential.
Sales and marketing strategy: The company is enhancing its marketing approach with a diversified media mix, including influencer campaigns and TV advertising, to improve lead quality and conversion rates. It is also implementing new training modules and tools for its sales team.
Capital allocation: AirSculpt is prioritizing debt repayment and investing in growth initiatives, including new procedures, to drive long-term growth.
Revenue Decline: Third quarter revenue was $35 million, a 17.8% decline compared to the prior year, with same-store revenue down approximately 22%. This decline impacts financial performance and operational stability.
Case Volume Decline: Cases declined 15.2% to 2,780, with same-store cases down approximately 20%. This indicates reduced customer demand, which could affect revenue and operational efficiency.
London Center Closure: The decision to close the London center, which was the only unprofitable location, resulted in a $2.3 million loss and reflects challenges in international market expansion.
Salesforce Project Impairment: A $4.6 million noncash impairment charge was recorded due to the partial failure of the Salesforce technology project, indicating inefficiencies in technology investments.
Customer Acquisition Costs: Customer acquisition cost increased to $3,100 per case from $2,900 in the prior year, reflecting higher marketing expenses and potential inefficiencies in lead generation.
Debt Levels: Gross debt outstanding was $57.9 million, with a leverage ratio of 3.04x. While debt repayment is ongoing, high leverage could limit financial flexibility.
Revenue Guidance Reduction: 2025 revenue guidance was reduced to $153 million from the previous range of $160 million to $170 million, reflecting lower-than-expected performance.
GLP-1 Market Risks: While the GLP-1 market presents opportunities, the company noted that many clients require procedures beyond skin tightening, which could increase operational complexity and costs.
Revenue Outlook for 2025: The company has updated its revenue outlook to approximately $153 million, down from the previous guidance range of $160 million to $170 million.
Adjusted EBITDA Guidance for 2025: The company is reiterating the low end of its adjusted EBITDA guidance at approximately $16 million, within the range of $16 million to $18 million.
Fourth Quarter Revenue and EBITDA Expectations: The company expects a smaller year-over-year revenue decline in Q4 and improving same-store sales performance compared to the year-to-date trend. Implied Q4 EBITDA guidance highlights stronger margins, both sequentially and year-over-year.
Long-term Growth Opportunity in GLP-1 Market: The company is focusing on capturing the GLP-1 market opportunity, which is expected to drive significant long-term growth. New procedures addressing loose skin and skin tightening are being introduced, with GLP-1 therapies reshaping the aesthetics landscape.
Marketing and Sales Strategy Enhancements: The company is adapting its marketing spend to align with revenue trends, focusing on higher conversion rates, targeted influencer campaigns, and television advertising. New training modules and tools are being implemented for the sales team.
Capital Allocation and Debt Repayment: The company has repaid nearly $18 million of debt year-to-date and continues to prioritize debt repayment in the near term. Investments in growth initiatives, including new procedures, will continue.
The selected topic was not discussed during the call.
The earnings call presents a negative outlook, with reduced revenue guidance, declining financial performance, and high leverage limiting flexibility. Despite some cost-cutting measures, the revenue and EBITDA have decreased, and the company faces challenges with new services. The Q&A highlighted uncertainties in cost savings and service expansion, with management providing vague responses. Given these factors, a negative stock price movement is likely, reflecting the company's current financial struggles and market uncertainties.
The earnings call summary shows a challenging macro environment with a decline in same-store revenue and cases, despite some cost reductions and improved cash flow. The Q&A section highlights consumer hesitancy, uncertainty in revenue guidance, and lack of clear data on new initiatives like skin tightening. The leverage ratio improvement is positive, but overall, weak financial performance and guidance uncertainty suggest a negative sentiment.
The earnings call reveals significant challenges, including a 17.3% revenue decline, increased customer acquisition costs, and financial leverage concerns. Despite some cost savings and potential future improvements, the current negative consumer environment and reduced marketing spend are impacting performance. The lack of a share repurchase program and avoidance of direct answers in the Q&A further contribute to a negative sentiment. Although there are plans for cost savings and improvements, the immediate outlook remains challenging, leading to a predicted negative stock price movement.
The earnings call reveals significant challenges: a 17.3% revenue decline, increased customer acquisition costs, and a high leverage ratio of 3.76. Despite cost-saving measures, the market strategy and financial health sections show weak performance and guidance, with no shareholder return plans. The Q&A highlights management's cautious outlook and lack of clear guidance on key metrics. These factors suggest a negative stock price reaction over the next two weeks, especially given the uncertain consumer environment and financial leverage risks.
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