Airsculpt Technologies, Inc. Q1 FY2025 earnings call

• CEO Yogi Jashnani noted Q1 results were in line with expectations, with early traction on initiatives. Consumer interest in AirSculpt remains strong with average revenue per case between $12,000 - $13,000. • Lead volume grew in Q1 as marketing dollars were reallocated. New hires like Chief Digital Officer and Chief Sales Officer are driving lead generation and sales process improvements. • Focus on business imperatives: marketing reallocated spend to proven strategies, sales optimizing lead conversion, launch of skin tightening pilot, enhancing customer experience, and investing in technology for expanded financing and new tech enhancements.

For the first quarter, revenue was $39.4 million, declining 17.3% from Q1 2024. Adjusted EBITDA was $3.8 million with a margin of 9.5% versus $7.3 million and 15.4% margin in Q1 2024. Cases declined 17.9% to 3,076, and average revenue per case was $12,799, slightly higher than Q1 2024. Cost of service decreased $2.1 million year-over-year but increased as a percentage of revenue to 40.5% due to fixed costs. Selling, general, and administrative expenses increased $6 million year-over-year, primarily due to equity-based compensation. Customer acquisition cost was $3,130 per case, higher than Q1 2024 due to lower case volumes.

• Fiscal 2025 revenue expected in range of $160 million to $170 million. • Adjusted EBITDA expected between $16 million and $18 million. • Guidance reflects current economic conditions with conservatism due to uncertain consumer spending, not contemplating economic downturn.

• Exposed to impact of inflationary pressures and consumer sentiment changes driven by tariffs as procedures are discretionary. • Proactively addressing by removing barriers to lead conversion via expanded payment options and increasing lead generation.

Q: Speak to specific cost savings in the quarter and sustainability, and if cost savings need to increase to grow cases.

A: Significant savings from workforce changes, targeting $3 million in savings for the year, anticipated to continue through remainder of year.

Q: Guidance implies EBITDA margin over 10%, what's potential margin on $160M - $170M revenue and case growth needed to increase margins?

A: For $160M - $170M revenue, current guidance's EBITDA margin is appropriate; expect to approach 30%-ish EBITDA margins as same-store revenue returns to 2022-2023 levels.

Q: Momentum in cases exiting quarter, seasonal patterns or same-store year-over-year?

A: Both seasonal improvement and sequential same-store sales improvement seen, still expect same-store sales growth by end of year.

Q: Underlying assumptions in guidance range, around same-store case growth and pricing?

A: Pricing has been stable sequentially; case volume down 24% in Q1, seeing improvement in Q2 but not giving inter-quarter guidance, expecting return to same-store case growth by end of year.

Q: Improvement in conversion rate to cases and time to book?

A: Time to book cases is elongated due to macroeconomic environment, encouraged by lead volume growth but conversion rate not yet significantly improved.

Q: Contribution of standalone skin tightening pilot in 2025?

A: No contribution expected from skin tightening pilot in 2025, any growth would be incremental.

Q: Detail on marketing initiatives driving lead generation?

A: Search engine marketing and social media marketing are primary drivers, also testing online video but too early for results.

Q: Macro state impact on guidance, low end vs high end assumptions?

A: Low end assumes further moderation in consumer spending, high end incorporates current operating environment and benefits from initiatives like financing; expect sequential improvement but macro remains challenging.

Q: Timing of financing rollout and confidence in its impact?

A: Expect to roll out financing by end of Q2; confident as financing helps with considered purchase of $12,000 - $13,000 average ticket and has helped consumer businesses in past.