Airsculpt Technologies, Inc. Q2 FY2025 earnings call

• Yogi mentioned Dennis Dean's intention to retire later this year and the ongoing search for a new CFO. AirSculpt is better capitalized now compared to 7 months ago. - Key strategic priorities include enhancing culture and improving go-to-market strategy with 5 business priorities: marketing (reallocated spend to proven strategies like search engine marketing, social media, online video, record lead generation), sales conversion (supported sales team with training and expanded financing options, virtual appointments increased consultations), new services (pilot of skin tightening procedure in 3 centers, learning from pilot), customer experience (planned initiatives to elevate experience), and technology (expanded financing options, upgraded IT system, expanded use of Salesforce for higher consultation volume). - Dennis reviewed financial results, balance sheet improvement (repaid $16 million in debt, cash $8.2 million, leverage ratio 2.87x), and cash flow from operations was $5 million for the quarter.

In the second quarter of 2025, AirSculpt's revenue was $44 million, a decline of 13.7% from the second quarter of 2024. Cases decreased by 14.1% to 3,392. Average revenue per case was $12,975, approximately flat compared to the second quarter of 2024. Adjusted EBITDA was $5.8 million, with a margin of 13.3%, down from 13.5% in the second quarter of 2024. Same-store revenue, excluding new centers, declined by approximately 22%. Lead generation was at record highs, and consultation volume increased. The revenue decline was mainly due to lower case volume in a challenging macro environment.

• Reiterated fiscal 2025 guidance: revenue in the range of $160 million to $170 million and adjusted EBITDA between $16 million and $18 million. - No planned de novo openings in 2025. - Anticipates remaining in compliance with the terms of the credit agreement throughout the fiscal year.

• Consumer spending uncertainty impacting revenue and case volume. - Challenges with new centers performing lower due to consumer environment pressures. - Macro-economic pressures affecting consumer sentiment and behavior, leading to hesitancy in consumers pulling the trigger on purchases.

Q: Congrats to Dennis and question on guidance drivers and lead growth.

A: Yogi said leads at record highs, consultations growing but consumers hesitant in back half; actions on 5 priorities to stabilize revenue and drive EBITDA margin.

Q: Follow-up on skin tightening offering.

A: Pilot of skin tightening in 3 centers, strong interest, no standalone expectations in guidance yet, results to be appraised in coming quarters.

Q: On 2024 centers entering same-store pool and same-store case growth.

A: 2024 de novos performing in line with expectations, modest help to same-store metric, Q3 expected to decline less than Q1/Q2, Q4 to see improvement.

Q: On seasonality and cash flow.

A: Typically soft Q3, picks up in Q4; cost initiatives impact in back half, both Q3 and Q4 to get similar impact.

Q: On market dynamics, centers vs independent surgeons, expansion.

A: Yogi said consumer behavior choppy, AirSculpt's balance sheet and initiatives position well vs independent surgeons; focus on improving same-center sales growth first before considering expansion.