Airsculpt Technologies, Inc. Q1 FY2026 earnings call

First, the first quarter was a key turning point with stabilized revenue, positive same store sales, expanded gross margin, investments in marketing and talent, reduced non-consumer-facing expenses, and strengthened balance sheet. Second, strategic priorities include: introducing new services to capture GLP-1 market opportunity where GLP-1 user base growth creates a tailwind, AirSculpt's minimally invasive procedures are desired, newer procedures like skin tightening and removal are growing with over 150 skin excision procedures in Q1; enhancing sales and marketing strategy with expanded media mix, improved digital funnel and website driving higher quality leads, better conversion and sales execution improvement; maintaining strong financial discipline with debt reduction, repaid nearly $30 million of debt over last five quarters, leverage below 2.5 turns, in process to refinance term loan.

The first quarter marked a key turning point. Revenue was flat year over year and delivered positive same center sales for the first time in over two years. Gross margin was expanded. Investments were made in marketing and talent while non-consumer-facing expenses were reduced, resulting in healthy profitability. The balance sheet was strengthened, ending the quarter with over $16 million in cash and leverage below 2.5 times, a reduction compared to the same time last year.

Reaffirming full-year 2026 outlook with revenue in the range of $151 to $157 million and adjusted EBITDA in the range of $15 to $17 million. Expecting the business to build momentum as the year progresses, with midpoint of revenue range reflecting approximately 3% comparable growth excluding London. Anticipating sequential improvement in both revenue and EBITDA in absolute dollars versus Q1 in Q2, a seasonally stronger quarter.

Q: Hi, good morning. Thanks for taking the questions here. Yogi, maybe I can start on the Q1 results. Clearly, it looks like demand has stabilized. Revenue results are starting to trend back up in the right direction. I guess What's been working well so far in the quarter? How much would you attribute it to the enhanced marketing strategy versus the new skin tightening services versus maybe just a better demand environment overall for body contouring procedures?

A: Sam, thank you so much for the question. So we see that, first of all, obviously we have three Twitter results in Q1 and continue to build on that. We've seen that it was the actions we took and we are taking, which is driving the improvements, primarily around the enhanced marketing strategy and what that's doing, not just to leads and consoles, but showing up in revenue as well. All of those actions and the underlying performance metrics that are going into it are working. So the building blocks are there to deliver growth. As far as the expanded procedures are concerned, we continue to be excited about the early progress from the pilot and the learnings we've gained to date around skin removals. They're still in pilot phase and being rolled out across centers, so they've not been a meaningful incremental contributor yet to what we are doing. The consumer environment is still... I'd say challenging, especially for considered purchases. So in summary, the improvement we are seeing, we are able to tie back directly to the enhancements to sales and marketing and all of the foundational work we did in 2025. And we have more upside, particularly as we go through the year, particularly as we see the new procedures expand and go from there.

Q: Maybe just a quick follow-up on the balance sheet now strengthened. Do you look at maybe the opportunity to look at opening de novo centers again later this year? Is that still maybe a 2027 dynamic? I guess, how should we be thinking about reinvesting back into opening new centers again?

A: Hi, Sam. This is Michael. Yeah, I mean, as of right now, our plan doesn't contemplate any Denevas in 2026. You know, however, we do continue to be excited about the long-term center opportunity, and we'll open Denevas at the appropriate time. In the short term, as Yogi kind of mentioned, we're still, you know, really focused on improving our same center sales growth. You know, it's our number one priority, and Q1 is a big step in that, right, with the positive comp growth. But right now that's our short-term focus. But certainly DeNovo is an opportunity for us, but nothing contemplated in the year.