The Beauty Health Co. Q4 FY2024 earnings call

• Transformation Priorities: Identified three priorities: sales execution, operational excellence, and financial discipline. Strengthened sales structure, expanded pricing options, and introduced new tools for sales execution. Reshored manufacturing to Long Beach, exited China production, and improved supply chain oversight. Reduced operating expenses by over $30 million year-over-year.
• Innovation and Product Pipeline: Launched Hydralock HA Booster in Q3 2024, a clinically backed booster. Plan to launch additional boosters in 2025. Implemented wrap the treatment room strategy to expand presence in treatment rooms and drive higher revenue per provider.

Device Sales: Fourth quarter 2024 device sales totaled 1,087 units worldwide with an average selling price of $24,650. Full year 2024, 4,907 systems were sold, bringing total active machines in the field to 34,735. Non-Syndeo unit sales increased in Q4 2024. Consumables Sales: Fourth quarter 2024 consumable sales were $56.7 million, an 8.7% increase Y/Y. Full year 2024 consumable sales reached $208.9 million, with 10.1% growth in The Americas, 5.3% in APAC, and 8.2% in EMEA. Regionally, Q4 consolidated revenue in The Americas was down 3.9%, while APAC and EMEA declined by 50.5% and 8.3% respectively. China accounted for a significant decline in APAC revenue.

• Full year 2025 sales projected to be between $270 million to $300 million and adjusted EBITDA between $10 million to $25 million.
• Q1 2025 sales projected to be $61 million to $66 million with an adjusted EBITDA loss of negative $6 million to negative $4 million.
• Assumes continued pressure on delivery systems due to financing pressure and uncertainty in the global market, projecting decline in all three regions specifically China.

• Macroeconomic uncertainty and industry headwinds impacting top-line performance.
• China transition to a third-party distributor model may impact revenue and growth in the short term.
• Continued pressure on equipment sales due to cautious provider decisions and high borrowing costs.

Q: What's the decision behind moving to a distributor model in China?

A: Investment required to capture market share in China was significant, so focusing investments in core markets and product pipeline. Working with a distributor with expertise to scale sales and marketing. Expected to be accretive long-term though there will be near-term revenue impact.

Q: Progress on manufacturing consolidation and quality control?

A: Manufacturing was reshored in fall, quality improvement program implemented in Long Beach facility. Results show improved quality control and no capacity issues. Reshoring had positive impact on manufacturing quality.