Beauty Health Q1 2025 Earnings Call Transcript

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Provided by Quartr
May 8, 2025

There are 10 speakers on the call.

Operator

and welcome to today's Beauty Health Company First Quarter twenty twenty five Earnings Call. At this time, all participants are in a listen only mode. Later, you will have the opportunity to ask a question during the question and answer session. Please note this call is being recorded and I will be standing by if you should need any assistance. It is now my pleasure to turn the conference over to Norberto Ajah, Investor Relations.

Speaker 1

Thank you, operator, and good afternoon, everyone. Thank you for joining the Beauty Health Company's conference call to review our first quarter twenty twenty five results. We released our results earlier this afternoon, which can be found on our corporate website at beautyhealth.com. Joining me on the call today is Beauty Health's Chief Executive Officer, Marla Beck along with our Chief Financial Officer, Mike Bonahan. Before we begin, I would like to remind everyone of the company's Safe Harbor language.

Speaker 1

Management may make forward looking statements, including guidance and underlying assumptions. Forward looking statements are based on expectations and involve risks and uncertainties that could cause actual results to differ materially. Listeners are cautioned not to place undue reliance on any forward looking statements. For a further discussion of risks related to our business, please see the company's filings with the SEC. This call will present non GAAP financial measures.

Speaker 1

A reconciliation of these non GAAP financial measures to the most comparable GAAP measures are in the earnings press release furnished to the SEC and available on our website. Following management's prepared remarks, we will open the call for a question and answer session. With that, I would now like to turn the call over to our CEO, Marla Peck. Please go ahead, Marla.

Speaker 2

Thank you, Norberto, and good afternoon, everyone. I appreciate you joining us to review our first quarter results. I'm pleased to report a strong start to the year. We exceeded our revenue and adjusted EBITDA guidance and continue to build momentum across our key strategic priorities. These results reflected disciplined execution of our transformation strategy and the power of our recurring revenue model.

Speaker 2

Since taking the helm as CEO, my focus has been clear, stabilize operations, reignite innovation and return Beauty Health to sustainable profitable growth. Our first quarter results reflect this momentum with strong consumable sales across all regions and notable improvements in key metrics including gross margin and bottom line profitability. Despite continued macro pressure on equipment sales, at $69,600,000 above the high end of our guidance and delivered over $7,000,000 of adjusted EBITDA. This achievement was driven by a favorable mix shift toward high margin consumables, better inventory management and operational cost discipline. Consumables grew over 8% and now represent over 70% of our revenue.

Speaker 2

Total active devices in the field increased to over 35 approximately 32,500 units at the end of Q1 twenty twenty four, highlighting the demand for hydro facial devices and medical aesthetics practices. Looking ahead to the rest of 2025, our strategic focus remains anchored on three priorities enhancing commercial execution, accelerating science backed innovation and deepening provider partnerships. Our first priority is enhancing commercial execution. We're beginning to see traction from our improved go to market approach. This includes our refined sales structure, enhanced pricing flexibility and tools to drive smarter, faster execution.

Speaker 2

We are generating results using greater analytical discipline, particularly in our direct markets. In China, the transition to a third party distribution model is already underway, preserving access to a high growth market while simplifying operations and lowering capital intensity. We've also opened our device portfolio to more flexible pricing and product options, leading to increased demand, especially for non SENDAO units, which represented 36% of system sales in the first quarter. Operationally, we completed the consolidation of our production in The U. S.

Speaker 2

In the fourth quarter, a move that enhances quality, increases agility and most significantly reduces tariff exposure. These strategic shifts are improving execution, lowering complexity and positioning us to scale more efficiently. Our second priority is accelerating science backed innovation. Innovation remains central to our MedTech meets Beauty positioning. We're reigniting our pipeline with clinical rigor and consumer relevance.

Speaker 2

The HydraLock booster launched in the second half of twenty twenty four marks the most successful branded booster launch in our history. Building on that momentum, we're preparing to launch the new hydrophilic booster with our proprietary PEP9 complex in June, targeting signs of aging, a top skin concern among consumers. Later this year, we'll introduce three new treatment tips, one for the lip area and two more to extend our proprietary solution. Our Backbar initiative as part of our wrap the treatment room strategy is another exciting milestone. These skincare products that can be used as part of our in room hydro facial services will complement treatments, improve outcomes and increase provider revenue potential.

Speaker 2

The Back Bar rollout begins in the second half of this year. And to expand beyond the treatment room, we're developing a dedicated skincare line, further strengthening our consumer facing offering. Each of these innovations is grounded in clinical validation reinforcing HydroFacial's leadership and science backed aesthetics. Our third priority is deepening provider partnerships. Strong provider relationships are foundational to our growth.

Speaker 2

To support this, we have a dedicated business development team that partners with our providers to drive their revenue growth. In the first quarter, U. S. National accounts were a highlight with strength in the medical sector, especially med spas, dermatology and wellness providers. We are building on this momentum with the relaunch of our U.

Speaker 2

S. Loyalty program expected in Q3 twenty twenty five. The program is designed to reward provider commitment and boost engagement throughout our ecosystem while driving incremental sales. We're also investing in brand and consumer engagement. A refresh campaign launching this year will elevate awareness, spotlight our innovation pipeline and drive traffic to providers.

Speaker 2

In summary, Q1 reflects solid execution of our transformation strategy. We exceeded both internal and external expectations, saw continued growth in consumables, improved profitability and made strategic moves to strengthen our operational model. We're focused on driving sustainable margin expansion and delivering against our three strategic pillars, commercial excellence, innovation and engagement to unlock long term value. Mike, over to you.

Speaker 3

Thank you, Marla. I'm pleased to report we delivered the quarter above our initial expectations. Revenue for Q1 came in at $69,600,000 adjusted gross margin was 71.9% and adjusted EBITDA was $7,300,000 We continue to grow our global footprint, which adds to the recurring consumables revenue stream. In the first quarter, we sold eight sixty two total units worldwide at an average selling price of approximately $23,455 As of 03/31/2025, total active machines in the field increased to 35,014 units versus 32,530 units at the end of Q1 twenty twenty four. Consumable sales for the quarter totaled $49,400,000 or an 8.2% increase versus the comparable prior year period with growth across all regions.

Speaker 3

Consumable net sales increased 3.5% in The Americas, 40 2 Point 6 Percent in APAC and 7.9% in EMEA. Macroeconomic pressures continue to impact capital equipment purchasing decisions, contributing to a 43.5% year over year decline in global device sales. Our good, better, best device strategy addresses this by expanding provider access by offering select systems at lower price points. This initiative is working well as non Sindeo systems represented 36% of total devices sold in Q1 last year. With this approach, we believe we will be well positioned to capture additional market share when the macro environment improves.

Speaker 3

From a regional perspective, Q1 consolidated revenue in The Americas was down 8.1%, while revenue across APAC and EMEA declined by 30.421.6% respectively. Contributing to the decline in APAC is the planned go to market strategy change in China. We have begun transitioning the business from a direct to a distributor model and expect to make initial shipments during the second quarter of twenty twenty five. As part of this plan, we ensured that we warehoused enough capital equipment inventory in China expected equipment demand for the remainder of the year that will not be subject to tariffs. We will have some exposure to tariffs for consumables sold into China.

Speaker 3

However, we are working through this with our new distribution partner. Gross margins came in strong, driven primarily by disciplined demand planning, overall management of inventory, a favorable mix towards consumable net sales and improved operational processes. This led to reduced excess and obsolete inventory charges and reduced overhead spend. Specifically, profit for the first quarter was $48,600,000 comparing favorably to $48,400,000 in the prior year period. Adjusted gross margin for the quarter was 71.9% compared to 63.4% in the prior year period.

Speaker 3

GAAP gross margin for the quarter was 69.8% improving versus the prior year period as well as sequentially from 62.7% in Q4 of twenty twenty four. Total operating expenses for the first quarter decreased by 7.3 to $60,600,000 as we continue to manage our expenses. Selling and marketing expense was down approximately 22.7% to $26,000,000 reflecting lower personnel related expenses, including share based compensation, lower sales commission, marketing, training and events expense. R and D expense was also down $1,800,000 while G and A expense was $33,600,000 or an increase of 16.3% driven primarily by higher legal fees and severance and restructuring expense, partially offset by lower personnel related expenses, including share based compensation and bad debt recoveries. This led to an operating loss of $12,000,000 in Q1 twenty twenty five, an improvement versus a loss of $17,000,000 in the comparable prior year.

Speaker 3

Adjusted EBITDA of $7,300,000 was above our implied guidance, reflecting lower operational spend and higher gross margin. We ended the quarter with approximately $373,000,000 in cash, an improvement from approximately $370,000,000 on 12/31/2024. This reflects the initial benefits of the cost reductions and operational actions we have taken to improve the efficiency of the business. As of March 31, inventory was $65,600,000 a decrease compared to $69,100,000 in December and full year 2025 sales of between $270,000,000 to $300,000,000 and adjusted EBITDA of $15,000,000 to $25,000,000 Compared to full year 2024, our full year 2025 guidance assumes continued pressure on delivery systems due to financing pressure and uncertainty in the global market, projecting decline in all three regions, specifically in China. Capital expenditures are expected to be approximately 10,000,000 to $15,000,000 for the full year 2025.

Speaker 3

For the second quarter, we are projecting sales of 71,000,000 to $76,000,000 and an adjusted EBITDA of $2,000,000 to $4,000,000 Our second quarter and full year guidance assumes no material deterioration in current general market conditions or other unforeseen circumstances beyond the company's control, such as foreign currency, exchange rates, tariffs and trade restrictions. It also excluded any potential acquisitions, dispositions or financing. Next, I'd like to take a minute to address tariffs. We made several changes to the business over the past six months to position the company to be able to minimize the impact of tariffs. In the prior year, we moved our production from China back to The United States.

Speaker 3

As a result, while there are certain raw materials and componentry that is sourced internationally, 100% of our capital production is now in Long Beach, California. Additionally, we strategically placed our capital equipment inventory across the globe based on projected demand so that we are less exposed to import tariffs. On the supply side, we expect the impact of tariffs to be approximately $5,000,000 of additional costs in twenty twenty five five based on what we know now and have factored that estimate into our projections. The tariff situation is very fluid. As we get more information, we will adjust our expectations as needed.

Speaker 3

In summary, we're encouraged by our first quarter performance reflecting the execution of strategic initiatives. Despite a dynamic environment, our strategy is delivering results and we're confident that actions we're taking are laying a strong and agile foundation for sustained profitable growth in the future. Looking ahead, we remain committed to creating lasting shareholder value by unlocking the significant growth potential of HydroFacial as the market leader in the growing category of minimally invasive skin health treatments. I'll now turn the call back to Marla.

Speaker 2

Thank you, Mike. I'd like to reiterate that we are on track with our strategic plan. Our focus remains anchored on our three priorities: enhancing commercial execution, accelerating science backed innovation and deepening provider partnerships. We're confident that as we continue to execute, we will drive long term shareholder value. I'd like to close with a sincere thank you to all of our Hydrofacial employees around the globe.

Speaker 2

Our success would not be possible without your hard work and dedication. Thank you. With that, I'd like to turn the call over for Q and A.

Operator

Thank you. And we will take our first question from Oliver Chen with TD Cowen. Please go ahead. Your line is open.

Speaker 4

Thank you. This is Jonah on for Oliver today. Would love some perspectives on key drivers behind better profitability for the year, just key puts and takes there. And what are potential areas of upside to your full year guide as well? And just one more question on the end consumer strength.

Speaker 4

Are you seeing any signs of pullback from the end consumer as the macro remains uncertain? Thank you so much.

Speaker 2

Mike, why don't you take the start of the question, then I'll take the consumer.

Speaker 3

Great. So our guidance implies slight improvement in the back half of 2025, especially, however, given the uncertainty regarding the macro environment, we still remain somewhat cautious and have factored that in. However, we have a number of initiatives we're executing on to drive a return to growth, including lower price equipment options, improved sales execution and investment in innovations. So we'll keep the investors updated throughout the year on these initiatives as we continue to look to drive incremental profitability and growth.

Speaker 2

I'll talk a little bit about what we're seeing with consumers. Our consumable sales growth continues to be strong and what we're seeing is strong growth in our signature treatments which is our core everyday treatment which shows that HydraFacial is a part of our consumers' everyday skin health routines. We are seeing slightly lower adoption of our luxury treatments and we have a lot of bright spots we're seeing with the consumer. The dermatology and wellness sectors are really strong. Our U.

Speaker 2

S. National accounts, specifically our medical national accounts have experienced significant growth. And then we're seeing a little softness in day spas and plastic surgeon channel. They're not growing as well. Does that make sense because there are more luxury sort of less necessity services on some of

Speaker 3

the dermatology and wellness channels.

Speaker 2

But we do believe that the med spas and doctors offices that have loyal client ele will continue to drive patients and consumers into hydro facial treatments as they're minimally invasive and can be experienced every 30 days. They also have a more accessible price point than some of the other more extensive treatments in the sector.

Speaker 4

Thank you. Appreciate the color.

Operator

Thank you. And your next question comes from the line of Susan Anderson with Canaccord Genuity.

Speaker 5

Hi, good evening. Thanks for taking my questions. Nice job on the quarter. I was wondering if maybe you could talk about the consumables. There's definitely a standout across all the regions.

Speaker 5

Maybe if you could give some color on also how much the new launches such as the HydraLock launch is helping to drive that strength. And also just looking at the APAC Region, looks like you did see a big pickup there. If you could talk about the drivers there as well. Thanks.

Speaker 2

I'll have Mike take the regional part, but I'll talk briefly about HydraLock HydraLock is really a traffic driver for practices. As the practices and med spas can market a new product to their consumers. It drives additional visits. Additionally, it gives our sales force a reason to visit and talk with our providers and create events around new products. So we are really excited about the potential that new products have to drive consumer traffic and then provider revenue.

Speaker 2

We don't disclose sort of specifics, but this makes us really excited about the hydrophilic launch that's coming in June. In terms of any regional color, I'll pass it to Mike.

Speaker 3

Yes. Hi, Susan. You're correct. We did have improvement in year over year in the overall APAC region for consumables. A big piece of it was China.

Speaker 3

The team did a good job with less discounting and really selling some of the items into our existing consumer base.

Speaker 5

Okay, great. And then, I guess, just looking at the skincare launch, did you say what the timing of that would be? I'm not sure if I missed that. And then, I guess, how should we think about what that will look like? Is it going to be kind

Speaker 2

of a suite of products or is it

Speaker 5

going to be a couple of products or how should we think about that when the launch happens? Thanks.

Speaker 2

Yes, there's two parts. The back of our launch, which is really the skincare products that can be used in the treatment room is slated for the back half of this year. So it has a number of SKUs, but it'll be very early days. I mean the plan is to build a more comprehensive line with the launch this fall as the start. And then skincare is really slated for the beginning of next year.

Speaker 2

So back bar in the treatment room, back half of this year, in the beginning of next year.

Speaker 5

Okay, great. Thanks so much. Good luck the rest of the year.

Speaker 2

Thank you.

Operator

Thank you. And your next question comes from the line of Jon Block with Stifel. Please go ahead. Your line is open.

Speaker 6

Great. Thanks guys. Good afternoon. Gross margin really strong in the quarter, so maybe I'll start there. Mike, is this the new run rate call it and I'm guessing that's the main driver despite the top line being unchanged?

Speaker 6

Maybe if you can provide some color there and then I'll just ask a follow-up.

Speaker 3

Sure. Hi, John. So in the quarter, we did have a strong quarter for gross margin. I mentioned that a little bit in the script, credit to the operations team and the organization, we really drove efficiency throughout our supply chain. That was a big piece of it.

Speaker 3

The team has done a really good job tightening up demand planning, so we minimized write offs. And then also the mix component that we had a high percentage of consumables in Q1 because some of the from just overall performance of consumables was strong and then we're continuing to see some pressure on the capital equipment side. So that mix helped us out. For Q2 and the remainder of the year, I would expect it to step down from Q1 for a couple of reasons. One is, I would expect a slightly higher percentage of equipment purchases as a percentage of revenue going forward is the way we've modeled it in.

Speaker 3

And then secondly, the tariff and import costs that we mentioned, while we're able to minimize it, we are expecting an impact this year and that will flow through our overall cost of sales.

Speaker 6

Got it. Very helpful. And maybe for the second question, maybe a two parter. Marlin, first, just on the good, better, best, you've now got a bunch of the different systems out there. So I'm just curious if you see a difference in the actual consumable utilization from, call it, the good, better, best strategy out in the field.

Speaker 6

And then Mike, to go back to the tariffs, the $5,000,000 hit this year, but there did seem to be a lot of planning to your point to avoid or limit the import tariffs. So when we think forward to 2026 and you can't get all the inventory out there in advance of tariff implementation, does the $5,000,000 run rate or does that number change dramatically as we think about next year? Thank you.

Speaker 2

Yes, it's a great question about consumables utilization between the devices. They all perform a similar treatment with SYMDEO having some more bells and whistles, including lymphatic treatment. In terms of what we're seeing, the benefit of having SYMDEOs in the field is that there's a tool that helps the provider select which booster for the consumer on as part of the prompting on the screen. So we do see historically more boosters used with the SYMDEO relative to the other devices. So that is something we watch and we are focused on getting pull through in the boosters among Elite and Allegro users also.

Speaker 2

But in terms of sort of our day to day core consumables, all three devices use all of the base solutions that go into the devices. So good question.

Speaker 3

And on the tariffs, if I understood the second part of your question, you're right. The team did a good job, a really good job kind of anticipating some of the tariffs and positioning the company so we could minimize the impact this year. Projecting into 2026 is early, I would say, where we sit today. The situation is so fluid and keeps changing. I will say the team is continually looking at ways to onshore some of the purchases to make sure that we're even better positioned kind of going forward.

Speaker 3

But we'll have more of an update into that in the upcoming quarters once we have a little bit more visibility about where this might settle.

Speaker 6

Understood. Thanks for your time.

Operator

Thank you. And your next question comes from the line of Olivia Tong with Raymond James. Please go ahead. Your line is open.

Speaker 2

Great. Thanks. Good afternoon. My first question is on the sales guide. Your outlook for the year at the midpoint seems to suggest a mid teens decline, which is in line with what you report for Q1.

Speaker 2

So first, why wouldn't the run rate be a little bit better as the year progresses, especially if you have more new products in place as well as the material easing in comps? And then secondly, your Q2 guide would suggest there's a deceleration in the rate of sales sequentially versus Q1. Why would

Operator

that be the case? Thanks.

Speaker 3

Yes. One of the hi, how are you doing? One of the drivers that offset the guide, so we had we exceeded where we thought we were going to be in Q1, but we maintain the guidance we had before, largely driven by what's going on in APAC and specifically China. And so with the tariffs where they are now, we are positioned well on the capital side, but we lowered our expectations in terms of the consumable sales for Q2 and the remainder of the year because of where the tariffs kind of sit. So that's kind of an offset to some of the improvements we're seeing and that's really one of the larger drivers for what you mentioned in terms of a bit of a slowdown in the year over year comp in the second quarter.

Speaker 2

Got it. And then just following up on gross margin, obviously, very, very strong Q1. And just trying to understand the sustainability of that. I know you mentioned more equipment purchase and tariff, but typically your gross margin is higher in the second half than it is in the first half. So should we expect that to continue or not because of the incrementality of expenses related to tariffs?

Speaker 3

The latter. The tariffs are we're expecting and projecting that to have a larger impact starting a bit in Q2, but mostly in the second half of the year as we run down our inventory and start flowing through some of the purchases that we have to make at the higher cost.

Speaker 2

Okay. So the tariffs will eat up the normal seasonality that you see in terms of first half versus second half dynamics?

Speaker 3

That's the way we projected it. Correct.

Operator

Understood. Thank you so much.

Speaker 3

Thank you.

Operator

Thank you. And your next question comes from the line of Ashley Helgans with Jefferies. Please go ahead. Your line is open.

Speaker 4

Hi, this is Sydney on for Ashley. I'm just wondering how you kind of think about the terminal mix of consumables as a percent of sales and where you kind of want that to ultimately shake out? And then also just thinking about consumables by region, any difference in trends you would call out, maybe level of attach rate, any kind of detail there would be helpful. Thank you.

Speaker 2

Mike, do want to take that? Sure. So the first part

Speaker 3

of your question for our we don't have a targeted mix. We're in this macro environment, we expect to grow overall capital equipment in the future. We're not positioned to do that or forecasting to do that this year. So really the mix is going to depend on where the capital equipment sales kind of level out. But our belief is that there's still a significant TAM for our product and brands.

Speaker 3

And so we're really positioning the company to return to growth there. On the regional piece for consumables, the largest piece, and I mentioned this earlier, where we expect pressure is really in APAC and China region. That's driven by where we are with the tariff situation. And so for our projections in the back half of this year and even to some degree in Q2, we reduced our consumable sales expectations assuming that the tariffs that are currently in place will stay.

Speaker 7

Thank you.

Operator

Thank you. And your next question comes from the line of Bruce Jackson with The Benchmark Company. Please go ahead. Your line is open.

Speaker 8

Hi, good afternoon. Thanks for taking the questions. I was hoping we could go back to the consumer demand dynamics. You said that the medical side was a little bit weak during the quarter and that the health and beauty side is holding up pretty well. Is that still the case quarter to date given the change in consumer confidence?

Speaker 2

Yes, good question, Bruce. I mean, when I the dermatology and wellness sectors are really strong. So it's interesting, it's sort

Speaker 3

of

Speaker 2

bifurcated, right? MedSpa, dermatology, wellness, super strong with growth and adding some of the boosters and the luxury treatments. It's the day spas and plastic surgeons that did plastic surgery practices that did not grow as well as the others. And as I mentioned, it makes a little bit of sense, right, which is plastic surgery locations and going for facial to date spots, not as necessity as going to a derm for treatments and going to get some of your other treatments of the derms or the med spa. So I think it makes sense, but we're seeing health across all sectors in terms of our signature hydro facial treatment.

Speaker 2

It's just some trading away from the adoption of our more luxury treatments.

Speaker 8

Okay. That's helpful. Thank you.

Speaker 2

Sure. Thanks Bruce.

Operator

Thank you. And your next question comes from the line of Karin Wolfmeyer with Piper Sandler. Please go ahead. Your line is open.

Speaker 9

Hi, this is Sarah on for Karin. Thanks for taking our question. Wonder if you could talk a little bit about the marketing spend over the course of the year and then any color on spending tactics and campaigns to expect this year? And then just how willing are you to flex if needed to protect the bottom line?

Speaker 2

I'll have Mike talk about the spend in marketing and then I'll talk about some of the tactics.

Speaker 3

Yes. So overall, where we've modeled out that we hold sales and marketing as a percentage of revenue, we're targeting where we were last year. The mix of where we're spending the dollars has changed kind of on a year over year basis. We're starting to invest more dollars to drive the end consumer into the provider and support our provider network and really kind of focusing in on that area of spend to get behind the brand and support our provider base.

Speaker 2

Mike, you covered it. I mean pull through is really our critical focus. And so that means eventing, that means providing our giving our providers gifts with purchase to drive consumers into practice. So just an acute focus on ROI we can get in partnership with our providers.

Speaker 9

Great. Thank you.

Operator

Thank you. And we will take our next question from Navin Tighe with BNP Paribas. Please go ahead. Your line is open.

Speaker 7

Thank you. Can you discuss the progress made on the shift for distributor model in China? And also if you can clarify whether the tariffs impact is on a net basis after mitigating actions? I also have a question if you have seen more competition and commoditization microdermabrasion lately. Thank you.

Speaker 3

So I want to make sure I answered the first part of the question, I followed. There was a little bit of static, so I apologize. In terms of our transition to a distributor model for China, we've begun that and are far along. So we've identified a partner and are working with them to transition all the operations. We expect we should complete the transition during kind of this quarter, and then we'll continue to wind down the operations for the remainder in the year and potentially into next year.

Speaker 3

Can you repeat the second part of the There a

Speaker 2

tariff question that I didn't quite hear and then I'll take the question on competition.

Speaker 7

Sure. Whether the tariffs impact was on a net basis after you were mitigating actions?

Speaker 3

So the tariffs, we did not assume that we would pass through all of that expense. And we are starting to work potential pass through of the expense to our providers and end consumers. So we're still evaluating that and haven't factored that in. So we just factored the expense.

Speaker 2

And then in terms of competition, we remain the category leader with over 60% market share in The U. S. And we are the number one most requested facial treatment by consumers with a very high consumer NPS as compared to our competitors. We're a gateway treatment. So in our category, we drive the most new patients to practices according to point of sale data we have.

Speaker 2

And then we're really focused in on how well we pair with other aesthetic treatments. So we feel good about our positioning vis a vis the competition. And as we continue to double down on our clinical backing for our treatments and the products that complement treatments. That gives us further distance from any of our other competitors that do not have clinical backing for any of their boosters or products that go with their treatments.

Speaker 7

Thank you. That's very clear and helpful. Thank you.

Operator

Thank you. And there are no further questions at this time. I will now turn the call back to Marla Beck for closing remarks.

Speaker 2

Thank you for all to all of you for joining us today. We appreciate your time and wish you the best.

Operator

Thank you. This does conclude today's presentation. Thank you for your participation. You may disconnect at any time.

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Key Takeaways

  • Beauty Health delivered Q1 revenue of $69.6 M, surpassing guidance, with adjusted EBITDA of $7.3 M and a gross margin of 71.9% driven by higher-margin consumables which grew 8.2% to represent over 70% of sales.
  • Global device sales declined 43.5% year-over-year due to macro pressures, but total active devices in the field grew to 35,014 units and non-Syndeo systems accounted for 36% of Q1 equipment shipments under a “good-better-best” strategy.
  • The company is enhancing commercial execution through a transition to a third-party distribution model in China, consolidation of U.S. production to minimize tariff exposure, and increased pricing flexibility for providers.
  • Beauty Health is accelerating innovation with the successful HydraLock booster launch, the upcoming hydrophilic booster featuring proprietary PEP9 complex in June, three new treatment tips, and a Back Bar skincare rollout in H2 followed by a consumer line in early 2026.
  • Provider engagement is a priority, with a U.S. loyalty program relaunch in Q3 2025, a global brand refresh campaign to drive consumer demand, and dedicated support for major medical spa, dermatology, and wellness accounts.
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Earnings Conference Call
Beauty Health Q1 2025
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