Beauty Health NASDAQ: SKIN, referred to by executives as SkinHealth Systems following a recent rebrand, reported first-quarter 2026 net sales of $64.9 million, down 6.7% from the prior year, as weaker device placements continued to weigh on growth. The company said adjusted EBITDA rose 17% year over year to $8.5 million, exceeding the high end of its guidance range.
Chief Executive Officer Pedro Malha said the quarter showed that “top-line growth has not yet returned,” but also that the company’s operating foundation is strengthening. He said the rebrand to SkinHealth Systems reflects a shift toward operating with “the clinical rigor, the commercial discipline, and the operational mindset of a leading medical device company.”
Hydrafacial remains central to the company’s strategy, Malha said, while SkinStylus, microneedling and nano-channeling technology, and a planned relaunch of Keravive for scalp health are intended to broaden the platform.
Device Demand Remains Under Pressure
Delivery systems revenue was $18.5 million in the first quarter, down 8.3% from the prior year. Chief Financial Officer Mike Monahan said the company placed 746 systems, compared with 862 in the first quarter of 2025.
Malha said device placements came in below expectations due to several factors, including tighter credit conditions, longer purchasing cycles and increased competition. He said those pressures are structural rather than isolated to one quarter.
“Competition continues to increase, and this is very particular around the lower end of the market,” Malha said during the question-and-answer session. He cited lower-cost alternatives, secondary-market devices and a broader set of aesthetic treatments competing for treatment room time.
Malha said the company is not seeking to compete primarily on price, arguing that providers focus on patient outcomes and long-term returns from treatment rooms. He also said he is taking a more direct role in the global sales organization after a recent commercial leadership change, with a focus on sales processes, pipeline management, account prioritization and conversion.
Consumables Decline, But Installed Base Grows
Consumables revenue was $46.4 million, down 6.1% year over year. Malha said about two-thirds of the decline was related to China’s transition to a distributor model last year, which continues to affect comparisons.
Monahan said consumables revenue in the Americas declined 1.6%, primarily because fourth-quarter promotions pulled some demand forward. EMEA consumables were down 5.6%, driven by distributor order timing, while APAC declined 29.9% due to the China distributor transition.
Despite softer device placements, the company’s active installed base grew to 36,400 systems globally, up 4% from the prior year. Malha also said device churn declined 40% year over year in the quarter, which he described as a meaningful signal that provider retention and reactivation programs are working.
Profitability Improves as Costs Decline
Adjusted gross margin expanded to 72.2%, compared with 71.9% in the prior year. GAAP gross margin was 68.5%, down from 69.8%, with Monahan attributing the decline primarily to higher amortization expense.
GAAP operating expenses were $46.2 million, compared with $60.6 million a year earlier. Selling and marketing expenses declined to $23.2 million from $26 million, while general and administrative expenses fell to $21.9 million from $33.6 million. Monahan said the G&A decline reflected lower headcount-related costs, reduced legal fees and lower depreciation and amortization.
Net loss improved to $6.6 million from $10.1 million in the prior-year period. The company ended the quarter with $204.4 million in cash equivalents and restricted cash. Monahan said the company’s October 2026 debt maturity totals about $103 million and said management is confident it can address the maturity based on its cash position and expected cash generation.
Revenue Outlook Cut, EBITDA Guidance Maintained
The company lowered its full-year revenue outlook to $280 million to $295 million, down from its prior range of $285 million to $305 million. Malha said the revision reflects a more cautious view of near-term capital equipment demand and the time required for commercial improvements to affect results.
However, the company maintained its full-year adjusted EBITDA guidance of $35 million to $45 million. For the second quarter, management expects revenue of $72 million to $77 million and adjusted EBITDA of $11 million to $13 million.
In response to an analyst question about the rest of the year, Malha said 2026 remains an “execution year” and a “stabilization year.” He said the company expects pressure on device placements and utilization trends to continue in the first half, followed by gradual sequential improvement in the second half if commercial initiatives gain traction.
Innovation Focuses on Boosters, Partnerships and Next-Generation Device
Malha said SkinHealth Systems is advancing its innovation pipeline across three priorities: boosters, strategic partnerships and the next-generation Hydrafacial platform.
The company is restructuring its booster portfolio around clinical use cases, differentiated outcomes and tiered pricing. Malha said the company plans to relaunch Keravive later this quarter with updated marketing, enhanced protocols and better integration into the Hydrafacial platform. He also said the company expects to introduce a clinically backed booster in the fourth quarter.
During the Q&A session, Malha said the company has historically had “a lot of different boosters” and SKUs, but is now prioritizing simplicity and clinical impact. He said boosters are expected to help drive utilization, provider engagement and consumer demand.
Management also said the company is in late-stage diligence on strategic partnerships involving both devices and consumables. Monahan said the potential partnerships span both sides of the business, while Malha said they are intended to expand the portfolio available to sales representatives.
The company is also developing a next-generation Hydrafacial device targeted for a 2028 launch. Malha said the goal is to improve clinical outcomes and treatment experience while creating an upgrade opportunity for the company’s installed base of more than 36,000 active systems.
About Beauty Health NASDAQ: SKIN
Beauty Health Company NASDAQ: SKIN is a U.S.-based consumer wellness and beauty enterprise that integrates device-based and product-based offerings across skin, body and hair wellness categories. The company operates a portfolio of established brands that blend professional and at-home solutions, focusing on innovative formulations and technologies to address a range of beauty and self-care needs. Through its proprietary e-commerce platforms and strategic retail partnerships, Beauty Health seeks to deliver premium experiences and tangible results to a global customer base.
Beauty Health's brand portfolio includes Sol de Janeiro, known for its award-winning Brazilian Bum Bum Cream body care collection; Elemis, a U.K.-originated professional skin care line distributed in spas and skincare clinics; NuFACE and Dermaflash, two at-home beauty device brands specializing in microcurrent facial toning and gentle exfoliation respectively; and Nutrafol, a legal-strength hair wellness supplement clinically designed to support hair growth.
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