SBC Medical Group Holdings Incorporated(SBC) - 2025 Q1 - Quarterly Report

Revenue Performance - For the three months ended March 31, 2025, the company generated revenues of $47,328,701, a decrease of 13.65% from$ 54,808,042 in the same period of 2024[204]. - Franchising revenue increased by 4.03% to $15,719,282 for the three months ended March 31, 2025, compared to$ 15,110,268 in 2024[210]. - Procurement revenue rose by 8.61% to $14,332,783 for the three months ended March 31, 2025, up from$ 13,195,984 in 2024[211]. - Management services revenue decreased by 44.25% to $8,728,103 for the three months ended March 31, 2025, down from$ 15,654,670 in 2024[212]. - Rental services revenue increased significantly by 55.90% to $5,640,514 for the three months ended March 31, 2025, compared to$ 3,617,941 in 2024[213]. - Other revenues decreased by 59.77% to $2,908,019 for the three months ended March 31, 2025, down from$ 7,229,179 in 2024[214]. Profitability - Net income attributable to SBC Medical Group Holdings Incorporated for the three months ended March 31, 2025 was $21,502,446, representing an increase of 14.63% from$ 18,757,752 in 2024[204]. - Gross profit for the three months ended March 31, 2025 was $37,733,084, a decrease of 4.52% from$ 39,519,375 in 2024[216]. - Net income increased by $2,741,734, or 14.62%, to$ 21,491,950 for the three months ended March 31, 2025, from $18,750,216 for the same period in 2024[225]. Expenses - Cost of revenues decreased to$ 9,595,617 for the three months ended March 31, 2025, from $15,288,667 in 2024, primarily due to cost reduction efforts[215]. - Operating expenses decreased by$ 1,527,480, or 10.14%, to $13,531,010 for the three months ended March 31, 2025, compared to$ 15,058,490 for the same period in 2024[217]. - Recruiting expense decreased by $512,678, or 67.72%, to$ 244,377 for the three months ended March 31, 2025, from $757,055 for the same period in 2024[218]. - Depreciation and amortization expense decreased by$ 507,299, or 52.37%, to $461,405 for the three months ended March 31, 2025, from$ 968,704 for the same period in 2024[219]. Cash Flow and Financial Position - Cash and cash equivalents increased by $7,011,731, or 37.30%, to$ 132,055,823 as of March 31, 2025, compared to $96,181,550 as of March 31, 2024[233]. - Net cash provided by operating activities decreased by$ 1,753,554, or 47.62%, to $1,928,621 for the three months ended March 31, 2025, from$ 3,682,175 for the same period in 2024[233]. - As of March 31, 2025, the company had retained earnings of $210,965,453[204]. Tax and Compliance - The effective tax rate was 31.67% for the three months ended March 31, 2025, compared to 31.07% for the same period in 2024[224]. - The company qualifies as an "emerging growth company," allowing it to take advantage of certain exemptions from reporting requirements[252]. - The company is classified as a "smaller reporting company," which permits reduced disclosure obligations, including providing only two years of audited financial statements[254]. - The company has not experienced material changes to its critical accounting policies and estimates since the last annual report[251]. - The company has elected not to opt out of the extended transition period for new or revised financial accounting standards, aligning its compliance with private companies[253]. Future Outlook and Strategic Initiatives - The Company expects to deploy capital for investment opportunities in the expanding global medical aesthetics market[230]. - A share repurchase program with an aggregate purchase limit of up to$ 5 million was approved, set to begin on May 20, 2025[242]. - The revised fee structure effective April 1, 2025, aims to support the establishment of new clinics and is expected to stabilize the business foundation[239]. Liabilities and Financial Risks - As of March 31, 2025, total undiscounted lease payments amount to $5,473,817, with total lease liabilities of$ 5,443,973 after accounting for imputed interest[245]. - Future minimum borrowing payments total $6,864,995, with the largest repayment of$ 6,750,622 due in 2027[247]. - The company is exposed to foreign currency exchange rate fluctuations, primarily due to operations in Japan and revenues in Japanese yen, while reporting in U.S. dollars[249]. - There are no off-balance sheet arrangements as of March 31, 2025, indicating a straightforward financial position[248]. - The company borrowed loans from various banks and a financial institution for working capital purposes, indicating reliance on external financing[246]. - The company continues to evaluate its accounting estimates and assumptions, which could lead to actual results differing from expectations[250].