AirSculpt Technologies(AIRS) - 2024 Q3 - Earnings Call Transcript

Financial Data and Key Metrics - Revenue for Q3 2024 was $42.5 million, down 9.1$4.7 million, or 11% of revenue, compared to $9.1 million, or 19.4$12,984, on the high side of the $12,000 to$13,000 range, but down from $13,658 in Q3 2023 [15] - Customer acquisition cost (CAC) was$2,900 per case, up from $2,750 in the prior year [17] Business Line Performance - The company opened four new centers in Q3 2024: Kansas City, Columbus, Deerfield, and Birmingham, with a fifth center in White Plains expected to open soon [13] - The 2023 de novo centers are performing ahead of the$4.5 million first-year revenue target, with a payback period of less than one year [12] - The company operated 31 facilities as of September 30, 2024, up from 27 in Q3 2023 [13] Market Performance - The company is seeing measured improvement in converting leads to consultations, attributed to a more targeted advertising approach [9] - The percentage of patients using financing for procedures remained consistent at 53% [16] - The company is exploring opportunities to extend payment options for qualified customers, potentially increasing revenue per case [31] Strategic Initiatives and Industry Competition - The company is focusing on three back-to-basics priorities: improving lead-to-case conversion, ensuring successful de novo center openings, and better cost management [7] - The company is leveraging Salesforce to reconnect with customer leads and improve conversion rates [11] - The company is exploring opportunities in skin tightening procedures, particularly in response to the growing use of GLP-1 drugs [26][27] Management Commentary on Operating Environment and Future Outlook - The company is navigating a challenging consumer spending environment, with lower case and lead volumes impacting revenue [15] - The company expects to achieve $2 million in annualized cost savings and plans to reinvest savings into higher-return marketing activities [14] - The company increased its 2024 revenue guidance midpoint to$183 million to $189 million and maintained its adjusted EBITDA guidance of$23 million to 28 million [19] Other Important Information - The company promoted Philip Bodie to Chief Accounting Officer, citing his significant experience in the healthcare industry [20] - The search for a permanent CEO is ongoing, with several interviews conducted and an announcement expected soon [21] Q&A Session Summary Question: New Center Ramp-Up and Contribution Expectations - The four new centers opened in Q3 contributed 530 cases, with Deerfield and Birmingham contributing minimally due to late-quarter openings [23] - The company expects a significant improvement in Q4, with centers potentially doubling their Q3 case volume [24] Question: Impact of GLP-1 Drugs on Demand - The company has not seen significant changes in demand due to GLP-1 drugs but is exploring opportunities in skin tightening procedures [26][27] Question: New Payment Options for Consumers - The company is extending payment options for qualified customers, potentially increasing revenue per case and volume [31] Question: Cost of Service Increase and Future Expectations - The increase in cost of service was driven by new center openings and pre-opening costs, with improvement expected in Q4 as centers ramp up [36][37] Question: SG&A Spend and Future Outlook - The company reduced marketing spend by 4.1 million sequentially and expects a slight uptick in Q4, focusing on optimizing marketing spend [40][41] - Corporate overhead reductions of $0.5 million are expected to continue into Q4 and 2025 [42]