AirSculpt Technologies(AIRS) - 2024 Q4 - Earnings Call Transcript

Financial Data and Key Metrics Changes - For Q4 2024, revenue totaled $39.2 million, a decline of 17.7$1.9 million or 4.7% of revenue, compared to $10.1 million or 21.2$180.4 million, a decline of 7.9% from fiscal 2023, with adjusted EBITDA of $20.7 million and an adjusted EBITDA margin of 11.5$12,000 and $13,000, indicating a longer conversion time from leads to cases, increasing from approximately 45 days to closer to 60 days in the second half of 2024 [14][15] Market Data and Key Metrics Changes - The percentage of patients using financing for procedures was 50$11 billion total addressable market in the U.S., highlighting significant growth potential despite current challenges [11] Company Strategy and Development Direction - The company aims to enhance its culture and align on a singular vision while improving its go-to-market strategy to drive consistent revenue growth [20][29] - Five key priorities include marketing to drive consumer interest, improving sales processes, introducing new services, enhancing customer experience, and leveraging technology [20][28] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenging consumer backdrop affecting sales across the aesthetics space and emphasized the need for internal corrections [14][12] - The company expects Q1 2025 same-store sales performance to mirror Q4 2024 trends, with an anticipated sequential improvement as marketing spend increases [30][42] Other Important Information - The company has paused new center openings to focus on improving same-center performance and has amended its credit agreement to enhance investment flexibility [29][31] - Cash flow from operations for the year was $11.4 million, down from$24 million in fiscal 2023, with gross debt outstanding at 75.8 million [41] Q&A Session Summary Question: Can you provide more color on sequential growth expectations? - Management expects to see a similar seasonal trend with sequential improvement in same-store performance year-over-year, particularly in Q2 [51] Question: What are the liquidity improvement actions being taken? - The company drew down on its revolving credit facility to maintain marketing efforts while facing challenges in Q4 results [56] Question: How should we think about marketing spend versus customer acquisition cost (CAC)? - The elevated CAC was driven by lower case volumes and reduced lead volumes due to decreased marketing spend, but improvements in marketing strategy are expected to lower CAC in the future [62] Question: Can you elaborate on the cost savings program? - The company has executed a 3 million annual savings plan primarily through reductions in corporate headcount not aligned with the current strategy, with benefits expected to start in Q1 [67] Question: What specifics can you share about new marketing efforts? - The company is combining traditional paid search with new initiatives like online video and social marketing, focusing on a returns-based approach to optimize spending [72]