AirSculpt Technologies(AIRS) - 2025 Q1 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Revenue for Q1 2025 was $39.4 million, a decline of 17.3% from Q1 2024, with adjusted EBITDA at$ 3.8 million and a margin of 9.5%, down from $7.3 million and 15.4% in the prior year [6][23][24] - Same store revenue decreased approximately 24% year-over-year, consistent with previous trends [7][20] - Average revenue per case was$ 12,799, slightly higher than the first quarter of 2024 [20][23] Business Line Data and Key Metrics Changes - Cases declined by 17.9% to 3,070, primarily due to lower consumer spending and reduced marketing efforts [20][21] - The percentage of patients using financing for procedures was 44%, down from 50% in the previous quarter [21] Market Data and Key Metrics Changes - The company operates in a challenging macroeconomic environment, impacting consumer spending and case volumes [5][18] - Despite the decline, there was an improvement in lead generation and case performance from February to April 2025 [7][20] Company Strategy and Development Direction - The company is focused on stabilizing performance and laying the foundation for long-term growth through cost discipline, marketing efficiency, and operational rigor [5][6] - Strategic priorities include reallocating marketing spend to effective channels, optimizing sales processes, and introducing new services to meet consumer demand [14][15][16] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's transformation efforts and the potential for future growth, despite current economic pressures [5][19] - The guidance for fiscal 2025 anticipates revenue between $160 million and$ 170 million, with adjusted EBITDA between $16 million and$ 18 million, reflecting a cautious outlook due to uncertain consumer behavior [17][25] Other Important Information - The company is monitoring inflationary pressures and consumer sentiment, which could impact discretionary spending on procedures [18] - Cost of service decreased by $2.1 million compared to the prior year, but as a percentage of revenue increased to 40.5% due to fixed costs [21][22] Q&A Session Summary Question: Specific cost savings and sustainability - Management noted significant cost savings from workforce changes, targeting$ 3 million in savings for the year [28] Question: Potential EBITDA margins and case growth - Management expects EBITDA margins to approach historical levels of around 30% as same store revenue improves [30] Question: Momentum in cases and seasonal patterns - Management confirmed improvements in cases were both seasonal and due to strategic initiatives, with a target for same store sales growth by year-end [31] Question: Underlying assumptions in guidance - Guidance incorporates a range of scenarios, with the low end accounting for further moderation in consumer spending [47][48] Question: Financing options and their impact - Financing options are expected to roll out by the end of Q2, which management believes will help increase case volumes [52][54]