The Beauty Health Company (NASDAQ: SKIN) Q2 2025 Earnings | 08/08/2025

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Beauty Health Company (HydraFacial) Q2 2025 Earnings Summary

Date: August 8, 2025
Participants:

Marla Beck (CEO)
Michael Monahan (CFO)
Roberto Aja (Investor Relations)

Key Highlights

1. Financial Performance

Revenue: $78.2M (beat guidance)
- Consumables (70% of revenue): $55.8M (+0.8% YoY)
- Devices: Pressured by macro headwinds (-9.5% YoY)
Gross Margin:
- GAAP: 62.8% (vs. 45.2% YoY)
- Adjusted: 65.9% (vs. 59.4% YoY)
Adjusted EBITDA: $13.9M (above guidance)
Cash Position: $212M (down from $370M due to debt restructuring)

2. Business Updates

Active Devices: 35,193 (+5% YoY)
China Transition: Shifted to distributor model (tariff impact: ~$4M in H2).
Debt Restructuring: Extended maturities, issued new 7.95% secured notes due 2028.
Price Increase: ~5% on consumables (first in 3 years, no pushback).

3. Growth Drivers

Innovation:
- HydroPeptide with PEP9 Booster: Top-performing launch, exceeding targets.
- Upcoming Launches:
  - Backbar products (Q4 2025)
  - Skincare hero product (Q4 2025)
  - Scalp/lip tips (2026)
Commercial Execution:
- "Good-Better-Best" Device Strategy: Non-Syndeo devices now 37% of sales (vs. 28% YoY).
- Provider Loyalty Program Relaunch (Early 2026): Focus on retention & cross-selling.

4. Guidance Raised

FY 2025 Revenue: $285–300M (up from prior $285–300M, but tightened range).
FY 2025 Adjusted EBITDA: $27–35M (up from $25–35M).
Q3 2025 Outlook:
- Revenue: $65–70M (seasonally slower).
- Adjusted EBITDA: $2–4M (R&D investments, tariff headwinds).

Key Takeaways

✅ Recurring Revenue Strength: Consumables growth (+0.8% YoY) and margin expansion (65.9%) underscore resilience.
✅ Macro Pressures Persist: Device sales remain weak due to capital expenditure delays.
✅ Innovation Pipeline: Skincare/backbar launches and AI partnerships (e.g., OpenAI) aim to boost long-term growth.
✅ Debt & Tariff Management: Restructuring improves flexibility; China transition mitigates future tariff risks.

Analyst Q&A Highlights:

Device Sales Recovery? Depend on macro improvement; sales team enhancements underway.
China Impact: Distributor model lowers margins but reduces OPEX; growth expected in 2026.
R&D Spend: $4–5M in H2 for 2026 launches (e.g., exosomes, haircare).
Churn: Higher in Q2 (non-channel-specific); reactivation efforts in progress.

Outlook: Cautious near-term (H2 seasonality, tariffs) but confident in 2026+ growth via innovation and provider engagement.

About this video

The Beauty Health Company reported a strong second-quarter 2025 performance that exceeded market expectations despite challenging conditions in device sales. The company posted revenue of $78.2 million, surpassing analyst forecasts of $74.5 million, though representing a 13.7% year-over-year decline primarily driven by a 36.5% drop in delivery system device sales. Consumables revenue demonstrated resilience, growing slightly by 0.8% year-over-year and now comprising over 70% of total revenue, underscoring the strength of the company’s recurring revenue model. Earnings per share (EPS) came in at $0.03 on a GAAP basis, beating the forecasted loss of $0.06 and marking a significant positive surprise. The company achieved a notable GAAP gross margin improvement to 62.8% from 45.2% a year earlier, reflecting operational efficiencies and a favorable product mix shift toward higher-margin consumables. Adjusted EBITDA was $13.9 million, exceeding expectations and supporting improved profitability. Operational highlights include expanding the installed base to 35,193 active machines, an increase from 33,504 units at the end of Q2 2024. The company implemented its first price increase in three years across consumables, effective July 3, 2025, contributing to margin expansion. The company also completed a debt restructuring transaction, enhancing financial flexibility despite a lower cash position of $212 million compared to year-end 2024. Management raised full-year 2025 net sales guidance to a range of $285 million to $300 million and adjusted EBITDA guidance to $27 million to $35 million, reflecting confidence in recurring revenue growth and controlled costs. For Q3 2025, net sales are expected between $65 million and $70 million with adjusted EBITDA between $2 million and $4 million. The company’s strategy emphasizes innovation in skincare and device products alongside maintaining strong consumables revenue. Risks include ongoing macroeconomic pressures impacting device sales, supply chain disruptions, competitive pressures in the skincare market, and potential device churn affecting revenue stability. About Inside Ticker: Inside Ticker delivers timely, in-depth financial news and earnings analysis to empower investors with actionable insights on global companies across sectors. For comprehensive video analysis and real-time updates, visit https://www.insideticker.com/. #TheBeautyHealthCompany #SKIN #Q22025 #Earnings #FinancialResults #Revenue #EPS #GrossMargin #AdjustedEBITDA #Consumables #DeviceSales #RecurringRevenue #DebtRestructuring #PriceIncrease #Skincare #Innovation #OperationalEfficiency #InstalledBase #CashPosition #MarketGuidance #FinancialFlexibility #SupplyChain #ProductMix #MacroeconomicRisks #InvestorUpdates #NASDAQ #BeautyTech #HealthcareInnovation #InsideTicker

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