Beauty Health Company ((SKIN)) has held its Q1 earnings call. Read on for the main highlights of the call.
Protect Your Portfolio Against Market Uncertainty
- Discover companies with rock-solid fundamentals in TipRanks' Smart Value Newsletter.
- Receive undervalued stocks, resilient to market uncertainty, delivered straight to your inbox.
The Beauty Health Company recently held its Q1 2025 earnings call, which painted a picture of both optimism and challenges. The company reported a positive start to the year, with revenue and EBITDA exceeding expectations, and strong growth in consumables. However, the call also highlighted significant hurdles, including a notable decline in equipment sales, regional revenue declines, and the impact of tariffs on operations in China. Despite these challenges, the company’s strategic initiatives and successful product launches provide a promising outlook.
Exceeding Revenue and EBITDA Guidance
The Beauty Health Company surpassed its revenue expectations, reporting $69.6 million, which was above the high end of its guidance. Additionally, the company delivered over $7 million of adjusted EBITDA, showcasing a strong financial performance for the quarter.
Strong Consumable Sales
Consumables have become a significant revenue driver for the company, growing over 8% and now representing more than 70% of total revenue. Notably, consumable net sales increased by 3.5% in the Americas, 42.6% in APAC, and 7.9% in EMEA, indicating robust demand across regions.
Successful Product Launches
The launch of the Hydralock HA booster in the second half of 2024 was a major success, marking the most successful branded booster launch in the company’s history. This product launch has contributed to the company’s positive outlook.
Improved Gross Margin
The company reported an adjusted gross margin of 71.9% for the quarter, a significant improvement from 63.4% in the prior year period. This improvement was driven by a favorable mix towards consumable net sales and enhanced operational processes.
Increased Active Devices
The number of active devices in the field increased to over 35,000 units, up from approximately 32,500 units at the end of Q1 2024. This growth reflects strong demand for the company’s Hydrafacial devices.
Decline in Equipment Sales
Despite the positive trends, global device sales experienced a 43.5% year-over-year decline due to macroeconomic pressures affecting capital equipment purchasing decisions.
Revenue Declines in Key Regions
The company faced revenue declines in key regions, with Q1 consolidated revenue in the Americas down 8.1%, and revenue across APAC and EMEA declining by 30.4% and 21.6%, respectively.
Tariff Impact on China Operations
The transition to a third-party distribution model in China is underway, but the company anticipates approximately $5 million of additional costs in 2025 due to tariffs, impacting their operations in the region.
Operating Loss
The company reported an operating loss of $12 million in Q1 2025, which is an improvement compared to a loss of $17 million in the comparable period, indicating progress in managing operational expenses.
Forward-Looking Guidance
Looking ahead, Beauty Health Company maintained its full-year 2025 sales guidance between $270 million and $300 million, with adjusted EBITDA projected at $15 million to $25 million. Despite macroeconomic pressures impacting equipment sales, the company remains optimistic about its growth prospects, driven by a shift towards high-margin consumables and increased demand for its devices.
In conclusion, the Beauty Health Company’s Q1 2025 earnings call highlighted a mix of positive achievements and challenges. While the company exceeded revenue expectations and saw strong growth in consumables, it also faced significant declines in equipment sales and regional revenues. Nonetheless, strategic initiatives and successful product launches provide a hopeful outlook for the future.