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Airsculpt Technologies, Inc. (AIRS)·Q4 2024 Earnings Summary

Executive Summary

  • Q4 2024 revenue was $39.2M, down 17.7% year over year; adjusted EBITDA fell to $1.9M (4.7% margin), reflecting lower case volumes and a marketing pullback late in 2024; GAAP diluted EPS was -$0.09 .
  • Management implemented an annualized ~$3M cost-reduction program and paused de novo openings to prioritize same-center sales stabilization; liquidity actions included drawing the revolver and amending the credit agreement to relax covenants .
  • FY2024 guidance was lowered in January to ~$180.0M revenue and ~$20.5M adjusted EBITDA from prior ranges of $183–$189M and $23–$28M; actual 2024 results came in at $180.4M revenue and $20.7M adjusted EBITDA (11.5% margin) .
  • Management expects Q1 2025 same-store revenue decline similar to Q4’s level (~22.6%) with sequential improvement through 2025 as marketing is refocused and lead conversion initiatives ramp; full-year guidance will be provided with Q1 results in May .

What Went Well and What Went Wrong

What Went Well

  • Refocused marketing under a returns-based approach; early 2025 lead volumes improved after reversing late-2024 cuts and testing online video/connected TV channels under a new Chief Digital Officer .
  • Sales process upgrades with enhanced consultative training and improved Salesforce utilization to nurture historic leads and boost conversion; financing partnerships expanded to add longer-term options (e.g., 18–24 months) for qualified patients .
  • Operational discipline: cost initiative (~$3M annualized net) largely executed by mid-Q1 to realign corporate headcount and fund investments in technology/data; covenant relief obtained to support transformation while maintaining compliance .

What Went Wrong

  • Significant topline/margin compression: cases down 16.7% y/y to 3,064; revenue down 17.7% to $39.2M; adjusted EBITDA down to $1.9M from $10.1M; margin dropped to 4.7% from 21.2% .
  • Elevated CAC and elongated conversion cycle: CAC rose to ~$3,250 per case in Q4 (vs. $2,900 in Q3 and $3,325 in Q2) as leads and case volumes declined; lead-to-case conversion stretched from ~45 days historically to ~60 days in H2’24 .
  • Marketing pullback late in 2024 reduced lead volumes despite de novo openings and contributed to same-store revenue decline of 22.6% y/y in Q4; macro consumer pressure persisted across aesthetics .

Financial Results

Quarterly Financials (sequential comparison)

MetricQ2 2024Q3 2024Q4 2024
Revenue ($USD Millions)$51.0 $42.5 $39.2
GAAP Diluted EPS ($)-$0.06 -$0.10 -$0.09
Adjusted EBITDA ($USD Millions)$6.868 $4.666 $1.855
Adjusted EBITDA Margin (%)13.5% 11.0% 4.7%

Year-over-Year Q4 comparison

MetricQ4 2023Q4 2024
Cases3,680 3,064
Revenue ($USD Millions)$47.6 $39.2
Revenue per Case ($USD)$12,937 $12,787
Net Loss ($USD Millions)$4.6 $5.0
Adjusted EBITDA ($USD Millions)$10.1 $1.9
Adjusted EBITDA Margin (%)21.2% 4.7%
Same-Center Case Growth (%)N/A-21.8%
Same-Center Revenue per Case ($USD)N/A$12,797

Operating KPIs and footprint

KPIQ2 2024Q3 2024Q4 2024
Cases3,949 3,277 3,064
Revenue per Case ($USD)$12,916 $12,984 $12,787
Number of Facilities27 31 32
Total Procedure Rooms57 65 67
CAC per Case ($USD)$3,325 $2,900 $3,250

Notes:

  • Same-center revenue declined 22.6% y/y in Q4 2024; financing usage was ~50% vs. ~53% in recent quarters .
  • Cost of service rose to 42.7% of revenue in Q4 due to fixed-cost deleveraging (rent, nursing) amid lower revenues; expected to normalize as revenues rebound .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
RevenueFY 2024$183–$189M (affirmed Oct/Nov) ~$180.0M (Jan update) Lowered
Adjusted EBITDAFY 2024~$23–$28M ~$20.5M (Jan update) Lowered
De Novo OpeningsFY 2024Five new centers in 2024 Achieved five in 2024; pausing new openings near-term in 2025 Strategic pause
Same-Store RevenueQ1 2025Not providedDecline similar to Q4 2024 (~22.6%) Indicated decline
FY 2025 OutlookFY 2025Not providedTo be provided with Q1 results in May Deferred

Earnings Call Themes & Trends

TopicPrevious Mentions (Q2 2024 and Q3 2024)Current Period (Q4 2024)Trend
Marketing mix and ROI focusPivot away from brand awareness, back to paid search; reduced H2 marketing spend; CAC elevated but improving sequentially Returns-based approach; early 2025 lead volumes up; testing online video/CTV; dynamic rebalancing across centers Improving execution; lead momentum building
Lead conversion and CACConversion lengthening to ~60 days; CAC ~$3,325 (Q2)→$2,900 (Q3) CAC ~$3,250; conversion stretched ~60 days in H2’24; expect improvement as sales processes and financing expand Near-term pressured, medium-term improving
GLP-1 implications and skin tighteningGLP-1 a catalyst; skin tightening opportunity; Renuvion adjunct used; exploring offerings Pilot stand-alone skin tightening in Q2 2025 to capitalize on GLP-1 demand Building a new service vector
De novo cadenceOpened multiple centers in Q3; de novo ramp 3–4 months; 2023 cohort exceeded $4.5M year-1 target Pausing de novos near-term to focus on same-center stabilization Strategic pause
Financing options~52–53% usage; exploring extended terms Adding 18–24 month options for qualified patients; ~50% usage in Q4 Expanding choices
Cost actionsBack-half savings targeted; corporate overhead reductions ~$3M annualized net savings executed by mid-Q1 Savings implemented
Technology and CRMBegin Salesforce utilization to nurture leads Expanding Salesforce platform; testing clinic team solutions Scaling tools
Liquidity and covenantsLeverage ~2.2x; revolver availability Revolver drawn; amended credit agreement; expect covenant compliance in 2025 Increased flexibility

Management Commentary

  • “My number one priority in the year ahead is to stabilize our same center sales performance… utilizing data to optimize our marketing investment; improving our go-to-market strategy… expanding our financing options for consumers… We… implemented a cost reduction program… approximately $3 million… we have paused de novo and new procedure room openings.” — CEO Yogi Jashnani .
  • “Adjusted EBITDA was $1.9 million or 4.7%… The decline in revenue accounted for approximately $6 million of the decrease… During the quarter, we opened 2 locations… giving us 5 new de novo centers for the year.” — CEO remarks .
  • “As of December 31, 2024, cash was $8.2 million… gross debt outstanding was $75.8 million… We revised our credit agreement relaxing various covenants… we are confident these new terms will provide added flexibility.” — CFO Dennis Dean .

Q&A Highlights

  • Sequential improvement context: Management expects typical seasonal pattern with Q2 higher than Q1, and sequential improvement particularly in same-store performance; full-year guidance deferred to May to ensure informed outlook .
  • Liquidity and revolver draw: Revolver draw supported maintaining marketing into season following ~$10M capital deployed for five H2’24 de novos amid lighter Q4 results; near-term focus remains same-center growth .
  • CAC/marketing dynamics: CAC elevated due to softer case volumes and higher lead costs; marketing spend was cut late 2024 and is being redeployed with returns-based tactics in 2025 .
  • Cost savings: ~$3M annualized net savings largely from corporate headcount realignment; benefits begin in Q1 2025; savings net of new investments in tech/data/analytics .
  • New services: Pilot stand-alone skin tightening to capture GLP-1-driven demand; expand across centers based on pilot learnings .

Estimates Context

  • Wall Street consensus EPS and revenue estimates via S&P Global were unavailable at time of analysis due to a data access limitation (daily request cap exceeded). As a result, estimate comparisons are not shown and should be revisited once access is restored.

Key Takeaways for Investors

  • Q4 marked a trough in profitability with EBITDA margin compressing to 4.7% as late-2024 marketing cuts and a longer conversion cycle weighed on volume; sequential improvement is expected through 2025 as marketing and sales initiatives take hold .
  • Strategic pivot to same-center stabilization should reduce execution risk; pausing de novos near term concentrates resources on conversion, pricing, and fixed-cost leverage in existing centers .
  • Returns-based marketing and enhanced consultative sales (training, Salesforce, analytics) are core to rebuilding lead conversion; early 2025 lead volumes improved, providing a pipeline for case recovery .
  • Financing expansion (longer-term options) may lift revenue per case and reduce friction for higher-ticket procedures amid a stretched consumer backdrop .
  • Cost program (~$3M) and covenant relief enhance flexibility to fund the transformation while preserving liquidity; watch CAC trajectory and operating leverage as volumes rebound .
  • The stand-alone skin tightening pilot targets GLP-1 spillover demand—a potential incremental revenue stream leveraging existing infrastructure .
  • Near-term trading: stock likely reacts to signs of lead and conversion improvement, CAC moderation, and evidence of sequential EBITDA scaling; medium-term thesis hinges on same-store stabilization, disciplined marketing ROI, and successful new service roll-out .