SBC Medical Group Holdings Inc (SBC)·Q2 2025 Earnings Summary

Executive Summary

• Q2 2025 revenue was $43.36M, down 18% year over year, with EPS of $0.02 versus $0.20 last year; EBITDA was $15.19M (35% margin), reflecting fee revisions, business exits, and divestitures .
• Sequentially, results softened versus Q1 2025: revenue $47.33M, EPS $0.21, EBITDA $24.83M (52% margin) .
• No formal numeric guidance was provided, but management expects growth to accelerate from Q3, citing stronger franchise network, high-repeat customer base, and new clinic formats (Neo Skin, JUN CLINIC) with higher average spend .
• Capital policy is the near-term stock catalyst: buybacks occurred May–July; company is considering new share issuance and a partial founder share sale to improve liquidity; added to Russell 3000 in June .
• Wall Street consensus estimates via S&P Global were unavailable for Q2 2025; accordingly, beat/miss vs Street cannot be assessed.*

What Went Well and What Went Wrong

• What Went Well

  • Procurement and rental revenues rose on higher purchase of medical materials and hair-removal device replacements; franchise footprint expanded to 259 locations, with LTM visits reaching 6.31M and repeat rate at 72% .
  • Launch of Neo Skin Clinic (April) gained rapid traction; JUN CLINIC joined the network and is expected to be a key growth driver with high average spend per customer; multi-brand strategy targets different segments with improved profitability .
  • Management reiterated confidence and expects acceleration from Q3, supported by higher-margin models, inbound medical tourism (China), and focus areas like Orthopedics and AGA where SBC targets leadership in Japan .

• What Went Wrong

  • Revenue declined 18% YoY driven by fee structure revisions, discontinuation of staffing services, and divestitures (SNA, Kijimadaira); EBITDA margin compressed to 35% vs 52% in Q1 and 53% YoY .
  • Elevated effective tax rate from non-deductible executive compensation and timing differences in aircraft sales recognition increased tax expense and reduced net profit; point redemptions reduced revenue, impacting management service revenues .
  • Average customer spending trended lower versus last year (early signs of recovery emerging); SG&A was temporarily elevated by laser purchases (~100 units) and professional fees tied to capital policy/legal matters .

Financial Results

Change analysis for Q2 2025:

• YoY vs Q2 2024: Revenue -18%; EPS -90%; EBITDA -46%; EBITDA margin -18pp to 35% .
• Seq vs Q1 2025: Revenue -8%; EPS -89%; EBITDA -39%; EBITDA margin -17pp .

Revenue composition (quarterly):

KPIs:

Notes:

• EBITDA and EBITDA margin are non-GAAP measures; see reconciliations and disclosures in company materials .

Guidance Changes

Earnings Call Themes & Trends

Management Commentary

• “Total revenue declined 18% year-over-year to $43 million, primarily due to the completed discontinuation of our staffing business, targeted divestitures… and revision of fee structure… Looking ahead, we remain confident… focused on optimizing our franchise model, capturing growth opportunities, transitioning to higher-margin models, and delivering lasting value to our shareholders.”
• “From the third quarter onward, we intend to accelerate growth.”
• “The combination of fixed pricing and personalization [at JUN CLINIC] delivers high customer satisfaction and retention… [Neo Skin] has already gained such popularity that the appointments are becoming difficult.”
• “To address [limited liquidity], we are working to improve the supply-demand balance and are considering new share issuance and partial sale by the founder… From May to July, we conducted our first ever share buyback… In June we were added to the Russell 3000 Index.”

Q&A Highlights

• Pricing strategy and brand segmentation: Management is using multi-brand pricing to meet diverse needs; average spend is recovering in higher-end formats (Neo Skin, JUN CLINIC) while accessible brands maintain volume .
• Near-term OpEx/SG&A: First-half SG&A elevated by ~100 laser purchases and legal/consultation fees tied to capital policy; normalization expected in the second half .
• Guidance philosophy: EPS guidance not disclosed; management is considering future disclosure post-restructuring and one-time expense digestion .
• Capital policy and liquidity: Buybacks executed; company is considering new issuance and founder share sale to improve liquidity; dividends under consideration .
• Growth trajectory: Goal to scale clinic count to ~1,000 in ~10 years; pipeline of M&A across North America and Asia being scrutinized for value .

Estimates Context

• S&P Global consensus for Q2 2025 (EPS, revenue, EBITDA, # of estimates) was unavailable; thus, a beat/miss assessment vs Street cannot be provided at this time.*

Key Takeaways for Investors

• Near-term print was weak on reported metrics (revenue -18% YoY; EPS $0.02) due to structural changes and a high effective tax rate; EBITDA margin compressed to 35% from 52% in Q1 and 53% YoY .
• Management expects inflection from Q3 driven by higher-margin clinic formats and brand mix, inbound demand, and operational transitions at franchise clinics; watch for sequential recovery evidence in Q3 results .
• Capital policy is active: buybacks completed; potential equity issuance/founder sale could increase float and improve liquidity; index inclusion (Russell 3000) adds visibility—monitor supply/demand and event timing as trading catalysts .
• Strategic focus areas (Orthopedics, AGA, Fertility) and multi-brand clinic strategy provide medium-term growth vectors with higher average spend potential; JUN CLINIC and Neo Skin are early proof points .
• Tax headwinds (non-deductibility, timing differences) materially impacted Q2 net income; normalization would support EPS leverage if operational recovery materializes .
• No numeric guidance was provided; expect qualitative updates on pricing, clinic ramp, and M&A; EPS guidance may be considered in future periods .
• With Street estimates unavailable, positioning should focus on: evidence of margin rebuild, clinic growth execution, inbound momentum, and capital policy actions likely to move the stock near term.*

* S&P Global consensus data was unavailable for Q2 2025.