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SBC Medical Group Holdings Inc (SBC)·Q4 2024 Earnings Summary

Executive Summary

  • Q4 2024 revenue was $44.0M, down 29% year over year (vs. $62.0M in Q4 2023) as management services declined post-termination of staffing services; EBITDA margin was a robust 47% in Q4 (vs. 43% in Q4 2023) supported by cost control and mix shift .
  • Versus prior quarter, revenue fell from $53.1M in Q3 2024 to $44.0M in Q4 2024; net income rose to $7.0M from $2.8M due partly to lower cost of revenues in Q4 .
  • Management outlined 2025 strategic changes: franchise fees to be scaled and discounted in year one (estimated ~10% revenue headwind if applied to FY2024) and ~20% price increases in medical hair removal to rebalance supply/demand .
  • Liquidity remains a focus; the company is exploring share buybacks/dividends and broader capital actions to improve stock liquidity and valuation, highlighted as potential catalysts .

What Went Well and What Went Wrong

What Went Well

  • EBITDA margin expanded to 47% in Q4 2024 (from 43% in Q4 2023), demonstrating resilient profitability despite top-line pressure .
  • Strong franchise expansion and customer growth in FY2024: clinics reached 251 (+21% YoY) and total customers hit 6.03M (+15% YoY), underscoring durable demand and repeat behavior (71% repeat rate) .
  • Management commitment: “We want to be the biggest medical group in Japan, and we are determined to accomplish this,” signaling confidence in growth trajectory and execution discipline .

What Went Wrong

  • Q4 revenue declined 29% YoY, driven by a sharp drop in management services (post staffing-service termination), and weaker procurement revenues sequentially amid industry competition .
  • Revenue per customer fell 13% YoY in FY2024 as 2024 strategy prioritized first-visit pricing to expand the base, which lowered per-customer revenue in the period .
  • Competitive headwinds and market restructuring (hair-removal bankruptcies, heightened competition) pressured growth cadence and necessitated pricing recalibration and fee revision plans .

Financial Results

Quarterly Comparison (YoY and QoQ)

MetricQ4 2023Q3 2024Q4 2024
Total Revenues ($USD Millions)62.0 53.1 44.0
Net Income ($USD Millions)14.0 2.8 7.0
EBITDA Margin %43% 28% 47%
Gross Profit ($USD Millions)43.0 33.5 34.0
Cost of Revenues ($USD Millions)19.0 9.8 11.0

Segment Breakdown – Q4 2024

Segment Revenue ($USD Millions)Q4 2024
Franchising Revenue16.0
Procurement Revenue11.0
Management Services Revenue9.0
Rental Services Revenue5.0
Other Revenues5.0

KPIs (FY2024)

KPIFY2024
Number of Franchise Clinics (Dec 2024)251 clinics
Repeat Rate71%
Total Customers / Unique Customers6.03M / 1.90M
Revenue per Customer$186
Revenue Distribution: Aesthetic Dermatology / Aesthetic Surgery / Medical / Overseas55% / 29% / 16% / 0.3% (Overseas +48% YoY)

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Franchise Fee StructureFY2025 (Apr 2025 start)Fixed fee per MC/clinicFees based on scale; fee reductions in first year of openingLowered/optimized; estimated ~10% negative impact on total revenues if applied to FY2024; FY2025 impact uncertain
Medical Hair Removal PricingFY2025 (Apr 2025)1 session: ¥20,000; 3 sessions: ¥45,000; 6 sessions plan1 session: ¥25,000; 3 sessions: ¥49,500; 5-session plan at ¥53,800; 6 sessions discontinuedRaised prices (~10–25% per session), plan redesign from 6 to 5 sessions
Franchise Clinics Net IncreaseFY2025n/aNet +20 clinics (organic), plus potential M&A additionsRaised expansion target
Capital Returns / Liquidity ActionsFY2025 (ongoing)n/aExploring share buybacks, dividends, founder share sale, block trade, new issuance, warrant exchangeConsidering multiple measures to improve liquidity/valuation

Earnings Call Themes & Trends

TopicPrevious Mentions (Q-2, Q-1)Current Period (Q4 2024)Trend
Pricing & Customer AcquisitionQ3 2024 materials noted one-time stock-based comp and mix; strategy to expand customers (Q-2 not available in set) 2024 strategy lowered prices to ease first visits; Q4 revenue per customer down; 2025 rebalancing via hair removal price hikes Transition from customer-base expansion at lower ticket to price normalization
Franchise Fee Modeln/aPlan to revise fees to scale-based, discount first year to support openings; win-win for franchisees Structural change to support franchise growth even in tough competition
Demand & Market StructureHeadwinds, competition; staffing-service termination reflected in Q3 Intensifying competition, hair-removal bankruptcies; proactive pricing and fee strategy Competitive shakeout continuing; SBC adjusting
Male/Inbound Customersn/aMale demand strong; inbound (esp. Chinese) recovered to pre-COVID; focus on inbound growth Positive momentum in male and inbound segments
Liquidity/Capital Policyn/aLiquidity is low; considering buybacks/dividends and broader actions to improve investor accessibility Potential capital actions as catalysts
Overseas Expansionn/aBuilding Asia hub (Singapore), US clinic/M&A ambitions; Vietnam to scale post-model establishment Gradual international ramp

Management Commentary

  • “We want to be the biggest medical group in Japan, and we are determined to accomplish this.”
  • “We would like to revise our fees… receive a fee depending on the size and the business… create a win‑win situation and increase the number of clinics who would like to become members.”
  • “Strategically, we lowered the price so that the first step by the customers will be easier… as a result, there was a decline of the revenue per customer… most prominent in the latter half… Q4.”
  • “Liquidity is quite low… explore new major shareholders or conduct a share buyback and make dividend payment.”
  • “We want to increase presence in the U.S. and enhance brand value… seek M&A opportunities to realize win‑win.”

Q&A Highlights

  • Growth driver: make the first step easier (pricing and access) to convert and retain repeat customers; expand market penetration beyond ~12% .
  • U.S. strategy: horizontal deployment plus M&A to accelerate impactful growth; balance direct management and franchising .
  • Vietnam: establish strong model this year, expand clinics next year; post-COVID performance improving .
  • Capital allocation: considering share buybacks/dividends and broader measures to address low liquidity; timing and appropriateness remain under consideration .
  • 2025 clinic expansion: net +20 organically, with possible additions via M&A .

Estimates Context

  • Wall Street consensus (S&P Global) for Q4 2024 EPS and revenue was unavailable for SBC at this time despite attempted retrieval via S&P Global; as a result, explicit beat/miss versus consensus cannot be determined. Values retrieved from S&P Global.*

Key Takeaways for Investors

  • Q4 profitability was resilient (47% EBITDA margin) despite revenue pressure; focus shifts from base expansion to monetization via price normalization and mix .
  • 2025 fee model and hair removal price hikes are material strategic changes; near-term revenue headwind from fee revision (~10% if applied to 2024) may be offset by higher pricing and clinic growth over time .
  • Franchise network and repeat behavior remain strong; broadening male/inbound demand are incremental tailwinds to traffic and revenue .
  • Capital actions (buybacks/dividends, founder block, issuance/warrant exchange) could improve liquidity and valuation; monitor announcements as potential stock catalysts .
  • International expansion (Asia hub via AHH, US clinics/M&A) provides optionality; execution milestones (clinic openings, M&A) will be key for medium-term growth .
  • Competitive shakeout continues; SBC’s pricing and fee strategies aim to support franchisee viability and sustain market leadership in aesthetic medicine .
  • With S&P Global consensus unavailable, traders should anchor on company-provided Q4 metrics and watch for near-term disclosures on guidance and capital actions to calibrate expectations.*

Sources Reviewed and Notes

  • We searched for an 8-K 2.02 earnings press release for Q4 2024 but did not find one in the available document set; instead, we relied on the Q4 2024 earnings call transcript and Q4/Q4+FY 2024 investor materials – –.
  • Prior quarter analysis used Q3 2024 10-Q and Q3 investor slides – –.
  • Consensus estimates were attempted via S&P Global but returned no data for SBC; therefore, beat/miss analysis against Street estimates is not provided. Values retrieved from S&P Global.*