Executive Summary

Q1 2025 delivered a clean top- and bottom-line beat versus guidance and consensus: revenue $69.6M vs S&P Global consensus $63.10M*, and S&P “Primary EPS” +$0.04 vs −$0.07*; company GAAP diluted EPS was −$0.08. Strength came from consumables (+8% YoY) and mix-driven, inventory-disciplined gross margin expansion to 69.8% (adjusted GM 71.9%) . Values retrieved from S&P Global.*
Adjusted EBITDA was $7.3M (10.4% margin), well above Q1 guidance of −$6 to −$4M and above internal expectations, aided by lower operating spend and improved margins .
FY25 guidance maintained for revenue ($270–$300M) but floor was raised for adjusted EBITDA to $15–$25M (from $10–$25M); Q2 revenue guided to $71–$76M and adjusted EBITDA to $2–$4M, with tariff headwinds and APAC/China transition weighing on outlook .
Strategic catalysts: production consolidation in the U.S. (reduces tariff exposure), China go-to-market shift to a distributor model in Q2, a “good-better-best” device strategy, and a pipeline including a PEP9 booster in June and backbar products in H2 2025 .

What Went Well and What Went Wrong

What Went Well
- Consistent execution on transformation: revenue above guidance ($69.6M) and adjusted EBITDA $7.3M as mix shifted toward high-margin consumables; management: “We exceeded our revenue and adjusted EBITDA guidance” .
- Material gross margin uplift (69.8% GAAP; 71.9% adjusted) on mix and better inventory management; CFO cited “disciplined demand planning,” reduced excess/obsolete charges and improved processes .
- Recurring engine resilient: consumables rose to $49.4M (+8.2% YoY) across all regions; active install base up to 35,014 (from 32,530), underscoring durable treatment demand .
What Went Wrong
- Capital equipment softness: delivery systems net sales fell to $20.2M and units sold declined 39%+ YoY to 862 amid macro pressure and financing constraints; APAC devices notably weak .
- APAC/China headwinds and tariffs: company expects ~+$5M cost in 2025 and reduced APAC consumables assumptions; guidance maintained on sales but more cautious regionally .
- Elevated opex in G&A on legal and restructuring; litigation-related costs ($6.9M) were a notable non-GAAP add-back in Q1 .

Financial Results

Overall P&L progression (oldest → newest)

Metric	Q3 2024	Q4 2024	Q1 2025
Net Sales ($M)	$78.8	$83.5	$69.6
Gross Margin (%)	51.6%	62.7%	69.8%
Adjusted Gross Margin (%)	69.5%	67.1%	71.9%
Net Loss ($M)	$(18.3)	$(10.3)	$(10.1)
Diluted EPS ($)	$(0.15)	$(0.08)	$(0.08)
Adjusted EBITDA ($M)	$8.1	$9.0	$7.3
Adjusted EBITDA Margin (%)	10.2%	10.8%	10.4%
Cash & Equivalents ($M)	$358.9	$370.1	$373.0

Q1 2025 regional and product mix (YoY comparison)

Category	Q1 2024	Q1 2025
Delivery Systems net sales – Americas ($M)	$18.3	$13.1
Delivery Systems net sales – APAC ($M)	$7.5	$2.0
Delivery Systems net sales – EMEA ($M)	$10.0	$5.1
Total Delivery Systems net sales ($M)	$35.8	$20.2
Consumables net sales – Americas ($M)	$32.0	$33.1
Consumables net sales – APAC ($M)	$4.5	$6.4
Consumables net sales – EMEA ($M)	$9.1	$9.9
Total Consumables net sales ($M)	$45.6	$49.4
Total Net Sales – Americas ($M)	$50.3	$46.3
Total Net Sales – APAC ($M)	$12.0	$8.3
Total Net Sales – EMEA ($M)	$19.1	$15.0
Total Delivery Systems Sold (units)	1,417	862

KPI snapshot

KPI	Q1 2024	Q1 2025
Total delivery systems sold (units)	1,417	862
Active install base (units)	32,530	35,014
Consumables net sales ($M)	$45.6	$49.4
Consumables as % of total revenue	56.1% (calc from )	71.0% (calc from )
Approx. device ASP (Q1 2025)	—	~$23,455 (management)

Q1 2025 vs S&P Global consensus

Metric	Actual	Consensus	Surprise
Revenue ($M)	$69.58	$63.10*	+$6.48M (Beat)*
Primary EPS ($)	+$0.04*	−$0.07*	+$0.11 (Beat)*
EBITDA ($M, S&P standardized)	−$5.86*	−$5.54*	−$0.32 (Miss)*

Values retrieved from S&P Global.*

Notes: Company-reported GAAP diluted EPS was −$0.08, while S&P “Primary EPS” reflects a normalized methodology; company-reported adjusted EBITDA was +$7.3M versus S&P standardized EBITDA at −$5.86M . Values retrieved from S&P Global.*

Guidance Changes

Outlook updates

Metric	Period	Previous Guidance	Current Guidance	Change
Net Sales	FY 2025	$270–$300M	$270–$300M	Maintained
Adjusted EBITDA	FY 2025	$10–$25M	$15–$25M	Raised (higher floor)
Net Sales	Q2 2025	—	$71–$76M	New
Adjusted EBITDA	Q2 2025	—	$2–$4M	New
Capex	FY 2025	—	~$10–$15M	New detail
Tariff cost impact	FY 2025	—	~+$5M cost assumed	New detail

Guidance outcomes (Q1 vs prior guide provided in March)

Metric	Period	Prior Guidance (issued 3/12)	Actual	Result
Net Sales	Q1 2025	$61–$66M	$69.6M	Beat
Adjusted EBITDA	Q1 2025	−$6 to −$4M	$7.3M	Beat

Earnings Call Themes & Trends

Topic	Q3 2024 (older)	Q4 2024 (prior)	Q1 2025 (current)	Trend
Manufacturing/onshoring	Decision to centralize production in Long Beach; exit China third-party manufacturing	—	Production consolidation completed in Q4; reduces tariff exposure and improves agility	Executed; structural tailwind
China GTM model	—	Plan to convert China to distributor in 2025	Transition underway; initial distributor shipments expected in Q2; APAC outlook tempered	Progressing; near-term headwind
Tariffs	—	FY25 guide assumed no deterioration incl. tariffs	2025 tariff cost estimate ~+$5M; impact greatest in H2 as inventory rolls	Emerging headwind
Consumables momentum	Hydralock HA launch; consumables growth	Consumables growth and GM expansion	Consumables $49.4M (+8.2% YoY); now >70% of revenue; APAC consumables up 42.6% YoY	Strong, recurring engine
Capital equipment	Lower equipment sales; macro pressures	Continued pressure on deliveries	Units 862 (−39%+ YoY); implementing “good-better-best”; non‑Syndeo 36% of Q1 system sales	Weak but strategy in place
Innovation pipeline	Hydralock booster launched	—	PEP9 booster June; three new treatment tips; backbar rollout H2; consumer skincare early 2026	Accelerating
Provider engagement	—	—	U.S. national accounts strong (med spas/derm/wellness); loyalty program relaunch in Q3 2025	Building
Opex/legal	—	Litigation-related costs in Q4	Litigation costs $6.9M add‑back in Q1	Elevated non‑GAAP add‑backs
Supply chain/inventory	—	—	Improved demand planning, lower write‑offs aided GM	Improving

Management Commentary

CEO Marla Beck: “We exceeded both revenue and adjusted EBITDA guidance, driven by gross profit growth and meaningful cost efficiencies… consumables revenue remained resilient, reinforcing the strength of our recurring revenue model” .
CFO Michael Monahan on margins: “Gross margins came in strong… disciplined demand planning… favorable mix towards consumable net sales and improved operational processes” .
On tariffs: “We expect the impact of tariffs to be approximately $5 million of additional cost in 2025… factored that estimate into our projections” .
On strategy: “Operationally, we completed the consolidation of our production in the U.S… reducing tariff exposure” and “We’ve opened our device portfolio to more flexible pricing… non‑Syndeo units represented 36% of system sales” .
On innovation: “We’re preparing to launch the new hydrophilic booster with our proprietary PEP9 complex in June… later this year… 3 new treatment tips… backbar initiative… and developing a dedicated skin care line” .

Q&A Highlights

Profitability drivers and cadence: Slight back-half improvement assumed, but macro uncertainty remains; initiatives include lower-priced equipment, improved sales execution, and innovation .
Consumer trends: Signature treatments strong (everyday routine), luxury treatments softer; med spa/derm/wellness channels healthy; day spa/plastic surgery channels softer .
Consumables/APAC: Hydralock booster drives traffic; APAC consumables improved with less discounting and targeted selling; APAC outlook tempered by tariffs .
Gross margin sustainability: Expect step-down from Q1 as equipment mix rises and tariffs flow through (more impact in H2) .
China distributor transition: Partner identified; transition progressing in Q2; tariff costs not fully passed through to providers/consumers yet .

Estimates Context

Versus S&P Global consensus, Q1 2025 revenue beat by ~$6.5M and S&P “Primary EPS” beat by $0.11; S&P standardized EBITDA modestly missed, while company’s adjusted EBITDA was +$7.3M. Coverage depth was thin (EPS based on 1 estimate; revenue on 8) . Values retrieved from S&P Global.*
Expect estimate revisions focused on: (a) higher FY25 adjusted EBITDA floor (from $10–$25M to $15–$25M), (b) modest Q2 revenue/EBITDA reflecting tariff/APAC pressure, and (c) gross margin normalization from Q1 highs as tariffs hit in H2 .

Financial Tables: Additional Detail

Q1 2025 GAAP detail (income statement excerpts)

Metric	Q1 2024	Q1 2025
Net Sales ($M)	$81.4	$69.6
Cost of Sales ($M)	$33.0	$21.0
Gross Profit ($M)	$48.4	$48.6
Operating Expenses ($M)	$65.4	$60.6
Loss from Operations ($M)	$(17.0)	$(12.0)
Net Loss ($M)	$(0.7)	$(10.1)
Diluted EPS ($)	$(0.10)	$(0.08)

Q1 2025 cash flow and balance sheet snapshots

Metric	Q1 2024	Q1 2025
Cash & Equivalents ($M)	$444.6	$373.0
Net Cash from Ops ($M)	$(16.9)	$3.0
Inventories ($M)	$—	$65.6 (Mar 31, 2025)
Convertible Senior Notes, net ($M)	$—	$553.0 (Mar 31, 2025)

Non-GAAP reconciliations (Q1 2025)

Metric	Q1 2024	Q1 2025
Adjusted Gross Margin (%)	63.4%	71.9%
Adjusted EBITDA ($M)	$0.4	$7.3
Adjusted EBITDA Margin (%)	0.4%	10.4%

Key Takeaways for Investors

Mix-led margin expansion and expense discipline drove a high-quality beat versus guidance and consensus; however, management explicitly telegraphed gross margin normalization as tariffs and mix shift back to equipment flow through, particularly in H2 .
Recurring consumables engine is resilient (>$49M; ~71% of revenue), supported by an expanding active install base (35,014), providing visibility even as capital equipment remains pressured .
FY25 revenue guide held ($270–$300M) while the adjusted EBITDA floor was raised to $15M, signaling confidence in profitability levers despite APAC/China pressure and tariffs (~+$5M cost) .
Strategic moves (U.S. production consolidation, China distributor transition, good-better-best devices, loyalty program, and new boosters/backbar) de-risk execution and expand the funnel for pull-through .
Near-term watch items: Q2 execution versus guide ($71–$76M revenue, $2–$4M adj. EBITDA), tariff pass-through ability, APAC/China consumables trends, and H2 gross margin cadence .
Product catalysts: June PEP9 booster and H2 backbar launch can drive provider traffic and consumables; national account strength (med spas/derm/wellness) supports mix quality .
Balance sheet remains liquid ($373M cash at 3/31/25) alongside $553M convertible notes; improved operating cash flow in Q1 supports flexibility for the transition period .

Footnote: S&P Global consensus and “Primary EPS/EBITDA” figures are starred and may differ from company GAAP and non-GAAP definitions. Values retrieved from S&P Global.*

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