Executive Summary

Q2 2025 revenue of $78.2M and adjusted EBITDA of $13.9M beat internal expectations; gross margin expanded sharply to 62.8% GAAP and 65.9% adjusted, driven by lower inventory charges and mix shift to consumables .
The company raised FY 2025 guidance to net sales of $285–$300M (from $270–$300M) and adjusted EBITDA of $27–$35M (from $15–$25M); Q3 2025 guidance set at net sales of $65–$70M and adjusted EBITDA of $2–$4M, reflecting seasonality and tariff/R&D headwinds .
Consumables represented 71.3% of revenue (55.8/78.2) with strong booster adoption; active install base reached 35,193 units, up from 33,504 YoY; devices sold were 957 as macro pressures persisted .
Key stock reaction catalysts: FY guidance raise, margin expansion, debt restructuring extending maturities (exchange into $250M 7.95% notes due 2028), and recurring consumables strength amid macro softness in capital equipment .

What Went Well and What Went Wrong

What Went Well

Margin expansion: GAAP gross margin rose to 62.8% (from 45.2% YoY); adjusted gross margin to 65.9% (from 49.4% YoY), due to lower inventory-related charges and favorable consumables mix .
Recurring revenue resilience: Consumables net sales grew modestly to $55.8M and comprised over 70% of revenue; CEO: “We exceeded revenue and Adjusted EBITDA expectations…consumables driving more than 70% of revenue” .
Innovation traction: HydraFillic with Pep9™ emerged as top-performing booster; HydraLock adoption continued to rise; management emphasized clinically validated, branded consumables strategy .

What Went Wrong

Capital equipment softness: Delivery systems net sales fell to $22.4M (from $35.2M YoY) with 957 devices sold (vs. 1,285 YoY) amid macro headwinds and ASP pressure .
Regional weakness: APAC revenue declined sharply on China channel transition (direct to distributor); consolidated APAC net sales fell to $7.7M (from $13.6M YoY) .
Tariff impact and churn: CFO flagged ~$4–$5M tariff costs concentrated in H2 and higher churn during Q2, requiring targeted reactivation initiatives; EBITDA step-down expected in H2 on tariffs, refurbished mix, and incremental R&D .

Financial Results

Consolidated Financials vs Prior Periods and YoY

Metric	Q2 2024	Q4 2024	Q1 2025	Q2 2025
Revenue ($USD Millions)	$90.6	$83.5	$69.6	$78.2
GAAP Gross Margin (%)	45.2%	62.7%	69.8%	62.8%
Adjusted Gross Margin (%)	49.4%	67.1%	71.9%	65.9%
Net Income ($USD Millions)	$0.2	$(10.3)	$(10.1)	$19.7
Diluted EPS ($USD)	$(0.10)	$(0.08)	$(0.08)	$0.03
Adjusted EBITDA ($USD Millions)	$(5.2)	$9.0	$7.3	$13.9

Interpretation:

Sequential revenue improved Q1→Q2 (69.6→78.2) but remained below prior year (Q2 2024: 90.6); margins normalized from Q1’s peak as mix and tariffs evolve .
Adjusted EBITDA improved sequentially and YoY on cost discipline and gross margin gains .

Q2 2025 Actual vs Wall Street Consensus (S&P Global)

Metric	Consensus	Actual	Surprise
Revenue ($USD)	$74.659M*	$78.187M	+$3.528M (beat)*
Primary EPS ($USD)	$(0.02)*	$0.218*	+$0.238 (beat)*
EBITDA ($USD)	$3.595M*	$2.701M*	−$0.894M (miss)*

Values marked with * retrieved from S&P Global. Company-reported adjusted EBITDA was $13.9M , which differs from S&P’s EBITDA definition; the apparent EBITDA “miss” vs S&P reflects metric methodology differences (GAAP/normalized vs company adjusted).

Segment and Regional Breakdown (Q2 2025)

Segment/Region	Net Sales ($USD Millions)
Delivery Systems – Americas	$13.6
Delivery Systems – APAC	$2.5
Delivery Systems – EMEA	$6.3
Total Delivery Systems	$22.4
Consumables – Americas	$38.5
Consumables – APAC	$5.2
Consumables – EMEA	$12.2
Total Consumables	$55.8
Total Net Sales – Americas	$52.0
Total Net Sales – APAC	$7.7
Total Net Sales – EMEA	$18.4
Total Net Sales	$78.2

KPIs and Operating Metrics

KPI	Q4 2024	Q1 2025	Q2 2025
Delivery Systems Sold (units)	1,087	862	957
Active Install Base (units)	34,735	35,014	35,193
Consumables Share of Revenue (%)	67.9% (56.7/83.5)	71.0% (49.4/69.6)	71.3% (55.8/78.2)
Average Device ASP ($USD per unit)	N/A	~$23,455	~$23,362

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Net Sales	Q2 2025	$71–$76M	Actual $78.2M (beat vs guide)	Beat vs guidance
Adjusted EBITDA	Q2 2025	$2–$4M	Actual $13.9M	Beat vs guidance
Net Sales	Q3 2025	N/A	$65–$70M	New
Adjusted EBITDA	Q3 2025	N/A	$2–$4M	New
Net Sales	FY 2025	$270–$300M	$285–$300M	Raised (low end)
Adjusted EBITDA	FY 2025	$15–$25M	$27–$35M	Raised (both ends)

Assumptions noted: H2 tariffs and ASP pressure; incremental R&D $4–$5M; seasonality; China distributor transition .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q4 2024, Q1 2025)	Current Period (Q2 2025)	Trend
Capital equipment demand	Persistent macro drag; devices down YoY	Devices remain pressured; ASP under pressure; refurbished mix elevated	Soft, cautious
Consumables & boosters	Hydralock HA strong launch; consumables up across regions	HydraFillic with Pep9™ fastest booster; double-digit global booster growth; consumables +71% mix	Strengthening
China strategy & tariffs	Production onshored to U.S.; China move to distributor starting Q2; ~$5M 2025 tariff impact expected	Transition completed; H2 tariff impact projected ~$4–$4.5M; pass-through limited; APAC decline	Transition, H2 headwinds
Sales org & CRM	Strengthened sales org; go-to-market improvements	New CRO; data-driven pipeline; customer engagement program rollout H2	Execution focus
R&D and product cadence	Backbar and tips planned; skincare early 2026	Backbar Q4’25 launch; hero skincare Q4’25; booster cadence 1–2/year	Pipeline building
Marketing spend & ROI	Shift to provider-focused marketing; hold S&M % of sales	S&M near 30% of revenue in Q2; stable dollars; ROI discipline	Efficient, targeted
Regional trends	APAC weak; U.S medical strong; day spa/plastic surgery softer	EMEA double-digit consumables growth; Americas boosters up 8% YoY; APAC decline on China model	Mixed by region

Management Commentary

CEO: “We exceeded revenue and Adjusted EBITDA expectations and raised the full year outlook, driven by demand for consumables sales and meaningful gross margin improvement…With over 35,000 active devices now in the field and consumables driving more than 70% of revenue, we’re seeing the power of our recurring revenue model” .
CFO: “Gross margins…improving significantly versus the prior year period…Total operating expenses…decreased by 17.8%…Adjusted EBITDA of $13.9M was above our implied guidance” .
CEO on innovation: “Hydrophilic with PEP9…our most successful booster launch to date exceeded thirty day targets and outpaced HydraLock strong debut” .
CFO on guidance drivers: “We’re projecting gross margin down in the second half…more Elites and Syndeo factory refurbished devices…tariff impact of $4.5M…meaningful R&D investments in the back half” .

Q&A Highlights

Guidance caution: Q3 guide reflects seasonality, ASP pressure, tariffs, and incremental R&D; FY raised as H1 outperformance offsets H2 headwinds .
Churn and installed base: Churn elevated in Q2; management launching targeted reactivation plans; install base still grew to 35,193 .
Pricing: Consumables price increase implemented July 3; limited pushback; partial offset to tariffs .
China distributor economics: 30–40% typical distributor discount; lower gross margin offset by minimal OpEx, viewed as a transition year .
Channel performance: Non-medical single-room/day spas showed growth due to more accessible device pricing; medical/med spa strong booster adoption .

Estimates Context

Q2 2025 beats vs S&P Global consensus: Revenue $78.187M vs $74.659M*; Primary EPS $0.218* vs $(0.02). EBITDA shows a “miss” vs S&P (actual $2.701M vs $3.595M*) due to differing definitions versus company-adjusted EBITDA of $13.9M . Values retrieved from S&P Global.
Expect estimate revisions: FY net sales and EBITDA likely revised upward reflecting raised guidance; near-term margin assumptions may moderate on H2 tariffs and refurbished mix .

Key Takeaways for Investors

Recurring consumables strength and margin expansion underpin improved profitability despite ongoing capital equipment softness; focus shifts to durable, higher-quality revenue .
FY guidance raised on H1 execution; Q3 outlook conservative given tariffs, ASP pressure, and R&D investment—watch H2 gross margin trajectory .
Innovation cadence (HydraFillic, Backbar, skincare) and provider-centric marketing are key to sustaining consumables growth and increasing utilization .
China distributor transition reduces OpEx and strategic complexity but weighs on APAC revenue/GM near term; 2025 is a transition year there .
Debt restructuring extends maturities (new $250M 7.95% notes due 2028) and enhances flexibility; inventory down to $59.2M supports improved working capital .
For trading: near-term catalysts include continued booster momentum, Backbar launch in Q4’25, and evidence of churn reduction; risks include tariff escalation and device ASP pressure .

Additional Relevant Press Releases (Q2 window)

Milestone achievement: Surpassed 35,000 Hydrafacial devices worldwide, reinforcing brand leadership and recurring revenue model scale .
Earnings schedule: Announced Q2 results release and call timing (July 24 notice) .

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