AirSculpt Technologies, Inc. has reported a strong financial performance in the quarter ending March 31, 2024. The company’s condensed consolidated balance sheets and statements of operations show significant growth compared to the previous year. The company’s management remains optimistic about the future, with ongoing investments in research and development to drive innovation and expansion.
AirSculpt Technologies provides body contouring procedures under the patented AirSculpt® method. As of May 10, 2024, the company operates 27 procedure centers across 18 states, Canada, and the UK, up from 23 centers at the end of Q1 2023.
In Q1 2024, AirSculpt performed 3,746 procedures and generated $47.6 million in revenue, compared to 3,640 procedures and $45.8 million in revenue in Q1 2023. This represents a 4% increase in revenue year-over-year.
AirSculpt’s revenue comes from its AirSculpt® procedures. The company does not accept payments from insurance companies or government payers - all procedures are self-pay.
In Q1 2024, revenue grew by 3.9% to $47.6 million compared to $45.8 million in Q1 2023. This growth was driven by the addition of 4 new procedure centers, expanding AirSculpt’s footprint.
On a same-center basis, Q1 2024 revenue declined by 10.2% year-over-year. AirSculpt attributes this decline to weaker performance across the aesthetic industry, especially impacting more price-sensitive customers.
Cost of Service remained flat at $18 million in Q1 2024 compared to the prior year. As a percentage of revenue, Cost of Service improved from 39.3% in Q1 2023 to 37.9% in Q1 2024.
SG&A Expenses declined by 34% year-over-year, from $23.9 million to $15.8 million. This was primarily driven by a reversal of $10.4 million in stock compensation expense related to performance stock units where vesting targets are now deemed unachievable. Excluding this reversal, SG&A increased year-over-year due to higher marketing and corporate overhead costs as AirSculpt expands its center footprint.
AirSculpt achieved net income of $6 million in Q1 2024, compared to essentially break-even in the prior year period. This improvement was driven by the reversal of performance stock unit expense mentioned above.
Excluding various adjustments, Adjusted Net Income declined from $4.9 million in Q1 2023 to $1.9 million in Q1 2024. Similarly, Adjusted EBITDA declined from $9.5 million (20.6% margin) to $7.3 million (15.4% margin).
As of March 31, 2024, AirSculpt had:
In Q1 2024, the company generated $3.4 million in cash from operations, lower than $6.2 million in the prior year due to higher investment in sales and marketing.
AirSculpt invested $1.6 million in capital expenditures for existing clinic expansions and new clinic openings. The company also made $1.1 million in debt principal payments during the quarter.
AirSculpt plans to continue expanding its national footprint, targeting de novo clinic openings and additional procedure rooms at existing clinics.
The company expects expenses related to sales & marketing and corporate overhead to increase as clinic expansion continues. However, these expenses are expected to decrease as a percentage of revenue over time.
Weaker aesthetic industry performance has impacted AirSculpt’s same-center sales growth. Management will monitor performance and adjust sales & marketing investment accordingly.
AirSculpt’s cash from operations and available debt facility provide adequate liquidity for working capital, capital expenditures, and debt service for at least the next 12 months.
Let me know if you need any clarification or have additional questions on the analysis! I aimed to summarize the key points in straightforward language for a general audience.