AirSculpt (AIRS) 8 Nov 24 2024 Q3 Earnings call transcript

In AirSculpt Technologies' third quarter earnings call for fiscal 2024, the company reported a solid performance in line with their expectations, despite a challenging macro environment. Dennis Dean, Interim Chief Executive Officer and Chief Financial Officer, led the call, focusing on three key initiatives: improving lead conversion, ensuring the success of recent de novo center openings, and managing costs.

Financial Performance and Guidance

AirSculpt's revenue for the third quarter totaled $42.5 million, down 9.1% year-over-year. This decrease was attributed to lower case and lead volume due to the challenging consumer spending environment. The company's adjusted EBITDA was $4.7 million, or 11% of revenue, compared to $9.1 million, or 19.4% of revenue, in the previous year's quarter. This decline was mainly due to the costs related to new de novo openings.

Strategic Initiatives

The company's efforts to convert leads into consultations have shown some improvement, especially in the context of a prolonged period of macro challenges. AirSculpt's approach to targeting advertising and engaging historical leads has contributed to this progress. The company has also introduced new payment options to provide consumers with greater flexibility, which could potentially boost revenue and improve margins.

AirSculpt's new de novo centers have been performing well, with each of the U.S. centers that have been open for a year exceeding their year 1 revenue objectives. The company's strategy of recruiting seasoned teams has proven effective in driving productivity from these centers. In the third quarter, AirSculpt opened new centers in Kansas City, Columbus, Deerfield, and Birmingham, with the fifth and final opening expected in White Plains, New York soon. The company's pipeline for new centers remains strong, with plans to operate over 100 centers in the medium term.

Cost Management

AirSculpt is focused on achieving cost savings as part of its back-to-basics strategy. The company has identified and achieved half of its planned $1 million savings goal for the back half of the year. This translates to an annualized savings of $2 million. AirSculpt plans to prudently invest these savings into higher-return marketing activities to increase leads and case growth.

Key Takeaways

AirSculpt Technologies' third quarter earnings call highlighted the company's resilience in the face of a challenging macro environment. The company's focus on improving lead conversion, ensuring the success of new de novo centers, and managing costs is positioning AirSculpt for future growth. The company's strong performance from existing centers and the promising outlook for new centers underscore AirSculpt's strategic initiatives and execution capabilities.

Looking ahead, AirSculpt is well-positioned to navigate the dynamic macro environment with a clear focus on operational excellence and strategic growth. The company's pipeline of new centers, cost savings initiatives, and targeted marketing efforts bode well for AirSculpt's future prospects. Investors and stakeholders will be closely watching AirSculpt's progress in implementing its strategic priorities and achieving its growth objectives.