AirSculpt Technologies, Inc.

Good morning, ladies and gentlemen, and welcome to the Ascolb Technologies, Inc.' 's third quarter 2025 earnings call. All participants will be in listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please key star and then zero on your telephone keypad. Please note that this event is being recorded. I want to hand the call over to Alison Malkin of ICR. Please go ahead.

Good morning, everyone. Thank you for joining us to discuss Airskill Technologies' results for the third quarter of fiscal 2025. Joining me on the call today are Yogi Jasnani, Chief Executive Officer, and Dennis Dean, Chief Financial Officer. Before we begin, I would like to remind you that this conference call may include forward-looking statements. These statements may include our future expectations regarding financial results and guidance, market opportunities, and our growth. Risks and uncertainties that may impact these statements and could cause actual future results to differ materially from currently projected results are described in this morning's press release and the reports we will file with the SEC, all of which can be found on our website at investors.airsoft.com. We undertake no obligation to revise or update any forward-looking statements or information except as required by law. During our call today, we will also reference their non-GAAP financial measures. We use non-GAAP measures in some of our financial discussions as we believe they more accurately represent the true operational performance and underlying results of our business. A reconciliation of these measures can be found in our earnings release as filed this morning and in our most recent thank you, which will also be available on our website. For today's call, Yogi will begin with an overview of our third quarter and share an update on our strategic priorities. Then Dennis will review our financial results in more detail and provide our outlook. With that, I'll turn the call over to Yogi.

Thank you, Alison, and good morning, everyone. During the quarter, we made strong progress on our key initiatives that focused on new growth opportunities, margin improvement, and debt reduction. While third quarter revenue was lower than anticipated, this is reflective of timing instead of trajectory of our business. Most significantly, we are setting the stage to realize a broader market opportunity to provide body-contouring solutions that address the unwanted side effects related to GLP-1 use. This represents a long-term growth engine for S-Cult. Our capabilities, scale, and brand uniquely position us to capture this major opportunity in aesthetic surgery, which we are calling the GLP-1 transformation. To that end, we have expanded and refined our strategy to focus on three key areas. introducing new services to capture the GLP-1 opportunity, enhancing our sales and marketing strategy, and financial discipline in the areas of margin improvement and capital allocation. First, we are introducing new services to capture our GLP-1 market opportunity, which is broader and more durable than I initially expected. We see our skin tightening pilot programs as part of a long-term opportunity that is highly complimentary with our core body contouring business. GLP-1 medications have fundamentally reshaped how consumers approach weight loss and wellness, and we are seeing this change is beginning to create demand for aesthetic procedures that align to our existing brand and capabilities. In the long term, we believe these procedures can account for a significant portion of AirSkull's revenue and drive meaningful growth. For context, global GLP-1 prescriptions have grown at roughly 38% annually between 2022 and 2024, with total sales expected to reach $100 billion by 2030, according to a study from McKinsey & Company. GLP-1 therapies are reshaping the aesthetics landscape with 63% of GLP-1 patients seeking aesthetic treatments post-use, representing new consumers to the market. Equally encouraging is that nearly two-thirds of patients that have lost 11 to 30% of their body weight have multiple concerns with GLP-1 medication side effects, driving growth in patient needs for skin tightening and overall reshaping after significant weight loss. At S-CULP, we have begun to serve this patient base as our protocols, scale, and brand trust give us a meaningful head start to further capitalize on this opportunity. While it's still early, in our pilots, we are seeing higher conversion rates amongst GLP-1 patients. The first step toward realizing this potential was a successful pilot of skin tightening that began in Q2 and has recently been expanded to multiple centers. While we saw a lift in tightening services in the third quarter, we found that many clients coming in for this procedure have loose skin beyond what skin tightening can address. As a result, we have begun to add new procedures to address loose skin when skin tightening alone is not sufficient thus expanding our total addressable market. This represents a natural extension for us as the scale player in the space. Looking ahead, we will continue to invest to capture this meaningful opportunity. Our second area of focus is enhancing our sales and marketing strategy. In Q3, we adapted our marketing spend to align with the moderation in our revenue trend and prioritized initiatives that drives higher conversion. As we move forward, our marketing approach will balance near-term lead generation with longer-term brand building with a more diversified media mix, including targeted influencer campaigns and television advertising. This is designed to strengthen lead quality, improve conversion, and deepen our focus on the affluent consumer base. With our sales team, we are implementing new training modules and tools as we remain focused on improving conversion. Finally, we have also improved financing options for our patients. Our third area of focus is maintaining strong financial discipline, both in our margins and capital allocation. Year-to-date, we have generated more than $3 million in annualized cost savings net of investments in new growth initiatives. We expect to continue unlocking incremental value from our current operations, which we anticipate will expand our operating margin going forward. Turning to capital allocation, we have repaid nearly $18 million of our debt year-to-date. Debt repayment continues to be the primary focus of our capital allocation strategy in the near term. And beyond that, we will continue to invest in growth initiatives, including new procedures. In Q3, we made the decision to close our center in London. As part of a strategic review of all our centers, we saw this was the only unprofitable center and would have required significant investment to turn around. Instead, we have chosen to focus our resources on delivering growth who are North America locations where we continue to see considerable opportunity. We are updating our annual outlook and expect 2025 revenue of approximately $153 million as compared to our previous guidance in the range of $160 million to $170 million. We expect 2025 EBITDA of approximately $16 million. The bottom end of our guidance of $16 million to $18 million. For the fourth quarter, we are seeing improving same-store sales performance compared to a year-to-date trend. Additionally, our implied fourth quarter EBITDA guidance highlights stronger margins both sequentially and year-over-year. Turning to personnel news, This morning, we announced Michael Arthur will be joining Airscult as Chief Financial Officer starting January 2026. He assumes the CFO position from Dennis Dean, who will retire, as we had previously announced, following a transition period. Michael is a seasoned executive who brings public market experience and has led financial organizations through growth, complexity, and change. I am confident he will add meaningful strength to our leadership team. Over the next few weeks, Dennis will work closely with Michael to ensure a seamless transition, and I'm looking forward to working with him as we position AirSculpt to realize its true growth potential. Secondly, on Wednesday, we filed an 8K announcing that Dr. Aaron Rollins has resigned from the board citing personal reasons. He confirmed this was not due to any disagreements between him and the company, its management, or the board on any matter related to the company's operations, policies, or practices. We thank Aaron for all his contributions to Airskull and wish him all the best. In summary, we have expanded and refined our strategy to focus on three key areas. Introducing new services to capture the GLP-1 opportunity, enhancing our sales and marketing strategy, and financial discipline in the area of margin improvement and capital allocation. While near-term revenue reflects a period of transition, a growing suite of procedures, balanced marketing strategy, and disciplined execution give us the confidence in our long-term trajectory. And with that, I will now pass it over to Dennis.