SkinHealth Systems Inc.

Good day, everyone, and welcome to today's Beauty Health Company first quarter 2025 earnings call. At this time, all participants are in a listen-only mode. Later, you will have the opportunity to ask a question during the question and answer session. You may register to ask a question at any time by pressing the star and 1 on your telephone keypad. You may withdraw yourself from the queue by pressing star and 2. Please note this call is being recorded, and I will be standing by if you should need any assistance. And it's now my pleasure to turn the conference over to Norberto Aja, Investor Relations.

Norberto Aja, Thank you, operator, and good afternoon, everyone. Thank you for joining the Beauty Health Company's conference call to review our first quarter 2025 results. We released our results earlier this afternoon, which can be found on our corporate website at beautyhealth.com. Joining me on the call today is Beauty Health's Chief Executive Officer, Marla Beck, along with our Chief Financial Officer, Mike Monahan. Before we begin, I would like to remind everyone of the company's safe harbor language. Management may make forward-looking statements, including guidance and underlying assumptions. Forward-looking statements are based on expectations and involve risks and uncertainties that could cause actual results to differ materially. Listeners are cautioned not to place undue reliance on any forward-looking statements. For a further discussion of risks related to our business, please see the company's filings with the SEC. This call will present non-GAAP financial measures. A reconciliation of these non-GAAP financial measures to the most comparable GAAP measures are in the earnings press release furnished to the SEC and available on our website. Following management's prepared remarks, we will open the call for a question and answer session. With that, I would now like to turn the call over to our CEO, Marla Beck. Please go ahead, Marla.

Marla Beck Thank you, Norberto, and good afternoon, everyone. I appreciate you joining us to review our first quarter results. I'm pleased to report a strong start to the year. We exceeded our revenue and adjusted EBITDA guidance and continue to build momentum across our key strategic priorities. These results reflected disciplined execution of our transformation strategy and the power of our recurring revenue model. Since taking the helm as CEO, my focus has been clear. stabilize operations, reignite innovation, and return beauty health to sustainable, profitable growth. Our first quarter results reflect this momentum with strong consumable sales across all regions and notable improvements in key metrics, including gross margin and bottom line profitability. Despite continued macro pressure on equipment sales, we exceeded revenue expectations at $69.6 million above the high end of our guidance and delivered over $7 million of adjusted EBITDA. This achievement was driven by a favorable mixed shift toward high margin consumables, better inventory management, and operational cost discipline. Consumables grew over 8% and now represent over 70% of our revenue. Total active devices in the field increased to over 35,000 units versus approximately 32,500 units at the end of Q1 2024, highlighting the demand for hydrafacial devices and medical aesthetics practices. Looking ahead to the rest of 2025, our strategic focus remains anchored on three priorities. enhancing commercial execution, accelerating science-backed innovation, and deepening provider partnerships. Our first priority is enhancing commercial execution. We're beginning to see traction from our improved go-to-market approach. This includes our refined sales structure, enhanced pricing flexibility, and tools to drive smarter, faster execution. We are generating results using greater analytical discipline, particularly in our direct markets. In China, the transition to a third-party distribution model is already underway, preserving access to a high-growth market while simplifying operations and lowering capital intensity. We've also opened our device portfolio to more flexible pricing and product options, leading to increased demand, especially for non-Sendayo units, which represented 36% of system sales in the first quarter. Operationally, we completed the consolidation of our production in the U.S. in the fourth quarter, a move that enhances quality, increases agility, and most significantly reduces tariff exposure. These strategic shifts are improving execution, lowering complexity, and positioning us to scale more efficiently. Our second priority is accelerating science-backed innovation. Innovation remains central to our MedTech Meets Beauty positioning. We're reigniting our pipeline with clinical rigor and consumer relevance. The HydroLock HA booster launched in the second half of 2024 marked the most successful branded booster launched in our history. Building on that momentum, we're preparing to launch the new hydrophilic booster with our proprietary PEP9 complex in June, targeting signs of aging, a top skin concern among consumers. Later this year, we'll introduce three new treatment tips, one for the lip area and two more to extend our proprietary care of youth scalp solution. Our back bar initiative as part of our wrap the treatment room strategy is another exciting milestone. These skin care products that can be used as part of our in-room hydrafacial services will complement treatments, improve outcomes, and increase provider revenue potential. The back bar rollout begins in the second half of this year. And to expand beyond the treatment room, we're developing a dedicated skincare line, further strengthening our consumer-facing offering. Each of these innovations is grounded in clinical validation, reinforcing hydrafacial leadership, and science-backed aesthetics. Our third priority is deepening provider partnerships. Strong provider relationships are foundational to our growth. To support this, we have a dedicated business development team that partners with our providers to drive their revenue growth. In the first quarter, U.S. national accounts were a highlight with strength in the medical sector, especially med spas, dermatology, and wellness providers. We are building on this momentum with the relaunch of our U.S. loyalty program expected in Q3 2025. The program is designed to reward provider commitment and boost engagement throughout our ecosystem while driving incremental sales. We're also investing in brand and consumer engagement. A refreshed campaign launching this year will elevate awareness, spotlight our innovation pipeline, and drive traffic to providers. In summary, Q1 reflects solid execution of our transformation strategy. We exceeded both internal and external expectations, saw continued growth in consumables, improved profitability, and made strategic moves to strengthen our operational model. We're focused on driving sustainable margin expansion and delivering against our three strategic pillars, commercial excellence, innovation, and provider engagement to unlock long-term value. Mike, over to you.