SkinHealth Systems Inc.

Good day and welcome to the Beauty Health Company Second Quarter 2025 earnings conference call. All participants will be in the listen only mode. Should you need assistance, please signal a conference specialist by pressing the star keys followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on touch tone four. To withdraw your questions, please press star then two. Please note, this event is being recorded. I would now like to turn the conference over to Roberto Aja, Investor Relations. Please go ahead.

Thank you, operator, and good afternoon. Thank you for joining the Beauty Health Company's 2025 Second Quarter Conference call. Our earnings press release was issued this afternoon and is available on our investor relations site at beautyhealth.com. Joining me on the call today is Beauty Health's Chief Executive Officer, Marla Beck, along with her Chief Financial Officer, Michael Monahan. Before we begin, please note that today's discussion includes forward looking statements, including guidance and underlying assumptions, which are subject to risks and uncertainties. Actual results may differ materially. For a further discussion of risks related to our business, please refer to our SEC filings. We may also reference non-GAAP measures, with reconciliations available in our 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.

Thank you, Norberto. Good afternoon, everyone. Q2 marked another strong quarter, demonstrating the momentum of our transformation strategy and disciplined execution. We exceeded both revenue and adjusted EBITDA guidance for the third consecutive quarter, driven by our consumables revenue, margin expansion, and operational improvements. During the quarter, we successfully launched the hydrophilic with pep9 booster, which has quickly become our top performing hydrophacial branded booster. We expanded to over 35,000 active devices globally. We saw significant gross margin improvement, GAAP at .8% and adjusted at 65.9%. We completed our transition to a distributor model in China, and we restructured our debt. These achievements fueled 78.2 million in revenue and 13.9 million in adjusted EBITDA, both above expectations. Our consumables business, now over 70% of revenue, remains strong, demonstrating the impact of our Razor, Razor Blade model. A favorable mix, judicious cost control, and inventory optimization continue to enhance profitability. We reduced operating expenses by nearly 18%, lowered inventory, and closed the quarter with 212 million in cash, following a strategic debt restructuring. While we've made significant progress on adjusted EBITDA and cash flow, device sales remain pressured due to macroeconomic headwinds. That said, we're confident in the long-term opportunity and in our ability to improve performance through strategic execution and innovation. Over the past year, we've taken several steps to drive equipment sales growth in the future. These include a strength and sales organization with new leadership at every level, including a new chief revenue officer to instill a data-driven approach to pipeline management and execution, an upgraded CRM to better leverage field and lead data to target new providers, and improved alignment between sales and marketing around shared initiatives to expand our global presence and footprint. Our strategy continues to center on three pillars, commercial execution and operational rigor, innovation acceleration, and provider-centric growth. Regarding commercial execution, our Razor-Razor Blade model continues to scale with consumables driving recurring revenue and margin expansion. Providers consistently see strong ROI from hydrofacial devices evidenced by exceptional loyalty. Over one-third of US providers have partnered with us for over five years, contributing significantly to consumables revenue. We ended the quarter with over 35,000 active devices up from 33,500 last year. Our Good Better Best offering is resonating with Cindeo sales accounting for two-thirds of device sales and non-Cindeo sales accounting for the remaining one-third. Booster sales in the Americas rose over 8% -on-year, led by the hydrophilic booster launch, a booster clinically proven to address fine lines and wrinkles. This demonstrates the end consumer demand for our premium treatments. We plan to build on this momentum with more innovation in the back half of 2025. In EMEA, increased booster adoption and expansion in the medical channel are positive signs for us to capture future market share. In addition, during the second half of the year, our global commercial teams will begin rolling out a new strategic engagement program to deepen account relationships and drive growth. Moving to science-based innovation, through our MedTech meets Beauty strategy, we're advancing clinically validated innovation, building on our 28-year legacy. Hydrophilic with PEP9, our most successful booster launch to date, exceeded 30-day targets and outpaced HydroLock HA's strong debut. HydroLock adoption and penetration continues to rise. A third of US providers have now purchased HydroLock HA boosters. The performance of these two booster launches demonstrates that our strategy to invest in hydrofacial-branded, clinically-backed consumables is resonating with our providers and the end consumers. We're continuing to implement our -the-treatment room strategy to support our providers in enhancing patients and consumer outcomes and generating revenue. This includes the launch of hydrofacial backbar products in the fourth quarter of this year, aimed at boosting in-office treatment results and provider revenue. A new retail skincare line debuting with a single hero product also in the fourth quarter of this year, along with more SKUs planned for 2026. And upcoming launches of two new scalp tips for Caravives and a lip tip, both now expected in 2026. This -the-treatment room strategy includes boosters, backbar and skincare, which work together to enhance treatment outcomes and extend the benefits of a hydrofacial treatment. The strategy helps to deepen engagement, increase utilization and drive revenue for our providers. All of our innovation remains grounded in clinical rigor and will be supported by our talented team of business development managers and our extensive provider network, all of which are part of our competitive edge in the physician-dispensed topicals market. As it relates to strengthening provider partnerships, providers are the backbone of our success. In the U.S., our largest market, we're seeing continued strength in national accounts. Excluding Sephora, consumable sales in the first half of 2025 increased by .1% over last year, partially driven by double-digit growth from our largest national accounts. We're also seeing continued traction in Europe, evidenced by double-digit growth in consumables this quarter. To support our providers, we're enhancing business development tools and preparing to relaunch our loyalty program in early 2026. The redesign aims to reward long-term commitment and drive incremental sales. Given the recent BCGD report that shows expected compounded annual growth in the specialty facial sector to be 7% through 2029, we are uniquely positioned with our device-installed base and recurring revenue consumables model to drive profitable growth. Hydrofacial is one of the most in-demand skin health treatments globally, with 5 million treatments delivered in 2024, over 175 patents, a 96% worth it rating on RealSelf, and a net promoter score of 52, the second highest in our industry. We're also the second most recognized facial treatment in the U.S. and the number one brand driving new patient traffic to med spas in our category. In summary, Q2 highlights the strength of our recurring revenue model, the growing reach of our brand, and the meaningful progress of our transformation. We're grateful to our global team and our provider partners. Our focus remains on driving sustainable growth and long-term value creation. Now I'll hand it over to Mike.