SkinHealth Systems Inc.

Good day and welcome to the Beauty Health Company 2025 3rd Quarter Earnings Conference Call. All participants will be in listen-only mode. If you need assistance, please signal a conference specialist by pressing the star key followed by 0. After today's presentation, there will be an opportunity to ask a question. To ask a question, you may press star then 1 on a touch-tone phone. To withdraw your question, please press star, then two. Please note, this event is being recorded. I would now like to turn over to Roberto Aja, Investor Relations. Please go ahead.

Thank you, Operator, and good afternoon, everyone. Thank you for joining the Beauty Health Company's conference call to review our third 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, Pedro Mala, along with her Chief Financial Officer, Mike Monaghan. 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 further discussion of these 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 measure It is available in the earnings press release, which was furnished to the FCC and available on the 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, Pedro Mala. Please go ahead, Pedro.

Thank you, Norberto. So good afternoon, everybody, and thank you for joining us today. Before I get into our quarterly results, let me by start thanking Marla Burke for her leadership during an important transition period. The Beauty Health team did a fantastic job stabilizing the business and positioning it for the next phase of growth. This next phase is actually one of the reasons why I chose to lead Beauty Health We have an incredible opportunity to leverage our hydrofacial device platform and expand it into a category-leading ecosystem of skin health technology solutions. This is a unique company with a proven and resilient razor and blade business model, which is anchoring recurring high-margin consumables and supported by a global network of providers who believe in our technology and in the outcomes of our treatments that are delivered every day to thousands of people around the world. Beauty Health is also well positioned to lead the skin health category as we continue to see the market shifting towards a less invasive, increasingly personalized, and more science-backed procedures and treatments. I say well positioned because if we look across the landscape, very few companies are capturing the recurring economics behind procedure volumes. And this is where beauty health stands apart, because we participate on both sides of the equation, the capital equipment and the consumables, which creates a self-reinforcing flywheel of predictable and profitable revenue. So since I joined beauty health a month ago, I've been very impressed by the passion and the commitment of our teams around the world and by the loyalty of our customers and providers. But as we all know, passion alone does not create shareholder value. So we need to make sure that this passion is harnessing with a clear strategy and operational excellence and the consistent top line growth and financial performance. So we are going to go and over-index our capital and attention in four different areas. First, our priority will be protecting and growing our hydrofacial install base of over 35,000 devices worldwide, because we know that for every device we place, that will drive years of high-margin consumable growth. Second, we will focus on driving consumable utilization. This is the engine behind our profitability. Consumables generate strong gross margins, so increasing device to consumable efficiency and usage across the install base needs to absolutely be a key focus area for us. Thirdly, We must keep innovating across both devices and consumable platforms, and we will do that by bringing to market superior clinical back products that meet our providers' needs and deliver the desired results for our customers. And fourth, we will continue to strengthen our operational discipline around commercial execution, cost control, margin expansion, supply chain, and quality. And this is an area where we already have done very good work and we will continue to focus on. So now, turning to our third quarter results. For Q3, total net sales were $70.7 million, down 10.3% year over year, slightly ahead of the high end of our forecast for the quarter. In our device segment, Q3 revenues were $20.8 million, a decrease of 24.6% year-over-year, primarily reflecting continued pressure on equipment sales globally and the impact of the China transition to a distributor partner. Looking at our consumable segment, Q3 revenues were $49.8 million, a decrease of 2.6% year over year, primarily reflecting the change in the China business model. If we net out the China impact, consumables sales will have actually increased modestly versus last year. So as a result, our consumable mix moved from 65% of net sales in Q3 of last year to 71% this quarter. Now looking from a portfolio perspective, we continue to deliver on our new product launches. Hydrolock HA and Hydrophilic with PEP9 boosters together contributed to 14% growth in the booster sales category this quarter. We also achieved significant milestone in operations. We are holding inventory below $60 million, which is the lowest in three years. And this is the result of the work the team has done to improve demand planning, forecasting, and production quality. In terms of Q3 adjusted gross margins, we landed at 68%, at a decline of approximately 150 bits from Q3 of last year. And this was driven primarily by lower average selling prices. as our distributed markets held a larger unit share of the overall equipment revenue year over year. Looking at an adjusted EBITDA, that was $8.9 million, up 11% from Q3 of last year, and reflects a tight control of cost and a solid operation execution. Now, looking ahead, we are confident in our outlook of raising adjusted EBITDA guidance for the remainder of the year, as well as the midpoint of our full-year revenue guidance. And that is because we are encouraged by the momentum we are building as we enter 2026. So with that, I'll turn the call over to Mike to walk you through our third quarter results in more detail.