Q3 2021 Beauty Health Co Earnings Call

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Greetings and welcome to the beauty health third quarter 2021 earnings conference call. At this time all participants are in a listen only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during todays conference. Please press star zero on your telephone keypad.

Speaker 1: and welcome to the Beauty Health Third Quarter 2021 earnings conference call. At this time, all participants aren't a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operators to send you in today's conference, please press star zero on your telephone keypad. As your reminder, this conference is being recorded. I would like to turn this conference over to your host, Ms. Don Frankfurt, managing director at ICR. Thank you, ma'am. You may begin your presentation.

A reminder, this conference is being recorded I would now like to turn this conference over to your host MS Dawn Frankfurt managing director at ICR. Thank you Ma'am you may begin your presentation.

Good afternoon, everyone. Thank you for joining the beauty help companies conference call to discuss the company's third quarter 2021 financial results, which we released this afternoon and can be found on our website at investors that beauty health dotcom.

Speaker 2: Good afternoon, everyone. Thank you for joining the Beauty Health Company's conference call to discuss the company's third quarter 2021 financial results, which we released this afternoon and can be found on our website and investors.beautyhealth.com.

Speaker 2: With me on the call is Brent Saunders, Executive Chairman, Clint Carnell, Chief Executive Officer, and Leanne Wu, Chief Financial Officer of the Beauty Health.

With me on the call is Brent Saunders Executive Chairman Clayton Cornell Chief Executive Officer, and Leigh Ann will Chief Financial Officer of the Beauty Health company.

Speaker 2: Before we get started, I would like to remind you of the company's Safe Harbor language, which I'm sure you're all familiar with.

Before we get started I would like to remind you of the Companys Safe Harbor language, which I'm sure you're all familiar with.

Speaker 2: Management may make forward looking statement, including guidance and underlying

Management may make forward looking statements, including guidance and underlying assumptions.

Speaker 2: for looking statements are based on expectations that involve risks and uncertainties that could cause actual results to differ material.

Forward looking statements are based on expectations that involve risks and uncertainties that could cause actual results to differ materially.

Speaker 2: For a further discussion of risks related to our business, fear of filings with the S.

A further discussion of risks related to our business see our filings with the SEC.

Speaker 2: This call will contain non-GAAP financial measures such as adjusted gross profit, adjusted gross margin, adjusted net income, adjusted EBITDA, and adjusted EBITDA margin.

This call will contain non-GAAP financial measures such as adjusted gross profit adjusted gross margin adjusted net income adjusted EBITDA and adjusted EBITDA margin.

Speaker 2: Reconciliation of these non- GAAP measures to the most comparable gap measure are included in the earnings release furnished to the SEC and available on our website.

Reconciliations of these non-GAAP measures to the most comparable GAAP measure are included in the earnings release furnished to the SEC and available on our website.

Speaker 2: Now, I would like to turn the call over to Brent Saunders, Executive Chairman of the Beauty Health Company.

Now I would like to turn the call over to Brent Saunders Executive Chairman of the beauty Health company.

Thank you dawn and good afternoon, everyone.

Speaker 3: Thank you for joining us for a discussion of today's third quarter results.

Thank you for joining us for a discussion of today's third quarter results.

Speaker 3: As I'm sure you saw in today's press release, I will be stepping into the role as the company's interim CEO , effective January 1st, 2022.

As I'm sure you saw in today's press release, I will be stepping into the wall as the company's interim CEO effective January 1st 2022.

Speaker 3: As part of this transition, Quinn will remain CEO through year end, at which point I will assume additional responsibilities of the CEO until a permanent successor is named.

As part of this transition Quinn will remain sealed through year end at which point I will assume additional responsibilities as CEO until a permanent successor is named.

Speaker 3: On behalf of the board, I want to thank Quinn for his dedication and commitment to beauty health over the past five years.

On behalf of the board I want to thank <unk> for his dedication and commitment to beauty health over the past five years.

Speaker 3: He has been a driving force behind the company's success. Now, we're getting beauty help through COVID, as well as our business combination in May.

It's been a driving force behind the company's success.

I'm getting PV held through Covid as well as our business combination in may.

Speaker 3: Under his leadership, Beauty Health has become a solid platform for us to build upon as we look towards our next pillar of growth and begin to accelerate our acquisition.

Under his leadership <unk>.

It has become a solid platform for us to build upon as we work towards our next four boats and begin to accelerate our acquisition.

Speaker 3: Even these objectives and the strength of beauty health, Clinton abored self that this was the ideal time to begin the CO transition. We thank him for his contribution.

Given these objectives and the strength of beauty health claim then the board felt that this was the ideal time to begin the CEO transition.

Thank him for his contributions.

Speaker 3: Well, Clinton, I have been working closely over the past few quarters. I'm excited to step in more fully and work with the team to continue to drive growth and focus on our strategic initiative.

Well question I had been working closely over the past few quarters I'm excited to step in more fully and work with the team to continue to drive growth and focus on our strategic initiatives.

Speaker 3: This is a compelling time, and I am excited about our future.

This is a compelling time and I'm excited about our future.

Speaker 3: The company has a strong foundation, and I look forward to the next chapter and the significant growth opportunities we have ahead. I would now like to turn the...

The company has a strong foundation and I look forward to the next chapter and the significant growth opportunities. We have ahead.

I would now like to turn the call over to quit.

Speaker 4: Thank you, Brent, and good afternoon, everyone. Before digging into our performance, I would like to express my gratitude for being part of building this category-created brand over the last five years.

Thank you, Brian and good afternoon, everyone.

First digging into our performance I would like to express my gratitude for being part of building this category, creating brand over the last five years.

Speaker 4: This has been an exciting journey, and I am pleased with what we have accomplished.

This has been an exciting journey and I'm pleased with what we have accomplished.

Speaker 4: I would now like to thank employees and providers across the globe for all of their hard work in commitment during this challenging environment.

I would now like to thank our employees and providers across the globe for all of their hard work and commitment during this challenging environment.

Speaker 4: They are vital to our success and propelled us to record performance again this quarter.

They are vital to our success and propelled us to record performance again this quarter.

Speaker 4: During today's call, I will provide color on our third quarter performance, as well as discuss our growth strategies and outlook for the remainder of the year.

During today's call I will provide color on our third quarter performance as well as discuss our growth strategies and outlook for the remainder of the year.

Speaker 4: I will then turn the call to Leanne for a more detailed discussion of our third quarter results, as well as our updated 2021 financial outlook in more detail.

I will then turn the call for me and for more detailed discussion of our third quarter results as well as our updated 2021 financial outlook in more detail.

Speaker 4: We are very pleased with the results this quarter, as well as the strength of our year-to-date performance.

We are very pleased with our results this quarter as well as the strength of our year to date performance, our sales and adjusted EBITDA continue to exceed our expectations and deliver new record results. While we continue to lead to a macro challenges in select market closures related to the Delta variance search.

Speaker 4: Our sales and adjusted EBITDA continue to exceed our expectations and deliver new record results. While we continue to lead through macro challenges and select market closures related to the delta variance surge.

Speaker 4: Our strength speaks to the diversification of our business across channels and geographies, as well as the favorable health and wellness tailwinds that remain strong, and we believe are here to stay.

Strength speaks to the diversification of our business across channels and geographies as well as the favorable health and wellness tailwind that remains strong.

We believe are here to stay.

Speaker 4: We are executing across all keys to key to conditions we laid out for you last December . And as of today, we grew our delivery systems to over 19,000 units as we leveraged our virtual and physical branding events to increase our consumer engagement with our beauty health community.

We are executing across all key strategic initiatives, we laid out for you last December and as of today, we grew our delivery systems to over 19000 units as we leveraged our virtual and physical branding events to increase our consumer engagement with our beauty health community.

Speaker 4: We invested in international infrastructure, adding Indra and Stephon to lead the APAC and EMEA regions respectfully. We are excited to add two additional products in the coming months.

We invested in international infrastructure, adding indirect and Stephane to lead the APAC and EMEA regions respectively.

To meaningfully expand our business in these markets and we are excited to add two additional products in the coming months.

Speaker 4: Now, turning to our financial results for the quarter, adjusted EBITDA with $5.8 million. Once again, driven by strong net sales growth of almost 100%, gross margin expansion and discipline expense management, despite challenges related to the Delta variant.

Now turning to our financial results for the quarter adjusted EBITDA was $5 8 million once again, driven by strong net sales growth of almost 100% gross margin expansion and disciplined expense management, despite challenges related to the Delta variant.

Speaker 4: We continue to accelerate our brand building initiatives to capitalize on the enormous white space opportunity we see ahead.

We continued to accelerate our brand building initiatives to capitalize on the enormous white space opportunity, we see ahead.

Speaker 4: We further strengthened our financial position with the completion of our convertible to your notes offering, which was up size to account for the strong investor domain.

We further strengthened our financial position with the completion of our convertible senior notes offering which was upsized to account for the strong investor demand.

Speaker 4: We raised approximately 900 million in dry powder from this off-brain and the warrant redemption to escalate our strategic investments and build upon a strong platform we created in beauty health. Our brand building initiatives effectively strengthen our connection between our consumers and providers, which further expands our beauty health community.

We raised approximately $900 million in dry powder from this offering and the warrant redemption to escalate our strategic investments and build upon the strong platform, we created beauty health.

Our brand building initiatives effectively strengthen our connection between our consumers and providers, which further expands our beauty health community.

Speaker 4: Our vision of creating a deep consumer connection with the beauty health community is a top priority, and we continue to make progress this quarter, improving our engagement with our customers by reaching them where they live, work and play.

Our vision of creating a deep consumer connection with the beauty health community is a top priority and we continue to make progress this quarter, improving our engagement with our customers by reaching them, where they live work and play.

Speaker 4: As a result of these achievements, we are well positioned to deliver on our long-term strategic goal.

As a result of these achievements, we are well positioned to deliver on our long term strategic goals.

Speaker 4: We are raising our top line and EBITDA outlook for our full year 2021 to reflect the confidence in this business model, as well as our ability to execute against our multi-lever growth

We are raising our top line and EBITDA outlook for full year 2021 to reflect the confidence in this business model as well as our ability to execute against our multi lever growth trajectory.

Speaker 4: During the quarter, we continued to make progress on strategic growth initiatives to build brand awareness, accelerate innovation, and expand our international program.

During the quarter, we continued to make progress on our strategic growth initiatives to build brand awareness accelerate innovation.

And expand our international presence.

Speaker 4: Our investments behind these initiatives remain elevated in order to create a deeply connected and engaged consumer within our beauty health community.

Our investments behind these initiatives remain elevated in order to create a deeply connected and engaged consumer within our beauty health community.

Speaker 4: It creates a strong community at the center of our vision and is essential to our long-term success.

It creates a strong community at the center of our vision and is essential to our long term success.

Speaker 4: So I will now focus on these key initiatives in detail.

I will now focus on these key initiatives in detail.

Speaker 4: First, we invested in brand new issues to drive consumer awareness. And during the quarter, we accelerated our brand and investments to engage with our consumers and providers both virtually, into a greater extent, physically as we look to strengthen and build our beauty health community.

First we invested in brand new initiatives to drive consumer awareness and during the quarter, we accelerated our brand and investments to engage with their consumers and providers, both virtually and to a greater extent physically as we look to strengthen and build our beauty health community.

Speaker 4: We continue to invest in hydropacial connect or clinical training, professional development, and holistic education programs designed for the esthetician, creating a highly passionate and educated community of influential providers.

Continue to invest in hydro Fisher connect or clinical training professional development and holistic education programs designed for the <unk> tissue, creating a highly passionate and educated community of influential providers.

Speaker 4: Our Business and the Retail Channel improved this order. As more locations reopen-fall and COVID related closures from March of 2020, we further expanded our presence in the Retail Channel with select partnerships during the quarter, including Nordstrom. While we were still early days with these partnerships and have not felt meaningful revenue into our outlook for this channel, we do see it as a unique pathway to bring more consumers into our community.

Our business in the retail channel improved this quarter as more locations reopened following COVID-19 related closures from March of 2020, we further expanded our presence in the retail channel with select partnerships during the quarter, including Nordstrom, while we're still early days with these partnerships and have not built meaningful revenue into our outlook for this channel we do see it as a unique pathway to.

Bring more consumers into our community.

During the quarter, we accelerated our marketing initiatives building on our second quarter's effective branding progress a.

Speaker 4: So in the quarter, we accelerate our marketing initiatives, building on our second quarter's effective branding program.

Speaker 4: Our global vision campaign has been highly successful by engaging consumers and institutions on our US coast to coast bus tour that started on June 4th, and continues through the end of September .

Our global <unk> campaign has been highly successful by engaging consumers and institutions on our U S Coast to coast bus tour that started on June 4th and continues through the end of September.

Speaker 4: At each stop, we treated 250 consumers with higher facial onsite during a two day period, working alongside our customers in delivering a compelling experience and reaching a meaningful number of consumers in each market we visit.

At each stop we treated 250 consumers with hydro facials onsite during the two day period, working alongside our customers and delivering a compelling experience and reaching a meaningful number of consumers in each market we visited.

Speaker 4: We believe globalization has been highly effective at activating demand by driving community engagement with both estheticians and consumers.

We believe global notion has been highly effective at activating demand by driving community engagement with both best decisions and consumers like cleaning and physical hydro facial event, we drove brand awareness and consumer demand because you have to get it to get it.

Speaker 4: By creating a physical hydrofacial event, we draw brand awareness and consumer demand because you have to get it to get it.

Speaker 4: As we have previously discussed, two thirds of consumers who try a high-deficial for the first time will become repeat costs.

As we have previously discussed two thirds of consumers, who try and high definition for the first time will become repeat customers and of those two thirds approximately one third of the customers will become frequent super users, which is why building brand awareness and treat new customers was one of our top investment initiatives.

Speaker 4: And of those two thirds, approximately one third of the customers will become frequent super users, which is why building brand awareness and tree new customers is one of our top investment initiatives.

Speaker 4: Over the past year, we have transitioned our business from a B2B to a B2C and back to B, effectively connecting our passionate community.

Over the past year, we have transitioned our business from a b to b.

B to C and back to be effectively connecting our passionate community.

Speaker 4: Second, we maintained our elevated investment level in innovation, creating product and technology to deepen the consumer engagement into our belt beauty health community.

Second we maintained our elevated investment level in innovation.

Creating product and technology to deepen the consumer engagement into a bill beauty health community.

Speaker 4: improving our product offering and enhancing our technological capabilities to build upon our beauty health community is important. As we effectively increase our connection to our cup.

Improving our product offerings and enhancing our technological capabilities to build upon our beauty health community is important as.

As we effectively increased our connection to our customers.

Speaker 4: or upcoming new product launches remain on track, including the November 11th launch of our go-on-go at home device, which I will discuss in more detail in just a moment.

Our upcoming new product launches remain on track, including the November 11th launch of our Guangzhou at home device, which I will discuss in more detail in just a moment.

Speaker 4: During the quarter, we launched a new booster collaboration with the Epicutus, targeting the neck and decklaterias and extending their treatments beyond the face.

During the quarter, we launched a new booster collaboration with epicurus targeting the neck and decorative areas and extending our treatments beyond the face.

Speaker 4: We also continue to test our app that builds consumer awareness and serves as a direct connection to the customer.

We also continue to test our app that builds consumer awareness that serves as a direct connection to the customer and.

Speaker 4: And taken together, all of these initiatives allow us to better connect with our consumers where they live or can play further expanding our direct consumer capabilities and relations.

When taken together all of these initiatives allow us to better connect with our consumers where they live work and play further expanding our direct to consumer capabilities and relationships.

Speaker 4: Third, we continue to expand our international infrastructure to support a strong international growth. With our failed international up over 105% this quarter, these markets remain a top investment priority.

Third we continued to expand our international infrastructure to support our strong international growth with our sales internationally up over 105%. This quarter. These markets remain a top investment priority.

Speaker 4: During the quarter, we entered South Korea through a new distributor partnership. We continued to globally increase market initiatives to expand brand awareness. And it was all invested in our team to build an SR infrastructure to support this growth.

During the quarter, we entered South Korea through a new distributor partnership we continue to globally increased market initiatives to expand brand awareness as well as invested in our team to build the necessary infrastructure to support this growth.

Speaker 4: And as previously announced, Stevon Becker joined us as president of EMEA in October , and we are continuing to make select hires, particularly as we build up teams in local markets.

And as previously announced Steven Becker joined US as President of EMEA in October and we are continuing to make select hires, particularly as we build out teams in local markets.

Speaker 4: We also made progress on our plans for headquarters and our EMEA PEC reasons, which will provide updates to during future calls.

We also made progress on our plans for headquarters in our EMEA and APAC regions, which will provide updates to during future calls.

Speaker 4: We are very pleased with our accomplishments this quarter and here to date, especially given the still volatile environment as it relates to the Delta variant and increasingly challenging worldwide macro concerns, which Liam will discuss in greater detail.

We are very pleased with our accomplishments this quarter and year to date, especially given the still volatile environment as it relates to the delta variant and increasingly challenging worldwide macro concerns, which Leo will discuss in greater detail.

Speaker 4: The sustainability of the momentum we are delivering, despite these challenges, was further supported by our almost 100% sales growth this quarter, and proof of our highly resilient business model.

The sustainability of the momentum we are delivering despite these challenges was further supported by our almost 100% sales growth this quarter and proof of a highly resilient business model.

Speaker 4: We're focused on creating a unique and powerful consumer brand in platform and beauty health with significant growth ahead.

We are focused on creating a unique and powerful consumer brand and platform and beauty health with significant growth ahead.

Speaker 4: As we move forward to our fourth quarter and beyond, we will continue to leverage our infrastructure, grow our install base in order to fund our investments, capitalizing on these significant opportunities.

As we look forward to our fourth quarter and beyond we will continue to leverage our infrastructure grow our installed base in order to fund our investments capitalizing on the significant opportunities in.

Speaker 4: And the combination of being well-capitalized and our broad geographic presence allows us to pursue strategic acquisitions in a distant land land.

And the combination of being well capitalized and our broad geographic presence allows us to pursue strategic acquisitions in a disciplined manner.

Speaker 4: Turning now to a brief overview of our guidance, as a result of another strong quarter, we are raising our top line and EBITDA guidance for 2021.

Turning now to a brief overview of our guidance as a result of another strong quarter, we are raising our topline and EBITDA guidance for 2021.

Speaker 4: We now expect net sales in the range of 245 to 255 million up from our previous guidance range of 230 to 240 million.

We now expect net sales in the range of $245 million to $255 million up from our previous guidance range of $230 million to $240 million.

We also are increasing our EBITDA to $30 million from our prior guidance of 25 million. Despite the significant investments we are making in our business.

Speaker 4: We also are increasing our EBITDA to 30 million from our prior guidance of 25 million, despite the significant investments we are making in our business.

Speaker 4: These upward revisions are based on a momentum and a third quarter results. And we will continue to invest ahead of our growth because we have a sense of urgency to capitalize on the category we have created.

These upward revisions are based on our momentum and our third quarter results and we will continue to invest ahead of our growth.

We have a sense of urgency to capitalize on the category we have created.

Speaker 4: I will now provide you with details on our upcoming investments and our three keys for FEW OUTING SOUND SHOULD I ANários

I will now provide you with details on our upcoming investments in our three key strategic growth initiatives.

Speaker 4: First, building and expanding consumer awareness remains a priority. Our marketing programs drive consumer awareness, which is proven to drive consumer demand. We are accelerating these marketing issues.

First building and expanding consumer awareness remains a priority our marketing programs drive consumer awareness, which has proven to drive consumer demand.

We are accelerating these marketing initiatives building, our team and expanding our partnerships, especially in the retail channel in order to capitalize on the significant white space ahead.

Speaker 4: building our team and expanding our partnerships, especially in the retail channel, in order to capitalize on the significant white space ahead.

Speaker 4: a consumer activation programs are highly effective and we will continue to leverage these events in less market.

Our consumer activation programs are highly effective and we will continue to leverage these events in select markets.

Speaker 4: Due to the success of Global Ocean, which wrapped up at the end of September , we are ready to event in New York City for the second weekend of December to build consumer awareness and mark the one year anniversary of our business combination announcement with Best for Health.

Due to the success of global Ocean, which wrapped up at the end of September we are bringing the event in New York City for the second week in December to build consumer awareness and marks the one year anniversary of our business combination announcement with best for health care.

Speaker 4: We are also excited about our Black Friday in Cyber Monday promotions, which historically generated meaningful customer engagement.

We are also excited about our black Friday, and cyber Monday promotions, which historically generated meaningful customer engagement.

Speaker 4: On October 24th, we participated in the Nordstrom's block party.

On October 24th we participated in the Nordstrom's Block Party we.

Speaker 4: We also are expanding our presence in the retail channel through our new partnerships, including Ulta, laser centers of Australia, John Lewis from the UK, and Fletcher-Mirad International Resort to Spa.

We also are expanding our presence in the retail channel through our new partnerships, including Alta laser centers of Australia, John Lewis in the UK and select Marriott International resorts in spots.

Speaker 4: We see retail as an important channel to further build our consumer awareness and diversify our operating model as we continue to monitor and test new retail partnerships. Longer term, we see this channel as a significant opportunity.

We see retail as an important channel to further build our consumer awareness and diversify our operating model as we continue to monitor and test new retail partnerships longer term, we see this channel as a significant opportunity.

Second we are increasing our R&D investments and innovation initiatives in order to deepen and expand our consumer and partnership connections with our beauty health community.

Speaker 4: Second, we are increasing our R&D investments in innovation missions in order to deepen and expand our consumer and partnership connections with our beauty health community.

Speaker 4: Our innovation initiatives will enhance our ability to meet our consumers with their live work and play. And on November 11th, we are launching a limited number of our Glow and Go handheld devices, with a broader rollout expected in 2022.

Our innovation initiatives will enhance our ability to meet our consumers, where they live work and play and unknown number 11th we are launching a limited number of our growing go handheld devices with a broader rollout expected in 2022.

Speaker 4: While we are testing at home market with our initial launch, we see this as a bigger opportunity over time.

While we are testing the at home market with our initial launch we see this as a bigger opportunity over time.

Speaker 4: How app, which we efficient launch October , allows us to engage with our consumer by providing self-skin assessments and an educational component among many other features.

Our App, which we officially launched in October allows us to engage with our consumers by providing self scan assessments and an educational component among many other features.

Speaker 4: We remain on track to launch our Hygur Facial 2.0 connected device in early 2022. A major technology upgrade from our existing Hygur Facial, innovation and products and technology remains an important component of our overall strategy to building our long-term vision of scene-wifling connecting and interacting with our customer through the beauty health community.

We remain on track to launch our Heidrick <unk> <unk> 2.0 connected device in early 2022.

A major technology upgrade from our existing hydro facial innovation in product and technology remains an important component of our overall strategy to building our long term vision of seamlessly connecting and interacting with our customer through the beauty health community.

Speaker 4: Third, we are accelerating the rollout of our global footprint. As we build on our international infrastructure, directly in key strategic markets and expand distribution partnerships into new markets.

Third we are accelerating the rollout of our global footprint as we build on our international infrastructure directly in key strategic markets and expand distribution partnerships into new markets.

Speaker 4: We are continuing to build our infrastructure in the team worldwide to capitalize on our significant international growth.

We are continuing to build our infrastructure and the team worldwide to capitalize on our significant international growth.

Speaker 4: Consistent with our strategy, we will continue to go direct in key markets where we see opportunities, as well as establish new director of distributed partnerships in select new markets.

Consistent with our strategy, we will continue to go direct in key markets, where we see opportunities as well as established new director distributor partnerships and select new markets.

Speaker 4: Over the next few years, we expect our international business to exceed the US and we are building the necessary infrastructure to capitalize on this opportunity.

Over the next few years, we expect our international business to exceed the U S and we are building the necessary infrastructure to capitalize on this opportunity.

In conclusion, we are proud of our third quarter performance. The results. We have delivered thus far in 2021 support the power of the platform. We have created and the community connection we are building in the dynamic beauty health category.

Speaker 4: The results we have delivered this fall in 2021 support the power of the platform we have created and the community connection we are building in the dynamic beauty health category. We are rapidly growing business capitalizing on our multiple levels of growth.

We are a rapidly growing business capitalizing on our multiple levers of growth.

Speaker 4: And I'm now pleased to turn the call over to Leanne for a more detailed discussion of a third quarter-financial performance, as well as provide you with our updated financial outlook for 2021. Thank you.

Im now pleased to turn the call over to Lance for a more detailed discussion of our third quarter financial performance as well as provide you with our updated financial outlook for 2021. Thank you.

Speaker 2: Thank you, Plint, and good afternoon, everyone. Before I discuss our performance this quarter, I also want to thank our employees and providers worldwide for their continued dedication and effort that is underpinning our growth.

Thank you Trent and good afternoon, everyone before I discuss our performance this quarter I also want to thank our employees and providers worldwide for their continued dedication and effort that is under keening outgrowth. This record performance. The successful completion of our convertible senior notes offering.

Speaker 2: This record performance, the successful completion of our convertible senior notes offering, and the redemption of our outstanding words, all demonstrate the flexibility of our business model and the confidence of our investors in allowing us to continue to rapid growth trajectory where X-

And the redemption of our outstanding warrants all demonstrate the flexibility of our business model and the confidence of our investors and allowing us to continue to rapid growth trajectory we are executing.

Speaker 2: I will review our third quarter results, patch on our balance sheet, and then provide details on our updated 2021 outlook.

I will review, our third quarter results touch on our balance sheet and then provide details on our updated 2021 outlook.

Speaker 2: I will make select comparisons to our third quarter of 2019 as we believe it is a more meaningful comparison due to the COVID-19 related market closures in 2020. Thanks,AYE.

I will make select comparison to our third quarter of 2019 I still believe it is a more meaningful comparison due to the COVID-19 related market closure in 2020.

Let me start with our third quarter results.

Speaker 2: As clinicians, we're very pleased with our record performance this past quarter as we continue to build on our strategic initiatives, which drove better than expected third quarter results across all metrics despite Delta variant related restrictions, especially in the ETAG region.

Cognition.

Very pleased with our record performance this past quarter as we continue to build on our strategic initiatives, which drove better than expected third quarter results across all metrics. Despite downtown areas related restrictions, especially in the APAC region.

Speaker 2: Our systems and products have global appeal, as reflected in our strong geographic segment growth in this path course.

Some products have global appeal as reflected in our strong geographic segment growth in this past quarter.

Speaker 2: Next sales of $68.1 million increased almost 100% from last year's COVID impacted sales of $34.6 million, and up 72% from $39.6 million in the third quarter 2019.

Net sales of $68 1 million increased almost 100% from last year's Colby impacted sales of $34 6 million and up 72% from $39 6 million in the third quarter 2019.

Speaker 2: The significant increase was largely due to expansion in our delivery system, with over 8,500 active systems globally at the end of the quarter. And the continual strength in our consumables as COVID-19 restrictions lifted. And more of our partners we open.

Significant increase was largely due to expansion in our delivery system with over 18500 <unk>.

Globally at the end of the quarter and the continued strength in our consumables as COVID-19 restrictions lifted and more of our partners. We opened strong trends in the U S and EMEA business and significant growth in the APAC region continued during the quarter. Despite a worsening colby.

Speaker 2: Strong trends in the US and EMEA businesses and significant growth in the APEC region continued during the quarter despite a worsening COVID-19.

Now I'll share a few highlights from our three regions.

Speaker 2: Now I'll share a few highlights from our three regions.

Speaker 2: Sir, quarter-sales in America's region increased to 45 million, compared to 21.2 million a year ago, and grew over 50% from our 2019 low.

Third quarter sales in our Americas region increased to $45 million compared with $21 2 million a year ago and grew over 50% from our 2019 levels. The strength was driven by continued traction in the U S and solid performance in that country as markets reopen and consumer demand to salary.

Speaker 2: The string was driven by continual traction in the US and solid performance in Latin. As markets reopened and consumer demand accelerated, as well as ongoing strength in our delivery system rollout. We continue to see select US locations operate as reduced capacity to accommodate state and local regulations, especially in a malmedical chance.

Ongoing strength in our delivery system rollout.

We continue to see select U S locations operating at reduced capacity to accommodate state and local regulation, especially in a non medical channels.

Speaker 2: We also saw considerable others increase for customers reopening, which drove their celebration from our 2019 levels. As Clint mentioned earlier, marketing and training activitions, such as global solutions, also positively contributed to the increasing sales. Given the strong performance of global solutions, we're extending the event into Q4, and we're holding the event in New York City during the second week of December .

We also saw consumable orders increase for our customers reopening, which drove the acceleration from our 2019 level as Clint mentioned earlier marketing and training Activations such as global Lucian also positively contributed to the increase in sales given the strong performance of global solution, we're extending event.

Into Q4, and we're holding the event in New York City during the second week of December.

Speaker 2: In the end, that sales of 12.6 million grew from 8.1 million in the prior year, and expanded over 90% from the third quarter in 2019, driven by strength in the United Kingdom, Germany, France, Russia, and the Middle East.

<unk> net sales of $12 6 million <unk> $8 1 million in the prior year.

Over 90% from the third quarter in 2019, driven by strength in the United Kingdom, Germany, France, Russia and immediately.

Speaker 2: The pop-up scene in the Middle East and the UK continues to feel grown for the region.

The pop up in the Middle East and the U K continue to feel growth for the region.

Speaker 2: Our creative marketing in Spain and France also helped consumer awareness and contributed to the sales increase. In addition, we have also started to expand PAPA into Germany and expect to see further acceleration in growth.

Our creative marketing in Spain, and France also help consumer awareness and contributed to the sales increase. In addition, we have also started to extend pop up into Germany and expect to see further acceleration in growth.

Speaker 2: Turning to APAC, net sales of 10.5 million increased almost 100% from the prior year, and over 200% from the third quarter of 2019, primarily driven for growth in China and Australia, despite the restrictive COVID-related lockdowns implemented in Australia.

Turning to APAC net sales up $10 5 million increased almost 100% from the prior year and over 200% from the third quarter of 2019, primarily driven by growth in China, and Australia. Despite a restricted Colgate related lockdowns implemented in Australia.

Speaker 2: In China, we're continuing to focus on our system rollout, while building sales productivity, and continuing to expand our presence in both the medical and non-medical channels. Our marketing and training program in regional markets also drove growth. Trends in the attack desalinated from the second quarter, primarily due to Delta variant related shutdowns in Japan, Australia, and part of China during the third quarter.

In China, we're continuing to focus on our system rollout, while building sales productivity and continuing to expand our presence in both the medical and nonmedical channels, our marketing and training programs in regional market also drove growth trend in the APAC decelerated from the second quarter, primarily due to the Delta there if I may just.

In Japan, Australia, and part of China during the third quarter.

Speaker 2: Overall, our growth has been demand driven across O-Channel. We continue to see consumers asking for a hydrothatial by name, especially in our more mature markets.

Overall, our growth has been demand driven across all channels, we continue to see consumers asking for hydro financial by knee, especially in our more mature markets.

Speaker 2: Even the current brand recognition and our initiative to build awareness as well as international global self-care momentum, thinking health is attractively positioned to continue to both expand this category and take share of Google with.

Given the current brand recognition and our initiatives to build awareness as well as international Global self care momentum is the house is attractively positioned to continue to both expand this category and take share globally.

Moving to profitability, our gross margin was 67, 6% from last year, 66% on an adjusted basis, we expanded our gross margin by 320 basis points year over year to 71, 5%.

Speaker 2: Moving to profitability, our growth margin was 67.6%, up from last year's 60.6%.

Speaker 2: On an adjusted basis, we expanded our goals close margin by 320 basis points year over year to 71.5.

Speaker 2: The increase was largely driven by six cost leveraging of higher than expected sales, improved selling prices for the other system, as well as cost-eating initiatives.

The increase was largely driven by fixed cost leveraging our higher than expected.

Improved selling prices for delivery system as wide cost savings initiatives.

Speaker 2: This was partially all set by higher supply chain and logistics.

This was partially offset by higher supply chain and logistic costs.

Speaker 2: On a sequential basis, our growth margin declined 340 basis points due to supply chain challenges and increase in logistic costs. As well as temporary impact from transitioning higher carrying inventory value related to the distributor acquisition.

On a sequential basis, our gross margin declined 340 basis points due to supply chain challenges and increased logistic costs.

As well as temporary impact from transitioning higher carrying inventory value related to the distributor acquisitions.

Speaker 2: We will continue to focus on enhancing our margin structure. However, we expect the continued headwind from global supply chain challenges and inflationary pressure to weigh our margins into a plan.

We will continue to focus on enhancing our margin structure. However, we expect the continued headwinds from global supply chain challenges and inflationary pressure to weigh on margins into 2022.

Speaker 2: We currently anticipate the higher shipping cost to continue into next year. Partially offset by an accretion emergence related to the acquired distributor and pricing emissions.

We currently anticipate a higher shipping costs to continue into next year, partially offset by an accretion in margins related to the acquired distributor and pricing initiatives.

Speaker 2: Here in the quarter, there were a few significant non-tash accounting entries from the valuation of Orange and the convertible transactions, which we will address and adjust out as non-getmeasures to focus and discussion on our core business performance.

During the quarter there were a few significant non cash accounting entry from the valuation of Orange and the convertible transaction, which we will address and then Jeff out as non-GAAP measures to focus our discussion on our core business performance.

Speaker 2: SG-8, then, is in the quarter of $49.7 million as compared to $17.6 million for the prior year.

SG&A expenses in the quarter were $49 7 million as compared to $17 6 million for the prior year.

Speaker 2: As a percentage of sales, selling and marketing increased by over 1,400 basis points to 44.7% compared to 30.5% in the third quarter of 2020, which was constrained due to COVID.

As a percentage of sales selling and marketing increased by over a fortune 100 basis points to 44, 7% compared to 35 pricing in the third quarter of 2020, which was constrained due to COVID-19.

This increase was driven by greater sales commissions higher personnel related expenses and increased marketing spending during the quarter, we significantly ramped up our marketing spend as we strategically activated demand. We will continue to focus on optimizing our investment sales marketing and training for <unk>.

Speaker 2: This increase was driven by greater self-commissions, higher personnel-related expenses, and increased marketing spending. During the quarter, we significantly run that our marketing spend as we strategically activated demand. We will continue to focus on optimizing our investment sales, marketing, and training, particularly as we look to build upon our community engagement mission.

Clearly as we look to build upon our community engagement initiatives.

Speaker 2: Moving on to R&D, we invested 1.9 million in the third quarter of 2021 compared to 0.6 million in the past year. As we accelerated our investment ahead of our lunch of the Hydrofacial Nation app, the initial test of our new home device and the upcoming lunch of upgraded delivery.

Moving on to R&D, we invested $1 9 million in the third quarter of 2021, compared with <unk> 6 million in the prior year as we accelerated our investments ahead of our launch of the Hydro station lesion at the initial test of our new home device and upcoming launch of <unk>.

Great delivery system.

Speaker 2: As Clint has shared, innovation is one of our main pillars of our strategic investments. We will continue to prioritize investments in innovation.

As Glenn has shared innovation is one of our main pillars of our strategic investments, we will continue to prioritize investments in innovation.

Our G&A expenses of $19 2 million included $3 9 million of noncash stock based compensation expenses. Excluding this item our G&A expenses were $15 3 million compared to $7 1 million in third quarter 2020, the increase in G&A expenses was driven by non payroll related.

Speaker 2: Our two N8's Benses of 19.2 million, included 3.9 million of non-catch stop-based compensation.

Speaker 2: Exuding this item, our G and 8 fences were 15.3 million compared to 7.1 million in CERT quarter 20.

Speaker 2: The increase in G&A expenses was driven by Mount Tearo-related public company cost of 1.7 million, which includes the insurance, tax compliance, and additional audit and tax-related services, as well as higher personnel-related expenses due to increased head loss.

Public company costs of $1 7 million, which includes D&O insurance Sox compliance and additional audit and tax related services as well as higher personnel related expenses due to increased head count we expect such public company costs will continue at this level.

Speaker 2: We expect such public company calls will continue at this level.

Speaker 2: During quarter, we accelerated our investment in building out the necessary infrastructure to support the significant growth in our international markets, as well as continuing to strategically invest in EMEA and APEC-BASE-CAM, people and technology.

During the quarter, we accelerated our investment in building out the necessary infrastructure to support the significant growth in our international markets as well as continue to strategically invest in EMEA and APAC based Ken people and technology.

Speaker 2: We have gone live on our first global ERP platform, which includes Sierra and any commerce.

We have gone live on our first global ERP platform, which includes CRM and e-commerce.

Speaker 2: Poundery with Oracle Nest week, we have positioned to extend our brand to global markets and improve operational Agilator.

Barry with Oracle next week, we are positioned to extend our brand through global market and improved operational ideology.

Speaker 2: This will never be pain-free and we expect execution change to continue. The new ERP platform advances our cloud-native hydrophacial ecosystem and will be expanded to include new capabilities in 2020.

This will not be.

Be pain free and we expect execution change to continue.

New ERP platform advances, our cloud native hydro facial ecosystem and will be expanded to include new capabilities in 2020.

We expect these investments to remain elevated over the next few quarters. We will continue to invest ahead of our significant growth opportunity in <unk>.

Speaker 2: We expect these investments to remain elevated over the next few quarters. We will continue to invest ahead of our significant growth opportunity, in order to capitalize on our long run way.

To capitalize on our long runway ahead.

Speaker 2: In addition to GAAP measures , adjust the EBITDA is an important profitability measure that we use to measure our business internally. For the quarter, adjust the EBITDA was 5.8 million, versus an adjust the EBITDA was 7.6 million 2020. The decline in our profitability is a result of increased commissions and bonuses related to strong sales and acceleration in our marketing and skill incentives as well as increased hat count for future growth.

In addition to GAAP measure adjusted EBITDA is an important profitability measure that we use to measure our business internally for the quarter. Adjusted EBITDA was $5 8 million versus an adjusted EBITDA of $7 6 million in 2020 the decline in our profitability is the result of increased commissions.

And bonuses related to strong sales and acceleration in our marketing and scaling spend as well as increased headcount for future growth.

Speaker 2: This was partially upset by higher self-dose margin.

This was partially offset by higher sales and gross margin improvement.

Speaker 2: Our adjusted net income for the quarter was 2.5 million.

Speaker 2: We did add a share of outstanding for approximately 132.3 million in Cert Quarterm 2021. SESC was funded through the quarter end. We announced plans to redeem our 15.3 million outstanding public warrants. On November 3rd, we completed the exercise and redemption of our public warrants, which have mounted to about 185 million cash, which you will see in details in our press release. They did in November 8th.

Speaker 2: Turning to the balance sheet, we ended the quarter with 718.6 million cash and cash equivalent. We ran the quarter with priced out a convertible senior notes offering, which we upsized to out come for the strong investor demand. And successfully raised 728.7 million.

Speaker 2: with the proceed, we purchase cat calls covering the aggregate numbers of shares that underline the notes. In order to reduce potential dilution and or offset any potential patch.

I would date numbers of sheer the underline and notes in order to review potential dilution and or I'll set any potential cash payments.

Speaker 2: But in my 100 million patch, we have the drive powder to continue to invest in our business, as well as pursue strategic acquisition, as we accelerate our initiative to capitalize on our significant opportunity in the rabbit-evolving beauty health industry.

Nearly 900 million cash we have the dry powder to continue to invest in our business as well as pursue strategic acquisition as we accelerate our initiative to capitalize on our significant opportunities in a rabbit involving beauty health industry.

Speaker 2: Now, I will share more details on our outlook for the flu.

Now our share more details on our outlook for the full year.

Speaker 2: As clinicians, we're raising our 2021 guidance.

As clinicians were racing or 2021 guidance.

Speaker 2: For our physical 2021, we now expect net sales in a range of 245 to 255 million, firing any deterioration related to COVID-19 trends. And up from our prior guidance range of 230 to 240 million.

Physical 2021, we now expect net sales in a range of 245 to 255 million barring any deterioration related to COVID-19 trends and up from our prior guidance range of 232 $240 million.

Speaker 2: We remain cautiously upsmithing while observing select closures related to Delta variant in both A-PAP and E-M-E-A region.

Remain cautiously optimistic while preserving select closures related to delta Marion in both APAC and EMEA region.

Speaker 2: We're raising our adjusted e-panda outlook to approximately 30 million up from our prior guidance of approximately 25 million. This upward revisions largely reflects our better than expected top line trend so far this year. Despite our run-up investments in increased spending on branding and global infrastructure initiatives that are accelerating our shared gain worldwide.

We're raising our adjusted EBITDA outlook to approximately $30 million up from our prior guidance of approximately $25 million. This upward revision largely reflects are better than expected topline trend. So far this year, despite our ramp up investment and increased spending on branding and global infrastructure initiative.

Is that are accelerating our share gain worldwide.

Speaker 2: We continue to anticipate tactile expenditure of up to 15 million in 2021. Our revised guidance for this year reflects our strong performance to date and solid trends that have continued into the fourth quarter.

We continue to anticipate capital expenditure of up to $50 million in 2021.

A revised guidance for this year reflects our strong performance to date and solid trends that have continued into the fourth quarter.

Speaker 2: As we look beyond 2021, we're excited about the long-term opportunity across our multiple levels of growth, as we catalyze on a significant opportunity in this category we created. However, given the uncertainty of the environment which we operate, and the incredible growth where, laughing in 2021, we remain cautious.

As we look beyond 2021, we're excited about that long term opportunity across multiple levels of growth as we capitalized on a significant opportunity in this category we created however.

Uncertainty of environment, which we operate and the incredible growth were lapping in 2021 will remain cautious we continue to face potential risk for further market closures related to COVID-19, global supply chain challenges as well as inflationary headwinds related to.

Speaker 2: We continue to face potential risk before their market closures related to COVID-19, global supply chain challenges, as well as inflationary headlines related to higher raw material, shipping, and labor costs.

Higher raw material shipping and labor costs.

Speaker 2: That's the point, to a quarter end, we have grown our delivery system in sub-A to over 19,000.

Perhaps liquid two quarter and we'll have grown our delivery system installed base to over 19000.

Speaker 2: I would like to note that due to factors such as treating trade-ups very system price point and our international distributor model, our total delivery system's bigger does not direct correlate to sales.

I would like to note that due to factors such as trading treat up various system price point in our international distributor motto or total delivery system bigger does not direct correlate to fail.

Speaker 2: In summary, we're very pleased with our performance so far this year. We have confidence that our proven operating model and key strategic growth initiatives will drive long-term profitable growth that will increase even greater shareholder value. With those comments, I'll turn the call back to the operator to open it up for questions. Thank you.

In summary, we're very pleased with our performance. So far this year, we have confidence that are proven operating model and key strategic growth initiatives will drive long term profitable growth that will increase even greater shareholder value.

With those comments I'll turn the call back to the operator to open it up for questions. Thank you.

Speaker 1: At this time, we will be conducting a question and answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation to them will indicate your line is in the question queue. You may press star two to remove your question from the queue for participants using speaker equipment and maybe necessary for you to pick up your hands up before pressing the star keys one moment while we pull for questions.

At this time, we will be conducting a question and answer session. If you would like to ask a question. Please press star one on your telephone keypad, a confirmation somewhat indicate your line isn't the question queue. You May press start to move your question from the queue for participants using speaker equipment and may be necessary for you to.

Pick up your handset before pressing the star keys, one moment lollipop or questions.

Speaker 1: Our first question comes along of Oliver Chen with Cowan. You may proceed with your question.

Our first question comes from the line of Oliver Chen with Cowan You May proceed with your question.

Speaker 5: and Brent and Clint congrats on all that you've accomplished.

And President Clinton, Congrats and all that you've accomplished Ah the connected device. The 2.0 connected advice sounds quite exciting how should we think about how 'bout maybe last throughout the year and also any any guidance in terms of your thoughts on revenues in terms of the quarterly K.

Speaker 5: The connected device, the 2.0 connected device sounds quite exciting. How should we think about how that may be launched throughout the year and also any guidance in terms of your thoughts on revenues in terms of the quarterly cadence?

<unk>.

Speaker 5: Also, the glow-and-go and the home device would love to hear any initial learnings and how you're thinking about pricing and more broadly, how this fits into the hydrophacial ecosystem.

Also the go and go in the home device would love to hear Uhm any initial learning and how you're thinking about pricing and more broadly uhm, how this fits into the hide your face facial ecosystem.

Speaker 5: And then third, Leanna modeling questions. The guidance was encouraging, was it the Americas that drove the most upside? Would love context on that as well as helping us understand some of the factors you mentioned on supply chain and inflation and which factors may be outside of your control as we monitor those risks across the sector. Thank you.

And then third Leighanna modeling question just the guidance was encouraging was it the Americans that drove the most upsides would love contact on that as well as helping us understand some of the factors you mentioned on supply chain and inflation and in which factors <unk> maybe outside of your control Ugly monitor those risks.

Cross the sector. Thank you.

Speaker 4: Sure, thanks all of our appreciate the kind of words in the question. If you look at our organic growth on the high-to-patial system, our consumables.

Sure. Thanks, Oliver appreciate the kind words in the question.

If you look at our organic roselawn, the hydro facial system or consumables.

Speaker 4: You know, it's really been very, very solid. And those products work and they feel good and you've given them media results. What we're doing is taking our technology now from analog to digital. And I think that's appropriate given, you know, we have over 19,000 providers out there. We'll launch in the glow and go, which is an exciting home device, really where you can take high-deficient on the road with you. And so we're doing what, you know, I think best in class brands do these days. And that's OK.

Really been very very solid and.

And those products work and they feel good and you get immediate results. What we're doing is taking our technology now from analog to digital and I think that's appropriate given we have over 19000 providers out there launching mcglone go.

Citing home device really where you can take artificial on the road with you and so we're doing what I think the best in the class brands do these days.

Speaker 4: Connecting the consumers with our professionals, the extititions, with the company to ensure that we can meet them where they live, work, and play.

Connecting the consumers with our professionals the us petitions with the company to ensure that we can meet them, where they live work and play.

Speaker 4: The Glow & Go, we've had really good ELSA and beta testing. We're super excited about it. You know, we don't have meaningful revenue from the model. So I would say this is testing Marin and to build it with our community.

The glowing go we've had really good alpha and beta testing, we're super excited about it.

We don't have meaningful revenue from the model. So I would say this is testimony and to build it with our community.

Project Sunday Oh, we're very excited we remain on track with that probably could be in each one of next year and and as Leon mentioned, there's gonna be a lot of new product introductions, we expect a lot of trade and trade up activity and most importantly, we're just really really excited about going to the next.

Speaker 4: Project Sendeo, we're very excited and we remain on track with our products, being H1 of next year. And as Lan mentioned, there's going to be a lot of new product interventions. We expect a lot of trade-in, trade-up activity.

Speaker 4: And most importantly, we're just really, really excited about going for the next step in what we've committed to the last several years in connecting.

Yep and what we've committed to for the last several years with connecting.

Speaker 4: the beauty health community. So, alternatively into the modeling. I just quickly interrupt Clint Oliver and just I saw this today of the device in the office last week. It's it.

The beauty health community, so ultimately into the modeling just quickly interrupt quit.

And just as solid today, a device in the office last week and it. It's it's slick it's going to be really nice to launch in the first half of next year.

Speaker 3: slick and it's going to be a really nice launch in the first half of the next year.

Speaker 2: Yeah, hey, Oliver. So on your questions in terms of the guidance, you know, we actually mentioned the fact that the Delta variant really impacted some of the regions especially with APEC. So there's that impact that we factored in as we looked forward to Q4.

Yeah, Hey, Oliver so on your questions in terms of the guidance.

We actually mentioned the fact that the delta there isn't really impacted some of the region's especially with APEC. So there is that impact that we factored in as we look forward to queue for.

Speaker 2: In terms of the margin of supply chain, you know, what we're really trying to say is, for the third quarter, there's some temporary impact because as you can't appreciate, we've all the four distributors, they have their inventory, and the balance they're carrying, it's higher, you know, as they were functioning as the distributor. And that's gonna go away as you, you know, things will queue for and go forward. However, when it comes to supply chain, when it comes to the actual shipping cost, all of that, just like everybody else in the market, you know, we continue to see pressure that's gonna impact us for going forward.

Arms of the margin of supply chain in all we're really trying to say is for the third quarter. There are some temporary impact because as you can't appreciate with all the foreign distributor they have their inventory and the balance or carrying it's higher.

We're function as a distributor and that's gonna go away as your things in queue for them before however, when it comes to supply chain. When it comes to the extra shipping costs all of that just like everybody else in the market.

Continue to see pressure, that's going to impact us for going forward.

Speaker 5: Thank you and Brent and Clint, as you think about beauty health of the platform, what should we know about in terms of what's on your mind for framework as you think about opportunities and your well capitalized and you have a lot of expertise in terms of this major structural change with the consumerization of healthcare. Thanks.

Thank you and Brent and Clint as you think about give me help as a platform what shall we know about in terms of what's on your mind for a framework as you'd think about opportunities in your well Capitalised and you have a lot of expertise in terms of this major test.

Structural change what the consumers they shouldn't have health care. Thanks, Yeah.

Speaker 3: I think that's exactly right, Oliver. And I think it's weak.

I think that's exactly right over and I think as we as we have always maintained as we think about the perfect emanate candidate or candidates.

Speaker 3: As we've always maintained, as we think about, you know, the perfect M&A candidate or candidate.

Speaker 3: It's a product of brand with a high NPS score and an Fremotor score.

It's it's a product or brand with a higher NPS coordinate promoter score.

Speaker 3: It allows us to get leverage on our call point, most specifically with the esthetician that someone we really want to grow with and support. We have a lot of loyalty there and it's something that would give us a lot of leverage with our existing costs and infrastructure. And then, you know, ideally something that would add accretion to the P&L. You know, that being said, you know, I really do.

It allows us to get leverage on our call point.

Most specifically with the esteve Titian that someone we really want to to grow with and support we have a lot of loyalty there and that's something that that would give us a lot of leverage with our existing costs and infrastructure.

And then I.

Ideally something that would add accretion to the piano.

That being said you know obviously no deal.

Speaker 3: No deal is a perfect deal. Some deals are better deals, some deals are not. So we're pretty fluid, but there's a lot of opportunities. We look at a lot of different things, but we don't feel any pressure. We want to do it in a very disciplined way, but we believe that that's a true growth level for us in the future. Absolutely.

A perfect deal sudden deals are better deal some deals or not so we're pretty pretty fluid, but there's a lot of opportunities. We look at a lot of different things but.

But we don't feel any pressure wouldn't want to do it in a in a in a very disciplined way, but we.

We believe that that's a that's a true growth Webber for us in the future absolutely.

Okay.

Thanks, very much best regards.

However.

Speaker 1: Our next question comes from the line of Steph, what's in with Jeffries? You may proceed with your question.

Our next question comes from the line of stuff with Jeffries you May proceed with your question.

Speaker 6: Thank you, good afternoon everyone, and Clint, it was bittersweet to see the announcement today. You'll definitely be missed.

Thank you good afternoon, everyone and Clint it was bittersweet to see the announcement today, you will definitely be missed.

Speaker 6: My question for you is, I think in the prepared remarks the word accelerated was used a number of times regarding marketing, R&D investments, the role out of international, the buyback of the distributorship.

My question for you is I think in the prepared remarks. The word accelerated was used a number of times regarding marketing R&D investments to roll out of international the buyback of the distributor ships.

Speaker 6: So if you talk a little bit about how much of the revenue upside has afforded you to accelerate the investments in the business, any of that of pull ahead from what would have been investments in later years, and then if you think about the growth that could come behind that, where should be?

Can you talk a little bit about how much of the revenue upside has afforded you to accelerate the investments and the business any of that or or pull ahead from what would have been investments. In later years and then if they think about the gross that could come behind that where should be seeded.

Speaker 6: see the prioritization of growth. Do you expect international to be the single biggest growth driver? Or are there other attributes of the model we should be watching over the next couple of years? Thank you. Sure. Yeah, thanks, Jeff. Next, the kind words. I'll take on the first part, and then maybe hand it to Brent for the second part. You know, do you remember when we...

See the prioritization of grass do you expect international to be the single biggest scrubs driver or are there other attributes of the model we should be watching over the next couple of years. Thank you sure. Yeah. Thanks that makes the kind words.

Opening on the first partner may be tended to Brent for the second part if you remember when we when we merged with best for back last December.

Speaker 4: When we merged with Vesper, you know, back last December , we thought that we were in state acceleration, we got hit by the Delta variant, closures and I think Leanne and the team had done a great job providing guidance on how we managed through, not just the pandemic, but we're thriving out of it. So what we've committed to investors is that we wouldn't spend on marketing and infrastructure and adding salespeople if we didn't have visibility to driving growth. So I think what you see in the Q3 results, hopefully you've seen in the first two quarters, of this project really, indeed. The building that we're facing is now with one point from Sbonfer,

We thought that we received celebration rectify the delta variant closures and I think Leon and the team has done a great job providing guidance on how we.

Managers through not just the pandemic, but were thriving out of it. So what we've committed to investors is that we would spend on marketing and infrastructure and adding salespeople. If we didn't have visibility to driving growth. So I think what you see in the queue. Three results hopefully you will see the first two quarters.

Is feathering in those investments really simply putting down more placements.

Speaker 4: Feathering in those investments, you know, really simply putting down more placement.

Speaker 4: driving the innovation to the two new products you're seeing, and we've increasingly spent on marketing and global infrastructure to get ahead of the growth.

Driving innovation to the two new products your seat and we've increasingly spent on marketing and global infrastructure to get ahead of the growth. So it's very consistent with what we laid out last December when did the pipe very consistent with I think the three quarters now that we've reported.

Speaker 4: So it's very consistent with what we laid out last December when we did the pipe. Very consistent with I think the three quarters now that we've reported. And I think the team's done an amazing job of working through with still challenging situations. So really good tailwinds, really disciplined expense management, but being incredibly opportunistic, we're possible and hopefully that's seen in the Q3 results. So no pull forward on revenue just to be clear. It's really just...

And I think the teams and the amazing job working through it's still a challenging situations so really.

Really good tailwind really disciplined expense management, incredibly opportunistic where possible and and hopefully that will see you in the queue. Three results. So no pull forward on revenue just to be clear, it's really just.

Speaker 4: bending against those three pillars that we laid out back almost a year ago.

Pending against those three pillars.

We laid out back almost a year ago now.

Speaker 3: I think as you think about growth, I mean, one of the things I find most exciting about our company is there's so many levers of growth.

I think as you as you think about growth I mean.

One of the things I find most exciting about but our company is there are so many levers of growth.

Speaker 3: And for us, as Clint said, it's about being very thoughtful and disciplined and having to invest behind those levers of road. Because there's so many of them. It clearly international is a huge opportunity for us and you see that in this quarter, particularly in Asia. And that's despite flare ups and delta variant and COVID closures.

And for US, It's Clinton said, it's about being very thoughtful.

And disciplined and how to invest behind those others of growth because there's so many of them.

It's clearly international is a huge opportunity for us and you see that in this quarter, particularly in Asia, and that's despite flare ups and delta very in Covid closures.

Speaker 3: You know, new products is going to be a strong source of growth for the future. And frankly, M&A is, you know, a completely, you know, unplanned source of growth. But given the firepower we have and the cash rail on the balance sheet, that could be a huge source of growth for us in the future. Try to predict which one is going to be the greatest, you know, is...

New products is going to be a strong source of growth for the future and frankly M&A is a completely.

Planned source of growth, but given the firepower we have in the cash we have on the balance sheet.

That could be a huge source of growth for us in the future tried to predict what which one is going to be the greatest is.

Speaker 3: is it hard to say because it's like asking which kid you like the most uh... but uh... clearly international is it is the probably the most fake opportunity or most advanced and mature opportunity for growth

It's hard to say, because it's like asking which could you like the most.

But clearly international is that probably the most baked opportunity or the most advanced or mature opportunity for growth for us.

Thank you that's helpful. And then could I ask one follow up question I think you mentioned higher pricing and delivery systems in the quarter, how 'bout stinks for some of the inflationary pressure in the power you see in your model to price into some of that in place and whether it's on the system sorry, the consumable side. Thank you.

Speaker 6: Thank you. That's helpful. And Leon, could I ask one follow-up question? I think you mentioned higher pricing on delivery systems in the quarter. How does things through some of the inflationary pressure and the power you see in your model to price into some of that inflation, whether it's on the systems or the consumable side? Thank you.

Speaker 2: I said, yeah, so we actually share that previously as well. We have a natural increase in ASP, partially because of the strong demand and really the mix. You know, you know, historically we were able to pass on cost and also increase in price. And you know, we're certainly thinking that through as we go for next year as well. So that's truly baked in for the numbers, the guidance and as we think through for the future as well. Thank you.

Hi, Steph, yes, we actually share that previously as well we have a natural increasing.

Partially because of the strong demand and really the Mick.

Historically, we were able to pass on costs and also increasing price and we're certainly thinking that correctly golf for next year as well so that that that's truly baking.

For the number of the guidance and as we think through for the future as well.

Thank you.

Speaker 1: Our next question comes in line of Corinne Wolfmeier with Piper Sandler. You may proceed with her question.

Our next question comes from the line of common welfare with Piper Sandler You May proceed with your question.

Speaker 1: Hi, thanks for taking the questions and it was great working with you and you'll certainly be missed. So first for us can you just talk a little bit about the growth and delivery systems that you saw? Is there any channel that stood out in the quarter as being stronger than others? And then how are you thinking about contributions from each channel going forward, especially as you continue to grow your various partnerships?

Hi, Thanks for taking our questions and client it was great working with you and you'll see that maybe mask. So first <unk> first fries can you just talk a little bit about the growth and delivery systems that you saw is there any channel that stood out in the quarter I've been stronger than others and then how are you thinking about contributions from each.

Channel going forward, especially guys you continue to grow your various partnerships.

Speaker 4: Yeah, that's great, friend. Thanks for the nice words. You know, if you think about what we've done the last three years, it's been quite a journey, but we've learned that to drive system placements, we need to drive consumer demands. So we've kind of flipped this upside down and it really worked to go from just a pure B2B play to a B2C back to B. And so I think around the world is we're traveling with our distributors and our salespeople. We're finding it easier to spell hydropatial units.

Yeah, it's great grin, thanks for the nice words.

If you think about what we've done the last three years has been quite a journey, but we've learned that.

To drive system places, we need to drive consumer demand. So we've kind of flipped this upside down and it really worked.

Go from just a pure <unk> back to be and so I think around the world as we're traveling with our distributors in our salespeople were planning to easier to sell hydro <unk> units.

Speaker 4: because more consumers are asking for it by name and we're filling the existing ones up so people are buying multiple lists.

Because more consumers are asking for it by name and were filling the existing ones up so people buy multiple systems. So that's really exciting I think it's a testament to where the brands starting to get a really nice.

Speaker 4: So that's really exciting. I think it's a testament to where the brand is starting to get so real nice.

Speaker 4: tipping point in terms of the channels they're all growing really nicely and that there's new channels emerging as we see Experiential beauty health happening. You know, that's I think results, you know as a result of our relationship not just before which is incredibly strong, but with Nordstrom

Point in terms of the channels are all growing really nicely and if there's new channels emerging as we see experiential beauty health happening I think results as a result of our relationship not just his performance incredibly strong, but with nordstroms, John Lewis and please as soon as of Australia really excited about these new and emerging business partners the woman.

Speaker 4: John Lewis and Playsett Center's Australia, really excited about these new emerging business partners. The one that's still depressed is our retail channel. And I think that is really, you know, you see flare ups and as you see restrictions from government restrictions.

Still depressed as our retail channel and I think that is really needed you.

See flare ups and as you see restrictions from government restrictions. So I think of anything that company as we emerge from the pandemic and with a great news we've had the last week.

Speaker 4: So I think of anything that company as we emerge from the pandemic and with the great news we've had the last week, we should see all these channels growing and really excited about it. It is important though the average high-tech facial consumer, if you remember, gets treatments in 3.2 different locations.

We should see all these channels growing and and really excited about it. It is important though the average hide official consumer if you remember gifts treatments and three two different locations. So we haven't lost those consumers. We just moved in to different places and I can't wait to help our retail partners get back on a strong footing.

Speaker 4: So, you know, we haven't lost those consumers. We just have moved them to different places and it can't wait to help our retail partners get back on a strong footing.

Speaker 1: Great, thank you. And then, so you've invested a ton in consumer awareness from Gold Reloost Intuiler and Social Media. Is there any way that you can quantify how these investments may be translating to new customers or increase spend from your current customers? I understand it still may be early days in these, but is there any color from the vibe that would be helpful? Thank you.

Great. Thank you and then.

So you've invested a time and consumer awareness from Gulf relation to area in such a media is there any way that you can quantify how these investments maybe translate into new customers or increase spend from your current customers.

I understand it so maybe early days in these mm Goodbye is there any call you can decide that'd be helpful. Thank you.

Speaker 4: Yeah, well, we do know, you know, the data for the last several years has said, look, if some, you know, hydrophacials had high single-visit awareness.

Yeah, what we do know.

The data for the last several years instead look at some some hydro <unk> had high single digit awareness.

Speaker 4: when people get it, two-thirds of them stick and one-third become super consumers. So, you know, several years ago we started the World Tour during the pandemic. We designed that very cool semi that's called Glow Volution. And what we find is whether we're in Dubai in a pop-up shop or London in a pop-up shop or one of our Glow Volution stops.

When people get it two thirds of them stick and one third become super consumers. So.

Several years ago, we started the world tour during the pandemic redesign, but very cool semi that's called global Lucian and what we find is whether we're in Dubai in a pop up shop or London in a pop up shop or one of our global Lucian stops the.

Speaker 4: The data looks the same. 85% of the people that we drive to one of our physical activations have never had a hydrophacial and if one leaving 85% they want to get a hydrophacial and so that has worked for us incredibly well. So we track the ROI on all of these events. I think increasingly the companies getting more sophisticated about the CAC to LTV relationship.

The data looks the same 85% of the people that we drive to one of our physical Activations I've never had a heck of facial and upon leaving 85%. They wanted to get 100 facial and so that has worked for us incredibly well so we track.

Roy on all of these events I think increasingly the company is getting more sophisticated about the cat to LTV relationship but.

Speaker 4: But it's safe to say we wouldn't be doubling our marketing spend particularly on these type of activations if we didn't think it was well worth it. So we're not prepared to give the secret.

But it's safe to say, we would be doubling our marketing spend particularly in these type of activation that we didn't think it was well worth it. So we're not prepared to give the secret sauce, so to speak but I think it's it's really targeted very surgical like marketing that drives physical sales drives consumer awareness and that turns into consumable sales because they are going to our placement. So since we are.

Speaker 4: It's a small source, so to speak, but I think it's really targeted, very surgical like marketing that drives physical fails, drives consumer awareness, and that turns into consumable fails because they're going to our place. So it tends to be a really great ecosystem that

Really great ecosystem that.

Speaker 4: that we found is very supportive. It's mirroring the consumer with great as-efficient that are well trained for HF Connect and just getting them to experience the treatment.

That we found is very supportive smearing the consumer with greater physicians that are well trained through HFF connecting just gave an experienced benefit the treatment.

Thank you.

Speaker 7: Our next question comes from the line of John Block. With Steve Ful you may proceed with your question.

Our next question comes from the line of John Block with Stifel. You May proceed with your question.

Speaker 8: Thanks guys, good afternoon. Maybe just to start the midpoint.

Thanks, guys. Good afternoon, maybe just to start the midpoint.

Speaker 8: The 2021 guidance I believe implies a flat 4Q with 3Q. And usually we see a 4Q seasonal uplift. Maybe if you could just talk to that a little bit as a conservatism, just also talk about what we take you to arguably the high end of the range versus the low end. And maybe just as an attack on that Leanne, is some of that a function of what you've witnessed in APAC. And are some of those APAC COVID headwinds beginning to abate here as we work our way throughout the fourth quarter.

2021 guidance I believe that implies a flat for <unk> and it usually we see a four Q seasonal uplift maybe if you could just talk to that a little bit as of conservatism.

Just also talk about what would take it are arguably the high end of the range versus the low end and maybe just as a tack onto that we add as some of that a function of what you've witnessed in APAC and are some of those APAC Kobe to headwinds beginning to abate here as we work our way throughout the fourth quarter.

Speaker 2: Hi, Jones. Yeah, so I think there's definitely a point of view when it comes to APEC market because that's the market impact us the most significantly when it comes to the third quarter.

Hi, Joan Yeah, So I think if they're especially.

Point of view when it comes to APEC market cause that's the market impact us and most significantly when it comes to the third quarter, you'll probably southern youth as well what happened to Shanghai D. C. I think China Sn market.

Speaker 2: You probably saw the news as well, what happened to Shanghai Disney. I think China, as a market, there's a lot of impact if the trend worked on the worst side of the equation. We also starting to see some ease up in Australia, but there's also other countries in the APEC region having a worsening trend. So overall, we did take that into consideration. We have shared with you previously, we track our open and closed.

A lot of impact.

That trend going on the west side of the equation. We also starting to see some ESF in Australia, but there's also other countries in APEC region, having a worsening trend. So overall, we did take that into consideration have shared with you previously would track are open and close pretty closely by region.

Speaker 2: pretty close way by region. So we build that into our guidance if that makes sense.

So we build that into our guidance if that makes sense.

Speaker 8: Okay, yep, certainly doesn't. Maybe I'll follow up with you a little bit more offline there. Just a pivot and sort of the follow up question.

Okay, Yeah, certainly doesn't big I'll follow up with you a little bit more offline. There just a payment in sort of a follow up question. The global supply chain pressures that you guys mentioned I don't think an impact 2.0, I think you called it out what age 22, but does.

Speaker 8: the global supply chain pressures that you guys mentioned i don't think it packs two point out i think you called it out you know one age twenty two but does it impact on how you roll it out in other words measuring the cadence of the roll out we've done some checks and there seems to be a really high want

Does it impact on how you rolled out in other words measuring the cadence of the rollout we've done some checks and there seems to be a really high want in the field from your current installed base to possibly upgrade so just as we think about those supply chain pressures.

Speaker 8: in the field from your current install base to possibly upgrade. So just as we think about those supply chain pressures, you know, will you be able to fill all demand, call it new and potential upgrades in your opinion as early as the first half of next year? Thanks, guys.

Would you be able to fill all demand call it new and potential upgrades in your opinion as early as the first half of next year. Thanks, guys.

Speaker 2: Hey, Joe. Yeah, so, you know, as you can appreciate, you know, we're pretty involved for in terms of making the main view of resistance, especially with shared with you historically, we wrote up, you know, call it 3500, 4000, right? So from a numbers point of view, while the supply chain remains to be constrained for all of us, we can plan ahead. So a lot of the real supply chain issue we're seeing, it's more when it comes to shipping or delays, more so than shortage, if that makes sense.

Hey, Joe Yes, so.

I appreciate it.

Thoughtful in terms of making the main delivery systems, especially with shared with Yosef directly with the rollout call at 3500 4000 right.

So from a numbers point of view, while the supply chain remains to be constrained for all of US. We can plan ahead. So a lot of the real supply chain issue. We're seeing it's more when it comes to shipping delays more so than shortage if that makes sense yeah.

Speaker 3: It's not a component issue necessarily for us. So we should be okay.

A component issue necessarily for us so we should be okay.

Perfect. Thanks, guys.

Our next question comes from the line of <unk> of Goldman Sachs. You May proceed with your question.

Speaker 7: Our next question comes from the line of Amit Hassan with Goldman Sachs. He may proceed with your question.

Speaker 9: I think this is Phil for me. Thanks for taking the question. Maybe my first one to follow on, which I was just asking the line of questioning. We're starting to see case rates increase in parts of Europe , some of the key countries that you all called out as areas of strength in this quarter. I'm just wondering if you can kind of follow on the APAC logic and talk about what you're seeing at this point from movement restrictions or otherwise in Europe that might be implied in the ports you've gotten.

Hi, Thanks, Cystoscope or I mean, thanks for taking my question, maybe my first one to fall on what time was just asking the line of questioning.

We're starting to see case rates increase in parts of Europe. Some of the key countries that you all called out as areas of strength in this quarter I'm. Just wondering if you can kind of follow on the APAC Lodge I can talk about what you're seeing at this point from from movement restrictions are otherwise in Europe that might be implied in the <unk> guidance.

Speaker 4: Yeah, John , this one, as you know, I mean, we've been through the worst, hopefully the worst of the pandemic. We've managed through it. We've never let that be an excuse. We've just tried to shoot straight with the market on what our visibility is. But I think there is no doubt that the macro terms of health and wellness and certainly the benefits that we have as macro tailwinds.co away.

Yes, John this discipline look as you know we've been through the worst hopefully the worst of the pandemic. We've managed through it we've never let that be an excuse we just tried to shoot straight with the market on our visibility is but I think.

There is no doubt that the macro terms of health and wellness and certainly the benefits that we have is a macro tailwind snuck away. So even when we see markets like Japan that shuts down in Australia shutdown, we see demand come back in because we have such a.

Speaker 4: So even when we see markets like Japan that shuts down or Australia shuts down, we see demand come back. And because we have such a, you know, on the channel approach, geographic diversity, no concentration, you know, I'm obviously gonna be handing the keys over to Brent and team here, but I feel really comfortable that we've gotten very good at managing through this.

Omnichannel approach geographic diversity no concentration.

Obviously can be handed the keys over to Brent and team here, but I feel really comfortable that we've gotten very good at managing through this so I don't think there's any reason to.

Speaker 4: So I don't think there's any reason to to overthink that we're to be, you know, too optimistic about it. We're giving you good guidance based on what we see up in the marketplace.

To over think or to be.

Too.

Optimistic about it will give you a good guidance based forms yoga in the marketplace.

Speaker 9: Okay, that's fair enough. My second question was around utilization of the systems broadly. It's more of a broad question, I think, about the seasonality that the unit has been in the business going forward. But as part of the talk track today, it sounded like there were a number of factors that were kind of impediments to what would have otherwise been even stronger growth. The crude math just treatments divided by systems.

Okay. That's fair enough. My second question was around utilization of the system's broadly.

It's more of a broad question I think about the seasonality that you answered it's been in the business going forward, but as part of the the top track today. It sounded like there were a number of factors that were kind of impediments to what would have otherwise been even stronger growth.

Crude mask just.

Treatments divided by systems looks.

Speaker 9: Looks like a step down sequentially. Is that something that we should be anticipating going for that kind of two queue that's Requeue seasonality step down and then recovery and four queue? Is that what you all see in Underlying business or there's some one times or otherwise we should be thinking about thanks for the question. Yes

It looks like a shutdown sequentially is that something that we should be anticipating going forward that kind of too cute at three two seasonality sat down and then recovery and <unk> is that what you all see an underlying business or there's some one times or otherwise so we should be thinking about thanks for the question yet.

Speaker 4: Yeah, I'll handle it at high level the first bit. As you're well aware, Q2 and Q4 tend to be stronger than Q1 and Q3. That has been a bit...

So.

High level of the first that is you are well aware Q2, and Q4 tend to be stronger than Q1, and Q3 that has been a bit.

Speaker 4: unusual because of the pandemic and the shutdowns and also we have a market that's growing outside the US very fast. So I wouldn't we're also laying down a lot of new systems which take a while to mature. So you know when you're laying down a lot of new systems and you've got a little bit of an abnormal cycle because of the pandemic, I think it'll normalize over time and we'll be prepared to do more granular information that time.

Unusual because of the pandemic and the shutdowns and also we have a market that's growing outside the us very fast so.

I wouldn't we're also laying down a lot of new systems, which take awhile to mature so you'll end out a lot of new systems, and you've got a little bit of an abnormal cycle because of the pandemic I think of a normalize over time will be prepared to be more granular information at that time.

Thanks for the question.

Speaker 7: Our next question comes from the line of Kyle Rose with Canacred, you may proceed with your question.

Our next question comes from the line of Kyle Rose with Canaccord. You May proceed with your question.

Speaker 10: Great, thank you for taking the questions and I echo all the sentiments regarding Clinton's departure, so congratulations on everything you've accomplished. Wanted to maybe just touch a little bit more on the acceleration comments that I think was asked previously. And the one thing, when I look back to where guidance started the year and where we're at now, you've obviously had tremendous upside on a revenue perspective and you've reinvested the majority of that back into the business. Obviously you're raising, you've been here a little bit. What I'm trying to understand is how should we think about leverage from a bigger picture perspective or over the medium term. You know, when we think about, you know, some of the investments you're making with the global ERP and CRM system, just trying to really understand how much is one time in nature versus going to be.

Great. Thank you for taking the questions and I Echo all the sentiments regarding.

Quinn's departure, so congratulations on everything you have accomplished.

Wanted to maybe just touch a little bit more on the acceleration comments that that I think it was asked previously.

The one thing when I look back to where guidance started the year and where we're at now I mean, you've obviously had tremendous upside on a revenue perspective, and you've you've reinvested the majority of that back into the business, obviously, you're raising EBITDA here a little bit when I'm trying to understand is how should we think about leverage from a from a bigger picture perspective or over the medium term.

When we think about some of the investments you are making with the with the global ERP in CRM system, just trying to really understand how much.

Is one time in nature versus.

Going to be.

Speaker 10: And now I'm going to expense line we should be thinking about.

An ongoing expense line, we should be thinking about.

Speaker 4: I'll start in the kind of words. I'll start with the first part and hand over the land. From the start of this, from the pipe to the Go public these back, we really wanted to be clear to investors that this was a gross story that there were investments that we felt would accelerate shareholder value. And that we thought like we could set up a really nice revenue predictability and expense predictability that was heavy on investment. Traditionally, this company historically has been very Catholic light.

I'll certain things from a kind of where they'll start with the first part in the land.

From the start of this from a place to go public. These back we really wanted to be clear to investors that this was a growth story that their investments that we felt would accelerate shareholder value and that we felt like we could set up a really nice revenue predictability of expense predictability. There was heavy on investment traditionally this company or historically has been very cap.

Ah slight so if you remember we agreed that.

Speaker 4: So if you remember, we agreed that we, or we, we, we, signals investors, we wanted to double the marketing spend consumer work and it drives revenue. We wanted to get the new products out because those have been stopped as we went into the pandemic. So we have two new exciting products coming. And then we wanted to build out the international infrastructure. And then we said we, we focus on M&A. So I think, you know,

Signals vessels, we wanted the double the marketing spent in consumer awareness drives revenue, we wanted to get the new product cell.

Those have been stopped as women in the Pandemics with two new exciting products coming and then we wanted to build up the international infrastructure and then we'd said we focus on M&A. So.

<unk>.

Speaker 4: What Leon and I have committed to is that for the next 18 months we're really thinking about this being a growth story. Historically, in a private equity management, we ran this at 25% to 30% EBITDA. There's no reason this company couldn't be run. So we really produced cash flows in that same level in the future. But this is a growth story out of the blocks. And hopefully we've delivered upon our commitments. And now we focus.

What we animal I have committed to is that for the next 18 months to really think about this kind of growth story historically into private equity management. We ran this a 25% to 30% EBITDA. There's no reason this company couldn't be runs were really produced cash flows in that same level in the future. But this is the growth story out of the blocks and hopefully we've delivered upon our <unk>.

<unk> and.

And now we focus.

Speaker 4: on that fourth pillar. So that's the meantime. I don't know if you want to add. Yeah, take out. So to add to that, I think we'd mention that briefly prior, if you really think about this current year, R&D has been a pretty big focus, and we had mentioned we were buying speed, right? Because we also wanted to speed up the process, accelerate it, and then we can start to test and learn some of the new product lines.

On that four pillars. So that's the only answer you want to add to the Hague how.

After that I think that nation that racially prior if you really think about this trend year R&D has been a pretty big focus and we had mentioned we were buying speed right. Because we also wanted to speed up the process accelerated and then we can start to test them. There are some of the new product lines.

Speaker 2: I think Clint has always also shared usually where at a three to five year cycle when it's a really significant, you know, long job of product, but then we're going to be active. So if you really think about this year, a big chunk of the R&D investment, you don't necessarily see the revenue until the following year. By the same token, you know, marketing that will continue as we see how we get a return investment.

Think Clinton has also shared usually where it is 325 year cycle. When it's a really significant lounge have a product, but then we're going to be active. So if you really think about this year at a big chunk of the R&D investment you don't necessarily see the revenue until the following year by the same token marketing that will continue.

Can you actually see how we get a return on investment for international as you mentioned earlier.

Speaker 2: For international, as you mentioned earlier, it's a cloud solution. There's some investment into these ERP and other space and people we're investing heavy this year, which would really benefit the year after and go forward. We will anticipate the continual investment, go forward for the next couple of quarters. Now we should be at a pretty good position to really leverage for the future.

Cloud solution there are some investment into these ERP and other.

And people were investing heavy this year, which would really benefit.

The year after and go forward Willa anticipate the continuing investment.

Go for for the next couple of quarters now we should be at a pretty good position to really leverage.

Future.

Speaker 10: thank you that that's very helpful uh... and then you uh... we spent some time already talking about uh... sunday o and and uh... glowing go but i wanted to touch on uh... if we go back to care of the in epic epic you know i'm not sure but i'm saying that right but when i think about that you're moving beyond the face into the scalp and now you're moving into the deco ties in the neck trying to understand you know what uptake has been of of of both of those products and in just how you expect to see utilization trend from a longer term perspective when we think about you know moving beyond just the face into some of the some of the other areas

Thank you that that's very helpful.

And then.

Yeah, we we spent the time already talking about Cindy.

Sunday, Oh, and glowing go but I wanted to touch on just if we could go back to care of Eve and epic executed some I'm not sure if I'm pronouncing that right, but when I think about that you are moving beyond the face into the scalp and now you're moving into the Declan Taj in the neck trying to understand.

Uptake has been of of of both of those products and and just how you expect to see utilization trend from a longer term perspective, when we think about moving beyond just the face it into some of the some of those other areas.

Speaker 4: Yeah, thanks for calling on server the first part of me.

Yeah, Thanks call I'll start with the first part of it.

Speaker 4: You know, I think three steps, 30 minutes, that's in your life, hydrofatials become really increasingly synonymous with kind of owning the healthy skin category. You know, we cleanse, extract the hydrate, and I think the team's done a really nice job.

I think three steps 30 minutes desk in your life Hydroa facial has become really increasingly synonymous with kind of owning the healthy skin category.

Category, we plan to extract rehydrate and I think the team spent a really nice job.

Speaker 4: increasing consumer awareness about this in the first place ago and I think beauty health is

Increasing consumer awareness about this in the first place to go and I think beauty health is a natural extension of trying to increase that influence if you look at the data.

Speaker 4: a natural extension of trying to increase that influence. If you look at the data, and I know you know this,

Speaker 4: Healthy scalp is as big a market. Caravvy is a highly differentiated product. It works just like our skin health products, some medicine and product that makes everything else better. And healthy scalp is key to healthy new hair growth.

This.

Okey Skelf as as big a market Caribees is a highly differentiated products. It works just like our skin health products to medicine and product that makes everything else better and healthy scalp is key to healthy new hair growth. So I think the teams really excited about it.

Speaker 4: So I think the team's really excited about it. And I would consider Caribbean just the first product and a portfolio product for Alpeas Gel. Epicutus is new. I think, you know, as we look to improve the system, improve the ingredients, launch new products, you know, skin is your largest organ, it's all over your body. And it's a really nice natural expansion to the Decle Trials. And Decle Tay, and I think the team is really excited about Epicutus.

And I would consider caribou just the first product in a portfolio products royalty scale at the queue. This is new I think.

We look to to improve the system improve the ingredients launched new products.

Skin is your largest organs all of your body and so it's a really nice natural extension to the deck with trials and <unk> and I think the team is real excited to have the cutest.

Speaker 4: really proprietary product with really, really very good results. And so early days, but certainly the market data would say that if we execute one of the should be very promising areas of opportunity for the company.

Really proprietary product with really really very good results in so early days, but certainly the market data would say that if we execute one of it should be very promising areas of opportunity for the company.

Great. Thank you for taking the questions.

Speaker 7: Our next question comes from the line of Alinda Bolton-Lizer with D.A. Davidson. You may proceed with your question.

Our next question comes from the line the Linda Bolton Wiser with da Davidson You May proceed with your question.

Speaker 7: Yes, hi, thank you. I was wondering if you could, I know you likely do not want to get into talking about guidance for next year, but I'm just curious if the numbers that you put out at the time of your desacking in terms of projections on revenue growth and EBITDA growth. Would those growth rates still hold true for 2022, or maybe you can just...

Yes, hi, Thank you I was wondering if you could I know you.

[laughter] likely do not want to get into talking about guidance for next year, but I'm just curious if the numbers that you put out at the time of your these backing in terms of projections on revenue growth and EBITDA growth would those growth rates still hold true for 2022 or maybe you can just.

Speaker 7: kind of qualitatively discuss any differences that there might be versus what you had originally projected. Thanks.

Qualitatively discuss any any differences that there might be versus what you had originally projected thanks.

Speaker 4: I don't want to give rent in the team a number that I, you know, I don't want to have had a check that he can't catch like this. So, you know, I feel really good about what we've achieved. I feel very good about finishing the year and transition in the business. We haven't ever had a better market position. A senior team that's reloaded and a strategy that we're executing for some really nice.

I don't I don't want to give a breath in the team a number that.

I don't want to get a check that he can't catch my shows [laughter]. So.

I feel really good about what we've achieved I feel very good about finishing the year and transition in the business, we haven't ever had a better market position.

Your team is reloaded and the strategy that were executed bone some really nice.

Speaker 4: products in a connected community, I think I'll leave it to Brenton the team on what future guidance is, but I felt it was important to deliver this company with a strong team, a strong product offering a good market presence, and I'm sure he'll be here to provide your further guidance on it. Yeah, I'll just chime in and then thanks, point. Well, if you look at the numbers we've provided in the desfacking or in the SPAC IPO or bridge,

New products in a connected community.

Income I'll leave it to Brent in the team on what future guidance is but I felt it was important to to deliver this company with a strong team a strong product offering a good market presence and I'm sure he'll be here to to provide your further guidance on it but yeah I'll just chime in and thanks.

If you look at the numbers, we provided and the stacking or in the in the spec.

Oh a bridge.

Speaker 3: Data we we've well surpassed those and and the company is in a very strong position We're very excited about future growth. We're going to provide that guidance in the normal course and

Data, we've well surpass those in the companies that in a very strong position, we're very excited about future growth, but we're going to provide that guidance in the normal course and.

Speaker 3: We'll be doing that in the next, I guess, probably two months or there about.

We'll be doing that in the next I guess, probably two months or thereabouts.

Speaker 7: Okay, thank you. And can you comment on how churn is looking as your number of systems continues to increase, is that churn increasing too, or is churn saying relatively stable?

Okay. Thank you and can you comment on how churn is looking as your number of system continues to increase is that Sharon.

<unk> turns staying relatively stable.

You mean that so far it's been relatively stable and consistent.

Speaker 2: I mean, that so far it's been relatively stable and consistent. Yeah, and I think if you look back, you know, the products went around since 05. It's been consistent historically. So I don't think the addition of newer, higher volume production, I think, is an and and ref productivity should be a side of strength with the brand, not not concerned. So nothing has changed so far.

If you look back product has been around since O. Five it's been consistent historically, so I don't think the addition of newer higher volume production I think as in Rep productivity should be a sign of strength with the brand not not concerned so nothing has changed so far.

Speaker 7: And then finally, just on the M&A strategy, I was just curious if you wanted to take advantage of the channels that you're strong in. So would you consider acquisition of say, like a Durham cosmetic brand that was distributed to doctors offices? Or do you think you want to stick more in the device area?

And then finally I'm just on the emanated strategy I was just curious if you.

You wanted to take advantage of the channels that you're strong and so would you consider acquisition of say like a dark cosmetics brand that was distributed to doctors offices or do you think you Wanna stick more in the device area.

Speaker 3: Yes, it's, you know, I think we want to take advantage of the distribution we have. That is the call point of the esthetician.

Yeah. It's I think we want to take advantage of the distribution, we have that as the call point of the <unk>, whether she sit in a doctor's office or a spa or a hotel or retail channel.

Speaker 3: whether she's in a doctor's office or a spa or a hotel or a retail channel. You know, it's really that call point and so it could be a, it could be skincare, it could be a device, it could be anything that really supports her practice and her growth and helps her benefit her customer. That's how I think about it at a high level for sure.

It's really that call point in so.

It could be it could be skincare it could be a device it could be anything that really supports her practice in her growth.

And health care benefit her customer.

That's how I think about it at a high level for sure.

Okay. Thank you very much.

Okay Tilman.

Speaker 11: Ladies and gentlemen, we have reached the end of today's question and session. I would like to turn this call back over to Mr. Brenn Sanders for closing remarks.

Ladies and gentlemen, we have reached the end of today's question and answer session I would like to turn this call back over to Mr friend Sondra for closing remarks.

Speaker 3: Yes, so thank you, operator. Just want to kind of end and say how pleased we are with our results for the quarter and how excited we are for our futures. We focus on executing our next phase of growth. We really thank everyone for joining us on the call today. And we look forward to keeping you all updated.

So thank you operator.

Wanted to kind of and and say how pleased we are with our results for the quarter and how excited we.

We are for our futures, we focus on executing our next phase of growth we rarely thank everyone for joining us on the call today, and we look forward to keeping you all updated.

Speaker 11: Thank you for joining us today. This includes today's conference. You may disconnect your lens at this time.

Thank you for joining US today. This concludes today's conference you may disconnect your lines at this time.

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