Q1 2026 SkinHealth Systems Earnings Call

May 7, 2026

Pedro Malha: Their patients' outcomes, and they optimize for the long-term return on their treatment rooms. We believe that exactly plays to the strength of our company, to the strength of HydraFacial platform and ultimately will come up stronger as we see the market stabilizing. In terms of innovation, definitely very over-indexed in our innovation agenda. Innovation needs to do four things for us. It needs to improve clinical outcomes, it needs to strengthen the economics of providers, it needs to obviously fit naturally into the treatment room where our devices of HydraFacial and SkinStylus already reside, and it needs to be accretive to margin. If it does not meet those, we are not pursuing it.

Speaker #1: Good afternoon, ladies and gentlemen, and welcome to the Skin Health Systems 2026 first quarter earnings call. At this time, all participants are in listen-only mode.

Operator: Good afternoon, ladies and gentlemen, welcome to the SkinHealth Systems Inc. 2026 Q1 Earnings Call. At this time, all participants are in listen-only mode. Following the presentation, we will conduct a question and answer session. If at any time during this call you require immediate assistance, please press star zero for the operator. This call is being recorded on Thursday, 7 May 2026. I would now like to turn the conference over to Norberto Aja, Investor Relations. Please go ahead.

Speaker #1: Patient's outcomes. And the optimize for the long-term return on their treatment rooms. So we believe that that exactly plays to the strength of our company, to the strengths of HydroFacial Platform, and ultimately we'll come up stronger as we see the market stabilizing.

Speaker #1: All participants are in listen-only mode. Following the presentation, we will conduct a question-and-answer session, if at any time during this call you require immediate assistance, please press *0 for the operator.

Speaker #1: Following the presentation, we will conduct a question-and-answer session. If at any time during this call you require immediate assistance, please press *0 for the operator.

Speaker #1: This call is being recorded on Thursday, May 7, 2026. I would now like to turn the conference over to Norberto Aja, Investor Relations, please go ahead.

Speaker #1: This call is being recorded on Thursday, May 7, 2026. I would now like to turn the conference over to Norberto Aja, Investor Relations. Please go ahead.

Speaker #1: In terms of innovation, definitely very, very over-indexed in our innovation agenda. Innovation needs to do four things for us. It needs to improve clinical outcomes.

Speaker #2: Thank you, operator, and good afternoon, everyone. Thank you for joining us today to discuss skin health systems 2026 first-quarter results. We released our results earlier this afternoon, which can be found on our corporate website at skinhealthsystems.com.

Speaker #2: Thank you, operator, and good afternoon, everyone. Thank you for joining us today to discuss Skin Health Systems 2026 first quarter results. We released our results earlier this afternoon.

Norberto Aja: Thank you, operator, and good afternoon, everyone. Thank you for joining us today to discuss SkinHealth Systems Inc.' 2026 Q1 results. We released our results earlier this afternoon, which can be found on our corporate website at skinhealthsystems.com. Joining me on the call today is SkinHealth Systems Inc.' Chief Executive Officer, Pedro Malha, along with our Chief Financial Officer, Michael Monahan. Before we begin, I want to remind everyone of the company's safe harbor language. Management may make forward-looking statements including guidance and underlying assumptions. Forward-looking statements are based on expectations and involve risks and uncertainties that could cause actual results to differ materially. Listeners are cautioned not to place undue reliance on any forward-looking statements. For further discussion of these risks related to our business, please see the company's filings with the SEC. This call will present GAAP financial measures.

Speaker #1: It needs to strengthen the economics of providers. It needs to obviously fit naturally into the treatment room where our devices of HydroFacial and skin stylists already reside.

Speaker #2: Which can be found on our corporate website at skinhelsystems.com. Joining me on the call today is Skin Health Systems Chief Executive Officer, Pedro Mala, along with her Chief Financial Officer, Mike Monahan.

Speaker #2: Joining me on the call today is Skin Health Systems Chief Executive Officer Pedro Malha, along with her Chief Financial Officer Mike Monahan. Before we begin, I want to remind everyone of the company's Safe Harbor language.

Speaker #1: And it needs to be accretive to margin. So if it does not meet those, we are not pursuing it. And as I mentioned in my opening remarks, we are putting the right capital behind the development of the next generation HydroFacial.

Speaker #2: Before we begin, I want to remind everyone of the company's safe harbor language. Management may make forward-looking statements, including guidance and underlying assumptions. Forward-looking statements are based on expectations and involve risks and uncertainties.

Speaker #2: Management may make forward-looking statements including guidance and underlying assumptions. Forward-looking statements are based on expectations and involve risks and uncertainties that could cause actual results to defer materially.

Pedro Malha: As I mentioned in my opening remarks, we are putting the right capital behind the development of the next generation HydraFacial, and we are putting the right capital and the teams behind our next generation of boosters, which I mean we are overhauling the whole strategy. In terms of the commercial organization, I come from organizations where I had direct overview of the regions. With this change that we did, that gives me the possibility to have a direct hand and management of the US and all international business. It will allow me, most importantly, to be directly involved with these regions, with the way we sell, closer to metrics.

Speaker #1: And we are putting the right capital and the teams behind our next generation of boosters, which I mean we are overall overhauling the whole strategy.

Speaker #2: That could cause actual results to defer materially. Listeners are cautioned not to place undue reliance on any forward-looking statements. For further discussion of these risks related to our business, please see the company's filings with the SEC.

Speaker #2: Listeners are cautioned not to place undue reliance on any forward-looking statements. For further discussion of these risks related to our business, please see the company's filings with the SEC.

Speaker #1: In terms of the commercial organization, I come from an organization where I had direct overview of the regions. And so we exchanged that we did.

Speaker #2: This call will present gap financial measures. A reconciliation of these gap non-financial measures to the most comparable gap measure is available in the earnings press release, which was furnished to the SEC and available on our website.

Speaker #1: That gives me the possibility to have a direct hand and management of the US and all international business. And it will allow me, most importantly, to be directly involved with these regions with the way we sell closer to metrics and this is an environment that I'm very comfortable with.

Norberto Aja: A reconciliation of these GAAP non-financial measures to the most comparable GAAP measure is available in the earnings press release, which was furnished to the SEC and available on our website. Following management's prepared remarks, we will open the call for a question and answer session. With that, I would now like to turn the call over to our CEO, Pedro Malha. Please go ahead, Pedro.

Speaker #2: Following management's prepared remarks, we will open the call for a question-and-answer session. With that, I would now like to turn the call over to our CEO, Pedro Mala.

Speaker #2: Following management's prepared remarks, we will open the call for a question-and-answer session. With that, I would now like to turn the call over to our CEO, Pedro Malha.

Speaker #2: Please go ahead, Pedro.

Speaker #3: Thank you, Norberto. So as you know, two weeks ago we rebranded Skin Health to his Skin Health Systems, and this was not simply a name change.

Speaker #2: Please go ahead, Pedro.

Speaker #3: Thank you, Norberto. So as you know, two weeks ago we rebranded Skin Health to his Skin Health Systems, and this was not simply a name change.

Pedro Malha: This is an environment that I'm very comfortable with and coming from all the experiences and positions that I had in the past. That's the reason why the change was made. Mike, you wanna address the other questions?

Speaker #1: And coming from all the experiences and positions that I had in the past. And that's the reason why the change was made. Mike, you want to address the other questions?

Speaker #3: It reflects a deliberate shift in how we operate as a company, and that we are building a company with a clinical rigor, the commercial discipline, and the operational mindset of a leading medical device company.

Pedro Malha: Thank you, Norberto. As you know, 2 weeks ago we rebranded The Beauty Health Company to SkinHealth Systems, and this was not simply a name change. It reflects a deliberate shift in how we operate as a company, and that we are building a company with the clinical rigor, the commercial discipline, and the operational mindset of a leading medical device company. HydraFacial remains at the center of that strategy as one of the most recognized specialty aesthetic treatments globally. Around it, we are building a broader platform that includes SkinStylus, our microneedling and nano-channeling technology, and the up-and-coming relaunch of our Keravive for scalp health. The objective is straightforward. It's to build a clinically differentiated platform that improves provider economics, strengthens the utilization, and drives durable recurrent revenue growth.

Speaker #2: Sure. Thanks, Oliver. The midpoint of our guidance assumes we have modest free cash flow generation in the last three quarters of the year. Overall CapEx I'm expecting 8 to 10 million for the year of CapEx.

Mike: Sure. Thanks, Oliver. The midpoint of our guidance assumes we have modest free cash flow generation in the last 3 quarters of the year. Overall CapEx, I'm expecting $8 to 10 million for the year of CapEx. We spent $1.6, $1.7 million in the Q1. As you look at kind of overall, we expect free cash flow, as I said, to be positive after we service the debt for the last 3 quarters. Working capital, I expect to not be a significant drain to actually we're forecasting it to be relatively flat year over year. It was a use of cash in Q1, that's largely due to the timing of payables.

Mike Monahan: Sure. Thanks, Oliver. The midpoint of our guidance assumes we have modest free cash flow generation in the last three quarters of the year. Overall CapEx, I'm expecting $8 to 10 million for the year of CapEx. We spent $1.6, $1.7 million in the Q1. As you look at kind of overall, we expect free cash flow, as I said, to be positive after we service the debt for the last three quarters. Working capital, I expect to not be a significant drain to actually we're forecasting it to be relatively flat year over year. It was a use of cash in Q1, that's largely due to the timing of payables. My expectation is that that normalizes by the time we get to the end of the year and specifically by the time we get to the maturity.

Speaker #3: Hydrofacial remains at the center of that strategy. As one of the most recognized specialty aesthetic treatments globally, and around it, we are building a broader platform that includes skin stylists, our microneedling and nano-channeling technology, and the up-and-coming relaunch of our CaraVive for scalp health.

Speaker #1: Fourth quarter of 2025. So some of it, was a smaller, kind of pull-forward. The other timing piece of it was the—we had a large, distributor order at the end of Q4 2025, a portion of that order was consumables that came in that pulled forward some of the, the revenue as well.

Speaker #1: In uncertainties, that could cause actual results to the firm materially. Listeners are cautioned not to place undue reliance on any forward-looking statements. For further discussion of these risks related to our business, please see the company's filings with the SEC.

Speaker #3: Hydrofacial remains at the center of that strategy. As one of the most recognized, specialty aesthetic treatments it, we are building a broader platform that includes skin stylists, our microneedling and nano-channeling technology, and the up-and-coming relaunch of our CaraVive for scalp health.

Speaker #2: We spent 1.6, 1.7 million in the first quarter. So as you look at kind of overall, we expect free cash flow. As I said, to be positive after we service the debt for the last three quarters.

Speaker #1: This call will present GAAP Financial measures. A reconciliation of these GAAP non-financial measures to the most comparable GAAP measure is available in the earnings press release, which was furnished to the SEC and available on our website.

Speaker #3: So the objective is straightforward. It's to build a clinically differentiated platform that improves provider economic, strengthens the utilization, and drives durable, recurrent revenue growth.

Speaker #1: The lo—the, the largest portion of the $3 million year-over-year difference on the global consumables was the, mo—move from the China dis—uh, to a China distributor.

Speaker #2: Working capital I expect to not be as significant drain to actually we're forecasting it to be relatively flat year over year. It was a use of cash in Q1, but that's largely due to the timing of payables.

Speaker #1: Following management's prepared remarks, we will open the call for a question-and-answer session. With that, I would now like to turn the call over to our CEO, Pedro Malha.

Speaker #3: I also want to take the time to acknowledge the addition of three new independent directors to our board. Kenneth Tripp, Dr. Shasin Shirarani, and Scott Betty.

Speaker #2: So my expectation is that that normalizes by the time we get to the end of the year and specifically by the time we get to the maturity.

Mike: My expectation is that that normalizes by the time we get to the end of the year and specifically by the time we get to the maturity.

Speaker #3: I also want to take the time to acknowledge the addition of three new independent directors to our board. Kenneth Tripp, Dr. Shasin Shirarani, and Scott Betty.

Speaker #1: Please go ahead, Pedro.

Speaker #2: Thank you, Norberto. So, as you know, two weeks ago we rebranded Skin Health to his Skin Health Systems, and this was not simply a name change.

Speaker #1: Okay. Thank you. Best regards.

Operator: Okay. Thank you. Best regards. Thank you. The next question comes from Allen Gong from J.P. Morgan. Your line is now open. Please go ahead.

Oliver Chen: Okay. Thank you. Best regards.

Speaker #3: Together, they bring deep experience across MedTech, aesthetics, and global consumer brands. And we believe we now have the right boards to support the company's next phase.

Pedro Malha: I also wanna take the time to acknowledge the addition of three new independent directors to our board, Kenneth Tripp, Dr. Sachin Shridharani, and E. Scott Beattie. Together, they bring deep experience across med tech, aesthetics, and global consumer brands. We believe we now have the right board to support the company's next phase. Now turning to the quarter. Q1 net sales were $64.9 million, so within our guidance range. While adjusted EBITDA was $8.5 million, up 17% year-over-year and well above the high end of our guidance range. The quarter clearly demonstrated two things. First, that the top line growth has not yet returned, but second, that the operational foundation of the business continues to strengthen. Let's go over first our systems revenue. Here, device placements came below our expectations during the quarter.

Speaker #3: Thank you. And the next question comes from Allen Gong from JP Morgan. Your line is now open. Please go ahead.

Operator: Thank you. The next question comes from Allen Gong from J.P. Morgan. Your line is now open. Please go ahead.

Speaker #3: Together, they bring deep experience across medtech, aesthetics, and global consumer brands. And we believe we now have the right boards to support the company's next phase.

Speaker #2: It reflects a deliberate shift in how we operate as a company, and that we are building a company with a clinical rigor, the commercial discipline, and the operational mindset of a leading medical device company.

Speaker #4: Hi, team. Thanks for the question. Just a quick one on the guide and the cadence that you expect to see throughout the balance of the year.

Allen Gong: Hi, team. Thanks for the question. Just a quick one on the guide and, you know, the cadence that you expect to see throughout the balance of the year. You know, I think previously we had been hoping that there would be a, you know, return to modest growth in H2 off of some easing comps and off of some continued stabilization. Is, you know, is the right expectation now that we probably, you know, won't be getting to positive growth in H2? Do you think that's something that you can still achieve, say, like in Q4?

Speaker #3: So now turning to the quarter. First quarter net sales were 64.9 million dollars. So within our guidance range. While adjusted EBITDA was 8.5 million dollars, up 17% year over year and well above the high end of our guidance range.

Speaker #2: HydroFacial remains at the center of that strategy. As one of the most recognized specialty aesthetic treatments globally, and around it, we are building a broader platform that includes skin stylists, our microneedling and nano-channeling technology, and the up-and-coming relaunch of our CaraVive for scalp health.

Speaker #4: I think previously we had been hoping that there would be a return to modest growth in the back half of the year off of some easing comps and off of some continued stabilization.

Speaker #4: But it is the right expectation now that we probably won't be getting to positive growth in the back half of the year. Or do you think that's something that you can still achieve, say, like in fourth quarter?

Speaker #3: So the quarter clearly demonstrated two things. First, that the top line growth has not yet returned, but second, that the operational foundation of the business continues to strengthen.

Speaker #1: So Allen, let me just refresh the numbers and the change on the guide that we just communicated. So definitely the Q2 it's not coming.

Pedro Malha: I, Allen Gong, let me just, you know, refresh the numbers and the change on the guide that we just communicated. Definitely the Q2, you know, it's not coming as expected. As I just spoke about, we revised our top line guidance to reflect the current market conditions and the execution that is underway across our business. We are basically guiding the revenue to a range of $280 million to $295 million. Also very strongly, we are maintaining the adjusted EBITDA guidance, right? That we had before.

Speaker #3: So the quarter clearly demonstrated two things. First, that the top-line growth has not yet returned, but second, that the operational foundation of the business continues to strengthen.

Speaker #2: So, the objective is straightforward. It's to build a clinically differentiated platform that improves provider economics, strengthens the utilization, and drives durable, recurrent revenue growth.

Speaker #3: So let's go over first our systems revenue. Here, device placements came below our expectations during the quarter. Several factors came into play here. On the macro side, the market had gone through rapid expansion followed consolidation, and some of the tailwinds that drove growth in prior years are not as strong today.

Speaker #1: As expected, as I just spoke about, we revised our top line guidance to reflect the current market conditions and the execution that is underway across our business.

Speaker #3: So let's go over first our systems revenue. Here, device placements came below our expectations during the quarter. Several factors came into play here. On the macro side, the market had gone through rapid expansion followed consolidation and some of the tailwinds that drove growth in prior years are not as strong today.

Speaker #2: I also want to take the time to acknowledge the addition of three new independent directors to our board. Kenneth Tripp, Dr. Shaheen Shirarani, and Scott Betty.

Speaker #1: So we are basically guiding the revenue to a range of $280 million to $295 million but also very strongly we are maintaining the adjusted EBIT guidance, right, that we had before.

Speaker #2: Together, they bring deep experience across MedTech, aesthetics, and global consumer brands. And we believe we now have the right boards to support the company's next phase.

Speaker #3: So as a result, capital equipment demands continue to be constrained by tighter credit conditions and longer purchasing cycles. Also, competition has intensified and providers have more choices than they did two years ago.

Pedro Malha: Several factors come into play here. On the macro side, the market has gone through rapid expansion, follow consolidation, and some of the tailwinds that drove growth in prior years are not as strong today. As a result, capital equipment demands continues to be constrained by tighter credit conditions and longer purchasing cycles. Also, competition has intensified, and providers have more choices than they did 2 years ago. All that I just mentioned are structural headwinds and not Q1 occurrences. The market conditions are only part of this story. We see opportunities to improve our commercial execution, and we are taking the steps to strengthen our sales discipline, to sharpen the focus across the organization, and to improve how we convert the opportunity in front of us.

Speaker #3: So as a result, capital equipment demands continued to be constrained by tighter credit conditions and longer purchasing cycles. Also, competition has intensified and providers have more choices than they did two years ago.

Speaker #1: The way we are looking at the quarter the current quarter at the midpoint of the guide the quarter is sitting at 74.5 million dollars, which basically translates this into having a quarter that will decrease 4.7% year over year.

Pedro Malha: The way we are looking at the quarter, the current quarter, at the midpoint of the guide, the quarter is sitting at $74.5 million, which basically translates this into having a quarter that will decrease 4.7% year over year. That is largely driven by, again, the lower device sales trends that we're seeing across the board. While consumables in the US and the rest of the world, excluding Asia Pacific, are expecting to be flat. In terms of how do we play it out for, you know, the remaining of the year, the expectation is that we are still seeing 2026, and that has not changed, as an execution year and as a stabilization year.

Speaker #2: So, now turning to the quarter. First quarter net sales were $64.9 million, so within our guidance range. While adjusted EBITDA was 8.5 million, up 17% year over year and well above the high end of our guidance range.

Speaker #3: So all that I just mentioned are structural headwinds. And not one quarter occurrences. But the market conditions are only part of this story. We see opportunities to improve our commercial execution and we are taking the steps to strengthen our sales discipline to sharpen the focus across the organization and to improve how we convert the opportunity in front of us.

Speaker #1: And that is largely driven by, again, the lower device sales trends that we're seeing across the board. While consumables in the US and the rest of the world, excluding the APAC, are expecting to be flat.

Speaker #2: So, the quarter clearly demonstrated two things. First, that the top-line growth has not yet returned, but second, that the operational foundation of the business continues to strengthen.

Speaker #2: So, let's go over first our systems revenue. Here, device placements came below our expectations during the quarter. Several factors came into play here. On the macro side, the market had gone through rapid expansion followed by consolidation, and some of the tailwinds that drove growth in prior years are not as strong today.

Speaker #3: So given the strengths of the hydrofacial brand and our current market position, we believe there is meaningful room to perform better and this is where the focus is.

Speaker #1: In terms of how do we play it out for the remaining of the year, the expectation is that we are still seeing 2026 and that has not changed.

Speaker #3: So given the strengths of the hydrofacial brand and our current market position, we believe there is meaningful room to perform better and this is where the focus is.

Speaker #1: As an execution year, and as a stabilization year. And the key drivers of our performance and the way we're going to be showing up the year is by improving the device conversion and as I spoke in the beginning, by improving the utilization across the installed base.

Speaker #3: One relevant fact is that we continue to see the softness in device placements in Q2. So we are not expecting a near-term inflection of this trend because the commercial fixes that we are implementing more structural sales processes, tighter pipeline management, better account prioritization, and an improved commercial leadership all will take time to fully translate into results.

Pedro Malha: The key drivers of our performance and the way we're gonna be showing up the year is by improving the device conversion, and as I spoke in the beginning, by improving the utilization across the install base and also improving the booster attachment rates. The way we are seeing the year is that in H1 of this year, we expect to see the pressure in the device placements and utilization trends to continue. As we move through the H2, we are expecting a gradual and a sequential improvement, as our commercial initiatives provider, provide more results and start taking traction.

Pedro Malha: Given the strengths of the HydraFacial brand and our current market position, we believe there is meaningful room to perform better, and this is where the focus is. One relevant fact is that we continue to see the softness in device placements in Q2. We are not expecting a near-term inflection of this trend because the commercial fixes that we are implementing, more structural sales processes, tighter pipeline management, better account prioritization, and an improved commercial leadership all will take time to fully translate into results. Therefore, we are revising our full year revenue outlook to a range of $280 to 295 million, which represents a reduction of approximately 2.5% or roughly $7.5 million at the midpoint.

Speaker #2: So, as a result, capital equipment demands continued to be constrained by tighter credit conditions and longer purchasing cycles. Also, competition has intensified, and providers have more choices than they did two years ago.

Speaker #1: And also improving the booster attachment rates. So the way we are seeing the year is that in the first half of this year, we expect to see the pressure in the device placements and utilization trends to continue.

Speaker #3: Therefore, we are revising our full-year revenue outlook to arrange of 280 million dollars to 295 million dollars, which represents a reduction of approximately 2.5% or roughly 7.5 million dollars at the midpoint.

Speaker #1: But as we move through the second half, we are expecting a gradual and a sequential improvement as our commercial initiatives provider provide more results.

Speaker #2: So, all that I just mentioned are structural headwinds. And not one quarter occurrences. But the market conditions are only part of this story. We see opportunities to improve our commercial execution and we are taking the steps to strengthen our sales discipline to sharpen the focus across the organization and to improve how we convert the opportunity in front of us.

Speaker #3: Therefore, we are revising our full-year revenue outlook to a range of 280 million dollars to 295 million dollars, which represents a reduction of approximately 2.5% or roughly 7.5 million dollars at the midpoint.

Speaker #1: And start taking traction. So it's important that to say that if we execute well against all these initiatives, against all these priorities, we believe that the model will begin to compound, utilization will begin to improve, and the recurring revenue base naturally will become more productive.

Speaker #3: This revision reflects a more cautious near-term view on capital equipment demand. As well as the time required for the commercial initiatives now underway to translate into improved trends.

Pedro Malha: It's important to say that if we execute well against all these initiatives, against all these priorities. We believe that the model will begin to compound, utilization will begin to improve, and the recurring revenue base, naturally will become more productive. That is why we believe, the business is positioned to return to more consistent growth in 2027 and beyond.

Speaker #2: So, given the strengths of the HydroFacial brand and our current market position, we believe there is meaningful room to perform better and this is where the focus is.

Speaker #3: Also, as part of our efforts we recently made a key leadership change within their commercial organization and I'm now taking on a more direct role in the global sales organization, particularly around how we sell and how we improve conversion across our pipeline.

Pedro Malha: This revision reflects a more cautious near-term view on capital equipment demand, as well as the time required for the commercial initiatives now underway to translate into improved trends. Also, as part of our efforts, we recently made a key leadership change within our commercial organization, I'm now taking on a more direct role in the global sales organization, particularly around how we sell and how we improve conversion across our pipeline. As importantly, despite the revised revenue outlook, we are maintaining our adjusted EBIT guidance range of $35 million to $45 million, which reflects the underlying margin strength, the operational discipline, and the resilience of our business model. Moving on now to our consumables business. Revenues for the quarter was $46.4 million, down 6.1% year-over-year.

Speaker #1: That is why we believe the business is positioned to return to more consistent growth in 2027 and beyond. But based on the current trends, we are seeing and the expected timing of the initiative that are underway, although we think that growth will come in 2027, the cadence of that recovery within the year will absolutely depend on how quickly the device business stabilizes.

Speaker #2: One relevant fact is that we continue to see the softness in device placements in Q2. So, we are not expecting a near-term inflection of this trend because the commercial fixes that we are implementing more structural sales processes, tighter pipeline management, better account prioritization, and an improved commercial leadership all will take time to fully translate into results.

Speaker #3: Also, as part of our efforts, we recently made a key leadership change within their commercial organization and I'm now taking on a more direct role in the global sales organization, particularly around how we sell and how we improve conversion across our pipeline.

Speaker #3: So as importantly, despite the revised revenue outlook, we are maintaining our adjusted EBITDA guidance range of 35 million dollars to 45 million dollars. Which reflects the underlying margin strength, the operational business model.

Pedro Malha: Based on the current trends we are seeing, and the expected timing of the initiatives that are underway, you know, although we think that growth will come in 2027, the cadence of that recovery within the year will, you know, absolutely depend on how quickly the device business stabilizes and on the timing of any impact of some of the catalysts that I just mentioned, which are the new boosters launches and the strategic partnerships take into effect.

Speaker #2: Therefore, we are revising our full-year revenue outlook to a range of $280 million to $295 million which represents a reduction of approximately 2.5%, or roughly 7.5 million dollars at the midpoint.

Speaker #3: Moving on now to our consumables business. Revenues for the quarter was 46.4 million dollars, down 6.1% year over year. But approximately two-thirds of this drop was related to a transition of China to a distributed model last year, which continues to impact the year-over-year comparisons.

Speaker #1: And on the timing of any impact of some of the catalysts that I just mentioned which are the new boosters launches and the strategic partnerships taken to effect.

Speaker #3: Moving on now to our consumables business. Revenues for the quarter were 46.4 million dollars, down 6.1% year over year. But approximately two-thirds of this drop was related to a transition of China to a distributor model last year, which continues to impact the year-over-year comparisons.

Speaker #2: This revision reflects a more cautious near-term view on capital equipment demand. As well as a time required for the commercial initiatives now underway to translate into improved trends.

Speaker #3: So outside of China, consumables performance was impacted primarily by the timing-related variability across certain regions which we expect that to normalize. Moving into our install base, despite the placement softness, our active install base grew this quarter to 36,0400 devices, up 4% year over year.

Operator: Thank you. The next question comes from Olivia Tong from Raymond James.

Speaker #3: Thank you. And the next question comes from Olivia Tong from Raymond James. Your line is now open. Please go ahead.

Speaker #2: Also, as part of our efforts, we recently made a key leadership change within our commercial organization. And I'm now taking on a more direct role in the global sales organization, particularly around how we sell and how we improve conversion across our pipeline.

Pedro Malha: Approximately two-thirds of this drop was related to a transition of China to a distributor model last year, which continues to impact the year-over-year comparisons. Outside of China, consumables performance was impacted primarily by the timing related variability across certain regions, which we expect that to normalize. Moving into our installed base. Despite the placement softness, our active installed base grew this quarter to 36,400 devices, up 4% year-over-year. More encouragingly, device churn in Q1 declined 40% year-over-year. That is meaningful and a meaningful earning signal that our provider retention and reactivation programs are working. To close up our quarterly financial results. On profitability, the quarter demonstrated again the strength of our operating model.

Speaker #5: Good afternoon. Thanks. Peter, what gets you to the upper end versus the lower end of your ranges on sales and EBITDA? And in your view, is it shortfall more in just the devices or consumables?

Olivia Tong: Good afternoon. Thanks. Pedro, what gets you to the upper end versus the lower end of your ranges on sales and EBITDA? In your view, is the shortfall more on just devices or consumables? It sounds like it's devices, but just kind of curious how you think about, sort of, you know, consumables and the demand there. Then how much of this is a function of your execution versus, you know, the, the volatility in terms of the external environment? Thank you.

Speaker #5: It sounds like it's devices, but just kind of curious how you think about sort of consumables and the demand there. And then how much of this is a function of your execution versus the volatility in terms of the external environment?

Speaker #3: More encouragingly, device churn in Q1 declined 40% year over year, and that is meaningful and a meaningful earning signal that our provider retention and reactivation programs are working.

Speaker #2: So, as importantly, despite the revised revenue outlook, we are maintaining our adjusted EBITDA guidance range of $35 million to $45 million. Which reflects the underlying margin strength, the operational discipline, and the resilience of our business model.

Speaker #5: Thank you.

Speaker #3: More encouragingly, device churn in Q1 declined 40% year over year, and that is meaningful and in a meaningful earning signal that our provider retention and reactivation programs are working.

Speaker #1: Sure. So focusing on consumers. Consumables obviously remain very core to our model. And if you exclude the impact of China and the shipment timing that we went through, the business remains actually relatively stable.

Speaker #3: To close up our quarterly financial results. On profitability, the quarter demonstrated again the strength of our operating model. Adjusted EBITDA was 8.5 million dollars, up 17% year over year and well above the high end of our guidance range while adjusted gross margin expanded to 72.2%.

Pedro Malha: Sure. Focusing on consumers. Consumables obviously remain very core to our model. If you exclude the impact of China and the shipment timing that we went through, the business remains actually relatively stable. The larger opportunity that we know for a fact exists is around utilization, which we still believe, you know, it remains below its potential. The market, we feel that the market is still there. The consumer remains engaged, although we have seen in the past years, the spending behavior being much more selective.

Speaker #2: Moving on now to our consumables business. Revenues for the quarter were $46.4 million, down 6.1% year over year. But approximately two-thirds of this drop was related to the transition of China to a distributed model last year, which continues to impact the year-over-year comparisons.

Speaker #1: The larger opportunity that we know for a fact exists is around utilization. Which we still believe remains below its potential. The market, we feel that the market is still there.

Speaker #3: Importantly, this performance was achieved while continuing to invest in R&D, in provider education, in commercial capabilities, and in our innovation pipeline. Now, let's step back and look at the longer term.

Speaker #2: So, outside of China, consumables performance was impacted primarily by the timing-related variability across certain regions which we expect that to normalize. Moving into our install base, despite the placement softness, our active install base grew this quarter to 36,400 devices, up 4% year over year.

Speaker #1: The consumer remains engaged, although we have seen in the past years the spending behavior being much more selective. But across the category, we're still seeing strong demand for treatments.

Pedro Malha: Adjusted EBIT was eight and a half million dollars, up 17% year-over-year, and well above the high end of our guidance range, while adjusted growth margin expanded to 72.2%. Importantly, this performance was achieved while continuing to invest in R&D, in provider education, in commercial capabilities, and in our innovation pipeline. Now, let's step back and look at the longer term. Innovation remains a central focus as we build the next phase of growth for the business. We are advancing our innovation pipeline across three key priorities, boosters, strategic partnerships, and the next generation HydraFacial platform. First, on boosters. Here, we are restructuring our booster portfolio around clearly defined clinical use cases, differentiated outcomes, and tier pricing designed to improve both provider economics and utilization.

Speaker #3: Innovation remains a central focus as we build the next phase of growth for the business. We are advancing our innovation pipeline across three key priorities.

Pedro Malha: Across the category, we're still seeing strong demand for treatments, and but only for treatments that actually deliver visible results and a very accessible price point, which we play directly into that to that position. As I mentioned in the beginning, the market continued to be impacted by tighter credit conditions, longer capital life purchasing cycles, which have been indeed putting continued pressure into device placement. That is across the industry for over the last couple of years. The way we see it is the market is gradually maturing, which means that utilization and the productivity per treatment room has become incredibly important to drive our equation.

Speaker #1: But only for treatments that actually deliver visible results. And a very accessible price point, which we play directly into that position. But as I mentioned in the beginning, the market continued to be impacted by tighter credit conditions, longer capital purchasing cycles, which have been indeed putting continued pressure in the device placement.

Speaker #3: Boosters, strategic partnerships, and the next generation hydrofacial platform. First on boosters. Here, we are restructuring our booster portfolio around clearly defined clinical use cases differentiated outcomes and tier pricing designed to improve both provider economics and utilization.

Speaker #2: More encouragingly, device churn in Q1 declined 40% year over year, and that is meaningful—and a meaningful earnings signal that our provider retention and reactivation programs are working.

Speaker #3: Innovation remains a central focus as we build the next phase of growth for the business. We are advancing our innovation pipeline across three key priorities.

Speaker #3: Boosters, strategic partnerships, and the next generation hydrofacial platform. First on boosters, here we are restructuring our booster portfolio around clearly defined clinical use cases differentiated outcomes and tier pricing designed to improve both provider economics and utilization.

Speaker #3: Later this quarter, we will relaunch Caraviv, our scalp health treatment, with updated marketing, enhanced protocols, and improved integration into the hydrofacial platform. Given the growing consumer focus on scalp health, including GLP-1 related hair loss concerns, we believe timing is favorable for us.

Speaker #2: To close up our quarterly financial results. On profitability, the quarter demonstrated again the strength of our operating model. Adjusted EBITDA was 8.5 million dollars, up 17% year over year and well above the high end of our guidance range while adjusted gross margin expanded to 72.2%.

Speaker #1: And that is across the industry for over the last couple of years. So the way we see it is the market is gradually maturing which means that utilization and the productivity per treatment room has become incredibly important to drive our acclaration.

Speaker #1: And that is what we are pivoting our strategy to increase that utilization with our booster strategy with better training of our sales force with better value selling with our reps because the market indeed has changed and has become somewhat more challenging.

Speaker #3: And in the fourth quarter, we also expect to introduce a new booster backed by strong clinical data. Second, we are in the late stages of diligence exploring strategic partnerships that will bring complementary technologies into the skin health systems portfolio.

Pedro Malha: That is what we are pivoting our strategy to increase that utilization with our booster strategy, with better training of our sales force, with better value selling, with our reps, because the market indeed has changed and has become somewhat more challenging.

Speaker #2: Importantly, this performance was achieved while continuing to invest in R&D, in provider education, in commercial capabilities, and in our innovation pipeline. Now, let's step back and look at the longer term.

Pedro Malha: Later this quarter, we will relaunch Keravive, our scalp health treatment, with updated marketing, enhanced protocols, and improved integration into the HydraFacial platform. Given the growing consumer focus on scalp health, including GLP-1 related hair loss concerns, we believe timing is favorable for us. In Q4, we also expect to introduce a new booster backed by strong clinical data. Second, we are in the late stages of diligence, exploring strategic partnerships that will bring complementary technologies into the SkinHealth Systems portfolio. These solutions will expand treatment options for providers, while at the same time strengthen the broader HydraFacial ecosystem. Third, we continue to advance the development of our next generation HydraFacial device, targeting a 2028 launch.

Speaker #2: Innovation remains a central focus as we build the next phase of growth for the business. We are advancing our innovation. Three key priorities: Boosters, strategic partnerships, and the next-generation HydroFacial platform.

Speaker #3: These solutions will expand treatment options for providers while at the same time strengthening the broader hydrofacial ecosystem. And third, we continue to advance the development of our next generation hydrofacial device targeting a 2028 launch.

Speaker #3: Thank you. The next question comes from Susan Anderson from Canacor Genuity. Your line is now open. Please go ahead.

Operator: Thank you. The next question comes from Susan Anderson from Canaccord Genuity. Your line is now open. Please go ahead.

Speaker #5: Hi. Thanks for taking my questions. I was wondering if maybe you could give some more color on the partnerships that you mentioned that you're looking at for the hydrofacial brand.

Susan Anderson: Hi. Thanks for taking my questions. I was wondering if maybe you could give some more color on the partnerships that you mentioned that you're looking at for the HydraFacial brand. I guess, what will these look like? Are they partnerships for additional boosters or other types of partnerships?

Speaker #2: First on boosters, here we are restructuring our booster portfolio around clearly defined clinical use cases differentiated outcomes and tier pricing designed to improve both provider economics and utilization.

Speaker #3: Our objective here with the next generation of hydrofacial is to deliver a meaningful advancement in clinical outcomes and treatment experience while creating a compelling upgrading opportunity for our install base of more than 36,000 active systems.

Speaker #3: This solutions will expand treatment options for providers while at the same time strengthens the broader hydrofacial ecosystem. And third, we continue to advance the development of our next generation hydrofacial device targeting a 2028 launch.

Speaker #5: I guess what will these look like? Are they partnerships for additional boosters or other types of partnerships?

Speaker #2: Later this quarter, we will relaunch Caraviv, our scalp health treatment, with updated marketing, enhanced protocols, and improved integration into the HydroFacial platform. Given the growing consumer focus on scalp health, including GLP-1 related hair loss concerns, we believe timing is favorable for us.

Speaker #3: We are also making sure we are applying the lessons learned from prior launches, particularly around quality standards, partner selections, and field readiness as we continue and we will continue to update you on the development progress.

Speaker #1: Thanks, Susan. So there's obviously four obvious reasons. There's so much I can say because we are still in the phase of diligence. And I will say late exploration.

Pedro Malha: Thanks, Susan. For obvious reasons, there's so much I can say because we are still in the phase of diligence and, I would say late exploration. As very core to our strategy, we believe that HydraFacial and SkinHealth Systems is indeed, a platform, it should be a platform of as an ecosystem of different solutions. We have the team working around not only identifying feasible partners that will play well, in that ecosystem. As I mentioned, we are in very late stages of that diligence. I personally, at this stage, feel encouraged by what I see, and this will become, again, together with SkinStylus, another part of our portfolio that the reps, can use in selling the overall solution.

Speaker #1: But very core to our strategy, we believe that hydrofacial and skin health systems is indeed a platform it should be a platform of and as an ecosystem of different solutions.

Pedro Malha: Our objective here with the next generation of HydraFacial is to deliver a meaningful advancement in clinical outcomes and treatment experience while creating a compelling upgrading opportunity for our installed base of more than 36,000 active systems. We are also making sure we are applying the lessons learned from prior launches, particularly around quality standards, partner selections, and field readiness as we continue, and we will continue to update you on the development progress. With that, I will turn over to Mike to walk you through the financials in more detail. Mike.

Speaker #3: With that, I'll turn over to Mike to walk you through the financials in more detail. Mike.

Speaker #4: Thank you, Pedro. The first quarter demonstrated that the operational improvements of the past year are durable. Margins are holding, adjusted EBITDA is outperforming, and the business is generating the financial flexibility to fund the investments required to drive future growth.

Speaker #2: And in the fourth quarter, we also expect to introduce a new booster backed by strong clinical data. Second, we are in the late stages of diligence, exploring strategic partnerships that will bring complementary technologies into the Skin Health Systems portfolio.

Speaker #1: So we have the team working around not only identifying feasible partners that will play well in that ecosystem, as I mentioned, we are in very late stages of that diligence.

Speaker #4: For the first quarter, Total Net Sales were 64.9 million, down 6.7% versus the prior year, and in line with our guidance range of 63 to 68 million.

Speaker #3: With that, I'll turn over to Mike, to walk you through the financials in more detail. Mike.

Speaker #2: These solutions will expand treatment options for providers while at the same time strengthening the broader HydroFacial ecosystem. And third, we continue to advance the development of our next generation HydroFacial device targeting a 2028 launch.

Speaker #1: I personally, at this stage, feel encouraged by what I see. And this will become again, together with Skin Stylist, another part of our portfolio that the reps can use in selling the overall solution.

Speaker #2: Thank you, Pedro. The first quarter demonstrated that the operational improvements of the past year are durable. Margins are holding, adjusted EBITDA is outperforming, and the business is generating the financial flexibility to fund the investments required to drive future growth.

Speaker #4: Consumables revenue was 46.4 million, down 6.1% versus the prior year. By region, America's was down 1.6%, primarily due to the outperformance of our Q4 promotions pulling demand forward.

Michael Monahan: Thank you, Pedro. The Q1 demonstrated that the operational improvements for the past year are durable. Margins are holding, adjusted EBITDA is outperforming, and the business is generating the financial flexibility to fund the investments required to drive future growth. For Q1, total net sales were $64.9 million, down 6.7% versus the prior year and in line with our guidance range of $63 to 68 million. Consumables revenue was $46.4 million, down 6.1% versus the prior year. By region, Americas was down 1.6%, primarily due to the outperformance of our Q4 promotions pulling demand forward. EMEA was down 5.6%, driven by distributor order timing. APAC was down 29.9%, as Pedro described, attributable to China's distributor transition.

Mike Monahan: Thank you, Pedro. The Q1 demonstrated that the operational improvements for the past year are durable. Margins are holding, adjusted EBITDA is outperforming, and the business is generating the financial flexibility to fund the investments required to drive future growth. For Q1, total net sales were $64.9 million, down 6.7% versus the prior year and in line with our guidance range of $63 to 68 million. Consumables revenue was $46.4 million, down 6.1% versus the prior year. By region, Americas was down 1.6%, primarily due to the outperformance of our Q4 promotions pulling demand forward. EMEA was down 5.6%, driven by distributor order timing. APAC was down 29.9%, as Pedro described, attributable to China's distributor transition.

Speaker #2: For the first quarter, total net sales were 64.9 million, down 6.7% versus the prior year, and in line with our guidance range of 63 to 68 million.

Speaker #4: EMEA was down 5.6%, driven by distributor order timing. And APAC was down 29.9% as Pedro described, attributable to China's distributor transition. We believe the Americas and EMEA declines are timing-related and we expect them to normalize.

Speaker #2: Our objective here with the next generation of HydroFacial is to deliver a meaningful advancement in clinical outcomes and treatment experience while creating a compelling upgrading opportunity for our install base of more than 36,000 active systems.

Speaker #1: Again, that's so much I can say, but I feel encouraged by what I see. And the timelines of this strategic partnerships that we are pursuing right now.

Pedro Malha: Again, that's how much I can say, but I feel encouraged by what I see and the timelines of these strategic partnerships that we are pursuing right now.

Speaker #2: Consumables revenue was 46.4 million, down 6.1% versus the prior year. By region, America's was down 1.6%, primarily due to the outperformance of our Q4 promotions pulling demand forward.

Susan Anderson: Okay, great.

Speaker #2: I can just add, Susan, they're both on the device side and the consumable side on the partnerships. Just yeah.

Speaker #4: Delivery systems revenue was 18.5 million, down 8.3% versus the prior year, with 746 systems placed compared to 862 in Q1 2025. America's was down 8.5%, EMEA was down 13.6%, consistent with the broader capital equipment pressure we have discussed.

Mike: I can just add, Susan, they're both on the device side and the consumable side on the partnerships.

Mike Monahan: I can just add, Susan, they're both on the device side and the consumable side on the partnerships.

Speaker #2: We are also making sure we are applying the lessons learned from prior launches, particularly around quality standards, partner selections, and field readiness as we continue, and we will continue to update you on the development progress.

Speaker #5: Okay. That's helpful. Thank you. And then maybe just I wanted to ask about I think you mentioned some timing-related variability in certain regions, related to the consumables decline.

Susan Anderson: Okay. That's helpful. Thank you. Then maybe just, I wanted to ask about, I think you mentioned some timing-related variability in certain regions related to the consumable decline. I think like maybe the Americas. Maybe if you could just expand on what that was and when you expect it to normalize. Thanks.

Speaker #2: EMEA was down 5.6%, driven by distributor order timing. And APAC was down 29.9% as Pedro described, attributable to China's distributor transition. We believe the Americas and EMEA declines are timing related, and we expect them to normalize.

Speaker #2: With that, I'll turn over to Mike, to walk you through the financials in more detail. Mike.

Speaker #5: I think maybe the Americas, maybe if you could just expand on what that was and when you expect it to normalize. Thanks.

Speaker #4: APAC was up 6.8%, supported by increased device orders versus the prior year from our distributor partner, a different dynamic than consumables where the transition impact was concentrated.

Speaker #1: Thank you, Pedro. The first quarter demonstrated that the operational improvements of the past year are durable. Margins are holding, adjusted EBITDA is outperforming, and the business is generating the financial flexibility to fund the investments required to drive future growth.

Speaker #2: Delivery systems revenue was 18.5 million, down 8.3% versus the prior year, with 746 systems placed compared to 862 in Q1 2025. America's was down 8.5%, EMEA was down 13.6%, consistent with the broader capital equipment pressure we have discussed.

Speaker #1: The Americas was down, Susan, the 1.6%, which is a smaller portion of the difference. It was largely due to we do a fourth-quarter promotion.

Mike: The Americas was down, Susan, the 1.6%, which is a smaller portion of the difference. It was largely due to we do a Q4 promotion that outperformed in Q4 2025. Some of it was a smaller kind of pull forward. The other timing piece of it was we had a large distributor order at the end of Q4 2025. A portion of that order was consumables that came in that pulled forward some of the revenue as well. The largest portion of the $3 million year-over-year difference on the global consumables was the move from the China to a China distributor. In Q1 and a large portion of Q2 last year, we still were direct in China.

Mike Monahan: The Americas was down, Susan, the 1.6%, which is a smaller portion of the difference. It was largely due to we do a Q4 promotion that outperformed in Q4 2025. Some of it was a smaller kind of pull forward. The other timing piece of it was we had a large distributor order at the end of Q4 2025. A portion of that order was consumables that came in that pulled forward some of the revenue as well. The largest portion of the $3 million year-over-year difference on the global consumables was the move from the China to a China distributor. In Q1 and a large portion of Q2 last year, we still were direct in China.

Michael Monahan: We believe the Americas and EMEA declines are timing related. We expect them to normalize. Delivery systems revenue is $18.5 million, down 8.3% versus the prior year, with 746 systems placed compared to 862 in Q1 2025. Americas was down 8.5%. EMEA was down 13.6%, consistent with the broader capital equipment pressure we have discussed. APAC was up 6.8%, supported by increased device orders versus the prior year from our distributor partner, a different dynamic than consumables where the transition impact was concentrated. Our active installed base grew to 36,400 systems globally, up 4% year-over-year. Adjusted gross margin was 72.2% versus 71.9% in the prior year, relatively flat despite lower revenue.

Mike Monahan: We believe the Americas and EMEA declines are timing related. We expect them to normalize. Delivery systems revenue is $18.5 million, down 8.3% versus the prior year, with 746 systems placed compared to 862 in Q1 2025. Americas was down 8.5%. EMEA was down 13.6%, consistent with the broader capital equipment pressure we have discussed. APAC was up 6.8%, supported by increased device orders versus the prior year from our distributor partner, a different dynamic than consumables where the transition impact was concentrated. Our active installed base grew to 36,400 systems globally, up 4% year-over-year. Adjusted gross margin was 72.2% versus 71.9% in the prior year, relatively flat despite lower revenue.

Speaker #4: Our active install base grew to 36,400 systems globally, up 4% year over year. Adjusted gross margin was 72.2% versus 71.9% in the prior year, relatively flat despite lower revenue.

Speaker #1: For the first quarter, total net sales were $64.9 million, down 6.7% versus the prior year, and in line with our guidance range of $63 to $68 million.

Speaker #1: That outperformed in the fourth quarter of 2025. So some of it was a smaller kind of pull forward. The other timing piece of it was we had a large distributor order at the end of Q4 2025.

Speaker #1: Consumables revenue was $46.4 million, down 6.1% versus the prior year. By region, America's was down 1.6%, primarily due to the outperformance of our Q4 promotions pulling demand forward.

Speaker #4: Gap gross margin was 68.5% compared to 69.8% in the prior year, with the decline primarily driven by higher amortization expense. Gap operating expenses totaled $46.2 million in Q1 2026 compared to $60.6 million in the prior year.

Speaker #2: APAC was up 6.8%, supported by increased device orders versus the prior year from our distributor partner, a different dynamic than consumables where the transition impact was concentrated.

Speaker #1: A portion of that order was consumables that came in that pulled forward some of the revenue as well. The largest portion of the $3 million year-over-year difference on the global consumables was the move from the China to a China distributor.

Speaker #2: Our active install base grew to 36,400 systems globally, up 4% year over year. Adjusted gross margin was 72.2% versus 71.9% in the prior year, relatively flat despite lower revenue.

Speaker #1: EMEA was down 5.6%, driven by distributor order timing. APAC was down 29.9%, as Pedro described, attributable to China’s distributor transition. We believe the Americas and EMEA declines are timing-related, and we expect them to normalize.

Speaker #4: Selling and marketing was 23.2 million versus 26 million, reflecting discipline spending while continuing to invest in provider education and training. R&D was 1.1 million, up slightly reflecting early-stage investment in the next generation device and booster pipeline.

Speaker #1: In Q1 and a large portion of Q2 last year, we still were direct in China and so as we move through the year, that comp is going to pressure the first half of the year.

Speaker #2: Gap gross margin was 68.5% compared to 69.8% in the prior year, with the decline primarily driven by higher amortization expense. Gap operating expenses totaled 46.2 million in Q1 2026 compared to 60.6 million in the prior year.

Speaker #1: Delivery Systems revenue was $18.5 million, down 8.3% versus the prior year, with 746 systems placed compared to 862 in Q1 2025. Americas was down 8.5%, EMEA was down 13.6%, consistent with the broader capital equipment pressure we have discussed.

Mike: As we move through the year, that comp is going to pressure H1 of the year, and should subside a bit as we move throughout 2026.

Mike Monahan: As we move through the year, that comp is going to pressure H1 of the year, and should subside a bit as we move throughout 2026.

Speaker #4: GNA was 21.9 million, down significantly from 33.6 million in Q1 2025, driven by lower headcount-related costs, reduced legal fees, and lower depreciation and amortization.

Michael Monahan: GAAP gross margin was 68.5% compared to 69.8% in the prior year, with the decline primarily driven by higher amortization expense. GAAP operating expenses totaled $46.2 million in Q1 2026, compared to $60.6 million in the prior year. Selling and marketing was $23.2 million versus $26 million, reflecting disciplined spending while continuing to invest in provider education and training. R&D was $1.1 million, up slightly, reflecting early stage investment in the next generation device and booster pipeline. G&A was $21.9 million, down significantly from $33.6 million in Q1 2025, driven by lower headcount related costs, reduced legal fees, and lower depreciation and amortization.

Mike Monahan: GAAP gross margin was 68.5% compared to 69.8% in the prior year, with the decline primarily driven by higher amortization expense. GAAP operating expenses totaled $46.2 million in Q1 2026, compared to $60.6 million in the prior year. Selling and marketing was $23.2 million versus $26 million, reflecting disciplined spending while continuing to invest in provider education and training. R&D was $1.1 million, up slightly, reflecting early stage investment in the next generation device and booster pipeline. G&A was $21.9 million, down significantly from $33.6 million in Q1 2025, driven by lower headcount related costs, reduced legal fees, and lower depreciation and amortization.

Speaker #1: And should subside a bit as we move through 2026.

Speaker #5: Okay. Great. Thanks. That's really helpful. Good luck the rest of the year.

Susan Anderson: Okay, great. Thanks. That's really helpful. Good luck the rest of the year.

Speaker #2: Selling and marketing was 23.2 million versus 26 million, reflecting discipline spending while continuing to invest in provider education and training. R&D was 1.1 million, up slightly reflecting early stage investment in the next generation device and booster pipeline.

Speaker #4: Adjusted EBITDA was 8.5 million, representing a margin of 13.1% and an improvement of 17% versus the prior year, well above the top end of our guidance range of 3.5 to 5.5 million.

Speaker #3: Thank you. The next question comes from John Block from Stifel, your line's now open. Please go ahead.

Operator: Thank you. The next question comes from Jonathan Block from Stifel. Your line is now open. Please go ahead.

Speaker #1: APAC was up 6.8%, supported by increased device orders versus the prior year from our distributor partner, a different dynamic than consumables where the transition impact was concentrated.

Speaker #6: Hey, everyone. Joe Federico. I'm for John Block. Maybe just focusing on EMEA following up on the last question. Obviously, growth was a little bit softer this quarter after kind of having been the bright spot in performance for the last handful of quarters.

Joseph Federico: Hey, everyone, Joseph Federico on for Jonathan Block. Maybe just focusing on EMEA, following up on the last question. Obviously growth was a little bit softer this quarter after kind of having been the bright spot in performance for the last handful of quarters. With the ongoing conflict in the Middle East and subsequent rise in energy costs over there, are you seeing anything specific in the consumer in those regions? I think, you know, some of the consumables commentary you just gave speaks to it improving. Do you expect the softer performance to continue on the capital side in the near term? Just any trends would be helpful.

Joe Federico: Hey, everyone, Joseph Federico on for Jonathan Block. Maybe just focusing on EMEA, following up on the last question. Obviously growth was a little bit softer this quarter after kind of having been the bright spot in performance for the last handful of quarters. With the ongoing conflict in the Middle East and subsequent rise in energy costs over there, are you seeing anything specific in the consumer in those regions? I think, you know, some of the consumables commentary you just gave speaks to it improving. Do you expect the softer performance to continue on the capital side in the near term? Just any trends would be helpful.

Speaker #4: This was achieved while continuing to reinvest in R&D, Salesforce training and tools, provider education, and marketing. Net loss for the quarter improved to 6.6 million compared to a net loss of 10.1 million in the prior year.

Speaker #1: Our active install base grew to 36,400 systems globally, up 4% year over year. Adjusted gross margin was $71.9% in the prior year, relatively flat despite lower revenue.

Speaker #2: GNA was 21.9 million, down significantly from 33.6 million in Q1 2025, driven by lower headcount related costs, reduced legal fees, and lower depreciation and amortization.

Speaker #6: So with the ongoing conflict in the Middle East and subsequent rise in energy costs over there, are you seeing anything specific in the consumer in those regions?

Speaker #4: We ended the quarter with $204.4 million in cash, cash equivalents, and restricted cash. Our October 2026 debt maturity totals approximately $103 million. Based on our current cash position, our Q2 and second-half cash generation trajectory, we are confident we can address this maturity.

Speaker #1: Gap gross margin was 68.5% compared to 69.8% in the prior year, with the decline primarily driven by higher amortization expense. Gap operating expenses totaled $46.2 million in Q1 2026 compared to $60.6 million in the prior year.

Speaker #2: Adjusted EBITDA was 8.5 million, representing a margin of 13.1% and an improvement of 17% versus the prior year, well above the top end of our guidance range of 3.5 to 5.5 million.

Speaker #6: I think some of the consumables commentary you just gave speaks to an improving. But do you expect the softer performance to continue on the capital side in the near term?

Michael Monahan: Adjusted EBITDA was $8.5 million, representing a margin of 13.1% and an improvement of 17% versus the prior year, well above the top end of our guidance range of $3.5 million to $5.5 million. This was achieved while continuing to reinvest in R&D, sales force training and tools, provider education, and marketing. Net loss for the quarter improved to $6.6 million compared to a net loss of $10.1 million in the prior year. We ended the quarter with $204.4 million in cash equivalents, and restricted cash. Our October 2026 debt maturity totals approximately $103 million. Based on our current cash position, our Q2 and H2 cash generation trajectory, we are confident we can address this maturity.

Mike Monahan: Adjusted EBITDA was $8.5 million, representing a margin of 13.1% and an improvement of 17% versus the prior year, well above the top end of our guidance range of $3.5 million to $5.5 million. This was achieved while continuing to reinvest in R&D, sales force training and tools, provider education, and marketing. Net loss for the quarter improved to $6.6 million compared to a net loss of $10.1 million in the prior year. We ended the quarter with $204.4 million in cash equivalents, and restricted cash. Our October 2026 debt maturity totals approximately $103 million. Based on our current cash position, our Q2 and H2 cash generation trajectory, we are confident we can address this maturity.

Speaker #2: This was achieved while continuing to reinvest in R&D, Salesforce training and tools, provider education, and marketing. Net loss for the quarter improved to 6.6 million compared to a net loss of 10.1 million in the prior year.

Speaker #6: Just any trends would be helpful.

Speaker #4: We are revising our full-year revenue outlook to $280 to $295 million from our prior range of $285 to $305 million. The primary drivers are continued softness in capital equipment demand and commercial execution improvements that will take time to be fully reflected in revenue.

Speaker #1: Selling and marketing was $23.2 million versus $26 million, reflecting disciplined spending while continuing to invest in provider education and training. R&D was $1.1 million, up slightly, reflecting early-stage investment in the next-generation device and booster pipeline.

Speaker #1: Yeah. So I'll take that and then Mike can chime in. So in terms of the conflict, the way we are seeing it is not going to have a material impact.

Pedro Malha: Yeah. I can take that and then Mike can chime in. In terms of the conflict, the way we are seeing it is not going to have a material impact. Obviously we are monitoring the situation very actively, but so far we're not expecting or forecasting any impact on our business. In terms of the EMEA, the split between devices and consumables and the way they show up in the quarter. What's happening to EMEA, it's very much in line with what we have seen and are seeing broadly going over globally in terms of devices. We have seen still a softness in device sales, and that is true for the US and for EMEA.

Speaker #2: We ended the quarter with 204.4 million in cash, cash equivalents, and restricted cash. Our October 2026 debt maturity totals approximately $103 million. Based on our current cash position, our Q2 and second-half cash generation trajectory, we are confident we can address this maturity.

Speaker #1: Obviously, we are monitoring the situation very actively. But so far, we're not expecting or forecasting any impact on our business. In terms of the EMEA, the split, between devices and consumables and the way they show up in the quarter, EMEA is very what's happening to EMEA it's very much in line with what we have seen and are seeing much more broadly going over globally.

Speaker #4: We are maintaining our adjusted EBITDA guidance of 35 to 45 million, as the operational, discipline, and margin strength of the business continues to offset top-line pressure.

Speaker #1: GNA was $21.9 million, down significantly from $33.6 million in Q1 2025, driven by lower headcount-related costs, reduced legal fees, and lower depreciation and amortization.

Speaker #4: For Q2, we expect revenue of $72 to $77 million and adjusted EBITDA of $11 to $13 million. I will now turn the call back to Pedro.

Speaker #1: Adjusted EBITDA was $8.5 million, representing a margin of 13.1% and an improvement of 17% versus the prior year, well above the top end of our guidance range of $3.5 to $5.5 million.

Speaker #2: We are revising our full-year revenue outlook to $280 to $295 million from our prior range of $285 to $305 million. The primary drivers are continued softness in capital equipment demand and commercial execution improvements that will take time to be fully reflected in revenue.

Speaker #3: Thanks, Mike. So to close, while top-line performance remains below where we wanted it to be, the underlying foundation of our business remains strong. We have a growing install base of more than 36,000 systems, a highly recurring consumables model, expanding margins, and one of the leading brands in aesthetics.

Michael Monahan: We are revising our full year revenue outlook to $280 to 295 million from our prior range of $285 to 305 million. The primary drivers are continued softness in capital equipment demand and commercial execution improvements that will take time to be fully reflected in revenue. We are maintaining our adjusted EBITDA guidance of $35 to 45 million as the operational discipline and margin strength of the business continues to offset top-line pressure. For Q2, we expect revenue of $72 to 77 million and adjusted EBITDA of $11 to 13 million. I will now turn the call back to Pedro.

Mike Monahan: We are revising our full year revenue outlook to $280 to 295 million from our prior range of $285 to 305 million. The primary drivers are continued softness in capital equipment demand and commercial execution improvements that will take time to be fully reflected in revenue. We are maintaining our adjusted EBITDA guidance of $35 to 45 million as the operational discipline and margin strength of the business continues to offset top-line pressure. For Q2, we expect revenue of $72 to 77 million and adjusted EBITDA of $11 to 13 million. I will now turn the call back to Pedro.

Speaker #1: In terms of devices, we have seen still a softness in device sales and that is true for the US and for EMEA. In terms of consumables, it's a mix, a little bit of a mixed bag.

Speaker #1: This was achieved while continuing to reinvest in R&D, Salesforce training and tools, provider education, and marketing. Net loss for the quarter improved to $6.6 million compared to a net loss of $10.1 million in the prior year.

Speaker #2: We are maintaining our adjusted EBITDA guidance of 35 to 45 million, as the operational, discipline, and margin strength of the business continues to offset top-line pressure.

Pedro Malha: In terms of consumables, it's a mix, a little bit of a mixed bag. There's some timing issues there. Again, we expect those to normalize over time.

Speaker #3: So our focus now is execution. Improving commercial conversion, increasing utilization across the install base, and continue to invest in the innovation pipeline that we believe will support sustainable, profitable, long-term growth.

Speaker #1: There's some timing issues. There, but again, we expect those to normalize over time.

Speaker #1: We ended the quarter with $204.4 million in cash, cash equivalents, and restricted cash. Our October 2026 debt maturity totals approximately $103 million. Based on our current cash position, our Q2 and second-half cash generation trajectory, we are confident we can address this maturity.

Speaker #2: For Q2, we expect revenue of $72 to $77 million and adjusted EBITDA of $11 to $13 million. I will now turn the call back to Pedro.

Speaker #6: Okay. Great. Really helpful. And then maybe just as a quick follow-up, when you originally gave the one Q guide, it was mid-March. And so I would think a good line of sight into how the quarter would shake out.

Joseph Federico: Okay, great. Really helpful. Maybe just as a quick follow-up. When you originally gave the Q1 guide, it was mid-March, I would think a good line of sight into how the quarter would shake out. Obviously you came in within range on sales, but the EBITDA was well above. Was there anything that really deviated in the final weeks of the quarter operationally that led to that outperformance? Maybe just one step further, with reiterating the full year guide for EBITDA, did some of those operations not continue into Q2, or is it just simply a function of the now lower sales outlook?

Joe Federico: Okay, great. Really helpful. Maybe just as a quick follow-up. When you originally gave the Q1 guide, it was mid-March, I would think a good line of sight into how the quarter would shake out. Obviously you came in within range on sales, but the EBITDA was well above. Was there anything that really deviated in the final weeks of the quarter operationally that led to that outperformance? Maybe just one step further, with reiterating the full year guide for EBITDA, did some of those operations not continue into Q2, or is it just simply a function of the now lower sales outlook?

Speaker #1: Thanks, Mike. So to close, while top-line performance remains below where we wanted it to be, the underlying foundation of our business remains strong. We have a growing install base of more than 36,000 systems, a highly recurring consumables model, expanding margins, and one of the leading brands in aesthetics.

Speaker #3: We understand where the opportunities are, and we are taking decisive actions. And so we remain confident in the long-term strength and potential of our platform.

Pedro Malha: Thanks, Mike. To close, while top-line performance remains below where we wanted it to be, the underlying foundation of our business remains strong. We have a growing install base of more than 36,000 systems, a highly recurring consumables model, expanding margins, and one of the leading brands in aesthetics. Our focus now is execution, improving commercial conversion, increasing utilization across the installed base, and continue to invest in the innovation pipeline that we believe will support sustainable, profitable long-term growth. We understand where the opportunities are, and we are taking decisive actions, and so we remain confident in the long-term strength and potential of our platform. With that, I will turn the call back to the operator for questions. Thank you.

Speaker #6: And obviously, you came in within range on sales. But the EBITDA was well above. So was there anything that really deviated in the final weeks of the quarter operationally that led to that outperformance?

Speaker #1: We are revising our full-year revenue outlook to $280 to $295 million from our prior range of $285 to $305 million. The primary drivers are continued softness in capital equipment demand and commercial execution improvements that will take time to be fully reflected in revenue.

Speaker #3: With that, I will turn the call back to the operator for questions. Thank you.

Speaker #1: Thank you, ladies and gentlemen. We will now begin the question-and-answer session. And if you wish to ask a question, please press star and one on your telephone keypad and wait for your name to be announced.

Speaker #6: And then maybe just one step further, with reiterating the full year guide for EBITDA, did some of those operations not continue into two Q or is it just simply a function of the now lower sales outlook?

Speaker #1: So our focus now is execution. Improving commercial conversion, increasing utilization across the install base, and continue to invest in the innovation pipeline that we believe will support sustainable, profitable, long-term growth.

Speaker #1: We are maintaining our adjusted EBITDA guidance of $35 to $45 million, as the operational discipline and margin strength of the business continue to offset top-line pressure.

Speaker #1: Once again, star and one if you wish to ask a question. Please stand by while we compile the Q&A roster. Thank you for waiting.

Speaker #1: Large portion of the EBITDA was driven by, excuse me, was driven by outperformance on gross margin. And then management of the overall OPEX. So OPEX specifically in March came in lower than we had forecasted.

Mike: A large portion of the EBITDA beat was driven by, excuse me, was driven by outperformance on gross margin and then management of the overall OpEx. OpEx specifically in March, came in lower than we had forecasted. On the gross margin side, there were two drivers, two of the largest drivers. The first was in the Americas, average selling price on devices was higher than we projected. That favored, even though we had pressure on the overall number of units and came in lower than we were forecasting, the ASP offset a portion of that which drove higher overall kind of profits on a lower number of units. The second thing is on the operational side, we project each quarter expected scrap and write-offs, and it was much lower than normal in Q1.

Mike Monahan: A large portion of the EBITDA beat was driven by, excuse me, was driven by outperformance on gross margin and then management of the overall OpEx. OpEx specifically in March, came in lower than we had forecasted. On the gross margin side, there were two drivers, two of the largest drivers. The first was in the Americas, average selling price on devices was higher than we projected. That favored, even though we had pressure on the overall number of units and came in lower than we were forecasting, the ASP offset a portion of that which drove higher overall kind of profits on a lower number of units. The second thing is on the operational side, we project each quarter expected scrap and write-offs, and it was much lower than normal in Q1.

Speaker #1: We understand where the opportunities are, and we are taking decisive actions. And so we remain confident in the long-term strength and potential of our platform.

Speaker #1: For Q2, we expect revenue of $72 to $77 million and adjusted EBITDA of $11 to $13 million. I will now turn the call back to Pedro.

Speaker #1: We will now take our first question. And this comes from Oliver Chen from TD Cowen, your line is now open. Please go ahead.

Speaker #2: Thanks, Mike. So to close, while top-line performance remains below where we wanted it to be, the underlying foundation of our business remains strong. We have a growing install base of more than 36,000 systems, a highly recurring consumables model, expanding margins, and one of the leading brands in aesthetics.

Speaker #1: With that, I will turn the call back to the operator for questions. Thank you.

Speaker #4: Hi, thank you. Pedro, regarding your comments on the nature of competition and also the role you're taking more closely with the sales organization, what are you seeing there in terms of what's within your control and also the outlook?

Speaker #1: On the gross margin side, there were two drivers. Two of the largest drivers. The first was in the Americas, average selling price on devices was higher than we projected.

Speaker #3: Thank you, ladies and gentlemen. We will now begin the question and answer session. And if you wish to ask a question, please press star and one on your telephone keypad, and wait for your name to be announced.

Speaker #1: And so that favored, even though we had pressure on the overall number of units and came in lower than we were forecasting, the ASP offset a portion of that, which drove higher overall kind of profits on a lower number of units.

Operator: Thank you. Ladies and gentlemen, we will now begin the question and answer session. If you wish to ask a question, please press star and 1 on your telephone keypad and wait for your name to be announced. Once again, star and 1 if you wish to ask a question. Please stand by while we compile the Q&A roster. Thank you for waiting. We will now take our first question, and this comes from Oliver Chen from TD Cowen. Your line is now open. Please go ahead.

Speaker #4: Still could be pretty hazy with the interest rates as well as pressured middle consumer. So just love your thoughts on innovation and where you think the company is with respect to what any you're in on the devices side relative to consumables and the work you have ahead.

Speaker #3: Once again, star and one if you wish to ask a question. Please stand by while we compile the Q&A roster. Thank you for waiting.

Speaker #2: So our focus now is execution. Improving commercial conversion, increasing utilization across the install base, and continue to invest in the innovation pipeline that we believe will support sustainable, profitable, long-term growth.

Speaker #1: The second thing is on the operational side, we project each quarter expected scrap and write-offs and it was much, much lower than normal in Q1.

Speaker #3: We will now take our first question. And this comes from Oliver Chen from TD Cowen, your line is now open. Please go ahead.

Speaker #4: And then, Mike, as we think about that October maturity, what are the puts and takes on working capital and CapEx to give us a more comfort in terms of achieving that consumer obligation as well as generally when we're modeling free cash flow this year?

Speaker #2: We understand where the opportunities are, and we are taking decisive actions. And so we remain confident in the long-term strength and potential of our platform.

Speaker #1: So as we look going forward, we're projecting overall gross margin to come down from Q1 a bit, still stay in the high upper 60s.

Mike: As we look going forward, we're projecting overall gross margin to come down from Q1 a bit, still stay in the high upper sixties. It's really the overall projection as we expect as we're projecting device unit sales to come back a little bit. We expect overall ASP to come down and normalize a little bit below where it did, specifically in the Americas on Q1, and we expect overall scrap to return to normal levels.

Mike Monahan: As we look going forward, we're projecting overall gross margin to come down from Q1 a bit, still stay in the high upper sixties. It's really the overall projection as we expect as we're projecting device unit sales to come back a little bit. We expect overall ASP to come down and normalize a little bit below where it did, specifically in the Americas on Q1, and we expect overall scrap to return to normal levels.

Speaker #2: Hi, thank you. Pedro. Regarding your comments on the nature of competition and also the role you're taking more closely with the sales organization, what are you seeing there in terms of what's within your control and also the outlook still could be pretty hazy with the interest rates as well as pressured middle consumer?

Speaker #2: With that, I'll turn the call back to the operator for questions. Thank you.

Speaker #1: And it's really the overall projection as we expect, as we're projecting device unit sales to come back a little bit, we expect overall ASP to come down and normalize a little bit below where it did, specifically in the Americas on Q1.

Oliver Chen: Hi. Thank you. Pedro, regarding your comments on the nature of competition and also the role you're taking more closely with the sales organization, what are you seeing there in terms of what's within your control? The outlook still could be pretty hazy with the interest rates as well as a pressured, you know, middle consumer. Just love your thoughts on innovation and where you think the company is with respect to what inning you're in on the devices side relative to consumables and the work you have ahead.

Speaker #4: What levers might you have in terms of protecting your free cash flow if there's lack of upside or downside risk to your guidance? Thank you.

Speaker #2: So just love your thoughts on innovation and where you think the company is with respect to what any you're in on the devices side relative to consumables and the work you have ahead.

Speaker #1: And we expect overall scrap to return to normal levels.

Speaker #1: Once again, star and one if you wish to ask a question. Please stand by while we compile the Q&A roster. Thank you for waiting.

Speaker #3: Great. Thanks, Oliver. So I'll start addressing the competition question and then I'll touch on the innovation agenda that we're driving. And then I will just close that talking a little bit about the commercial organizational changes that we have done.

Speaker #6: Very helpful. Thank you.

Joseph Federico: Very helpful. Thank you.

Joe Federico: Very helpful. Thank you.

Speaker #3: Thank you. And the next question comes from Sydney Wagner from Jefferies, your line is now open. Please go ahead.

Operator: Thank you. The next question comes from Sydney Wagner from Jefferies. Your line is now open. Please go ahead.

Speaker #2: And then Mike, as we think about that October maturity, what are the puts and takes on working capital and CapEx to give us more comfort in terms of achieving that cons obligation as well as generally when we're modeling free cash flow this year?

Speaker #1: We will now take our first question. And this comes from Oliver Chen from TD Cowen, your line is now open. Please go ahead.

Speaker #3: So in terms of the competition, it's true. The competition continues to increase. And this is very particular around the lower end of the market.

Speaker #5: Hi. Thanks for taking our question. So you mentioned restructuring the booster portfolio around clearly defined clinical use cases. Can you just walk us through how does that differ from how boosters were positioned previously?

Oliver Chen: Then Michael Monahan, as we think about that October maturity, what are the puts and takes on working capital and CapEx to give us more comfort in terms of achieving that obligation as well as generally when we're modeling free cash flow this year, what levers might you have in terms of, you know, protecting your free cash flow, if there's lack of upside or downside risk to your guidance? Thank you.

Sydney Wagner: Hi. Thanks for taking our question. You've mentioned restructuring the booster portfolio around, you know, clearly defined clinical use cases. Can you just walk us through how does that differ from how boosters were positioned previously? What specifically was maybe not coming through clearly around the efficacy or intended use before?

Speaker #3: Hi, thank you, Pedro. Regarding your comments on the nature of competition, and also the role you're taking more closely with the sales organization, what are you seeing there in terms of what's within your control?

Speaker #3: We are seeing some pressure from lower cost alternatives secondary market devices are coming in. And a broader set of aesthetic treatments, right? Because basically, we all compete in for the same treatment room time.

Speaker #2: What levers might you have in terms of protecting your free cash flow if there's lack of upside or downside risk to your guidance? Thank you.

Speaker #5: And what specifically was maybe not coming through clearly around the efficacy or attended use before?

Speaker #3: And also the outlook still could be pretty hazy with the interest rates as well as pressured middle consumer. So just love your thoughts on innovation and where you think the company is with respect to what any you're in on the devices side relative to consumables and the work you have ahead.

Speaker #1: Great. Thanks, Oliver. So I'll start addressing the competition question, and then I'll touch on the innovation agenda that we're driving. And then I will just close that talking a little bit about the commercial organizational changes that we have done.

Speaker #1: So we have done in the past quarter and a half a lot of not only strategic work around our booster strategy, where boosters play a very important role in consumables overall sales, but also in driving a higher utilization, a higher interest, from overall consumers getting to the door.

Speaker #3: The secondary market is particularly relevant in this current environment because among the smaller providers that are now facing tighter financial conditions, these providers are looking for lower upfront capital commitments.

Pedro Malha: We have done in the past quarter and a half, a lot of not only strategic work around our booster strategy, where boosters play a very important role in consumables, overall sales, but also in driving a higher utilization, a higher interest from overall consumers getting through the door, and most importantly, how it drives a higher return on investment for all providers. Boosters, we continue to see as the main driver of that to drive utilization. What we have seen is that historically the company has had a lot of different boosters, a lot of SKUs. Where we're going now is rather for simplicity and impact. We are redoing the whole selection of boosters.

Pedro Malha: Right. Thanks. Thanks, Oliver. I'll start addressing the competition question, and then I'll touch on the innovation agenda that we're driving. Then I will just close that, talking a little bit about the commercial organizational changes that we have done. In terms of the competition, it's true, the competition continues to increase, and this is very particularly around the lower end of the market. We are seeing some pressure from lower cost alternatives. Secondary market devices are coming in and a broader set of aesthetic treatments, right? Because basically, we're all competing for the same treatment room time.

Speaker #3: And then Mike, as we think about that October maturity, what are the puts and takes on working capital and CapEx to give us a more comfort in terms of achieving that consumer obligation as well as generally when we're modeling free cash flow this year?

Speaker #3: So that's relevant there. Our overall strategy is not to compete purely on price. Because we know for a fact that providers ultimately optimize for their patients' outcomes.

Speaker #1: So in terms of the competition, it's true. The competition continues to increase. And this is very particular around the lower end of the market.

Speaker #1: And most importantly, how we drive a higher return on investment for all providers. So boosters we continue to see as the main driver of that to drive utilization.

Speaker #1: We are seeing some pressure from lower-cost alternatives secondary market devices are coming in. And a broader set of aesthetic treatments, right? Because basically, we all compete for the same treatment room time.

Speaker #3: And the optimize for the long-term return on their treatment rooms. So we believe that that exactly plays to the strength of our company to the strengths of HydroFacial platform.

Speaker #3: What levers might you have in terms of protecting your free cash flow if there's lack of upside or downside risk to your guidance? Thank you.

Speaker #1: What we have seen is that historically, the company has had a lot of different boosters, a lot of SKUs, what we're going now is rather for simplicity and impact.

Speaker #3: And ultimately, we'll come up stronger as we see the market stabilizing. In terms of innovation, definitely very, very over-indexed in our innovation agenda. Innovation needs to do four things for us.

Speaker #1: The secondary market is particularly relevant in this current environment because among the smaller providers that are now facing tighter financial conditions, these providers are looking for lower upfront capital commitments.

Speaker #2: Great. Thanks, Oliver. So I'll start addressing the competition question, and then I'll touch on the innovation agenda that we're driving. And then I will just close that talking a little bit about the commercial organizational changes that we have done.

Pedro Malha: The secondary market is particularly relevant in this current environment because among the smaller providers that are now facing, you know, tighter financial conditions, these providers are looking for lower upfront capital commitments. That's relevant there. Our overall strategy is not to compete purely on price because we know for a fact that providers ultimately optimize for their patients' outcomes, and they optimize for the long-term return on their treatment rooms. We believe that exactly plays to the strength of our company, to the strengths of HydraFacial platform, and ultimately, we'll come up stronger as we see the market stabilizing. In terms of innovation, definitely very, very over indexed in our innovation agenda. Innovation needs to do four things for us.

Speaker #1: So we are redoing the whole selection of boosters but most importantly, we are selecting the boosters that bring clinical outcomes. That actually will give what consumers are looking for.

Speaker #1: So that's relevant there. Our overall strategy is not to compete purely on price. Because we know for a fact that providers ultimately optimize for their patients' outcomes.

Speaker #2: So in terms of the competition, it's true. The competition continues to increase. And this is very particular around the lower end of the market.

Pedro Malha: Most importantly, we are selecting the boosters that bring clinical outcomes that actually will give what consumers are looking for. That requires a different view of what boosters can do, and what type of boosters we are gonna be offering. Just to tell you that we have two planned launches this year. The first is actually next quarter, when we're gonna be launching the HydraFacial booster. We're gonna be using that for to reactivate basically an asset which is Keravive, that never got to deserve attention or focus. The second booster is gonna be launched in Q4 of this year, and that is definitely gonna be much more clinically backed booster, that is gonna be supported by real clinical data.

Speaker #3: It needs to improve clinical outcomes. It needs to strengthen the economics of providers. It needs to obviously fit naturally into the treatment room where our devices of HydroFacial and skin stylists already reside.

Speaker #2: We are seeing some pressure from lower-cost alternatives secondary market devices are coming in. And a broader set of aesthetic treatments, right? Because basically, we all compete for the same treatment room time.

Speaker #1: And the optimize for the long-term return on their treatment rooms. So we believe that that exactly plays to the strength of our company to the strengths of HydroFacial platform.

Speaker #1: And that requires a different view of what boosters can do. And what type of boosters we are going to be offering. Just to tell you that we have two planned launches this year.

Speaker #3: And it needs to be accretive to margin. So if it does not meet those, we are not pursuing it. And as I mentioned in my opening remarks, we are putting the right capital behind the development of the next generation HydroFacial.

Speaker #1: The first is actually next quarter. When we're going to be launching the hydroscope, booster. And we're going to be using that to reactivate basically an asset which is Caravive.

Speaker #1: And ultimately, we'll come up stronger as we see the market stabilizing. In terms of innovation, definitely very, very over-indexed in our innovation agenda. Innovation needs to do four things for us.

Speaker #2: The secondary market is particularly relevant in this current environment because, among the smaller providers that are now facing tighter financial conditions, these providers are looking for lower upfront capital commitments.

Speaker #3: And we are putting the right capital and the teams behind our next generation of boosters, which I mean we are overall overhauling the whole strategy.

Speaker #1: That never got to deserve attention or focus. And in the second, we're going to in the second booster is going to be launched in Q4 of this year.

Speaker #2: So that's relevant there. Our overall strategy is not to compete purely on price, because we know for a fact that providers ultimately optimize for their patients' outcomes.

Speaker #3: In terms of the commercial organization, I come from an organization where I had direct overview of the regions. And so we exchanged that we did.

Speaker #1: It needs to improve clinical outcomes. It needs to strengthen the economics of providers. It needs to obviously fit naturally into the treatment room where our devices of HydroFacial and skin stylists already reside.

Speaker #1: And that is definitely going to be much more clinically backed booster that is going to be supported by real clinical data. So the team is very enthusiastic about that booster.

Pedro Malha: It needs to improve clinical outcomes. It needs to strengthen the economics of providers. It needs to obviously fit naturally into the treatment room where our devices of HydraFacial and SkinStylus already reside, and it needs to be accretive to margin. If it does not meet those, we are not pursuing it. As I mentioned in my opening remarks, we are putting the right capital behind the development of the next generation HydraFacial, and we are putting the right capital and the teams behind our next generation of boosters, which, I mean, we are overhauling the whole strategy. In terms of the commercial organization, I come from organizations where I had direct overview of the regions.

Speaker #2: And the optimize for the long-term return on their treatment rooms. So we believe that that exactly plays to the strength of our company to the strengths of HydroFacial platform.

Pedro Malha: The team is very enthusiastic about that booster. We know for a fact, and we have those proxies in our business that when we launch a booster that delivers the outcomes that they're supposed to deliver, that drives sales, that drives provider engagement, that drives consumers into the doors, and that is a huge part of our business. We plan to over-index on that strategy.

Speaker #3: That gives me the possibility to have a direct hand and management of the US and all international business. And it will allow me, most importantly, to be directly involved with these regions with the way we sell closer to metrics and this is an environment that I'm very comfortable with.

Speaker #1: And we know for a fact and we have those proxies in our business that when we launch a booster that delivers the outcomes, that they're supposed to deliver, that drives sales.

Speaker #2: And ultimately, we'll come up stronger as we see the market stabilizing. In terms of innovation, definitely very, very over-indexed in our innovation agenda. Innovation needs to do four things for us.

Speaker #1: That drives provider engagement. That drives consumers into the doors. And that is a huge part of our business. So we plan to over-index on that strategy.

Speaker #1: And we are putting the right capital and the teams behind our next generation of boosters, which I mean we are overall overhauling the whole strategy.

Speaker #3: And coming from all the experiences and positions that I had in the past. And that's the reason why the change was made. Mike, you want to address the other questions?

Speaker #5: Okay. That's helpful. And then just one more on competition. So when you think about hydrofacials' competitive positioning, is it more about differentiation versus similar facial devices or systems?

Speaker #1: In terms of the commercial organization, I come from an organization where I had direct overview of the regions. And so we exchanged that we did.

Sydney Wagner: Okay. That's helpful. Just more on competition. When you think about HydraFacial's competitive positioning, you know, is it more about differentiation versus similar facial devices or systems, or are you increasingly competing for consumer spend against, you know, adjacent treatments like lasers, for instance?

Speaker #2: It needs to improve clinical outcomes. It needs to strengthen the economics of providers. It needs to obviously fit naturally into the treatment room where our devices of HydroFacial and SkinStyles already reside.

Speaker #4: Sure. Thanks, Oliver. The midpoint of our guidance assumes we have modest free cash flow generation in the last three quarters of the year. Overall CapEx I'm expecting 8 to 10 million for the year of CapEx.

Speaker #5: Or are you increasingly competing for consumer spend against adjacent treatments like a lasers, for instance?

Speaker #2: And it needs to be accretive to margin. So if it does not meet those, we are not pursuing it. And as I mentioned in my opening remarks, we are putting the right capital behind the development of the next generation HydroFacial.

Speaker #4: We spent 1.6, 1.7 million in the first quarter. So as you look at kind of overall, we expect free cash flow as I said to be positive after we service the debt for the last three quarters.

Pedro Malha: With this change that we did, that gives me the possibility to have a direct hand and management of the US and all international business. It will allow me, most importantly, to be directly involved with these regions, with the way we sell, closer to metrics. This is an environment that I'm very comfortable with, coming from all the experiences and positions that I had in the past. That's the reason why the change was made. Mike, you wanna address the other questions?

Speaker #1: I think it's both. It's not only the low-end of the market that we are competing is becoming more crowded. But we also are competing for time, space of those treatment rooms.

Pedro Malha: I think it's both. It's not only the low end of the market that we are competing is becoming more crowded, but we also are competing for time, space of those treatment rooms as more treatments, more technologies coming in, trying to get that time from the consumer and dollar. It's both. It's both. We feel that we are very well-positioned, actually very well resilient throughout all these challenges and throughout all these past years. HydraFacial continues to be the gateway for other treatments. We plan to over-index in that. It's a staple in the majority of all the med spas and is a technology and is a procedure that delivers results.

Speaker #2: And we are putting the right capital and the teams behind our next generation of boosters, which I mean we are overall overhauling the whole strategy.

Speaker #4: Working capital I expect to not be as significant drain to actually we're forecasting it to be relatively flat year over year. It was a use of cash in Q1, but that's largely due to the timing of payables.

Speaker #1: As more treatments more technologies coming in, trying to get that time from the consumer in dollar. So it's both. It's both. But we feel that we are very well positioned actually very well resilient throughout all these challenges and throughout all these past years.

Speaker #1: And coming from all the experiences and positions that I had in the past. And that's the reason why the change was made. Mike, you want to address the other questions?

Speaker #2: In terms of the commercial organization, I come from an organization where I had direct overview of the regions. And so we exchanged that we did.

Speaker #4: So my expectation is that that normalizes by the time we get to the end of the year and specifically by the time we get to the maturity.

Speaker #5: Okay. Thank you. Best regards.

Speaker #1: Hydrofacial continues to be the gateway for other treatments. We plan to over-index in that. It's a staple in the majority of all the med spas.

Michael Monahan: Sure. Thanks, Oliver. The midpoint of our guidance assumes we have modest free cash flow generation in the last three quarters of the year. Overall CapEx, I'm expecting $8 to 10 million for the year of CapEx. We spent $1.6, $1.7 million in the first quarter. As you look at kind of overall, we expect free cash flow, as I said, to be positive after we service the debt for the last three quarters. Working capital, I expect to not be a significant drain to actually we're forecasting it to be relatively flat year over year. It was a use of cash in Q1, but that's largely due to the timing of payables.

Mike Monahan: Sure. Thanks, Oliver. The midpoint of our guidance assumes we have modest free cash flow generation in the last three quarters of the year. Overall CapEx, I'm expecting $8 to 10 million for the year of CapEx. We spent $1.6, $1.7 million in the first quarter. As you look at kind of overall, we expect free cash flow, as I said, to be positive after we service the debt for the last three quarters. Working capital, I expect to not be a significant drain to actually we're forecasting it to be relatively flat year over year. It was a use of cash in Q1, but that's largely due to the timing of payables.

Speaker #2: That gives me the possibility to have a direct hand and management of the US and all international business. And it will allow me, most importantly, to be directly involved with these regions with the way we sell closer to metrics and this is an environment that I'm very comfortable with.

Speaker #1: Thank you. And the next question comes from Alan Gong from JP Morgan, your line is now open. Please go ahead.

Speaker #1: And is a technology and is a procedure that delivers results. So although we are seeing an increased competitive pressure, we feel that is a natural pressure because the segment is still very appealing.

Speaker #6: Hi, team. Thanks for the question. Just a quick one on the guide and the cadence that you expect to see throughout the balance of the year.

Pedro Malha: Although we are seeing an increased competitive pressure, we feel that is a natural pressure because the segment is still very appealing. We plan to combat it. We plan to have the right strategy, the right sales force execution, the right messaging, the right segmentation, and a well-prepared and well-trained sales force that is able to win in a little bit of a more challenging market that we're facing right now.

Speaker #6: I think previously, we had been hoping that there would be a return to modest growth in the back half of the year off of some easing comps and off of some continued stabilization.

Speaker #2: And coming from all the experiences and positions that I had in the past. And that's the reason why the change was made. Mike, you want to address the other questions?

Speaker #1: And we plan to combat it. We plan to have the right strategy, the right Salesforce execution. The right messaging, the right segmentation. And a well-prepared and well-trained Salesforce that is able to win in a little bit of a more challenging market that we're facing right now.

Speaker #6: But it is the right expectation now that we probably won't be getting to positive growth in the back half of the year? Or do you think that's something that you can still achieve, say, like in fourth quarter?

Speaker #3: Sure. Thanks, Oliver. The midpoint of our guidance assumes we have modest free cash flow generation in the last three quarters of the year. Overall CapEx I'm expecting 8 to 10 million for the year of CapEx.

Speaker #2: So my expectation is that that normalizes by the time we get to the end of the year and specifically by the time we get to the maturity.

Speaker #3: So Alan, let me just refresh the numbers and the change on the guide that we just communicated. So definitely the Q2 it's not coming as expected.

Michael Monahan: My expectation is that that normalizes by the time we get to the end of the year and specifically by the time we get to the maturity.

Speaker #3: Okay. Thank you. Best regards.

Mike Monahan: My expectation is that that normalizes by the time we get to the end of the year and specifically by the time we get to the maturity.

Speaker #5: Thank you.

Sydney Wagner: Thank you.

Speaker #3: We spent 1.6, 1.7 million in the first quarter. So as you look at kind of overall, we expect free cash flow. As I said, to be positive after we service the debt for the last three quarters.

Speaker #4: Thank you. And the next question comes from Allen Gong from JP Morgan, your line is now open. Please go ahead.

Speaker #3: Thank you. And the next question comes from Bruce Jackson from the Benchmark Company, your line is now open. Please go ahead.

Operator: Thank you. The next question comes from Bruce Jackson from The Benchmark Company. Your line's now open. Please go ahead.

Pedro Malha: Okay. Thank you. Best regards.

Oliver Chen: Okay. Thank you. Best regards.

Speaker #3: As I just spoke about, we revised our top line guidance to reflect the current market conditions and the execution that is underway across our business.

Operator: Thank you. The next question comes from Allen Gong from JP Morgan. Your line is now open. Please go ahead.

Speaker #5: Hi, team. Thanks for the question. Just a quick one on the guide and the cadence that you expect to see throughout the balance of the year.

Speaker #4: Hi. Good afternoon. A couple of macro questions. So with the rise in oil prices, are you seeing any effect on your inputs, for example, with plastic resins or freight costs?

Bruce Jackson: Hi. Good afternoon. Couple of macro questions. With the rise in oil prices, are you seeing any effect on your inputs, for example, with plastic resins or freight costs? If we do get a bout of inflation, how do you feel about your ability to protect the EBITDA margins?

Speaker #3: Working capital I expect to not be as significant drain to actually we're forecasting it to be relatively flat year over year. It was a use of cash in Q1, but that's largely due to the timing of payables.

Allen Gong: Hi, team. Thanks for the question. Just a quick one on the guide and, you know, the cadence that you expect to see throughout the balance of the year. You know, I think previously we had been hoping that there would be a, you know, return to modest growth in H2 off of some easing comps and off of some continued stabilization. Is, you know, is the right expectation now that we probably, you know, won't be getting to positive growth in H2? Or do you think that's something that you can still achieve, say, like in Q4?

Speaker #3: So we are basically guiding the revenue to a range of 280 million dollars to 295 million dollars but also very strongly we are maintaining the adjusted EBIT guidance, right?

Speaker #5: I think previously, we had been hoping that there would be a return to modest growth in the back half of the year off of some easing comps and off of some continued stabilization.

Speaker #4: And if we do get a bout of inflation, how do you feel about your ability to protect the EBITDA margins?

Speaker #5: But it is the right expectation now that we probably won't be getting to positive growth in the back half of the year. Or do you think that's something that you can still achieve, say, like in fourth quarter?

Speaker #3: So my expectation is that that normalizes by the time we get to the end of the year and specifically by the time we get to the maturity.

Speaker #3: That we had before. The way we are looking at the quarter the current quarter, at the midpoint of the guide, the quarter is sitting at 74.5 million dollars, which basically translates this into having a quarter that will decrease 4.7% year over year.

Speaker #1: No, we're not seeing anything specific, Bruce, on overall increases in our prices. On the capital equipment side, we have a decent amount of raw materials already in-house.

Mike: No, we're not seeing anything specific, Bruce, on overall increases in our prices. On the capital equipment side, we have a decent amount of raw materials already in-house. We've been working through our existing inventory, so we shouldn't see an impact to that in the near term. Overall, I'm not concerned about inflation materially impacting the adjusted EBITDA guide.

Mike Monahan: No, we're not seeing anything specific, Bruce, on overall increases in our prices. On the capital equipment side, we have a decent amount of raw materials already in-house. We've been working through our existing inventory, so we shouldn't see an impact to that in the near term. Overall, I'm not concerned about inflation materially impacting the adjusted EBITDA guide.

Speaker #4: Okay. Thank you. Best regards.

Speaker #1: So Allen, let me just refresh the numbers and the change on the guide that we just communicated. So definitely the Q2 it's not coming.

Speaker #1: Thank you. And the next question comes from Alan Gong from JP Morgan, your line is now open. Please go ahead.

Speaker #1: We've been working through our existing inventory. So we shouldn't see an impact to that in the near term. So overall, I'm not concerned about inflation materially impacting the adjusted EBITDA guide.

Pedro Malha: Allen, let me just, you know, refresh the numbers and the change on the guide that we just communicated. Definitely the Q2, you know, it's not coming as expected. As I just spoke about, we revised our top line guidance to reflect the current market conditions and the execution that is underway across our business. We are basically guiding the revenue to a range of $280 million to $295 million. Also very strongly, we are maintaining the adjusted EBITDA guidance, right, that we had before.

Speaker #3: And that is largely driven by, again, the lower device sales trends that we're seeing across the board. While consumables in the US and the rest of the world, excluding the APAC, are expecting to be flat.

Speaker #5: Mike, thanks for the question. Just a quick one on the guide and the cadence that you expect to see throughout the balance of the year.

Speaker #1: As expected, as I just spoke about, we revised our top-line guidance to reflect the current market conditions and the execution that is underway across our business.

Speaker #5: I think previously, we had been hoping that there would be a return to modest growth in the back half of the year off of some easing comps and off of some continued stabilization.

Speaker #4: Okay. And then a follow-up, if I may, with the booster that you're launching in the fourth quarter, are you providing any additional details about that at this time?

Bruce Jackson: Okay. A, a follow-up, if I may. With the booster that you're launching in Q4, are you providing any additional details about that at this time?

Speaker #3: In terms of how do we play it out for the remaining of the year, the expectation is that we are still seeing 2026 and that has not changed.

Speaker #1: So we are basically guiding the revenue to a range of $280 million to $295 million. But also very strongly, we are maintaining the adjusted EBIT guidance, right?

Speaker #1: Not at this time. It's in late stages of development. And we'll provide you the updates in the coming quarters as we get closer to the launch time.

Pedro Malha: Not at this time. It's in late stages of development, and we'll provide you the updates in the coming quarters as we get closer to the launch time.

Speaker #3: As an execution year, and as a stabilization year. And the key drivers of our performance and the way we're going to be showing up the year is by improving the device conversion and as I spoke in the beginning, by improving the utilization across the installed base.

Speaker #1: That we had before. The way we are looking at the quarter the current quarter, at the midpoint of the guide, the quarter is sitting at 74.5 million dollars, which basically translates this into having a quarter that will decrease 4.7% year over year.

Speaker #2: So Alan, let me just refresh the numbers and the change on the guide that we just communicated. So definitely the Q2, it's not coming as expected.

Speaker #4: All right. Great. Thank you.

Bruce Jackson: All right. Great. Thank you.

Speaker #3: Thanks, Bruce.

Pedro Malha: Thanks, Bruce.

Mike Monahan: Thanks, Bruce.

Pedro Malha: The way we are looking at the quarter, the current quarter, at the midpoint of the guide, the quarter is sitting at $74.5 million, which basically translates this into having a quarter that will decrease 4.7% year-over-year. That is largely driven by, again, the lower device sales trends that we're seeing across the board. While consumables in the US and the rest of the world, excluding the APAC, are expecting to be flat. In terms of how do we play it out for, you know, the remaining of the year, the expectation is that we are still seeing 2026, and that has not changed, as an execution year and as a stabilization year.

Speaker #2: Thank you. And there are no further questions that came through. This concludes our conference call for today. Thank you all for participating. You may now disconnect.

Operator: Thank you. There are no further questions that came through. This concludes our conference call for today. Thank you all for participating. You may now disconnect.

Speaker #3: And also improving the booster attachment rates. So the way we are seeing the year is that in the first half of this year, we expect to see the pressure in the device placements and utilization trends to continue but as we move through the second half, we are expecting a gradual and a sequential improvement as our commercial initiatives provider provide more results.

Speaker #2: As I just spoke about, we revised our top-line guidance to reflect the current market conditions and the execution that is underway across our business.

Speaker #2: So we are basically guiding the revenue to a range of $280 million to $295 million. But also very strongly, we are maintaining the adjusted EBIT guidance, right?

Speaker #1: In terms of how do we play it out for the remaining of the year, the expectation is that we are still seeing 2026 and that has not changed.

Speaker #2: That we had before. The way we are looking at the quarter—the current quarter—at the midpoint of the guide, the quarter is sitting at $74.5 million, which basically translates this into having a quarter that will decrease 4.7% year over year.

Speaker #3: And start taking traction. So it's important that to say that if we execute well against all these initiatives, against all these priorities, we believe that the model will begin to compound utilization, will begin to improve, and the recurring revenue base naturally will become more productive.

Speaker #1: As an execution year. And as a stabilization year. And the key drivers of our performance and the way we're going to be showing up the year is by improving the device conversion and as I spoke in the beginning, by improving the utilization across the installed base.

Speaker #2: And that is largely driven by, again, the lower device sales trends that we're seeing across the board. While consumables in the US and the rest of the world, excluding the APAC, are expecting to be flat.

Pedro Malha: The key drivers of our performance and the way we're gonna be showing up the year is by improving the device conversion, and as I spoke in the beginning, by improving the utilization across the install base and also improving the booster attachment rates. The way we are seeing the year is that in H1 of this year, we expect to see the pressure in the device placements and utilization trends to continue. As we move through H2, we are expecting a gradual and a sequential improvement as our commercial initiatives provider provide more results and start taking traction.

Speaker #3: That is why we believe the business is positioned to return to more consistent growth in 2027 and beyond. But based on the current trends we are seeing, and the expected timing of the initiative that are underway, although we think that growth will come in 2027, the cadence of that recovery within the year will absolutely depend on how quickly the device business stabilizes.

Speaker #2: In terms of how do we play it out for the remaining of the year, the expectation is that we are still seeing 2026 and that has not changed.

Speaker #1: But as we move through the second half, we are expecting a gradual and a sequential improvement as our commercial initiatives provider provide more results.

Speaker #2: As an execution year. And as a stabilization year. And the key drivers of our performance and the way we're going to be showing up the year is by improving the device conversion and as I spoke in the beginning, by improving the utilization across the install base.

Speaker #1: And start taking traction. So it's important that to say that if we execute well against all these initiatives, against all these priorities, we believe that the model will begin to compound utilization, will begin to improve and the recurring revenue base naturally will become more productive.

Speaker #3: And on the timing of any impact of some of the catalysts that I just mentioned which are the new boosters launches and the strategic partnerships taken to effect.

Speaker #2: And also improving the booster attachment rates. So, the way we are seeing the year is that in the first half of this year, we expect to see the pressure in the device placements and utilization trends continue.

Pedro Malha: It's important to say that if we execute well against all these initiatives, against all these priorities, we believe that the model will begin to compound, utilization will begin to improve, and the recurring revenue base naturally will become more productive. That is why we believe the business is positioned to return to more consistent growth in 2027 and beyond.

Speaker #2: But as we move through the second half, we are expecting a gradual and a sequential improvement as our commercial initiatives provide more results.

Speaker #1: Thank you. And the next question comes from Olivia Tong from Raymond James, your line is now open. Please go ahead.

Speaker #7: Good afternoon. Thanks. Peter, what gets you to the upper end versus the lower end of your ranges on sales and EBITDA? And in your view, is it shortfall more in just the devices or consumables?

Speaker #2: And start taking traction. So it's important that to say that if we execute well against all these initiatives, against all these priorities, we believe that the model will begin to compound utilization, will begin to improve and the recurring revenue base naturally will become more productive.

Pedro Malha: Based on the current trends we are seeing, and the expected timing of the initiative that are underway, you know, although we think that growth will come in 2027, the cadence of that recovery within the year will, you know, absolutely depend on how quickly the device business stabilizes and on the timing of any impact of or some of the catalysts that I just mentioned, which are the new boosters launches and the strategic partnerships take into effect.

Speaker #7: It sounds like it's devices, but just kind of curious how you think about sort of consumables and the demand there. And then how much of this is a function of your execution versus the volatility in terms of the external environment?

Speaker #1: And on the timing of any impact of some of the catalysts that I just mentioned which are the new boosters launches and the strategic partnerships taken to effect.

Speaker #7: Thank you.

Speaker #2: That is why we believe the business is positioned to return to more consistent growth in 2027 and beyond. But based on the current trends, we are seeing and the expected timing of the initiative that are underway, although we think that growth will come in 2027, the cadence of that recovery within the year will absolutely depend on stabilizes.

Speaker #3: Sure. So focusing on consumers. Consumables obviously remain very core to our model. And if you exclude the impact of China and the shipment timing that we went through, the business remains actually relatively stable.

Speaker #4: Thank you. And the next question comes from Olivia Tong from Raymond ahead.

Speaker #3: The larger opportunity that we know for a fact exists is around utilization. Which we still believe remains below its potential. The market, we feel that the market is still there.

Operator: Thank you. The next question comes from Olivia Tong from Raymond James. Your line is now open. Please go ahead.

Speaker #6: Good afternoon. Thanks. Peter, what gets you to the upper end versus the lower end of your ranges on sales and EBITDA? And in your view, is it shortfall more in just the devices or consumables?

Speaker #3: The consumer remains engaged, although we have seen in the past years the spending behavior being much more selective. But across the category, we're still seeing strong demand for treatments.

Olivia Tong: Good afternoon. Thanks. Pedro, what gets you to the upper end versus the lower end of your ranges on sales and EBITDA? In your view, is the shortfall more on just devices or consumables? It sounds like it's devices, but just kind of curious how you think about, sort of, you know, consumables and the demand there. Then how much of this is a function of your execution versus, you know, the volatility in terms of the external environment? Thank you.

Speaker #2: And on the timing of any impact of some of the catalysts that I just mentioned, which are the new boosters launches and the strategic partnerships taken to effect.

Speaker #6: It sounds like it's devices, but just kind of curious how you think about sort of consumables and the demand there. And then how much of this is a function of your execution versus the volatility in terms of the external environment?

Speaker #3: But only for treatments that actually deliver visible results. And a very accessible price point which we play directly into that position. But as I mentioned in the beginning, the market continued to be impacted by tighter credit conditions, longer capital purchasing cycles, which have been indeed putting continued pressure in the device placement.

Speaker #6: Thank you.

Speaker #1: Thank you. And the next question comes from Olivia Tong from Raymond James. Your line is now open. Please go ahead.

Speaker #6: Good afternoon. Thanks. Peter, what gets you to the upper end versus the lower end of your ranges on sales and

Pedro Malha: Sure. So focusing on consumers. Consumables obviously remain very core to our model. If you exclude the impact of China and the shipment timing that we went through, the business remains actually relatively stable. The larger opportunity that we know for a fact exists is around utilization, which we still believe, you know, it remains below its potential. The market, we feel that the market is still there. The consumer remains engaged, although we have seen in the past years, the spending behavior being much more selective.

Speaker #3: And that is across the industry for over the last couple of years. So the way we see it is the market is gradually maturing which means that utilization and the productivity per treatment room has become incredibly important to drive our acclaration.

Speaker #1: The larger opportunity that we know for a fact exists is around utilization. Which we still believe remains below its potential. The market, we feel that the market is still there.

Speaker #3: And that is what we are pivoting our strategy to increase that utilization with our booster strategy with better training of our sales force with better value selling with our reps because the market indeed has changed and has become somewhat more challenging.

Pedro Malha: Across the category, we're still seeing strong demand for treatments, and that's only for treatments that actually deliver visible results and a very accessible price point, which we play directly into that position. As I mentioned in the beginning, the market continues to be impacted by tighter credit conditions, longer capital life purchasing cycles, which have been indeed putting continued pressure into device placement. That is across the industry for over the last couple of years. The way we see it is the market is gradually maturing, which means that utilization and the productivity per treatment room has become incredibly important to drive our accretion.

Speaker #1: Thank you. The next question comes from Susan Anderson from Canacor Genuity, your line is now open. Please go ahead.

Speaker #7: Hi. Thanks for taking my questions. I was wondering if maybe you could give some more color on the partnerships that you mentioned that you're looking at for the hydrofacial brand.

Speaker #7: I guess what will these look like? Are they partnerships for additional boosters or other types of partnerships?

Speaker #3: Thanks, Susan. So there's obvious four obvious reasons. There's so much I can say because we are still in the phase of diligence. And I will say late exploration.

Speaker #3: But very core to our strategy, we believe that hydrofacial and skin health systems is indeed a platform it should be a platform of and as an ecosystem of different solutions.

Speaker #3: So we have the team working around not only identifying feasible partners that will play well in that ecosystem. As I mentioned, we are in very late stages of that diligence.

Speaker #4: Thank you. The next question comes from Susan Anderson from Canacor Genuity, your line is now open. Please go ahead.

Speaker #3: I personally, at this stage, feel encouraged by what I see. And this will become again, together with skin stylists, another part of our portfolio that the reps can use in selling the overall solution.

Operator: Thank you. The next question comes from Susan Anderson from Canaccord Genuity. Your line is now open. Please go ahead.

Speaker #6: Hi. Thanks for taking my questions. I was wondering if maybe you could give some more color on the partnerships that you mentioned that you're looking at for the hydrofacial brand.

Susan Anderson: Hi. Thank you for taking my questions. I was wondering if maybe you could give some more color on the partnerships that you mentioned that you're looking at for the HydraFacial brand, I guess. What will these look like? Are they partnerships for additional boosters or other types of partnerships?

Speaker #6: I guess what will these look like? Are they partnerships for additional boosters or other types of partnerships?

Speaker #3: Again, that's so much I can say, but I feel encouraged by what I see. And the timelines of this strategic partnerships that we are pursuing right now.

Speaker #1: Thanks, Susan. So there's obvious four obvious reasons. There's so much I can say because we are still in the phase of diligence. And I will say late exploration.

Pedro Malha: Thanks, Susan. There's for obvious reasons, there's so much I can say because we are still in the phase of due diligence and, I would say late exploration. As very core to our strategy, we believe that HydraFacial and SkinHealth Systems is indeed a platform. It should be a platform of an ecosystem of different solutions. We have the team working around not only identifying feasible partners that will play well in that ecosystem. As I mentioned, we are in very late stages of that diligence. I personally, at this stage, feel encouraged by what I see. This will become again, together with SkinStylus, another part of our portfolio that the reps can use in selling the overall solution.

Speaker #4: I can just add, Susan, they're both on the device side and the consumable side on the partnerships. Just yeah.

Speaker #1: But very core to our strategy, we believe that hydrofacial and skin health systems is indeed a platform it should be a platform of and as an ecosystem of different solutions.

Speaker #7: Okay. That's helpful. Thank you. And then maybe just I wanted to ask about I think you mentioned some timing-related variability in certain regions related to the consumables decline.

Speaker #1: So we have the team working around not only identifying feasible partners that will play well in that ecosystem, as I mentioned, we are in very late stages of that diligence.

Speaker #7: I think maybe the Americas, maybe if you could just expand on what that was and when you expect it to normalize. Thanks.

Speaker #3: The Americas was down, Susan, the 1.6%, which was a smaller portion of the difference. It was largely due to we do a fourth-quarter promotion.

Speaker #3: That outperformed in the fourth quarter of 2025. So some of it was a smaller kind of pull forward. The other timing piece of it was we had a large distributor order at the end of Q4 2025.

Speaker #3: A portion of that order was consumables that came in that pulled forward some of the revenue as well. The largest portion of the $3 million year-over-year difference on the global consumables was the move from the China to a China distributor.

Speaker #1: Again, that's so much I can say, but I feel encouraged by what I see. And the timelines of this strategic partnerships that we are pursuing right now.

Pedro Malha: Again, that's how much I can say, but I feel encouraged by what I see and the timelines of these strategic partnerships that we are pursuing right now.

Speaker #3: I can just add, Susan, they're both on the device side and the consumable side on the partnerships. Just yeah.

Speaker #3: In Q1 and a large portion of Q2 last year, we still were direct in China and so as we move through the year, that comp is going to pressure the first half of the year.

Speaker #6: Okay. That's helpful. Thank you. And then maybe just I wanted to ask about I think you mentioned some timing related variability in certain regions, related to the consumables decline.

Michael Monahan: I can just add, Susan, they're both on the device side and the consumable side on the partnerships.

Mike Monahan: I can just add, Susan, they're both on the device side and the consumable side on the partnerships.

Susan Anderson: Okay. That's helpful. Thank you. Maybe just I wanted to ask about, I think you mentioned some timing-related variability in certain regions related to the consumable decline. I think like maybe the Americas, maybe if you could just expand on what that was and when you expect it to normalize. Thanks.

Speaker #3: And should subside a bit as we move throughout 2026.

Speaker #6: I think maybe the Americas, maybe if you could just expand on what that was and when you expect it to normalize. Thanks.

Speaker #7: Okay. Great. Thanks. That's really helpful. Good luck the rest of the year.

Speaker #1: Thank you. The next question comes from John Block from Stifel, your line is now open. Please go ahead.

Speaker #1: The Americas was down, Susan, the 1.6%, which is a smaller portion of the difference. It was largely due to we do a fourth-quarter promotion.

Speaker #5: Hey everyone. Joe Federico. I'm for John Block. Maybe just focusing on EMEA following up on the last question. Obviously, growth was a little bit softer this quarter after kind of having been the bright spot in performance for the last handful of quarters.

Michael Monahan: The Americas was down, Susan, the 1.6%, which is a smaller portion of the difference. It was largely due to we do a Q4 promotion that outperformed in Q4 2025. Some of it was a smaller kind of pull forward. The other timing piece of it was we had a large distributor order at the end of Q4 2025. A portion of that order was consumables that came in that pulled forward some of the revenue as well. The largest portion of the $3 million year-over-year difference on the global consumables was the move from the China to a China distributor. In Q1 and a large portion of Q2 last year, we still were direct in China.

Speaker #5: So with the ongoing conflict in the Middle East and subsequent rise in energy costs over there, are you seeing anything specific in the consumer in those regions?

Speaker #5: I think some of the consumables commentary you just gave speaks to an improving. But do you expect a softer performance to continue on the capital side in the near term?

Speaker #5: Just any trends would be helpful.

Speaker #3: Yeah. So I can take that and then Mike can chime in. So in terms of the conflict, the way we are seeing it is not going to have a materially impact obviously, we are monitoring the situation very actively.

Speaker #1: In Q1 and a large portion of Q2 last year, we still were direct in China and so as we move through the year, that comp is going to pressure the first half of the year.

Speaker #3: But so far, we're not expecting or forecasting any impact on our business. In terms of DMAA, the split, between devices and consumables and the way they show up in the quarter, EMEA is very what's happening to EMEA it's very much in line with what we have seen and are seeing much more broadly going over globally.

Speaker #1: And should subside a bit as we move throughout 2026.

Michael Monahan: As we move through the year, that comp is going to pressure the H1 of the year, and should subside a bit as we move throughout 2026.

Mike Monahan: As we move through the year, that comp is going to pressure the H1 of the year, and should subside a bit as we move throughout 2026.

Speaker #6: Okay. Great. Thanks. That's really helpful. Good luck the rest of the year.

Speaker #4: Thank you. The next question comes from John Block from Stifel, your line is now open. Please go ahead.

Susan Anderson: Okay, great. Thanks. That's really helpful. Good luck the rest of the year.

Operator: Thank you. The next question comes from Jonathan Block from Stifel. Your line's now open. Please go ahead.

Speaker #5: Hey, everyone. Joe Federico. I'm for John Block. Maybe just focusing on EMEA following up on the last question. Obviously, growth was a little bit softer this quarter after kind of having been the bright spot in performance for the last handful of quarters.

[Company Representative] (Beauty Health): The Q4 of 2025. Some of it was a smaller, kind of pull forward. The other timing piece of it was we had a large distributor order at the end of Q4 2025. A portion of that order was consumables that came in that pulled forward some of the revenue as well. The largest portion of the $3 million year-over-year difference on the global consumables was the move from the China to a China distributor. In Q1 and a large portion of Q2 last year, we still were direct in China. As we move through the year, that comp is gonna pressure the H1 of the year, and should subside a bit as we move throughout 2026.

Speaker #3: In terms of devices, we have seen still a softness in device sales and that is true for the US and for EMEA. In terms of consumables, it's a mix, a little bit of a mixed bag.

Joseph Federico: Hey, everyone. Joseph Federico on for Jonathan Block. Maybe just focusing on EMEA, following up on the last question. Obviously growth was a little bit softer this quarter after kind of having been the bright spot in performance for the last handful of quarters. With the ongoing conflict in the Middle East and subsequent rise in energy costs over there, are you seeing anything specific in the consumer in those regions? I think, you know, some of the consumables commentary you just gave speaks to it improving. Do you expect the softer performance to continue on the capital side in the near term? Just any trends would be helpful.

Joe Federico: Hey, everyone. Joseph Federico on for Jonathan Block. Maybe just focusing on EMEA, following up on the last question. Obviously growth was a little bit softer this quarter after kind of having been the bright spot in performance for the last handful of quarters. With the ongoing conflict in the Middle East and subsequent rise in energy costs over there, are you seeing anything specific in the consumer in those regions? I think, you know, some of the consumables commentary you just gave speaks to it improving. Do you expect the softer performance to continue on the capital side in the near term? Just any trends would be helpful.

Speaker #5: So with the ongoing conflict in the Middle East and subsequent rise in energy costs over there, are you seeing anything specific in the consumer in those regions?

Speaker #3: There's some timing issues. There but again, we expect those to normalize over time.

[Company Representative] (Beauty Health): The largest portion of the $3 million year-over-year difference on the global consumables was the move from the China to a China distributor. In Q1 and a large portion of Q2 last year, we still were direct in China. As we move through the year, that comp is gonna pressure the H1 of the year, and should subside a bit as we move throughout 2026.

Speaker #5: I think some of the consumables commentary you just gave speaks to an improving. But do you expect the softer performance to continue on the capital side in the near term?

Speaker #5: Okay. Great. Really helpful. And then maybe just as a quick follow-up, when you originally gave the 1Q guide, it was mid-March. And so I would think a good line of sight into how the quarter would shake out.

Speaker #5: Just any trends would be helpful.

Speaker #1: Yeah. So I'll can take that and then Mike can chime in. So in terms of the conflict, the way we are seeing it is not going to have a materially impact obviously, we are monitoring the situation very actively.

Speaker #5: And obviously, you came in within range on sales. But the EBITDA was well above. So was there anything that really deviated in the final weeks of the quarter operationally that led to that outperformance?

Pedro Malha: Yeah. I can take that and then Mike can chime in. In terms of the conflict, the way we are seeing it is not going to have a material impact. Obviously, we are monitoring the situation very actively, but so far, we're not expecting or forecasting any impact on our business. In terms of the EMEA, the split between devices and consumables and the way they show up in the quarter, what's happening to EMEA, it's very much in line with what we have seen and are seeing much more broadly going over globally in terms of devices. We have seen still a softness in device sales, and that is true for the US and for EMEA.

Speaker #5: And then maybe just one step further, with reiterating the full year guide for EBITDA, did some of those operations not continue into 2Q or is it just simply a function of the now lower sales outlook?

Operator: Okay, great. Thanks. That's really helpful. Good luck the rest of the year. Thank you. The next question comes from Jonathan Block from Stifel.

[Analyst]: Okay, great. Thanks. That's really helpful. Good luck the rest of the year.

Fourth quarter of 2025. So some of it um was a smaller um kind of pull forward. The other timing piece of it was the we had a large distributor order at the end of Q4 2025 um um a portion of that order was consumables that came in the pulled forward, some of the, the revenue as well. The the the largest portion of the million dollar year-over-year difference on the global consumables was the um, move move from the China, uh, to a China distributor, uh, in q1. And a large portion of Q2 last year. We still were Direct in China. Um, and so, as we move through the year that comp is going to pressure, the first half of the year, um, um, um, and should subside a bit as we move throughout 2026.

Speaker #1: But so far, we're not expecting or forecasting any impact on our business. In terms of the EMEA, the split, between devices and consumables and the way they show up in the quarter, EMEA is very what's happening to EMEA it's very much in line with what we have seen and are seeing much more broadly going over globally.

That's really helpful. Good luck with the year.

Operator: Thank you. The next question comes from Jonathan Block from Stifel.

Speaker #3: A large portion of the EBITDA was driven by, excuse me, was driven by outperformance on gross margin. And then management of the overall OPEX.

Thank you. The next question comes from John Block from Stifel. Your line is now open. Please go ahead.

Joe Federico: Hey, everyone, Joe Federico on for Jonathan Block. Maybe just focusing on EMEA, following up on the last question. Obviously growth was a little bit softer this quarter after kind of having been the bright spot in performance for the last handful of quarters. With the ongoing conflict in the Middle East and subsequent rise in energy costs over there, are you seeing anything specific in the consumer in those regions? I think, you know, some of the consumables commentary you just gave speaks to it improving. Do you expect the softer performance to continue on the capital side in the near term? Just any trends would be helpful.

Speaker #3: So OPEX specifically in March came in lower than we had forecasted. On the gross margin side, there were two drivers. The largest drivers. The first was in the Americas, average selling price on devices was higher than we projected.

Speaker #1: In terms of devices, we have seen still a softness in device sales and that is true for the US and for EMEA. In terms of consumables, it's a mix, a little bit of a mixed bag.

Joe Federico: With the ongoing conflict in the Middle East and subsequent rise in energy costs over there, are you seeing anything specific in the consumer in those regions? I think, you know, some of the consumables commentary you just gave speaks to it improving. Do you expect the softer performance to continue on the capital side in the near term? Just any trends would be helpful.

Speaker #3: And so that favored, even though we had pressure on the overall number of units and came in lower than we were forecasting, the ASP offset a portion of that, which drove higher overall kind of profits on a lower number of units.

Hey everyone, Joe Federico, I'm for John block. Um, maybe just focusing on a Mia following up on the last question. I obviously growth was, um, a little bit softer this quarter after kind of having been the bright spot uh in performance for the last handful of quarters. So with the ongoing conflict in the Middle East and and subsequent rise in energy costs over there. Are you seeing anything specific in the

Speaker #1: There's some timing issues. There, but again, we expect those to normalize over time.

Pedro Malha: In terms of consumables, it's a mix, a little bit of a mixed bag. There's some timing issues there. Again, we expect those to normalize over time.

Consumer in those regions. I I think, you know, some of the consumables commentary you just gave

Speaker #5: Okay. Great. Really helpful. And then maybe just as a quick follow-up, when you originally gave the one Q guide, it was mid-March. And so I would think a good line of sight into how the quarter would shake out.

Speaker #3: The second thing is on the operational side, we project each quarter expected scrap and write-offs and it was much, much lower than normal in Q1.

Speaks to an improving. Uh, but do you expect the softer performance to continue on on the capital side in the near term? Just any, any Trends would be helpful.

[Company Representative] (Beauty Health): Yeah. I can take that and then Mike can chime in. In terms of the conflict is the way we are seeing it's not gonna have a material impact. Obviously, we are monitoring the situation very actively, so far, we're not expecting or forecasting any impact on our business. In terms of the EMEA, the split between devices and consumables and the way they show up in the quarter, what's happening to EMEA, it's very much in line with what we have seen and are seeing broadly going over globally in terms of devices. We have seen still a softness in device sales, and that is true for the US and for EMEA.

Joseph Federico: Okay, great. Really helpful. Then maybe just as a quick follow-up. When you originally gave the Q1 guide, it was mid-March, and so I would think, you know, a good line of sight into how the quarter, you know, would shake out. Obviously, you came in within range on sales, but the EBITDA was well above. Was there anything that, you know, really deviated in the final weeks of the quarter operationally that led to that outperformance? Then maybe just one step further, you know, with reiterating the full-year guide for EBITDA, did some of those, you know, operations not continue into Q2, or is it just simply a function of the now lower sales outlook?

Joe Federico: Okay, great. Really helpful. Then maybe just as a quick follow-up. When you originally gave the Q1 guide, it was mid-March, and so I would think, you know, a good line of sight into how the quarter, you know, would shake out. Obviously, you came in within range on sales, but the EBITDA was well above. Was there anything that, you know, really deviated in the final weeks of the quarter operationally that led to that outperformance? Then maybe just one step further, you know, with reiterating the full-year guide for EBITDA, did some of those, you know, operations not continue into Q2, or is it just simply a function of the now lower sales outlook?

Speaker #3: So as we look going forward, we're projecting overall gross margin to come down from Q1 a bit. Still stay in the high upper 60s.

Speaker #3: And it's really the overall projection as we expect as we're projecting device unit sales to come back a little bit. We expect overall ASP to come down and normalize a little bit below where it did specifically in the Americas on Q1.

Speaker #5: And then maybe just one step further, with reiterating the full year guide for EBITDA, did some of those operations not continue into two Q or is it just simply a function of the now lower sales outlook?

[Company Representative] (Beauty Health): In terms of the EMEA, the split between devices and consumables and the way they show up in the quarter, what's happening to EMEA, it's very much in line with what we have seen and are seeing broadly going over globally in terms of devices. We have seen still a softness in device sales, and that is true for the US and for EMEA. In terms of consumables, it's a mix, a little bit of a mixed bag. There's some timing issues there. Again, we expect those to normalize over time.

Speaker #3: And we expect overall scrap to return to normal levels.

Speaker #5: Yeah. Very helpful. Thank you.

Speaker #1: Thank you. And the next question comes from Sydney Wagner from Jefferies, your line is now open. Please go ahead.

Michael Monahan: A large portion of the EBITDA beat was driven by, excuse me, was driven by outperformance on gross margin, management of the overall OpEx. OpEx specifically in March came in lower than we had forecasted. On the gross margin side, there were two drivers, two of the largest drivers. The first was in the Americas, average selling price on devices was higher than we projected. That favored, even though we had pressure on the overall number of units and came in lower than we were forecasting, the ASP offset a portion of that, which drove higher overall kind of profits on a lower number of units. The second thing is on the operational side, we project each quarter expected scrap and write-offs, it was much lower than normal in Q1.

Mike Monahan: A large portion of the EBITDA beat was driven by, excuse me, was driven by outperformance on gross margin, management of the overall OpEx. OpEx specifically in March came in lower than we had forecasted. On the gross margin side, there were two drivers, two of the largest drivers. The first was in the Americas, average selling price on devices was higher than we projected. That favored, even though we had pressure on the overall number of units and came in lower than we were forecasting, the ASP offset a portion of that, which drove higher overall kind of profits on a lower number of units. The second thing is on the operational side, we project each quarter expected scrap and write-offs, it was much lower than normal in Q1.

Speaker #7: Hi. Thanks for taking our question. So you mentioned restructuring the booster portfolio around clearly defined clinical use cases. Can you just walk us through how does that differ from how boosters were positioned previously?

[Company Representative] (Beauty Health): In terms of consumables, it's a mix, a little bit of a mixed bag. There's some timing issues there. Again, we expect those to normalize over time.

Speaker #1: On the gross margin side, there were two drivers. Two of the largest drivers. The first was in the Americas, average selling price on devices was higher than we projected.

Yeah. So I can, I can take that and and then my can chime in. Uh, so in terms of the conflict is is the way we are seeing its is, is not going to have a materially impact. Uh, obviously we are monitoring the situation, very actively but so far we we not expecting or forecasting. Uh, any impact, um, on our business, in terms of dma, the split between devices and consumables, and the way they they show up in the quarter. Um, they may is very, what's happening to Emma. It's very much in line with what we have seen and are seeing a much more broader broadly going over globally in terms of devices. Uh, we we have seen still a softness in in device, uh, sales and and that is true for the US. And, and for imia, uh,

Speaker #7: And what specifically was maybe not coming through clearly around the efficacy or attended use before?

In terms of consumables, it's, it's, it's a mix, a little bit of a mixed bag. There's some timing issues, uh, there. Um, but again, we expect those to normalize over time.

Joe Federico: Okay. Great. Really helpful. Maybe just as a quick follow-up. When you originally gave the Q1 guide, it was mid-March, I would think, you know, a good line of sight into how the quarter, you know, would shake out. Obviously, you came in within range on sales, the EBITDA was well above. Was there anything that, you know, really deviated in the final weeks of the quarter operationally that led to that outperformance? Maybe just one step further, you know, with reiterating the full year guide for EBITDA, did some of those, you know, operations not continue into Q2, or is it just simply a function of the now lower sales outlook?

Speaker #3: So we have done in the past quarter and a half a lot of not only strategic work around our booster strategy, where boosters play a very important role in consumables overall sales, but also in driving a higher utilization, a higher interest, from overall consumers getting to the door.

Okay, great. Uh, really helpful and then maybe just as as a quick follow-up.

Speaker #1: The second thing is on the operational side, we project each quarter expected scrap and write-offs and it was much, much lower than normal in Q1.

Joe Federico: Was there anything that, you know, really deviated in the final weeks of the quarter operationally that led to that outperformance? Maybe just one step further, you know, with reiterating the full year guide for EBITDA, did some of those, you know, operations not continue into Q2, or is it just simply a function of the now lower sales outlook?

Speaker #1: So as we look going forward, we're projecting overall gross margin to come down from Q1 a bit, still stay in the high upper 60s.

Speaker #3: And most importantly, how it drives a higher return on investment for all providers. So boosters we continue to see as the main driver of that to drive utilization.

Michael Monahan: As we look going forward, we're projecting overall gross margin to come down from Q1 a bit, still stay in the high upper sixties.

Mike Monahan: As we look going forward, we're projecting overall gross margin to come down from Q1 a bit, still stay in the high upper sixties.

Speaker #1: And it's really the overall projection as we expect as we're projecting device unit sales to come back a little bit. We expect overall ASP to come down and normalize a little bit below where it did specifically in the Americas on Q1.

When you originally gave the 1 Q guide, it was mid March. And so I would think, you know, a good line of sight into how the quarter, you know would shake out and obviously you came in within range on sales, but the ibaa was well above. So is there anything that you know, really deviated in the final weeks of the quarter, operationally that that led to that outperformance and then maybe just 1 step further, you know, with reiterating the full year guide for ebit Dodd did did some of those, you know, operations not continue into 2 Q or is it just simply a function of the now lower, uh, sales Outlook

[Company Representative] (Beauty Health): A large portion of the EBITDA beat was driven by, excuse me, was driven by outperformance on gross margin and then management of the overall OpEx. OpEx in, specifically in March, came in lower than we had forecasted. On the gross margin side, there were two drivers, two of the largest drivers. The first was in the Americas, average selling price on devices was higher than we projected. That favored, even though we had pressure on the overall number of units and came in lower than we were forecasting, the ASP offset a portion of that, which showed higher overall kind of profits on lower, on a lower number of units. The second thing is on the operational side, we project each quarter expected scrap and write-offs, and it was much, much lower than normal in Q1.

Speaker #3: What we have seen is that historically, the company has had a lot of different boosters. A lot of SKUs. What are we going now is rather for simplicity and impact.

Michael Monahan: It's really the overall projection is we expect, as we're projecting device unit sales to come back a little bit, we expect overall ASP to come down and normalize a little bit below where it did, specifically in the Americas on Q1, and we expect overall scrap to return to normal levels.

Mike Monahan: It's really the overall projection is we expect, as we're projecting device unit sales to come back a little bit, we expect overall ASP to come down and normalize a little bit below where it did, specifically in the Americas on Q1, and we expect overall scrap to return to normal levels.

Speaker #1: And we expect overall scrap to return to normal levels.

Speaker #5: Very helpful. Thank you.

Speaker #3: So we are redoing the whole selection of boosters. But the boosters that bring clinical outcomes. That actually will give what consumers are looking for.

Speaker #4: Thank you. And the next question comes from Sydney Wagner from Jefferies, your line is now open. Please go ahead.

Joseph Federico: Very helpful. Thank you.

Joe Federico: Very helpful. Thank you.

Operator: Thank you. The next question comes from Sydney Wagner from Jefferies. Your line is now open. Please go ahead.

Speaker #6: Hi. Thanks for taking our question. So you mentioned restructuring the booster portfolio around clearly defined clinical use cases. Can you just walk us through how does that differ from how boosters were positioned previously?

[Company Representative] (Beauty Health): That favored, even though we had pressure on the overall number of units and came in lower than we were forecasting, the ASP offset a portion of that, which showed higher overall kind of profits on lower, on a lower number of units. The second thing is on the operational side, we project each quarter expected scrap and write-offs, and it was much, much lower than normal in Q1.

Speaker #3: And that requires a different view of what boosters can do. And what type of boosters we are going to be offering. Just to tell you that we have two planned launches this year.

Sydney Wagner: Hi. Thanks for taking our question. You mentioned restructuring the booster portfolio around, you know, clearly defined clinical use cases. Can you just walk us through how does that differ from how boosters were positioned previously? What specifically was maybe not coming through clearly around the efficacy or intended use before?

Speaker #6: And what specifically was maybe not coming through clearly around the efficacy or attended use before?

Speaker #3: The first is actually next quarter. When we're going to be launching the hydroscope. Booster. And we're going to be using that for to reactivate basically an asset which is Caravive.

And large portion of the ibida. Be was driven by, excuse me, the driven by outperformance on gross margin and then management of the um overall Opex. Um so Opex in specifically in March came in lower than we had forecasted it. Um on the gross margin side, there were 2 drivers um 2 large of the largest drivers. The first was in the Americas average selling price on devices was higher than we projected. Um and so that favored, even though we had pressure on the overall number of units and came in lower than we were forecasting. Um, the ASP offset a portion of that, which drove a higher overall kind of profits on Lower on a lower number of units. The second thing is on the operational side, we project each quarter expected

[Company Representative] (Beauty Health): As we look going forward, we're projecting overall gross margin to come down from Q1 a bit, still stay in the high upper sixties. It's really the overall projection, as we expect, as we're projecting device unit sales to come back a little bit, we expect overall ASP to come down and normalize a little bit below where it did, specifically in the Americas on Q1. We expect overall scrap to return to normal levels.

[Company Representative] (Beauty Health): As we look going forward, we're projecting overall gross margin to come down from Q1 a bit, still stay in the high upper 60s. It's really the overall projection, as we expect, as we're projecting device unit sales to come back a little bit, we expect overall ASP to come down and normalize a little bit below where it did, specifically in the Americas on Q1. We expect overall scrap to return to normal levels.

Pedro Malha: We have done in the past quarter and a half, a lot of not only strategic work around our booster strategy, where boosters play a very important role in consumables, overall sales, but also in driving a higher utilization, a higher interest from overall consumers getting into the door, and most importantly, how it drives a higher return on investment for all providers. Boosters, we continue to see as the main driver of that, to drive utilization. What we have seen is that historically the company has had a lot of different boosters, a lot of SKUs. Where we're going now is rather for simplicity and impact. We are redoing the whole selection of boosters.

Speaker #3: That never got to deserve attention or focus. And in the second, we're going to in the second booster is going to be launched in Q4 of this year.

Speaker #3: And that is definitely going to be much more clinically backed booster that is going to be supported by real clinical data. So the team is very enthusiastic about that booster.

Speaker #1: And most importantly, how it drives a higher return on investment for all providers. So boosters we continue to see as the main driver of that to drive utilization.

Speaker #3: And we know for a fact and we have those proxies in our business that when we launch a booster that delivers the outcomes, that they're supposed to deliver, that drives sales.

Joe Federico: Very, very helpful. Thank you.

They're very helpful. Thank you.

Operator: Thank you. The next question comes from Sydney Wagner from Jefferies. Your line is now open. Please go ahead.

Speaker #1: What we have seen is that historically, the company has had a lot of different boosters, a lot of SKUs, what we're going now is rather for simplicity and impact.

Thank you, and the next question comes from Sydney.

Speaker #3: That drives provider engagement. That drives consumers into the doors. And that is a huge part of our business. So we plan to over-index on that strategy.

Wagner from Jeffrey, your line is now open. Please go ahead.

Speaker #7: Okay. That's helpful. And then just one more on competition. So when you think about hydrofacials' competitive positioning, is it more about differentiation versus similar facial devices or systems?

Speaker #7: Or are you increasingly competing for consumer spend against adjacent treatments like a lasers, for instance?

Hi, thanks for taking our question. So you mentioned restructuring, the booster portfolio around, you know, clearly defined clinical use cases. Can you just walk us through? How does that differ from how boosters were positioned previously? And what specifically was maybe not coming through clearly around the efficacy or attended use before?

Pedro Malha: Most importantly, we are selecting the boosters that bring clinical outcomes that actually will give what consumers are looking for. That requires a different view of what boosters can do and what type of boosters we are gonna be offering. Just to tell you that we have two planned launches this year. The first is actually next quarter, when we're gonna be launching the HydraSculpt booster. We're gonna be using that for, to reactivate basically an asset which is Keravive that never got the deserved attention or focus. In the second, the second booster is gonna be launched in Q4 of this year, that is definitely gonna be a much more clinically backed booster that is gonna be supported by real clinical data.

[Company Representative] (Beauty Health): We have done in the past quarter, and a half, a lot of not only strategic work around our booster strategy, where boosters play a very important role in consumables, overall sales, but also in driving a higher utilization, a higher interest from overall consumers getting into the door, and most importantly, how it drives a higher return on investment for all providers. Boosters, we continue to see as the main driver of that to drive utilization. What we have seen is that historically the company has had a lot of different boosters, a lot of SKUs. Where we're going now is rather for simplicity and impact. We are redoing the whole selection of boosters.

Pedro Malha: Most importantly, we are selecting the boosters that bring clinical outcomes that actually will give what consumers are looking for. That requires a different view of what boosters can do and what type of boosters we are gonna be offering. Just to tell you that we have two planned launches this year. The first is actually next quarter, when we're gonna be launching the HydraSculpt booster. We're gonna be using that for, to reactivate basically an asset which is Keravive that never got the deserved attention or focus. In the second, the second booster is gonna be launched in Q4 of this year, that is definitely gonna be a much more clinically backed booster that is gonna be supported by real clinical data.

Speaker #1: And that requires a different view of what boosters can do. And what type of boosters we are going to be offering. Just to tell you that we have two planned launches this year.

Speaker #3: I think it's both. It's not only the low end of the market that we are competing is becoming more crowded. But we also space of those treatment rooms.

so we have done in the in the past quarter, quarter and a half, a lot of not only strategic work around our booster strategy where boosters play

Speaker #1: The first is actually next quarter. When we're going to be launching the hydroscope, booster. And we're going to be using that for to reactivate basically an asset which is Caravive.

Speaker #3: As more treatments more technologies coming in trying to get that time from the consumer and dollar. So it's both. It's both. But we feel that we are very well positioned actually very well resilient throughout all these challenges and throughout all these past years.

[Company Representative] (Beauty Health): Boosters, we continue to see as the main driver of that to drive utilization. What we have seen is that historically the company has had a lot of different boosters, a lot of SKUs. Where we're going now is rather for simplicity and impact. We are redoing the whole selection of boosters.

Speaker #1: That never got to deserve attention or focus. And in the second, we're going to in the second booster is going to be launched in Q4 of this year.

Speaker #3: Hydrofacial continues to be the gateway for other treatments. We plan to over-index in that. It's a staple in the majority of all the med spas.

A very important role in in consumables uh overall sales, but also in driving, a higher utilization, a higher interest from overall consumers, getting into the door and most importantly how it drives a higher return on investment for all providers. So boosters, uh, we continue to see as the main driver of that uh, to drive utilization. Um,

Speaker #1: And that is definitely going to be much more clinically backed booster that is going to be supported by real clinical data. So the team is very enthusiastic about that booster.

Speaker #3: And is a technology and is a procedure that delivers results. So although we are seeing an increased competitive pressure, we feel that is a natural pressure because the segment is still very appealing.

Speaker #1: And we know for a fact and we have those proxies in our business that we when we launch a booster that delivers the outcomes, that they're supposed to deliver, that drives sales.

Pedro Malha: The team is very enthusiastic about that booster. We know for a fact, and we have those proxies in our business that when we launch a booster that delivers the outcomes that they're supposed to deliver, that drives sales, that drives provider engagement, and that drives consumers into the doors, and that is a huge part of our business. We plan to over-index on that strategy.

[Company Representative] (Beauty Health): Most importantly, we are selecting the boosters that bring clinical outcomes that actually will give what consumers are looking for. That requires a different view of what boosters can do, and what type of boosters we are gonna be offering. Just to tell you that we have two planned launches this year. The first is actually next quarter, when we're gonna be launching the HydroSculpt booster. We're gonna be using that to reactivate basically an asset which is Keravive, that never got to deserve attention or focus. In the second, the second booster is gonna be launched in Q4 of this year, and that is definitely gonna be much more clinically backed booster, that is gonna be supported by real clinical data.

Speaker #3: And we plan to combat it. We plan to have the right strategy, the right sales force execution. The right messaging. The right segmentation. And a well-prepared and well-trained sales force that is able to win in a little bit of a more challenging market that we're facing right now.

Speaker #1: That drives provider engagement. That drives consumers into the doors. And that is a huge part of our business. So we plan to over-index on that strategy.

Speaker #6: Okay. That's helpful. And then just one more on competition. So when you think about hydrofacials' competitive positioning, is it more about differentiation versus similar facial devices or systems?

Speaker #7: Thank you.

[Company Representative] (Beauty Health): The first is actually next quarter, when we're gonna be launching the HydroSculpt booster. We're gonna be using that to reactivate basically an asset which is Keravive, that never got to deserve attention or focus. In the second, the second booster is gonna be launched in Q4 of this year, and that is definitely gonna be much more clinically backed booster, that is gonna be supported by real clinical data.

Speaker #1: Thank you. And the next question comes from Bruce Jackson from the Benchmark Company, your line is now open. Please go ahead.

Speaker #6: Or are you increasingly competing for consumer spend against adjacent treatments like a lasers, for instance?

Speaker #3: Hi. Good afternoon. A couple of macro questions. So with the rise in oil prices, are you seeing any effect on your inputs? For example, with plastic resins or freight costs.

What we have seen is that a historically, the company has had a lot of different boosters. Um, a lot of skus. Um, what are we going now? Is rather for Simplicity and impact. Uh, so we are, uh, re redoing the whole selection of boosters, uh, but most importantly, we are selecting the boosters that bring clinical outcomes, that actually will give what consumers are looking for. And, uh, and that requires a different view of what boosters can do. Um, and what type of boosters we are going to be offering. Uh, just to tell you that, we have 2 plan launches this year. Um, the first is is actually next quarter uh, when we going to be launching the the hydroscope um booster um and we going to be using that for to reactivate basically an asset.

Speaker #1: I think it's both. It's not only the low-end of the market that we are competing is becoming more crowded. But we also are competing for time, space of those treatment rooms.

which is kharviv, um, that um, that would never never got to deserve attention or focus, and in the second

Speaker #3: And if we do get a bout of inflation, how do you feel about your ability to protect the EBITDA margins?

Pedro Malha: I think it's both. It's not only the low end of the market that we are competing is becoming more crowded, but we also are competing for time space of those treatment rooms as more treatments, more technologies coming in, trying to get that time from the consumer and dollar. So it's both. It's both. We feel that we are very well-positioned, actually very well resilient throughout all these challenges and throughout all these past years. HydraFacial continues to be the gateway for other treatments. We plan to over-index in that. It's a staple in the majority of all the med spas and is a technology and is a procedure that delivers results.

Speaker #1: As more treatments more technologies coming in trying to get that time from the consumer and dollar. So it's both. It's both. But we feel that we are very well positioned actually very well resilient throughout all these challenges and throughout all these past years.

Speaker #5: No, we're not seeing anything specific, Bruce, on overall increases in our prices. On the capital equipment side, we have a decent amount of raw materials already in-house.

[Company Representative] (Beauty Health): The team is very enthusiastic about that booster. We know for a fact, and we have those proxies in our business that when we launch a booster that delivers the outcomes that they're supposed to deliver, that drives sales, that drives provider engagement, that drives consumers into the doors, and that is a huge part of our business. We plan to over-index on that strategy.

Uh, uh, we're going to— in the second— Booster is going to be launched in Q4 of this year, and that is definitely going to be a much more clinically-backed booster. Uh, that is going to be supported by, by real clinical data. So, the team is very enthusiastic about that booster. And we know for a fact, uh, and we have those proxies in our—

Speaker #5: We've been working through our existing inventory. So we shouldn't see an impact of that in the near term. So overall, I'm not concerned about inflation materially impacting the adjusted EBITDA guide.

Speaker #1: Hydrofacial continues to be the gateway for other treatments. We plan to over-index in that. It's a staple in the majority of all the med spas.

Speaker #3: Okay. And then a follow-up, if I may, with the booster that you're launching in the fourth quarter. Are you providing any additional details about that at this time?

Business that we, when we launched a booster that delivers the outcomes, uh, that, uh, they're supposed to deliver, uh, that drive sales, that drives provider engagement, that drives consumers into the doors. And that is a huge part of our business. So we plan to over-index on that strategy.

Sydney Wagner: Okay, that's helpful. Just more on competition. When you think about Hydrafacial's competitive positioning, you know, is it more about differentiation versus similar facial devices or systems, or are you increasingly competing for consumer spend against, you know, adjacent treatments like, you know, lasers for instance?

Okay, that's helpful. And then just

About.

Speaker #5: Not at this time. It's in late stages of development. And we'll provide you the updates in the coming quarters as we get closer to the launch time.

Speaker #3: All right. Great. Thank you.

Hydro facials, competitive positioning, you know, is it more about differentiation versus similar facial devices or systems? Or are you increasingly competing for Consumer spend against, you know, adjacent treatments like a, you know, lasers for instance,

[Company Representative] (Beauty Health): I think it's both. It's not only the low end of the market that we are competing is becoming more crowded, but we also are competing for time space of those treatment rooms as more treatments, more technologies coming in, trying to get that time from the consumer and dollar. It's both. It's both. We feel that we are very well-positioned, actually very well resilient throughout all these challenges and throughout all these past years. HydraFacial continues to be the gateway for other treatments. We plan to over-indexing that. It's a staple in the majority of all the med spas and is a technology and is a procedure that delivers results.

Speaker #5: Thanks, Bruce.

Speaker #1: Thank you. And there are no further questions that came through. This concludes our conference call for today. Thank you all for participating. You may now disconnect.

Speaker #6: Thank you.

Speaker #4: Thank you. And the next question comes from Bruce Jackson from the Benchmark Company, your line is now open. Please go ahead.

Sydney Wagner: Thank you.

Operator: Thank you. The next question comes from Bruce Jackson from The Benchmark Company. Your line is now open. Please go ahead.

[Company Representative] (Beauty Health): We feel that we are very well-positioned, actually very well resilient throughout all these challenges and throughout all these past years. HydraFacial continues to be the gateway for other treatments. We plan to over-indexing that. It's a staple in the majority of all the med spas and is a technology and is a procedure that delivers results.

Speaker #5: Hi. Good afternoon. A couple of macro questions. So with the rise in oil prices, are you seeing any effect on your inputs, for example, with plastic resins or freight costs?

Speaker #5: And if we do get a bout of inflation, how do you feel about your ability to protect the EBITDA margins?

I think it's both. Um, it's not only the, the, the low end uh, of the market that we are competing is becoming more crowded, uh, but we also are competing for time space of those treatment rooms as more treatments. Uh, more more Technologies coming in, um, trying to get, uh, to get that time from the consumer and, and, and dollar. Um, so it's both it's both, but we feel that we are very well positioned, uh, actually very well resilient throughout all these challenges and throughout all these past years, hydrofacial continues to be, uh, the Gateway, um, for other treatments. We plan to over-index in that. It's a staple in the majority of all the Mets paths and, and

Speaker #1: No, we're not seeing anything specific, Bruce, on overall increases in our prices. On the capital equipment side, we have a decent amount of raw materials already in-house.

[Company Representative] (Beauty Health): Although we are seeing an increased competitive pressure, we feel that is a natural pressure because the segment is still very appealing. We plan to combat it. We plan to have the right strategy, the right sales force execution, the right messaging, the right segmentation, and a well-prepared and well-trained sales force that is able to win in a little bit of a more challenging market that we're facing right now.

Michael Monahan: No, we're not seeing anything specific, Bruce, on overall increases in our prices. On the capital equipment side, we have a decent amount of raw materials already in-house. We've been working through our existing inventory, so we shouldn't see an impact to that in the near term. Overall, I'm not concerned about inflation materially impacting the adjusted EBITDA guide.

Speaker #5: Okay. And then a follow-up, if I may, with the booster that you're launching in the fourth quarter, are you providing any additional details about that at this time?

Challenging Market that we facing right now.

Sydney Wagner: Thank you.

Bruce Jackson: Okay. A follow-up, if I may. With the booster that you're launching in Q4, are you providing any additional details about that at this time?

Thank you.

Operator: Thank you. The next question comes from Bruce Jackson from The Benchmark Company. Your line is now open. Please go ahead.

Speaker #1: Not at this time. It's in late stages of development. And we'll provide you the updates in the coming quarters as we get closer to the launch time.

Thank you. And the next question comes from Bruce Jackson from The Benchmark company. Your alliance now open, please go ahead.

Pedro Malha: Not at this time. It's in late stages of development, and we'll provide you the updates in the coming quarters as we get closer to the launch time.

Speaker #5: All right. Great. Thank you.

Speaker #4: Thanks, Bruce.

Speaker #2: Thank you. And there are no further questions that came through. This concludes our conference call for today. Thank you all for participating. You may now disconnect.

Bruce Jackson: All right. Great. Thank you.

Hi, um, good afternoon. Um, Kyla, Mack requests. So with the rise in oil prices, are you seeing any effect on your inputs? For example, with um, plastic resins or, or freight costs?

Michael Monahan: Thanks, Bruce.

Mike Monahan: Thanks, Bruce.

Operator: Thank you. There are no further questions that came through. This concludes our conference call for today. Thank you all for participating. You may now disconnect.

And if we do get a, um, about inflation, um, how do you feel about your ability to protect the um the ibida margins?

[Company Representative] (Beauty Health): No, we're not seeing anything specific, Bruce, on overall increases, in our prices. On the capital equipment side, we have a decent amount of raw materials already in-house. We've been working through our existing inventory, so we shouldn't see an impact to that in the near term. Overall, I'm not concerned about inflation materially impacting the adjusted EBITDA guide.

No, we're not seeing anything specific Bruce on overall increases, um, in our prices, um, on the Capital Equipment side. Um, we have a decent amount of raw materials already in house. We've been working through, um, our existing inventory. Um, so we shouldn't see an impact of that, in, in the near term. Um, so, overall, I'm not concerned about inflation materially impacting, the adjusted Eva guide,

Bruce Jackson: Okay. A follow-up, if I may. With the booster that you're launching in Q4, are you providing any additional details about that at this time?

Okay. And then a um, a follow-up, if I may with the booster that you're watching in the the fourth quarter, um are you providing any additional details about that at this time?

[Company Representative] (Beauty Health): Not at this time. It's in late stages of development, and we'll provide you the updates in the coming quarters as we get closer to the launch time.

Uh, not at this time, uh, it's in late stages of development and we will provide you the updates in the coming quarters, as we get closer to the lunch time.

Bruce Jackson: All right. Great. Thank you.

All right. Um, great. Thank you.

[Company Representative] (Beauty Health): Thanks, Bruce.

Thanks Bruce.

Operator: Thank you. There are no further questions that came through. This concludes our conference call for today. Thank you all for participating. You may now disconnect. Goodbye.

Operator: Thank you. There are no further questions that came through. This concludes our conference call for today. Thank you all for participating. You may now disconnect.

Thank you. And there are no further questions that came through. This concludes our conference call for today. Thank you all for participating. You may now. Disconnect

goodbye.