Airsculpt Technologies, Inc. SEC 10-K Report
Airsculpt Technologies, Inc., a leading player in the body contouring market, has released its annual 10-K report, providing a comprehensive overview of its financial and operational performance for the fiscal year. The report highlights key financial metrics, business achievements, strategic initiatives, and the challenges and risks faced by the company.
Financial Highlights
Revenue: $180.35 million, reflecting a decrease of 7.9% compared to the previous year, primarily due to weaker than expected performance across the broader aesthetics and high-end retail industries.
Cost of Service: $71.38 million, representing 39.6% of revenue, with a decrease of 3.6% from the previous year, driven by a decrease in cases and partially offset by increases in nursing and rent costs related to new facility openings.
Selling, General and Administrative Expenses: $98.88 million, decreased by 3.4% from the previous year, attributed to a decrease in equity-based compensation, offset by increased marketing and corporate support expenses.
Depreciation and Amortization: $11.89 million, increased due to the addition of five new centers.
Net Loss: $(8.25) million, compared to $(4.48) million in the previous year, impacted by decreased revenue and increased marketing investments.
Loss per Share: $(0.14), compared to $(0.08) in the previous year, reflecting the net loss.
Adjusted EBITDA: $20.73 million, with an Adjusted EBITDA Margin of 11.5%, indicating a decrease from the previous year's margin of 22.1%.
Business Highlights
Revenue Segments: AirSculpt Technologies operates within the body contouring market, offering a range of procedures including fat removal and fat transfer. The company performed 14,036 body contouring procedures in 2024, with a focus on innovative procedures like Power BBL®, Up a Cup™, and Hip Flip™.
Geographical Performance: As of March 14, 2025, AirSculpt operates 32 centers across 20 U.S. states, Canada, and the United Kingdom. The centers are strategically located in metropolitan and suburban areas to cater to a premium clientele.
Sales Units: The company reported a decrease in the number of cases performed, from 14,932 in 2023 to 14,036 in 2024, indicating a 6.0% decline in case volume.
New Product Launches: In fiscal year 2022, AirSculpt introduced AirSculpt® + and AirSculpt® Smooth, enhancing their service offerings with advanced skin tightening and cellulite reduction procedures.
New Production Launches: The company expanded its operational capacity by opening five new de novo centers in 2024, increasing the total number of procedure rooms to 67.
Future Outlook: AirSculpt plans to stabilize revenue growth by optimizing marketing investments, improving sales strategies, expanding consumer financing options, and focusing on new product innovations, particularly in skin tightening services.
Strategic Initiatives
Strategic Initiatives: The company is focusing on stabilizing revenue growth through strategic initiatives such as optimizing marketing investments, improving sales strategies, expanding consumer financing offerings, and introducing new services like skin tightening. Additionally, the company is expanding its geographic footprint by opening new centers, particularly in densely populated and affluent regions.
Capital Management: The company has been actively managing its debt, including a voluntary $10 million prepayment on its term loans. It has also amended its credit agreement to modify financial covenants and applicable margins. The company maintains a revolving credit facility with a $5 million limit, of which $5 million was drawn as of December 31, 2024. The company has also been managing its equity through dividends and equity-based compensation, with a focus on maintaining liquidity and supporting expansion efforts.
Future Outlook: The company plans to continue its growth strategy by opening new centers and enhancing its marketing and sales capabilities. It aims to improve operating results through cost reduction programs and strategic investments in new services. The company expects to maintain sufficient liquidity to meet its obligations and support its expansion plans over the next 12 months.
Challenges and Risks
Operational Risks: The company has a limited operating history and its past results may not be indicative of future performance. Rapid growth has led to limited experience at the current scale, which could affect brand, culture, and financial performance. The company's success heavily depends on patient satisfaction with the AirSculpt® procedure, and any failure to meet patient expectations could harm its reputation and financial results.
Market Risks: The body contouring market is highly competitive, with significant exposure to the weight loss and obesity solutions market. Competitors may develop safer, more effective, or more affordable solutions, reducing the company's commercial opportunities. Additionally, macroeconomic trends such as inflation and rising interest rates may adversely affect financial conditions and results of operations.
Regulatory Risks: The company is subject to numerous healthcare regulations, and any changes could require significant operational adjustments. The evolving regulatory landscape for telehealth could impact the company's ability to provide virtual consultations. Compliance with privacy, data protection, and data security laws is increasingly stringent, and failure to comply could materially harm the business.
Supply Chain Risks: The company relies on a single third-party manufacturer, Euromi, for key components of its procedures. Any disruption in Euromi's operations or supply chain could limit the company's ability to perform procedures, harming its reputation and results.
Financial Risks: The company's leverage could limit its ability to raise additional capital, react to economic changes, and meet debt obligations. Restrictive covenants in debt instruments may adversely affect operations. Rising interest rates on variable rate debt could increase interest expenses, affecting cash flows.
Reputational Risks: Use of social media as a marketing tool poses risks, as negative commentary or false statements could harm the company's reputation. The company must maintain a presence on evolving social media platforms to effectively acquire new consumers.
Geopolitical Risks: The ongoing military conflict between Russia and Ukraine has created global economic disruptions, impacting supply chains and increasing costs for transportation and raw materials.
Management's Discussion and Analysis: Management is focused on implementing cost-saving initiatives and revenue growth strategies in response to declining revenue. However, there is no guarantee that these strategies will yield the anticipated benefits. The company is also addressing challenges related to expanding its footprint and managing operations at a larger scale.
Quantitative and Qualitative Disclosures About Market Risk: The company is exposed to market risks, including fluctuations in interest rates and credit markets, which could impact its financial performance. Rising interest rates on variable rate debt could increase interest expenses, affecting cash flows and financial results.
SEC Filing: Airsculpt Technologies, Inc. [ AIRS ] - 10-K - Mar. 14, 2025