Beauty Health Q4 Earnings Call Highlights

13 Mar 2026, 01:48 by Kim Johansen · The Markets Daily

Beauty Health (NASDAQ:SKIN) executives emphasized progress on profitability and operational discipline during the company’s fourth-quarter 2025 earnings call, while outlining a strategy shift designed to drive longer-term growth by increasing utilization across its installed base rather than relying primarily on new device placements.

Fourth-quarter results show stabilization and margin expansion

For the fourth quarter, the company reported total revenue of $82.4 million, down 1.3% year-over-year, which CEO Pedro Malha characterized as a meaningful improvement from the double-digit decline seen in the third quarter. Revenue performance was supported by the company’s consumables business, which grew 1.7% year-over-year to $57.7 million, while device revenue fell 7.9% to $24.7 million.

Beauty Health’s profitability improved in the quarter, with adjusted gross margin of 67.4% and GAAP gross margin of 64.4%, both helped by a favorable mix shift toward consumables. Adjusted EBITDA rose to $15.0 million from $9.0 million in the prior-year quarter, representing roughly 700 basis points of margin expansion. Net loss improved to $8.1 million from $10.3 million a year earlier.

CFO Mike Monahan said the quarter’s gross margin improvement was also aided by lower inventory-related charges, partially offset by lower equipment average selling prices. He noted the company “successfully sold through the majority” of Elite FRC devices during the quarter, which carry a lower average selling price than its newer Syndeo devices.

Full-year 2025: improved EBITDA, lower sales, and debt actions

For full-year 2025, net sales were $300.8 million, down from $334.3 million in 2024. Consumables revenue totaled $212.7 million and device revenue was $88.1 million. Adjusted EBITDA increased to $45.1 million from $12.3 million the prior year, which management attributed to expense discipline and margin improvement.

Monahan said the company generated “over $37 million in operating cash flows” and strengthened its balance sheet by restructuring debt. Beauty Health ended 2025 with approximately $232.7 million in cash equivalents and restricted cash, down from $370.1 million at the end of 2024, primarily due to the repurchase of convertible senior notes in the first half of 2025 and the refinancing of notes that extended the debt maturity profile.

Strategy pivots toward utilization and installed base activation

Malha, who said his first five months with the company reinforced his confidence in the long-term opportunity, described Beauty Health as having key assets already in place: a recognized global brand, a large installed base, and a consumables model with operating leverage. He said the company’s commercial approach was built for an earlier phase of the market when device placements were the primary growth driver, but that the next phase requires shifting toward “device utilization,” which he called the core driver of long-term growth.

Operationally, the company placed 1,032 delivery systems during the quarter and ended the year with an installed base of over 36,000 systems globally. Management said the installed base remains underutilized and that even modest improvements in utilization could drive meaningful consumables growth and margin expansion.

Malha laid out three priorities intended to accelerate what he described as a “flywheel” model where brand demand drives patient traffic, which increases utilization per device and ultimately drives high-margin consumables revenue:

Salesforce excellence: transitioning to a more structured, value-based selling model, sharpening account segmentation and sales planning, and implementing tools and analytics to track activation, utilization, and retention.
Marketing discipline: refining HydraFacial positioning as a clinical-grade platform supported by science and provider education; increasing focus on consumer demand programs; and elevating SkinStylus, which Malha said has not historically received the commercial focus it deserves.
Focused innovation: developing a next-generation HydraFacial system, investing in a more selective set of clinically backed boosters, and exploring external partnerships to broaden the product ecosystem.

Boosters, pricing, and regional dynamics in consumables

On consumables, management cited improved trends versus the third quarter. Malha said consumables grew low single digits year-over-year in the quarter, while booster sales grew faster. Executives noted EMEA strength, with Germany described as performing “exceptionally well.” Monahan attributed some of the region’s momentum to the timing of regulatory approvals and the launch of five new boosters in EMEA during the year.

Malha also said the average consumables spend per treatment in the U.S. was up 10% year-over-year, driven by premium boosters. He added that boosters represented about one-fifth of treatments and that attachment continued to improve, with fourth-quarter booster revenue up 7% year-over-year. The increase was attributed to the launch of HydraFillic and Hydralock boosters in the medical channel, which management said showed clinically visible results for providers and consumers.

Monahan also addressed pricing, noting the company implemented a 5% price increase on consumables at the beginning of the third quarter and said it did not see significant pushback. He added that the company continues to evaluate pricing strategy but did not outline additional planned changes.

2026 outlook: back-half weighted as investments continue

For 2026, Beauty Health guided to revenue of $285 million to $305 million and positive adjusted EBITDA of $35 million to $45 million. Monahan said the midpoint implies revenue broadly consistent with 2025 when “normalizing” for the go-to-market change and softness in China, with a more back-half weighted cadence as initiatives take hold.

For the first quarter of 2026, the company expects revenue of $63 million to $68 million and adjusted EBITDA of $3.5 million to $5.5 million, noting the first quarter is typically the lowest due to seasonality and ordering patterns.

Management said the first half of 2026 is expected to be modestly below the prior year, reflecting macro pressure in capital equipment, increased competitive activity that has lengthened device sales cycles, sales organization transition work, and international market adjustments including China. Monahan added that first-quarter consumables expectations also reflect distributor ordering timing that benefited the fourth quarter.

On churn, Monahan said churn was higher than usual for full-year 2025 but improved in the fourth quarter, at about 1.1%, compared with about 1.8% in the third quarter. He said churn was largely driven by smaller accounts without a business development manager assigned, and that the company has been restructuring inside sales and customer service to better serve those accounts. The 2026 guide assumes churn remains flat year-over-year, though he said the company hopes for upside.

Looking further out, Malha called 2026 an “execution year” focused on stabilization and investment, with expectations to return to revenue growth in 2027. On product development, he said a next-generation HydraFacial system is in early-stage development, with plans to launch in 2028, aimed at giving existing providers a compelling reason to upgrade and improving ROI for practices.

About Beauty Health (NASDAQ:SKIN)

Beauty Health Company (NASDAQ: SKIN) is a U.S.-based consumer wellness and beauty enterprise that integrates device-based and product-based offerings across skin, body and hair wellness categories. The company operates a portfolio of established brands that blend professional and at-home solutions, focusing on innovative formulations and technologies to address a range of beauty and self-care needs. Through its proprietary e-commerce platforms and strategic retail partnerships, Beauty Health seeks to deliver premium experiences and tangible results to a global customer base.

Beauty Health’s brand portfolio includes Sol de Janeiro, known for its award-winning Brazilian Bum Bum Cream body care collection; Elemis, a U.K.-originated professional skin care line distributed in spas and skincare clinics; NuFACE and Dermaflash, two at-home beauty device brands specializing in microcurrent facial toning and gentle exfoliation respectively; and Nutrafol, a legal-strength hair wellness supplement clinically designed to support hair growth.