BeautyHealth Upgrades 2025 EBITDA Guidance to $37M–$39M Amid Strong Margin Management
Strategic Shifts and Operational Improvements
Pedro Malha, CEO & President of The Beauty Health Company, opened the earnings call by expressing gratitude for the previous leadership and team efforts in stabilizing the business. He emphasized the company's potential to leverage its Hydrafacial device platform and expand it into a category-leading ecosystem of skin health technology solutions. Malha highlighted the unique recurring razor and blade business model and the company’s position to benefit from a market shift toward less invasive, personalized, and science-backed treatments.
Malha outlined four strategic priorities: protecting and growing the Hydrafacial installed base of over 35,000 devices, driving consumable utilization, innovating across device and consumable platforms, and strengthening operational discipline in areas such as cost control, margin expansion, supply chain, and quality.
For Q3, Malha reported total net sales of $70.7 million, noting a 10.3% year-over-year decline but stated this was "slightly ahead of the high end of our forecast for the quarter." Device segment revenue was $20.8 million, down 24.6% year-over-year, while consumables revenue was $49.8 million, down 2.6% year-over-year, mainly due to the China business model transition. He emphasized that excluding China, consumables sales would have increased modestly, with the consumable mix rising to 71% of net sales.
Malha noted operational achievements, including inventory levels below $60 million—"the lowest in 3 years"—and cited Q3 adjusted gross margins at 68%, down approximately 150 basis points year-over-year. Adjusted EBITDA reached $8.9 million, up 11% from Q3 last year, reflecting "tight control of cost and a solid operational execution." He announced a raise in adjusted EBITDA guidance and the midpoint of full-year revenue guidance.
CFO Michael Monahan stated, "I'm pleased to share another quarter of steady execution and disciplined financial performance in which we once again exceeded our initial expectations." He highlighted the impact of operational discipline, reporting net sales at $70.7 million, with device sales declining 24.6% and consumables down 2.6%. Monahan also pointed to regional revenue declines and outlined the company’s strategy for managing inventory and cost controls.
Outlook and Financial Results
The company raised the low end of its full year 2025 revenue guidance to between $293 million and $300 million and increased adjusted EBITDA guidance to between $37 million and $39 million. For Q4, expected net sales are between $74.5 million and $81.5 million, with adjusted EBITDA between $6.9 million and $8.9 million. Management stated the guidance reflects "reduced year-over-year revenue declines and continued cost management discipline."
Financial results showed Q3 net sales were $70.7 million compared to $78.8 million in the prior year, with device revenue at $20.8 million and consumables at $49.8 million. The Americas declined 7% to $48.3 million, APAC dropped 41.5% to $6.3 million, and EMEA remained flat at $16.1 million. GAAP gross profit was $45.6 million, with a GAAP gross margin of 64.6%. Adjusted gross margin was 68%, driven by a higher mix of consumables. Operating expenses fell 16.5% to $51.9 million, led by reduced sales and marketing spending (down 24.2%) and G&A expense (down 12.5%). Operating loss improved to $6.2 million from a loss of $21.5 million in the prior year.
Adjusted EBITDA was $8.9 million, up from $8.1 million, with margin improving to 12.6%. The company ended the quarter with $219.4 million in cash, reflecting refinancing activities and improved cash flow from operations.
Q&A Highlights
Oliver Chen, TD Cowen, asked about regional performance and cautious trends in the Americas. Malha responded that "Americas was down 7%...devices was down 16.3%," citing macro pressures but noted stabilization in device declines. For EMEA, "overall, we were flat...devices were down in EMEA about 21%." Consumables in EMEA grew double digits, driven by Germany and the medical channel.
Chen inquired about near-term vs. long-term strategic focus. Malha outlined that immediate priorities include driving utilization and device placement, with innovation and commercial execution as ongoing efforts, and highlighted targeted strategies for both devices and consumables.
John-Paul Wollam, ROTH Capital Partners, queried international strategy and channel mix. Malha stated there is continued reliance on distributor networks internationally, with plans for targeted commercial programs and investment in education and training.
Wollam also asked about the recent consumable price increase. Malha confirmed, "the team has been very pleased how the market...took that price increase," and noted average selling price is up.
Susan Anderson, Canaccord, asked about stabilizing device sales. Malha emphasized improving pipeline and commercial execution, predicting "the performance of our ability to sell devices into the market to get better and better as the quarters progress."
Anderson followed up on consumables focus. Malha disclosed a pause on the skin care initiative: "we have decided to actually pause the skin care initiative...our competitive advantage lies rather on the clinical differentiation, on recurring consumables, on stronger provider partnerships."
Lillian Moffett, Raymond James, asked about channel trends and consumer behavior. Malha described stability in medical and non-medical segments but noted pressure among plastic surgeons as consumers shift toward less invasive care. Monahan added, "booster attachment rates were very high...the end consumer...has been under a bit of pressure."
K. Gong, JPMorgan, asked about balancing growth vs. profitability for 2026. Malha stressed focus on top line growth and recurring revenue, indicating momentum heading into next year is contingent on improved macro conditions.
Joseph Federico, Stifel, queried guidance raise and margin dynamics. Monahan explained Q3 outperformance and Q4 margin expectations, noting, "gross margins tend to be a little bit lower quarter-over-quarter because we run the consumables promotion in the fourth quarter."
Federico asked about churn. Malha acknowledged churn is elevated at 1.8%, attributing it to "financial pressure being the primary factor" among low-volume providers, with proactive reengagement initiatives underway.
Sentiment Analysis and Risks
Analysts maintained a neutral tone, probing regional trends, strategic focus, pricing, and stabilization efforts, with particular attention on macro headwinds and device sales challenges. Management projected cautious confidence, with Malha stating, "we are encouraged by the momentum we are building as we enter 2026." Monahan’s tone reflected operational focus and discipline, noting "continued cost control even in the face of lower top line volume."
Compared to the previous quarter, management’s prepared remarks showcased increased optimism on stabilization and improvement in guidance, while analyst tone remained neutral but focused on risk factors and execution.
Quarter-over-Quarter Comparison
The current quarter featured a new CEO, Pedro Malha, succeeding Marla Beck, and a strategic pause on the skin care initiative. Guidance for full-year revenue and adjusted EBITDA was raised from the prior quarter’s range of $285 million–$300 million and $27 million–$35 million, respectively, to $293 million–$300 million and $37 million–$39 million.
Device revenue pressure persisted, but consumables mix improved. Operational discipline and cost controls remained central, while innovation shifted focus from skin care to clinically backed boosters and core consumables.
Analysts in both quarters concentrated on device sales, churn, and regional performance, but this quarter’s Q&A included increased scrutiny of churn and pricing power.
Management’s tone moved from cautious progress in Q2 to greater emphasis on momentum and margin resilience in Q3.
Risks and Concerns
Management cited ongoing macroeconomic headwinds, persistent inflation, challenging access to financing for capital equipment, and uneven consumer confidence as key external risks. Device sales remain under pressure, especially in the Americas and APAC, with churn elevated at 1.8%. The China market transition continues to impact results, though mitigation includes inventory planning and a shift to distributor models.
Proactive measures include greater support and training for low-volume providers, a focus on innovation in consumables, and a pause on non-core initiatives to preserve capital.
Final Takeaway
The Beauty Health Company delivered resilient Q3 2025 results amid challenging macro conditions, highlighted by improved profitability, disciplined cost control, and strategic clarity under new leadership. The company raised guidance for both revenue and adjusted EBITDA for the year, underscoring confidence in its recurring consumables model, operational improvements, and targeted innovation. Management remains focused on stabilizing device sales, reactivating providers, and leveraging its core strengths to drive growth into 2026.
Reverse Table Top
Start sitting down, and place your hands behind your back with your fingertips reaching toward your butt. Place your palms flat on the ground, and walk your feet forward. Press down through the feet and the palms to lift your butt up off of the ground. Engage your core to straighten your back from your neck to your knees. Bring your shoulders over your wrists, and your knees over your ankles, and hold this pose for a few breaths. Then release. Repeat 3 times.
Bird Dog
Start on all fours with your shoulder over your wrists and hips stacked above the knees. Straighten your left arm out in front of you and your right leg out behind you, balancing on your opposite hand and knee. Hold for a few breaths. For an added challenge, bend your left elbow and your right knee in toward each other until they touch underneath your stomach. Switch sides and repeat using your right arm and left leg. Continue alternating, performing 10 reps on each side.
Child’s Pose
Kneel on the floor so that your shins and the tops of your feet are on the ground. Bend at your hips, moving your hands forward and your butt back. Inch your hands out in front of you until your stomach is resting on your thighs and your arms are stretched straight out in front of you, palms on the floor. Focus on your breathing, and take it slow.
Forward Fold
If you have a hard time reaching toward your toes in a seated forward fold, performing the move standing allows gravity to help you get deeper into the stretch. Start standing with feet hips-width apart. Bend at the waist, reaching your hands toward the ground and letting your head hang between your arms. Hold here for 10-20 seconds, letting yourself sink deeper with each breath.
Plank
Place your hands and knees on a mat, lining up your shoulders over your wrists, with your wrists parallel with the front of the mat. Make sure that your shoulders stay over your wrists, so your hips will not be over your knees anymore; your hips will be further forward, and your knees will be behind your hips. Engage the abs. Pretend there is fire on the mat and you need to pull your stomach away from the fire. Lift your legs up off of the ground and squeeze your quads, reaching your heels toward the back of the room. Keep your head and neck elongated, and if you have a mirror, check yourself out to ensure that you’re in one straight line.
Chest Stretch
Stand tall with your feet hips-width apart and place your hands behind your back, interlocking your fingers. Straighten your arms down toward the ground and try to bring the palms together, bringing your shoulder blades toward each other until you feel a pull in your chest. Hold for a few breaths and then release.
Pigeon
Start in a downward facing dog. Bring the right leg forward toward your right hand and rest it on the mat, while reaching your right ankle toward the left hand and resting it on the mat (as close to your hand as is comfortable for you.) Ideally, your right shin will be parallel to the front of the mat. Lower your hips toward the floor, resting on top of your right leg. Straighten your left leg out behind you. Keep your hips square, balancing your weight by pressing your hands down onto the mat in front of you. If this is enough of a stretch, stay here and breathe. If you want a deeper stretch, bend at the hips, bringing your torso down toward the mat and reaching over your bent front leg. Flex your right foot. Maintain this position for 60 seconds; breathe slowly.
Downward Dog
Begin in plank position with your body in a straight line. Keep your arms straight with your palms pressing down on the mat. With your knees slightly bent, tuck in your belly and think about pulling your chest toward your thighs while lifting your butt up toward the sky. Once you are lifted into the final position, straighten your legs gently. Keep your head between your upper arms and relax your shoulders. Reach your legs long so that your heels touch the ground. If this isn’t possible, focus on lengthening your spine rather than forcing the feet to be flat on the ground.
Reverse Prayer Stretch
Standing or sitting, reach your hands behind your back. Reach your fingertips toward each other in the middle back, and bring your shoulders back. If that feels easy, you can make a fist with your hands and press them together. Or, to go even further, you can press your palms together in a prayer position. Hold for 2-4 breaths, then release.
Ragdoll
Stand with feet hip-width apart. Add a slight bend to your knees. Exhale as you fold at the hips, allowing your torso to fall forward. You can let your arms hang or grasp opposite elbows as you shift your weight forward. Sway side to side letting your neck hang loose. Perform for as long as desired, starting with 15 seconds.
Supine Twist
Lie down on your back, legs extended. Pull your right knee up to your chest. Allow your right knee to fall across your body to touch the floor. Keep your left leg straight on the floor. Extend your right arm out to the side. Use your left hand to press your knee down to the floor to obtain a deeper stretch. Hold for about 30 seconds. Repeat on the other side.
Bent Over Row
Step on the resistance band with both feet hip-width distance apart. Grab one handle of the resistance band in each hand, palms facing each other. Add a slight bend in your knees, pushing your hips back to hinge forward at the torso. Maintain a flat back with core engaged. Let your arms hang straight down under your shoulders, adding a slight bend to your elbows. Drive your elbows straight up to bring the resistance band to your chest, keeping elbows tucked into your sides. Slowly lower back to the starting position. Repeat for 10 repetitions.
“Yes” and “no” stretch
Standing tall with your arms at your sides and shoulders relaxed, nod your head up and down like you are motioning “yes.” Drop your chin toward your chest as far as you can. Then, lift your head up toward the ceiling. Repeat 10 times.
After saying “yes,” it’s time to say “no.” With your back straight, arms at your sides and shoulders relaxed, look toward your right as far as you can. Then slowly move your head to the left as far as you can. Keep your shoulders back and avoid jutting your chin forward. Repeat 10 times.
