AirSculpt (AIRS) Q2 Revenue Falls 14%

AirSculpt Technologies (AIRS 10.36%), a company specializing in minimally invasive body contouring, released its second quarter fiscal 2025 results on August 1, 2025. The company reported GAAP revenue of $44.0 million in Q2 FY2025, a decline of 13.7% from the prior year quarter and fell short of analyst expectations of $45.45 million (GAAP). Diluted earnings per share (EPS) (GAAP) was a slight loss of $0.01, compared to the $0.01 GAAP earnings per share analysts had expected, but an improvement over the $0.06 GAAP net loss per share in Q2 2024. Adjusted EBITDA was $5.8 million, representing a decrease from $6.9 million in the same quarter last year. Despite ongoing declines in case volume and same-center performance, management reaffirmed its full-year 2025 revenue target of approximately $160 to $170 million and adjusted EBITDA target of approximately $16 to $18 million. The quarter showed incremental operational progress, such as narrowing the revenue decline and improving sequential results, but same-center demand remains under pressure.

Source: Analyst estimates provided by FactSet. Management expectations based on management's guidance, as provided in Q1 2025 earnings report.

Company Overview and Business Focus

AirSculpt Technologies is best known for its patented AirSculpt® body contouring procedures. These treatments are minimally invasive and avoid needles, scalpels, and general anesthesia, aiming to deliver precise fat removal and skin tightening with quick recovery times. The company's model appeals to patients who want body shaping with less downtime and less discomfort compared to traditional methods.

The company operates 32 centers located in affluent regions across the U.S. Canada, and the UK. It focuses on performance at existing centers, robust marketing, and continued innovation in procedural offerings. Key drivers of success include its differentiated procedure, its ability to efficiently expand into new markets, and a focus on marketing to generate demand and patient leads. Regulatory compliance and developing new services also remain central to its strategy.

Quarterly Performance Highlights and Business Developments

During Q2 FY2025, GAAP revenue fell to $44.0 million, a drop of 13.7% compared to the prior year, and below the consensus estimate by 3.19% (GAAP). The number of procedures completed—referred to as 'case volume'—also declined 14.1%, totaling 3,392 cases. This contraction in demand was consistent with trends seen in the prior quarter, but management noted that both revenue and case decline percentages improved somewhat in Q2 FY2025 compared to Q1 FY2025. Average revenue per case held steady at about $12,975, preserving the company's premium price point even as demand softened.

Profit metrics (GAAP and non-GAAP) reflected the decline in top-line results. The Adjusted EBITDA margin was 13.3%, slightly lower than the prior year's 13.5%, but an improvement over the prior quarter's Adjusted EBITDA margin of 9.5% in Q1 FY2025, indicating some recent operational improvements. Net loss (GAAP) narrowed year over year in Q2 2025, mainly due to lower operating expenses rather than a recovery in underlying business performance.

The company continued piloting new offerings during the period. These included a standalone skin tightening procedure, which targets patients with skin laxity, including those who have used GLP-1 weight loss drugs that can cause excess skin. AirSculpt also began to roll out expanded consumer financing options, aiming to lower barriers to purchase for its procedures that average about $13,000. Management stated that neither pilot is reflected in current-year financial guidance, so any upside from these would be incremental.

AirSculpt reported a record increase in leads. The number of patient consultations rose, but the conversion of those consultations into booked procedures remains slow, with management pointing to an elongated booking cycle. Customer acquisition cost per case increased to $3,130 in Q1 FY2025 from $2,990 in Q1 FY2024, reflecting the decline in case volume, but company leadership expects efficiency improvements as new sales and marketing strategies take hold.

Same-center performance, which tracks results from locations open at least a year, showed a sharper contraction than overall company figures in Q1 FY2025. Same-center case volume fell 22.0% in Q2 FY2025, with per-case revenue remaining steady. This suggests that recent growth in the number of centers has not yet offset demand declines at older locations. No new center openings are assumed in the fiscal 2025 outlook; management intends to focus on improving sales and marketing efficiency at the current footprint.

On the financial and corporate management side, AirSculpt reduced its long-term debt by $16 million during Q2 FY2025, funded in part through a recent stock offering. The company reported $8.2 million in cash and cash equivalents as of June 30, 2025 and no outstanding line of credit, improving its balance sheet strength. Operating cash flow (GAAP) for the first six months of 2025 was $5.9 million, down from $6.8 million in the comparable period of 2024. The company remains in compliance with its debt covenants. The period also saw the planned retirement notice from the CFO, with a search for a successor underway.

Looking Ahead: Guidance and Investor Focus

The company maintained its full-year 2025 guidance, targeting revenue between $160 million and $170 million and adjusted EBITDA (non-GAAP) of $16 million to $18 million. With first-half GAAP revenue at $83.4 million, these targets require meaningful sequential improvement through the back half of the year, likely dependent on an uptick in case volume, improved conversion of leads, and potential contribution from new procedures or financing options. Management signaled a cautious optimism, commenting, “we remain on track to achieve our annual guidance.”

AirSculpt did not declare or announce any change to a dividend. Investors and observers may want to monitor conversion rates from leads to procedures, the pace of recovery in existing center volume, the ramp of new pilots in skin tightening and patient financing, and the potential financial impact of ongoing cost and marketing efficiency efforts. A successful turnaround depends on restoring growth in same-center performance while maintaining the company's premium price positioning and compliance with healthcare regulations. No other specific forward-looking guidance or quantitative outlook was provided beyond the reaffirmed annual targets.

Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.