SkinHealth Systems (SKIN) Q2 2024 earnings summary

Executive summary

• Q2 2024 net sales were $90.6 million, down 22.9% year-over-year, mainly due to a 46.3% decline in equipment sales, partially offset by 6.7% growth in consumables.

• Operating expenses decreased 22% year-over-year, driven by cost-saving initiatives and lower personnel and marketing costs.

• Adjusted EBITDA loss was $5.2 million, compared to a $12.4 million gain in Q2 2023, impacted by inventory write-downs and lower sales.

• Net income was $0.2 million, aided by a gain on repurchase of convertible notes, offsetting inventory-related charges.

• Full-year financial guidance was revised downward due to continued macroeconomic pressures and slower device sales recovery.

Financial highlights

• Q2 2024 revenue was $90.6 million, a 22.9% year-over-year decline, with a 46.3% drop in equipment sales and a 6.7% increase in consumable sales.

• Adjusted EBITDA loss was $5.2 million, compared to a $12.4 million gain in Q2 2023, impacted by $17 million in inventory write-offs.

• GAAP gross profit was $40.9 million (45.2% margin), down from $67.9 million (57.8% margin) in Q2 2023.

• Net income was $0.2 million, compared to $3.4 million in Q2 2023.

• Cash and equivalents at June 30, 2024, were $349.5 million, down from $523.0 million at year-end, mainly due to note repurchases.

Outlook and guidance

• Q3 2024 net sales projected at $70–$80 million, with Adjusted EBITDA loss of -$6 million to -$1 million.

• Full-year 2024 revenue expected between $325–$345 million; Adjusted EBITDA loss of -$10 million to break even.

• Positive Adjusted EBITDA anticipated in Q4 2024.

• Capital expenditures for 2024 expected to be approximately $12 million.

• Management believes liquidity is sufficient for at least the next 12 months, but will monitor capital needs based on revenue growth, R&D, and market conditions.