AirSculpt Technologies (NASDAQ:AIRS) management said the body contouring company is seeing early signs of stabilization in its core business while preparing to pursue a broader opportunity tied to side effects from GLP-1 weight-loss drugs.
Speaking at a TD-hosted discussion with retail and beauty analyst Jonah Kim, Chief Executive Officer Yogi Jashnani described AirSculpt as a provider of fat removal, fat transfer and skin-tightening services using a patented, minimally invasive method. Jashnani said patients are awake during the procedure, which he said contributes to lower complication rates and allows many customers to return to normal routines within 24 to 48 hours.
Same-store sales turn positive
Jashnani said AirSculpt recently posted 1% same-store sales growth, its first positive comparable-sales quarter in more than two years. He attributed the improvement primarily to changes in sales and marketing under a new leadership team.
“We’ve spent a lot of energy invested heavily in revamping our sales and marketing engine,” Jashnani said. “That’s been the key driver which has gotten us to positive same-store sales comp for the first time in years.”
AirSculpt Chief Financial Officer Dennis Dean said the company’s current outlook reflects continued stabilization of the existing business rather than a major contribution from expanded GLP-1-related services. He said the company is seeing momentum from enhanced sales and marketing efforts in the core business.
GLP-1 side effects viewed as growth opportunity
Jashnani said AirSculpt is increasingly seeing demand from customers who have used GLP-1 medications and are seeking treatment for loose skin, remaining stubborn fat deposits or lost volume in areas such as the face or buttocks. He said the company’s services can address those concerns through fat removal, skin tightening, skin removal and fat transfers.
Jashnani said AirSculpt rolled out skin tightening as a standalone service in the middle of last year and launched skin removal in a pilot during the fourth quarter. He said the company performed about 100 skin-removal procedures in the fourth quarter and about 150 in the first quarter, compared with roughly 3,000 total procedures per quarter.
“We are in really early innings of addressing GLP-1 side effects and capturing that market,” Jashnani said.
He added that customers seeking help with loose skin may represent an expanded customer base beyond the company’s traditional fat-removal consumers. He said the market for skin removal and skin tightening is currently about as large as the fat-removal market, creating what he described as an opportunity to double AirSculpt’s total addressable market over the long term.
Clinic economics and expansion plans
Dean said AirSculpt’s clinic-level economics remain a strength of the business. He said an average mature clinic produces roughly $5 million in annual revenue with about 60% gross margins. New clinics typically cost about $1 million to $2 million to build, become profitable within several months and have historically produced payback within one to two years, he said.
Management said AirSculpt has paused new clinic openings in recent years while focusing on stabilizing the business and strengthening the balance sheet. Dean said the company has reduced debt by roughly $30 million over the past year and brought its leverage ratio below 2.5 times.
Asked about growth from 31 centers, Dean said studies have indicated the potential for 200 to 300 U.S. locations, though he said reaching about 100 locations is a more reasonable near-term framework without meaningful cannibalization. He cited Long Island, the Bay Area, Portland, Indianapolis and Tampa as examples of markets where the company does not currently have a full presence.
Margins and capital allocation
Dean said AirSculpt’s EBITDA margins have historically been at or above 20%, compared with about 10% currently. He said higher procedure volumes should provide operating leverage because incremental cases carry gross margins of around 60%.
He also said the company has removed about $4 million of costs from the business over the past year through operational streamlining. Dean said future capital allocation will balance continued balance-sheet discipline with investment in growth initiatives, including sales and marketing and service expansion.
Jashnani said AirSculpt’s main self-help opportunities are improving awareness through sales and marketing, capturing GLP-1-related demand and eventually expanding its geographic footprint. He said the company is not relying on a stronger consumer backdrop to drive improvement.
“The consumer will remain uncertain and choppy,” Jashnani said. “We’re not waiting for the consumer to turn. We’re executing on our priorities.”
About AirSculpt Technologies (NASDAQ:AIRS)
AirSculpt Technologies, Inc (NASDAQ: AIRS) is a medical technology company specializing in minimally invasive body contouring. The company’s flagship AirSculpt® platform combines pneumatic power with precision microcannulas to deliver fat removal, transfer and sculpting procedures. AirSculpt Technologies partners with both company-owned and franchised cosmetic surgery practices to offer a streamlined, office-based alternative to traditional liposuction.
Through its proprietary system, AirSculpt Technologies provides both consumers and medical professionals with an integrated solution that emphasizes reduced downtime, smaller incision sites, and more predictable outcomes.
