What Management Said
Read the full Q4 2025 transcript ↗These statements may include our future expectations regarding financial results and guidance, market opportunities, and our growth. A reconciliation of these measures can be found in our earnings release as filed this morning and in our most recent 10-K, which will also be available on our website. Michael will then review our fourth quarter and fiscal 2025 financial performance and provide the 2026 outlook. In the fourth quarter, we delivered sequential improvement in same-store sales versus the first nine months of the year and higher adjusted EBITDA compared to Q4 2024.
We also saw improvements in our lead and consult volumes, which has continued into 2026 and is now converting into improved revenue trends. Our trends continued favorably in March, and we expect Q1 same-store sales to be flat, which would be the midpoint of the revenue range previously provided. As we prepare for our busiest quarter, we are seeing broad-based improvement in revenue across our centers. They have also created demand for aesthetic procedures such as skin tightening, contour restoration, and overall reshaping after weight loss, all of which play into our existing brand and capabilities.
Skin removal procedures represent another proof point of our expanded revenue opportunity. We have also deployed marketing efforts to raise awareness of our unique positioning to serve these patients. These new procedures strengthen our body contouring service and revenue streams using our existing base of centers and clinic talent. Turning to our third area of focus, maintaining strong financial discipline both in our margins and capital allocation.
- Q4 adjusted EBITDA rose to $2.5 million (7.4% of revenue), up $0.6 million with 2.8 points of margin expansion versus Q4 2024, driven by gross margin gains and SG&A leverage.
- Q4 gross margin expanded roughly 2 points to approximately 59%, as cost of services fell $3.1 million to $13.7 million (down 18% year over year).
- Same-store sales inflected from down 22% at the start of 2025 to positive in February 2026, with favorable trends continuing in March and Q1 comps expected to be flat.
- Cost discipline generated over $4 million in annualized savings in 2025, and Q4 SG&A declined about $5 million versus the prior-year quarter to roughly $18.2 million.
- Balance sheet strengthened: over $30 million of debt repaid across the last five quarters bringing leverage below 2.5x currently, plus $14.8 million raised via the ATM in Q1 2026 and an additional $11 million of debt principal paid down.
- Completed more than 100 skin removal (excisional) surgeries in the Q4 pilot, adding to standalone skin tightening as new procedures targeting a stated $100 million+ long-term GLP-1-driven opportunity.
- Q4 revenue fell approximately 15% year over year to $33.4 million, with same-store revenue down 16%, reflecting lower case volume amid a challenging consumer spending environment.
- Full-year 2025 revenue declined about 15.8% to $151.8 million, and adjusted EBITDA dropped to roughly $15 million (10% margin) from about $21 million (12% margin) in 2024.
- Cash flow from operations fell to $3.1 million for the year from $11.4 million in 2024, and year-end cash stood at just $8.4 million.
- The 10-K filing was delayed after an intercompany reconciliation matter prompted a broader accounting review (including ASC 842 leases), resulting in immaterial prior-year corrections and an acknowledgment that controls need strengthening.
- A meaningful portion of global helium plasma supply, which is needed for skin tightening procedures, is currently offline due to the Iran conflict, creating a supply risk the company is monitoring.
Guidance Changes
| Metric | Period | Current guidance |
|---|---|---|
| Full-year revenue | FY2026 | $151 million to $157 million; midpoint implies roughly 3% comparable growth excluding London |
| Full-year adjusted EBITDA | FY2026 | $15 million to $17 million |
| Same-store sales | Q1 2026 | expected flat, the midpoint of the prior range |
| De novo center openings | FY2026 | no new openings contemplated; resources focused on revenue growth in existing base |
| Net debt leverage | Ongoing | targeting below 2.5x with a planned term loan refinancing before it becomes current |
Performance Breakdown
| Metric | YoY | Note |
|---|---|---|
| Q4 revenue | down approximately 15% to $33.4 million | Lower case volume amid a challenging consumer spending environment. |
| Q4 same-store revenue | down 16% | Reduced case volume; excludes centers open less than a year. |
| Q4 gross margin | up roughly 2 points to about 59% | Cost of services down 18% ($3.1 million) to $13.7 million. |
| Q4 SG&A | down about $5 million to roughly $18.2 million | 2025 cost initiatives. |
| Q4 adjusted EBITDA | up $0.6 million to $2.5 million (7.4% margin, +2.8 points) | Gross margin expansion and SG&A operational leverage. |
| Full-year revenue | down approximately 15.8% to $151.8 million | Weak case volume through most of 2025 before stabilization. |
| Full-year adjusted EBITDA | down to about $15 million (10% margin) from about $21 million (12% margin) | Lower revenue, partly offset by cost reductions. |
| Cash flow from operations | down to $3.1 million from $11.4 million | Lower profitability during the rebuilding year. |
Earnings Call Themes & Trends
| Topic | Previous mention | Current period | Trend |
|---|---|---|---|
| Same-store sales trajectory | down 22% at the start of 2025 | positive in February 2026, favorable in March, Q1 expected flat | — |
| GLP-1 / new procedures | standalone skin tightening rolled out to all centers in H2 2024; skin excision pilot launched in Q4 2025 | 100+ skin removal surgeries done in Q4, expanding to all locations in 2026; stated $100 million+ long-term opportunity | — |
| Sales and marketing strategy | prior approach ahead of the Q4 2025 revamp | enhanced strategy launched Q4 2025 (connected TV, influencers, skin campaigns, website conversion, higher-value targeting) driving improved volume trends | — |
| Capital allocation / leverage | debt reduction the stated focus; over $30 million repaid across five quarters | leverage below 2.5x; planning term loan refinance, then reinvestment in sales/marketing and eventually de novos | — |
| Geographic footprint | operated one center outside North America (London), contributing 1% to 2025 comps | strategically exited the only non-North American clinic to streamline operations | — |
| Leadership / talent | team being rebuilt through 2025 | new CFO (Michael Arthur) plus added senior finance, legal, and operations executives in Q1 | — |
Q&A Summary
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