Beauty Health (NASDAQ:SKIN) reported second-quarter revenue at the low end of its guidance range as cautious capital spending by providers continued to weigh on equipment sales, while stronger gross margins and expense discipline lifted adjusted EBITDA above expectations.
SkinHealth Systems Inc., which markets HydraFacial and other professional skin-health products, posted second-quarter net sales of $72.1 million, down 7.8% from the prior-year period. Adjusted EBITDA rose to $17 million from $13.9 million a year earlier, exceeding the company’s guidance range of $11 million to $13 million.
Equipment and Consumables Sales Decline
Delivery Systems revenue fell 18.4% year over year to $18.3 million, with 770 systems placed during the quarter, compared with 957 systems in the prior-year period. Consumables revenue declined 3.5% to $53.9 million, primarily reflecting lower treatment utilization and a more difficult comparison with the prior year, which included booster launches.
Still, the company’s active installed base grew 3.8% year over year to 36,516 systems globally. Malha said the installed base remains a key source of recurring revenue, with consumables accounting for roughly 75% of company revenue.
Management said consumers continue to spend on skin health and noninvasive treatments, but their spending is now spread across a broader range of aesthetic offerings. Malha said providers are also facing more pressure to keep patients engaged and returning for treatments.
“We don’t look at this as simply as a demand issue when it comes to consumer behavior,” Malha said during the question-and-answer session. “We see it actually as an opportunity to increase the productivity of every HydraFacial system that we have in the field.”
The company is seeking to improve utilization through clinically validated boosters, treatment enhancements, provider education and protocols. A new clinically validated booster is expected to launch globally in the fourth quarter, followed by two additional booster launches planned for 2027, according to Malha.
Regional Results and Margin Expansion
Sales declined across all reported regions. Americas revenue totaled $49.9 million, down 4.2%, as consumables revenue decreased 1.4% and equipment sales faced broader capital-equipment pressure. EMEA revenue fell 19% to $14.9 million, reflecting softness in both equipment and consumables.
Chief Financial Officer Mike Monahan said EMEA results were also affected by personnel shortages and changes in the timing of distributor orders, which the company expects to improve during the second half of the year.
APAC revenue declined 5.4% to $7.3 million. During the quarter, the company transitioned Australia and New Zealand from a direct model back to a distributor model, leaving the entire APAC region served through distributors. Monahan said the transition is expected to reduce 2026 revenue by approximately $1 million.
Profitability improved significantly. GAAP gross margin expanded to 68.4% from 62.8% a year earlier, while adjusted gross margin increased 590 basis points to 71.8%. Monahan attributed the gain to lower equipment costs following the prior-year sell-through of trade-in units, reduced inventory-related charges, operating efficiencies and a favorable mix toward consumables.
GAAP operating expenses fell to $45.8 million from $51.8 million, driven by lower personnel costs and improved efficiencies. The company generated GAAP income from operations of $3.6 million, compared with an operating loss of $2.7 million a year ago. Net loss was $2.7 million, versus net income of $19.7 million in the prior-year quarter, which included an $18.1 million gain related to exchanges and repurchases of 2026 notes.
Rental Program, Product Pipeline and Outlook
Earlier in August, the company introduced a U.S. rental program for HydraFacial devices, intended to reduce providers’ upfront capital commitment. Under the program, a third-party financing partner owns the devices and administers the rentals, while SkinHealth books the sales revenue upfront upon shipment.
Malha said the company does not expect the program to cannibalize existing equipment sales. Instead, it is intended to reach qualified providers that have faced financing barriers and help expand the installed base. Monahan said providers purchasing equipment outright are generally told they can achieve payback in roughly nine months, depending on treatment volume.
The company continues to target a 2028 launch for its next-generation HydraFacial platform. Malha said the multiyear program is intended to improve clinical outcomes, treatment experience and provider workflow while creating reasons for current customers to upgrade and new providers to adopt the platform.
SkinHealth also cited progress in adjacent categories. The company recently received FDA clearance for SkinStylus microneedling to improve the appearance of periorbital wrinkles. Monahan said SkinStylus revenue, while still small, grew nearly 50% year over year during the second quarter after the sales force increased its focus on selling into the existing provider base.
HydraScalp, the relaunch of the Keravive offering for scalp and hair wellness, has also gained traction since its June relaunch, according to Malha. The company further said it remains on track to introduce a separate new device in the U.S. market in 2027, though management did not disclose the technology or category.
Guidance Updated; Convertible Maturity Addressed
SkinHealth lowered its full-year revenue outlook to a range of $280 million to $290 million by reducing the top end of its previous guidance, citing continued pressure on year-over-year device sales. However, it raised its adjusted EBITDA outlook to $39 million to $46 million, from prior guidance of $35 million to $45 million.
For the third quarter, the company expects revenue of $65 million to $70 million and adjusted EBITDA of $5 million to $7 million. Management expects second-half EBITDA to decline from first-half levels as research and development and commercial investments increase by approximately $4 million, while a greater mix of equipment sales may pressure gross margins.
The company ended the quarter with approximately $206 million in cash equivalents and restricted cash, about $1.5 million above its first-quarter ending position. Its October 2026 convertible maturity totals approximately $103 million. Monahan said the company’s current plan is to repay that maturity with cash on hand at the end of the third quarter and that its forecast assumes year-end cash of roughly $100 million.
Separately, Monahan said the company received notice from Nasdaq after its shares traded below the exchange’s $1 minimum bid-price requirement for 30 days. Stockholders will be asked to approve a reverse stock split at a special meeting scheduled for Sept. 22.
About Beauty Health (NASDAQ:SKIN)
Beauty Health Company (NASDAQ: SKIN) is a U.S.-based consumer wellness and beauty enterprise that integrates device-based and product-based offerings across skin, body and hair wellness categories. The company operates a portfolio of established brands that blend professional and at-home solutions, focusing on innovative formulations and technologies to address a range of beauty and self-care needs. Through its proprietary e-commerce platforms and strategic retail partnerships, Beauty Health seeks to deliver premium experiences and tangible results to a global customer base.
Beauty Health’s brand portfolio includes Sol de Janeiro, known for its award-winning Brazilian Bum Bum Cream body care collection; Elemis, a U.K.-originated professional skin care line distributed in spas and skincare clinics; NuFACE and Dermaflash, two at-home beauty device brands specializing in microcurrent facial toning and gentle exfoliation respectively; and Nutrafol, a legal-strength hair wellness supplement clinically designed to support hair growth.
