BeautyHealth’s third quarter saw the company outperform Wall Street’s revenue expectations, despite a double-digit year-over-year sales decline. The market’s positive reaction reflected management’s focus on stabilizing the core Hydrafacial business and shifting to higher-margin recurring consumables. CEO Pedro Malha credited “strong operational execution and disciplined cost management” for improved operating margins, as well as the successful transition to a distributor model in China, which helped streamline inventory and reduce exposure to tariffs. Management highlighted booster product innovation and a growing installed device base as bright spots, even as device sales remained pressured by cautious consumer spending and financing challenges.
Is now the time to buy SKIN? Find out in our full research report (it’s free for active Edge members).
BeautyHealth (SKIN) Q3 CY2025 Highlights:
- Revenue: $70.66 million vs analyst estimates of $68.91 million (10.3% year-on-year decline, 2.5% beat)
- EPS (GAAP): -$0.09 vs analyst estimates of -$0.08 (in line)
- Adjusted EBITDA: $8.9 million vs analyst estimates of $2.58 million (12.6% margin, significant beat)
- The company lifted its revenue guidance for the full year to $296.5 million at the midpoint from $292.5 million, a 1.4% increase
- EBITDA guidance for the full year is $38 million at the midpoint, above analyst estimates of $30.5 million
- Operating Margin: -8.8%, up from -27.3% in the same quarter last year
- Market Capitalization: $169.6 million
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From BeautyHealth’s Q3 Earnings Call
- Oliver Chen (TD Cowen) asked about Americas trends and the cautious outlook. CEO Pedro Malha explained that while device sales declined, stabilization is emerging, and consumables remain a bright spot due to strong booster sales.
- John-Paul Wollam (ROTH Capital Partners) questioned the international direct versus distributor strategy. Malha clarified that the distributor model will continue, especially in China, with additional investment in training and education to support market penetration.
- Susan Anderson (Canaccord) inquired about initiatives to return device sales to growth. Malha pointed to improving lead pipelines and commercial execution, expecting better results as financing access improves and sales teams mature.
- Lillian Moffett (Raymond James) asked about trends in medical versus non-medical channels and end consumer behavior. Malha noted medical channels, especially med spas, are key growth drivers, while non-medical channels are stable. CFO Mike Monahan added that booster product innovation is driving higher attachment rates.
- Joseph Federico (Steifel) asked about the sustainability of recent margin improvements and guidance drivers. Monahan explained that margin gains reflect cost control and a favorable mix, but seasonal promotions in Q4 may temporarily pressure gross margins.
Catalysts in Upcoming Quarters
Moving forward, our analysts will closely watch (1) the pace of recovery in device placements across key geographies, (2) sustained growth in consumables utilization—especially booster products, and (3) further evidence of margin expansion driven by disciplined cost management and operational improvements. Additionally, developments in provider financing options and the resolution of elevated churn rates among smaller accounts will be important signposts for the business.
BeautyHealth currently trades at $1.34, up from $1.29 just before the earnings. At this price, is it a buy or sell? The answer lies in our full research report (it’s free for active Edge members).
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