SkinHealth Systems — Q2 2026 Earnings Summary

Financial Performance

• Total net sales for Q2 2026 were $72.1 million, a 7.8% decrease compared to $78.2 million in Q2 2025, driven by lower delivery systems and consumables sales.
• Delivery systems net sales were $18.3 million in Q2 2026, down from $22.4 million in Q2 2025.
• Consumables net sales were $53.9 million in Q2 2026, down from $55.8 million in Q2 2025.
• Gross margin was 68.4% in Q2 2026, up from 62.8% in Q2 2025; adjusted gross margin was 71.8%, up from 65.9%.
• Operating expenses were $45.8 million in Q2 2026, down from $51.8 million in Q2 2025; adjusted operating expenses were $34.8 million, down from $37.6 million.
• Net loss was $(2.7) million in Q2 2026, compared to net income of $19.7 million in Q2 2025, primarily due to an $18.1 million net gain on note exchange and repurchases in the prior year.
• Adjusted EBITDA was $17.0 million in Q2 2026, up from $13.9 million in Q2 2025, with an adjusted EBITDA margin of 23.6% versus 17.8%.
• For the six months ended June 30, 2026, total net sales were $137.0 million, down from $147.8 million in the prior year period.
• Net loss for the six months ended June 30, 2026, was $(9.3) million, compared to net income of $9.6 million in the prior year.
• Adjusted EBITDA for the six months ended June 30, 2026, was $25.5 million, up from $21.2 million in the prior year.
• Cash, cash equivalents, and restricted cash were $206.1 million as of June 30, 2026, down from $232.7 million as of December 31, 2025.
• Convertible senior notes, net, totaled $345.2 million ($103.1 million current portion and $242.1 million non-current) as of June 30, 2026.

Guidance and Future Outlook

• Revised Q3 2026 net sales guidance is $65–$70 million.
• Revised Q3 2026 adjusted EBITDA guidance is $5–$7 million.
• Revised full-year 2026 net sales guidance is $280–$290 million.
• Revised full-year 2026 adjusted EBITDA guidance is $39–$46 million.
• Guidance reflects continued sales pressure and cost discipline.
• Guidance presumes no further material deterioration in general market conditions, foreign currency exchange rates, tariffs, or trade restrictions.
• Guidance excludes any unannounced acquisitions, dispositions, or financings.

Business Segments and Product Lines

• The company focuses on strengthening the core Hydrafacial franchise, increasing productivity of the installed base, and expanding the portfolio with complementary technologies.
• Total delivery systems sold were 770 in Q2 2026, down from 957 in Q2 2025.
• Active install base was 36,516 as of June 30, 2026, up from 35,193 in the prior year period.
• Regional delivery systems sales in Q2 2026: Americas $12.0 million, APAC $2.1 million, EMEA $4.2 million.
• Regional consumables sales in Q2 2026: Americas $37.9 million, APAC $5.2 million, EMEA $10.7 million.
• The company transitioned sales in Australia, New Zealand, and China to a distributor partner model during the second quarter of 2026 and 2025, discontinuing direct sales in these markets.

Market and Competitive Landscape

• The company operates in a competitive and rapidly changing environment with longer equipment sales cycles.
• Management cites continued sales pressure as a key market condition.

Risks and Challenges

• Risks include potential negative reactions to the company's name change and operational shift, litigation involving the company, and changes in laws or regulations.
• Specific risks include unfavorable macroeconomic and credit conditions, timing of distributor orders, and transitions to distributor models.
• The company faces debt service obligations and the October 2026 maturity of its 1.25% Convertible Senior Notes.
• The company faces risks related to its continued listing on The Nasdaq Capital Market, including minimum bid price deficiency and a proposed reverse stock split.
• Risks include the proposed settlement of the securities class action and related cash obligations.
• Foreign currency fluctuations, tariffs, and trade restrictions are cited as potential adverse factors.

Management Commentary and Tone

• Pedro Malha, President and CEO, stated that Q2 results reflected continued sales pressure but noted adjusted EBITDA came in well above guidance due to improved gross margin and disciplined operating expense management.
• Management emphasized strategic priorities to strengthen the Hydrafacial franchise, increase installed base productivity, and expand the portfolio with complementary technologies.
• Management expressed confidence that these priorities, supported by the brand, global provider network, and recurring consumables business, position the company for sustainable and diversified long-term growth.

Other Key Points

• The company incurred $4.9 million in litigation-related costs in Q2 2026, which includes the proposed settlement in the Securities Class Action suit.
• Go-to-Market restructuring costs in Q2 2026 were $(0.2) million, reflecting costs associated with the transition to a distributor model in China and Australia/New Zealand.
• The company reported a $18.1 million net gain related to the exchange and repurchases of 2026 Notes in Q2 2025.
• The company will host a conference call on August 6, 2026, at 4:30 p.m. ET to review results.
• The company does not provide a reconciliation of fiscal 2026 adjusted EBITDA guidance to net (loss) income due to the inherent difficulty in forecasting certain non-cash and variable adjustments.