SkinHealth Systems — Q3 2026 Earnings Summary

Financial Performance

• Total net sales for the three months ended September 30, 2026, were $69.2 million, a 2.1% decrease from $70.7 million in Q3 2025, driven by lower delivery systems net sales.
• Delivery systems net sales were $18.8 million in Q3 2026 compared to $20.8 million in Q3 2025; 798 units were sold in Q3 2026 versus 875 in Q3 2025.
• Consumables net sales were $50.4 million in Q3 2026, an increase from $49.8 million in Q3 2025.
• Gross margin was 68.2% in Q3 2026 compared to 64.6% in Q3 2025; adjusted gross margin was 71.8% compared to 68.0%.
• Operating expenses were $42.2 million in Q3 2026 compared to $51.9 million in Q3 2025; adjusted operating expenses were $36.3 million compared to $39.1 million.
• Net loss was $0.9 million in Q3 2026 compared to a net loss of $11.0 million in Q3 2025.
• Adjusted EBITDA was $13.4 million in Q3 2026 compared to $8.9 million in Q3 2025; adjusted EBITDA margin was 19.3% compared to 12.6%.
• For the nine months ended September 30, 2026, total net sales were $206.2 million compared to $218.4 million in the prior year period.
• For the nine months ended September 30, 2026, net loss was $10.2 million compared to $1.4 million in the prior year period.
• For the nine months ended September 30, 2026, adjusted EBITDA was $38.9 million compared to $30.1 million in the prior year period.
• Cash, cash equivalents, and restricted cash were approximately $112 million as of September 30, 2026, down from approximately $233 million as of December 31, 2025.
• The Company repaid $103.2 million in aggregate principal amount of 2026 Notes on September 30, 2026, retiring the debt.
• Total liabilities were $333.3 million as of September 30, 2026, compared to $438.7 million as of December 31, 2025.
• Stockholders' equity was $55.8 million as of September 30, 2026, compared to $61.1 million as of December 31, 2025.

Guidance and Future Outlook

• Updated fiscal year 2026 net sales guidance is $281 million to $287 million.
• Updated fiscal year 2026 adjusted EBITDA guidance is $48 million to $50 million.
• Guidance reflects continued pressure on sales and continued cost discipline.
• Guidance presumes no further material deterioration in current general market conditions or unforeseen circumstances such as foreign currency exchange rates, tariffs, and trade restrictions.
• Guidance excludes the potential effect of any unannounced acquisitions, dispositions, or financings.

Business Segments and Product Lines

• The Company introduced the HydraClear™ Treatment Booster, a clinically differentiated innovation designed to increase the value and productivity of the installed base.
• The Company launched SkinStylus™ across six European markets.
• Americas region net sales were $48.9 million in Q3 2026 compared to $48.3 million in Q3 2025.
• APAC region net sales were $6.1 million in Q3 2026 compared to $6.3 million in Q3 2025.
• EMEA region net sales were $14.2 million in Q3 2026 compared to $16.1 million in Q3 2025.
• The Company transitioned sales in the Australia and New Zealand market to a distributor partner in Q2 2026.
• The Company transitioned sales in the China market to a distributor partner in Q2 2025, discontinuing direct sales in these regions.
• Active install base was 37,342 as of September 30, 2026, compared to 35,409 in the prior year period.

Market and Competitive Landscape

• The Company operates in a competitive and rapidly changing environment with factors including pricing pressures, competitor pricing, discounting, and promotional activity.
• The Company faces risks related to unfavorable macroeconomic and credit conditions and longer equipment sales cycles.

Risks and Challenges

• The Company faces risks related to the November 15, 2028 maturity of its 7.95% Convertible Senior Secured Notes.
• The Company is subject to risks regarding the proposed settlement of the securities class action and related cash obligations.
• Risks include potential negative reactions to the Company's name change and focused shift in operations.
• Risks include the Company's continued listing on The Nasdaq Capital Market, including minimum bid price requirements and the reverse stock split.
• Risks include tariffs, trade restrictions, and foreign currency fluctuations.

Management Commentary and Tone

• Pedro Malha, President and CEO, stated that Q3 results reflect encouraging progress in strengthening the business, with improved revenue trends, returning consumables growth, and healthy adjusted EBITDA.
• Management expressed greater confidence that actions taken are moving the business in the right direction, though noted there is more work ahead.
• Management highlighted advancing strategic priorities including strengthening commercial execution in the core Hydrafacial franchise and expanding the portfolio.
• Management noted a strong global brand, substantial installed base, and a more efficient operating model, with a focus on translating these advantages into sustainable growth through disciplined execution.

Other Key Points

• On October 14, 2026, the Company effected a 1-for-20 reverse stock split of its Class A Common Stock.
• The Company had 6.5 million shares of Class A Common Stock outstanding as of September 30, 2026.
• The Company retired its 2026 debt as planned.
• The Company incurred litigation-related costs of $1.4 million in Q3 2026 and $8.4 million for the nine months ended September 30, 2026, including a proposed settlement in the Securities Class Action suit.
• Go-to-Market restructuring costs were $0.2 million in Q3 2026 and $0.3 million for the nine months ended September 30, 2026, associated with the transition to a distributor model in China and Australia/New Zealand.
• A conference call to review results was scheduled for November 5, 2026, at 4:30 p.m. ET.