SkinHealth Systems — Third Quarter 2026 Earnings Summary

Financial Performance:

• Total net sales for Q3 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 profit was $47.1 million in Q3 2026 (68.2% margin) compared to $45.6 million (64.6% margin) in Q3 2025.
• Adjusted gross profit was $49.7 million in Q3 2026 (71.8% margin) compared to $48.1 million (68.0% margin) in Q3 2025.
• Operating expenses were $42.2 million in Q3 2026, down from $51.9 million in Q3 2025.
• Adjusted operating expenses were $36.3 million in Q3 2026, down from $39.1 million in Q3 2025.
• Net loss was $0.9 million in Q3 2026, a significant improvement from a net loss of $11.0 million in Q3 2025.
• Adjusted EBITDA was $13.4 million in Q3 2026 (19.3% margin) compared to $8.9 million (12.6% margin) in Q3 2025.
• 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 $112.4 million as of September 30, 2026, down from $232.7 million as of December 31, 2025.
• The Company retired the 2026 Notes on September 30, 2026, repaying $103.2 million in aggregate principal.
• Convertible senior notes, net, were $243.0 million as of September 30, 2026, compared to $240.4 million as of December 31, 2025.
• Total liabilities were $333.3 million as of September 30, 2026, compared to $438.7 million as of December 31, 2025.
• Total stockholders' equity was $55.8 million as of September 30, 2026, compared to $61.1 million as of December 31, 2025.
• Net cash provided by operating activities for the nine months ended September 30, 2026, was $8.4 million, compared to $22.3 million in the prior year period.
• Net cash used for financing activities for the nine months ended September 30, 2026, was $124.6 million, compared to $174.4 million in the prior year period.

Guidance and Future Outlook:

• Updated 2026 full-year net sales guidance is $281 million to $287 million.
• Updated 2026 full-year 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 Americas region generated $48.9 million in net sales in Q3 2026, compared to $48.3 million in Q3 2025.
• The APAC region generated $6.1 million in net sales in Q3 2026, compared to $6.3 million in Q3 2025.
• The EMEA region generated $14.2 million in net sales in Q3 2026, compared to $16.1 million in Q3 2025.
• The Company launched the SkinStylus™ product across six European markets.
• The Company introduced the HydraClear™ Treatment Booster to increase the value and productivity of the installed base.
• During the second quarter of 2026, sales in Australia and New Zealand transitioned to a distributor partner, discontinuing direct sales.
• During the second quarter of 2025, sales in China transitioned to a distributor partner, discontinuing direct sales.

Market and Competitive Landscape:

• The active install base was 37,342 as of September 30, 2026, compared to 35,409 in the prior year period.
• The Company noted continued pressure on sales in the current market environment.
• The Company faces risks related to pricing pressures, including competitor pricing, discounting, and promotional activity.

Risks and Challenges:

• Risks include unfavorable macroeconomic and credit conditions and longer equipment sales cycles.
• The Company faces risks related to the November 15, 2028 maturity of its 7.95% Convertible Senior Secured Notes.
• The Company faces risks related to the proposed settlement of its securities class action and related cash obligations.
• Risks include the timing of distributor orders and distributor-model transitions.
• Risks include tariffs, trade restrictions, and foreign currency fluctuations.
• Risks include the Company's continued listing on The Nasdaq Capital Market, including minimum bid price requirements and the reverse stock split.

Management Commentary and Tone:

• Pedro Malha, President and CEO, stated that Q3 results reflect encouraging progress, with improved revenue trends, returning consumables growth, and healthy adjusted EBITDA.
• Management expressed greater confidence that their actions are moving the business in the right direction, though they acknowledged there is more work ahead.
• Management highlighted advancing strategic priorities, including strengthening commercial execution in the core Hydrafacial franchise.
• Management emphasized a focus on translating advantages (strong global brand, substantial installed base, efficient operating model) 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.
• As of September 30, 2026, there were 6.5 million shares of Class A Common Stock outstanding.
• The Company retired its 2026 debt as planned.
• The Company hosts a conference call on November 5, 2026, at 4:30 p.m. ET to review results.
• Litigation related costs included in adjusted operating expenses were $1.4 million for Q3 2026 and $8.4 million for the nine months ended September 30, 2026, which includes the proposed settlement in the Securities Class Action suit.
• Go-to-Market restructuring costs included in adjusted operating expenses were $0.2 million for 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.