AirSculpt Technologies, Inc. (AIRS) Bundle
Understanding AirSculpt Technologies, Inc. (AIRS) Revenue Streams
Understanding AirSculpt Technologies, Inc.’s Revenue Streams
For the nine months ended September 30, 2024, the total revenue was $141,172,000, a decrease of 4.8% from $148,309,000 for the same period in 2023.
The revenue breakdown for the three months ended September 30, 2024 was $42,548,000, compared to $46,793,000 in 2023, reflecting a decline of 9.1%.
Year-over-Year Revenue Growth Rate
The year-over-year revenue growth rate for the nine months ended September 30, 2024 was -4.8%, while for the three months ended September 30, 2024, the growth rate was -9.1%.
Contribution of Different Business Segments to Overall Revenue
Revenue from international locations for the nine months ended September 30, 2024 was $4,700,000, an increase from $3,900,000 in 2023. For the three months ended September 30, 2024, international revenue was $1,500,000, compared to $1,400,000 in 2023.
Analysis of Significant Changes in Revenue Streams
The decline in revenue is primarily attributed to weaker than expected performance across the broader aesthetics and high-end retail industries. The number of cases performed decreased from 11,252 in the nine months ended September 30, 2023 to 10,972 in 2024, representing a 2.5% decline.
| Period | Revenue ($) | Year-over-Year Change (%) | International Revenue ($) |
|---|---|---|---|
| Three Months Ended Sept 30, 2024 | 42,548,000 | -9.1% | 1,500,000 |
| Three Months Ended Sept 30, 2023 | 46,793,000 | N/A | 1,400,000 |
| Nine Months Ended Sept 30, 2024 | 141,172,000 | -4.8% | 4,700,000 |
| Nine Months Ended Sept 30, 2023 | 148,309,000 | N/A | 3,900,000 |
The revenue per case for the nine months ended September 30, 2024 was $12,867, down from $13,181 in the previous year, indicating a 2.4% decrease. For the three months ended September 30, 2024, revenue per case was $12,984, compared to $13,658 in 2023, reflecting a 4.9% decline.
Overall, the financial performance indicates challenges in maintaining revenue growth amidst broader market difficulties, with significant fluctuations in both total revenue and revenue per case.
A Deep Dive into AirSculpt Technologies, Inc. (AIRS) Profitability
A Deep Dive into AirSculpt Technologies, Inc.'s Profitability
Gross Profit Margin: For the nine months ended September 30, 2024, the gross profit margin was 61.3%, down from 62.1% in the same period of 2023.
Operating Profit Margin: The operating profit margin for the nine months ended September 30, 2024, stood at 1.6%, compared to 5.4% for the same period in 2023.
Net Profit Margin: The net profit margin for the nine months ended September 30, 2024, was (2.3)%, a significant decline from 0.1% in the same period of 2023.
Trends in Profitability Over Time
Over the past year, profitability has shown a downward trend. The revenue decreased by $7.1 million, or 4.8%, from $148.3 million for the nine months ended September 30, 2023, to $141.2 million for the same period in 2024.
Comparison of Profitability Ratios with Industry Averages
The operating profit margin of 1.6% for the nine months ended September 30, 2024, is below the industry average of approximately 10%. The net profit margin of (2.3)% contrasts sharply with the industry average, which typically hovers around 5%.
Analysis of Operational Efficiency
Cost management has been a challenge, with total operating expenses reaching $138.9 million for the nine months ended September 30, 2024, compared to $140.2 million for the same period in 2023. The breakdown is as follows:
| Expense Type | 2024 ($000s) | 2023 ($000s) | Percentage of Revenue (2024) | Percentage of Revenue (2023) |
|---|---|---|---|---|
| Cost of Service | 54,635 | 56,144 | 38.7% | 37.9% |
| Selling, General and Administrative | 75,525 | 76,805 | 53.5% | 51.8% |
| Depreciation and Amortization | 8,693 | 7,479 | 6.2% | 5.0% |
| Total Operating Expenses | 138,857 | 140,230 | 98.4% | 94.6% |
The increase in selling, general, and administrative expenses to 53.5% of revenue indicates a need for improved cost efficiency. Additionally, depreciation and amortization expenses rose to 6.2% of revenue, reflecting the impact of new facility openings.
Debt vs. Equity: How AirSculpt Technologies, Inc. (AIRS) Finances Its Growth
Debt vs. Equity: How AirSculpt Technologies, Inc. Finances Its Growth
As of September 30, 2024, the total indebtedness of the company was $70.1 million, which includes unamortized deferred financing costs of $1.1 million. As of December 31, 2023, the total indebtedness was $71.6 million.
The debt-to-equity ratio stands at approximately 0.85, calculated by dividing total debt of $70.1 million by total stockholders' equity of $82.5 million as of September 30, 2024.
Recent debt activity includes the voluntary prepayment of $10 million of the principal balance of the term loans under the Credit Agreement on September 29, 2023. This was part of a credit agreement with a principal amount of $85 million for term loans maturing on November 7, 2027.
The company’s interest rates under the Credit Agreement vary based on its total leverage ratio. As of September 30, 2024, the applicable interest rate was 7.85%.
In terms of equity financing, the company has issued common stock, with a total of 57,809,121 shares outstanding as of September 30, 2024. The additional paid-in capital totaled $105.4 million.
The company maintains a balance between debt financing and equity funding primarily through its operational cash flows, which are used for capital expenditures and to meet liquidity requirements. As of September 30, 2024, the company had $6 million in cash and cash equivalents and an available amount of $5 million under its revolving credit facility.
| Metric | Amount |
|---|---|
| Total Debt | $70.1 million |
| Debt-to-Equity Ratio | 0.85 |
| Total Stockholders' Equity | $82.5 million |
| Interest Rate (as of September 30, 2024) | 7.85% |
| Number of Outstanding Shares | 57,809,121 |
| Additional Paid-In Capital | $105.4 million |
| Cash and Cash Equivalents | $6 million |
| Available Revolving Credit Facility | $5 million |
Assessing AirSculpt Technologies, Inc. (AIRS) Liquidity
Assessing AirSculpt Technologies, Inc. (AIRS) Liquidity
Current Ratio: As of September 30, 2024, the current ratio is not provided directly in the data; however, the working capital is reported as $(12.5) million, indicating a liquidity challenge.
Quick Ratio: The quick ratio is not explicitly stated, but given the working capital position, it is likely to reflect a similar liquidity concern.
Analysis of Working Capital Trends
Working capital as of September 30, 2024, stands at $(12.5) million, a decline from $(4.4) million at December 31, 2023 . This trend indicates increasing liquidity pressure.
Cash Flow Statements Overview
The following table summarizes the cash flows for the nine months ended September 30, 2024 and 2023:
| Cash Flows | 2024 ($000s) | 2023 ($000s) |
|---|---|---|
| Operating Activities | $8,637 | $19,090 |
| Investing Activities | $(10,479) | $(8,092) |
| Financing Activities | $(2,448) | $(11,954) |
| Net Decrease in Cash | $(4,290) | $(956) |
The operating cash flow for the nine months ended September 30, 2024, decreased by $10.5 million compared to the same period in 2023, primarily due to weaker revenue performance and increased marketing investments .
Potential Liquidity Concerns or Strengths
As of September 30, 2024, the company has $6.0 million in cash and cash equivalents, with an additional $5.0 million available under the revolving credit facility . The company does not have any letters of credit outstanding, which indicates a degree of liquidity flexibility.
Long-term debt as of September 30, 2024, is recorded at $70.1 million, down from $71.6 million at December 31, 2023 . The interest rate on outstanding loans is approximately 7.85% . This level of indebtedness, combined with the negative working capital, highlights potential liquidity concerns moving forward.
Is AirSculpt Technologies, Inc. (AIRS) Overvalued or Undervalued?
Valuation Analysis
To assess whether the company is overvalued or undervalued, we will examine key valuation metrics including the price-to-earnings (P/E) ratio, price-to-book (P/B) ratio, and enterprise value-to-EBITDA (EV/EBITDA) ratio.
Price-to-Earnings (P/E) Ratio
The current stock price is approximately $5.50. The diluted earnings per share (EPS) for the last twelve months is ($0.10). Therefore, the P/E ratio is not applicable due to the negative earnings.
Price-to-Book (P/B) Ratio
The book value per share is calculated from the total stockholders' equity of $82.537 million and total shares outstanding of 57.809 million, giving a book value per share of approximately $1.43. Thus, the P/B ratio is 3.85 (calculated as $5.50 / $1.43).
Enterprise Value-to-EBITDA (EV/EBITDA) Ratio
The enterprise value (EV) is calculated as the market capitalization plus total debt minus cash. The total debt is $70.142 million and cash is $6 million. Therefore, the market capitalization is approximately $317.815 million (calculated as $5.50 57.809 million). The EV is approximately $381.957 million (calculated as $317.815 million + $70.142 million - $6 million).
For the last twelve months, EBITDA is approximately $18.871 million. Hence, the EV/EBITDA ratio is approximately 20.21 (calculated as $381.957 million / $18.871 million).
Stock Price Trends
Over the past 12 months, the stock price has fluctuated between a low of $4.20 and a high of $8.00. The average stock price over this period has been approximately $6.10.
Dividend Yield and Payout Ratios
The company has paid dividends of approximately $14,000 for the nine months ended September 30, 2024, resulting in a dividend yield of approximately 0.25% (calculated as $14,000 / ($5.50 57.809 million)).
Analyst Consensus on Stock Valuation
As of the latest reports, the analyst consensus indicates a hold rating, with a target price of approximately $6.00.
| Metric | Value |
|---|---|
| Current Stock Price | $5.50 |
| P/E Ratio | N/A (Negative EPS) |
| P/B Ratio | 3.85 |
| EV/EBITDA Ratio | 20.21 |
| 12-Month Stock Price Range | $4.20 - $8.00 |
| Average Stock Price | $6.10 |
| Dividend Yield | 0.25% |
| Analyst Consensus | Hold |
Key Risks Facing AirSculpt Technologies, Inc. (AIRS)
Key Risks Facing AirSculpt Technologies, Inc.
AirSculpt Technologies, Inc. faces several internal and external risks that could significantly impact its financial health.
Industry Competition
The company operates in a highly competitive environment within the aesthetics and body contouring industry. As of September 30, 2024, revenue decreased by $7.1 million, or 4.8%, compared to the same period in 2023, primarily due to weaker-than-expected performance across the broader aesthetics and high-end retail industries.
Regulatory Changes
Changes in healthcare regulations could impact operational capabilities. The company must comply with various medical and safety standards, which may evolve, leading to increased compliance costs. As of September 30, 2024, the effective tax rate was (38.5)%, compared to 96.4% for the same period in 2023, influenced by non-deductible executive compensation.
Market Conditions
Fluctuations in market conditions can affect consumer demand for elective procedures. The company has seen a decline in cases performed, dropping to 3,277 for the three months ended September 30, 2024, from 3,426 in the same period in 2023.
Operational Risks
Operational risks include the management of new facility openings and the associated costs. The company opened four new centers, which increased procedure rooms by eight, but also led to higher operational expenses. For the nine months ended September 30, 2024, total operating expenses were $138.9 million, compared to $140.2 million in 2023.
Financial Risks
Financial risks include leveraging debt to fund operations. As of September 30, 2024, the carrying value of total indebtedness was $70.1 million, with an interest rate of 7.85%. The company's net loss for the nine months ended September 30, 2024, was $3.2 million, compared to a net income of $95,000 in the same period in 2023.
Mitigation Strategies
The company has plans to mitigate these risks through strategic marketing investments and operational efficiencies. However, selling, general, and administrative expenses increased to $75.5 million, or 53.5% of revenue, for the nine months ended September 30, 2024.
| Risk Type | Description | Recent Impact |
|---|---|---|
| Industry Competition | High competition in body contouring | Revenue decreased by $7.1 million (4.8%) |
| Regulatory Changes | Compliance with evolving healthcare regulations | Effective tax rate at (38.5)% |
| Market Conditions | Fluctuating demand for elective procedures | Cases performed dropped to 3,277 |
| Operational Risks | Management of new facility openings | Total operating expenses at $138.9 million |
| Financial Risks | Leverage from debt financing | Net loss of $3.2 million |
Future Growth Prospects for AirSculpt Technologies, Inc. (AIRS)
Future Growth Prospects for AirSculpt Technologies, Inc.
Key Growth Drivers:
- Product Innovations: The company continues to refine its proprietary AirSculpt® method, which enhances patient outcomes and satisfaction.
- Market Expansions: As of November 2024, the company operates 31 centers across 20 states, Canada, and the UK, with plans for further expansion.
- Acquisitions: Strategic acquisitions may be pursued to enhance operational capabilities and market reach.
Future Revenue Growth Projections:
For the nine months ended September 30, 2024, the company reported revenue of $141.2 million, a decrease of 4.8% from $148.3 million in the same period of 2023. Future projections estimate a gradual revenue recovery as new centers ramp up operations.
Earnings Estimates:
Net loss for the nine months ended September 30, 2024, was $3.2 million, compared to a net income of $95,000 for the same period in 2023. Analysts predict a return to profitability as operational efficiencies improve.
Strategic Initiatives or Partnerships
The company has entered partnerships with several financing companies to facilitate patient payment options, enhancing accessibility to its services and potentially increasing procedure volumes.
Competitive Advantages
AirSculpt Technologies benefits from:
- A unique and proprietary body contouring procedure that differentiates it from competitors.
- A strong brand reputation bolstered by positive patient outcomes and testimonials.
- Established operational infrastructure with 31 centers, providing a scalable model for future growth.
Financial Performance Overview
As of September 30, 2024, the company reported:
| Metric | 2024 Amount | 2023 Amount |
|---|---|---|
| Revenue | $141.2 million | $148.3 million |
| Net Loss | $3.2 million | $95,000 |
| Operating Expenses | $138.9 million | $140.2 million |
| Adjusted EBITDA Margin | 13.4% | 22.3% |
The company's operational metrics for the nine months ended September 30, 2024, show a decrease in cases performed to 10,972, down from 11,252 in 2023. Revenue per case also declined to $12,867 from $13,181.
Investment in Marketing and Infrastructure
Marketing expenditures increased significantly, with total selling expenses reaching approximately $34.0 million for the nine months ended September 30, 2024, up from $27.4 million in 2023. This investment aims to support the growth of new centers and enhance brand visibility.
The company also reported a 7.85% interest rate on its credit agreement as of September 30, 2024, reflecting ongoing efforts to manage debt while pursuing growth opportunities.
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Updated on 16 Nov 2024
Resources:
- AirSculpt Technologies, Inc. (AIRS) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of AirSculpt Technologies, Inc. (AIRS)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View AirSculpt Technologies, Inc. (AIRS)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.