SkinHealth Systems Inc.

Total net sales were $72.1 million, down 7.8% year over year. Delivery systems revenue was $18.3 million, down 18.4%, with 770 systems placed versus 957 a year ago. Consumables revenue was $53.9 million, down 3.5%. GAAP gross margin was 68.4% versus 62.8% last year, and adjusted gross margin was 71.8% versus 65.9%, up 590 basis points. Adjusted EBITDA was $17 million versus $13.9 million last year and above the $11 million to $13 million guidance range. The company raised full-year adjusted EBITDA guidance to $39 million to $46 million from $35 million to $45 million, while lowering revenue guidance to $280 million to $290 million from the prior range by reducing the top end. Third-quarter guidance is revenue of $65 million to $70 million and adjusted EBITDA of $5 million to $7 million.

Pedro Malha framed the quarter as mixed: disappointed with top-line performance but encouraged by stronger margins and operating discipline. He said the market for skin health remains healthy, but providers are being more selective with capital, so the company is focusing on execution, utilization, and expanding access through the new rental program. Strategically, he emphasized three priorities: strengthening HydraFacial, increasing value from the installed base, and expanding into adjacent categories through clinically differentiated products and devices.

Michael Monahan highlighted the main financial drivers: lower equipment sales, softer consumables from lower utilization, and strong profitability from gross margin expansion and lower operating expenses. He said GAAP operating expenses were $45.8 million versus $51.8 million a year ago, adjusted EBITDA improved to $17 million, and cash, cash equivalents, and restricted cash ended at about $26 million, up about $1.5 million from Q1. He also said the October 2026 convertible maturity is about $103 million and that the current plan is to retire it with cash on hand at the end of Q3; midpoint-year cash is expected to be roughly $100 million.

Analysts focused on weaker consumables, the October 2026 convertible maturity, rental-program cannibalization, competitive pressure, and gross margin/back-half EBITDA trends. Management said consumables weakness reflects broader consumer choice and lower utilization rather than a structural demand problem, and it is trying to offset that with boosters, HydraScalp, better provider education, and commercial execution. On the rental program, Pedro said it is meant to remove financing barriers and expand the installed base, not cannibalize sales, while Mike said the program has been modeled to end the year with about $100 million in cash. Management also said competition remains intense, with some rivals using pricing and incentives more aggressively.