What happened
Shares of The Beauty Health Company (SKIN -0.62%) soared 28.8% on Wednesday after the skincare company delivered impressive fourth-quarter growth metrics.
So what
Beauty Health's net sales surged 105.6% year over year to $77.9 million, fueled by strong growth in the U.S. and international markets.
The company's razor-and-blades strategy is bearing fruit. Beauty Health sold more than 1,800 delivery systems -- which enable aestheticians to provide HydraFacial hydradermabrasion procedures -- in the fourth quarter and a total of 6,191 in 2021. Its delivery systems net sales, in turn, jumped 145% to $42.7 million.
Moreover, that growing installed base of systems is helping Beauty Health build valuable recurring revenue. Its consumables net sales climbed 72% to $35.2 million.
Image source: Getty Images.
Better still, Beauty Health is becoming more profitable as it scales its business. Its adjusted gross margin improved to 76.5%, up from 67.8% in the year-ago quarter. That contributed to a 136% increase in adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA), to $8.5 million.
"Importantly, we navigated through macro challenges and COVID, delivering strong results by executing against our key strategic initiatives," executive chairman Brent Saunders said in a press release. "Our performance is proof of the compelling opportunity we have to capture the convergence of medical aesthetics and skincare."
Now what
These solid results prompted management to issue an upbeat forecast for the year ahead, including:
- net sales of $320 million to $330 million, representing year-over-year growth of roughly 25%
- adjusted EBITDA of about $50 million, up 53%
Additionally, Stanleick said that Beauty Health will soon be able to dial back its expansion-related spending. "2022 will be our final year of elevated investments," Stanleick said. "In 2023, we plan to leverage our operating infrastructure to accelerate our profitability."
