AirSculpt Technologies, Inc. (NASDAQ:AIRS) Q3 2023 Earnings Call Transcript

Aaron Rollins: Thanks. It’s Aaron Rollins. First of all, I see almost every patient that gets AirSculpt as an AirSculpt Lift candidate because most of our patients get other cosmetic procedures. Very few of our patients are complete cosmetic procedure or aesthetic virgins. And to throw away their fat and get artificial fillers, when we know they’re probably not the best thing for you, seems ridiculous to me. So — I mean, I think the opportunity is great. It’s something that we have to roll out. It’s something we have to market. Right now, we’re doing a good job of training our doctors. We’re now training our sales, and we’re training our doctors to explain it to patients as well at a consult. From a pricing standpoint, we made it priced very attractively.

It’s about the same price as a regular filler. So it’s $1,500 per area. So on a volume basis, I’m sure you know fillers, you only get one CC kind of per monetary increment. So we don’t — we can give someone as much — as many CCs as they need for a particular area. So it’s a great value. And as I’m sure you know, it lasts longer, and we think it’s a far healthier option. So that’s the most I can tell you right now. We don’t have financial projections for it yet. It’s a little early for that. But we’re very excited about the opportunity, and I’m sure many of you have seen the articles, at least in the British papers, about fillers and lymphatic drainage. So it’s something we’re watching keenly.

Korinne Wolfmeyer: Very helpful. Thank you. And then if I could just touch on the SG&A and kind of the marketing spend that you’re doing. I mean, the CAC continues to come up, even though you say it’s eventually going to come down. And SG&A came a little bit higher, I believe, this quarter than we were expecting. So can you just talk about when we’re going to start seeing some better leverage in OpEx and when we’ll start seeing that CAC start to come down? Is that really going to be like a ’24 event, maybe push to ’25? Just really how early are we going to start seeing some more leverage there? Thank you.

Dennis Dean: Hey, Korinne. It’s Dennis. Yeah. Thanks for the question. One of the things that we did call out is we did some really kind of our first time into what we would call a little bit more major brand awareness activities with our Ginnie McCarthy, and as Todd also pointed out, Joey Fatone. And so those impacted our numbers in the quarter. They were a little bit more of a, what I would call, onetime type events. It doesn’t mean that we’re not necessarily going to do them in the future and do more of those potentially. But from the standpoint of historically comparison, that was kind of a onetime event. It cost us about 200 bps from that standpoint as far as margins are concerned. So that’s one aspect of it. We do believe that brand awareness is our #1 opportunity for driving significant, particularly same-store growth.

Obviously, de novo growth has been our major growth factor, but brand awareness is going to be significant for us, and we’ve been heavily, heavily focused on that. So that’s one aspect of it, which caused the CAC to go up a little bit during the quarter. That’s going to fluctuate. It’s going to fluctuate with seasonality. It’s going to fluctuate with volume. And it’s going to fluctuate with, quite frankly, opportunities we see as great investments to further the brand. And as far as G&A, Todd talked about last quarter and again in his remarks today, we’ve done a lot of work in sort of building out the executive team. And so that cost us about 90 basis points, comparatively speaking, there from the standpoint. And so those are primarily complete now.