Beauty Health Co
For the period ended Jun 30, 2025. Filed Aug 7, 2025.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2025 · Filed Aug 7, 2025
SKIN$15.71+51.8%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-03-31; filed 2025-05-08.
0001628280-25-023922
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-06-30; filed 2025-08-07.
0001628280-25-038993
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 64 previous paragraphs and 89 current paragraphs.
46 unchanged; 15 reworded; 21 added; 3 removed; 0 previous and 7 current paragraphs rearranged.
Tables are not compared: 8 previous and 15 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (21)
Current report
Research and development expense for the three months ended June 30, 2025 remained relatively flat compared to the three months ended June 30, 2024.
Current report
Comparison of Six Months Ended June 30, 2025 to Six Months Ended June 30, 2024
Current report
Net Sales
Current report
Cost of sales for thesix months ended June 30, 2025 decreased $32.6 million, compared to the six months ended June 30, 2024 primarily due to lower net sales and inventory related charges. Cost of sales for the six months ended June 30, 2024 include $19.3 million of inventory charges for discontinued, excess, obsolete inventory, including the write-down of Delivery System inventory to its net realizable value and the write-off of excess raw materials. Gross margin increased to 66.1% for thesix months ended June 30, 2025 from 51.9% for thesix months ended June 30, 2024 primarily due to lower inventory related charges and favorable mix shift towards consumable net sales, partially offset by lower average selling price of equipment net sales.
Current report
Operating Expenses
Current report
Selling and Marketing
Current report
Selling and marketing expense for the six months ended June 30, 2025 decreased $15.0 million, or 23.4%, compared to the six months ended June 30, 2024. The decrease is primarily driven by lower personnel-related expenses, including share-based compensation expense, and lower sales commission expense, marketing related spend and depreciation and amortization expense.
Current report
Research and Development
Current report
General and Administrative
Current report
General and administrative expense for thesix months ended June 30, 2025 remained relatively flat compared to thesix months ended June 30, 2024, with higher legal fees and severance being partially offset by lower personnel-related expenses, including share-based compensation expense, lower other general corporate spend and depreciation and amortization expense, and bad debt recoveries.
Current report
Interest income for thesix months ended June 30, 2025 decreased $3.4 million compared to thesix months ended June 30, 2024 primarily due to lower average invested balances during thesix months ended June 30, 2025.
Current report
Other income, net for the six months ended June 30, 2025 included $18.1 million net gain related to the exchange and repurchases of the 2026 Notes. Other income, net for the six months ended June 30, 2024 included $33.4 million net gain related to the repurchases of the 2026 Notes.
Current report
Convertible Senior Notes, Net
Current report
Convertible Senior Notes - 2026
Current report
During the three months ended March 31, 2024, the Company repurchased $75.0 million principal amount of its 2026 Notes at a weighted-average price equal to 77% for $57.8 million and recognized a net gain of $16.1 million, which includes $1.2 million of unamortized debt issuance costs. Additionally, during the three months ended June 30, 2024, the Company repurchased $117.3 million principal amount of its 2026 Notes at a weighted-average price equal to 84% for $98.3 million and recognized a net gain of $17.3 million, which includes $1.6 million of unamortized debt issuance costs. The total amount paid and net gain recognized to repurchase $192.3 million principal amount during the six months ended June 30, 2024 was $156.1 million and $33.4 million, respectively.
Current report
During the three and six months ended June 30, 2025, the Company repurchased an additional $20.0 million principal amount of its 2026 Notes at a weighted-average price equal to 92% for $18.4 million and recognized a net gain of $1.5 million, which includes $0.1 million of unamortized debt issuance costs.
Current report
Convertible Senior Secured Notes - 2028
Current report
On May 21, 2025, the Company entered into privately negotiated exchange agreements (the “Exchange Agreements”) with certain holders (the “Exchanging Holders”) of the 2026 Notes (the “Existing Notes”). Pursuant to the Exchange Agreements, the Company exchanged and repurchased approximately $413.2 million aggregate principal amount of the Existing Notes. Of the $413.2 million aggregate principal amount of the Existing Notes, $263.2 million principal amount were exchanged at a weighted-average price equal to 95% for $250.0 million principal amount of new 7.95% Convertible Senior Secured Notes due November 15, 2028 (the “2028 Notes”), and $150.1 million principal amount were repurchased at a weighted-average price equal to 95% for $142.6 million. The exchange and repurchase resulted in a net gain of $16.6 million, which includes $3.1 million of unamortized debt issuance costs and $0.9 million of other related fees. The Company incurred $10.8 million of debt issuance costs related to the exchange and repurchase of its Existing Notes which are being amortized over the term of the 2028 Notes using the effective interest method.
Current report
The 2028 Notes are the Company’s senior, secured obligations and are guaranteed by certain of the Company’s subsidiaries (including the Company’s material domestic, wholly-owned subsidiaries) and are secured on a first-priority basis by substantially all assets of the Company and such guarantors, subject to certain exceptions. The 2028 Indenture also contains a number of restrictive covenants and limitations, including restrictions on the Company’s ability to incur certain indebtedness and other limitations on liens, investments and restricted payments, as further described in the 2028 Indenture. For more information, see Part I, Item 1 “Financial Statements — Note 5 - “Long-term Debt” in this Quarterly Report on Form 10-Q.
Current report
The net gain recognized related to the exchange and repurchases is included in other income, net in the Condensed Consolidated Statements of Comprehensive Income (Loss).
Current report
Net cash used for financing activities for the six months ended June 30, 2025 was $173.6 million, as compared to $157.4 million for the six months ended June 30, 2024. The cash used for financing activities for the six months ended June 30, 2025 was primarily related to the exchange and repurchases of the Company’s 2026 Notes. The cash used for financing activities for the six months ended June 30, 2024 was primarily related to the repurchases of the Company’s 2026 Notes.
Removed paragraphs (3)
Previous report
Notes
Previous report
During the three months ended March 31, 2024, the Company repurchased $75.0 million principal amount of the Notes for $57.8 million. During the year ended December 31, 2024, the Company repurchased $192.3 million principal amount of the Notes for $156.1 million. During the three months ended March 31, 2025, there were no repurchases related to the Notes.
Previous report
Net cash used for financing activities for the three months ended March 31, 2025 was $0.3 million, as compared to $58.6 million for the three months ended March 31, 2024. The change in cash used for financing activities was primarily related to prior year’s repurchase of $75.0 million principal amount of the Company’s Notes at a weighted average price equal to 77% for $57.8 million.
Reworded paragraphs (15)
Previous wording
During thethree months ended March 31, 2025, we continued to execute against our plan to expand our footprint by selling and placing our patented hydradermabrasion delivery systems (“Delivery Systems”) worldwide, drive consumables, which consist of single-use tips, solutions, serums and other consumables used to provide a Hydrafacial treatment that cleanses, extracts, and hydrates the skin (collectively “Consumables”), invest in our community of providers, partners, and consumers, drive brand awareness, and optimize our global infrastructure. Although we believe we can be successful in our current operating environment, various factors may impact our business in unpredictable ways such as:
Current wording
During thethree and six months ended June 30, 2025, we continued to execute against our plan to expand our footprint by selling and placing our patented hydradermabrasion delivery systems (“Delivery Systems”) worldwide, drive consumables, which consist of single-use tips, solutions, serums and other consumables used to provide a Hydrafacial treatment that cleanses, extracts, and hydrates the skin (collectively “Consumables”), invest in our community of providers, partners, and consumers, drive brand awareness, and optimize our global infrastructure. Although we believe we can be successful in our current operating environment, various factors may impact our business in unpredictable ways such as:
Previous wording
The Company evaluated its global distribution strategy to align its go-to-market strategy with in-market partner capabilities and market opportunity. The Company expects to transition sales in the China market to a distributor partner during the second quarter of 2025, and as a result, the Company intends to discontinue its direct sales presence in China. During the three months ended March 31, 2025, the Company recognized approximately $3 million and $1 million, respectively, of severance and restructuring and other non-cash charges associated with these actions. The change in go-to-market strategy is expected to be accretive to the Company’s long-term profitability, as reductions in operating spend are partially offset by a reduction to revenue.
Current wording
The Company evaluated its global distribution strategy to align its go-to-market strategy with in-market partner capabilities and market opportunity. During the second quarter of 2025, the Company transitioned sales in the China market to a distributor partner, and as a result, the Company has discontinued direct sales to customers in China.
Previous wording
Total net sales for the three months ended March 31, 2025 decreased $11.8 million, or 14.5%, compared to the three months ended March 31, 2024. Delivery Systems net sales for the three months ended March 31, 2025 decreased $15.6 million, or 43.5%, compared to the three months ended March 31, 2024, with decreases across all regions. Delivery Systems net sales were negatively impacted globally by unfavorable macroeconomic and credit conditions.
Current wording
Total net sales for the three months ended June 30, 2025 decreased $12.4 million, or 13.7%, compared to the three months ended June 30, 2024. Delivery Systems net sales for the three months ended June 30, 2025 decreased $12.9 million, or 36.5%, compared to the three months ended June 30, 2024, with decreases across all regions. Delivery Systems net sales were negatively impacted globally by unfavorable macroeconomic and credit conditions.
Previous wording
Consumables net sales for the three months ended March 31, 2025 increased $3.7 million, or 8.2%, compared to the three months ended March 31, 2024. The increase in Consumables net sales was primarily attributable to increased placements of Delivery Systems and the adjoining consumption of Consumables during the three months ended March 31, 2025.
Current wording
Consumables net sales for the three months ended June 30, 2025 increased $0.4 million, or 0.8%, compared to the three months ended June 30, 2024. The slight increase in Consumables net sales was primarily attributable to increased placements of Delivery Systems and the adjoining consumption of Consumables during the three months ended June 30, 2025.
Previous wording
Cost of sales for the three months ended March 31, 2025 decreased $12.0 million, compared to the three months ended March 31, 2024 primarily due to lower net sales and inventory related charges. Gross margin increased to 69.8% for the three months ended March 31, 2025 from 59.4% for the three months ended March 31, 2024 primarily due to lower inventory related charges and favorable mix shift towards consumable net sales, partially offset by lower average selling price of equipment net sales.
Current wording
Cost of sales for the three months ended June 30, 2025 decreased $20.6 million, compared to the three months ended June 30, 2024 primarily due to lower net sales and inventory related charges. Cost of sales for the three months ended June 30, 2024 include $13.8 million of inventory charges for discontinued, excess, obsolete inventory, including the write-down of Delivery System inventory to its net realizable value and the write-off of excess raw materials. Gross margin increased to 62.8% for the three months ended June 30, 2025 from 45.2% for the three months ended June 30, 2024 primarily due to lower inventory related charges and favorable mix shift towards consumable net sales, partially offset by lower average selling price of equipment net sales.
Previous wording
Selling and marketing expense for the three months ended March 31, 2025 decreased $7.6 million, or 22.7%, compared to the three months ended March 31, 2024. The decrease is primarily driven by lower personnel-related expenses, including share-based compensation expense and lower sales commission expense and marketing spend.
Current wording
Selling and marketing expense for the three months ended June 30, 2025 decreased $7.4 million, or 24.2%, compared to the three months ended June 30, 2024. The decrease is primarily driven by lower personnel-related expenses, including share-based compensation expense and lower sales commission expense, marketing related spend, and depreciation and amortization expense.
Previous wording
General and administrative expense for the three months ended March 31, 2025 increased $4.7 million, or 16.3%, compared to the three months ended March 31, 2024. The increase is primarily driven by higher legal fees and severance and restructuring expense, partially offset by lower personnel-related expenses, including share-based compensation expense and bad debt recoveries.
Current wording
General and administrative expense for the three months ended June 30, 2025 decreased $4.0 million, or 12.6%, compared to the three months ended June 30, 2024. The decrease is primarily driven by lower personnel-related expenses, including share-based compensation expense, lower severance, depreciation and amortization expense, and other general corporate spend, and bad debt recoveries. The decrease was partially offset by higher legal fees.
Previous wording
Interest income for the three months ended March 31, 2025 decreased $2.3 million, compared to the three months ended March 31, 2024, primarily due to lower average invested balances during the three months ended March 31, 2025.
Current wording
Interest income for the three months ended June 30, 2025 decreased $1.0 million, compared to the three months ended June 30, 2024, primarily due to lower average invested balances during the three months ended June 30, 2025.
Previous wording
During the three months ended March 31, 2025, the Company recognized expense of $0.3 million related to the change in the fair value of the warrant liabilities as compared to income of $1.5 million for the three months ended March 31, 2024, driven primarily by the fluctuation of the price of the Company’s Class A common stock (the “Class A Common Stock”).
Current wording
During the three months ended June 30, 2025, the Company recognized expense of $0.2 million related to the change in the fair value of the warrant liabilities as compared to income of $4.0 million for the three months ended June 30, 2024, driven primarily by the fluctuation of the price of the Company’s Class A common stock (the “Class A Common Stock”).
Previous wording
Other income, net for the three months ended March 31, 2024 included $16.1 million net gain related to the repurchase of the 1.25% Convertible Senior Notes due October 1, 2026 (the “Notes”).
Current wording
Other income, net for the three months ended June 30, 2025 included $18.1 million net gain related to the exchange and repurchases of the 1.25% Convertible Senior Notes due October 1, 2026 (the “2026 Notes”). Other income, net for the three months ended June 30, 2024 included $17.3 million net gain related to the repurchases of the 2026 Notes.
Previous wording
Research and development expense for the three months ended March 31, 2025 decreased $1.8 million, or 64.4%, compared to the three months ended March 31, 2024. The decrease is primarily driven by lower personnel-related expenses, including share-based compensation expense.
Current wording
Research and development expense for the six months ended June 30, 2025 decreased $1.7 million, or 43.3%, compared to the six months ended June 30, 2024. The decrease is primarily driven by lower personnel-related expenses.
Previous wording
Our primary sources of capital have been (i) cash flow from operating activities, (ii) net proceeds received from the consummation of the Business Combination, (iii) net proceeds received from the Notes, and (iv) net proceeds received from the exercise of public and private placement warrants. As of March 31, 2025, we had cash, cash equivalents, and restricted cash of $373.0 million.
Current wording
Our primary sources of capital have been (i) cash flow from operating activities, (ii) net proceeds received from the consummation of the Business Combination, (iii) net proceeds received from the 2026 Notes, and (iv) net proceeds received from the exercise of public and private placement warrants. As of June 30, 2025, we had cash, cash equivalents, and restricted cash of $212.0 million.
Previous wording
On September 14, 2021, the Company issued an aggregate of $750.0 million in principal amount of its Notes. The Notes were issued pursuant to, and are governed by, an indenture dated as of September 14, 2021, between the Company and U.S. Bank National Association, as trustee (the “Indenture”). Pursuant to the purchase agreement between the Company and the initial purchasers of the Notes, the Company granted the initial purchasers an option to purchase, for settlement within a period of 13 days from, and including, the date the Notes were first issued, up to an additional $100.0 million principal amount of Notes. The Notes issued on September 14, 2021 include the $100.0 million principal amount of Notes issued pursuant to the full exercise by the initial purchasers of such option.
Current wording
On September 14, 2021, the Company issued an aggregate of $750.0 million in principal amount of its 2026 Notes. The 2026 Notes were issued pursuant to, and are governed by, an indenture dated as of September 14, 2021, between the Company and U.S. Bank National Association, as trustee. Pursuant to the purchase agreement between the Company and the initial purchasers of the 2026 Notes, the Company granted the initial purchasers an option to purchase, for settlement within a period of 13 days from, and including, the date the 2026 Notes were first issued, up to an additional $100.0 million principal amount of 2026 Notes. The 2026 Notes issued on September 14, 2021 include the $100.0 million principal amount of 2026 Notes issued pursuant to the full exercise by the initial purchasers of such option.
Previous wording
Net cash provided by operating activities for the three months ended March 31, 2025 was $3.0 million, as compared to net cash used for operating activities of $16.9 million for the three months ended March 31, 2024. The change in cash provided by operating activities was primarily related to lower working capital usage and changes in net loss and non-cash adjustments. The prior year net loss and non-cash adjustments include the gain on the repurchase of the Company’s Notes and the prior year changes in working capital includes the impact of the Syndeo Program.
Current wording
Net cash provided by operating activities for the six months ended June 30, 2025 was $12.6 million, as compared to net cash used for operating activities of $10.7 million for the six months ended June 30, 2024. The change in cash provided by operating activities was primarily related to lower working capital usage and changes in net income and non-cash adjustments. The current year net income and non-cash adjustments include $18.1 million of net gain related to the exchange and repurchases of the 2026 Notes. The prior year net loss and non-cash adjustments include $33.4 million of net gain related to the repurchases of the 2026 Notes and the prior year changes in working capital includes the impact of the costs associated with the Syndeo Program of $20.1 million.
Previous wording
Net cash used for investing activities for the three months ended March 31, 2025 was $1.1 million, as compared to $1.8 million for the three months ended March 31, 2024. The change in cash used for investing activities was due to lower capital expenditures during the three months ended March 31, 2025.
Current wording
Net cash used for investing activities for the six months ended June 30, 2025 was $2.7 million, as compared to $3.8 million for the six months ended June 30, 2024. The change in cash used for investing activities was due to lower capital expenditures during the six months ended June 30, 2025.
Rearranged current paragraphs (7)
Current report — wording carried from elsewhere
The following tables set forth our consolidated results of operations in dollars and as a percentage of net sales for the periods presented. The period-to-period comparisons of our historical results are not necessarily indicative of the results that may be expected in the future. The results of operations data for thesix months ended June 30, 2025 and June 30, 2024 have been derived from the condensed consolidated financial statements included elsewhere in this Form 10-Q. Amounts and percentages may not foot due to rounding.
Current report — wording carried from elsewhere
Total net sales for thesix months ended June 30, 2025 decreased $24.2 million, or 14.1%, compared to thesix months ended June 30, 2024. Delivery System net sales for thesix months ended June 30, 2025 decreased $28.4 million, or 40.0%, compared to thesix months ended June 30, 2024, with decreases across all regions. Delivery Systems net sales were negatively impacted globally by unfavorable macroeconomic and credit conditions.
Current report — wording carried from elsewhere
Consumables net sales for thesix months ended June 30, 2025 increased $4.2 million, or 4.1%, compared to thesix months ended June 30, 2024. The increase in Consumables net sales was primarily attributable toincreased placements of Delivery Systems and the adjoining consumption of Consumables during thesix months ended June 30, 2025.
Current report — wording carried from elsewhere
Cost of Sales, Gross Profit, and Gross Margin
Current report — wording carried from elsewhere
Interest Income, Change in Fair Value of Warrant Liabilities, and Other Income, Net
Current report — wording carried from elsewhere
During thesix months ended June 30, 2025, the Company recognized income of$0.1 million related to the change in the fair value of the warrant liabilities, as compared toincome of$2.6 million for thesix months ended June 30, 2024, driven primarily by the fluctuation of the price of the Class A Common Stock.
Current report — wording carried from elsewhere
On May 27, 2025, the Company issued the 2028 Notes to the Exchanging Holders. The 2028 Notes were issued pursuant to, and are governed by, an indenture (the “2028 Indenture”), dated as of May 27, 2025, between the Company, the guarantors party thereto, and U.S. Bank Trust Company, National Association, as trustee and collateral agent.