What changed in this filing

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Item 1. Business

2025-03-14 compared with 2024-02-27 · 77 added, 75 removed, 316 unchanged (32% of the section changed)

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Further, the Company introduced AirSculpt ® + and AirSculpt ® Smooth in fiscal year 2022.

AirSculpt ® + is a new procedure that permanently removes fat and tightens the skin with unparalleled precision and finesse.

Patients first target any area containing excess fat with AirSculpt ® , then have that same area treated with a new technology that instantly tightens skin and improves laxity.

AirSculpt ® + permanently removes fat and tightens the skin with unparalleled precision and finesse.

Patients first target any area containing excess fat with AirSculpt ® , then have that same area treated with a technology that instantly tightens skin and improves laxity.

This advanced, minimally invasive treatment combines helium gas and radiofrequency energy to create a plasma specially equipped to correct sagging skin and restore a youthful, natural appearance.

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We deliver our body contouring procedures through a growing, nationwide footprint of 32 centers across 20 U.S.

states, Canada, and the United Kingdom as of February 27, 2024.

states, Canada, and the United Kingdom as of March 14, 2025.

Our centers, located in metropolitan and suburban areas, offer a premium patient experience and luxurious, spa-like atmosphere.

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Under the stewardship of our founder and Executive Chairman of our board of directors, Dr.

Aaron Rollins, our Lead Independent Director, Adam Feinstein, and the other management team members, we have built a results-driven culture.

For the year ended December 31, 2023, we generated $195.9 million of revenue compared to $168.8 million for the year ended December 31, 2022, which represents approximately 16.1% growth.

Additionally, we have invested in our social media and marketing capabilities to drive our brand awareness and increase consumer acceptance for our procedures.

We believe we have significant opportunity to further grow our brand awareness, open new centers in the United States and internationally, and increase sales in our existing centers.

Our Growing Market Opportunity

Aaron Rollins, our Lead Independent Director, Adam Feinstein, and the other management team members, we have built a culture focused on achieving the best results for our patients.

For the year ended December 31, 2024, we generated $180.4 million of revenue compared to $195.9 million for the year ended December 31, 2023, which represents a decline of approximately 7.9%.

Given the recent decline in revenue, our focus will be stabilizing revenue growth through optimizing our marketing investment, improving our go-to-market and sales strategies, expanding consumer financing offerings and focusing on new

product innovation.

In January 2025, the Company hired a new Chief Executive Officer, Yogi Jashnani, with over 20 years of experience in the aesthetics, retail and finance industries and significant experience in driving revenue growth through strategic initiatives.

We believe that Mr.

Jashnani's industry knowledge, as well as his leadership experience, will provide value in driving initiatives forward to return to revenue growth.

We are focusing our marketing spend on techniques that have proven successful for us in the past using a returns-based approach and are also testing new areas such as online video, and other social marketing channels under the direction of our new Chief Digital Officer.

The Company has also hired a new Chief Sales Officer dedicated to strengthening our consultative sales model with enhanced training, improving our sales processes, and providing a greater focus on lead conversion.

We believe that there is an opportunity to introduce new services, particularly in the area of skin tightening, that would allow us to expand our customer reach and generate incremental revenues.

Finally, we have implemented a cost reduction program that is estimated to eliminate approximately $3 million in annual overhead costs and contracted expenses.

Our Market Opportunity

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Our market includes both surgical procedures, such as liposuction and abdominoplasty procedures, as well as non-surgical procedures, such as cryolipolysis, ultrasound, laser lipolysis and other non-surgical body fat reduction procedures.

The United States market for body fat reduction procedures was estimated to be $5.2 billion in 2021 by LifeSci Consulting, growing at approximately a 8.8% compound annual growth rate (“CAGR”) since 2017 and expected to grow at a 10% CAGR through 2026, according to Global Market Insights.

The global market for body fat reduction procedures was estimated to be in excess of $10 billion in 2021.

The recent regulatory approval, increased market acceptance, availability and customer awareness of weight-loss drugs has

negatively impacted demand in the market for body fat reduction procedures by causing some patients to reject surgical

options in favor of non-invasive and less expensive solutions.

It is difficult to predict the long-term outlook of the market

for weight-loss drugs, including their long-term efficacy and potential drawbacks.

As a result, we cannot be certain that the

market for body fat reduction procedures which we operate in will continue to grow and that it will not be reduced or

eliminated due to the growth of the market for weight-loss drugs.

Based on a study completed by an independent third-party consultant contracted by the Company in July 2023, the addressable market that the Company operates in, including liposuction, body sculpting, fat transfer fillers and skin tightening procedures, was estimated to be $11 billion in 2022 and expected to grow at a 9% compound annual growth rate through 2027.

The increased market acceptance, availability and customer awareness of weight-loss drugs has changed the market for body fat reduction procedures.

The increasing use of weight loss drugs may lead to increased demand for body contouring and skin tightening procedures.

It is difficult to predict the long-term outlook of the market for weight-loss drugs, including their long-term efficacy and potential drawbacks.

As a result, we cannot be certain of the impact these wight-loss drugs will have on the market for body fat reduction procedures.

Our Growth Drivers

The market for surgical aesthetic procedures is growing, fueled by favorable trends including:

The market for surgical aesthetic procedures is growing, fueled by trends including:

• Self-Image Awareness:

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worldwide prevalence of overweight and obesity in individuals continues to rise.

The combination of these growth drivers continue to propel the market.

• Increased use of GLP-1 Weight Loss Drugs:

increasing use of weight loss drugs may lead to increased demand for body contouring and skin tightening procedures.

Limitations to Existing Procedures

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The proprietary AirSculpt ® method empowers our surgeons to use their high level of skill and artistry to deliver dramatic results personalized to our patients.

Beneficial Treatment Results and Premium Patient Experience, Underpinned by Proprietary AirSculpt ® Technology

Beneficial Treatment Results and Premium Patient Experience, Underpinned by Proprietary AirSculpt ® Method

We believe that our AirSculpt ® procedures offer beneficial results and a premium patient experience.

Our AirSculpt ® procedures are differentiated by our patented technology, broad and innovative procedures, elite patient experience, and highly skilled surgeons.

• AirSculpt ® Technology:

• AirSculpt ® Method:

Our patented and precision-engineered method, AirSculpt ® , permanently removes fat and tightens skin while sculpting targeted areas of the body through minimally invasive body contouring procedures.

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As of December 31, 2024, our patent portfolio is comprised of two issued U.S.

utility patents and one pending U.S.

utility patent application, each of which we own directly.

utility patents, one pending U.S.

utility patent application, and one International (PCT) patent application, each of which we own directly.

The tools we use to perform our fat removal and fat transfer procedures are purchased from third parties, and we do not own the proprietary rights to such tools.

Instead of protecting specific, individual liposuction components (such as a particular handpiece design), our issued patents and our pending application relate to certain proprietary implementations of the process described in the section “Our Technique, Training and Equipment,” and the combination of multiple components to form proprietary systems that are specially configured for carrying out those proprietary processes.

Instead of protecting specific, individual liposuction components (such as a particular handpiece design), our issued patents and our pending applications relate to certain proprietary implementations of the process described in the section “Our Technique, Training and Equipment,” and the combination of multiple components to form proprietary systems that are specially configured for carrying out those proprietary processes.

We believe the systems and methodologies claimed in our issued patents provide impressive results with less patient trauma relative to other systems and methods, such as liposuction and abdominoplasty (tummy tuck), that require more invasive surgical procedures.

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From the initial consultation to the day of procedure, our patients are guided by knowledgeable patient care consultants.

Our centers are located near high end retail environments, such as Rodeo Drive in Beverly Hills and Fifth Avenue in New York.

Our centers are located near high end retail environments, such as Rodeo Drive in Beverly Hills and Fifth Avenue in

The centers are designed and furnished with furniture from a high-end retailer with the patient experience in mind, offering a comfortable and calming environment ahead of and after the procedure.

In 2020, we began to offer our patients the choice of virtual consults prior to their procedures.

We offer our patients the choice of virtual consults prior to their procedures.

• Elite Surgeons:

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We have a growing national footprint consisting of 32 centers across 20 U.S.

states, Canada, and the United Kingdom as of February 27, 2024.

states, Canada, and the United Kingdom as of March 14, 2025.

Our centers are located primarily in metropolitan cities near retail shops that our patients frequent and popular areas.

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Our centers generate highly attractive unit-level economics and require only a modest investment to open.

Given the consistently high level of demand for our services and the average price of our procedures, our centers typically achieve profitability within approximately three months, providing AirSculpt with a highly attractive and near-immediate return on invested capital.

Scaled Platform and Consistent Demand Drives Attractive Growth and Free Cash Flow

Our centers typically achieve profitability within approximately three months, providing AirSculpt with a highly attractive and near-immediate return on invested capital.

We believe our focus on returning to same-store revenue growth though optimizing marketing investments, enhancing sales strategies, expanding consumer financing options and adding new product lines will enhance the unit level economics over the levels we saw in 2024.

Scaled Platform and Consistent Demand Drives Capital Efficient Growth and Free Cash Flow

Our operating model is highly scalable and enables capital efficient growth.

We have generated double digit growth in each of the years since 2015.

For the year ended December 31, 2023, we generated approximately $196 million of revenue compared to approximately $169 million for the year ended December 31, 2022, which represents approximately 16.1% growth.

We have a capital efficient business that requires minimal maintenance capital expenditures and working capital to support our operations, enabling us to generate strong cash flows to fund future growth.

We have achieved consistent, self-funded growth since our founding in 2012 and have accelerated our performance in recent years.

For the year ended December 31, 2024, we generated approximately $180 million of revenue compared to approximately $196 million for the year ended December 31, 2023, which represents an approximately 7.9% decline.

We have a capital efficient business that requires minimal maintenance capital expenditures and working capital to support our operations.

Experienced Founder-Led Management Team to Support Growth

We are led by an experienced team united by our vision to redefine body contouring and a belief in our future growth potential.

We are led by an experienced team united by our vision to redefine body contouring and a belief in our long-term growth potential.

Our founder and Executive Chairman of our board of directors, Dr.

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Rollins is primarily focused on leading the Company’s overall vision and providing strategic guidance.

In addition, Todd Magazine became Chief Executive Officer at the end of January 2023.

Magazine brings to AirSculpt more than 30 years of experience in retail operations and brand-building.

For the past 10 years, he has been the CEO of Blink Fitness, a subsidiary of Equinox, where he led the company of over 1,500 employees from four locations to over 100 and increased membership 25x.

Previously, he was North American President of Pfizer's OTC business, held president's roles for Gatorade and Quaker Oats at PepsiCo, and led various marketing teams at Procter & Gamble.

We have built a strong and diverse team across our marketing and operations functions that is highly scalable and capable of supporting future growth.

We have a results-driven team culture.

We believe our combination of talent, experience, and culture gives us the ability to drive sustainable growth.

In addition, Yogi Jashnani became Chief Executive Officer in January 2025.

Jashnani served as the Chief Revenue Officer of Sky Zone, Inc.

from November 2023 to January 2025 (and as a consultant in the same role from April 2023 to November 2023), and as Chief Commercial Officer of Ideal Image Development Corp., from December 2019 to March 2023.

We have built a strong and experienced team across our marketing and operations functions that is highly scalable and capable of supporting future growth.

Our Growth Strategies

We intend to deliver sustainable growth in revenue and profitability by executing on the following strategies:

We intend to deliver long-term growth in revenue and profitability by executing on the following strategies:

• Continue to Grow Our Brand Awareness and Attract New Patients:

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• Continue to Drive Sales Growth of Our Centers:

We employ the following strategies to increase our procedures performed and drive higher revenue per procedure with the aim of continuing to accelerate our growth in existing centers:

◦ Continue to add new procedure rooms:

Our centers typically have two procedure rooms.

We have the opportunity to continue to both add procedure rooms and adapt our schedule from primarily open six days to seven days a week in order to meet the strong demand from our patients for our services.

Through referral and outreach, we plan to continue recruiting surgeons to operate on our growing number of patients and staff to conduct consultations and organize appointments.

We employ the following strategies to increase our procedures performed and drive higher revenue per procedure in existing centers:

◦ Increase speed and efficiency of patient onboarding to increase utilization and reduce patient waiting times:

We have and will continue to execute initiatives that increase the speed through which patients convert from initial consultation to procedure.

These initiatives include hiring additional sales support staff to respond to patient inquiries and utilizing virtual consultations that enable our patients to speak with surgeons and qualified patient care representatives in the convenience of their own home or office, making it easier and quicker to schedule a procedure and reduce overall waiting time.

These initiatives include responding more efficiently to patient inquiries and utilizing virtual consultations that enable our patients to speak with surgeons and qualified patient care representatives in the convenience of their own home or office, making it easier and quicker to schedule a procedure and reduce overall waiting time.

◦ Continue to introduce new, innovative procedures:

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We have an ability to increase prices on our procedures driven by the strong value proposition that our services offer to our patients.

◦ Optimizing Marketing Investment :

As part of our long-term growth strategy, we are focused on optimizing our marketing investment to enhance efficiency, improve return on investment, and drive sustainable revenue growth.

By leveraging data-driven insights, we aim to allocate marketing resources more effectively across channels, ensuring that each dollar spent contributes to measurable business outcomes.

◦ Expanding Financing Offerings :

We are focused on expanding consumer financing options to enhance affordability, increase customer accessibility, and drive sales growth.

By offering flexible payment solutions, we aim to attract a broader customer base, improve conversion rates, and strengthen customer loyalty.

We employ the following strategies to drive brand awareness:

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We have collected a catalog of over 250,000 “before and after” photos, showcasing our treatment outcomes.

Our AirSculpt ® TV program, featured on our AirSculpt Instagram page and website, provides a never-before seen transparency in our space, encouraging further growth.

Our AirSculpt ® TV program, featured on our AirSculpt Instagram page and website, provides a never-before seen transparency in our space.

We will continue to develop high quality digital content that highlights the transformative power of our minimally invasive procedures.

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We encourage our patients to share their “before and after” photos on social media.

While we are not likely to open new centers in the near term due to initiatives to improve liquidity, we do believe opening new centers in North America remains a part of our long-term growth strategy.

We employ the following strategies to expand our footprint:

• Expand Footprint by Opening New Centers in the United States:

We believe our track record of successfully opening new AirSculpt centers consistently generating strong unit-level economics validates our strategy across the United States and to domestically expand our footprint.

We believe our track record of successfully opening new AirSculpt centers consistently generating strong unit-level economics validates our strategy across the United States.

In order to ensure our new centers are profitable, we follow the same business plan for each new center.

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Management uses a disciplined approach to choose potential markets, opening centers at minimal cost located near premium retail shops that our patients frequent.

there is a significant domestic growth opportunity and will continue to opportunistically evaluate new center openings and target opening three to four centers each year.

• Expand Internationally:

We believe our brand has global appeal.

We draw clients from international markets that travel to our existing centers for body contouring procedures.

We believe there is significant opportunity to open new centers in densely populated, affluent international metropolitan regions.

We opened our first international facility in Toronto, Canada in December 2022, and our second in London, United Kingdom in June 2023.

We believe there is a significant North American growth opportunity of over 200 potential locations in the U.S.

and Canada and will continue to opportunistically evaluate new center openings.

Our Technique, Training and Equipment

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Center Format and Selection

Our centers are approximately 3,000 square feet each and are typically open six days per week, with select centers open seven days per week, from 9 am to 5 pm.

Our centers are approximately 3,000 to 5,000 square feet each and are typically open six days per week, with select centers open seven days per week, from 9 am to 5 pm.

Certain centers may operate outside of typical hours to accommodate client schedules.

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Our centers are typically staffed by three surgeons, who are independent contractors, nurses, office managers, sales consultants, sales assistants and front desk concierges/administrative assistants.

Our target markets include affluent metropolitan and suburban areas.

We conduct in-person site visits to proposed center locations.

Our target markets include affluent metropolitan and suburban areas and we conduct in-person site visits to proposed center locations.

While we are not likely to open new centers in the near term due to initiatives to improve liquidity, we do believe opening new North American centers remains a part of our long-term growth strategy.

We use a disciplined approach when opening de novo centers and conduct extensive diligence of potential markets through social research, economic analysis of each market and conduct in-person site visits to proposed center locations.

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Our customer acquisition costs were approximately $3,130 per customer in 2024.

As part of our long-term growth strategy, we are focused on optimizing our marketing investment to enhance efficiency, improve return on investment, and drive sustainable revenue growth.

By leveraging data-driven insights, we aim to allocate marketing resources more effectively across channels, ensuring that each dollar spent contributes to measurable business outcomes.

Our sales assistants respond to inquiries from prospective patients and schedule virtual or in-person consultations.

Starting in 2020, we began to offer our patients the choice of a pre-procedure virtual consult.

We offer our patients the choice of a pre-procedure virtual consult.

Rather than making an in-office appointment, our patients are able to speak with our surgeons and qualified patient care consultants in the convenience of their own home or office typically within 24-72 hours.

We encourage a strong relationship between our patients and surgeons, from initial consultation, through procedure, to after treatment.

Nearly all of our patient-facing consultants are

former patients and can speak to their personal AirSculpt experiences.

Nearly all of our patient-facing consultants are former patients and can speak to their personal AirSculpt experiences.

Based on these efforts, together with discussions with our surgeons, our patients elect to move forward and schedule a procedure date.

Many patients, satisfied with results and experience, return to AirSculpt to receive further AirSculpt ® treatments on additional body parts.

Our consultants provide patients pricing information the day of their consult and, if requested by the patient, assist patients with securing third-party financing from entities such as CareCredit, Cherry and Alphaeon, among others, enabling consumers to more quickly schedule their procedures.

Our consultants provide patients pricing information the day of their consult and, if requested by the patient, assist patients with securing third-party financing from entities such as CareCredit, PatientFi and Alphaeon, among others, enabling consumers to more quickly schedule their procedures.

We do not face any risk in default of payment under that financing arrangement, which is solely between the patient and third-party financing vendor.

In 2024, approximately 52% of our cases involved the patient securing third-party financing.

We are focused on expanding consumer financing options to enhance affordability, increase customer accessibility, and drive sales growth.

By offering flexible payment solutions, we aim to attract a broader customer base, improve conversion rates, and strengthen customer loyalty.

Our Intellectual Property

As of December 31, 2024, our patent portfolio is comprised of two issued U.S.

utility patents and one pending U.S.

utility patent application, each of which we own directly.

utility patents, one pending U.S.

utility patent application, and one International (PCT) patent application, each of which we own directly.

The tools we use to perform our fat removal and fat transfer procedures are purchased from third parties and we do not own the proprietary rights to such tools.

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We expect our issued patents to expire in 2033 or later.

AirSculpt ® , AirSculpt+®, AirSculpting™, AirSculpt Plus ™ , Elite Body Sculpture®, RevisionSculpt®, AirSculpt Lift ™ , No Needle, No Scalpel, No Stitches ® , If You Can Pinch It, We Can Take It ® , Power BBL ® , Tiny Tuck ® , 48 Hour Six Pack ® , AirSculpt is for Everybody ® , Cure for the Hip Dip ® , Hip Flip ® , CankCure ® , Stubborn Fat, It’s All We Do®, The 48 Hour Difference™, What a Difference A Day Makes™, and our logo are U.S.

AirSculpt ® , AirSculpt+®, AirSculpting ® , AirSculpt Plus ® , Elite Body Sculpture®, RevisionSculpt®, AirSculpt Lift ™ , No Needle, No Scalpel, No Stitches ® , If You Can Pinch It, We Can Take It ® , Power BBL ® , Tiny Tuck ® , 48 Hour Six Pack ® , Cure for the Hip Dip ® , Hip Flip ® , CankCure ® , Stubborn Fat, It’s All We Do®, The 48 Hour Difference™, and our logo are U.S.

registered trademarks or trademarks for which registration is pending in the United States.

We have also registered AirSculpt ® and certain other trademarks outside of the United States.

We seek to protect our intellectual property by filing patent applications in the United States related to our procedures that are important to our business.

We seek to protect our intellectual property by filing patent applications in the United States and internationally related to our procedures that are important to our business.

We rely on a combination of confidentiality, non-disclosure and assignment of invention agreements with our employees, surgeons, consultants, contractors and other partners and collaborators.

We further rely on copyright, trademark and trade secret laws to protect our brands, proprietary technologies, know-how, data, and copyrighted content (including our library of before and after photographs).

We believe that our brand recognition and minimally invasive procedures with results meeting or exceeding our customer expectations distinguish us in the rapidly growing market for body contouring.

We believe that our brand recognition and minimally invasive procedures with results meeting or exceeding our customer expectations distinguish us in the growing market for body contouring.

While we believe we are transforming and growing the body contouring market, our primary competition includes individual and small practice group providers of traditional liposuction, which we believe require a longer patient recovery time than AirSculpt ® and some national providers of other minimally-invasive techniques, which we believe are less effective than AirSculpt ® .

Additionally, university and hospital systems, medical spas and centers and beauty and rejuvenation centers include the body contouring services in their offerings.

Additionally, university and hospital systems, medical spas and centers and beauty and rejuvenation centers include body contouring services in their offerings.

While we primarily operate in the body

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Our business and the healthcare industry generally are highly regulated.

A number of states, including states in which we

operate, such as California, Massachusetts, and New York have passed recent legislation that are materially increasing the

scrutiny of investors investing in for-profit health care providers, which could ultimately impact our existing structure.

While we believe that we have structured our agreements and operations in material compliance with applicable healthcare laws and regulations, there can be no assurance that we will be able to successfully address changes in the current regulatory environment or changes in interpretation of existing laws and regulations.

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Some states also require the applicable Professional Association to hold its own clinic license or permit.

Through the affiliated Professional Associations, we voluntarily seek accreditation from The Joint Commission for all of our centers.

Through the affiliated Professional Associations, we voluntarily seek accreditation from The Joint Commission for all of our centers in the United States.

The Joint Commission is a not-for-profit with over 70 years of experience in health care accreditation.

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State Corporate Practice of Medicine and Fee-Splitting Laws

The laws in many of the states in which we operate or may in the future operate, prohibit entities owned by non-physicians from practicing medicine, exercising control over surgeons, employing surgeons or otherwise interfering with the

independent professional judgment of surgeons.

This prohibition on the corporate practice of medicine, is intended to prevent unlicensed persons from interfering with the practice of medicine by licensed surgeons or interfering in any way with the independent professional judgment of physicians as it pertains to patient treatment and related clinical matters.

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was incorporated in Delaware on June 30, 2021 and completed an IPO on October 28, 2021.

Our website address is www.airsculpt.com and our investor relations website is located at https://investors.elitebodysculpture.com .

Our website address is www.airsculpt.com and our investor relations website is located at https://investors.airsculpt.com .

The information posted on our website is not incorporated into this Annual Report.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business