Beauty Health Co. Reports $29.1 Million Net Loss and Decrease in Total Net Sales for Fiscal Year 2024

Beauty Health Co. (formerly Vesper Acquisition Corp.) reported a net loss of $29.1 million for the fiscal year ended December 31, 2024, compared to a net loss of $100.1 million in 2023. Total net sales decreased by $63.7 million (16.0%) to $334.3 million in 2024. This decline was primarily driven by a $81.2 million (39.3%) decrease in Delivery Systems sales, attributed to a challenging year-over-year comparison due to the prior year's international Syndeo launch and unfavorable macroeconomic conditions impacting customer confidence. Conversely, Consumables sales increased by $17.5 million (9.2%) to $208.9 million, reflecting increased Delivery System placements.

Cost of sales decreased by $90.9 million (37.4%) to $152.0 million in 2024, primarily due to the absence of Syndeo Program charges and inventory write-downs from 2023, partially offset by higher inventory charges and manufacturing optimization costs in 2024. This resulted in a significant increase in gross margin from 39.0% to 54.5%. Operating expenses also decreased, with selling and marketing expenses down 18.1% to $118.3 million, research and development expenses down 37.7% to $6.3 million, and general and administrative expenses down 4.5% to $125.5 million. The decrease in operating expenses was partially offset by a decrease in interest income and an increase in other expenses, net.

Significant developments during the year included the completion of the Syndeo Program, aimed at addressing performance issues with older Syndeo devices, and a planned transition to a distributor model in the China market during the second quarter of 2025. The company also launched the MyBeautyHealth mobile application in November 2023, designed to reward consumers and connect them with providers. As of December 31, 2024, Beauty Health Co. employed 769 people, with 219 based in its Long Beach, California headquarters. The company's growth strategy focuses on expanding its product footprint, investing in its provider network, nurturing direct consumer relationships, leveraging its technology platform, and pursuing strategic acquisitions.

The company identified a material weakness in its internal control over financial reporting related to inventory accounting, although this did not result in material misstatements to its financial statements. A remediation plan is underway and expected to be completed in fiscal year 2025. The company faces numerous risks, including intense competition, economic downturns, supply chain disruptions, regulatory changes, cybersecurity threats, and intellectual property protection challenges, as detailed in the 10-K filing's extensive risk factors section. The company's outlook is contingent upon successfully implementing its growth strategy and navigating these various risks.