Good morning and welcome to The Beauty Health Company's 2022 earnings call. All participants will be in listen only mode. If you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there'll be an opportunity to ask questions. Please note that this event is being recorded. I'd like to turn the call over to Mr. Eduardo Rodriguez, Senior Director of M&A and Investor Relations. Please go ahead, sir. Thank you, operator, and good morning, everyone. Thank you for joining The Beauty Health Company's conference call to discuss the company's second quarter 2022 financial results, which were released this morning and can be found on our website at beautyhealth.com. Also available on our website is an investor presentation that will be referenced during this call. With me on the call today are The Beauty Health Company President and Chief Executive Officer, Andrew Stanleick, and Chief Financial Officer, Liyuan Woo. Before we get started, I would like to remind you of the company's safe harbor language. Management may make forward-looking statements including guidance and underlying assumptions. Forward-looking statements are based on expectations that involve risks and uncertainties that could cause actual results to differ materially. For a further discussion of risks related to our business, see our filings with the SEC. This call will contain non-GAAP financial measures such as adjusted gross margin and adjusted EBITDA. Reconciliation of these non-GAAP measures to the most comparable GAAP measures are included in the earnings release furnished to the SEC and available on our website. I will now turn the call over to Andrew Stanleick, President and Chief Executive Officer of The Beauty Health Company. Thank you, Eduardo. Good morning, everyone, and thank you for joining our second quarter earnings call. I'm excited to walk you through our spectacular second quarter performance, as well as the strong progress we have made on our strategic master plan. Before we begin, I want to welcome Marla Beck, who joined our board of directors in June. As the founder of Bluemercury, Marla brings invaluable beauty industry, D2C, and retail experience to our board, and her positive impact is already felt. I also wish to extend a special thank you to the Beauty Health teams around the world. Since becoming the CEO six months ago, I have had the privilege of working with and meeting hundreds of you on my travels. I am constantly inspired by your passion, creativity, and commitment, and our excellent results are a testament to your amazing work. With that, I am pleased to announce that we achieved a record-breaking quarter, reaching sales above $100 million in a single quarter for the first time ever. You will see in our results that The Beauty Health Company is firing on all cylinders with outstanding momentum across the business and a growing enthusiasm from our community for our efficacious, patent-protected HydraFacial technology, which is fueling our growth. All of these extraordinary achievements come while we are still in the very early stages of disrupting this dynamic beauty health category. With our compelling competitive advantages, we believe we are just getting started on our growth journey. Turning to slide 5, we posted record high net sales of $103.5 million, representing nearly 56% growth year-over-year. We also delivered a strong adjusted EBITDA of $12.6 million, up nearly 11% year-over-year. It is our sixth consecutive quarter exceeding top line expectations. Our sales growth is both impressive and accelerating, driven by record HydraFacial system sales. We accelerated momentum in Q2 with total HydraFacial delivery system sales growth of 85.4% year-over-year, setting another record of 2,738 total delivery systems sold. As part of this, the Syndeo rollout in the U.S. has been a tremendous success, with 2,265 Syndeos placed since launch in March. We are also seeing that consumer interest in HydraFacial has never been higher, and I will come on to the growing momentum we are seeing here shortly. We are breaking records across our business, and the outlook has never been better. Based upon our performance and ongoing momentum, I am pleased to raise our 2022 net sales guidance to a range of $340 million-$350 million, and I reaffirm our $50 million adjusted EBITDA outlook, a growth of 53% versus 2021. The enthusiasm we see from our highly engaged community of providers validates raising our net sales guidance, and our approach of investing to capture and fuel consumer demand is paying dividends. The expected operating leverage generated from our investment should drive profitable growth for the years to come as we work towards better profitability by the end of 2022 and continue the momentum towards historical levels in 2023. I look forward to providing more detail on our long-term growth ambitions at our Investor Day on the fifteenth of September. I will now turn to slide 6 to discuss the drivers of our performance in the quarter. In the Americas, we achieved growth of 76.6%, fueled by the launch of Syndeo. Having visited with hundreds of providers and consumers across the U.S., there is an incredible enthusiasm for our new Syndeo delivery system, and we see it in our results. Our performance in EMEA is similarly exceptional. We registered growth of 56%. This was achieved by strong system sales and increased marketing activity across the region. We have been actively investing in the brand and participating in high visibility trade shows and events. The energy we are creating behind the brand is palpable. In line with our omni-channel approach to reach consumers where they live, work, and play, we are also rapidly expanding into new channels, including retail. We have just announced a permanent HydraFacial presence at the iconic Galeries Lafayette flagship on Boulevard Haussmann in Paris, in partnership with Innerskin, who will be the exclusive aesthetic clinic provider in their state-of-the-art wellness gallery set to open in September. It is expected to be the largest space devoted to wellness in Europe. This complements the existing partnerships we have in other markets with Sephora, Ulta, Nordstrom, and John Lewis. Turning to APAC, the region is dynamic and unsurprisingly, persistent COVID lockdowns in China impacted our results. APAC net sales declined 16.5%, partially offset by continued strength outside of China, especially in Australia. Liyuan Woo and I recently had the privilege to visit our teams and providers across the APAC region, and the trip reinforced our belief in the large and untapped reservoir of growth that exists in APAC over the long term. Looking ahead, the success we are seeing across the business and our growing momentum reinforce our confidence in the future. HydraFacial is an unrivaled breakthrough technology. It creates efficacious results, and it delivers a confidence-boosting experience that consumers love. We are at the nexus of a thriving market for beauty and health. Pair this with a resilient upper middle class consumer with a high affinity for beauty, and we have a powerful flywheel that gives us the conviction to continue reinvesting in growth for the future. Turning to slide seven, we continue to make strong progress against our five-point master plan, and I will share an update on each point. First, we remain focused on placing new systems. The first phase of our Syndeo rollout in the U.S. was an astounding success. Syndeo is a giant leap forward in skin health technology. Our customers are raving about the connected system and user experience. On slide 8, you can see some of the feedback we have received. This is the first of its kind phygital experience in beauty health, and the buzz in the U.S. is creating growing excitement abroad. On slide 9, you will find our execution plan. The positive feedback we have with U.S. customers underscores the remarkable opportunity we see globally with Syndeo. Internationally, we plan to launch Syndeo in early 2023. In the meantime, we continue our remarkable expansion across existing and new channels in these important regions via our Elite system. Second, we continue to invest in our providers. We are proud to be one of the world's top trainers of aestheticians. We view the unique relationship that we have created with this community via continuous education as a competitive advantage. This highly engaged community of providers and aestheticians, the HydraFacial nation, are our most powerful advocates. They inspire and educate consumers around the world every day about the benefits of HydraFacial. Unleashing human magic by continued investment in education of our provider and esthetician community is a key pillar to driving increased utilization and brand awareness. Providers who go through our training become our most loyal, engaged, and enthusiastic brand evangelists. They typically record double-digit growth in consumable purchases, and their second system sales happen 50% faster. One example of our investment in providers is Estipalooza, an event we created to educate and celebrate our wonderful HydraFacial community. You can get a flavor for Estipalooza here on slide 10, and the enormous amount of content our highly engaged community creates for us on social channels. On slide 11, you will see examples of other investments we have made in our providers. We featured HydraFacial at high-profile trade shows in every region and have taken HydraFacial on the road with our GLOWvolution tour, which we extended to Europe this year. Third, we continue to invest in initiatives to drive brand awareness. The biggest growth opportunity for HydraFacial is to increase our brand awareness. We have a best-in-class product that is loved by those who have tried it, and we made significant strides this quarter to expand our funnel via investments in digital media, partnerships with influencers, and key opinion leaders such as Dr. Paul Nassif and the expanded GLOWvolution tour. As you see on slide 12, more consumers are seeking information about HydraFacial. With Google search activity reaching an all-time high in Q2, up 30% year-over-year. We also generated record levels of earned media value this quarter. As we look ahead to Q4, we will launch an incredible HydraFacial booster partnership with JLo Beauty by Jennifer Lopez. We are excited about the positive impact this will have on brand awareness, given the strength of J.Lo's global community of loyal fans. We are also driving brand awareness by expanding touch points with consumers. As you know, late last year, we beta tested an at-home device called Glow and Go. Through this test, we gained valuable insights that validated our belief in the potential opportunity of a take-home product from HydraFacial. We will refine the current concepts with the insights garnered from this test and launch a take-home product at a future date. In the meantime, we remain laser focused on continuing the successful global rollout of Syndeo. As a reminder, revenue from Glow and Go was never part of our 2022 guidance. Fourth, we continue to build our global infrastructure. Slide 13 illustrates some of the initiatives we advanced during the quarter. The international integration of our ERP system is on track to be completed by the end of 2022, and our global efforts in hiring talent, network automation, and brand building are well underway. We expect these initiatives will generate operating leverage in the years to come. Fifth, M&A. Looking forward, we see a great opportunity in front of us to use M&A in a strategic and disciplined manner. During the quarter, we invested $2 million in Mxt, an early-stage technology advanced personalized skincare company. It provides a great opportunity for us to test and learn in this rapidly growing space of personalization that leverages data and technology. We continue to be laser-focused on delivering strategic M&A. On the left slide of 14, you will see the acquisition criteria we have previously laid out. On the right is our playbook for building our Beauty Health platform. As you know, we continue to be prudent in our approach and remain focused on digestible, accreted, differentiated products that leverage our unique community. Before I turn it to Liyuan, I want to reiterate how incredibly proud I am of what our team have achieved in the first half of the year. Consumer interest in our confidence-boosting experience has never been higher. We attract a resilient, highly desirable consumer and continue to see strong demand. The enthusiasm of our team is electrifying, and we are eager to sustain our profitable hypergrowth trajectory. We have a tremendous opportunity ahead of us. I will now turn the call to Liyuan Woo for a more detailed discussion of our second quarter performance. Thank you, Andrew, and thank you everyone for joining the call. To reiterate Andrew's comments, I'd like to thank our dedicated employees and partners around the globe for delivering our best quarter ever. This marks the sixth consecutive quarter of exceeding top-line expectations. Over the past few months, Andrew and I traveled throughout the US and APAC, meeting our teams and providers. I could not be more stoked about the passion and excitement shared among our community. Today, I'll walk you through our second quarter results, touch on our balance sheet, and discuss our full year guidance in a bit more detail. Turning to our net sales results on slide 16, we delivered record second quarter net sales of $103.5 million, up 55.7% year-over-year, despite softness in APAC from the COVID lockdowns in China. Strong global demand for delivery systems and consumables drove the outperformance. On the left, you will see delivery system sales growth was 85.4% year-over-year. We shipped 2,738 systems, of which 1,203 were trade-ups, accounting for approximately $23.3 million in incremental net sales this quarter. You will recall from last quarter that 742 of the trade-up systems sold in Q2 were rollovers from orders placed in Q1. Excluding the net sales generated from trade-ups, delivery systems growth was 21.5% year-over-year, a testament to the continued demand for our products. Turning to consumables, we delivered strong sales growth of 22.8% year-over-year for a total of $38.8 million. As a reminder, we include an initial 2- to 3-month supply of consumables with each new system sold and with each Syndeo trade-up sold. This contributes to a lag in the pull-through of consumables revenue, a trend we expect to continue as we rapidly expand our install base and launch Syndeo internationally in early 2023. We also instituted our annual price increase in mid-May. Consistent to prior price increases, there has been no material impact to reordering patterns. Moving to the regional performance on the right, America's net sales grew 76.6% year-over-year or 22% excluding trade-ups, driven by the outstanding performance of new Syndeo placements. In EMEA, we saw sales growth of 56% year-over-year, driven by high conversion on our marketing activations in the region. The results are a validation of our test and learn approach, where we experiment with driving consumer demand in various ways, including targeted trade shows, hosting experience center events, and driving retail-related activations. We expect the leads and buzz generated as a result of these initiatives will fuel growth for the rest of 2022. As a result of the COVID lockdowns in China, net sales in APAC declined 16.5%. Despite this, we remain confident in our view on the APAC market opportunities, even more so after the productive and inspiring visit we had to the region. Our original guidance anticipated lockdowns in China in the first half of this year, and our guidance modeled a gradually opening in the second half. We ended the quarter with an installed base of 22,929 delivery systems. As a reminder, trade ups have a net zero impact on our installed base as an existing system is removed from our install base when a new trade-up system is sold. Lastly, the average selling price, or ASP, of a delivery system in the quarter was $23,543. With the impact of the enticing promotions associated with Syndeo's launch behind us, we expect to see sequential improvement in ASP for the balance of the year. As a reminder, we guided to a high single-digit blended ASP increase for 2022, incorporating both trade ups and the Syndeo rollout in the US. Moving to slide 17. We reported a GAAP gross margin of 69.2% or 72.3% on an adjusted basis. Gross margin came in above our expectations due to the incredibly strong demand from providers for delivery systems, creating fixed cost leverage from higher sales volumes. With the most enticing of our promotions having expired at the end of March and associated units shipped, we expect trade-up volumes to moderate in the second half of the year. During the quarter, we delivered adjusted EBITDA of $12.6 million. For the balance of the year, we expect our adjusted EBITDA to ramp up significantly, consistent with historical seasonality as we see the pull-through from our first half marketing spend and capitalize on the global demand. We have stated repeatedly, we reserve the right to continue reinvesting our upside as growth accelerates in order to set the business up for long-term success. These investments in our golden triangle of sales, marketing, and training, drive engagement, build loyalty, and expand our community, all of which are key ingredients to sustain long-term growth. I will turn to slide 18 to discuss our cost detail. Selling and marketing expenses in the second quarter were $44.9 million, compared to $26.2 million for the second quarter last year, primarily driven by increases in planned marketing programs, personnel-related expenses, and sales commissions associated with higher revenues. Breaking this down, selling and marketing increased to 43.3% of sales, up by 393 basis points compared to the second quarter of 2021. We're down 495 basis points compared to the first quarter of 2022. The year-over-year percentage increase was driven by increased spend in marketing, investment in our training program, and personnel-related expenses, including commissions. The sequential decrease was primarily driven by Syndeo launch-related investments in the first quarter of 2022. Our G&A expense of $27.6 million increased from $26.3 million last quarter and includes approximately $2 million of one-time transaction costs and $1.1 million in litigation costs to vigorously protect our technology and pursue ongoing patent and trademark infringement cases. Touching on R&D, we invested $2.6 million in the second quarter compared to $3 million in the prior year, which reflects the wind down of Syndeo-related R&D consulting costs, partially offset by investments in data and technology personnel. I will now move to our balance sheet highlights on slide 19. We ended the quarter with $821 million in cash and cash equivalents. We remain well-positioned to execute on our hyper-growth initiatives while keeping strategic M&A opportunities actionable. We also continue to carry $750 million of 1.25% convertible notes on the balance sheet, which we opportunistically raised for M&A, among other uses. Our revolving credit facilities remains undrawn. Finally, our current shares outstanding are approximately 151 million. Turning now to our full-year outlook on slide 20. As Andrew detailed, we raised our guidance for net sales to a range of $340-$350 million, up from our previous guidance of $330-$340 million. The early success of Syndeo in the US and continued strong demand from consumers worldwide are the drivers behind the raise. Moving to the right, we reaffirm our 2022 adjusted EBITDA guidance of $50 million. We have emphasized repeatedly that 2021 and 2022 are outsized investment years for the business. As Andrew already mentioned, a vast market opportunity and favorable dynamics support our investment to cement our leadership position in the rapidly growing beauty health category. We're working towards better profitability by the end of 2022 and to continue the momentum towards historical levels in 2023. In conclusion, we're proud of our performance in the first half of the year and pleased with the position we're in to achieve our goals as we enter the second half. We expect to see the typical sequential pickup in demand and are confident in our ability to generate returns on our investment spending as we capture the unpenetrated market opportunity ahead of us. We will now gladly take your questions. I'll begin the question and answer session. To ask a question, you may press star then one on your touchtone phone. If you're using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press star then two. This time we'll pause momentarily to assemble the roster. First question comes from Margaret Nolan of William Blair. Please go ahead. Hey, guys. This is Maggie Nolan on for Margaret today. Thanks for taking our questions. I just wanted to start with the adjusted EBITDA guide. Obviously another quarter raising the revenue guide and then, reiterating the adjusted EBITDA guide. I know you guys have said, that you're continuing to reinvest in the business. Maybe can you talk about when you expect to get more leverage off of these investments, especially given the fact that, you know, you're rolling into a global launch at the beginning of 2023? Thank you for joining the call this morning. Yeah, as we've previously stated, we're a young company with a large white space ahead of us. We're in that hyper-growth mode. With the board, we've put in a business plan that we are successfully delivering against that balances growth with posture of availability. In 2022, we're continuing to invest in the business to drive that growth and demand around the world. I would also remind you that we're delivering $50 million EBITDA, which is the growth of over 50% more than last year. I acknowledge the importance of great EBITDA, and we're on track to do that. Look, we aren't just investing for growth here. We're building a moat around our business, and it's a little bit like Monopoly. You need to own the properties to collect the rent, and we do need to have as many providers with our systems around the world, to collect the consumer recurring revenue. 2022 is our final year of elevated investment, and we will then focus on driving EBITDA margins towards historical levels in 2023 and beyond. Great. Thank you. I wanted to ask the next one on the Syndeo launch. You're about one quarter into the launch so far within the U.S. Can you talk about, you know, what you're seeing in the field, kind of what data insights you've been able to gather, and then any thoughts on, improvements of software and, algorithms and updates into the future? No, thank you. You know, as we said in the recorded notes, we're really thrilled with the launch of Syndeo in the US. You know, it was co-invented with our providers in mind. You saw, you know, their feedback on page eight of the deck, which has been very consistent what we're hearing. I mean, it's a leap forward in technology and some of the, you know, the feedback we're getting, which gives us confidence. The global launch is, you know, the data connectivity, the improvements in your user interface, the touch screen technology, the LightStim LED, et cetera, all, you know, really big leap forwards, which we're getting really good feedback on. In terms of the data, yeah, we are gathering data. It's obviously early days with you know the 2,000 Syndeo plus systems placed. We're learning all the time. We'd love to come back to the market at a later stage and really share some of those insights of what we're getting. Of course just like any IoT product you know we'll continue to improve the software and app experience as we learn and grow together with our business partners. Very excited to launch internationally in the early part of 2023. Great. Thank you so much. Thank you. Thank you. As a reminder, analysts are reminded to limit themselves to one question each. Our next question will come from Stephanie Wissink of Jefferies. Please go ahead. Thank you. Good morning, everyone. I'm gonna sneak two in because one is just a clarifying question. Liyuan, if you could just talk a little bit about your comments on the delivery system ASP. You do expect it to advance into that high single-digit range for the year, but is there anything we need to be aware of in terms of sequencing on the pricing just coming off of the Syndeo launch? Then Andrew, my bigger picture question is for you related to marketing strategy. As you've come in and spent time in the business, any changes that you're making to the execution or activation of marketing? Anything you're learning from the Syndeo launch that has you tweaking or shifting some of your focus within marketing mediums or plans for the back half? Thank you. Good morning, Steph, and thanks for joining the call. I'll let Liyuan kick off, then I'll handle the second part of that question. Morning, Steph. Thank you for the question. Yeah. In terms of the ASP, you know, all along what we have mentioned is obviously giving the actual sticker price for Syndeo. As we roll out in the U.S., you know, we're no longer selling other systems such as Elite. As a result, all the new units should automatically have a higher ASP. What we've been really stating is the fact that, you know, given the amount of trade-ups, right, the most significant promotions ended in March. We'll continue to sell trade-ups and, you know, we reserve the right to promote as we see appropriate as we test and learn going forward. On a blended basis, you're gonna continue to see sequential improvement in terms of that ASP for the second half of the year. When we take the entire year, this is, you know, to try to reinforce the guidance from the beginning. We believe on a blended basis compared to last year, the ASP should be increasing by high single digits. Thanks, Steph. On the second part of the question, yes, it was six months in a row yesterday, Steph. It's been obviously a really exciting first half of the year for me. I think we've learned a lot. I think, you know, as I've articulated before, our biggest opportunity for HydraFacial is to build our brand awareness. I shared last quarter that, you know, we recently tested it. Aided awareness, 9%. Unaided is 2%. We're really set on the best-kept secret in beauty, knowing that we have such a high NPS score at 44, which has been increasing. We know it's a great experience. We just need to get more consumers to try it. With that, you know, we've been tweaking and amending our marketing strategy since I've been on board. We've, you know, obviously approach it as this pyramid approach to building a brand, where we're really leaning in on those doctors, physicians, key opinion leaders at the top. That's why you've seen probably on the social and a lot of what we've been doing with, you know, people like Dr. Paul Nassif, where we've really been, you know, bringing that trust and credibility from the physician positions. We've really been doing the basics on digital. We've really refined our search, our paid social, to really get that clicking well. Finally, we've been working very closely with our aestheticians and other influencers to really, you know, amplify our branding. Hopefully, if you follow our chain, you've seen a really leap forward in the quality and the amount of our content with this content factory which we've created in-house, which is driving out fabulous content every day. It's complemented by so much free earned media, which we get posted every day from our highly engaged community of aestheticians and providers. You know, the HydraFacial nation, as I always refer to it, who are such powerful advocates for the brand. Then finally, we're still doing the on-ground activations. You know, the Glowvolution tour, we just finished a really successful tour of, you know, the US. We also extended it to Europe for the first time this year. We're still doing the on-the-ground events, but I think the big pivot is balancing that with broad reach digital marketing. I think that's why we've seen record levels of digital search activity on Google this quarter and also our higher earned media value metrics ever. It's a really exciting time, and we're learning all the time. It's our approach, test and learn and pivot with the data on ROI which we receive. Steph, the only thing I'll add to that from an investment point of view, this is why we've been very vocal about we invest up front, right? From a seasonality point of view, all the big events happened already in the first half of the year. This is another reason why we feel really comfortable, especially given all the ROIs, where we're gonna land for the second half of the year. Very helpful as always. Thank you. Thank you. Thanks. Thank you. Our next question will be from Oliver Chen, Cowen and Company. Please go ahead. Hi, Andrew and Liyuan. Congrats on a great quarter. As we think ahead, your guidance includes that gradual reopening of China. Just would love your thoughts on controllable factors in that region and what you see happening. Also, you mentioned supply chain and those considerations. That continues to be a pretty dynamic topic. Would love your thoughts on what you're seeing there and what's embedded in guidance. And then Andrew, longer term, marketing as a percentage of sales, there's a huge awareness opportunity. What do you see happening to that line item in 2023 more broadly? I'm sure we'll get more details over time. Thank you very much. Thank you. Look, I will kick off, hand over to Liyuan and maybe finish off with the last question. As for China, Oliver, you know, as we've discussed before, we had a gradual opening in China built into our guidance. That's why we're, you know, obviously feel confident reiterating our commitment to our $50 million EBITDA, and we've raised our net revenue. In saying that, you know, lockdowns, further lockdowns, et cetera, would be something we need to balance. Saying that, we're just so thrilled with the results which we have been seeing outside of China and outside of the lockdown cities within China across the, you know, APAC, especially in Australia. I think, you know, Liyuan and I just returned from an extended trip of APAC, excluding China. I think we just returned with such a huge optimism about the future, and we see what a large, sort of untapped reservoir of growth this region is for our business in the future. Liyuan, why don't you talk about supply chain? Yeah, absolutely. Hey, Oliver, just to reiterate Andrew's point, you know, as you know, we are growing so fast, especially for APAC and EMEA, you really do have to invest ahead, right? 'Cause we keep on talking about you have to hire the sales team, the marketing and training. You actually have to train them to get ready to continue with that growth. From an investment point of view, it's always gonna be ahead a bit. I wanted to reiterate that point. You know, followed by that, we feel very strong in terms of the reception outside of the lockdown areas. As Andrew had mentioned, it's hard to predict, so we kind of build that into our guidance. In terms of supply chain, I would say twofold. One, you know, we continue to buy ahead and really manage the cost under our own control. Too, we've been sharing with you the network optimization, you know, play we've been having, not only setting up a 3PL in Europe, but also trying to figure out secondary manufacturing in China. You will see temporary cost burden, you know, as you have these multiple sources as you expand. Over time, this is where the accretion is gonna come from. You know, we kind of had alluded early on as well. This is why we see potential margin upside beginning Q4, and that would really, you know, work towards the next year as well. Oliver, thank you. To your last point on the marketing. Historically, when this company was private, which was not so long ago, by the way, they spent less than 5% on marketing. I think last year we finished at 10%, this year we're tracking for 12%. As for next year, I think, look, it will continue to review and look at that. This is a very different model to perhaps mass consumer beauty brands. It's not a very, very high media model. We invest through that important golden triangle of sales, marketing and education, as you know, as a business driver. As we scale, we'll be looking at the ROIs on our investment very carefully to ensure that we're balancing our need to drive awareness, but also ensuring that we're delivering continued levels of profitability. I think also the way we're refining our plans, you know, that balance now we have between on-ground events which deliver high ROI, but they are expensive with more broader reach activity has really helped us. You know, a good example of this year is the U.S. You know, we cut down from 10 stops on the GLOWvolution tour to 5 this year, but that should not be seen as a negative because one of the reasons we did that is that we've opened a network of education centers around the world. New York is a great example. We've refurbished others around the country. If you have a fantastic experience center, and I think you've been to the one in New York, clearly you don't need to bring the GLOWvolution tour. That's why we cut down the investment on the tour and shifted that investment to broader reach, digital marketing. You know, that's why we're winning. Sounds very agile. Thanks. Just one quick follow-up. An incoming question we get is about your dry powder. You have a lot of financial flexibility and thinking about M&A, how are you seeing that market evolve, you know, given the reality of valuations? On the Glow and Go, any tips on how we should think about modeling it? It looks like you've been making a lot of beta testing progress. Thanks. Sure. In terms of M&A, you know, we believe that, you know, M&A will be an important component of the future. We have a unique opportunity to build up the Beauty Health platform. However, you know, since raising the capital last fall, we've been extremely disciplined and extremely prudent, as we outlined in the remarks. You know, we have seen valuations come down and continue to come down. We're actively looking, but we're going to wait to find the right opportunity, which is best for the company and our shareholders. In the meantime, we're laser focused on delivering our commitments and obviously globalizing the successful launch of Syndeo. In terms of Glow and Go, look, we did a, you know, a beta test with a limited range of consumers to get data. I mean, we are convinced that ultimately there is a you know long-term opportunity for a take-home device. With all the learnings which we've now had from Syndeo, you know, in terms of it's beautiful, it's connected, and it gives a great user experience, we wanna take all the insights from the test and ensure what we launch in the future is new, better and different. You know, I wouldn't include in any models for the moment, and we will obviously update the market in future. At the moment, of course, we're you know laser focused on you know really globalizing the Syndeo. Thanks. Best regards. Thank you. Thanks. Thank you. Our next question will be from Olivia Tong of Raymond James. Please go ahead. Great. Thanks. Good morning. My question is a follow-up on brand support. You know, I know we're in a period of fairly elevated brand support because of the launch, but can you talk about the magnitude of spending on, you know, for the rest of the year? Because, you know, you maintained your EBITDA outlook. Obviously, a maintenance of profit on higher sales would suggest more spending or less leverage. Do you already have plans for spending more, or is this more about keeping powder dry to capitalize on opportunities? Thank you. Good morning, Olivia. Yeah, great point. I mean, what we're trying to say is a lot of these marketing activations are planned way ahead. This is why we've been emphasizing from a seasonality's point of view, whatever we invest in Q1, Q2 really benefit for the rest of the year. Suffice to say, there's always, excuse me, digital marketing planned, another type of marketing, but you wouldn't see the outsized marketing activation as you've witnessed in Q1 and Q2. It's to my point, Olivia, just to sort of really reinforce this point. You know, it's not just we're investing for growth, but as I said, building this moat around the business. It's like that monopoly analogy. You need to own the properties to collect the rent. That's why I invested in the first half, and we're, you know, securing that leverage in the second half as we obviously continue the rollout of Syndeo. Great. Thanks. Then, you know, what should we be thinking in terms of when the Syndeo launch begins to bear fruit in consumables? I know, new customers are stocked on consumables when they purchase a new system. How long does that last, and when should we start to see the flow through there? Thank you. Hi, Olivia. If you think about what we had mentioned, given this is a new launch, we provided training kit, you know, usually it's 2-3 months worth of free consumables, essentially for all the trade ups and the new system sale. Usually depends on, you know, as we mentioned previously, 12% of our customers actually buy a second system. If you just sit back and look at the lag, usually it's between 1-2 quarters of lag before they really speed up. Our vintage is not really caught in the way based on the year. It's really based on, is that one system? Is that multi-system? How long they've owned it, what tier of customer they are. In that vein, there's always a ramp up when it comes to consumables, and we kind of track utilization accordingly. Thank you so much. Best of luck. Thank you, Olivia. Thank you. Our next question will be from Korinne Wolfmeyer, Piper Sandler. Please go ahead. Hi, good morning, and congrats on the quarter, and thanks for taking the question. I'd just like to touch a bit on how you're thinking about the current inflationary impact on consumers. Obviously, you know, you've been doing really well the first half of the year, and utilization looks to be trending pretty well. How are you thinking about utilization as we enter the back half of the year? Are you baking in any sort of conservatism into guidance in terms of, you know, if consumers start to space out appointments more or come in less? Are you not really seeing any signs of that at all? Just curious your thoughts there. Thank you. Korinne, thanks for joining the call. You know, we obviously sit on this fabulous intersection of, you know, wellness, aesthetics, beauty and skincare. As you know from, you know, other companies which you follow, these categories are extremely resilient in periods of economic downturn. You know, we speak to providers, you know, every day all over the world. We've seen absolutely no slowdown in appetite for our category, for HydraFacial, and demand remains very strong. You know, historically, you know, that's proven time and again, be it the lipstick index or the strength of skincare or aesthetics during periods of recession, et cetera. When we look back at our own data, when we're a private company for the global financial crisis of 2009, we still continued to grow, because of twofold. First, consumers, just like they do with lipstick, continue to prioritize spending in items which make them feel good. I would say these still feel and look good and feel healthy. You know, we're all on Zoom more often these days, hybrid working. We're really benefiting from those tailwinds. We're seeing that strength. Secondly, as we've talked before, really the secret of our business model is HydraFacial is a gateway service. We're by far the lowest cost product in a doctor's or physician's office. Even the GFC, we saw a trade down of consumers come in, they perhaps not doing more invasive, expensive surgeries or fillers, but they still want to invest in themselves to make them feel good, make them confident, and that's why we're benefiting. We see no demand, and that's why we feel so confident, you know, after speaking to so many providers around the world about, you know, the second half of the year, why we've raised our guidance and reconfirmed our EBITDA. We're feeling very, you know, strong about the, you know, the time ahead. Corinne, the only thing I'll add, when we look at our guidance for the second half of the year, you know, we take into consideration of the COVID impact in China. In addition to that, believe it or not, you know, talking to folks even in the US, the only cancellation we've been hearing are related to COVID. So there's still some resurgence here and there. So we kinda take that into consideration, but absolutely we feel really good in terms of, you know, consumables. Very helpful. Thank you. Thank you. Thank you. Our next question will be from Jonathan Block of Stifel. Please go ahead. Great. Thanks, guys. Good morning. Liyuan, the 1H revs is a little over 50% weighting of the full year guide, but the EBITDA is roughly $15 million year to date, which implies $35 million in 2H EBITDA, you know, off the same if not or lower implied revenue number. Hopefully all that made some sense. Can you just give us some color on where the leverage points come from in 2H 2022? I'm guessing some of that might be the gross margin, you know, if the upgrades subside a bit. Maybe you can speak to that and what about OpEx, as many details as possible on how you guys get there. Then I've got a shorter follow-up. Absolutely. Hi, John. So you're right on. Gross margin is definitely one of the areas, and as I emphasize, especially towards the last quarter of the year, right? Because we are still building that whole infrastructure and network optimization. You continue to kinda spend and scale for the future. Absolutely, in the meanwhile, we're searching for, you know, kind of the accretion side of the equation. So we feel very strong in terms of that sequential improvement when it comes to gross margins, which would contribute. Two, you know, we provide a guidance taking into consideration of the current market environment. As we always say, you know, if the market environment improves, especially in China and other markets, and if we generate additional revenue, we will continue to invest back into the business. We have pretty strong levers in terms of control for G&A. You know, think about us almost 50/50 split, roughly speaking, between fixed versus variable, and there's various levers we can pull when it comes to the variable side of the equation. You know, especially when it comes to marketing, as we emphasize, a lot of the heavy lifting has been done in the beginning of the year. You know, we can certainly pull the lever there. You know, in terms of some of the other infrastructure build, the one-time items, some of them are coming to a finish. You will start to see some of the leverage point there as well. Perfect. Very helpful. Second question, admittedly somewhat unrelated, but, you know, Andrew, just any reason to think about the international ramp for Syndeo being different than what you've experienced it here in the US, you know, better or worse? I guess where I'm going with this is, you know, the demand here in the US was through the roof, so can you discount less, or who cares? Is this all about just getting the next gen system in the provider's hands due to the downstream, you know, positive impacts on utilization, et cetera? Would just love your thoughts as that might be around the corner in early 2023. Thanks. John, thanks, and great to speak to you. Well, you in part answered the question which you asked. No, absolutely. I will say that there's a really growing excitement outside of the US about Syndeo. They've seen, you know, seen it at trade shows and events. They've seen all the coverage and feedback online from our partners. So, you know, there's a big excitement. You know, clearly, you know, a big part of our model is that we have a playbook which is very successful in the US. Which we look to, you know, to roll out globally in the new year. Of course, there's nuances by market. What we do have, as you know, we've discussed before together, is global pricing. We like to, you know, control the pricing internally, so we don't have any externally, so we don't have any secondary market. So no, we feel very good about the plan and, you know, looking forward to rolling out in Q1 of 2023. Thank you. The next question will come from Mr. Allen Gong of J.P. Morgan. Please go ahead. Hey, guys. Congrats on the good quarter. I just had one question, kind of jumping back to the top line. You know, relative to kind of where the street was at heading into the print, it looks like you came in above by, you know, roughly $20 million on the top line, largely driven by your delivery system strength. When I look at, you know, the guide, you only raised it by around $10 million on the top and bottom. I guess, like how much of that is conservatism and what you're seeing in terms of trends so far in third quarter, and how much of that could be, you know, maybe a little bit of pull forward, given it looks like you did have a little bit higher churn in the quarter relative to expectations? Thank you. Thanks, Alan. In terms of the outsize Q2, you know, as we talked about before, we provided pretty deep promotions back in March, right? That generated a lot of the sales of the trade-up. You know, at this point, we're not being very promotional, right? Back to John's point earlier, we're really controlling the pricing. In that vein, you know, we'll continue to sell trade-ups, but you will see from a trends point of view, that should be moderate, because we're not really launching international to the earlier point till beginning of next year. Alan, with that said, you know, we should be really seeing the momentum building, you know, based on the new sales and especially given what's going on with the gradual opening in China. It's kinda hard to see, right, in terms of how the lockdown will continue to evolve. In that vein, we're being very thoughtful in terms of providing our guidance. We re-emphasize, as we're selling a lot of these new Syndeos and the trade-ups, we keep on giving free consumables as well. You know, we take all of that into consideration. Just like every other quarter, we emphasize, you know, if we do sell more, you know, obviously we will, you know, continue to build the business and inform the market as we see we have more clarity. Thank you. Again, please remember to limit yourself to one question per analyst. The next question will be from Bruce Jackson of The Benchmark Company. Please go ahead. Hi. Good morning. Nice qr. Some follow-up questions about Europe. It was very strong. I was wondering if you could tell us a little bit about how the end user demand is holding up and how the second half of the year might unfold, given that you've got the partnership with Innerskin. Could we see like, similar levels or continued acceleration? I've got one follow-up. Bruce, thanks for joining. Great to hear from you. You know, we're extremely thrilled with you know, the success in Europe, +56% for the quarter and really continued momentum and demand. I think there's a real case in point where we make the case about investing forward. We've really upgraded our marketing late last year and early in the year in Europe. You've seen us showing up, if you follow us at trade shows, events, influencer events. You can see that payback coming through, which really talks to our investment and then getting leverage later. We've seen demand continue, you know, and momentum, so we feel very good about the second half. You know, there's some activity in the plan. We have the GLOWvolution tour now, which we've extended to Europe for the first time, making its way around Europe, and obviously complemented by the, you know, the Jennifer Lopez JLo launch, which is, you know, a global launch from, you know, Q4, which will also help amplify. You know, we really feel good about the guidance we've given. Of course, if things accelerate and China opens up, we'll obviously upgrade now. We're trying to balance now with some of the uncertainty we have in China and with, you know, our commitment to delivering our targets. Hey, Bruce, just to add one point, just to remind everybody, we have no revenue concentration, right? If you think about, we have, you know, over 20,000 systems out there, but our biggest customer is less than 3% of our revenue. Re-emphasize the sense we're constantly partnering and experimenting, but usually it doesn't really necessarily move the needle. It's really in the long run, you know, as we see the fruition. Okay. My follow-up is also related to Europe, on the foreign currency impact. Is most of that foreign currency impact in Europe? Has that stabilized? Do you do any hedging, or is that something that's just gonna kinda flow through for the next couple of quarters? That's it for me. Thank you. Great question, Bruce. Yeah, we're very mindful and thoughtful when it comes to currency management. You know, we're likely not gonna go through a hedging program from an accounting treatment point of view, 'cause those are very complex. We're constantly working on operational hedging, just to make sure we have enough currency purchased, both in APAC and in EMEA, to make sure from a real cash, not necessarily unrealized point of view, you know, to preserve our rate and manage our hedging and currency. Thank you. The next question will be from Kyle Rose with Canaccord Genuity. Please go ahead. Great. Thank you for taking the questions. Look, I just wanted to see if you could comment, you know, a little bit more. I realize that Syndeo's early days, and it's only, you know, plus or minus 2,000 units, but just the overall interaction that you're seeing with respect to the connectivity of Syndeo relative to what you're seeing on the consumer-facing apps. I mean, are you able to drive, you know, some push marketing type of initiatives there? Secondarily, you know, just following your social over the course of the last several months, you know, we're seeing a big focus, you know, maybe outside the face, including Keravive, the décolletage. I think you're treating other body parts as well. If you could just maybe unpack that a little bit for us and just help us understand, you know, where clinicians are starting to treat? Thanks for joining the call. I'll start with the second part of your question, which you're absolutely right. Thanks for seeing that, leap forward in content. It's been really intentional for us, with the new team we created in our content factory. Look, I think what is the beauty of our system is that for a provider and esthetician, the revenue stream is just more about the face. I think I've been really intentional with the team since I joined that with this so many bigger parts of the body which we can utilize the service on, which bigger surface space means bigger consumables. You know, you're gonna see big pushes behind back face, décolletage, HydraBooty and legs has been a big thing this summer, if you've been following us. That's really intentional. We put training and protocols in place and who knows, other boosters activity which could be coming down the line in the future, which we'll come and talk about at a later stage. Very excited about that area. In terms of Syndeo and data connectivity, you know, our first phase of this, as we talked last quarter, is really getting the systems out, and we've placed over 2,000 Syndeos. With that learning, which we're getting in real time from providers and that data which we're getting to collect, that's gonna help us, you know, renew and relaunch the app to give a better user experience in the near future. I will say, you know, at the moment we will look forward, I think in a quarter or two, in sharing a lot more data of what we're learning. It's super interesting. The reason we're not sharing now, there's a lot of bias in it. You can imagine the first 2,000 providers aboard it, you know, many of them are trade ups, so they're super engaged with Syndeo. They're really active. They're posting as well. So, you know, that's obviously gonna be a bias in the data. So let that just even out the kinks, and we'll come back and share some of the great and powerful learnings we're getting, which will help us really unlock future growth for our business in the future. Great. You know, if I can just squeak in one follow-up. It's just, you know, obviously really strong demand for Syndeo. Just wondering if you're seeing any different, you know, market trends with respect to, you know, interest in purchasing of the capital systems. Are you seeing it come from different geographies and/or, you know, different channels? Just wanted to see, you know, where the demand is coming from. Thank you. No, good question. I think obviously we've launched at this stage only in the U.S. only. We've seen it come from everywhere. I mean, I think our largest providers all across the U.S., every state we had a look at actually before the call, it's very uniform. It's coming from everywhere, the demand. There's no one particular state or channel in particular. Everyone is growing. There's a huge amount of momentum. It's such a big leap forward in technology. There's nothing like it, anything really in the spa and facial. It's not a facial, it's a HydraFacial. You know, there's a lot of excitement everywhere. Kyle, the only thing I emphasize is, you know, we kinda talked about how attractive in terms of ROI to our customers, and we truly see that firsthand, right? With EMEA and APAC, there's no slowdown, you know, in terms of buying the lease system either. That's why we feel very confident to you know really roll it out at the most optimal timing, which is, you know, the beginning of next year. That was really great to see. Thank you. Our next question will be from Linda Bolton Weiser of D.A. Davidson. Please go ahead. Yes, hello. I was curious, I know it's the smallest part of your sales, but in the partners, the retail partners that you have, Sephora, Ulta, Nordstrom, et cetera, what are you seeing in terms of system usage levels? Like how much have you returned to pre-pandemic levels? Are those systems at 50% of pre-pandemic or like what is kind of the usage level? And is the growth in those retail partners more coming from increased usage of the systems, or are they actually starting to place more systems in the stores? Thanks. Linda, hi, and thanks for joining the call. Good to speak to you. Retail is, as you say, small, but really, rapidly growing. It's an exciting moment for us. Obviously, we just announced today our partnership in Europe with Galeries Lafayette, which we're super excited about to continue to expand our retail. By the way, it's not just retail. You know, we've got partnership with luxury hotels, you know, gyms, which if you follow, if you've seen really growing over the last quarter. You know, I think what we will say about retail is we don't break out in detail, is that, you know, certainly if we speak for North America with our biggest presence in Europe, biggest presence is across Ulta, Nordstrom, and Sephora. I think, you know, we've seen it all open up this year. A number of these services, of course, were on hold for an extended time during COVID. I think, of course, now with the opening, we've seen consumers come back in store. You know, they got fed up with home shopping or curbside pickup, and they're coming in for experience. Of course, HydraFacial is really the only skincare experience on the floor in so many of these retailers. We have a real competitive advantage. Of course, they're getting makeovers and getting blowouts of hair, and we're the skin service provider in this space. We're really excited about the growth opportunity ahead. Thank you. Thank you. The next question will be from Amit Hazan of Goldman Sachs. Please go ahead. All right. Phil, thanks for taking the question. I'll limit it to just one. You previously anchored us to 3,500-4,000 systems annually. You know, 2021 over 6,000 systems this year, 7,000, 8,000. Even if you look on a net basis, we're still well above that 3,500-4,000. I'm just, I guess the question is, with the momentum in the business, is that still the right way that you'd like to anchor us and have us thinking as we go into Syndeo's international launch in 2023 and 2024? Hi, Amit. Great question. I think the context we were giving when we were talking about the 35-4,000, it's much more historical. You know, as you recall, it's a very U.S.-centric business, right? With a 70-30 split. You know, as we continue to grow, we kind of have to take that into consideration. The way as a company, as we look at the trend, we are very much focused on new system sales as a trend, which we've been disclosing to you on a quarterly basis, and that's kind of the base as we model out our business going forward. That's helpful. Thanks again. Thank you. This concludes our question-answer session. I'd now like to turn the conference back over to Mr. Andrew Stanleick for closing remarks. Please go ahead. Thank you, operator. In closing, I will say, you know, we are ecstatic about our results and are as confident as ever about the future of our business. Beauty Health exists in that bright space where beauty, aesthetics, wellness, and health converge. This is a space post-COVID, which is growing rapidly and adding new devoted consumers by the day. The Beauty Health category has proven its resiliency time and time again, and our upper-middle-class consumer, who is generally less impacted by economic downturns, reinforces the conviction we have in achieving our outlook. We remain committed to our 2022 strategy of investing in the business. You know, the time to play offense is now, and we expect our investments this year in sales, marketing, and training to strengthen our community and propel future growth while still delivering an implied 2022 EBITDA growth of 53% year-over-year. I'm eager to share more of our vision and details about our long-term growth ambition during Investor Day on September 15th, and I look forward to seeing many of you there. Thank you all again for joining us today. Goodbye. Conference is now concluded. Thank you for attending today's presentation. You may now disconnect.