SBC Medical's First Quarter Margins Improve; Company Announces Share Buyback Program

Associated Press

20-05-2025

By Meg Flippin Benzinga
DETROIT, MICHIGAN - May 20, 2025 ( NEWMEDIAWIRE ) - SBC Medical Group Holdings Inc. (NASDAQ: SBC), the Japanese owner and operator of a chain of cosmetic surgery clinics, is in transformation mode, overhauling its pricing structure and adapting to a changing marketplace, which seems to have paid off in the company's first quarter.
For the three months ended March 31, 2025, SBC Medical reported earnings per share of $0.21, which was up 5% year-over-year. EBITDA margins were 52%, up from 46% in the year-ago first quarter.
The company, which is positioning itself as a leader in the cosmetic surgery market, ended the quarter with 251 clinics, increasing the number by 36 compared to last year's first quarter. Despite a challenging marketplace in Japan, SBC Medical was able to increase its customers in the last twelve months ending in March by 14% to 6.1 million. In a nod to the quality it offers customers at its clinics, SBC Medical also reported that 71% of customers visited franchisee clinics two or more times during the quarter.
'SBC is actively preparing for strategic expansion by enhancing its platform, optimizing its profitability structure, and stabilizing its business through revised pricing strategies and adapting to changing market dynamics,' said Yoshiyuki Aikawa, Chairman and Chief Executive Officer of SBC Medical, when reporting first quarter results. 'In the first quarter of 2025, we were pleased to see the expansion of Medical Corporations (MCs) gaining traction in our franchising, procurement and rental business segments as global demand for aesthetic medical services continued to rise.'
SBC Medical Group has been focused on expanding its MCs, which are designed to help cosmetic practitioners operate cosmetic surgery centers and at the same time adhere to regulations.
SBC Medical Overhauling For Growth
While SBC reported revenue of $47 million in the first quarter - down 14% year-over-year - the company attributed that to the discontinuation of its staffing business and the divestitures of Sky Net Academy and SBC Kijimadaira Resort. Despite that, margins increased, and net income increased 15% year-over-year. 'As we move ahead, we remain confident in our ability to build a scalable franchise model while accelerating expansion across domestic and international markets, driving long-term value for shareholders and positioning the Company to capitalize on future opportunities,' said Aikawa.
SBC Medical is working hard to position itself as a leader in the cosmetic surgery market, and it isn't resting on its laurels. To address competition and keep its leading position in the industry, the company is pursuing two strategies: expanding the market by making aesthetic medicine more accessible and appealing to the masses and differentiating itself from the competition by offering advanced treatments and better pricing - bringing its treatments to the U.S. and Singapore. The company is preparing for expansion and says its first quarter results are evidence of that.
Buying Back Shares
The company underscored its confidence in its growth plan by announcing its board has approved a share buyback program of up to $5 million worth of shares. The buyback program will kick off on May 20, 2025, and last through May 20, 2026.
The company is using excess cash and future free cash flow to buy back the shares. SBC Medical said it launched the program because it believes the stock at the current share price undervalues its business performance, growth potential and the aesthetic medical market, including SBC Medical's position. The global cosmetic surgery and procedure market was worth $122.08 billion in 2022, and it is expected to grow at a CAGR of 14.7% from 2023 to 2030.
SBC Medical will buy the shares on the open market at prevailing market prices and will continue to look at other ways to enhance the liquidity of its shares. It also plans to issue shares as future stock-based compensation in proportion to the number of repurchased shares. In addition to the repurchase program, SBC Medical says it will continue to consider dividend distributions with the goal of improving its total shareholder return.
From expanding the number of clinics to overhauling its pricing to lure new customers and repeat business, SBC Medical is positioning itself to capitalize on what it expects to be growth in the aesthetic medicine market. With a new stock buyback program underway, SBC Medical is showing the world and its investors it has confidence in its growth plans.
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