By Meg Flippin, Benzinga
DETROIT, MICHIGAN - April 11, 2025 (NEWMEDIAWIRE) - Despite increased competition, SBC Medical Group Holdings Inc. (NASDAQ: SBC), the Japanese owner and operator of 251 aesthetic medical clinics, was able to post full-year 2024 revenue of $205 million, growing 6% year-over-year, steadily increasing with the expansion of the number of clinics. Gross profit was $156 million, up 14% from full-year 2023 while net income increased 18% to $47 million. During 2024, the depreciation of the Japanese yen against the U.S. dollar had unfavorable impacts on net revenues and net income along with a decrease in Management Services as a result of the termination of staffing services.
The company, which is aiming to position itself as a leader in the aesthetic medical market - operating 251 clinics across Japan - credited its ability to grow in an otherwise challenging market to its high level of services, which it says keeps customers revisiting especially given its expansion into new areas of cosmetic surgeries and treatments. During 2024, the company added 43 new clinics to its roster, while annual patient visits grew 15% from the prior year.
“The year 2024 was a momentous year for us, showcasing our solid performance and sustained growth, culminating in our successful Nasdaq listing. We delivered strong 2024 results with the top line growing by 6% while the bottom line surged 18% year over year. More encouragingly, supported by our extensive network of 251 clinics, we served 6 million loyal customers over the last twelve months, with a repeat rate exceeding 70%,” said Yoshiyuki Aikawa, chairperson and CEO of SBC Medical when reporting fourth quarter and full-year 2024 results.
“As we continue to see increasing global demand for aesthetic medical services, we remain committed to developing a strong franchising structure and network and expanding our business both domestically and internationally. Looking ahead, we remain dedicated to not only maintaining, but expanding, our competitive edge while capturing significant growth opportunities both at home and abroad. With these goals we aim to create long-term value and drive sustainable growth for our shareholders,” he said.
With Demand Comes Competition
The aesthetics and cosmetic medical market in Japan is heating up as some Chinese and other Asian consumers go to Japan for their advanced cosmetic treatments and surgeries, including botox, body contours or wrinkle fillers. Compounding that growth is demand among locals in Japan, many of whom are also chasing the fountain of youth, albeit more subtly.
But with the increased interest comes competition. Rivals, big and small, are trying to get a piece of the global cosmetic surgery and procedure market which was $156.39 billion last year, and is expected to grow at a CAGR of 14.7% from 2023 to 2030.
The heightened competition was on display during the last three months of 2024. SBC Medical reported that their fourth quarter total revenues fell 29% year-over-year to $44 million while gross profit was down 22% to $34 million. But the company said that was due to its focus on growing patient volume, partly by reducing prices for certain services such as hair removal. That, they said, led to a decrease in average spend per customer, but was strategic in nature as a way to build its customer base.
“Entering 2025, we’ve observed a decline in competitors- especially in single-service clinics- and we’ve responded with selective price increases. This is helping us boost unit revenue and return to a stronger growth trajectory,” said the company on a conference call to discuss earnings results with Wall Street.
To address the competition, SBC Medical said it is pursuing multiple strategies: expanding the market by making aesthetic medicine more accessible and appealing to the masses, differentiating itself from the competition by offering advanced treatments and better pricing and expanding its business in the U.S. and Singapore.
Bolt-On Buys In The Cards?
What’s more, the company says it entered 2025 with $125 million in cash, which it may use to acquire businesses in aesthetic medicine and adjacent fields such as general healthcare services. The company noted that interest among male patients is increasing, particularly in areas such as hair removal, which presents an opportunity. As it stands, male customer growth is surpassing female revenue growth in some categories for the company.
The focus on medical hair removal could prove to be a strong market for SBC Medical, especially if it raises prices as the market consolidates, wrote Zacks Research in a note to clients covering SBC Medical’s earnings results. “With a growing number of men increasingly interested in aesthetic procedures – particularly for hair replenishment - the company is optimistic that this represents a source of growth for SBC.”
SBC is also adopting a more flexible fee structure to help franchisees succeed. In the past, SBC Medical had a uniform franchise fee model regardless of the size or stage of the clinic. Since it can take a year for a clinic to achieve stable operations, having high initial fees can be challenging for some franchisees. As a result, SBCs said it is adopting a more flexible free structure which started in April.
This Year And Beyond
Looking out toward 2027, SBC Medical said it is focusing its growth around aesthetic medicine and will be expanding into adjacent fields. The company pointed to orthopedics, ophthalmology, fertility treatments and AGA (hair loss treatment) as areas of opportunity. The company expects this focus should help it continue to grow revenue and EPS. Wall Street firm Sidoti is forecasting 10% year-over-year revenue growth to $223 million in 2026. It expects SBC to end 2026 with 300 clinics.
Looking one’s best is important to many people around the world. With SBC’s focus on the growing aesthetic market domestically and internationally, the company is confident it is well-positioned to potentially capitalize on growth in the years to come.
More about SBC;s results and business strategy can be reviewed by listening to the company’s full-year 2024 financial results webcast at SBC Year End 2024 Webcast.
Featured image by Tung Lam from Pixabay.
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This content was originally published on Benzinga. Read further disclosures here.
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