SBC Medical Group Holdings Inc. (NASDAQ:SBC), the Japanese owner and operator of a chain of cosmetic surgery clinics, reported a significant improvement in net profit for the third quarter as the company returns to a more typical cost structure in the absence of IPO-related and stock-based compensation expenses.
Profitability was also lifted by the company's execution of its strategy shift, which includes expanding the number of franchise locations, increasing visits among customers, optimizing its pricing strategy and acquiring a higher-priced customer base. All of these efforts position the company for what it says will be a strong 2026.
"Looking ahead, we will continue to pursue sustainable growth toward 2026 by focusing on delivering high-quality solutions, advancing multi-brand initiatives in the dermatology segment, and building a stronger business foundation in overseas markets," said Yoshiyuki Aikawa, Chairman and Chief Executive Officer of SBC Medical, when announcing third quarter results.
Revenue Down, But Profitability Improves
For the third quarter, SBC Medical reported total revenue of $43 million, which was 18% lower than last year's third quarter. The company attributed that to a revised fee structure for clinic services that reduced franchising revenue, decreased procurement revenue due to reduced orders for medical materials and lower management services revenue due to the discontinuation of clinic operation staff supporting services. While the company reported lower Q3 2025 revenue, when compared to Q2 2025 revenue, it was essentially unchanged. SBC attributes this stabilizing of revenues to the opening of new clinics and the improvement in average revenue per patient on a sequential basis.
Aikawa noted the decline "primarily reflects the impact of our past business restructuring initiatives." SBC is positioning itself as a leader in the cosmetic surgery market, and as part of that, it is discontinuing its staffing business, engaging in targeted divestitures to streamline its operations and revising its fee structure to lure more repeat customers its way.
Those efforts appear to be paying off. During the third quarter, SBC Medical reported average revenue per visit was up 6% sequentially to $298, and up 8.4% from Q1 2025. SBC said the higher revenue per visit is due to the overhaul in its pricing strategy, promotions and its efforts to go after more affluent customers. SBC Medical ended the quarter with a repeat rate of 72%. As of the third quarter, the company operates 258 locations, which is up 15% year-over-year.
Net income for the quarter ending September 30 was $13 million, compared to $3 million a year ago, and EBITDA was $17 million, an increase of 12%. EBITDA margin was 38% for the third quarter of 2025, compared to 28% for the third quarter of 2024. The company credited this improvement to a reduction in operating expenses, offsetting the decrease in revenue primarily as a result of its previously announced franchise fee revisions. The company has $127 million in cash heading into the end of the year.
Setting Its Sights Internationally
In addition to overhauling its pricing and going after well-heeled consumers, SBC Medical Group also has expansion on its mind and has set its sights on Thailand as one of the markets it’s going after next.
To meet that goal, the company just announced that it has inked a consulting agreement with BLEZ ASIA Co., Ltd., which operates more than twenty pharmacies and clinics in Thailand. SBC Medical said it is widely trusted by both Japanese expatriates and local patients.
The partnership is a key component of SBC's broader Asia strategy and represents a significant step toward full-scale entry into the rapidly growing Thai aesthetic medicine market, reported SBC. Under the agreement, SBC will provide comprehensive management support to a new clinic focused primarily on dermatological treatments such as pigmentation and spot removal, which BLEZ is preparing to open in Bangkok.
SBC will advise on the development of clinical protocols aligned with SBC's quality standards and assist in selecting medical devices and treatment methods optimized for local skin characteristics and environmental conditions. The clinic is expected to commence operations by year-end in the Asok district of Bangkok.
It’s a big market opportunity. According to the company, Thailand’s aesthetic medicine market was valued at about $372.2 million in 2024 and is projected to grow to around $1.2 billion by 2033. SBC believes Thailand is a good market to go after because it’s highly fragmented and there are more than 60,000 Japanese expatriate families living there.
SBC Medical also announced it is acquiring a stake in Waqoo, the Japanese research and development company which provides medical support business such as promoting blood-derived processing services and skincare & cosmetic brands. To fully integrate Waqoo’s technological assets, SBC Medical announced a Tender Offer (TOB) to acquire a majority stake in the company. The acquisition focuses on generating synergies by combining SBC’s clinical expertise with Waqoo’s R&D foundation. Key initiatives include upgrading treatments for AGA and orthopedics, co-developing proprietary skincare products and utilizing Waqoo's technology to support SBC’s international market entry.
About a year ago, SBC Medical Group laid the groundwork to get where it is today – profit is improving, the company is keeping customers and is expanding internationally. With more to come in the fourth quarter and beyond, things could be looking good for a company on a quest to make everyone beautiful. To learn more about SBC Medical Group, click here.
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