AirSculpt Technologies delivered a second consecutive quarter of stable revenue in Q2 fiscal 2026, with revenue of $42.9 million (down 2.5% year-over-year, or ~1% on a same-center basis excluding London) as positive 1% case growth was offset by a ~2% ASP decline to ~$12,700. Gross margin expanded to roughly 61%, but adjusted EBITDA of $4.9 million fell $900,000 year-over-year on a deliberate $1.5 million increase in brand marketing, pushing customer acquisition cost up to ~$3,500 per case. Management continued its turnaround by expanding its procedure portfolio (200+ skin excisions, new upper breastoplasty and mastopexy, and an alloClae partnership with Tiger Aesthetics) and strengthening the balance sheet, cutting gross debt by over $30 million since early 2025 and extending its term loan maturity to November 2027. Guidance was reaffirmed at the low end of the revenue range with adjusted EBITDA trimmed to $12-$14 million to fund an extra $5 million of marketing, with a down-single-digits Q3 expected to give way to comparable-basis revenue and EBITDA growth in Q4.
Good morning, everyone. Thank you for joining us to discuss AirSculpt Technologies results for the second quarter of fiscal 2026. Joining me on the call today are Yogi Jashnani, Chief Executive Officer, and Michael Arthur, Chief Financial Officer. For this morning's call, Yogi will begin with a review of our second quarter results and the progress made on our strategic priorities. Michael will share a detailed review of our second quarter and first six-month performance and guidance. Before we begin, I would like to remind you that this conference call may include forward-looking statements. These statements may include our future expectations regarding financial results and guidance, market opportunities, and our growth.
Risks and uncertainties that may impact these statements and could cause actual future results to differ materially from currently projected results are described in this morning's press release and the reports we will file with the SEC, all of which can be found on our website at investors.airsculpt.com. We undertake no obligation to revise or update any forward-looking statements or information except as required by law. During our call today, we will also reference their non-GAAP financial measures. We use non-GAAP measures in some of our financial discussions as we believe they more accurately represent the true operational performance and underlying results of our business. A reconciliation of these measures can be found in our earnings release as filed this morning and in our most recent 10-K, which will also be available on our website. With that, I'll turn the call over to Yogi.
Thank you, Allison, and good morning, everyone. Welcome to AirSculpt's second quarter earnings call. I am pleased to share that our second quarter and first half results marked meaningful progress on our transformation. For the quarter, on a comparable basis, we delivered stable revenue and positive same-center case growth. Same-center sales began the quarter positively and saw moderating sales trends in June, which we attribute to a dynamic consumer environment. Overall, we generated a 21 percentage point improvement in same-center sales versus Q2 last year and a 23 percentage point improvement year to date. Over the past 18 months, we have broadened our consumer reach to capture the growing opportunity presented by GLP-1 patients, bolstered our talent, invested in new marketing strategies, and strengthened our balance sheet to provide the financial flexibility to support future growth.
Those actions are showing in the continued stabilization of the business with roughly flat same-center sales growth in the first half. Our near-term focus remains squarely on increasing same-center sales. Longer term, we believe there is meaningful growth in new procedures and de novo expansion. As our balance sheet and cash flow generation strengthen, we intend to expand our geographic footprint and center base over time. Let me now turn to our progress on the three strategic priorities. As a reminder, these are, first, introducing new services to capture our GLP-1 market opportunity, second, enhancing our sales and marketing strategy, and third, maintaining strong financial discipline. First, introducing new services to capture our GLP-1 market opportunity. GLP-1 continues to represent a significant long-term growth driver for AirSculpt, with nearly 19 million potential patients interested in body contouring or related aesthetic procedures over time.
Our core body contouring procedures continue to resonate with GLP-1 patients. We are expediting the expansion of our portfolio of procedures to serve their evolving aesthetic needs. During the quarter, we completed over 200 skin excision procedures and expanded the offering to additional centers. We also broadened our services to include upper breastoplasty and mastopexy. These procedures further expand our addressable market and increase our center productivity while allowing us to better serve the needs of our patients. We continue to expect this to represent a $100+ million long-term revenue opportunity across our existing base of centers with an increasing long-term potential as we resume de novos. As part of our strategy to expand our body contouring platform, today we are announcing a partnership with Tiger Aesthetics to offer alloClae for patients.
alloClae is a structural adipose tissue allograft used for nonsurgical body contouring designed to add subtle, natural-looking, targeted volume. We are excited about this partnership for several reasons. First, it allows us to reach patients we previously could not serve, including those without enough fat for a traditional fat transfer. Second, we expect a quicker ramp as many of our surgeons are trained in this procedure already. Finally, consumer interest in this category continues to grow as the use of GLP-1 creates the need for targeted restoration of volume. We believe this further strengthens our ability to serve consumers across their entire aesthetics journey. alloClae will start rolling into our centers later this quarter. Looking forward, we have additional procedures in the pipeline that are core to body contouring and are a strong fit for our brand.
We remain focused on thoughtfully expanding our capabilities to enhance the patient experience and increase center productivity. Our second focus is enhancing our sales and marketing strategy. As we expand our portfolio of procedures, we're also evolving how we market and sell them. During the quarter, we refined our marketing through a test and learn approach, optimizing how we reach GLP-1 patients, and educate prospective patients on our new procedures. As we fine-tune our marketing investments in these procedures, we expect to achieve a higher return on that spend, driving revenue growth and greater marketing efficiency. At the same time, we trained our sales team and implemented additional sales optimization tools to make them more efficient and effective, recognizing that selling these procedures requires a different approach than our traditional body contouring business.
We believe these investments will enable us to better reach patients and improve commercial execution as our portfolio continues to grow. The third area of focus is maintaining strong financial discipline. Maintaining a strong balance sheet remains a key priority as we execute our long-term strategy. During the quarter, we raised approximately $5 million through our ATM program, which continues to provide us with the balance sheet flexibility and liquidity to support our growth.
Michael will discuss our balance sheet in more detail shortly. In summary, we made progress in the second quarter, and while our results reflect the expected variability of a turnaround being executed in a dynamic consumer environment, we enter the second half of the year a stronger company with the right strategy and team. Our addressable market is larger, our procedure mix is broader, and our operating platform is more disciplined than it was 12 months ago.
Our focus for the balance of the year is unchanged. Convert the stabilization achieved year-to-date into sustained profitable growth. That means same-center sales, marketing efficiency, and consistent execution across our locations. We expect the actions underway to be reflected in our results in the quarters ahead, and with that, I will now pass it over to Michael.
Thank you, Yogi, and good morning, everyone. As Yogi mentioned, we are pleased to deliver our second consecutive quarter of stable revenue. We continue to see encouraging signs across the business. Underlying case volume increased year-over-year. Our newer procedures continue to gain traction, and we remain focused on executing the strategic priorities Yogi outlined. Turning to the second quarter, revenue for the quarter was $42.9 million, a decrease of 2.5% versus the prior year quarter. On a same-center basis, excluding the impact of London, revenue declined approximately 1%, reflecting positive 1% case growth in the quarter. The second consecutive quarter of year-over-year case growth, a continued sign of stabilization. This was offset by a 2% decline in average selling price in the quarter. The decline in average selling price was primarily driven by our comparison against an unusually high average selling price in the prior year period.
Average selling price for the quarter of approximately $12,700 remains well within our historical range. Cost of services was $16.6 million, resulting in gross margin expansion to roughly 61% of revenue. Selling, general, and administrative expenses were approximately $23.4 million, an increase of approximately $750,000 compared to prior year. This reflects a deliberate choice to increase investment in marketing and brand development by $1.5 million in the quarter. That was offset by efficiencies in general and administrative expenses. Customer acquisition cost for the quarter was roughly $3,500 per case, compared to approximately $2,900 in the prior year quarter. While elevated, as Yogi mentioned, we made intentional investments in brand marketing. While the spend is not fully optimized today, we do expect these investments to pay off in the future.
Overall, cost disciplines continue to be a priority, and equally important is being strategic about where we reinvest those savings to drive long-term shareholder value. As a result, adjusted EBITDA was $4.9 million, or roughly 11.5% of revenue, a decrease of $900,000 from the prior year. Through June 30th, 2026, cash provided by operating activities after capital expenditures was approximately $3.8 million, up slightly year-over-year. Also, year-to-date, we raised roughly $20 million on our ATM and paid down debt of approximately $13 million. As it relates to our balance sheet, we ended the quarter with roughly $19 million in cash and $5 million available on our revolver, resulting in roughly $24 million of liquidity available to the company at the end of the quarter.
Turning to our term loan, we ended the quarter with approximately $44 million of gross debt and remain in compliance with all covenants under our credit agreement. We recently signed an amendment extending the maturity of the facility to November 2027. At the same time, we continue to make progress refinancing. The continued stability in our business has allowed us to receive multiple term sheets that we believe are aligned with our long-term interests, and the maturity extension gives us additional time to achieve the right transaction. Now, turning to guidance. As you saw in our earnings release, we are reaffirming our outlook at the lower end of our revenue guidance and updating our adjusted EBITDA outlook to a range of $12 million-$14 million, which reflects our intentional investment in marketing of an additional $5 million this year to support future growth.
We believe this will strengthen the business and support improving performance over time. Our guidance assumes a stable macroeconomic environment through the balance of the year and does not contemplate any further deterioration in consumer demand. While we are not providing quarterly guidance, we thought it'd be helpful to provide context for our expectations in Q3 versus Q4. On a comparable basis, excluding London Center sales from 2025, we expect third quarter revenue to be down single digits. In Q4, we expect continued ramp of our existing and new service offerings and marketing efforts to deliver year-over-year growth in revenue and adjusted EBITDA on a comparable basis. Additionally, while we're introducing new procedures such as alloClae, our guidance does not include any contributions from these offerings given how early they are in the implementation process.
While we remain mindful of the current environment, we continue to be encouraged by the underlying fundamentals of the business, including continued growth in case volume, progress over strategic initiatives, and the early impact we're seeing from our expanded marketing efforts. We believe these investments position the business well for improving performance as we move through the remainder of the year. Importantly, we've made significant strides strengthening the business. In the past year alone, we have stabilized revenue trends, improved same-center sales from -23% in the first half of 2025 to flat year-to-date, reduced gross debt by over $30 million since the start of 2025, and increased cash by over $10 million since the start of 2025. Overall, the business is much stronger on almost all accounts compared to a year ago.
As we look towards the second half of the year, we remain focused on disciplined execution, maintaining financial flexibility, and continuing to invest in initiatives we believe will drive long-term shareholder value. With that, I'll turn it back to Yogi for closing remarks.