SBC (SBC) Q3 2025: Clinic Network Expands by 34, Signals Franchise Recovery
SBC’s third quarter saw its franchise clinic count rise by 34 locations, marking a significant expansion effort even as the business worked through the tail end of franchise fee restructuring and cost absorption. The company’s initiatives in pricing, multi-brand dermatology, and international expansion set the stage for renewed organic growth and margin recovery. With stable liquidity and targeted capital policy changes, SBC is positioning itself for more predictable performance and broader investor appeal into 2026.
Summary
- Clinic Network Expansion: Franchise footprint grew by 34 clinics, reinforcing scale and brand reach.
- Profitability Inflection: Cost normalization and higher average spend per customer signal margin stabilization.
- Strategic Global Moves: Thailand entry and Waku acquisition target new growth vectors beyond Japan.
Performance Analysis
SBC’s Q3 results highlighted a turning point in operational momentum as the company added 34 clinics, bringing its network to 258 locations. This expansion drove the annual customer base to approximately 6.5 million, underscoring the company’s ability to scale its franchise model, a business structure where independent operators license SBC’s brand and systems in exchange for fees and compliance. The average spend per customer showed clear signs of recovery, attributed to effective pricing strategies and a multi-brand approach in dermatology, which captured higher-spending segments.
On the financial side, sales rebounded after being impacted by franchise fee structure changes, with bottoming out supported by rising points-related revenue and tighter control over listing-related costs, including share-based compensation. Operating and net income both benefited from these cost reductions. The company also cited an uptick in medical equipment leasing costs and the consolidation of AHH in Singapore as drivers of higher cost of goods sold (COGS), but management expects cost absorption to level off into Q4.
- Clinic Scale Drives Customer Growth: 6.5 million annual customers reflect ongoing demand for medical aesthetic services.
- Cost Structure Stabilization: Declining listing costs and expense control support margin recovery.
- International Expansion Costs: Medical equipment leasing and Singapore consolidation temporarily elevated COGS.
With restructuring largely complete and negative revenue impacts fading, SBC is targeting a return to stable growth and improved profitability in the coming quarters.
Executive Commentary
"Thanks to initiatives such as pricing and promotion strategy optimization and our multi-brand strategy in the dermatology segment, which has successfully captured high spending customer groups, the overall average living per customer visit is clearly showing signs of recovery."
Yuya Yoshida, Chief Financial Officer
"We are pleased to announce that our first step in entering into Thailand is through a partnership with BlazeAzure... By deepening our collaboration... we will accelerate our full-scale entry into Thailand's rapidly growing aesthetic medical market."
Yuya Yoshida, Chief Financial Officer
Strategic Positioning
1. Franchise Network Expansion and Brand Leverage
SBC’s aggressive clinic rollout—with 34 new locations—demonstrates its commitment to scaling its platform and capturing geographic white space. The franchise model, where local operators run clinics under the SBC brand, enables rapid expansion with lower direct capital intensity, and the rising customer count validates the approach. The company’s multi-brand dermatology strategy is designed to segment the market and attract higher-value clients, supporting both volume and pricing power.
2. International Market Entry and Diversification
Entry into Thailand through a partnership with BlazeAzure, a local operator with a strong network, marks SBC’s first step toward international diversification. The initial focus is on proof-of-concept laser treatments for both Japanese and Thai customers, with ambitions to expand into other Southeast Asian markets. While near-term financial impacts are modest, this move is intended to lay groundwork for future growth and to leverage SBC’s core competencies abroad.
3. R&D and Service Innovation via Waku Acquisition
The tender offer to acquire a majority stake in Waku, an R&D and skincare business, is aimed at integrating innovation and clinical delivery. SBC expects to realize synergies by selling Waku products in its clinics, developing proprietary treatments, and internalizing cell culture operations. This vertical integration could enhance both product differentiation and margin profile, particularly in high-growth segments like regenerative medicine and orthopedics.
4. Capital Policy and Liquidity Initiatives
Management is addressing the low liquidity of SBC shares by considering new share issuances, partial founder sales, and potential share buybacks. These steps are intended to broaden the investor base and improve trading conditions, which could attract more institutional interest. Ample liquidity from bank financing and disciplined cash management provide flexibility for both organic investment and M&A activity.
Key Considerations
SBC’s Q3 marks a strategic inflection, with operational normalization and new growth initiatives shaping the outlook. Investors should assess both the pace of recovery and the risks tied to international and R&D bets.
Key Considerations:
- Post-Restructuring Trajectory: Franchise fee restructuring impacts are receding, setting up a cleaner growth comparison into Q4 and 2026.
- Global Expansion Execution: Thailand entry is early-stage, with success dependent on local partnerships and adapting the SBC model to new consumer bases.
- Innovation Integration: Waku acquisition could unlock new service offerings, but integration and synergy realization will require careful execution.
- Capital Allocation Balance: Management is weighing dividends, buybacks, and reinvestment, with a stated preference for growth and M&A over immediate shareholder returns.
Risks
Execution risk remains elevated as SBC pursues international expansion and integrates new R&D capabilities, with uncertain timelines for revenue contribution from these initiatives. Franchise fee disruptions and elevated COGS from equipment leasing and overseas consolidation could pressure margins if not carefully managed. Low share liquidity and share price volatility also present ongoing capital market challenges, especially as management weighs share issuance and founder sales.
Forward Outlook
For Q4, SBC management signaled:
- Continuation of positive momentum established in Q3
- Expectation for more stable and predictable financial performance
For full-year 2025, management did not provide explicit guidance but indicated:
- Active consideration of providing revenue and profit guidance in the near future
Management highlighted key drivers for the outlook:
- Restructuring impacts largely behind the company, setting up for normalized growth
- International and R&D initiatives to provide incremental growth over time
Takeaways
Q3 marks a pivot for SBC as it emerges from franchise restructuring and cost absorption, with clinic network scale and customer spend on the rise.
- Franchise Model Resilience: Network expansion and customer growth reinforce the scalability and stickiness of SBC’s platform.
- Margin and Liquidity Focus: Cost normalization and capital policy changes aim to stabilize earnings and attract new investors.
- Growth Watchpoints: Investors should monitor international execution and R&D integration for signs of meaningful revenue contribution in 2026 and beyond.
Conclusion
SBC’s third quarter underscores a transition point, with core operations stabilizing and strategic bets in play for future growth. The company’s ability to balance franchise expansion, innovation, and capital discipline will determine its trajectory as it enters new markets and scales its platform.
Industry Read-Through
SBC’s expansion into Thailand and investment in regenerative medicine reflect broader trends in the medical aesthetics sector: regional players are leveraging local partnerships to enter high-growth Asian markets and integrating R&D closer to the clinic to drive innovation and differentiation. Franchise models continue to prove effective for rapid scale in healthcare services, though execution risk rises as companies move across borders and invest in new modalities. Capital market access and liquidity remain top of mind for Asian healthcare rollups, signaling that investor-friendly policies will be a competitive advantage for sector leaders.