SBC Medical profit falls 47% on franchise fee revisions

SBC Medical Group Holdings (NASDAQ:SBC) reported a 47% decline in net income for the first quarter of 2026, as structural overhauls to its franchise billing models outpaced steady underlying volume growth across its medical clinic network.

The medical services organization posted net income attributable to the company of $11 million for the three months ended March 31, 2026, down from the prior-year period.

The contraction compressed the firm's net income margin to 26%, representing a drop of 19 percentage points from the first quarter of 2025.

Diluted earnings per share fell 48% year-over-year to $0.11.

Total revenue for the quarter decreased 9% to $43 million.

Management attributed the lower reported top-line figures to a strategic structural reform initiated in April 2025, which altered the organization's legacy franchise fee framework.

The compression filtered through to the company’s core operational profitability measures.

First-quarter EBITDA declined 26% to $18 million, reducing the corresponding EBITDA margin by 10 percentage points to 43%.

Return on equity experienced a parallel softening, dropping 23 percentage points to finish the three-month period at 18%.

Despite the downbeat financial metrics, SBC Medical sustained double-digit expansion across its physical and digital distribution channels.

The company's total franchise network grew to 284 locations, reflecting a net addition of 33 clinic locations compared to March 31, 2025.

Patient acquisition and retention metrics also tracked higher during the period.

The total number of unique customers served over the trailing twelve months rose 10% year-over-year to 6.76 million. B

rand stickiness remained robust, with the company reporting a 72% repeat visit rate among patients booking two or more appointments at its franchised aesthetic and medical facilities.