NEXGEL (NXGL) Q3 2024 earnings summary

Executive summary

• Achieved record Q3 2024 revenue of $2.94 million, up 141% year-over-year and 104% sequentially, driven by strong growth in branded consumer products, notably Silly George and Kenkoderm, and contract manufacturing.

• Gross profit margin improved to 43.6% from 28.2% in Q3 2023, reflecting a higher-margin product mix and operational leverage.

• Net loss for Q3 2024 was $754,000, with adjusted EBITDA loss narrowing to $347,000 from $788,000 in Q2 2024 and $464,000 in Q3 2023.

• Cash and equivalents were $1.1 million as of September 30, 2024, with $2 million raised post-quarter for working capital and inventory.

• Recent acquisitions and capital raises have expanded the product portfolio beyond core hydrogel technology.

Financial highlights

• Q3 2024 revenue: $2.94 million (+141% YoY, +104% QoQ); nine-month revenue: $5.65 million.

• Gross profit: $1.3 million in Q3 2024 (Q3 2023: $344,000; Q2 2024: $410,000).

• Gross margin: 43.6% in Q3 2024 vs. 28.2% in Q3 2023.

• Net loss: $754,000 in Q3 2024 vs. $552,000 in Q3 2023 and $979,000 in Q2 2024.

• Cash balance at quarter end: $1.1 million; $2 million raised post-quarter for working capital.

Outlook and guidance

• Expects continued revenue growth in Q4 2024, with revenue projected to exceed $3 million and further narrowing of adjusted EBITDA loss.

• Operating cash flow expected to approach positive in Q4.

• Revenue guidance for Q4 does not include potential AbbVie partnership revenue, expected to start in Q1 2025.

• Anticipates strong holiday season sales for Silly George, with potential for significant upside.

• Additional capital raises may be necessary to fund strategic initiatives and acquisitions.