STRATA Skin Sciences (SSKN) Q2 2024 earnings summary

Executive summary

• Q2 2024 revenue grew 2% year-over-year to $8.4M, with gross margin improving to 58.5% from 52.3% a year ago.

• Net loss narrowed to $0.1M ($0.03/share) from $3.1M ($0.90/share) in Q2 2023, reflecting reduced operating expenses and improved cost controls.

• Operating expenses declined 14% year-over-year, reducing operating loss from $2.0M to $0.5M.

• Strategic focus on optimizing device utilization and expanding DTC marketing, with expansion from 4 to 28 areas and positive early results.

• Cash balance at quarter-end was $6.8M, aided by $864K Employee Retention Credit and a $2.1M equity raise in July 2024.

Financial highlights

• Q2 2024 revenue: $8.4M (+2% YOY); global recurring revenue: $5.3M (-2% YOY); equipment revenue: $3.1M (+11% YOY), with international sales comprising the majority.

• Gross profit: $4.9M (58.5% margin) vs. $4.3M (52.3%) in Q2 2023.

• Net loss: $0.1M (EPS $(0.03)), improved from $3.1M loss (EPS $(0.90)) in Q2 2023.

• Adjusted EBITDA for Q2 2024: $1.0M vs. $(0.1)M in Q2 2023.

• Cash, cash equivalents, and restricted cash at June 30, 2024: $6.8M.

Outlook and guidance

• Management expects DTC marketing to continue driving patient awareness and appointment growth, with increased spend planned through 2024.

• Current cash, anticipated revenues, and July 2024 equity raise expected to cover liquidity needs for at least 12 months.

• Strategic plan to optimize installed device base, focusing on higher utilization and profitability.

• If pre-pandemic utilization levels are reached, annual revenue could increase by $8M at higher margins without expanding the install base.

• Market conditions, supply chain disruptions, and geopolitical risks could impact future results and financing access.