Driving Value in Dermatology Matching Patients with Clinics for a Win-Win-Win Outcome Investor Presentation December 2024 NASDAQ: SSKN Safe Harbor Statement This presentation includes "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 that are subject to risks, uncertainties and other factors. All statements other than statements of historical fact are statements that could be deemed forward-looking statements, including any statements of the plans, strat ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2025 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF Registrant's telephone number, including area code: (215) 619-3200 Securities registered pursuant to Section 12(b) of the Act: | | | Name Of Each Exchange On Which | | --- | --- | --- | | Title of Each Cl ...

STRATA Skin Sciences (SSKN) Q1 2025 Earnings Call May 14, 2025 05:00 PM ET Company Participants Jules Abraham - Managing Director - CommunicationsDolev Rafaeli - President, CEO & Vice-ChairmanJohn Gillings - VP of FinanceJeffrey Cohen - MD - Equity Research Conference Call Participants Jeremy Pearlman - Equity Analyst Operator Good afternoon, and welcome to the Strata Skin Sciences First Quarter twenty twenty five Financial Results Conference Call. All participants will be in a listen only mode. After today ...

Financial Data and Key Metrics Changes - Total revenue for Q1 2025 was $6.8 million, up 1% compared to Q1 2024 [16] - Global recurring revenue for Q1 2025 was $4.7 million, also up 1% year-over-year [16] - Gross profit increased to $3.6 million for Q1 2025, up from $3.1 million in the same period in 2024, resulting in a gross margin of 53.5% compared to 45.6% in Q1 2024 [17] - Total operating expenses decreased to $5.7 million in Q1 2025 from $6.0 million in Q1 2024, a reduction of 5% [18] - Cash burn improved to $749,000 in Q1 2025 from $1.55 million in the prior year [19] Business Line Data and Key Metrics Changes - The installed base of XTRAC devices in the U.S. is approximately 850, with a significant increase in recurring revenue per device [6][11] - The TheraClear X device installed base reached 160 units, up from 104 units at the end of Q1 2024, with revenue growing over 50% year-over-year in six of the last seven quarters [13] - The number of patients submitted for reimbursement for TheraClear X increased by 138% year-over-year, with pre-authorization rates exceeding 85% [14][29] Market Data and Key Metrics Changes - International business sales reached $2.5 million, up 8% year-over-year, with equipment sales up 13% and recurring treatments revenue up 27% [14] - The company is cautiously monitoring the potential negative impact of tariffs on international sales, particularly in Asian markets [15][41] Company Strategy and Development Direction - The company is executing a multifaceted turnaround strategy focused on increasing recurring revenue per device and optimizing device placements [5] - The Elevate360 consulting model is being expanded to improve patient conversion and device utilization in underperforming clinics [6][7] - The strategy includes removing underutilized devices to ensure capital efficiency and focusing on clinics that show potential for growth [9][54] Management's Comments on Operating Environment and Future Outlook - Management cautioned about potential impacts of tariffs on international business, although there was no immediate effect observed in Q1 2025 [20] - The company anticipates favorable outcomes from ongoing discussions regarding reimbursement coverage expansions [12] - Management expressed optimism about the traction gained from the turnaround strategy and the increase in demand for cost-effective treatments [14] Other Important Information - The company exited Q1 2025 with cash and cash equivalents totaling $7.8 million, including $1.3 million of restricted cash [20] - The average revenue per XTRAC device in the U.S. was approximately $22,000 in 2024, indicating potential for significant revenue growth with increased utilization [10] Q&A Session Summary Question: Can you discuss the TheraClear pipeline and marketplace learnings? - Management noted that the installed base is growing, with 160 devices deployed and a significant increase in patients submitted for reimbursement [24][25] Question: What are the utilization trends for TheraClear? - Management provided insights on the revenue breakeven points and the expected number of procedures per device, indicating a focus on increasing utilization [31] Question: What is the potential impact of tariffs on domestic business? - Management clarified that the domestic supply chain is minimally impacted by tariffs, but there are peripheral effects due to suppliers raising prices [41][42] Question: What is the focus for the rest of 2025 regarding the installed base? - Management indicated a dual focus on increasing utilization of the current installed base while also signing new clinics [46][54] Question: How many clinics could benefit from the Elevate360 program? - Management stated that they are currently implementing the program in about 100 accounts, with plans for further expansion [58][60]

Revenue Performance - Revenue for Q1 2025 was $6.8 million, a 1% increase compared to Q1 2024[6] - International revenue grew 8% in Q1 2025, now accounting for 36% of total revenue[5] - Equipment revenue for Q1 2025 was $2.1 million, up 1.4% from the previous year[6] - Average net revenue per domestic XTRAC® system increased to $4,776, a 3% year-over-year growth[6] Profitability and Loss - Gross margin improved to 53.5%, up 790 basis points from 45.6% in the prior year[6] - Adjusted EBITDA improved by $732 thousand to negative $547 thousand compared to negative $1.3 million in the prior year[6] - Net loss for Q1 2025 was $2.4 million, or EPS of negative $0.58, an improvement from a net loss of $3.4 million in Q1 2024[8] - Net loss for the three months ended March 31, 2025, was $2,432 million, an improvement from a net loss of $3,368 million in the same period of 2024[28] Operating Expenses - Operating expenses decreased by 5% to $5.7 million, with engineering & product development down 60%[8] - Cash flows from operating activities resulted in a net cash outflow of $550 million, compared to a net cash outflow of $804 million in the prior year[28] - Depreciation and amortization expenses were $1,220 million, slightly down from $1,249 million in the previous year[28] Cash and Liquidity - Total cash at the end of Q1 2025 was $7.8 million[9] - Cash, cash equivalents, and restricted cash at the end of the period totaled $7,846 million, up from $6,571 million at the end of the same period in 2024[28] - The net decrease in cash, cash equivalents, and restricted cash was $749 million, compared to a decrease of $1,547 million in the prior year[28] - Cash paid for interest during the year was $450 million, down from $480 million in the previous year[28] Inventory and Receivables - Inventory write-off was recorded at $0 million, a significant decrease from $141 million in the prior year[28] - Accounts receivable decreased by $590 million, from $726 million in 2024 to $136 million in 2025[28] Strategic Initiatives - Direct-to-consumer strategy drove 32% and 128% increases in unique Psoriasis and Acne patients, respectively[4] - The company made a purchase of property and equipment totaling $199 million, a decrease from $725 million in the same period last year[28] - Operating lease right-of-use assets obtained in exchange for operating lease were $0 million, down from $977 million in the previous year[28]

Core Insights - STRATA Skin Sciences, Inc. reported a modest revenue increase of 1% year-over-year for Q1 2025, totaling $6.8 million, with gross margins improving significantly by nearly 800 basis points to 53.5% [6][10][24] - The company has successfully executed its direct-to-consumer strategy, resulting in a 32% increase in unique psoriasis patients and a 128% increase in unique acne patients compared to the prior year [4] - International revenue grew by 8% in Q1 2025, contributing to 36% of total revenue, and is expected to continue growing as global tariff uncertainties resolve [5] Financial Performance - Revenue for Q1 2025 was $6.8 million, a 1% increase from Q1 2024, with global recurring revenue at $4.7 million and equipment revenue at $2.1 million, both up approximately 1% [6][10] - Gross profit for Q1 2025 was $3.6 million, representing 53.5% of revenue, compared to $3.1 million or 45.6% of revenue in Q1 2024 [6][24] - Total operating expenses decreased by 5% to $5.7 million, with significant reductions in engineering and product development expenses by 60% [7][24] Loss and Cash Position - The net loss for Q1 2025 was $2.4 million, or a loss per share of $0.58, an improvement from a net loss of $3.4 million or $0.96 per share in Q1 2024 [7][24] - Cash, cash equivalents, and restricted cash at the end of Q1 2025 were $7.8 million, down from $8.6 million at the beginning of the period [8][26] Strategic Developments - The company is focused on enhancing its direct-to-consumer marketing efforts and building a strong franchise in dermatology and aesthetics [20] - STRATA's partnership program offers innovative treatment technologies with a fee-per-treatment cost structure, which is expected to drive further growth [19][18]

Core Insights - STRATA Skin Sciences, Inc. will participate in the D. Boral Capital Inaugural Global Conference on May 14, 2025, at The Plaza Hotel in New York City [1] - Dr. Dolev Rafaeli, President and CEO, will host one-on-one meetings during the conference from 9:00 AM to 3:00 PM (ET) [2] Company Overview - STRATA Skin Sciences is focused on developing, commercializing, and marketing innovative products for treating dermatologic conditions such as psoriasis, vitiligo, and acne [3] - The company's product offerings include the XTRAC excimer laser, VTRAC lamp systems, and the TheraClearX Acne Therapy System [3] Partnership Program - STRATA offers a unique Partnership Program in the U.S., which includes a fee per treatment cost structure instead of requiring equipment purchase [4] - The program provides on-site training for practice personnel, service and maintenance of equipment, dedicated account and customer service associates, and co-op advertising support [4]

Core Viewpoint - STRATA Skin Sciences, Inc. will report its first quarter 2025 financial results on May 14, 2025, after market close [1] Group 1: Financial Results Announcement - The financial results will be followed by a conference call at 5:00 p.m. ET on the same day to review the results and provide updates on corporate developments [2] - Interested parties can join the conference call via domestic and international dialing options, with a recommendation to join 10 minutes early [3] Group 2: Replay Information - A telephonic replay of the call will be available until May 21, 2025, with specific dialing instructions provided [4] - A webcast replay will be accessible approximately one hour after the live call and will remain available until September 21, 2025 [4] Group 3: Company Overview - STRATA Skin Sciences is focused on developing and marketing innovative products for dermatologic conditions, including psoriasis, vitiligo, and acne [5] - The company offers products such as the XTRAC excimer laser, VTRAC lamp systems, and the TheraClearX Acne Therapy System [5] Group 4: Partnership Program - STRATA employs a unique Partnership Program that includes a fee per treatment cost structure, on-site training, service and maintenance, and co-op advertising support [6]

Financial Data and Key Metrics Changes - Total revenue for Q4 2024 was $9.6 million, an increase of 10% from $8.7 million in Q4 2023 [20] - Gross profit increased to $5.8 million in Q4 2024, up from $4.8 million in the year-ago quarter, with gross margins improving to 60.1% from 55.3% [21] - Operating loss improved by 68% compared to Q4 2023, adjusted for non-cash impairment charges [12] Business Line Data and Key Metrics Changes - Average net revenue per XTRAC device increased by 11% over the previous quarter and 6% over the prior year [10] - Equipment revenue was $3.8 million in Q4 2024, compared to $3.1 million in Q4 2023, driven by strong capital sales in international markets [20] - Gross domestic revenue billings in Q4 were $4.9 million, marking the third consecutive quarter of sequential increase [13] Market Data and Key Metrics Changes - International sales reached $4.1 million in Q4 2024, up 27% from Q3 2024 and up 41% from Q4 2023, representing the highest level of international sales to date [15] - The installed base of TheraClearX devices in the U.S. increased to 144 by the end of Q4 2024, up from 92 at the end of 2023 [14] Company Strategy and Development Direction - The company is focusing on improving the utilization of its machines by removing underperforming units and assisting higher-performing accounts [10] - The strategy includes enhancing direct-to-consumer advertising and in-clinic processes to drive patient appointments and revenue growth [12][13] - The company aims to stabilize financial performance and drive growth through strategic initiatives laid out at the beginning of 2024 [24] Management's Comments on Operating Environment and Future Outlook - Management noted a strong seasonal effect between Q4 and Q1, with Q1 typically being the weakest quarter [17] - The company is optimistic about continued progress in 2025, supported by its current financial position and strategic goals [22][23] Other Important Information - The company secured preauthorization for over 3,700 patients with acne in partner clinics year-to-date [14] - The cash position as of December 31, 2024, was $8.6 million, which includes $1.3 million of restricted cash [22] Q&A Session Summary Question: Clarification on TheraClearX device numbers - Management confirmed that 108 of the 144 TheraClearX devices are in accounts that are billing insurance [27] Question: Types of practices and geographical presence for TheraClearX - Initial uptake was stronger in the Northeast, primarily among small- to medium-sized groups [32] Question: Strength of international markets - Key international markets include Japan, China, South Korea, and the Middle East, with strong growth driven by technology appreciation and clinical efficacy [36][38] Question: Criteria for identifying underutilized accounts - Management explained that approximately 10% of accounts are churned annually based on performance metrics [49] Question: Determining new clinics for device placement - New accounts are identified based on historical patient treatment numbers and previous relationships with the company [60]

Financial Data and Key Metrics Changes - Total revenue for Q4 2024 was $9.6 million, an increase of 10% from $8.7 million in Q4 2023 [20] - Gross profit increased to $5.8 million in Q4 2024, up from $4.8 million in the year-ago quarter, with gross margins improving to 60.1% from 55.3% [21] - Operating loss improved by 68% compared to Q4 2023, adjusted for non-cash impairment charges [12] Business Line Data and Key Metrics Changes - Average net revenue per XTRAC device increased by 11% over the previous quarter and 6% over the prior year [10] - Equipment revenue was $3.8 million in Q4 2024, compared to $3.1 million in Q4 2023, driven by strong capital sales in international markets [20] - Gross domestic revenue billings in Q4 were $4.9 million, marking the third consecutive quarter of sequential increase [13] Market Data and Key Metrics Changes - International sales reached $4.1 million in Q4 2024, up 27% from Q3 2024 and up 41% from Q4 2023, representing the highest level of international sales to date [15] - The installed base of TheraClearX devices in the U.S. increased to 144 at the end of Q4 2024, up from 92 at the end of 2023 [14] Company Strategy and Development Direction - The company is focusing on improving the utilization of its machines by removing units from underperforming accounts and assisting higher-performing accounts [10] - The strategy includes enhancing direct-to-consumer advertising and consulting-like efforts with partner clinics to drive better utilization [12][13] - The company aims to stabilize financial performance and drive growth through strategic initiatives laid out at the beginning of 2024 [24] Management's Comments on Operating Environment and Future Outlook - Management noted a strong seasonal effect between Q4 and Q1, with Q1 typically being the weakest quarter [17] - The company is optimistic about continued progress in improving device utilization and revenue growth in the upcoming periods [11][12] - Management highlighted the importance of understanding the operational dynamics within clinics to enhance device utilization [56] Other Important Information - The company had a cash position of $8.6 million as of December 31, 2024, which supports growth initiatives [22] - The company is not providing specific guidance but noted historical patterns to help refine models for future performance [17] Q&A Session Summary Question: Clarification on TheraClearX device numbers - Management confirmed that 108 of the 144 TheraClearX devices are in accounts that are billing insurance [27] Question: Types of practices and geographical presence for TheraClearX - Initial uptake was stronger in the Northeast, primarily among small- to medium-sized groups [32][34] Question: Strength of international sales - Key international markets include Japan, China, South Korea, and the Middle East, with strong growth driven by technology appreciation and economic changes [36][41] Question: Identifying underutilized accounts and new clinics - Management explained the process of evaluating accounts based on revenue thresholds and the importance of patient follow-up for utilization [49][60]