Solesence Inc(SLSN) - 2025 Q1 - Quarterly Results

Executive Summary & Business Highlights Solésence achieved record Q1 2025 revenue, driven by new partnerships, despite temporary margin compression, with strong future order visibility and Nasdaq uplisting - Record revenue was fueled by strong sales across consumer products and large customer orders, including a new product line with a key new brand partner[2] - One-time start-up costs associated with a new partner launch impacted Q1 gross margins, but the company anticipates substantial margin improvement as operations scale[2] - The company anticipates continued sequential revenue growth, citing current shipped and open orders in excess of $45 million[2] Financial Performance Solésence reported record Q1 2025 revenue of $14.6 million (+48% YoY), but gross profit and net income declined significantly due to higher start-up costs Q1 2025 Key Financial Metrics (vs. Q1 2024) | Financial Metric | Q1 2025 | Q1 2024 | Change | | :--- | :--- | :--- | :--- | | Net Revenue | $14.6 million | $9.9 million | +48% | | Gross Profit | $3.3 million | $3.6 million | -8.3% | | Gross Margin | 23% | 36% | -13 pts | | Net Income | $0.0 million (breakeven) | $0.9 million | -100% | | Adjusted EBITDA | $0.6 million | $1.5 million | -60% | Consolidated Statements of Operations Q1 2025 net revenue increased 48% to $14.6 million, but a 79.9% surge in cost of revenue reduced gross profit and led to breakeven net income Q1 2025 vs Q1 2024 Statement of Operations (in thousands) | Account | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net revenue | $14,625 | $9,868 | | Gross profit | $3,313 | $3,580 | | Income from operations | $256 | $1,111 | | Net income | $80 | $893 | | Net income per share-diluted | $0.00 | $0.02 | Consolidated Balance Sheets Total assets grew to $57.0 million as of March 31, 2025, driven by receivables and inventories, while total liabilities increased due to a new line of credit Balance Sheet Highlights (in thousands) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total current assets | $35,904 | $29,348 | | Total assets | $57,016 | $50,002 | | Total current liabilities | $32,876 | $25,773 | | Total liabilities | $41,860 | $35,056 | | Total stockholders' equity | $15,156 | $14,946 | Non-GAAP Financial Measures Solésence uses non-GAAP measures like Adjusted EBITDA, which declined sharply to $609 thousand in Q1 2025 from $1,505 thousand in Q1 2024 - The company presents non-GAAP measures, believing they provide meaningful supplemental information to evaluate performance across reporting periods[10] Adjusted EBITDA Reconciliation (in thousands) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net Income | $80 | $893 | | Adjusted EBITDA | $609 | $1,505 | Operational Highlights Q1 2025 saw significant operational scaling with 95% shipment and 120% production volume increases, alongside expanded intellectual property with new patent allowances - Shipment volume increased by 95% and production volume grew by 120% year-over-year[7] - Intellectual property was expanded with patent allowances in Japan (Kleair™ technology), South Korea (plant-based antioxidant), and Mexico (skin health technology)[7] Corporate Updates & Conference Call A key corporate update was the successful uplisting to Nasdaq under ticker SLSN, enhancing visibility, with a conference call scheduled for May 5, 2025 - The company successfully uplisted to the Nasdaq market under the new ticker symbol "SLSN"[6] - A conference call to discuss Q1 2025 financial results is scheduled for May 5, 2025, at 4:00 p.m. CDT[8]