NexGel(NXGL) - 2025 Q2 - Quarterly Results

Executive Summary & Highlights Second Quarter 2025 Financial Highlights NEXGEL achieved strong financial performance in Q2 2025, with revenue growing 100.3% YoY and gross margin significantly improving to 43.6%, while the adjusted EBITDA loss continued to narrow Key Financial Metrics Comparison for Q2 2025 (in millions USD): | Metric | Q2 2025 | Q2 2024 | YoY Change | Q1 2025 | QoQ Change | | :----- | :------ | :------ | :--------- | :------ | :--------- | | Net Revenue | $2.88 | $1.44 | +100.3% | $2.81 | +2.5% | | Gross Profit | $1.26 | $0.29 | +334.5% | $1.19 | +5.9% | | Gross Profit Margin | 43.6% | 20.3% | +23.3 pp | 42.4% | +1.2 pp | | Net Loss Attributable to NEXGEL Stockholders | ($0.67) | ($0.89) | -24.6% | ($0.71) | -5.6% | | EBITDA | ($0.53) | ($0.76) | -30.2% | ($0.58) | -8.6% | | Adjusted EBITDA | ($0.42) | ($0.79) | -46.8% | ($0.50) | -16.0% | CEO Commentary and Outlook CEO Adam Levy highlighted strong Q2 2025 revenue and gross margin performance, reaffirming the full-year $13 million revenue guidance and the goal of achieving positive EBITDA - Year-over-year growth was primarily driven by increased consumer demand for branded products and new contract manufacturing agreements[4] - Subsequent to the quarter, the company expanded its partnership with STADA, including a $1 million non-dilutive capital advance to support product launch and marketing efforts[4][11] - The company completed a gross financing of $1.05 million, sufficient to support upcoming growth initiatives[4][11] - Reaffirmed the 2025 revenue guidance of $13 million and plans to achieve positive EBITDA within the year[2][4] Second Quarter 2025 Financial Results Analysis Revenue and Cost of Revenues Net revenues reached $2.88 million in Q2 2025, a 100.3% YoY increase, driven by growth in contract manufacturing and branded product sales, with a corresponding rise in cost of revenues Revenue and Cost of Revenues (in millions USD): | Metric | Q2 2025 | Q2 2024 | YoY Change | | :----- | :------ | :------ | :--------- | | Revenues, net | $2.88 | $1.44 | +100.3% | | Cost of revenues | $1.63 | $1.15 | +41.7% | - The increase in total revenues was primarily attributable to growth in contract manufacturing and branded product sales[5] - The increase in cost of revenues was primarily consistent with the growth in branded consumer product sales, as Silly George was acquired mid-way through the comparable period in 2024[6] Gross Profit Gross profit for Q2 2025 substantially increased to $1.26 million with the gross margin improving to 43.6% from 20.3% in the prior year period Gross Profit and Gross Margin (in millions USD): | Metric | Q2 2025 | Q2 2024 | YoY Change | | :----- | :------ | :------ | :--------- | | Gross profit | $1.26 | $0.29 | +334.5% | | Gross profit margin | 43.6% | 20.3% | +23.3 pp | - The increase in gross profit was primarily due to growth in contract manufacturing and consumer branded product sales, along with the acquisition of Silly George mid-way through the comparable period in 2024[7] Operating Expenses (Selling, General and Administrative) Selling, general and administrative expenses for Q2 2025 rose to $1.89 million, primarily due to increased costs in compensation, stock-based compensation, and professional fees Selling, General and Administrative Expenses (in millions USD): | Metric | Q2 2025 | Q2 2024 | YoY Change | | :----- | :------ | :------ | :--------- | | Selling, general and administrative expenses | $1.89 | $1.27 | +48.8% | - The increase in expenses was attributable to rises in compensation and benefits, stock-based compensation, advertising, professional consulting fees, other expenses, and investor and stockholder services, partially offset by a decrease in depreciation and amortization[8] Net Loss and Profitability Metrics NEXGEL reduced its net loss attributable to stockholders to $0.67 million in Q2 2025, with significant improvements in both EBITDA and Adjusted EBITDA Net Loss and Profitability Metrics (in millions USD): | Metric | Q2 2025 | Q2 2024 | YoY Change | | :----- | :------ | :------ | :--------- | | Net loss attributable to NEXGEL stockholders | ($0.67) | ($0.89) | -24.6% | | EBITDA | ($0.53) | ($0.76) | -30.2% | | Adjusted EBITDA | ($0.42) | ($0.79) | -46.8% | Financial Position and Liquidity Cash and Financing Activities As of June 30, 2025, NEXGEL held a cash balance of approximately $0.73 million and secured additional funding post-quarter through a partnership expansion and financing Cash Balance (in millions USD): | Metric | As of June 30, 2025 | | :----- | :------------------ | | Cash Balance | $0.73 | - Expanded partnership with STADA, including a $1 million non-dilutive capital advance to support product launch and marketing efforts[4][11] - Completed a gross financing of $1.05 million, sufficient to support upcoming growth initiatives[4][11] Condensed Consolidated Balance Sheets Overview As of June 30, 2025, the company's total assets were $9.71 million, with total liabilities and stockholders' equity at $4.66 million and $5.06 million, respectively Key Data from Condensed Consolidated Balance Sheets (in thousands USD): | Metric | June 30, 2025 | December 31, 2024 | Change | | :----- | :------------ | :---------------- | :----- | | Total assets | $9,711 | $10,983 | ($1,272) | | Total liabilities | $4,656 | $4,903 | ($247) | | Total stockholders' equity | $5,055 | $6,080 | ($1,025) | | Cash | $725 | $1,807 | ($1,082) | | Total current assets | $4,162 | $5,114 | ($952) | | Total current liabilities | $2,396 | $2,470 | ($74) | Company Information & Disclosures About NEXGEL, INC. NEXGEL, Inc. is a leading provider of healthcare, beauty, and over-the-counter (OTC) products, specializing in ultra-gentle, high-water-content hydrogels - NEXGEL is a leading provider of healthcare, beauty, and over-the-counter (OTC) products, including ultra-gentle, high-water-content hydrogel products[14] - The company has over two decades of experience in electron-beam cross-linked hydrogel development and manufacturing in Langhorne, Pennsylvania[14] - NEXGEL's brands include SilverSeal, Hexagels, Turfguard, Kenkoderm, and Silly George, and it maintains strategic contract manufacturing relationships with leading consumer healthcare companies[14] Non-GAAP Financial Measures The company utilizes non-GAAP financial measures like EBITDA and Adjusted EBITDA to provide a clearer view of its core operational performance for investors and management - Non-GAAP financial measures are intended to provide a representation of the company's core operating performance and information that may be useful in assessing its future prospects and potential trends[15] - Excluded items include amortization of intangible assets, stock-based compensation, adjusted tax impacts, other non-recurring items, and discrete items that impact the income tax provision[15] Forward-Looking Statements This section contains cautionary notes regarding forward-looking statements, which involve risks and uncertainties that could cause actual results to differ materially from expectations - Statements include expectations for significant growth opportunities in the second half of 2025, and continued expectations of at least $13 million in revenue and achieving positive EBITDA in 2025[16] - These forward-looking statements involve known and unknown risks, uncertainties, and other factors that may cause the company's actual results, performance, or achievements to be materially different from expectations[16] - The company does not intend and does not assume any obligation to revise any forward-looking statements[16] Investor Relations This section provides contact information for investor inquiries, directed to Valter Pinto, Managing Director at KCSA Strategic Communications - Investor Contact: Valter Pinto, Managing Director, KCSA Strategic Communications, Phone: 212.896.1254, Email: Nexgel@kcsa.com[18] Condensed Consolidated Financial Statements Condensed Consolidated Balance Sheets The condensed consolidated balance sheets present NEXGEL's financial position as of June 30, 2025, and December 31, 2024 NEXGEL, INC. Condensed Consolidated Balance Sheets (in thousands USD): | ASSETS: | June 30, 2025 | December 31, 2024 | | :-------------------------------- | :------------ | :---------------- | | Current Assets: | | | | Cash | $725 | $1,807 | | Accounts receivable, net | 753 | 933 | | Inventory, net | 1,821 | 1,751 | | Prepaid expenses and other current assets | 863 | 623 | | Total current assets | 4,162 | 5,114 | | Goodwill | 1,128 | 1,128 | | Intangibles, net | 744 | 807 | | Property and equipment, net | 2,070 | 2,211 | | Operating lease - right of use asset | 1,512 | 1,628 | | Other assets | 95 | 95 | | Total assets | $9,711 | $10,983 | | LIABILITIES AND STOCKHOLDERS' EQUITY | | | | Current Liabilities: | | | | Accounts payable | $826 | $761 | | Accounts payable - related party | 447 | 531 | | Accrued expenses and other current liabilities | 534 | 310 | | Deferred revenue | 180 | 179 | | Current portion of note payable | 99 | 97 | | Warrant liability | 14 | 118 | | Contingent consideration liability | - | 178 | | Financing lease liability, current portion | 62 | 59 | | Operating lease liabilities, current portion | 234 | 237 | | Total current liabilities | 2,396 | 2,470 | | Operating lease liabilities, net of current portion | 1,446 | 1,538 | | Financing lease liability, net of current portion | 275 | 307 | | Notes payable, net of current portion | 539 | 588 | | Total liabilities | 4,656 | 4,903 | | Stockholders' Equity: | | | | Common stock | 8 | 8 | | Additional paid-in capital | 24,036 | 23,743 | | Accumulated deficit | (19,373) | (17,996) | | Total NexGel stockholders' equity | 4,671 | 5,755 | | Non-controlling interest in joint venture | 384 | 325 | | Total stockholders' equity | 5,055 | 6,080 | | Total liabilities and stockholders' equity | $9,711 | $10,983 | Condensed Consolidated Statements of Operations The condensed consolidated statements of operations detail revenues, costs, expenses, and net loss for the three and six-month periods ending June 30, 2025 and 2024 NEXGEL, INC. Condensed Consolidated Statements of Operations (in thousands USD): | | Three Months Ended June 30, | | Six Months Ended June 30, | | | :------------------------------------------ | :------------ | :------------ | :------------ | :------------ | | | 2025 | 2024 | 2025 | 2024 | | Revenues, net | $2,884 | $1,440 | $5,690 | $2,706 | | Cost of revenues | 1,626 | 1,147 | 3,244 | 2,187 | | Gross profit | 1,258 | 293 | 2,446 | 519 | | Operating expenses: | | | | | | Research and development | - | 76 | 1 | 78 | | Selling, general and administrative | 1,894 | 1,271 | 3,858 | 2,366 | | Total operating expenses | 1,894 | 1,347 | 3,859 | 2,444 | | Loss from operations | (636) | (1,054) | (1,413) | (1,925) | | Other income (expense): | | | | | | Interest expense, net | (21) | (29) | (42) | (44) | | Loss on sale of assets | - | (4) | - | (4) | | Other expense | (37) | - | (76) | - | | Other income | 41 | 6 | 109 | 6 | | Gain on investments | - | 23 | - | 57 | | Changes in fair value of warrant liability | 13 | 79 | 104 | 26 | | Total other income (expense), net | (4) | 75 | 95 | 41 | | Loss before income taxes | (640) | (979) | (1,318) | (1,884) | | Income tax expense | - | - | - | - | | Net loss | (640) | (979) | (1,318) | (1,884) | | Less: Income (loss) attributable to non-controlling interest in joint venture | (25) | 94 | (59) | 146 | | Net loss attributable to NexGel stockholders | $(665) | $(885) | $(1,377) | $(1,738) | | Net loss per common share - basic | $(0.09) | $(0.14) | $(0.18) | $(0.28) | | Net loss per common share - diluted | $(0.09) | $(0.14) | $(0.18) | $(0.28) | | Weighted average shares used in computing net loss per common share - basic | 7,654,348 | 6,254,659 | 7,649,878 | 6,118,212 | | Weighted average shares used in computing net loss per common share – diluted | 7,654,348 | 6,254,659 | 7,649,878 | 6,118,212 | Condensed Consolidated Statements of Cash Flows The condensed consolidated statements of cash flows outline cash inflows and outflows from operating, investing, and financing activities for the six months ended June 30, 2025 and 2024 NEXGEL, INC. Condensed Consolidated Statements of Cash Flows (in thousands USD): | | Six Months Ended June 30, | | | :---------------------------------------------------------- | :------------ | :------------ | | | 2025 | 2024 | | Operating Activities | | | | Net loss | $(1,377) | $(1,738) | | Adjustments to reconcile net loss to net cash used in operating activities: | | | | Income (loss) attributable to non-controlling interest in joint venture | 59 | (146) | | Depreciation and amortization | 225 | 144 | | Net changes in operating lease assets and liabilities | 21 | 22 | | Share-based compensation and restricted stock vesting | 293 | 118 | | Gain on investment in marketable securities | — | (57) | | Changes in fair value of warrant liability and warrant modification expense | (104) | (26) | | Changes in operating assets and liabilities: | | | | Accounts receivable, net | 180 | 28 | | Inventory | (70) | (127) | | Prepaid expenses and other assets | (240) | (68) | | Accounts payable | 65 | 117 | | Accounts payable – related party | (84) | (105) | | Accrued expenses and other current liabilities | 224 | (113) | | Deferred revenue | 1 | 159 | | Net Cash Used in Operating Activities | (807) | (1,792) | | Investing Activities | | | | Proceeds from sales of marketable securities | — | 57 | | Capital expenditures | (20) | (361) | | Net cash paid for asset acquisition | — | (400) | | Net Cash Used in Investing Activities | (20) | (704) | | Financing Activities | | | | Proceeds from equity offering, net of expenses | — | 946 | | Investment by joint venture partner | — | 37 | | Payment of contingent consideration liability | (178) | (69) | | Principal payment on financing lease liability | (29) | (22) | | Principal payments of notes payable | (48) | (27) | | Net Cash Provided by (Used in) Financing Activities | (255) | 865 | | Net Decrease in Cash | (1,082) | (1,631) | | Cash – Beginning of period | 1,807 | 2,700 | | Cash – End of period | $725 | $1,069 | | Supplemental Disclosure of Cash Flows Information | | | | Cash paid during the year for: | | | | Interest | $18 | $27 | | Taxes | $— | $— | | Supplemental Non-cash Investing and Financing activities | | | | Shares issued in conjunction with asset acquisition | $— | $200 | | Property and equipment financed under notes payable | $— | $165 | | Property and equipment financed under financing leases | $— | $416 | Reconciliation of Non-GAAP Measures Calculation of EBITDA & Adjusted EBITDA This section provides a detailed reconciliation of GAAP net loss to the non-GAAP measures of EBITDA and Adjusted EBITDA for the respective periods Reconciliation of GAAP Measures to Non-GAAP Measures (in thousands USD): | | Three Months Ended | | | Six Months Ended June 30, | | | :------------------------------------------ | :------------ | :------------ | :------------ | :------------ | :------------ | | | March 31, 2025 | June 30, 2025 | June 30, 2024 | 2025 | 2024 | | Net (loss) income: | $(678) | $(640) | $(979) | $(1,318) | $(1,884) | | Less: Loss (income) attributable to non-controlling interest in joint venture | (34) | (25) | 94 | (59) | 146 | | Net loss attributable to NexGel stockholders | (712) | (665) | (885) | (1,377) | (1,738) | | Adjustments: | | | | | | | Depreciation and amortization | 114 | 111 | 92 | 225 | 144 | | Interest expense, net | 21 | 21 | 29 | 42 | 44 | | Income tax expense | - | - | - | - | - | | EBITDA | (577) | (533) | (764) | (1,110) | (1,550) | | Change in warrant liability(1) | (91) | (13) | (79) | (104) | (26) | | Share-based compensation expense(2) | 166 | 127 | 55 | 293 | 118 | | Adjusted EBITDA: | $(502) | $(419) | $(788) | $(921) | $(1,458) | - Adjustments for EBITDA include depreciation and amortization, interest expense, and income tax expense[25] - Further adjustments for Adjusted EBITDA include the non-cash change in warrant liability and share-based compensation expense[25][26]