NEXGEL, INC. Q4 FY2024 earnings call

• 2024 was a record year with revenue growth over 100% for the third consecutive year.
• Q4 gross margin 37% affected by reclassification of Amazon sales commissions; EBITDA and adjusted EBITDA loss were $726,000 and $621,000.
• Q4 net loss included $243,000 one-time inventory write-offs, with no future write-offs expected.
• Contract manufacturing expanded with new customers like Cintas, and consumer products saw brand expansions and new product launches.
• Partnership with STADA progressing well, with plans to launch more products in future quarters.

For the fourth quarter of 2024, revenue totaled $3.04 million, an increase of 181% compared to Q4 2023. Full year 2024 revenue was $8.69 million, up 112% from 2023. Contract manufacturing played a key role, driven by increased demand from existing customers and new global corporations like Cintas and Owens & Minor. Consumer products saw strong expansion: Medagel to launch new offerings, Kenkoderm to double product portfolio, Silly George grew from $2M annual run rate to over $5M post-acquisition, and partnership with STADA progressing well with Histasolv exceeding projections.

• Expect Q1 2025 revenue at least $2.75 million.
• Anticipate 2025 revenue to be at least $13 million.
• Aim to achieve positive EBITDA in 2025, with adjusted EBITDA expected to improve quickly excluding one-time event in Q4.

• Forward-looking statements subject to risks and uncertainties as per SEC regulations. One-time inventory write-offs in Q4 were a factor, but no future such write-offs expected.

Q: On guidance and adjusted EBITDA, when do you expect to reach positive adjusted EBITDA?

A: Joe McGuire said adjusted EBITDA will improve quickly, with Q1 being traditionally weakest but still good, expecting to improve in Q2 with new customers.

Q: Could you provide more context on the pipeline of new customers and industry applications?

A: Adam Levy said they have four large opportunities in pipeline, with some taking longer due to iterations and testing, others like Innovative Optics can get to market quickly.

Q: When might product from Innovative Optics start selling if data is positive?

A: Adam Levy said if data is positive, they expect to start selling product around mid-year 2025.

Q: Updates on AbbVie Acoustic device launch?

A: Adam Levy said AbbVie will ship product in Q2 on initial orders, receiving orders in Q1 as per plan.