STRATA Skin Sciences, Inc. Q1 FY2024 earnings call

• Executed on multifaceted turnaround strategy, with clinical results for extract proven across patients with psoriasis, vitiligo, and eczema.
• Started DTC spend ramp-up in Q1, expanded from 4 to 6 targeted regions, generated over 500 patient appointments with low cost per appointment and lead.
• Optimized extract device placements by removing underperforming dermatology partners' devices and placing in higher-utilization clinics.
• Grew TheraClearX installed base from 92 to 104, with 47 clinics submitting RDF insurance reimbursement charts, addressing acne treatment limitations.
• Extended exclusive distribution agreements in Korea, China, and Japan, mutually beneficial for international growth.

Total revenue for the first quarter of 2024 was $6.8 million, down from $7.6 million in the first quarter of 2023. Global recurring revenue in Q1 2024 was $4.7 million versus $5.2 million in Q1 2023. Equipment revenue was $2.1 million in Q1 2024 compared to $2.4 million in Q1 2023. International revenue typically accounts for approximately 30% to 35% of total revenue, with Korea, China, and Japan alone accounting for over 50% of those international revenues.

• Expect continued growth in DTC marketing efforts to drive device utilization and gross domestic recurring billings.
• Aim to increase average gross recurring revenue per device from ~$21,000 in 2023 to $30,000.
• Reduce cash burn by $1.1 million (41%) and operating expenses by $1 million (14%) in Q1, with goal to return to 2019 lean cost structure.
• Believe in executing strategic goals for 2024 given current financial position.

Forward-looking statements involve risks and other factors that may cause actual results to differ materially from those statements. Refer to risk factors described in STRATA Skin Sciences' most recently filed annual report on Form 10-K and subsequent periodic reports filed with the SEC.

Q: Could you talk about the region of the country referenced in DTC and the number of regions by end of '24?

A: Anticipate covering all regions by end of the year, aiming for middle of Q3. DTC spend ramp-up started in limited region, with leads converting to appointments and revenue following. Visuals of device placements and patient needs available for each region.

Q: Talk about XTRAC and TheraClearX placements, utilization trends, and upside?

A: TheraClearX has ~200 devices in inventory, aiming to deploy all by end of year/early next year, with run rate of over 3,000 new patients from 47 of 104 accounts. XTRAC ended 2023 with 923 devices, reduced to 907, with plan to redeploy underperforming devices to more productive accounts. Focus on extending utilization, working on account tiers to move lower tiers up, and targeting accounts with existing excimer laser franchises for head start.