Executive Summary

Twirla posted record Q2 performance: net revenue $5.50M (+44% q/q; +159% y/y), gross profit ~$3.20M, and gross margin expanded to 58% from 47% in Q1 as mix shifted toward higher-margin retail; operating expenses fell to $8.3M (-2% q/q; -27% y/y) .
Management reaffirmed FY23 net revenue guidance of $25–$30M and reiterated full-year operating expenses will be lower than 2022, underscoring confidence in second-half growth drivers (retail channel, Afaxys-led non-retail, new FPA/MMCAP access, telehealth) .
Unit KPIs inflected: Q2 demand 55,687 cycles (+24% q/q; +158% y/y) and factory sales 61,770 cycles (+42% q/q; +188% y/y); wholesaler inventories “stabilized,” helping normalize sell-in vs sell-through .
Capital and P&L dynamics: quarter-end cash was $2.8M; company raised $6.5M net on May 25, 2023; GAAP net loss improved to $(3.81)M/$ (2.15) per share, with non-cash warrant remeasurement impacting GAAP; non-GAAP net loss was $(5.48)M .
Stock reaction catalysts: continued gross margin expansion on mix, sustained demand momentum, and reaffirmed FY revenue targets; watch liquidity runway and execution on retail/telehealth scale-up .

What Went Well and What Went Wrong

What Went Well

Record demand, revenue, and factory sales; gross margin advanced to 58% from 47% in Q1, aided by improved mix and lower gross-to-net deductions. CEO: “single-quarter record highs in demand, net revenue and factory sales… another quarterly decrease in operating expenses” .
Retail demand rose 17% q/q to 35,682 cycles and comprised 64% of total demand; non-retail demand grew 38% q/q to 20,005 cycles, reflecting Afaxys momentum .
Guidance reaffirmed for FY23 net revenue ($25–$30M) and commitment to lower FY23 opex vs FY22, signaling confidence in H2 trajectory and cost control .

What Went Wrong

Cash balance declined to $2.8M at June 30 despite a late-May equity raise; continued financing needs remain a risk until positive cash flow is achieved .
GAAP results still negative (net loss $(3.81)M); business remains subscale with reliance on channel partners; warrant remeasurement drives non-cash P&L volatility .
Q2 growth benefited from channel normalization (inventory stabilization) that may not repeat; execution risk remains in scaling retail and telehealth channels as primary profit drivers .

Financial Results

P&L and Cash (oldest → newest)

Metric	Q4 2022	Q1 2023	Q2 2023
Revenue ($M)	$3.996	$3.813	$5.503
Cost of Product Revenues/COGS ($M)	$1.653	$2.003	$2.307
Gross Profit ($M)	$2.343	$1.810	$3.196
Total Operating Expenses ($M)	$9.219	$8.518	$8.322
GAAP Net Loss ($M)	$(3.929)	$(5.390)	$(3.809)
Diluted EPS ($)	$(0.10)	$(5.91)	$(2.15)
Non-GAAP Net Loss ($M)	$(7.278)	$(7.077)	$(5.483)
Cash & Equivalents ($M)	$5.246	$4.429	$2.785

Notes:

Gross margin improved to 58% in Q2 from 47% in Q1, per company disclosure .
GAAP vs Non-GAAP: warrant liability fair value changes added $1.674M to other income in Q2, impacting GAAP net loss; excluded in non-GAAP .

Margins (sequential comparison)

Metric	Q1 2023	Q2 2023
Gross Margin (%)	47%	58%

KPIs – Demand and Sell-in

KPI (cycles)	Q4 2022	Q1 2023	Q2 2023
Twirla Total Demand	37,452	45,036	55,687
Factory Sales	43,230	43,446	61,770

Channel mix detail

KPI (cycles)	Q1 2023	Q2 2023
Retail Demand	30,576	35,682
Non-Retail Demand	14,460	20,005

Other operating details

Wholesaler inventory levels “stabilized” by Q2 2023, aiding factory sales normalization .
Public offering on May 25, 2023 raised net proceeds of $6.5M (shares and pre-funded warrants) .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Net Revenue	FY 2023	$25–$30M (reaffirmed in Q1 2023)	$25–$30M (reaffirmed in Q2 2023)	Maintained
Operating Expenses	FY 2023	FY23 opex lower than FY22	FY23 opex lower than FY22	Maintained

Qualitative execution plan highlights (H2 2023 growth)

Focus on five high-reimbursement states covering ~45% of U.S. women 18–24 .
Expand telemedicine footprint (Nurx; plus awareness via Twentyeight Health and Pandia) .
Broaden non-retail access via FPA Women’s Health and MMCAP, augmenting Afaxys network (Planned Parenthood, student health centers) .

Earnings Call Themes & Trends

Note: The Q2 2023 earnings call transcript could not be retrieved due to a document database inconsistency; themes below reflect quarter-over-quarter disclosures from company press releases.

Topic	Previous Mentions (Q4 2022 and Q1 2023)	Current Period (Q2 2023)	Trend
Product Performance/Demand	Q4: Demand +25% q/q; FY22 demand +213% y/y; factory sales +31% q/q . Q1: Demand +20% q/q; factory sales flat due to inventory workdown .	Demand +24% q/q; factory sales +42% q/q; record demand/revenue .	Improving
Channel Mix & Margin	Q4: Non-retail cycles +42% q/q via Afaxys; retail +25% q/q . Q1: Retail and non-retail each +20% q/q; slightly higher non-retail mix pressured g-to-n .	Retail share 64% of demand; gross margin 58% (vs 47% in Q1) on better mix/lower g-to-n .	Improving
Telemedicine	Q4: Expect Nurx to accelerate retail in 2023 . Q1: Nurx to be only patch at partner pharmacy starting Q2 .	Continued expansion with female telehealth providers (Nurx, Twentyeight Health, Pandia) .	Building
Non-Retail Access	Q4: Afaxys expanding in Planned Parenthood . Q1: Non-retail factory sales +15% q/q; Afaxys driving growth .	Added FPA Women’s Health and MMCAP to augment Afaxys network .	Expanding
Cost Discipline	Q4: GAAP opex -55% q/q; FY23 opex < FY22 . Q1: Opex -8% q/q; FY23 opex < FY22 .	Opex -2% q/q and -27% y/y; FY23 opex < FY22 reiterated .	Stable/Improving

Management Commentary

“We set single-quarter record highs in demand, net revenue and factory sales, all while reporting another quarterly decrease in operating expenses… our focus is on accelerating future growth and achieving 2023 net revenue of $25–$30 million.” – Al Altomari, Chairperson & CEO .
“Strong, focused external relationships are an integral part of our business plan… explore collaborations that can positively impact our business, allow us to expand without incurring significant costs and promote a growing, sustainable, fiscally-responsible business.” – Amy Welsh, Chief Commercial Officer .
On H2 execution: focus on five key states, expand telemedicine partnerships, and broaden access via FPA Women’s Health and MMCAP to complement Afaxys and drive both retail and non-retail growth .

Q&A Highlights

The Q2 2023 earnings call transcript could not be accessed due to a document retrieval inconsistency; as a result, Q&A details and any in-call guidance clarifications were not available for review (we attempted to retrieve the 2023-08-09 transcript but were unable to read its contents).

Estimates Context

Consensus estimates via S&P Global were unavailable for AGRX for Q2 2023 due to missing CIQ mapping; therefore, comparisons vs Street revenue/EPS/EBITDA could not be made at this time. Where relevant, we default to company-reported trends and guidance .

Key Takeaways for Investors

Demand and sell-in momentum accelerated in Q2, with retail mix up and margins expanding to 58%; sustaining retail growth and favorable mix is key to continued gross margin gains .
Reaffirmed FY23 net revenue guidance ($25–$30M) provides a credible H2 bar; watch execution across telehealth, Afaxys, and new access points (FPA/MMCAP) to bridge to the guide .
Operating discipline remains intact (opex down y/y and q/q); combined with mix tailwinds, this narrows losses and improves operating leverage potential if revenue scales .
Liquidity is the primary risk: $2.8M cash at Q2-end, offset by a $6.5M net raise in May; monitoring financing cadence and path to positive cash flow is critical for de-risking .
Warrant liability remeasurement will continue to add non-cash P&L volatility; focus on non-GAAP trends and unit economics to assess core progress .
Near-term trading setup: catalysts include continued retail growth, additional telehealth traction, and further gross-to-net improvements; risks center on financing needs and execution in scaling profitable channels .

Additional Source Notes

Q2 2023 results and operational update: press release furnished on Aug 9, 2023 (Form 8-K, Item 2.02; Exhibit 99.1) .
Prior quarter references for trend: Q1 2023 press release (May 11, 2023) ; Q4/FY 2022 press release (Mar 22, 2023) .
Other Q2 press releases: none located in the period reviewed.

AGILE THERAPEUTICS INC (AGRX)·Q2 2023 Earnings Summary