Journey Medical Corp (DERM)·Q1 2025 Earnings Summary

Executive Summary

• Q1 2025 revenue of $13.1M and GAAP EPS of $(0.18) both beat S&P Global consensus; revenue exceeded by ~$0.5M and EPS by ~$0.06, driven by Emrosi’s initial launch contribution and sharply lower R&D expense . Revenue consensus $12.05M*, EPS consensus $(0.24)*.
• Gross margin expanded to 64% vs 54% in Q1 2024, reflecting product mix and absence of prior-year non-recurring charges .
• Emrosi commercialization is “off to a strong start,” with ~$2.0–$2.1M of Q1 revenue largely from initial stocking, >660 unique prescribers to date, and ~30% commercial payer coverage; management targets sustainable positive EBITDA later in 2025 .
• No formal 2025 guidance provided; management will give guidance later in the year as launch data and payer contracts progress . Catalyst: continued Emrosi uptake, coverage ramp (GPO access begins July 1), and proof points from JAMA publication/NRS algorithm inclusion .

What Went Well and What Went Wrong

What Went Well

• Emrosi launch momentum: “launch is off to a great start,” with ~$2M initial revenue and strong prescriber engagement at AAD; Emrosi demonstrated statistical superiority to Oracea on co‑primary endpoints and positive secondary endpoints in JAMA Dermatology .
  Quote: “We believe…Emrosi will become our flagship product and enable us to become sustainably EBITDA positive later this year.”
• Margin improvement: gross margin rose to 64% vs 54% YoY, reflecting product mix and prior-year non-recurring charges rolling off .
• Operating discipline: R&D nearly zero vs $7.9M prior year; cash increased to $21.1M from $20.3M at year-end despite launch investments .

What Went Wrong

• Base business softness ex-Emrosi: stripping ~$2M Emrosi, legacy brands declined; management called out ongoing erosion in legacy generics (e.g., Targadox, Exelderm) and competitive pressure in Accutane .
• EBITDA below Street: GAAP EBITDA was about $(2.27)M versus consensus of roughly $(1.81)M*, reflecting higher SG&A for launch and timing of stocking dynamics .
• SG&A up $2.1M YoY to support launch infrastructure; Emrosi revenue in Q1 largely stocking, with demand pull-through weighted to Q2+ .

Financial Results

Headline Metrics vs Prior Periods

Profitability Detail

Estimate Comparisons (S&P Global consensus)

Notes: Primary EPS estimates count = 4*, Revenue estimates count = 4*. Values retrieved from S&P Global.

Segment/KPI Highlights

Guidance Changes

Earnings Call Themes & Trends

Management Commentary

• “Our in-line dermatology products continue to perform and the launch of Emrosi™, our best-in-class oral rosacea treatment, is off to a strong start.”
• “We remain in a strong position with $21.1 million in cash…improvement in our gross margin…and overall operating spend down year-over-year…2025 will be a transformational year…drive the business to sustainable positive EBITDA and profitability.”
• “Positive initial response…gives us even more confidence that Emrosi will become our flagship product and enable us to become sustainably EBITDA positive later this year.”
• “Approximately 30% of covered commercial insured lives now have access to Emrosi…contracted with one of the largest commercial GPOs…begin July 1.”

Q&A Highlights

• Emrosi Q1 revenue largely stocking; demand pull-through expected in Q2; management did not provide Q2 revenue guidance yet .
• Legacy business: ongoing erosion in legacy generics; Qbrexza prescriptions +15% YoY in March and April; Accutane stabilized (+10% vs Q4) but remains below prior-year levels due to new competitors .
• Inventory in the channel targeted at ~2–4 weeks during early launch; varies with ramp .
• Early physician feedback highlights strong efficacy, including erythema improvement noted anecdotally; growing repeat prescribers .
• Payer utilization management: where step edits exist, generally through generic oral agents (minocycline/doxycycline); some payers allowing unrestricted access .

Estimates Context

• Q1 2025 vs S&P Global consensus: revenue $12.05M* vs actual $13.14M (beat), EPS $(0.2375)* vs $(0.18) (beat), EBITDA $(1.81)M* vs $(2.27)M (miss). Primary EPS estimates count = 4*, Revenue estimates count = 4*. Values retrieved from S&P Global.
• Street likely revises near-term revenue/EPS higher on demonstrated pricing/margin discipline and Emrosi uptake; EBITDA forecasts may reflect continued launch SG&A through mid-year before improving as access expands .

Key Takeaways for Investors

• Emrosi is scaling with tangible early demand, clinical validation, and increasing coverage—expect continued revenue/margin tailwinds as payer access ramps through H2’25 .
• Q1 beat on revenue/EPS owed to launch contribution, better gross margin, and steep R&D decline; launch SG&A weighed on EBITDA but should normalize as volume scales .
• Base business mixed: Qbrexza growth offsetting legacy erosion; Accutane stabilized post-competitive pricing pressure—watch prescription trends and rebate dynamics into seasonally stronger H2 .
• No formal FY25 guidance yet; near-term catalysts include July 1 GPO access, additional peer‑reviewed publications, and quarterly coverage updates—monitor for guidance issuance and Emrosi script trajectories .
• Actionable: Position for continued Emrosi adoption and margin expansion; focus on quarterly access wins and script growth traction as primary stock drivers.
  Supporting data: revenue $13.1M, EPS $(0.18), gross margin 64%, cash $21.1M .

Additional source documents used:

• Q1 2025 press release and 8‑K (financials and launch details)
• Q1 2025 earnings call transcript (prepared remarks, Q&A)
• FY 2024 press release and Q4 2024 call (context, guidance policy, coverage baseline)
• Q3 2024 press release/8‑K (trend analysis)

Notes: Consensus estimates marked with * were retrieved from S&P Global.