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Journey Medical Corp (DERM)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 2025 revenue was $17.6M, up 21% YoY, with gross margin at 67.4%; GAAP net loss improved to $(2.3)M (−$0.09 per share). Emrosi contributed $4.9M as prescriptions ramped 146% QoQ to 18,198 and unique prescribers surpassed 2,700 .
  • Versus Wall Street consensus, revenue missed ($17.631M vs $18.786M*), EPS missed (−$0.09 vs −$0.038*), and EBITDA sharply missed (−$0.465M vs $2.579M*), driven by launch-stage copay assistance and still‑ramping payer/formulary adoption; management reiterated expectation to be sustainably EBITDA positive in Q4 2025 . Values retrieved from S&P Global.
  • Sequentially, revenue rose from $15.0M in Q2 and $13.1M in Q1; gross margin improved for the third straight quarter (Q1 63.5% → Q2 67.1% → Q3 67.4%), reflecting higher mix from Emrosi and Qbrexza and lower inventory period costs .
  • Near‑term catalysts: finalizing contracts with the third major GPO early 2026 to broaden coverage, growing refill ratio above current ~1:1, and continued prescriber conversion from Oracea; management also reiterated long‑term Emrosi peak sales aspirations of >$200M U.S. and >$300M global .

What Went Well and What Went Wrong

What Went Well

  • Emrosi net revenue reached $4.9M and prescriptions grew 146% QoQ to 18,198; unique prescribers climbed ~50% from ~1,800 to >2,700. “Emrosi…contributed $4.9 million…an increase of 75% compared to Q2…unique Emrosi prescribers…increased…to over 2,700” .
  • Margin expansion continued: GM improved Q1→Q2→Q3 (63.5%, 67.1%, 67.4%). CFO: “steady quarter-over-quarter gross margin improvement in 2025…driven by higher revenues from Emrosi and Qbrexza…lower overall inventory period costs” .
  • Adjusted EBITDA turned positive to $1.7M; management reiterated expectation to become “sustainably EBITDA positive” in Q4. “We achieved positive adjusted EBITDA of $1.7 million…expect to become sustainably EBITDA positive in the fourth quarter” .

What Went Wrong

  • Consensus miss: revenue and EPS below S&P Global consensus, and EBITDA far below expectations amid launch-stage gross‑to‑net pressure and copay assistance reliance; management declined to provide ASP/gross‑to‑net guidance yet . Values retrieved from S&P Global.
  • Legacy/aggregate non‑Emrosi product revenue declined 16% YoY due to Accutane generic pressure; Qbrexza was down YoY but sequentially up (less than Q3’24 seasonality) .
  • Payer/formulary implementation lag: despite contracting two of three major GPOs and >100M covered lives, downstream plan adoption can take up to three quarters, delaying revenue conversion of TRx growth .

Financial Results

Quarterly progression (oldest → newest)

MetricQ1 2025Q2 2025Q3 2025
Total Revenue ($USD)$13.1M $15.009M $17.631M
GAAP Diluted EPS ($)−$0.18 −$0.16 −$0.09
Gross Margin (%)63.5% 67.1% 67.4%
SG&A ($USD)$10.6M $11.882M $12.054M
EBITDA ($USD)—−$1.873M −$0.468M
Adjusted EBITDA ($USD)—−$0.476M $1.676M
Cash & Equivalents ($USD)$21.1M $20.293M $24.948M

YoY comparison

MetricQ3 2024Q3 2025
Total Revenue ($USD)$14.629M $17.631M
GAAP Diluted EPS ($)−$0.12 −$0.09
Gross Margin (%)69.4% 67.4%
SG&A ($USD)$11.396M $12.054M
EBITDA ($USD)−$1.006M −$0.468M
Adjusted EBITDA ($USD)$0.252M $1.676M

Emrosi contribution and KPIs

MetricQ1 2025Q2 2025Q3 2025
Emrosi Net Revenue ($USD)$2.0M $2.8M $4.9M
Emrosi Total Prescriptions (TRx)—7,394 18,198
Unique Emrosi Prescribers~660 ~1,800 >2,700

Q3 2025 vs S&P Global consensus

MetricConsensusActual
Revenue ($USD)$18.786M*$17.631M
Primary EPS ($)−$0.038*−$0.09
EBITDA ($USD)$2.579M*−$0.465M
# of Estimates (EPS / Revenue)4* / 3*—

Values retrieved from S&P Global.

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Company EBITDAQ4 2025“EBITDA positive later this year” (Q2 call) “Sustainably EBITDA positive in Q4” Clarified/maintained
Gross Margin trajectoryH2 2025–2026Expect improvement as Emrosi/Qbrexza mix increases (Q2) Continued QoQ improvement; mix and lower inventory costs cited (Q3) Maintained
Payer/GPO contractingEarly 2026Contracted 1 major GPO; coverage >100M lives (Q2) 2 of 3 major GPOs contracted; remaining expected early 2026 Progressing
Long‑term Emrosi peak salesLT—>$200M U.S., >$300M global New reiteration

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1 & Q2)Current Period (Q3)Trend
Payer access & GPOsQ1: ~30% commercial lives; contracted 1 major GPO effective July 1 . Q2: >100M lives (~65%); late‑stage talks with other GPOs .2 of 3 major GPOs contracted; downstream formulary adoption can take up to 3 quarters; expect remaining GPO early 2026 .Improving access; conversion lag shortening over coming quarters
Copay assistance relianceQ1/Q2: early reliance; ASP guidance withheld .Copay program bridges interim coverage; reliance expected to decrease as adoption grows; more visible by 2026 .Decreasing reliance over time
Emrosi adoption & prescribersQ1: ~660 unique prescribers . Q2: >1,800 unique; 10% NRx share in target cohort .>2,700 unique; aim to deepen writer “depth” and raise refill/TRx ratio above ~1:1 .Accelerating breadth and depth
Gross marginQ2: 67% vs 61% YoY; mix drivers (Emrosi/Qbrexza) .67.4%; continued QoQ improvement, same drivers .Sustained expansion
Accutane competitionQ1/Q2: pressure from generic pricing; stabilization efforts .Management sees stabilization into Q4; vigilant on competitor pricing .Stabilizing, but remains sensitive
Clinical differentiationQ1: JAMA Derm publication; algorithm inclusion . Q2: SDPA data; body weight efficacy consistency .Fall Clinical pooled Phase 3 data; superiority vs Oracea and placebo (p<0.001) .Reinforced KOL validation

Management Commentary

  • “The third quarter of 2025 was another period of solid execution…Emrosi…contributed $4.9 million…an increase of 75% compared to Q2…unique Emrosi prescribers…increased by approximately 50% to over 2,700” .
  • “Gross margin…continued to see steady quarter-over-quarter…from 63.5% in Q1 to 67.1% in Q2, and now 67.4% in Q3…driven by higher revenues from Emrosi and Qbrexza…lower overall inventory period costs” .
  • “We continue to believe that Emrosi can achieve peak annual net sales of over $200 million in the United States and over $300 million globally…we expect to become sustainably EBITDA positive in the fourth quarter” .
  • “Downstream health plan formulary adoption…takes time, up to three quarters…In the interim, our patient copay assistance program is bridging the gap” .

Q&A Highlights

  • Copay assistance and payer adoption timing: Expect lower reliance as coverage expands; third GPO expected early 2026; plan adoption takes ~2–3 quarters per GPO/PBM/plan layer .
  • Prescriber breadth vs depth: Focus shifting toward deepening scripts per writer; refill/TRx ratio tracking ~1:1 in Q3 and ~1:1.2 in October, targeted higher going forward .
  • Net revenue per script/ASP: Management declined to guide; gross‑to‑net dynamic remains volatile early in launch .
  • Accutane: Analyst referenced ~$2.8M in Q3; management indicated stabilization into Q4 but noted sensitivity to competitor pricing .
  • OpEx trajectory: Expect relatively consistent expenses into 2026 with operating leverage from revenue growth .

Estimates Context

  • Q3 2025 results vs S&P Global consensus: revenue missed ($17.631M vs $18.786M*), EPS missed (−$0.09 vs −$0.038*), EBITDA missed (−$0.465M vs $2.579M*). EPS est. count = 4*, revenue est. count = 3*. Values retrieved from S&P Global. Actuals per press release and 8‑K .
  • Drivers of miss: high TRx growth not yet fully translating to revenue due to payer/formulary implementation lag and copay assistance usage during early launch; gross‑to‑net variability acknowledged by management .
  • Implications: Near‑term estimate models likely need lower ASP/gross‑to‑net assumptions and more conservative conversion of TRx to revenue; margin forecasts should reflect continuing gross margin expansion from mix, offset by SG&A tied to launch .

Key Takeaways for Investors

  • Emrosi’s launch is scaling: prescriptions +146% QoQ, prescribers >2,700; expect momentum as refill ratios rise and writer depth increases .
  • Near‑term revenue conversion will hinge on payer/formulary implementation; expect sequential improvement, with a more material shift as the third major GPO is contracted and downstream plans adopt through early 2026 .
  • Margin story intact: three consecutive quarters of gross margin expansion; Adjusted EBITDA turned positive in Q3; management targeting sustainable EBITDA positivity in Q4, a potential stock catalyst .
  • Watch legacy portfolio dynamics: Accutane stabilizing but sensitive to competitor pricing; Qbrexza remains a key contributor and benefits from category attention despite competition .
  • Estimate recalibration: Models should temper near‑term revenue/EBITDA vs prior consensus given gross‑to‑net/ASP uncertainty and lagged coverage; upside as coverage and refills scale through 2026 .
  • Long‑term thesis: Emrosi’s clinical superiority, growing KOL validation, and expanding access support management’s >$200M U.S. peak sales aspiration; commercial infrastructure provides operating leverage .
  • Tactical: Track monthly TRx/refill trends, payer coverage updates, and Q4 EBITDA inflection; monitor any explicit gross‑to‑net guidance once adoption matures .