Executive Summary

Q3 2024 revenue increased 9% year over year to $5.48M, operating income expanded to $0.82M, and net income improved to $1.83M ($0.03 EPS), driven by resumed inventory production and fulfillment of back orders beginning in August .
Sequentially, revenue and operating income recovered vs. Q2 2024; net turned positive as other income improved on lower FX loss and interest expense .
Management expects net revenues and income from operations to stabilize in Q4; full-year 2024 to be materially lower than 2023 due to earlier inventory shortages and potential impact from a generic L‑glutamine competitor launched in July .
Key near-term stock catalysts: pace of U.S. Endari® stabilization amid generic competition, MENA demand strength, and liquidity/going concern actions highlighted in forward-looking statements (debt restructuring/refinancing needs) .

What Went Well and What Went Wrong

What Went Well

Resumed inventory production and fulfilled back orders in August, supporting revenue and operating income increases; “We are pleased to report that we were able to resume inventory production and fulfill back orders in August…” — Willis Lee, CEO .
Operating expenses fell 11% YoY in Q3 (from $4.78M to $4.26M), primarily due to lower CRO and payroll/share-based comp, aiding margin recovery .
Other income swung to +$1.0M vs. +$0.08M YoY on decreases in FX loss and interest expense, supporting positive net income .

What Went Wrong

U.S. Endari® sales declined in Q3, which management attributes to the July launch of a competing generic L‑Glutamine Oral Powder; MENA strength only partially offset the U.S. weakness .
Full-year 2024 net revenues and operating results are expected to be materially lower than 2023 due to inventory shortages earlier in the year .
Liquidity remains tight: cash and equivalents were $1.26M at 9/30 vs. $2.55M at 12/31, and management highlights needs to restructure/refinance debt and raise funds; going concern risk referenced in forward-looking statements .

Financial Results

Consolidated Results vs. Prior Periods and Estimates

Metric	Q3 2023	Q2 2024	Q3 2024	Vs. Estimates
Revenue ($USD Millions)	$5.02	$5.38	$5.48	N/A – S&P Global consensus unavailable
Operating Income ($USD Millions)	$0.02	$0.58	$0.82	N/A – S&P Global consensus unavailable
Net Income ($USD Millions)	$0.07	$(2.18)	$1.83	N/A – S&P Global consensus unavailable
Diluted EPS ($USD)	$0.00	$(0.03)	$0.03	N/A – S&P Global consensus unavailable
Gross Profit ($USD Millions)	$4.80	$5.14	$5.08	N/A – S&P Global consensus unavailable
COGS ($USD Millions)	$0.21	$0.24	$0.39	N/A – S&P Global consensus unavailable

Note: Wall Street consensus via S&P Global was unavailable due to data access limitations; therefore, no estimate comparisons are provided.

Margins (derived from reported figures)

Margin	Q3 2023	Q2 2024	Q3 2024
Gross Margin %	95.7% (4.804/5.018)	95.5% (5.136/5.377)	92.8% (5.084/5.478)
EBIT Margin %	0.5% (0.024/5.018)	10.8% (0.582/5.377)	15.0% (0.821/5.478)
Net Income Margin %	1.3% (0.067/5.018)	(40.6)% (−2.184/5.377)	33.4% (1.827/5.478)

Detailed Line Items

Metric ($USD Millions)	Q3 2023	Q2 2024	Q3 2024
Net Revenues	$5.02	$5.38	$5.48
Operating Expenses	$4.78	$4.55	$4.26
Income (Loss) from Operations	$0.02	$0.58	$0.82
Total Other Income (Expense)	$0.08	$(2.74)	$1.01
Net Income (Loss)	$0.07	$(2.18)	$1.83
Diluted EPS ($)	$0.00	$(0.03)	$0.03
Weighted Avg Shares (Millions)	53.64	63.36	63.87

KPIs and Balance Sheet Snapshot

KPI	12/31/2023	6/30/2024	9/30/2024
Cash & Equivalents ($USD Millions)	$2.55	$1.53	$1.26
Accounts Receivable, net ($USD Millions)	$4.01	$4.60	$4.94
Inventories, net ($USD Millions)	$1.71	$1.63	$1.61
Total Assets ($USD Millions)	$35.18	$25.94	$27.34
Total Liabilities ($USD Millions)	$82.94	$82.95	$81.12
Stockholders’ Deficit ($USD Millions)	$(47.76)	$(57.01)	$(53.78)

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Net Revenues	FY 2024	“Do not expect net revenues for the full year to reach the level achieved in 2023” (Sept)	“Results of operations for the full year to be materially lower than in 2023” (Nov)	Lowered tone/expectations
Net Revenues & Operating Income	Q4 2024	Not previously quantified	“Expect net revenues and income from operations to stabilize in Q4”	New qualitative stabilization
U.S. Endari Sales Outlook	Ongoing	Assessing impact of generic entrant	Continuing to assess impact; steps to bolster sales	Maintained assessment; actions signaled

Earnings Call Themes & Trends

Note: No Q3 2024 earnings call transcript was found. Themes below reflect management commentary from press releases.

Topic	Previous Mentions (Q2 2024)	Current Period (Q3 2024)	Trend
Supply chain / inventory	Prolonged shortage beginning Feb; further interruption mid‑June to August; working with alternative manufacturers	Resumed production, fulfilled back orders in August	Improving availability
Competitive dynamics (generic)	Assessing impact of generic L‑glutamine launch	U.S. sales may have been adversely affected; steps to bolster Endari	Heightened competitive pressure
Regional demand (MENA)	Not highlighted quantitatively	MENA sales increase offsetting some U.S. weakness	MENA strength
Financial posture (other income/FX/interest)	High other expense; FX loss and interest expense elevated	Other income improved; lower FX loss and interest expense	Improving non‑operating line
Liquidity/going concern	Cash $1.5M; forward-looking notes on financing needs	Cash $1.26M; continued need to restructure/refinance debt and raise funds	Persistent funding risk

Management Commentary

“We were able to resume inventory production and fulfill back orders in August which led to increases of $0.5 million, or 9%, and $0.8 million, or over 3000%, in net revenues and income from operations, respectively… and net income of $1.8 million, an increase of 2,626% as compared to Q3 2023.” — Willis Lee, Chairman & CEO .
“We expect net revenues and income from operations to stabilize in Q4… Our Endari U.S. sales in Q3 may have been adversely affected by the launch in July of a competing generic L‑Glutamine Oral Powder… and steps to bolster Endari sales.” — Willis Lee .
“We are working with alternative manufacturers to avoid similar shortages in the future.” — George Sekulich, Chief Commercial Officer (Q2 release) .

Q&A Highlights

No Q3 2024 earnings call transcript was available; therefore, there were no analyst Q&A highlights to report [ListDocuments earnings-call-transcript returned none].

Estimates Context

S&P Global Wall Street consensus data for EMMA Q3 2024 was unavailable due to data access limitations; as a result, comparisons to consensus EPS and revenue could not be provided. Where relevant, investors should expect sell-side estimates to reflect: improved Q3 profitability from resumed inventory production, potential U.S. Endari pressure from generic competition, and management’s expectation of Q4 stabilization with a materially lower full-year vs. 2023 .

Key Takeaways for Investors

Q3 delivered a clear operational recovery: revenue +9% YoY to $5.48M and operating income to $0.82M; net income swung to $1.83M ($0.03) on resumed inventory and improved non‑operating items .
Sequential improvement vs. Q2 as revenue/operating profit stabilized; margins recovered (EBIT margin ~15% in Q3 vs. ~11% in Q2) despite gross margin normalizing with higher COGS .
U.S. Endari exposure to generic competition is the critical risk; watch for actions to bolster U.S. sales and evidence of stabilization in Q4 .
MENA region strength is a partial offset; further regional expansion (e.g., pending Saudi marketing authorization) could underpin demand diversification .
Liquidity remains constrained (cash $1.26M) and management underscores the need to restructure/refinance debt and raise additional funds; monitor financing milestones and going concern disclosures closely .
With no available consensus figures, traders should frame Q4 setup around operational stabilization vs. the generic overhang and funding catalysts; near-term narrative hinges on U.S. demand resilience and capital structure progress .
Longer-term thesis depends on defending Endari positioning vs. generics, manufacturing reliability, and regional expansion execution, balancing margin sustainability with competitive dynamics .

Emmaus Life Sciences, Inc. (EMMA)·Q3 2024 Earnings Summary