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NEXGEL, INC. (NXGL)·Q2 2025 Earnings Summary

Executive Summary

  • Q2 2025 delivered triple-digit top-line growth but a modest miss versus consensus: revenue rose 100.3% YoY to $2.88M, gross margin expanded to 43.6%, and net loss narrowed to $0.67M; however, revenue was below the $3.08M consensus and EPS missed at -$0.09 vs -$0.07 estimate . Revenue and EPS consensus values marked with an asterisk are from S&P Global.*
  • Management reiterated 2025 guidance for $13M revenue and achieving positive EBITDA, supported by an expanded STADA partnership ($1M non‑dilutive advance) and a $1.05M financing completed post‑quarter .
  • Contract manufacturing traction continued (Cintas reorders; iRhythm onboarding), while consumer brands delivered 95% YoY growth; seasonally stronger 2H expected with multiple new product launches (Silly George, Kenkoderm, Medagel) .
  • Key watch items: AbbVie program pushed to 2026, cash declined to $0.73M at quarter-end (mitigated by subsequent funding), and tariffs present manageable mixed effects; manufacturing capacity remains ample to scale .

What Went Well and What Went Wrong

What Went Well

  • Strong revenue growth and margin expansion: Net revenue +100.3% YoY to $2.88M; gross margin 43.6% vs 20.3% YoY . CEO: “strong revenue and gross margin… steady decline of our Adjusted EBITDA loss” .
  • Contract manufacturing momentum: Cintas reorders began late Q2; iRhythm added as a new customer; contract manufacturing revenue rose to $0.863M (+103% YoY) .
  • Funding support and guidance confidence: $1M non‑dilutive STADA advance and $1.05M financing; management reiterated $13M revenue and positive EBITDA for 2025 .

What Went Wrong

  • Consensus miss: Revenue came in below the $3.08M consensus and EPS missed (-$0.09 vs -$0.07), likely reflecting timing of reorders and consumer seasonality in Q2; S&P Global estimates used*.
  • AbbVie timing slippage: Management now expects meaningful impact beginning 2026 (delayed twice), reducing near‑term visibility of a major potential revenue driver .
  • Liquidity tighter at quarter-end: Cash fell to ~$0.73M before subsequent financing; SG&A stepped up to $1.89M as the company scales commercial operations .

Financial Results

MetricQ2 2024Q4 2024Q1 2025Q2 2025
Revenue ($USD Millions)$1.44 $3.04 $2.81 $2.88
Gross Margin (%)20.3% 37.2% 42.4% 43.6%
EBITDA ($USD Millions)($0.76) ($0.73) ($0.54) ($0.53)
Adjusted EBITDA ($USD Millions)($0.79) ($0.62) ($0.47) ($0.42)
Net Loss Attrib. to Stockholders ($USD Millions)($0.89) ($0.85) ($0.71) ($0.67)
EPS (Basic/Diluted, $)($0.14) ($0.10)*($0.09) ($0.09)

Notes: Q4 2024 EPS actual marked with an asterisk is from S&P Global.*

Segment and KPI details:

  • Contract Manufacturing Revenue ($USD Millions): Q2 2024 ≈ $0.43; Q2 2025 $0.86 .
  • Consumer Products YoY Growth: +95% (Q2 2025 vs Q2 2024) .
  • SG&A ($USD Millions): Q4 2024 $1.97 ; Q1 2025 $1.96 ; Q2 2025 $1.89 .
  • Cash and Equivalents ($USD Millions): Q4 2024 $1.81 ; Q1 2025 $1.19 ; Q2 2025 $0.73 .
  • Shares Outstanding: 7,654,038 (3/24/25) ; 7,654,537 (5/13/25) ; 8,067,580 (8/12/25) .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
RevenueFY 2025$13M (issued Q4 2024) $13M (reiterated Q1 & Q2 2025) Maintained
EBITDAFY 2025Positive EBITDA in 2025 Positive EBITDA in 2025 (reiterated) Maintained

Earnings Call Themes & Trends

TopicPrevious Mentions (Q4 2024)Previous Mentions (Q1 2025)Current Period (Q2 2025)Trend
Contract Manufacturing pipeline (Cintas, Owens & Minor)Initial Cintas shipments in Q4; robust 2025 pipeline Cintas reorders starting Q2; onboarding new corporates Cintas reorder cadence; iRhythm supply agreement; CM revenue $0.86M (+103% YoY) Strengthening execution
Consumer brands (Silly George, Kenkoderm, Medagel)Planned launches in 2025 (lip gloss, masks, under-eye) Optimization and margin gains; launches staged across 2025 SG new lash variants; 5 lip gloss shades; hydrogel under-eye in Q4; Kenkoderm eczema expansion Expanding product slate
STADA partnershipHISTAsolv outperformance; expansion planned Multi-enzyme roadmap (Q4’25, Q1’26) Expanded partnership; $1M non-dilutive advance; broader product catalog potential Broadening scope
Tariffs/macroAmazon commissions reclassified to COGS for stability Tariffs mixed impact; contingency to assemble in Texas Mild margin headwind for Silly George; rising domestic gel interest Manageable headwind/offset
Regulatory/clinicalIRB laser hair removal plume study initiated Study completed; awaiting publication Awaiting final data; commercialization pathway discussed Approaching commercialization
AbbVie device programOrders expected Q2 2025 (then delayed) Minimal 2025 revenue baked in Launch now expected 2026; significant potential long term Deferred but intact
Manufacturing capacityCleanroom capacity for scale Contingency plans if tariffs escalate Utilization “high teens”; ample room in Texas and Langhorne Ready to scale

Management Commentary

  • “For the second quarter of 2025 we reported strong revenue and gross margin with a steady decline of our Adjusted EBITDA loss… We remain confident in our previously issued guidance for 2025 of $13 million in revenue and to achieve positive EBITDA during the year.” — Adam Levy, CEO .
  • “Contract manufacturing revenue increased to $863,000… a 103% year over year increase.” — Adam Levy .
  • “With our current cash on hand, the $1,000,000 from STADA and the $1,050,000 which we recently raised, we now have sufficient cash to support our upcoming growth initiatives.” — Adam Levy .
  • “As of 06/30/2025, the company held a cash balance of approximately $730,000… As of August 12, NextGel had 8,067,580 shares… outstanding.” — Joseph F. McGuire, CFO .

Q&A Highlights

  • STADA expansion and retail strategy: Management highlighted enzyme pipeline (gluten, dairy, fructose) and a preference for private‑label retail entry given single‑product shelf risk; $1M advance structured as profit‑share recoup with generous terms (no interest) .
  • Capacity and scaling: Plant utilization remains in the high teens; ample capacity in Texas and Langhorne to onboard large medical device customers and expand as needed .
  • AbbVie timeline: Program delayed twice; now expected to drive material revenue starting 2026, with possibility of small orders earlier .
  • Tariffs impact: Mild negative margin effect on imported consumer products; offset by increased interest in U.S.-made gels; contingency plans in place .
  • New logos and pipeline: iRhythm onboarding; additional “top-three” scale opportunities in pipeline; Health Canada clearance supports expansion .

Estimates Context

MetricQ2 2024Q4 2024Q1 2025Q2 2025
Revenue Consensus Mean ($USD)$1.405M*$2.992M*$2.725M*$3.080M*
Revenue Actual ($USD)$1.440M $3.041M $2.806M $2.884M
EPS Consensus Mean ($)($0.14)*($0.13)*($0.10)*($0.07)*
EPS Actual ($)($0.1455)*($0.0964)*($0.09) ($0.09)
Primary EPS – # of Estimates1*1*1*1*
Revenue – # of Estimates1*1*1*1*

Notes: All consensus values and marked actuals with an asterisk are from S&P Global.*

  • Q2 2025: Revenue miss (~$0.196M; ~6%) and EPS miss (by ~$0.02) vs consensus*. Q1 2025: Revenue and EPS both beat*. Q4 2024: Revenue and EPS beat*. These patterns suggest momentum into 2H but some Q2 timing/seasonality.

Key Takeaways for Investors

  • Mix-shift and scale are expanding margins: Gross margin at 43.6% (+1,330 bps YoY) reflects higher-volume CM and improving consumer optimization; sustained 40%+ margins support path to EBITDA breakeven in 2H .
  • Near‑term funding risk mitigated: Quarter‑end cash was $0.73M, but the $1M STADA advance and $1.05M raise provide working capital to execute growth initiatives without immediate dilutive financing pressure .
  • CM revenue catalysts: Cintas reorders, iRhythm onboarding, and multiple top-tier medical device opportunities can underpin durable volumes against fixed costs—key to achieving and sustaining positive EBITDA .
  • Consumer product engine: 95% YoY growth; SG launches broaden beyond lashes (lip glosses, hydrogel under-eye), Kenkoderm expands into eczema; expect seasonal acceleration in Q3/Q4 .
  • Strategic risk: AbbVie’s RESONIC timeline pushes major upside to 2026; investors should discount near‑term contribution yet track milestones closely for upside optionality .
  • Tariff dynamics: Manageable headwinds on imported beauty SKUs offset by growing demand for U.S.-made gels; contingency to assemble domestically if needed .
  • Execution focus: Ample capacity (Texas/Langhorne), strong pipeline, and reiterated guidance ($13M revenue, positive EBITDA) position NXGL for a catalyst‑rich 2H; watch Q3 reorder cadence, product launch ramp, and IRB study outcomes .