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NEXGEL, INC. (NXGL)·Q4 2024 Earnings Summary

Executive Summary

  • Q4 2024 delivered record revenue of $3.04M (+181% Y/Y; +3% Q/Q) and gross margin of 37.2% (down vs 43.6% in Q3 due to reclassifying Amazon commissions to COGS), with net loss of $0.85M and Adjusted EBITDA loss of $0.62M .
  • Revenue and EPS exceeded S&P Global consensus: revenue $3.041M vs $2.992M* and EPS -$0.096 vs -$0.130*, driven by strong branded consumer products and contract manufacturing; EBITDA loss narrowed vs Q4 2023* *.
  • Management guided Q1 2025 revenue “at least $2.75M” and FY 2025 “at least $13M” with positive EBITDA, citing Cintas shipments, STADA products, and new white-label customers as catalysts .
  • Key narrative shifts: margin methodology change (Amazon commissions into COGS), one-time inventory write-offs ($243k) impacting Q4 loss, and accelerating pipeline including AbbVie Resonic pads (shipping product in Q2 2025) and Innovative Optics laser-hair hydrogel opportunity mid-year .

What Went Well and What Went Wrong

What Went Well

  • Record Q4 revenue and sustained triple-digit Y/Y growth for both Q4 and FY 2024 for the third consecutive year; “record periods across all financial measures,” per CEO .
  • Branded portfolio momentum: Silly George scaled from ~$2M run-rate at acquisition to >$5M, with new beauty SKUs launching in 2025; Kenkoderm portfolio to double by Q3 2025; Medagel new kits/pads .
  • Contract manufacturing traction: Cintas first shipments in Q4 and continued orders into Q1/Q2; pipeline of four large opportunities progressing; STADA’s HISTAsolv exceeded projections .

Quoted management: “We expect contract manufacturing and white label to continue being a major driver… some of the largest opportunities… in our pipeline” .
Quoted management: “We saw growth [Silly George] from its initial $2 million annual revenue run rate to over $5 million” .

What Went Wrong

  • Gross margin compression to 37.2% from 43.6% Q/Q due to reclassifying Amazon commissions (~15% of sales) from selling costs to COGS to stabilize reported margins .
  • Q4 included $243k one-time inventory write-offs (high MOQ in 2022; excess/obsolete), increasing net loss; management does not expect similar future write-offs .
  • SG&A elevated with advertising/marketing and Amazon fees; SG&A $1.97M in Q4 and $6.22M for FY (up vs 2023), offsetting some gross profit gains .

Financial Results

Quarterly P&L snapshot

MetricQ2 2024Q3 2024Q4 2024
Revenue ($USD)$1.44M $2.94M $3.04M
Gross Profit ($USD)$0.41M $1.28M $1.13M
Gross Margin %28.5% 43.6% 37.2%
Net Loss ($USD)$0.98M $0.75M $0.85M
EBITDA ($USD)($0.97)M ($0.49)M ($0.73)M
Adjusted EBITDA ($USD)($0.79)M ($0.35)M ($0.62)M

Notes: Q4 EBITDA/Adj. EBITDA reconciliations provided; EBITDA loss narrowed vs Q4 2023 .

Actual vs S&P Global Consensus (quarterly)

MetricQ2 2024Q3 2024Q4 2024
Revenue Actual ($USD)$1.44M $2.94M $3.041M
Revenue Consensus ($USD)$1.405M*$2.847M*$2.992M*
Surprise ($)+$0.035M*+$0.093M*+$0.049M*
Surprise (%)+2.5%*+3.3%*+1.6%*
EPS Actual ($USD)-0.1455*—-0.0964*
EPS Consensus ($USD)-0.14*-0.10*-0.13*
EPS SurpriseSlight miss*—+$0.0336*

Values marked with * retrieved from S&P Global.

KPIs and balance highlights

KPIQ2 2024Q3 2024Q4 2024
Cash and Equivalents ($USD)$1.07M $1.10M $1.81M
Shares Outstanding6,324,266 (as of Aug 14, 2024) 6,790,777 (as of Nov 13, 2024) 7,654,038 (as of Mar 24, 2025)
SG&A ($USD)$1.39M (quarter) $2.07M (quarter) $1.97M (quarter)
One-time Inventory Write-offs——$0.243M

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Revenue ($USD)Q3 2024$2.2M (Aug 14, 2024) ~$2.85M pre-announced (Oct 10, 2024) Raised
Revenue ($USD)Q4 2024$2.6M (Aug 14, 2024) ~$3.0M (Jan 22, 2025 letter) Raised
Revenue ($USD)Q1 2025—At least $2.75M New
Revenue ($USD)FY 2025—At least $13.0M; positive EBITDA New
EBITDAFY 2025—Positive (Adj./EBITDA) New

Context: Actual Q3 revenue came in $2.94M (above pre-announced) ; Q4 actual $3.04M (above Q4 guidance) .

Earnings Call Themes & Trends

TopicPrevious Mentions (Q-2 and Q-1)Current Period (Q4 2024)Trend
Gross margin methodologyHigh DTC gross margins; SG&A rising for Silly George (Q3) Reclassified Amazon commissions to COGS; ~15% commission Refinement for stability
Contract manufacturing (Cintas, AbbVie)Cintas agreement; Q4 deliveries; AbbVie launch expected Q1 2025 (Q3) Cintas shipments in Q4 with additional orders in Q1/Q2; AbbVie orders in Q1, product shipping Q2 2025 Ramping
Branded consumer portfolioSilly George run-rate to ~$5M; Kenkoderm/Medagel growth (Q3) Silly George >$5M; New beauty SKUs; Kenkoderm doubling portfolio in Q3 2025; Medagel new kits/pads Expansion
STADA partnershipHISTAsolv North America launch (Q3) HISTAsolv exceeding projections; contract amendment; more launches (Q4 2025, Q1 2026) Broadening
Innovative Optics laser-hair hydrogelIRB study initiated (Q2 press); top-line data expected Q4 (Q3) [36 from list, context] Data publication “shortly”; commercial launch targeted mid-year 2025 Near commercialization
Cash flow/EBITDA trajectory“Very close to cash flow positive” (Q3) Expect improved Adj. EBITDA in Q1 and meaningful ramp in Q2 as new customers scale Improving
Geographic/retail expansionPursuing retail (Walgreens), Europe, Canada approvals (Q3) Continued focus; Cintas exposure as brand awareness driver Building channels

Management Commentary

  • “2024 was a watershed year… record periods across all financial measures… full year and fourth quarter revenue over 100% for the third consecutive year.”
  • “Gross margins for the fourth quarter were 37%… negatively affected by a reclassification of Amazon sales commissions… approximately 15% on all of our sales.”
  • “We began shipping SilverSeal to Cintas [in Q4]… pleased with initial sales… additional orders that will ship in Q1 and Q2.”
  • “We expect contract manufacturing and white label to continue being a major driver… largest opportunities in our pipeline.”
  • CFO: “Q4 revenue totaled $3.04M (+181% Y/Y)… Q4 gross margin 37.2%… Adjusted EBITDA loss $0.62M… cash $1.81M as of Dec 31.”
  • “We expect revenue to be at least $2.75M in Q1 2025 and at least $13M in 2025, and to achieve positive EBITDA during the year.”

Q&A Highlights

  • Adjusted EBITDA path: Management expects improvement in Q1 vs Q4/Q3 and stronger ramp in Q2 as new customers scale; one-time Q4 inventory write-off ($240k) impacted results .
  • Pipeline breadth: Typically 4–5 large opportunities in development; timelines vary by complexity and regulatory pathway (including 510(k) clears for some) .
  • Innovative Optics commercialization: Targeting mid-2025 launch subject to positive study data; leveraging partner relationships and KOLs; potential ancillary cooling mask product for post-procedure .
  • AbbVie Resonic device: Orders received in Q1; initial product shipments scheduled for Q2; management to supply per AbbVie’s schedule .

Estimates Context

  • Coverage is thin (often one estimate). Q4 2024 revenue beat consensus ($3.041M vs $2.992M*) and EPS beat (-$0.096 vs -$0.130*). Q3 2024 revenue beat ($2.94M vs $2.847M*) while Q2 2024 modestly beat revenue ($1.44M vs $1.405M*) and broadly in line EPS (-0.146* vs -0.14*). Values retrieved from S&P Global*.
  • Implications: With recurring Cintas orders, STADA outperformance, and branded portfolio expansion, near-term consensus for Q1 2025 may need to reflect at least $2.75M revenue and improved Adj. EBITDA trajectory per management guidance .

Key Takeaways for Investors

  • Quality beat: Q4 revenue and EPS exceeded consensus, supported by balanced growth in branded and contract manufacturing; EBITDA trend improving *.
  • Margin reset improves comparability: Reclassification of Amazon commissions clarifies true margin profile and should dampen volatility; monitor mix and DTC intensity .
  • 2025 catalysts: Cintas reorders, AbbVie Resonic shipments in Q2 2025, additional STADA products, and potential mid-year laser-hair hydrogel launch .
  • One-time charges now behind: $243k inventory write-offs tied to 2022 MOQs are non-recurring; manufacturing control since 2023 reduces risk of similar events .
  • Liquidity bolstered: Cash $1.81M at year-end; $2M registered direct offering in Nov supports inventory/marketing and receivables growth .
  • Guidance credibility: Q3/Q4 guidance was raised and then exceeded; FY 2025 “at least $13M” with positive EBITDA is supported by visible customer ramps .
  • Watch estimate revisions: Expect consensus to adjust higher for near-term quarters as white-label programs onboard and branded launches expand*.

Appendix: Additional Prior-Quarter Context

  • Q3 2024: Revenue $2.94M (+141% Y/Y; +104% Q/Q); gross margin 43.6%; Adj. EBITDA loss $0.347M; net loss $0.754M .
  • Q2 2024: Revenue $1.44M (+23% Y/Y); gross margin 28.5%; net loss $0.979M; branded revenue led by Silly George integration .

Values marked with * retrieved from S&P Global.