Executive Summary

Q4 2022 underlying demand remained strong for UPNEEQ: shipments were preliminarily ~$12.1M, but a revenue recognition refinement shifted $2.3M into Q1 2023, resulting in recognized Q4 net product sales of $9.8M (+216% YoY). Gross margin expanded to 74% (vs. 58% LY), and Adjusted EBITDA loss improved to $(9.3)M (vs. $(15.2)M LY) .
Sequential optics: reported revenue appeared flat/down vs. Q3 ($10.0M) due solely to the accounting change; management emphasized underlying momentum and expects Q1 to benefit from the shift, with a lower-than-typical seasonal drop-off .
Channel build-out progressed: ~4,300 cumulative aesthetics practices at YE, ~70 sales territories, telemedicine channel in place, and company “recently surpassed” 20,000 cumulative unique pharmacy-paid prescribers; ~50% of Q4 aesthetics orders were reorders, evidencing repeat demand .
Balance sheet: $44.5M cash at 12/31; debt $75M principal ($55.5M FV carrying). Non-cash $13.3M impairment of arbaclofen ER reflects delays and potentially higher costs .

What Went Well and What Went Wrong

What Went Well
- Robust YoY growth with improving unit economics: Q4 net product sales $9.8M (+216% YoY) and gross margin 74% (vs. 58% LY) on better overhead absorption and pricing .
- Demand quality: ~50% of Q4 aesthetics orders were reorders; CEO: “we have made significant inroads into both the eye care and medical aesthetics markets and have essentially created a new category” .
- Profitability trajectory: Adjusted EBITDA loss improved to $(9.3)M from $(15.2)M in Q4 2021; SG&A declined YoY by $6.1M to $17.6M .
What Went Wrong
- Accounting change flattened sequential optics: prelim Q4 shipments ~$12.1M, but $2.3M recognized in Q1 due to recognition “upon delivery to the end customer,” making Q4 recognized revenue $9.8M; this complicates Q3→Q4 comparisons and may confuse models .
- Continued losses: Q4 loss from continuing operations $(18.3)M; non-cash $13.3M impairment on arbaclofen ER due to delays/potentially higher costs .
- Capital intensity and leverage: 2022 cash used in operations $(37.8)M); YE cash $44.5M vs. $75M principal debt, highlighting need to scale revenue efficiently .

Financial Results

Metric	Q4 2021	Q2 2022	Q3 2022	Q4 2022
Net Product Sales (UPNEEQ) ($M)	$3.060	$8.448	$10.022	$9.807
Total Revenues ($M)	$2.860	$8.448	$10.022	$9.807
Gross Margin (%)	58%	74%	75%	74%
EPS – Diluted, Continuing Ops ($)	$(0.24)	$(0.14)	$(0.16)	$(0.18)
Adjusted EBITDA ($M)	$(15.233)	$(11.754)	$(10.914)	$(9.320)

Segment/Revenue Mix

Revenue Component ($M)	Q4 2021	Q2 2022	Q3 2022	Q4 2022
Net Product Sales (UPNEEQ)	$3.060	$8.448	$10.022	$9.807
Royalty/Licensing Revenue	$(0.200)	$0.000	$0.000	$0.000
Total Revenues	$2.860	$8.448	$10.022	$9.807

Key KPIs and Commercial Progress

KPI	Q2 2022	Q3 2022	Q4 2022
Cumulative Pharmacy‑Paid Prescribers	~15,000	~17,000	“Recently surpassed” 20,000
Cumulative Aesthetics Practices Ordering	~2,200	~3,500	~4,300
Aesthetics Reorder Mix	—	—	~50% of Q4 orders reorders
Sales Territories	—	—	~70 territories at YE
Telemedicine Channel	Began selective opening in Q3	Active	Active

Notes on sequential optics: Preliminary Q4 shipments ~$12.1M; $2.3M recognized in Q1’23 due to revenue methodology, leaving recognized Q4 net product sales at $9.8M .

Guidance Changes

Metric	Period	Previous Guidance	Current/Update	Change
UPNEEQ Net Sales	Q4 2022	$12–$14M (11/10/22)	Preliminary ~$12.1M (1/9/23); final recognized $9.8M due to revenue recognition change (3/20/23)	Reported: Lower (timing); Underlying sell‑in: In‑line

Management refined Direct Dispense revenue recognition from “shipment” to “delivery to end customer,” shifting $2.3M from Q4 to Q1’23; sales supported by firm POs, paid and delivered .

Earnings Call Themes & Trends

Topic	Q2’22 Mentions	Q3’22 Mentions	Q4’22 (Current)	Trend
Revenue recognition methodology	—	—	Refined to recognize Direct Dispense upon delivery to end customer; shifts $2.3M to Q1	One‑time methodology refinement; improves comparability going forward
Sequential growth optics	—	Guided Q4 +20–40% vs Q3	Mgmt: Q4 appears flat on reported basis; expect Q1 to benefit, with less seasonal drop-off	Underlying trajectory intact
eCommerce/“Elevate”	—	Plan to launch in Q1’23	Rollout focus; subscription options	Advancing
Telemedicine channel	—	Active	Expanded; complements eye care and aesthetics	Expanding
Product adoption & reorders	—	3,500 aesthetics practices; ~1,000 reorders	~4,300 practices; ~50% Q4 aesthetics orders reorders	Strengthening
Liquidity & leverage	Cash $27.4M; debt $55.6M principal (6/30)	Cash $59.8M; debt $75M principal (9/30)	Cash $44.5M; debt $75M principal (12/31)	Manage for runway

Management Commentary

“Net product sales of UPNEEQ…have continued to grow…we have made significant inroads into both the eye care and medical aesthetics markets and have essentially created a new category…our fourth quarter 2022 orders in aesthetics were comprised of approximately 50% reorders, demonstrating clear traction…” — Brian Markison, CEO .
“UPNEEQ is well positioned as a first-in-class cash pay product with no direct competition…our model is designed to optimize…eye care, medical aesthetics, and now telemedicine…we are focused on…the rollout of Elevate…which will enable subscription options, and business development.” — Brian Markison .
On rev rec change and sequential optics: “the change in our accounting…is based on firm, unconditional orders…we will ramp in a similar manner to last year…we now expect a little bit better revenue performance in Q1 than we otherwise would have…traditionally, there is a bit of a drop-off from Q4 to Q1. We would expect it to be significantly less with our business because of the revenue change.” — Brian Markison / JD Schaub .

Q&A Highlights

Sequential trajectory vs. optics: Analysts probed how to interpret Q3→Q4 in light of the shift; management noted reported revenue looks flat but underlying demand did not slow, and Q1 should benefit from timing .
Focus on reorder behavior: Management emphasized prioritizing reorder traction so practices integrate UPNEEQ into daily workflows, underpinning sustainable growth .
Commercial levers: Discussion of eCommerce “Elevate” rollout and telemedicine expansion to improve access/retention .

Estimates Context

S&P Global consensus for RVLPQ Q4’22 could not be retrieved via our S&P Global interface at the time of analysis (mapping unavailable). As such, we cannot present Revenue/EPS consensus comparisons and flag potential beats/misses at this time. Values were unavailable from S&P Global*.

Key Takeaways for Investors

Underlying growth intact; accounting change clouds Q4 sequential optics but shifts ~$2.3M into Q1’23, likely yielding a stronger Q1 print than typical seasonality would imply .
Quality of demand improving: ~50% reorder mix in aesthetics and expanding prescriber/practice bases suggest durability and rising utilization intensity .
Margin expansion continues with scale; Q4 gross margin 74% vs. 58% LY and improving Adjusted EBITDA trend should continue with higher volumes .
Watch liquidity/leverage: YE cash $44.5M vs. $75M principal debt; continued scaling and operating discipline remain critical for runway and covenant flexibility .
Near-term catalysts: eCommerce “Elevate” (subscriptions), telemedicine expansion, deeper aesthetics penetration and reorders; these should enhance LTV and retention .
Modeling note: For comparability, use delivery-based revenue recognition going forward; reconcile Q4 reported revenue with prelim shipments to avoid underestimating the run-rate .
Risk factors: Non-cash arbaclofen impairment highlights pipeline timing risk; UPNEEQ remains the core revenue engine—execution in channels and pricing/mix will drive outcomes .

Footnotes:
*Consensus estimates were unavailable from S&P Global at time of analysis via our interface.

Sources: Q4 2022 8‑K with press release and financials ; Preliminary Q4 update (Jan 9, 2023) ; Q3 2022 press release and financials (Nov 10, 2022) ; Q2 2022 press release and financials (Aug 11, 2022) ; Q4 2022 earnings call transcript excerpts .

RVL Pharmaceuticals plc (RVLPQ)·Q4 2022 Earnings Summary