Executive Summary

Record quarterly revenue of $11.39M (+13% YoY) with gross margin expanding to ~28% on strength of higher‑margin 340B and TPA services; net loss narrowed sharply to $(0.13)M versus $(1.36)M YoY .
Mix improvement: prescription revenue +21% to $10.44M; 340B revenue quadrupled to $1.58M; COVID testing revenue fell to $0.05M as pandemic tailwinds faded .
Operating income turned positive ($0.014M) despite higher OpEx tied to a ~$0.3M claims audit settlement and ~$0.2M non‑recurring consulting fees; cash rose to $7.45M with $0.83M operating cash flow .
No formal guidance provided; strategic capital and governance changes: $1.0M investment from NextPlat and debt conversion post‑quarter, and COO transition effective May 1, 2023—potential catalysts for execution focus and balance sheet simplification .

What Went Well and What Went Wrong

What Went Well

Margin expansion: gross margin rose from 24% to 28% YoY due to higher 340B contract revenue and TPA fees with structurally higher margins than pharmacy operations .
Strong volume and mix: prescriptions filled up ~8% YoY to ~120,000; prescription revenue +21% YoY to $10.44M; 340B revenue +$1.19M YoY to $1.58M .
Operating leverage and cash generation: income from operations swung to +$0.014M and operating cash flow reached $0.83M; cash increased by ~$0.71M in the quarter .

What Went Wrong

COVID testing normalization: testing revenue dropped to $0.05M from $1.29M YoY as travel/business continuity testing demand faded, pressuring high‑margin contribution .
PBM headwinds: PBM/DIR fees increased to $0.67M (from $0.23M YoY), continuing to pressure reimbursement economics and predictability .
Elevated OpEx items: OpEx rose ~$0.62M YoY, driven by a ~$0.3M claims audit settlement, ~~$0.2M non‑recurring consulting, and higher salaries/wages (~~$0.1M) .

Financial Results

Consolidated P&L vs prior periods (oldest → newest)

Metric	Q2 2022	Q3 2022	Q1 2023
Revenue ($USD)	$9,973,584	$10,143,881	$11,391,944
Gross Profit ($USD)	—	$2,162,085	$3,146,685
Gross Margin %	20%	21%	28%
Operating Income ($USD)	$(200,000) approx.	$(1,869,689)	$13,795
Net Income ($USD)	—	$(8,962,628)	$(130,339)
Diluted EPS ($USD)	—	—	$(0.04)

Segment/Revenue Mix

Revenue Category ($USD)	Q2 2022	Q3 2022	Q1 2023
Prescription Revenue	$9,275,774	$9,397,483	$10,440,944
340B Contract Revenue	$706,102	$1,154,166	$1,576,295
COVID-19 Testing Revenue	$368,197	$235,221	$45,456
Other/Rent	$1,450	$903	$15,207
Subtotal	$10,351,523	$10,787,773	$12,062,710
PBM Fees (Reduction)	$(377,939)	$(643,892)	$(670,766)
Net Revenues	$9,973,584	$10,143,881	$11,391,944

KPIs and Balance Sheet Highlights

KPI / Metric	Q2 2022	Q3 2022	Q1 2023
Prescriptions Filled (units)	~118,000	~117,000	~120,000
Cash ($USD)	$2.2M	$7.35M	$7.45M
Operating Cash Flow ($USD)	—	$999,188 (9M’22)	$827,070

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue	FY/Quarter	Not provided	Not provided	Maintained – no formal guidance
Margins	FY/Quarter	Not provided	Not provided	Maintained – no formal guidance
OpEx	FY/Quarter	Not provided	Not provided	Maintained – no formal guidance
Other metrics	FY/Quarter	Not provided	Not provided	Maintained – no formal guidance

Note: The company did not issue quantitative guidance ranges in Q1 2023 materials .

Earnings Call Themes & Trends

Note: No Q1 2023 earnings call transcript was available; themes synthesized from press releases and SEC filings.

Topic	Previous Mentions (Q2 & Q3 2022)	Current Period (Q1 2023)	Trend
Technology/TPA/340B analytics (ClearMetrX, 340MetrX)	Emphasis on 340B TPA and platform launch; 340B revenue stable in Q2, improved in Q3	340B revenue +$1.19M YoY; gross margin lift from higher‑margin TPA/340B services	Strengthening contribution from data/TPA to margins
Remote Patient Monitoring (RPM)	Planned launch and strategic focus highlighted in Q2 2022	No specific update disclosed in Q1 documents	Awaiting operational update
Supply chain/vendor concentration	Heavy reliance on single wholesaler (McKesson 95–96%)	No change disclosed; continued concentration	Ongoing structural risk
PBM/DIR fees and reimbursement pressure	DIR fees cited as margin headwind; QoQ fees vary and can be clawed back	DIR/PBM fees up to $0.67M; continued pressure	Persistent headwind
COVID testing/macro normalization	Testing revenue fell in Q2/Q3 as demand faded	Testing revenue minimal ($0.05M)	Headwind; largely normalized
Regulatory/legal/compliance	Audit settlement, derivative liabilities and financing modifications	~$0.3M claims audit settlement increased OpEx	One‑time OpEx impact

Management Commentary

Margin drivers: “Gross profit margins increased from 24%…to 28%…primarily attributable to the increase in 340B contract revenue, which has higher margins than revenue generated from pharmacy operations.” (Company Q1 press release) .
Volume and mix: “Net pharmacy revenues increased by approximately $1.3 million…attributable to an increase in pharmacy revenue of approximately $1.8 million and an increase in 340B contract revenue of approximately $1.2 million…” (Company Q1 press release) .
Prior strategic stance: “Our…focus will be on more profitable business lines, such as our long‑term care business, 340B contract pharmacy services, and 340B third party administration…” — CEO (Q2 2022 press release) .

Q&A Highlights

No Q1 2023 earnings call transcript was available; no analyst Q&A to summarize [ListDocuments: earnings-call-transcript returned 0].

Estimates Context

Wall Street consensus (S&P Global Capital IQ) for Q1 2023 EPS and revenue was unavailable due to missing mapping for RXMD; as a result, estimate comparisons cannot be provided. Values from S&P Global were unavailable.

Key Takeaways for Investors

Mix shift is working: 340B/TPA growth is driving margin expansion despite PBM/DIR pressure; watch continued scaling of higher‑margin services to sustain ~28% GM .
Core pharmacy is healthy: prescriptions filled +8% YoY and prescription revenue +21% YoY signal volume and adherence execution; monitor patient growth and payer mix .
COVID testing fade largely complete: minimal contribution ($0.05M) sets a cleaner baseline for organic pharmacy/TPA performance going forward .
OpEx normalization opportunity: Q1 included ~$0.3M audit settlement and ~$0.2M non‑recurring consulting—scope to improve operating margin as one‑offs roll off .
Balance sheet improved and de‑risking underway: cash $7.45M; subsequent $1.0M equity from NextPlat and debt conversion simplify capital structure; track warrant/convert impacts .
PBM/DIR fee volatility remains a structural headwind; continued gross margin resilience depends on scaling 340B/TPA and LTC while managing reimbursement friction .
Near‑term: focus on operating leverage and cash generation; mid‑term: RPM commercialization updates and tech/data monetization (340MetrX) could broaden margin‑accretive revenue streams .

Sources:
- Q1 2023 press release and Form 8‑K: **[1402945_0001493152-23-016738_ex99-1.htm:0]** **[1402945_0001493152-23-016738_ex99-1.htm:1]** **[1402945_0001493152-23-016738_form8-k.htm:1]**
- Q1 2023 Form 10‑Q: **[1402945_0001493152-23-016727_form10-q.htm:2]** **[1402945_0001493152-23-016727_form10-q.htm:4]** **[1402945_0001493152-23-016727_form10-q.htm:9]** **[1402945_0001493152-23-016727_form10-q.htm:16]** **[1402945_0001493152-23-016727_form10-q.htm:17]** **[1402945_0001493152-23-016727_form10-q.htm:7]**
- Q2 2022 press release: **[1402945_0001493152-22-022394_ex99-1.htm:0]** **[1402945_0001493152-22-022394_ex99-1.htm:1]**
- Q3 2022 Form 10‑Q and 8‑K: **[1402945_0001493152-22-031905_form10-q.htm:3]** **[1402945_0001493152-22-031905_form10-q.htm:13]** **[1402945_0001493152-22-032501_ex99-1.htm:0]** **[1402945_0001493152-22-032501_ex99-1.htm:1]** **[1402945_0001493152-22-032501_ex99-1.htm:2]**
- FY 2022 Form 10‑K: **[1402945_0001493152-23-009839_form10-k.htm:11]** **[1402945_0001493152-23-009839_form10-k.htm:16]**

Progressive Care Inc. (RXMD)·Q1 2023 Earnings Summary