Executive Summary

Q2 2023 delivered record revenues of $11.6M (+16% YoY) and record operating income of $0.6M, driven by a sharp increase in higher‑margin 340B contract revenue; gross margin expanded to 31% from 20% YoY .
Despite stronger operations, net loss widened to $4.64M due to a non‑operating, non‑cash debt conversion expense of ~$5.21M related to converting outstanding notes and issuing warrants; Adjusted EBITDA turned positive to $0.706M from $(0.536)M in Q2 2022 .
Sequentially, total revenues increased ~2% vs Q1 2023 ($11.56M vs $11.39M) while operating income rose markedly ($0.624M vs $0.014M), reflecting ongoing 340B mix benefits and controlled SG&A .
Balance sheet de‑risked: convertible debt eliminated via conversion; cash ended Q2 at $7.35M; subsequent July warrant exercises and voting agreement resulted in NextPlat, CEO Charles Fernandez, and Vice‑Chairman Rodney Barreto collectively controlling ~53% of voting common stock (a potential catalyst and governance overhang) .
No formal financial guidance or Wall Street consensus estimates were disclosed/available for Q2 2023; estimate comparison is therefore not possible (S&P Global consensus unavailable) .

What Went Well and What Went Wrong

What Went Well

Record operating income ($0.624M) and margin expansion to 31% as 340B contract revenue increased to $2.09M (+197% YoY), structurally lifting gross profitability .
CEO balance sheet message: “we successfully eliminated the Company’s outstanding convertible debt and increased the cash available to operate the business,” underscoring de‑risking and liquidity focus .
ClearMetrX TPA/data services scaling with significantly higher margins than pharmacy operations; 340MetrX platform supports further 340B monetization and operational leverage .

What Went Wrong

Net loss expanded to $4.64M due to a one‑time, non‑operating debt conversion expense of ~$5.21M; total other loss ballooned to $5.26M vs $0.68M in Q2 2022 .
Operating expenses rose 32% YoY to $2.93M, reflecting higher salaries/wages (+$0.4M), stock‑based comp (+$0.2M), and consulting (+$0.1M) .
COVID‑19 testing revenue collapsed to $8K from $368K YoY; management notes uncertain recurrence, limiting an erstwhile high‑margin contributor .

Financial Results

Headline P&L and Key Ratios (prior year, prior quarter, current)

Metric	Q2 2022	Q1 2023	Q2 2023
Revenues, net ($)	$9,973,584	$11,391,944	$11,556,085
Gross Profit ($)	$2,030,353	$3,146,685	$3,558,846
Gross Margin (%)	20%	28%	31%
Operating Income (Loss) ($)	$(197,270)	$13,795	$624,172
Net Loss ($)	$(880,722)	$(130,339)	$(4,637,026)
Diluted EPS ($)	$(0.32)	$(0.04)	$(1.05)

Revenue Mix and PBM Fees

Category	Q2 2022	Q1 2023	Q2 2023
Prescription Revenue ($)	$9,275,774	$10,440,944	$9,864,709
340B Contract Revenue ($)	$706,102	$1,576,295	$2,093,919
COVID-19 Testing Revenue ($)	$368,197	$45,456	$8,147
Rent and Other Revenue ($)	$1,450	$15,207	$5,688
Sub-total ($)	$10,351,523	$12,062,710	$11,972,463
PBM Fees ($)	$(377,939)	$(670,766)	$(416,378)
Revenues, net ($)	$9,973,584	$11,391,944	$11,556,085

KPIs and Non-GAAP

KPI / Non-GAAP	Q2 2022	Q1 2023	Q2 2023
Prescriptions Filled (units)	~118,000	~120,000	~118,000
Cash and Equivalents ($)	$6,742,876 (Dec 31, 2022 reference)	$7,451,770	$7,352,183
Adjusted EBITDA ($)	$(536,090)	$83,721	$705,850

Notes: Adjusted EBITDA excludes interest, taxes, D&A and significant non‑operating items such as the debt conversion expense .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue	FY / Q2 2023	N/A	No formal guidance provided in 8-K/10-Q	Maintained (no guidance)
Margins	FY / Q2 2023	N/A	No formal guidance provided in 8-K/10-Q	Maintained (no guidance)
OpEx	FY / Q2 2023	N/A	No formal guidance provided in 8-K/10-Q	Maintained (no guidance)
Other (OI&E, tax, dividends)	FY / Q2 2023	N/A	No formal guidance provided in 8-K/10-Q	Maintained (no guidance)

Earnings Call Themes & Trends

No Q2 2023 earnings call transcript was available; themes below reflect management remarks in the press release and 10‑Q .

Topic	Previous Mentions (Q3 2022, Q1 2023)	Current Period (Q2 2023)	Trend
340B program & TPA/data services	Q3 2022: ClearMetrX platform launched; 340B revenue +$0.5M YoY; margins diluted by COVID decline . Q1 2023: 340B $1.58M; noted higher margins .	340B $2.09M; key driver of 31% gross margin; TPA fees ~$2.1M .	Strengthening mix; scaling platform; margin accretive.
COVID-19 testing	Q3 2022: demand down; margin headwind . Q1 2023: testing $45K vs $1.29M prior year; outlook uncertain .	Testing $8K; management remains ready if demand returns .	Structural decline; minimal contribution.
PBM fees	Q3 2022: PBM fees increased . Q1 2023: PBM fees $(0.67)M .	PBM fees $(0.42)M; still a net revenue drag .	Ongoing headwind; mitigated by mix.
Technology initiatives (ClearMetrX/340MetrX)	Q3 2022: platform launch; kiosk partnerships .	Reinforced as higher‑margin driver; data analytics and TPA efficiency .	Execution advancing; incremental margin tailwind.
Capital structure / governance	Q3 2022: recapitalization; CEO appointment . Q1 2023: NextPlat PIPE $1.0M; conversion framework .	Debt conversion (~$2.9M principal+interest) to equity; subsequent change in control via voting agreement .	De‑levered but concentrated control (governance risk/catalyst).
Regulatory/legal	Prior PHA claim settled; KeyCentrix litigation noted .	Legal matters unchanged; disclosures maintained .	Stable backdrop.

Management Commentary

“I am pleased to report that…we successfully eliminated the Company’s outstanding convertible debt and increased the cash available to operate the business…Looking ahead, we remain committed to…driving growth and better positioning the Company to create shareholder value.” — Charles M. Fernandez, Chairman & CEO .
Margin driver: “Gross profit margins increased…primarily attributable to the increase in 340B contract revenue, which has higher margins than revenue generated from pharmacy operations.” .
ClearMetrX strategy: “340MetrX…provides 340B covered entities with data insights…enhances…TPA services…aiming to maximize…resources…through identification and validation of missing claims, increasing the covered entity’s revenue.” .

Q&A Highlights

No Q2 2023 call transcript or Q&A was available in the document set; insights are drawn from the 8‑K press release and 10‑Q MD&A .

Estimates Context

Wall Street consensus (S&P Global) for Q2 2023 EPS and revenue was unavailable due to missing Capital IQ mapping for RXMD; therefore, estimate comparisons cannot be provided at this time. Values would be retrieved from S&P Global when available.

Key Takeaways for Investors

Mix shift toward 340B and TPA/data services is expanding gross margin (31%) and driving record operating income; monitor continued contract scaling and ClearMetrX adoption .
The large reported net loss is not reflective of core operations; it stems from non‑operating, non‑cash debt conversion expense; Adjusted EBITDA flipped positive to $0.706M, indicating improving underlying profitability .
Balance sheet de‑risking (debt elimination, $7.35M cash) enhances liquidity; however, concentrated voting control (~53%) following July actions introduces governance considerations and potential strategic catalysts .
COVID‑19 testing revenue has largely normalized near zero; near‑term upside depends on unforeseen demand resurgence; core pharmacy and 340B should remain primary growth vectors .
PBM fees remain a structural headwind to net revenue; continued margin progress depends on sustaining higher‑margin services and controlling SG&A .
With no formal guidance or street estimates available, focus on sequential operating improvements and contract wins as near‑term trading catalysts; medium‑term thesis centers on 340B scale, data/TPA monetization, and margin durability .

Progressive Care Inc. (RXMD)·Q2 2023 Earnings Summary