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STRATA Skin Sciences, Inc. (SSKN)·Q4 2024 Earnings Summary

Executive Summary

  • Q4 2024 revenue was $9.6M, up 10% year-over-year, with gross margin improving 480 bps to 60.1%; equipment revenue rose 23% to $3.8M amid strong international sales .
  • Global recurring revenue increased to $5.8M (+3% YOY), while average net revenue per domestic XTRAC system rose 6% YOY to $5,906 on a smaller installed base (864 vs. 923) as the company removed underperforming units .
  • Versus S&P Global estimates: revenue beat ($9.576M actual vs. $8.976M estimate); EBITDA beat ($0.864M actual vs. $0.605M estimate); EPS comparisons are complicated—SPGI “Primary EPS” showed +$0.287 actual vs. -$0.30 estimate*, while company-reported GAAP EPS was -$1.18—highlighting definitional differences .
  • Management reiterated no formal guidance and emphasized seasonality (Q1 typically weaker after a strong Q4); narrative catalysts include international momentum, DTC-driven utilization improvement, and legal actions curbing competitor reimbursement claims .

What Went Well and What Went Wrong

What Went Well

  • International strength: Q4 international sales reached $4.1M, up 27% sequentially and 41% YOY; equipment segment international portion rose 45% YOY .
  • Utilization and margin improvement: Average net revenue per domestic XTRAC device increased 6% YOY to $5,906 as underperforming accounts were removed; gross margin rose to 60.1% (+480 bps YOY) .
  • TheraClear progress: U.S. TheraClearX installed base grew to 144 units; insurance pre-authorizations exceeded 3,700 patients year-to-date, with ~86% of patients preauthorized for ≥10 procedures (management commentary) .

Management quote: “Our fourth quarter results highlight the success we are having in implementing our strategy to shift our existing installed base from underperforming centers to more productive ones… our operating margins… improved by 950 bps compared to the fourth quarter of 2023.”

What Went Wrong

  • Larger GAAP net loss: Q4 net loss of $4.5M (GAAP EPS -$1.18) worsened vs. -$3.8M in Q4 2023; full-year net loss was $10.1M, reflecting non-cash impairment and the Q3 NY sales tax accrual .
  • Domestic recurring billings modestly lower YOY: Q4 XTRAC gross domestic recurring billings were $4.871M, down ~1.5% YOY; domestic installed base declined to 864 as removals accelerated .
  • Opex pressure before normalizing: Reported Q4 total opex was $10.0M vs. $8.2M prior year; normalized (ex-impairment) opex was $6.1M, only slightly above the prior year .

Financial Results

Quarterly Income Statement Summary

MetricQ2 2024Q3 2024Q4 2024
Revenue ($USD)$8.435M $8.797M $9.600M
Gross Profit ($USD)$4.937M $5.307M $5.800M
Gross Margin %58.5% 60.3% 60.1%
Net Loss ($USD)$(0.099)M $(2.122)M $(4.500)M
GAAP Diluted EPS$(0.03) $(0.53) $(1.18)

Segment Revenue

SegmentQ2 2024Q3 2024Q4 2024
Recurring Revenue ($USD)$5.3M $5.4M $5.8M
Equipment Revenue ($USD)$3.1M $3.4M $3.8M

KPIs

KPIQ2 2024Q3 2024Q4 2024
Domestic XTRAC Installed Base (units)882 873 864
Avg Net Revenue per Domestic XTRAC System ($)N/A$5,332 $5,906
XTRAC Gross Domestic Recurring Billings ($USD)$4.735M $4.813M $4.871M
TheraClearX Devices (U.S.)117 135 144
Cash, Cash Equivalents & Restricted Cash ($USD)$6.8M $8.4M $8.6M
International Sales ($USD)N/AN/A$4.1M

Q4 2024 Results vs S&P Global Consensus

MetricEstimate (S&P)*Actual (S&P)*GAAP Actual (Company)Beat/Miss
Revenue ($USD)$8.9765M$9.5760M$9.600M Bold beat
EBITDA ($USD)$0.6045M$0.8640MN/ABold beat
Primary EPS ($USD)$(0.30)$0.2872$(1.18) Not comparable
Primary EPS – # of Estimates2———
Revenue – # of Estimates2———

Values retrieved from S&P Global.*

Notes: EPS differences reflect SPGI “Primary/Normalized” EPS vs company-reported GAAP EPS; use caution when comparing.

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Company GuidanceQ1 2025 / FY 2025NoneNo formal guidance providedMaintained no guidance
Seasonality CommentaryNear-termN/AQ1 typically weaker after strong Q4; historical sequential declines of 22–29% in prior yearsInformational

Earnings Call Themes & Trends

TopicPrevious Mentions (Q2, Q3)Current Period (Q4)Trend
DTC/Patient AcquisitionDTC spend ramp; >1,900 appointments YTD by Q3; Spanish-language campaigns ~2,800 appointments YTD; efficiency gains enabling clinic process optimization Improving execution
Installed Base OptimizationDomestic XTRAC devices fell (907→882→873); removing underperformers; revenue per device improving Base at 864; avg revenue/device +6% YOY; continued removals/placements Positive utilization mix
International ExpansionJapan approval for XTRAC Momentum; multiple lectures; majority equipment sales international Q4 international sales $4.1M (+41% YOY); equipment up 45% YOY internationally Strong momentum
Litigation/RegulatoryCourt order enjoins competitor reimbursement claims (Pallas laser) Motion for civil contempt filed Feb 28, 2025 for violations Ongoing enforcement
TheraClear AdoptionDevices 117→135 by Q3; >2,000 acne preauths Devices 144; ~86% preauth rate and scaling beyond Northeast Accelerating
Gross Margin TrajectoryQ2 58.5%; Q3 60.3% Q4 60.1%; aiming for ~70% longer term (historic peaks) Stable high-50s/low-60s
Tariffs/CurrencyN/AChina tariff uncertainty; FX fluctuations; market instability in Korea Macro watch
SeasonalityN/AQ1 tends to be weakest; caution after strong Q4 Consistent pattern

Management Commentary

  • “We are removing units from significant underperformance accounts, while helping our higher volume customers to better utilize our XTRAC devices… average net revenue per device… up 11% over the previous quarter and up 6% over the prior year period.” – Dr. Dolev Rafaeli
  • “International sales increased to $4.1 million… 27% over the prior quarter and 41% over the prior year period… international portion of the Equipment segment up 45% over the fourth quarter of 2023.” – Dr. Dolev Rafaeli
  • “Normalized operating expenses in the fourth quarter of 2024 were $6.1 million, up slightly versus the prior year period at $6 million… $8.6 million total cash balance includes $1.3 million of restricted cash related to the sales tax accrual.” – John Gillings
  • “We tend to have a fairly strong seasonal effect between Q4… and Q1… historical sequential declines of 22–29%.” – Dr. Dolev Rafaeli

Q&A Highlights

  • TheraClear adoption playbook: initial uptake strong in Northeast across small-to-medium group practices; focus on preauthorization (≈86% of patients authorized for ≥10 procedures), patient show-through, and payer reimbursement before scaling across clinics .
  • International drivers: Japan, China, South Korea, Middle East highlighted; high-throughput clinical environments require stable platforms; FX and possible China tariffs noted as near-term uncertainties .
  • Installed-base decisions: threshold economics imply ~$15–$16k fixed expense per device; underperforming clinics face removal unless utilization can be improved via consulting-like efforts; replacements target productive accounts and “comeback” clinics .
  • Guidance/tone: No formal guidance; confident on operational turnaround, utilization initiatives, and international growth, but explicit seasonality caution for Q1 .

Estimates Context

  • Revenue beat: Company revenue $9.600M vs SPGI consensus $8.976M; positive surprise likely to support near-term estimate revisions upward.*
  • EBITDA beat: SPGI actual $0.864M vs $0.605M estimated, reflecting better operating performance; normalization adjustments and non-cash items remain key to interpretation.*
  • EPS discrepancy: SPGI “Primary EPS” shows positive actual vs negative estimate, while GAAP EPS was -$1.18; investors should anchor on definitions (normalized vs GAAP) and non-GAAP adjustments when modeling future EPS.*
  • Target price and recommendation data limited; consensus recommendation text unavailable.*

Values retrieved from S&P Global.*

Key Takeaways for Investors

  • International strength is now a core growth driver (Q4 international sales +41% YOY, equipment international +45% YOY), diversifying revenue beyond domestic recurring .
  • Utilization-focused strategy (removal of underperformers, clinic consulting, DTC funnel) is raising revenue per device and sustaining 60% gross margins, improving unit economics .
  • GAAP net loss remains elevated due to impairment and prior tax accrual; normalized opex discipline and margin gains mitigate underlying cash burn risk; cash and restricted cash $8.6M at year-end .
  • TheraClear adoption is gaining traction (144 devices; strong preauthorization metrics), offering incremental recurring revenue and insurance-based reimbursement tailwinds .
  • Legal enforcement against competitor reimbursement claims protects STRATA’s excimer laser economics; ongoing actions (civil contempt motion) maintain competitive integrity .
  • Near-term modeling should reflect seasonality (Q1 typically weaker post strong Q4), international momentum, and continued installed base optimization .
  • Watch macro/FX and potential China tariffs for international equipment sales; management cites currency volatility in Japan/Korea and tariff uncertainty in China .
Sources: 
Q4 2024 8-K and Exhibit 99.1 press release **[1051514_0001140361-25-010713_ef20046329_8k.htm:1]** **[1051514_0001140361-25-010713_ef20046329_ex99-1.htm:1]** **[1051514_0001140361-25-010713_ef20046329_ex99-1.htm:2]** **[1051514_0001140361-25-010713_ef20046329_ex99-1.htm:3]** **[1051514_0001140361-25-010713_ef20046329_ex99-1.htm:5]** **[1051514_0001140361-25-010713_ef20046329_ex99-1.htm:7]** **[1051514_6cf50912d5eb4f699987c5fd43ea6b5e_0]** **[1051514_6cf50912d5eb4f699987c5fd43ea6b5e_2]** **[1051514_6cf50912d5eb4f699987c5fd43ea6b5e_5]**; 
Q4 2024 earnings call transcript **[1051514_SSKN_3421591_0]** **[1051514_SSKN_3421591_1]** **[1051514_SSKN_3421591_2]** **[1051514_SSKN_3421591_3]** **[1051514_SSKN_3421591_4]** **[1051514_SSKN_3421591_5]**; 
Q3 2024 8-K and press release **[1051514_0001140361-24-046508_ef20038566_ex99-1.htm:1]** **[1051514_0001140361-24-046508_ef20038566_ex99-1.htm:3]** **[1051514_0001140361-24-046508_ef20038566_ex99-1.htm:5]** **[1051514_7a79b09b7fb04504ac879546167eb6d2_0]** **[1051514_7a79b09b7fb04504ac879546167eb6d2_3]** **[1051514_7a79b09b7fb04504ac879546167eb6d2_5]** **[1051514_7a79b09b7fb04504ac879546167eb6d2_8]**; 
Q2 2024 8-K press release **[1051514_0001140361-24-037322_ef20034059_ex99-1.htm:1]** **[1051514_0001140361-24-037322_ef20034059_ex99-1.htm:2]** **[1051514_0001140361-24-037322_ef20034059_ex99-1.htm:3]** **[1051514_0001140361-24-037322_ef20034059_ex99-1.htm:5]** **[1051514_0001140361-24-037322_ef20034059_ex99-1.htm:7]**; 
Litigation and clinical press releases **[1051514_d8291c60878e448da7b3c242b0aede85_0]** **[1051514_d8291c60878e448da7b3c242b0aede85_1]** **[1051514_41fcc3fa2da24920a49a0c0d751afd15_0]**; 
S&P Global consensus estimates for Q4 2024 and forward quarters.*