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XI

XWELL, Inc. (XWEL)·Q1 2025 Earnings Summary

Executive Summary

  • Q1 2025 revenue was approximately $7.0M, down year over year on lower XpresTest and XpresSpa contributions, partly offset by a new Priority Pass revenue stream; operating loss widened versus Q1 2024 on higher one-time costs, and net loss increased to approximately $4.7M .
  • The CDC’s Traveler-based Genomic Surveillance (TGS) program was extended for three years; however, TGS revenue in Q1 came in lower than anticipated due to timing of the extension and is expected to be made up in subsequent quarters .
  • Continued cost discipline: cost of sales decreased ~6% YoY and total operating expenses declined ~11% YoY in Q1; liquidity at quarter-end included ~$3.7M cash and ~$7.3M marketable securities, with no long-term debt .
  • Strategic initiatives continue: tech-forward Penn Station opening targeted for mid-2025; expanding off-airport presence (Naples Wax Center) and pursuing medspa acquisitions to broaden wellness platform .
  • Potential stock reaction catalysts: visibility on TGS revenue catch-up, execution on Penn Station mid-2025 opening, and clarity on medspa acquisition pipeline .

What Went Well and What Went Wrong

  • What Went Well

    • Secured three-year extension of CDC TGS program, reinforcing multi-year visibility in biosurveillance .
    • Cost discipline persisted: Q1 total cost of sales down ~6% YoY, total operating expenses down ~11% YoY .
    • New distribution/revenue channel: Priority Pass contributed a new revenue stream in Q1, helping offset lower XpresSpa/XpresTest revenue .
    • Quote: “With our renewed CDC partnership, continued discipline in operations, and a clear growth plan in wellness and beauty, we believe we are expanding what accessible wellness looks like…” – Ezra Ernst, CEO .
  • What Went Wrong

    • Top-line pressure: Q1 revenue decreased versus Q1 2024 due to lower XpresTest and XpresSpa revenue despite new Priority Pass revenue .
    • Profitability: Operating loss ($3.2M) and net loss ($4.7M) increased vs. the prior-year quarter, partly driven by higher one-time and seasonal costs .
    • Timing headwind: Q1 TGS revenue underperformed expectations due to contract timing; management expects recovery in subsequent quarters .

Financial Results

  • Quarterly performance vs sequential and year-over-year comparisons
MetricQ1 2024Q3 2024Q4 2024Q1 2025
Revenue ($)$8.726M*$8.422M*$7.467M*$7.023M*
Net Income ($)$(2.512)M*$(4.750)M*$(7.595)M*$(4.719)M*
Diluted EPS ($)$(0.60)*$(0.99)*$(1.45)*$(1.00)*
Gross Margin (%)30.6%*24.4%*15.0%*18.8%*
EBITDA ($)$(1.502)M*$(4.365)M*$(3.651)M*$(2.992)M*
EBITDA Margin (%)(17.2%)*(51.8%)*(48.9%)*(42.6%)*
Operating Income ($)$(1.727)M*$(4.617)M*$(3.884)M*$(3.158)M*
Total Operating Expenses ($)$10.453M*$13.039M*$11.351M*$10.181M*

Values marked with * retrieved from S&P Global.

  • Primary-source cross-checks and context:

    • Management reported Q1 2025 total revenue “approximately $7.0M” and net loss “approximately $4.7M”; operating loss “approximately $3.2M” .
    • Q3 2024 revenue disclosed at $8.4M; operating loss ~$4.8M; net loss ~$4.8M .
  • Segment Revenue Mix

SegmentQ3 2024Q1 2025
XpresSpa & Treat~$4.9M ~$4.3M
XpresTest (incl. TGS & HyperPointe)~$3.1M ~$2.2M
Naples Wax Center~$0.4M ~$0.552M

Note: Priority Pass became a new revenue stream in Q1 2025 within the spa category .

  • KPIs and Liquidity
KPIQ4 2024 (12/31/24)Q1 2025 (3/31/25)
Cash & Cash Equivalents ($)~$4.6M ~$3.7M
Marketable Securities ($)~$7.3M ~$7.3M
Total Current Assets ($)~$15.3M ~$14.8M
Long-Term DebtNone None
Airport Locations18 domestic + 10 international (28 total) 28 operating locations

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
TGS revenue timingFY 2025Not specifiedQ1 revenue lower than anticipated due to timing of extension; expected to be made up in subsequent quarters Timing shift
Penn Station openingMid-2025Opening in 2025 Targeted for mid-2025 Narrowed timing
Off-airport (Naples Wax) expansion20256 additional locations planned in 2025 Pursuing plans to open 6 locations in 2025 Maintained
Medspa acquisitions2025Plans to acquire select medical spas (announced) Plans reiterated; acquisition targets in high-demand metros (Orlando, Dallas, Salt Lake City) Maintained

No quantitative revenue/EPS/margin guidance was provided in the Q1 2025 materials .

Earnings Call Themes & Trends

Note: The company did not host a Q1 2025 call; a call was planned for the “next several weeks” . Trends below compare Q3 2024 remarks and FY 2024 update to Q1 2025 press release.

TopicPrevious Mentions (Q-2 and Q-1)Current Period (Q1 2025)Trend
CDC TGS biosurveillanceQ3 2024: TGS program role and operations highlighted . FY 2024: 3-year extension; base value $53.7M, ceiling $85.7M .Extension secured; Q1 revenue lower than anticipated due to timing; expected catch-up in later quarters .Visibility improved; timing headwind near term.
Airport spa expansion & Priority PassQ3 2024: PHL opening; Priority Pass boosting traffic .28 locations operating; Priority Pass a new revenue stream in Q1 .Building utilization; new channel contributing.
Off-airport growth (Naples Wax)Q3 2024: Forecast ~10 out-of-airport locations in 2025 . FY 2024: Estero opened; plan for +6 in 2025 .Pursuing +6 Florida openings in 2025 .Steady execution.
Penn StationQ3 2024: Target 2025 opening . FY 2024: Execute plans for 2025 .Opening targeted mid-2025 .Timeline refined.
Cost disciplineQ3 2024: Significant OpEx reductions; focus on profitability . FY 2024: OpEx down ~19% YoY; improved gross margin .Q1 cost of sales down ~6% YoY; total OpEx down ~11% YoY .Ongoing improvement.
Capital structureQ3 2024: $1.4M registered direct offering .$4.0M private placement closed Jan 2025 .Liquidity enhanced.

Management Commentary

  • Strategic focus: “With our renewed CDC partnership, continued discipline in operations, and a clear growth plan in wellness and beauty, we believe we are expanding what accessible wellness looks like—anchored in science…” – Ezra Ernst, CEO .
  • Platform vision: “Our vision is a seamless continuum of care… from biometric screenings at the airport to advanced skin and body treatments on Main Street, we believe that we are democratizing access to trusted, science-proven wellness.” – Ezra Ernst .
  • Brand and footprint: XpresSpa remains the category leader and is being upgraded with science-driven offerings; off-airport expansion continues via Naples Wax Center and medspa acquisitions plan; Penn Station location targeted for mid-2025 .

Q&A Highlights

  • No Q&A this quarter; the company stated it intends to host an investor call and webcast in the coming weeks to update on growth initiatives and programs .

Estimates Context

  • Wall Street consensus (S&P Global) for Q1 2025 was not available for EPS or revenue (no published consensus or estimate counts). As such, beat/miss vs. estimates cannot be determined [GetEstimates returned no consensus].
  • Actuals for context: Revenue $7.023M*, Diluted EPS $(1.00)*.
    Values marked with * retrieved from S&P Global.

Key Takeaways for Investors

  • Near-term revenue visibility improved by the 3-year TGS extension; Q1 shortfall is a timing issue with expected catch-up in later quarters, which could re-accelerate XpresTest revenue cadence .
  • Continued cost control is a key lever; Q1 cost of sales and OpEx fell YoY, supporting the path back to profitability if revenue normalizes with TGS catch-up and spa channel uplift .
  • Priority Pass as a new revenue stream and tech-forward format (e.g., Penn Station) may drive improved utilization and mix in XpresSpa over 2025 .
  • Off-airport expansion (Naples Wax) and planned medspa acquisitions broaden TAM and diversify revenue beyond airport traffic, potentially smoothing seasonality and travel-related cyclicality .
  • Liquidity remains adequate for near-term execution with ~$11.0M combined cash and marketable securities and no long-term debt; disciplined capital deployment and operating execution remain critical .
  • Watch for: (1) timing and magnitude of TGS revenue catch-up, (2) confirmation of Penn Station mid-2025 opening, (3) clarity and pace of medspa acquisitions, and (4) incremental Priority Pass traction in spa revenue .

Additional supporting citations and context:

  • Q1 2025 press release (8-K 2.02, Exhibit 99.1): revenue, segment mix, cost decreases, operating loss, net loss, liquidity, TGS timing commentary, Priority Pass revenue stream, Penn Station timing .
  • FY 2024 8-K: multi-year TGS contract values, FY cost/margin improvements, Naples Wax expansion plans, capital raise in Jan 2025 .
  • Q3 2024 8-K and call transcript: revenue composition, OpEx/cost reduction trajectory, Priority Pass traction, PHL opening, out-of-airport expansion outlook .

S&P Global data disclaimer: All values marked with * are retrieved from S&P Global.