NEXGEL, Inc. Q1 FY2025 earnings call

• Revenue for Q1 was $2.81 million, 121% YOY growth. Gross margins normalized to 42.4%, aligning with historical range. - Contract manufacturing: Pivotal in growth, with demand from existing and new customers like Cintas and Owens & Minor; AbbVie's RESONIC machine launch delayed. - Consumer products: Strong expansion; Medagel to launch new products, Kenkoderm to double product portfolio, Silly George expanding beauty offerings, partnership with STADA progressing well. - Tariffs: Double-edged sword; minimal impact at current rates, but monitoring for potential escalations and considering Texas manufacturing transition if needed. - R&D: Pursuing opportunities thoughtfully, managing cash and resources for high ROI.

Revenue for the first quarter was $2.81 million, a 121% year-over-year increase. Contract manufacturing revenue increased 58% year-over-year, and consumer branded products (led by Silly George) increased 189% year-over-year. Gross margins normalized to 42.4% in Q1. Contract manufacturing segment was driven by increased demand from existing customers and new global corporations like Cintas and Owens & Minor. Consumer products saw growth with launches and partnerships, e.g., Medagel expanding product line, Kenkoderm launching new products, Silly George expanding beauty offerings, and continued growth with STADA.

• Revenue guidance of $13 million remains on track. - AbbVie's delay is not impactful as minimal revenue was baked in. - STADA to launch another product in Q4 2025 and several more in 2026.

• Tariffs: Uncertainty around tariff changes, potential impact on manufacturing costs and profitability. - AbbVie launch: Delay in RESONIC machine launch out of NEXGEL's control, though confident in eventual launch. - Market and economic uncertainties: Potential impact on consumer spending and sales of Silly George products.

Q: How much did you bake into revenue from AbbVie and does delay affect guidance?

A: Did not bake in much as AbbVie revenue was minor, not impactful to $13M guidance.

Q: Details on STADA product launch in 4Q?

A: First product Histasolv is growing, STADA partnership to expand with another digestive enzyme in 4Q 2025 and more in 2026.

Q: Tariffs and manufacturing transition to Texas?

A: Clean room in Texas has capacity, but current tariffs manageable; considering transition if tariffs escalate.

Q: Silly George revenue decline and market share?

A: Slight Q1 decline due to seasonality, but not seeing weakness, expecting growth with new products.

Q: Dilution and financing?

A: Avoiding debt until EBITDA positive, expect to cross EBITDA positive soon with various financing options available.