NEXGEL, Inc. Q4 FY2024 earnings call

• 2024 was a record year with full year and fourth quarter revenue growing over 100% for the third consecutive year.
• Fourth quarter gross margin was 37%, negatively affected by reclassification of Amazon sales commissions from selling costs to COGS.
• Fourth quarter EBITDA and adjusted EBITDA loss were $726,000 and $621,000 respectively, with net loss including $243,000 one-time inventory write-offs.
• Contract manufacturing grew with partnerships like Cintas, shipping SilverSeal to them and expecting more orders.
• Consumer products expanded with Medagel launching new offerings, Kenkoderm doubling its product portfolio, Silly George launching new beauty products, and the STADA partnership expanding with new products planned.
• R&D exploration of hydrogel applications is done thoughtfully and strategically.

For the full year 2024, revenue totaled $8.69 million, an increase of 112% compared to $4.09 million in 2023. The fourth quarter of 2024 had revenue of $3.04 million, a 181% increase from $1.08 million in the fourth quarter of 2023. Contract manufacturing played a pivotal role in growth, with increased demand from existing customers and onboarding of new global corporations like Cintas and Owens & Minor. Consumer products saw expansion with brands such as Medagel, Kenkoderm, and Silly George; Silly George grew from a $2 million annual revenue run rate to over $5 million post-acquisition, and the partnership with STADA progressed well with Histasolv exceeding projections.

• Expect Q1 2025 revenue to be at least $2.75 million.
• Anticipate 2025 revenue to be at least $13 million.
• Aim to achieve positive EBITDA during 2025, with adjusted EBITDA expected to improve quickly with growth and no major one-time items after Q4 2024.

• Inventory write-offs were one-time, but other uncertainties exist.
• Regulatory risks for medical device products and hydrogel applications.
• Dependence on successful onboarding of new customers and product launches.

Q: On guidance and adjusted EBITDA, when to reach positive adjusted EBITDA?

A: Joe McGuire states they'll get there quickly, with Q1 being the weakest quarter but improving, and Q2 expected to ramp up.

Q: Pipeline of new customers, context on size and industry?

A: Adam Levy says they have 4-5 large opportunities in the pipeline, with a long onboarding process involving iterations, testing, etc.

Q: Innovative Optics, timeline for selling product if data positive?

A: Adam Levy says mid-year 2025, with no heavy regulatory lift.

Q: AbbVie Acoustic device launch update?

A: Adam Levy says shipping product in Q2 on initial orders, receiving orders in Q1, but launch not started yet.