NextPlat Corp Q1 FY2026 earnings call

Turnaround Progress and Regulatory Compliance

• The company completed a required reverse stock split in April 2026 and regained compliance with NASDAQ's minimum bid requirement, which management views as in the best interest of shareholders.
• The 2025 operational turnaround is largely complete, resulting in a leaner operating structure, dramatic margin expansion, and an expanding global new business pipeline, positioning the company for long-term profitable growth.

Healthcare Segment Strategic and Operational Updates

• Management shifted the healthcare segment focus to higher-margin 340B covered entities, long-term care facilities, and contracted medication fulfillment, driving significant margin and profitability improvements.
• The segment secured five new 340B pharmacy service agreements in Q1 2026, a single-quarter record; new customers are expected to begin contributing revenue in Q3 2026 following a 90-day onboarding period.
• The new Medicare Maximum Fair Price program implemented January 1 2026 favorably improved margins on previously lower-profit Medicare prescriptions, supporting overall segment profitability.
• The company entered a nationwide fulfillment partnership to support expansion beyond Florida, and will launch a new healthcare e-commerce website featuring GLP-1 prescriptions and the Florida Sunshine line of over-the-counter vitamins/supplements before the end of Q2 2026.
• Management is pursuing selective geographic acquisitions to expand footprint and is expanding sales/account management teams to support growth across Florida and other strategic markets.

E-commerce Segment Operational Updates

• The segment recorded sales to customers in over 130 countries in Q1 2026, with new European government and military multi-year contracts building a strong long-term pipeline.
• Demand for satellite-enabled IoT products (offered in partnership with Iridium and GlobalStar) drove IoT sales and recurring revenue to record highs. The segment is expected to continue delivering consistent cash flow and long-term growth.

Financial Position

• The company ended Q1 2026 with 11 million USD in cash, 14 million USD in working capital, and no meaningful debt, maintaining a healthy liquidity position to support growth initiatives.
• Management established an at-the-market (ATM) equity program with HC Wainwright post-quarter to provide financial flexibility for potential joint ventures or acquisitions, with no immediate plans to use the program at current share price levels.

Total net revenue for Q1 2026 was 10 million USD, down from 14 million USD in Q1 2025 and 13 million USD in Q4 2025. Consolidated gross profit was 3.4 million USD, up from 2.9 million USD in Q1 2025, with gross margin expanding to 35% from 21% year-over-year. Operating loss improved to 1.1 million USD, down from 2.1 million USD in Q1 2025.

• Healthcare Operations: Q1 2026 revenue was 7 million USD (68% of total company revenue), down from 10 million USD in Q4 2025. Segment generated positive operating income of 24 thousand USD, compared to an operating loss of 1.2 million USD in Q4 2025 and 0.9 million USD in Q1 2025. 340B and contract pharmacy revenue grew to 1.9 million USD, up from 1.6 million USD in Q4 2025 and 1.4 million USD in Q1 2025. Healthcare segment gross margin reached 39%, up from 20% year-over-year.

• E-commerce (Satellite Connectivity): Q1 2026 revenue was 3.2 million USD (32% of total company revenue), up from 3 million USD in Q1 2025. The segment delivered steady performance with stable demand across consumer, enterprise, and government channels, and recurring IoT revenue reached record highs.

• Management expects the newly secured 340B customers to begin contributing to revenue in Q3 2026, with building momentum in the healthcare segment supporting revenue growth in the second half of 2026.
• The company reaffirmed its target to achieve operational profitability in the second half of 2026, with a clear path to meaningful reductions in operating losses over this period.
• Priorities for the remainder of 2026 include expanding contract-based healthcare and fulfillment services, sustaining current expanded gross margins, improving operating leverage, maintaining disciplined expense management, and positioning the company for sustained profitability.
• Management expects the new nationwide expansion and e-commerce initiatives to drive long-term scalable growth for the healthcare business, and expects continued growth in the satellite connectivity e-commerce segment.

• Forward-looking statements regarding growth, profitability, and expansion are subject to known and unknown risks and uncertainties that could prevent the company from achieving its stated goals, as detailed in SEC filings.
• The macroeconomic environment and healthcare reimbursement landscape remain dynamic, which could create unforeseen pressure on margins or operating performance.
• There is an ongoing unresolved legal matter; the outcome of this lawsuit remains uncertain, and resolution may take additional time.

Q: The retail pharmacy segment still faces industry challenges. Does management see ongoing opportunities in this segment?

A: Management confirms it sees viable opportunities in retail pharmacy for Nexplat. Well-managed operations that combine strong margin discipline, operational efficiency, and local high-touch customer service can generate attractive profits, especially in underserved rural or lower-density markets where large national chains have limited presence. The company is actively exploring opportunities to profitably expand its retail footprint.

Q: Is the company's operational turnaround complete, or are additional improvements still being implemented?

A: Management states the core turnaround plan implemented over the past nine months is largely complete, having delivered material improvements across all key operational and financial metrics. The company will maintain its focus on prudent expense control and high-quality revenue growth, but has shifted its primary strategic focus to scaling the business and pursuing new growth opportunities, supported by its strong cash position and zero-debt balance sheet.

Q: Why did the company establish an ATM equity program when it already holds ample cash and has no debt?

A: Now that the turnaround is complete, the company is pursuing multiple potential expansion opportunities via joint ventures and acquisitions. The ATM program was established to provide additional financial flexibility to pursue these opportunities if they arise. Management emphasized there are no immediate plans to access the ATM program at current share price levels.

Q: Is there an update on the status of the company's ongoing lawsuit?

A: As of the Q1 2026 earnings call, there is no new material update to provide. The company continues to work with legal counsel and its insurance provider to resolve the remaining outstanding matter as quickly as possible while protecting shareholder interests.