STRATA Skin Sciences, Inc. Q4 FY2024 earnings call

• Fourth quarter had strong progress in corporate turnaround, with average net revenue per device up 11% over previous quarter and 6% over prior year period. U.S. XTRAC installed base declined from 923 to 864 from Q4 '23 to Q4 '24, but average gross billing per device increased. - Gross margin remained elevated at 60%, showing 480 basis point improvement over prior year Q4. - Operating loss improved 68% adjusted for non - cash impairment charges compared to fourth quarter of 2023. - DTC advertising ramped up in 2024, generating approximately 2,800 patient appointments. - Reached an installed base of 144 TheraClearX devices in the United States at end of fourth quarter, with 108 of them billing insurance. - International sales were particularly strong in fourth quarter, up 27% over third quarter and 41% over Q4 2023.

Total revenue for the fourth quarter of 2024 was $9.6 million versus $8.7 million in the year - ago quarter, an increase of 10%. Global net recurring revenue for the fourth quarter of 2024 was $5.8 million versus $5.6 million in the fourth quarter of 2023. Excluding deferred billings and other GAAP adjustments, XTRAC gross domestic recurring billings were $4.87 million in the fourth quarter of 2024, down 1.5% from $4.95 million in the fourth quarter of 2023. Equipment revenue was $3.8 million in the fourth quarter of 2024 versus $3.1 million in the fourth quarter of 2023, with the increase due to strong capital sales in international markets. Gross profit increased to $5.8 million in the fourth quarter, up from $4.8 million in the year - ago quarter. Gross margins improved to 60.1% versus 55.3% over the same period in 2023.

• Believes can execute on strategic goals for 2025 given current financial position. - Historical pattern of seasonal effect: difference between Q4 and Q1 can be significant, e.g., difference between Q4 2023 and Q1 2024 was 22% sequential decline, and between Q4 2022 and Q1 2023 was 29% sequential decline.

• International markets affected by currency exchange fluctuations. - Uncertainty regarding tariffs in Chinese market. - Impact of competitors' Chapter 11 declarations on Korean and Chinese markets affecting cash availability from local market distributors.

Q: Jeffrey Cohen asked about TheraClearX installed base and uptake on newer accounts, and geographical presence domestically.

A: Dolev Rafaeli said 108 of 144 TheraClearX devices are billing insurance, initial uptake of insurance - reimbursed accounts was stronger in the Northeast in 2024, with accounts being mostly small - to medium - sized groups.

Q: Jeremy Pearlman asked about determining underutilized accounts and new clinics.

A: Dolev Rafaeli said they look at accounts with run rate below a threshold related to fixed expenses. Removing non - productive accounts and placing productive ones, with 10% removal and placement in normal years, but more in 2024 and 2025.