STRATA Skin Sciences Reports First Quarter 2025 Financial Results and Provides a Corporate Update

Rhea-AI Summary

STRATA Skin Sciences (NASDAQ: SSKN) reported Q1 2025 financial results with revenue of $6.8 million, up 1% year-over-year. The company's gross margin improved significantly to 53.5%, up 790 basis points from 45.6% in Q1 2024. Global recurring XTRAC® revenue was $4.5 million, with international growth of 27% offsetting a 4% domestic decline. Operating expenses decreased by 5% to $5.7 million, and Adjusted EBITDA improved by $732,000 to negative $547,000. The company's direct-to-consumer strategy showed strong results, with Psoriasis and Acne patient growth of 32% and 128% respectively. International revenue grew 8% in Q1, now representing 36% of total revenue. The company reported a net loss of $2.4 million, or negative $0.58 per share, compared to a loss of $3.4 million in Q1 2024.

Positive

• Gross margin improved significantly by 790 basis points to 53.5%
• Operating expenses reduced by 5% year-over-year
• Strong international revenue growth of 27% in XTRAC and 8% overall
• Impressive DTC strategy results with 32% growth in Psoriasis patients and 128% in Acne patients
• Adjusted EBITDA improved by $732,000 compared to prior year

Negative

• Minimal revenue growth of only 1% year-over-year
• 4% decline in domestic XTRAC revenue
• Continued net loss of $2.4 million
• Negative operating cash flow of $550,000
• Negative Adjusted EBITDA of $547,000

Insights

Financial Analyst

STRATA shows modest revenue growth but significant operational improvements with expanding margins and reduced losses, though remains unprofitable.

STRATA Skin Sciences posted marginal revenue growth of 1% in Q1 2025, reaching $6.8 million. While top-line growth appears anemic, the company has made substantial operational improvements that deserve attention.

The most impressive metric is the gross margin expansion of 790 basis points year-over-year, reaching 53.5% compared to 45.6% in Q1 2024. This significant margin improvement demonstrates enhanced operational efficiency and potentially better pricing power.

Disciplined cost management is evident with operating expenses declining 5% to $5.7 million, with notable reductions across all categories – engineering & product development (down 60%), selling & marketing (down 1%), and general & administrative (down 5%).

These operational improvements have substantially narrowed STRATA's losses. Adjusted EBITDA improved by $732,000 to negative $547,000 (versus negative $1.3 million in Q1 2024), while net loss decreased to $2.4 million from $3.4 million a year earlier.

The company's XTRAC business shows a mixed performance. While domestic recurring revenue declined 4%, international growth of 27% helped offset this weakness. The average revenue per domestic XTRAC system increased 3% to $4,776, indicating better monetization of the installed base despite fewer treatments.

STRATA's international expansion is becoming increasingly important, now representing 36% of total revenue. With 8% growth in Q1 (following 41% growth in the previous quarter), this segment appears to be a key growth driver that could help stabilize the overall business.

With $7.8 million in cash and improved operating cash flow (though still negative at $550,000), the company has some financial runway, but continued progress toward profitability is essential for long-term sustainability.

HORSHAM, Pa., May 14, 2025 (GLOBE NEWSWIRE) -- STRATA Skin Sciences, Inc. (“STRATA” or the “Company”) (NASDAQ: SSKN), a medical technology company dedicated to developing, commercializing, and marketing innovative products for the treatment of dermatologic conditions, announces its financial results for the quarter ended March 31, 2025, and provides a corporate update.

First Quarter 2025 Financial Highlights

• Revenue in the first quarter of 2025 was $6.8 million, up 1%
  • Global net recurring XTRAC^® revenue in the first quarter was $4.5 million vs. $4.6 million in the prior year period, with international growth of 27% offsetting a 4% decline in the domestic market
  • Average net revenue per domestic XTRAC^® system increased to $4,776 (+3% YoY) on 846
  • Total Recurring revenue increased 1% to $4.7 million in the first quarter
  • Equipment revenue for the first quarter was $2.1 million, up 1.4% from the year-ago period
• Gross margin in the first quarter was 53.5%, up 790 basis points from 45.6% in the prior year period
• Operating expenses in the first quarter were $5.7 million, down 5% as compared to the year-ago period
• Operating cash flow improved by $254 thousand to negative $550 thousand
• Adjusted EBITDA improved by $732 thousand to negative $547 thousand versus negative $1.3 million in the prior year period
• Total cash at quarter end was $7.8 million

“STRATA made solid progress in the first quarter in executing our strategic plan,” said Dr. Dolev Rafaeli, STRATA President and CEO. “Along with a modest increase in revenue, we have significantly improved our gross margins, expanding nearly 800 basis points year over year. We have also maintained disciplined cost control resulting in a decline in operating expenses and improvement in our seasonally low first quarter adjusted EBITDA.

“Our existing direct-to-consumer (DTC) strategy continues to strengthen, driving 32% and 128% more unique Psoriasis and Acne patients respectively, as compared to prior year period demonstrating both growing demand and improved marketing efficiency.

“Internationally, we’re building strong momentum. Revenue from international markets grew 8% in Q1 as compared to prior year, following 41% growth in the previous quarter. This segment now accounts for 36% of our total revenue, and we anticipate, once the global tariff uncertainty clears it will continue to grow, adding strong growth to our U.S. business stabilization and growth,” concluded Dr. Rafaeli.

First Quarter 2025 Financial Results

Revenue for the first quarter of 2025 was $6.8 million, an increase of 1% versus the first quarter of 2024. Global recurring revenue of $4.7 million and equipment revenue of $2.1 million in the first quarter of 2025 were each up roughly 1% over the prior-year first quarter.

Gross profit for the first quarter of 2025 was $3.6 million, or 53.5% of revenue, as compared to $3.1 million, or 45.6% of revenue, for the first quarter of 2024.

Total operating expenses of $5.7 million in the first quarter of 2025 declined 5% versus the prior-year period, with engineering & product development down 60%, selling & marketing down 1%, and general & administrative down 5% versus their prior-year levels.

Net loss for the first quarter of 2025 was $2.4 million, or EPS of negative $0.58 per basic and diluted common share, as compared to a net loss of $3.4 million, or EPS of negative $0.96 per basic and diluted common share, in the first quarter of 2024.

Cash, cash equivalents, and restricted cash at March 31, 2025 were $7.8 million.

First Quarter 2025 Earnings Conference Call

STRATA management will host a conference call at 5:00 p.m. ET on Wednesday, May 14, 2025 to review financial results and provide an update on corporate developments. Following management’s formal remarks, there will be a question-and-answer session.

To listen to the conference call, interested parties within the U.S. should dial 1-866-524-3160 (domestic) or 1-412-317-6760 (international). All callers should dial in approximately 10 minutes prior to the scheduled start time and ask to be joined into the STRATA Skin Sciences, Inc. conference call.

The conference call will also be available through a live webcast that can be accessed at STRATA Skin Sciences YE24 Earnings Webcast.

A telephonic replay of the call will be available until May 21, 2025 by dialing 1-877-344-7529 (or 1-412-317-0088 for international toll callers) and using replay access code 6753445. To access the replay using an international dial-in number, please see here.

A webcast earnings call replay will be available approximately one hour after the live call and remain accessible until September 21, 2025.

Non-GAAP Financial Measures

STRATA has determined to supplement its consolidated financial statements, prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”), presented elsewhere within this report, with certain non-GAAP measures of financial performance. These non-GAAP measures include non-GAAP gross profit, which excludes the non-cash expense of amortization of acquired intangible assets classified as cost of revenues, and non-GAAP adjusted EBITDA, “Earnings Before Interest, Taxes, Depreciation, and Amortization.”

These non-GAAP disclosures have limitations as an analytical tool, should not be viewed as a substitute for Gross Profit or Net Earnings (Loss) determined in accordance with U.S. GAAP, should not be considered in isolation or as a substitute for analysis of our results as reported under U.S. GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other companies. STRATA considers these non-GAAP measures in addition to its results prepared under current accounting standards, but they are not a substitute for, nor superior to, U.S. GAAP measures. These non-GAAP measures are provided to enhance readers’ overall understanding of STRATA’s current financial performance and to provide further information for comparative purposes. This supplemental presentation should not be construed as an inference that the Company's future results will be unaffected by similar adjustments to Gross Profit or Net Earnings (Loss) determined in accordance with U.S. GAAP. Specifically, STRATA believes the non-GAAP measures provide useful information to management and investors by isolating certain expenses, gains, and losses that may not be indicative of the Company’s core operating results and business outlook. In addition, STRATA believes non-GAAP measures enhance the comparability of results against prior periods.

Reconciliation to the most directly comparable U.S. GAAP measure of all non-GAAP measures included in this press release is as follows:

	Three Months Ended March 31,
(in thousands)		2025				2024
Net loss	$	(2,432	)		$	(3,368	)
Adjustments:
Depreciation and amortization		1,220				1,249
Amortization of operating lease right-of-use asset		85				95
Loss on disposal of property and equipment		34				13
Interest expense, net		417				479
Non-GAAP EBITDA		(676	)			(1,532	)
Stock-based compensation		129				112
Inventory write-off		-				141
Non-GAAP adjusted EBITDA	$	(547	)		$	(1,279	)

XTRAC Gross Domestic Recurring Billings

XTRAC gross domestic recurring billings represent the amount invoiced to partner clinics when treatment codes are sold to the physician. It does not include normal GAAP adjustments, which are deferred revenue from prior quarters recorded as revenue in the current quarter, the deferral of revenue from the current quarter recorded as revenue in future quarters, adjustments for co-pay and other discounts. This excludes international recurring revenues.

The following is a reconciliation of non-GAAP XTRAC gross domestic billings to domestic recorded revenue for the first quarter of 2025 and 2024 (in thousands), respectively:

	Three Months Ended March 31,
(in thousands)		2025				2024
Gross domestic recurring billings	$	4,086			$	4,578
Co-Pay adjustments		(74	)			(80	)
Other Discounts		(4	)			(30	)
Deferred revenue from prior quarters		1,545				1,624
Deferral of revenue to future quarters		(1,513	)			(1,901	)
GAAP domestic revenue	$	4,041			$	4,190

About STRATA Skin Sciences, Inc.

STRATA Skin Sciences is a medical technology company dedicated to developing, commercializing, and marketing innovative products for the in-office treatment of various dermatologic conditions, such as psoriasis, vitiligo, and acne. Its products include the XTRAC^® excimer laser, VTRAC^® lamp systems, and the TheraClear^®X Acne Therapy System.

STRATA is proud to offer these exciting technologies in the U.S. through its unique Partnership Program. STRATA’s popular partnership approach includes a fee per treatment cost structure versus an equipment purchase, installation and use of the device, on-site training for practice personnel, service and maintenance of the equipment, dedicated account and customer service associates, and co-op advertising support to help raise awareness and promote the program within the practice.

Safe Harbor

This press release includes "forward-looking statements" within the meaning of the Securities Litigation Reform Act of 1995. These statements include but are not limited to the Company’s plans, objectives, expectations and intentions and may contain words such as “will,” “may,” “seeks,” and “expects,” that suggest future events or trends. These statements, the Company’s ability to launch and sell products recently acquired or to be developed in the future, the Company’s ability to develop social media marketing campaigns, direct to consumer marketing campaigns, and the Company’s ability to build a leading franchise in dermatology and aesthetics, are based on the Company’s current expectations and are inherently subject to significant uncertainties and changes in circumstances. Actual results may differ materially from the Company’s expectations due to financial, economic, business, competitive, market, regulatory, adverse market conditions labor supply shortages, or supply chain interruptions resulting from fiscal, political factors, international conflicts, responses, or conditions affecting the Company, the medical device industry and our customers and patients in general, as well as more specific risks and uncertainties set forth in the Company’s SEC reports on Forms 10-Q and 10-K. Given such uncertainties, any or all these forward-looking statements may prove to be incorrect or unreliable. The statements in this press release are made as of the date of this press release, even if subsequently made available by the Company on its website or otherwise. The Company does not undertake any obligation to update or revise these statements to reflect events or circumstances occurring after the date of this press release. The Company urges investors to carefully review its SEC disclosures available at www.sec.gov and www.strataskinsciences.com.

Investor Contact:
CORE IR
516-222-2560
IR@strataskin.com 

STRATA Skin Sciences, Inc. and Subsidiary Condensed Consolidated Balance Sheets (in thousands, except share and per share data)
	March 31, 2025			December 31, 2024
	(unaudited)
Assets
Current assets:
Cash and cash equivalents	6,512			7,261
Restricted cash	1,334			1,334
Accounts receivable, net of allowance for credit losses of $548 and $466 at March31, 2025 and December 31, 2024, respectively	5,007			5,253
Inventories	2,659			2,246
Prepaid expenses and other current assets	364			501
Total current assets	15,876			16,595
Property and equipment, net	9,462			10,061
Operating lease right-of-use assets	1,179			1,264
Intangible assets, net	4,856			5,348
Goodwill	2,658			2,658
Other assets	231			231
Total assets	34,262			36,157
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable	2,816			2,433
Accrued expenses and other current liabilities	8,779			8,593
Deferred revenues	2,204			2,241
Current portion of operating lease liabilities	331			328
Current portion of contingent consideration	1,009			1,030
Total current liabilities	15,139			14,625
Long-term debt, net	15,231			15,192
Deferred revenues and other liabilities	292			353
Operating lease liabilities, net of current portion	835			919
Contingent consideration, net of current portion	96			96
Total liabilities	31,593			31,185
Commitments and contingencies
Stockholders equity:
Series C convertible preferred stock, $0.10 par value; 10,000,000 shares authorized, no shares issued and outstanding	-			-
Common stock, $0.001 par value; 150,000,000 shares authorized; 4,171,161 shares issued and outstanding at both March 31, 2025 and December 31, 2024	4			4
Additional paid-in capital	253,241			253,112
Accumulated deficit	(250,576	)		(248,144	)
Total stockholders' equity	2,669			4,972
Total liabilities and stockholders' equity	34,262			36,157

STRATA Skin Sciences, Inc. and Subsidiary Condensed Consolidated Statements of Operations (in thousands, except share and per share data)
	Three Months Ended March 31,
		2025				2024
Revenues, net	$	6,812			$	6,754
Cost of revenue		3,165				3,674
Gross profit		3,647				3,080
Operating expenses
Engineering and product development		96				241
Selling and marketing		2,993				3,018
General and administrative		2,573				2,710
Total operating expenses		5,662				5,969
Loss from operations		(2,015	)			(2,889	)
Other income (expense):
Interest expense		(486	)			(524	)
Interest income		69				45
Total other expense		(417	)			(479	)
Net loss	$	(2,432	)		$	(3,368	)
Net loss per share of common stock, basic and diluted	$	(0.58	)		$	(0.96	)
Weighted average shares of common stock outstanding, basic and diluted		4,171,161				3,506,025

STRATA Skin Sciences, Inc. and Subsidiary Condensed Consolidated Statements of Cash Flows (in thousands)
	Three Months Ended March 31,
		2025				2024
Cash flows from operating activities:
Net loss	$	(2,432	)		$	(3,368	)
Adjustments to reconcile net loss ot net cash provided by (used in) operating activities:
Depreciation and amortization		1,220				1,249
Amortization of operating lease right-of-use assets		85				95
Amortization of deferred financing costs and debt discount		39				31
Change in allowance for credit losses		110				84
Stock-based compensation expense		129				112
Loss on disposal of property and equipment		34				13
Inventory write-off		-				141
Changes in operating assets and liabilities:
Account receivable		136				726
Inventories		(377	)			(154	)
Prepaid expenses and other assets		137				(31	)
Accounts payable		362				261
Accrued expenses and other liabilities		169				(57	)
Deferred revenues		(81	)			194
Operating lease liabilities		(81	)			(100	)
Net cash provided by (used in) operating activities		(550	)			(804	)
Cash flows from investing activities:
Purchase of property and equipment		(199	)			(725	)
Net cash used in investing activities		(199	)			(725	)
Cash flows from Financing activities:
Payment of contingent consideration		-				(18	)
Net cash provided by financing activities		-				(18	)
Net decrease in cash, cash equivalents and restricted cash		(749	)			(1,547	)
Cash, cash equivalents and restricted cash at beginning of period		8,595				8,118
Cash, cash equivalents and restricted cash at end of period	$	7,846			$	6,571
Supplemental disclosure of cash flow information:
Cash paid during the year for interest	$	450			$	480
Supplemental schedule of non-cash operating, investing, and financing activities:
Operating lease right-of-use assets obtained in exchange for operating lease	$	-			$	977
Transfer of property and equipment to inventories	$	36			$	9
Accrued payment of contingent consideration	$	21			$	6

FAQ

What were STRATA Skin Sciences (SSKN) key financial results for Q1 2025?

STRATA reported Q1 2025 revenue of $6.8 million (+1% YoY), gross margin of 53.5% (+790 bps), and a net loss of $2.4 million (-$0.58 per share). Operating expenses decreased 5% to $5.7 million.

How did STRATA's XTRAC business perform in Q1 2025?

Global XTRAC recurring revenue was $4.5 million, with 27% international growth offsetting a 4% domestic decline. Average revenue per domestic XTRAC system increased 3% to $4,776.

What was STRATA's (SSKN) cash position at the end of Q1 2025?

STRATA reported total cash, cash equivalents, and restricted cash of $7.8 million as of March 31, 2025.

How did STRATA's international business perform in Q1 2025?

International revenue grew 8% in Q1 2025 and now represents 36% of total revenue, with XTRAC international growth of 27% year-over-year.

What were the results of STRATA's direct-to-consumer (DTC) strategy in Q1 2025?

STRATA's DTC strategy showed strong results with 32% growth in unique Psoriasis patients and 128% growth in Acne patients compared to the prior year.