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

1. Revenue increased 1% to $6.8 million in Q1 2025. 2. International revenue grew 27%, offsetting a domestic decline of 4%. 3. Gross margin improved significantly to 53.5%, up 790 basis points YoY. 4. Operating expenses decreased by 5% to $5.7 million. 5. Adjusted EBITDA improved by $732,000, reflecting operational efficiencies.

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Why Bullish?

The improvement in gross margins and decreasing operating expenses signal better profitability and management efficiency. Historical patterns show that sustained revenue growth and improved margins often lead to positive investor sentiment, as seen with other biotech firms recovering from losses.

How important is it?

The financial results show operational improvements and potential market opportunities, making this news materially impactful for SSKN's investors and analysts.

Why Short Term?

With STRATA demonstrating tangible financial improvements, investor interest may spike in the short term. Additionally, the anticipated increase in international revenue could further catalyze short-term stock performance.

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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 marketAverage net revenue per domestic XTRAC® system increased to $4,776 (+3% YoY) on 846Total Recurring revenue increased 1% to $4.7 million in the first quarterEquipment 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 periodOperating expenses in the first quarter were $5.7 million, down 5% as compared to the year-ago periodOperating cash flow improved by $254 thousand to negative $550 thousandAdjusted EBITDA improved by $732 thousand to negative $547 thousand versus negative $1.3 million in the prior year periodTotal 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 IR516-222-2560IR@strataskin.com  STRATA Skin Sciences, Inc. and SubsidiaryCondensed Consolidated Balance Sheets(in thousands, except share and per share data)  March 31, 2025 December 31, 2024 (unaudited)  Assets   Current assets:   Cash and cash equivalents6,512  7,261 Restricted cash1,334  1,334 Accounts receivable, net of allowance for credit losses of $548 and $466 at March31, 2025 and December 31, 2024, respectively5,007  5,253 Inventories2,659  2,246 Prepaid expenses and other current assets364  501 Total current assets15,876  16,595 Property and equipment, net9,462  10,061 Operating lease right-of-use assets1,179  1,264 Intangible assets, net4,856  5,348 Goodwill2,658  2,658 Other assets231  231 Total assets34,262  36,157     Liabilities and Stockholders' Equity   Current liabilities:   Accounts payable2,816  2,433 Accrued expenses and other current liabilities8,779  8,593 Deferred revenues2,204  2,241 Current portion of operating lease liabilities331  328 Current portion of contingent consideration1,009  1,030 Total current liabilities15,139  14,625 Long-term debt, net15,231  15,192 Deferred revenues and other liabilities292  353 Operating lease liabilities, net of current portion835  919 Contingent consideration, net of current portion96  96 Total liabilities31,593  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, 20244  4 Additional paid-in capital253,241  253,112 Accumulated deficit(250,576) (248,144)Total stockholders' equity2,669  4,972 Total liabilities and stockholders' equity34,262  36,157      STRATA Skin Sciences, Inc. and SubsidiaryCondensed 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) $(0.96)Weighted average shares of common stock outstanding, basic and diluted 4,171,161   3,506,025      STRATA Skin Sciences, Inc. and SubsidiaryCondensed Consolidated Statements of Cash Flows(in thousands)  Three Months Ended March 31,  2025   2024 Cash flows from operating activities:   Net loss$(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     

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