Strata Skin Sciences Inc (SSKN) Q4 2024 Earnings Call Highlights: Strong Revenue Growth and ...

GuruFocus.com
28 Mar
  • Total Revenue: $9.6 million in Q4 2024, up 10% from $8.7 million in Q4 2023.
  • Global Net Recurring Revenue: $5.8 million in Q4 2024, compared to $5.6 million in Q4 2023.
  • Gross Domestic Revenue Billings: $4.9 million in Q4 2024, showing sequential increases from previous quarters.
  • Equipment Revenue: $3.8 million in Q4 2024, up from $3.1 million in Q4 2023.
  • Gross Profit: Increased to $5.8 million in Q4 2024 from $4.8 million in Q4 2023.
  • Gross Margin: Improved to 60.1% in Q4 2024 from 55.3% in Q4 2023.
  • Operating Expenses: $10 million in Q4 2024, compared to $8.2 million in Q4 2023.
  • Normalized Operating Expenses: $6.1 million in Q4 2024, slightly up from $6 million in Q4 2023.
  • Cash Equivalents and Restricted Cash: $8.6 million as of December 30, 2024.
  • Installed Base of Therapy X Devices: 144 devices in the U.S. at the end of Q4 2024, up from 92 at the end of 2023.
  • International Sales: $4.1 million in Q4 2024, up 27% from Q3 2024 and 41% from Q4 2023.
  • Common Shares Outstanding: 4,171,161 as of December 30, 2024.
  • Warning! GuruFocus has detected 5 Warning Signs with SSKN.

Release Date: March 27, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

  • Strata Skin Sciences Inc (NASDAQ:SSKN) reported a strong fourth quarter with a significant improvement in average net revenue per device, up 11% over the previous quarter and 6% over the prior year.
  • The company's gross margin improved to 60%, showing a 480-basis point improvement over the prior year Q4.
  • International sales were particularly strong, with a 27% increase over the third quarter and a 41% increase over Q4 2023, marking the highest level of international sales to date.
  • The company successfully secured pre-authorization for over 3,700 acne patients in partner clinics, indicating strong adoption of their insurance-reimbursed treatments.
  • Strata Skin Sciences Inc (NASDAQ:SSKN) achieved a third consecutive quarter of sequential increase in gross domestic revenue billings, highlighting the effectiveness of their strategic efforts.

Negative Points

  • The US extract install base declined from 923 to 864, indicating a reduction in the number of devices in operation.
  • Total operating expenses for the fourth quarter of 2024 increased to $10 million from $8.2 million in the year-ago period.
  • The company experienced a sequential decline of 22% between Q4 2023 and Q1 2024, reflecting a strong seasonal effect.
  • Global net recurring revenue for the fourth quarter of 2024 was only slightly up at $5.8 million compared to $5.6 million in the fourth quarter of 2023.
  • The company faces challenges in the Chinese and Korean markets due to economic changes and competitor bankruptcies, affecting local market distributors.

Q & A Highlights

Q: Can you clarify the numbers regarding the 144 devices and the 108 mentioned earlier? A: Yes, we are transitioning accounts to non-cash insurance reimbursed accounts. Out of the 144 devices, 108 are now billing insurance. - Dolev Rafaeli, CEO

Q: What types of practices are adopting the new accounts, and what is the geographical presence domestically? A: Initially, the uptake was stronger in the Northeast with small to medium-sized groups. We are now expanding to other regions, starting with one or two accounts in a group and expanding as they see success with insurance pre-authorizations and patient treatments. - Dolev Rafaeli, CEO

Q: What is driving the international growth, and can you elaborate on the geographical strengths? A: Our strongest international markets are Japan, China, South Korea, and the Middle East. Growth is driven by a shift from public tenders to private clinics, appreciation for our technology, and economic changes. Japan is replacing older devices with our new technology, and China and Korea are seeing increased adoption despite market challenges. - Dolev Rafaeli, CEO

Q: How do you determine which accounts are underutilized, and how do you decide on new clinic placements? A: We assess accounts based on revenue generation against fixed expenses. Underperforming accounts are either improved or removed. New placements are determined by historical patient numbers or previous successful accounts returning for additional revenue sources. - Dolev Rafaeli, CEO

Q: How do you work with clinics to increase device utilization? A: We engage with clinics to identify patient populations, ensure proper scheduling and treatment, and address any operational issues. This involves collaboration with clinic owners, staff, and technicians to optimize device use and revenue generation. - Dolev Rafaeli, CEO

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

This article first appeared on GuruFocus.

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