STRATA Skin Sciences Reports Fourth Quarter and Full-Year 2024 Financial Results and Provides a Corporate Update

HORSHAM, Pa., March 27, 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 and year ended December 31, 2024, and provides a corporate update.

Fourth Quarter and Full-Year 2024 Financial Highlights

Revenue in the fourth quarter of 2024 was $9.6 million, up 10% from $8.7 million in the year-ago quarter

Global net recurring XTRAC® revenue in the fourth quarter was $5.5 million vs. $5.4 million in the prior year period, with international growth of 13% more than offsetting a slight decline in the domestic market

Average net revenue per domestic XTRAC® system increased to $5,906 (+6% YOY) on 864 systems in the fourth quarter vs. $5,555 per system on 923 systems in the comparable prior year period

Total Recurring revenue increased 3.0% to $5.8 million in the fourth quarter, driven by international growth and contribution from TheraClear

Equipment revenue of $3.8 million increased 23% vs. $3.1 million in the fourth quarter of 2023, representing our highest level in two years

Full year 2024, revenue of $33.6 million increased slightly vs. $33.4 million in 2023

While revenue for the full year was up only slightly, results improved significantly over the course of the year with Y/Y growth in the fourth quarter of 10%

For the full year, growth of 5% in the Equipment segment more than offset a decline of 2% in the Recurring segment

Gross margin of 60.1% in the fourth quarter of 2024, improved 480 bps vs. 55.3% in the fourth quarter of 2023

Adjusting for a one-time accrued expense of $1.8 million in the third quarter of 2024 and the impact of non-cash impairment in both years, operating expense of $22.7 million in 2024 declined 8.5% vs. $24.8 million in 2023

Implemented a turnaround, focusing on cost efficiency and improving revenue per device, and delivered meaningful improvements in both metrics

Drove efficiencies in Sales & Marketing to more than offset the increase in Direct-to-Consumer (DTC) spend associated with the reimplementation of the Company's strategic revenue model

Implemented a strategy to remove and refurbish underutilized machines, driving a 67% year-over-year reduction in capex spend for full-year 2025, further conserving cash

2024 Corporate Highlights

Renewed 3-year agreements with exclusive distributors in China and Japan, each agreement carries minimum unit placements and/or purchases of the XTRAC® and VTRAC® devices

Amended credit agreement with MidCap Financial Trust to ensure alignment with the Company's current and future business projections

On July 23, 2024, closed a registered direct offering that raised $2.1 million in gross proceeds ($1.9 million in net proceeds) through the sale of 665,136 shares of common stock at an average purchase price of $3.16 per share, with participation from insiders and existing institutional shareholders

Received approval for the XTRAC Momentum™ 1.0 device in Japan and drove significant growth in international recurring revenue

Upgraded clinical team and implemented a consulting model focused on best practices within customer clinics. Early results show meaningful improvement in procedures per device and, in some cases, demand for additional placements

Filed a complaint against LaserOptek, and others, citing unfair competition under federal and state laws regarding the marketing and sales of competitive laser devices. On November 8, 2024  pursuant to a joint stipulation a court order was entered in the US District Court for the Eastern District of Pennsylvania enjoining LaserOptek, and all those acting at their direction from engaging in any sales, marketing or promotion of  Pallas lasers that states or implies, that treatments with Pallas lasers are reimbursable using CPT Codes 96920-96922, and also barred LaserOptek and others from engaging in any deceptive advertising  that includes any false or misleading statements regarding the Pallas lasers or STRATA's lasers. On February 28, 2025, Strata filed a motion for civil contempt against LaserOptek for violating that court order.

"2024 was a year of execution for STRATA. Our fourth quarter results highlight the success we are having in implementing our strategy to shift our existing installed base from underperforming centers to more productive ones while utilizing our DTC and service model to help our customers succeed," commented STRATA's President and CEO Dr. Dolev Rafaeli. "We have reduced XTRAC® devices in our domestic installed base to 864, from 923 at the prior year end, resulting in average revenue per device increasing to $5,906 in the fourth quarter of 2024, up from $5,555 in the prior-year period, representing an increase of 6%. At the same time, our operating margins, adjusted for non-cash impairment charges in both periods, improved by 950 bps compared to the fourth quarter of 2023. On a full-year basis, our non-GAAP adjusted EBITDA, including the adjustment for the $1.8 million accrual we discussed last quarter, improved to $2.2 million versus $1.0 million in the prior year.

"With regard to our international markets, we have seen significant traction, with particular strength in the Equipment segment. During the fourth quarter, international sales increased to $4.1 million, which represents a sequential increase of 27% over the prior quarter and 41% over the prior year period, with the international portion of the Equipment segment up 45% over the fourth quarter of 2023," concluded Dr, Rafaeli.

Fourth Quarter 2024 Financial Results

Revenue for the fourth quarter of 2024 was $9.6 million, as compared to revenue of $8.7 million for the fourth quarter of 2023. Global recurring revenue for the fourth quarter of 2024 was $5.8 million, as compared to global recurring revenue of $5.6 million for the prior-year period. Equipment revenue was $3.8 million for the fourth quarter of 2024 versus $3.1 million for the fourth quarter of 2023.

Gross profit for the fourth quarter of 2024 was $5.8 million, or 60.1% of revenue, as compared to $4.8 million, or 55.3% of revenue, for the fourth quarter of 2023.

Selling and marketing costs for the fourth quarter of 2024 were $3.2 million, compared to $2.8 million in the year-ago period. General and administrative costs for the fourth quarter of 2024 were $2.7 million, compared to $2.8 million for the fourth quarter of 2023.

Net loss for the fourth quarter of 2024 was $4.5 million, or EPS of negative $1.18 per basic and diluted common share, as compared to a net loss of $3.8 million, or EPS of negative $1.09 per basic and diluted common share, in the fourth quarter of 2023.

Cash, cash equivalents, and restricted cash at December 31, 2024 were $8.6 million.

Full Year 2024 Financial Results

Revenue for the full year 2024 was $33.6 million, as compared to revenue of $33.4 million for the full year 2023. Global recurring revenue for the full year 2024 was $21.2 million, as compared to global recurring revenue of $21.5 million for the full year 2023. Equipment revenue was $12.4 million for the full year 2024, as compared to $11.8 million for the full year 2023.

Gross profit for the full year 2024 was $19.1 million, or 56.9% of revenue, as compared to $18.5 million, or 55.3% of revenue for the full year 2023.

Selling and marketing costs for the full year 2024 were $12.3 million, as compared to $13.0 million for the full year 2023. General and administrative costs for the full year 2024 were $11.3 million ($9.5 million adjusted for a one-time accrual of $1.8 million taken in the third quarter), as compared to $10.5 million for the full year 2023.

Impairment expense for the full year 2024 was $3.9 million, as compared to $2.3 million for the full year 2023.

Other expenses for the full year 2024 were $1.0 million compared to $2.3 million for the full year 2023.

Net loss for the full year 2024 was $10.1 million, including the $1.8 million accrual to general and administrative expenses in the third quarter, and the $3.9 million impairment expense. This resulted in a net loss of $2.65 per basic and diluted common share.

Fourth Quarter and Full Year 2024 Earnings Conference Call

STRATA management will host a conference call at 4:30 p.m. ET on Thursday, March 27, 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 1-844-481-2523 (domestic) or 1-412-317-0552 (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 4Q24 Earnings Webcast.

A telephonic replay of the call will be available until April 3, 2025 by dialing 1-877-344-7529 (or 1-412-317-0088 for international callers) and using replay access code 8210574. 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 24, 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:

 

Year Ended December 31,

(in thousands)

2024

 

2023

 

 

 

 

Net loss

$

(10,086

)

 

$

(10,830

)

 

 

 

 

Adjustments:

 

 

 

Depreciation and amortization

 

4,968

 

 

 

5,553

 

Amortization of operating lease right-of-use asset

 

339

 

 

 

349

 

Loss on disposal of property and equipment

 

49

 

 

 

72

 

Benefit from income taxes

 

(170

)

 

 

(92

)

Interest income

 

(242

)

 

 

(231

)

Interest expense

 

2,107

 

 

 

1,640

 

Non-GAAP EBITDA

 

(3,035

)

 

 

(3,539

)

Impairment of goodwill

 

3,861

 

 

 

2,284

 

Stock-based compensation

 

427

 

 

 

1,303

 

Loss on debt extinguishment

 

—

 

 

 

909

 

Employee retention credit

 

(864

)

 

 

—

 

Non-GAAP adjusted EBITDA

$

389

 

 

$

957

 

One-time accrual for NY State Sales Tax

 

1,781

 

 

 

—

 

Non-GAAP adjusted EBITDA normalized for one-time events

 

2,170

 

 

 

957

 

 

 

 

 

 

 

 

 

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 third quarter and first nine months of 2024 and 2023 (in thousands), respectively:

 

Three Months EndedDecember31,

 

YTD

 

 

2024

 

 

 

2023

 

 

 

2024

 

 

 

2023

 

Gross domestic recurring billings

$4,871

 

 

$4,947

 

 

$18,996

 

 

$19,622

 

Co-Pay adjustments

 

(84

)

 

 

(87

)

 

 

(331

)

 

 

(343

)

Other discounts

 

(6

)

 

 

(22

)

 

 

(81

)

 

 

(110

)

Deferred revenue from prior quarters

 

1,867

 

 

 

1,913

 

 

 

7,204

 

 

 

8,114

 

Deferral of revenue to future quarters

 

(1,545

)

 

 

(1,624

)

 

 

(7,126

)

 

 

(7,567