What impacted ECOR's Q2 2024 profit margins?

**ElectroCore's Q2 2024 profit margins are likely to have been impacted by a combination of factors**:

1. **Revenue Growth**: Despite a 96% increase in net sales for Q1 2024, reaching $5.4 million, the company may face challenges in maintaining similar growth rates as the market matures and competitive pressures intensify. This could lead to a saturation point in certain channels, such as the physician dispense cash pay channel, which experienced a slight decline in revenue.
2. **Operational Adjustments and New Product Launches**: The company's strategic adjustments and the launch of new products, such as Truvaga Plus™, Vega, and Taxim, have positively influenced revenue growth. However, these initiatives may require significant upfront investments, which could temporarily strain margins until they are fully ramped up.
3. **Gross Margin Sustainability**: While ElectroCore maintained a high gross margin of 84% in Q1 2024, the sustainability of these margins in the longer term may be influenced by factors such as supply chain disruptions, competitive pricing pressures, and the company's ability to control costs.
4. **Operating Expenses**: The company's operating expenses were approximately $8.4 million in Q1 2024, with research and development expenses decreasing significantly due to reduced investments in Truvaga Plus development. However, selling, general, and administrative expenses increased, primarily driven by strategic initiatives.
5. **Cash Flow and Liquidity**: ElectroCore's cash and equivalents decreased from $10.6 million at the end of 2023 to $8.1 million by March 31, 2024. This decline could impact the company's ability to invest in growth opportunities and may necessitate additional capital raises, which could dilute shareholders' equity and affect profit margins.
6. **Market Saturation and Competitive Pressures**: The VA hospital system channel, which saw a significant increase in sales, may eventually reach a saturation point, limiting further growth in this segment. Additionally, competition from other players in the bioelectronic medicine and wellness space could intensify, affecting profit margins.

In conclusion, while ElectroCore's Q2 2024 profit margins are likely to be influenced by the sustainability of revenue growth and gross margins, operational adjustments, new product launches, and the management of operating expenses and cash flow will also play critical roles.