Why did CLGN's Q4 2024 earnings surprise analysts?

CollPlant Biotechnologies Ltd. (CLGN) experienced a significant decline in annual revenue and increased net losses, which may have surprised analysts. However, several factors contributed to the company's performance:

1. **Revenue Decline**: The company's full-year 2024 revenue decreased to $515,000 compared to $11 million in 2023, primarily due to a $10 million milestone payment from AbbVie in 2023 that was not repeated in 2024. This decline is a notable factor in the earnings surprise.
2. **Cost of Revenue Reduction**: There was a decrease in the cost of revenue from $773,000 in Q4 2023 to $272,000 in Q4 2024. This reduction in costs, along with a decrease in operating expenses, contributed to the net loss but may have influenced the earnings surprise positively.
3. **Gross Loss Improvement**: The gross loss improved from $474,000 in Q4 2023 to $108,000 in Q4 2024. This improvement suggests that the company's production efficiency or cost management has improved, which could be a positive surprise.
4. **Cash Management**: CollPlant reported cash and cash equivalents of $11.9 million as of December 31, 2024, with a cash runway expected to last through Q2 2026. This financial stability may have been a positive surprise, indicating the company's ability to fund its operations and ongoing projects.
5. **Strategic Advances**: Despite the revenue decline, CollPlant has made significant strides in its preclinical programs and continues to collaborate with AbbVie. The progress in developing proprietary photocurable dermal fillers and regenerative breast implants could be seen as a strategic move that may pay off in the future.

In conclusion, while the revenue decline may have been a negative surprise, the company's cost management improvements, gross loss reduction, cash stability, and strategic advancements could have mitigated the negative impact and even provided positive surprises to analysts.