STRATA Skin Sciences 2025 Q1 Earnings Misses Targets with Net Loss Improvement

STRATA Skin Sciences (SSKN) reported its fiscal 2025 Q1 earnings on May 15th, 2025. The total revenue of STRATA Skin Sciences increased by 0.9% to $6.81 million in 2025 Q1, up from $6.75 million in 2024 Q1. STRATA Skin Sciences narrowed losses to $0.58 per share in 2025 Q1 from a loss of $0.96 per share in 2024 Q1 (39.6% improvement). Meanwhile, the company successfully narrowed its net loss to $-2.43 million in 2025 Q1, reducing losses by 27.8% compared to the $-3.37 million net loss reported in 2024 Q1. The Company has sustained losses for 14 years over the corresponding fiscal quarter, highlighting ongoing financial headwinds.

STRATA Skin Sciences missed revenue expectations for the first quarter, falling short of the anticipated $7.28 million with actual revenues of $6.81 million. Despite the revenue miss, the company saw a reduction in net loss and improved gross margins, suggesting progress in operational efficiency. The guidance for future quarters remains optimistic, with expectations of continued international revenue growth contributing to stabilization and growth in the U.S. market once global tariff uncertainties are resolved.

Revenue

The revenue for STRATA Skin Sciences in the first quarter was $6.81 million, reflecting a 0.9% growth compared to the previous year. The global net recurring XTRAC® revenue was recorded at $4.5 million, slightly down from $4.6 million in the prior year period, with international growth offsetting domestic declines.

Earnings/Net Income

STRATA Skin Sciences reported an EPS of negative $0.58 per share, an improvement from negative $0.96 per share in the previous year. The net loss narrowed to $2.43 million compared to $3.37 million in 2024 Q1, showing a positive trend in reducing losses.

Post-Earnings Price Action Review

The strategy of buying STRATA Skin Sciences (SSKN) when revenues miss and holding for 30 days remains a high-risk approach. With the recent earnings results, which showed only a slight revenue increase and ongoing losses, the market reacted negatively, evidenced by a 3.60% drop in stock price during the latest trading day. Investors considering this strategy should assess their risk tolerance, as the stock may not recover quickly given the company's continued financial challenges and minimal revenue growth. While the strategy could work in a favorable market, alternatives such as waiting for clearer trend reversals or analyzing the company's product pipeline may offer more prudent investment paths.

CEO Commentary

"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, 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, and we anticipate it will continue to grow, adding strong growth to our U.S. business stabilization and growth."

Guidance

Dr. Rafaeli indicated that STRATA expects continued growth in international revenue, projecting it will contribute positively to U.S. business stabilization and growth once global tariff uncertainties are resolved. The company aims to further enhance its direct-to-consumer strategy and anticipates the overall revenue trajectory to improve as operational efficiencies are realized, thereby strengthening their market position moving forward.

Additional News

STRATA Skin Sciences has announced its participation in the D. Boral Capital Inaugural Global Conference, scheduled for May 14, 2025, at The Plaza Hotel in New York City. CEO Dr. Dolev Rafaeli will conduct one-on-one meetings from 9:00 AM to 3:00 PM ET, focusing on strategic partnerships and business growth opportunities. Interested parties can register for meetings through John Perez at D. Boral Capital. This engagement underscores STRATA's commitment to expanding its influence and forging critical partnerships within the medical technology industry.