XWELL 2025 Q1 Earnings Misses Targets as Net Loss Widens 94.6%

XWELL (XWEL) reported its fiscal 2025 Q1 earnings on May 20th, 2025. The company's performance fell short of expectations, with a significant decline in revenue and a widening net loss. Guidance remains optimistic, focusing on strategic expansion plans and partnerships. XWELL aims to improve its financial trajectory by acquiring new wellness locations and enhancing its CDC partnership. Despite current challenges, the company is committed to achieving profitability through disciplined operations and growth initiatives in the wellness sector.

Revenue
XWELL experienced a 19.5% drop in total revenue, reaching $7.02 million for the first quarter of 2025, compared to $8.73 million in the same period of 2024. The services segment generated $6.42 million, while product sales contributed $603,000. The overall revenue decline indicates ongoing financial challenges despite the company's strategic initiatives.

Earnings/Net Income
XWELL's losses increased to $1.00 per share in Q1 2025 from $0.60 per share in Q1 2024, marking a 66.7% deeper loss. The net loss widened to $4.59 million, a 94.6% increase from the previous year. These figures highlight the company's ongoing struggle with profitability.

Price Action
The stock price of XWELL declined by 3.03% during the latest trading day, rose by 1.10% over the past week, and increased 17.20% month-to-date.

Post Earnings Price Action Review
Following XWELL's earnings report, the strategy of buying shares after revenue announcements and holding for 30 days led to significant losses. The return on this strategy was -89.97%, compared to a benchmark return of 48.37%, resulting in an excess return of -138.34%. The Sharpe ratio was -0.60, indicating poor risk-adjusted returns, and the maximum drawdown reached -92.43%, underscoring the strategy's high risk and substantial losses. Despite initial optimism, investors experienced a severe downturn, revealing the volatility and uncertainty surrounding XWELL's stock performance post-earnings.

CEO Commentary
“XWELL began 2025 with strong momentum,” commented Ezra Ernst, Chief Executive Officer of XWELL. “With our renewed CDC partnership, continued discipline in operations, and a clear growth plan in wellness and beauty, we believe we are expanding what accessible wellness looks like -- anchored in science, backed by biosurveillance, and designed for everyday life.” Ernst highlighted the company's multi-brand strategy aimed at unifying wellness experiences, asserting their vision of democratizing access to trusted, science-proven wellness through both airport and community-based services.

Guidance
XWELL anticipates continued progress towards profitability, emphasizing a disciplined operational approach. The company expects to expand its footprint by acquiring medical spas in metropolitan areas and opening new wellness locations, including a tech-forward spa in New York City’s Penn Station. With the extension of the Traveler-based Genomic Surveillance Program in partnership with the CDC, XWELL aims to enhance its wellness offerings while maintaining its commitment to science-driven care.

Additional News
In March 2025, XWELL announced plans to acquire select medical spas in high-demand metropolitan areas, including Orlando, Dallas, and Salt Lake City, as part of its strategic expansion beyond travel hubs and into consumers' everyday wellness routines. This move aligns with XWELL's vision of a seamless continuum of care, offering advanced wellness treatments beyond airports. Additionally, the company secured a three-year extension of its Traveler-based Genomic Surveillance Program, operated with the CDC and Ginkgo Bioworks Holdings, solidifying its commitment to safeguarding national health through airport-based biosurveillance. These developments reflect XWELL’s strategy to broaden its footprint and enhance its offerings in the wellness industry.