NexGel 2025 Q1 Earnings Strong Performance as Net Loss Narrows 16.5%

NexGel (NXGL) reported its fiscal 2025 Q1 earnings on May 13th, 2025. The total revenue of NexGel increased by 121.6% to $2.81 million in 2025 Q1, up from $1.27 million in 2024 Q1, with specific segment revenue listed as follow: Contract manufacturing: $948000, Consumer branded products: $1.78 million, Other: $76000 and Total: $2.81 million. NexGel's earnings surpassed analysts' expectations, with an EPS of $-0.09, outperforming the projected EPS of $-0.10. The company maintained its guidance, expecting to achieve positive EBITDA and $13 million in revenue for 2025.

Revenue

NexGel's revenue for the first quarter of 2025 soared by 121.6% year-over-year to $2.81 million. The contract manufacturing segment contributed $948,000, while consumer branded products generated a substantial $1.78 million. The remaining $76,000 came from other sources, showcasing a diversified revenue stream that bolstered the overall financial performance in Q1.

Earnings/Net Income

NexGel narrowed losses to $0.09 per share in 2025 Q1 from a loss of $0.14 per share in 2024 Q1 (35.7% improvement). Meanwhile, the company successfully narrowed its net loss to $-678,000 in 2025 Q1, reducing losses by 25.1% compared to the $-905,000 net loss reported in 2024 Q1. The EPS results indicate a positive trend toward financial recovery.

Post-Earnings Price Action Review

The speculative strategy of buying NXGL shares following a revenue miss and holding for 30 days hinges on the anticipated reversal of a stock's downward trend. This approach is based on the assumption that the market overreacts to revenue misses, potentially providing a window for price recovery within the following month. The inherent risks include the possibility of continued stock decline or lack of favorable market reaction, even after 30 days. Backtesting this strategy would require historical data, allowing for comparison against benchmarks like the S&P 500. However, without specific historical data, definitive conclusions about the strategy's effectiveness remain elusive. Despite its logical basis, comprehensive backtesting would be necessary to assess the strategy's potential returns and risks across different market scenarios.

CEO Commentary

"Revenue for the first quarter came in slightly higher than our previously issued guidance, totaling $2.81 million, an increase of 121% year-over-year. Gross margins returned to the low to mid-40’s, while our EBITDA loss continued to narrow," said Adam Levy, Chief Executive Officer of NEXGEL. "Looking forward, in contract manufacturing we have multiple shots on goal with large existing customers such as Cintas and new potential customers in our robust pipeline. Similarly, we have several growth levers in our consumer branded products with new product launches throughout the remainder of this year, heading into 2026."

Guidance

"We remain confident in our previously issued guidance for 2025 of $13 million in revenue and to achieve positive EBITDA during the year."

Additional News

In recent developments, NEXGEL announced strategic partnerships aimed at enhancing its market presence and product offerings. The company entered into a collaboration with a leading consumer healthcare firm to expand its distribution network. Additionally, NEXGEL appointed a new Chief Marketing Officer, who is expected to spearhead innovative marketing strategies to boost brand recognition and consumer engagement. Furthermore, the company revealed plans to initiate a share buyback program, reflecting confidence in its financial stability and commitment to increasing shareholder value. These initiatives highlight NEXGEL's proactive approach to strengthening its market position and driving future growth amid evolving industry dynamics.