Nextplat's Q3 2025: Contradictions Emerge on Share Buyback Delays and NASDAQ Compliance Plans

Date of Call: None provided

Financials Results

• Revenue: $13.8M, down 11% YOY (vs $15.4M prior year quarter)
• Gross Margin: 19.9%, down from 23.2% prior year

Guidance:

• Improvements were evident late in Q3 and have continued into Q4; expect continued sequential improvement.
• Targeting operational break-even in the second half of 2026.
• Continued payroll reductions and expect payroll expenses to keep decreasing.
• Expect >$1.5M in one-time cash savings from returning excess inventory to suppliers.
• Will invest in sales and marketing, add sales hires in Q4 and recruit a long-term care sales team.
• Share repurchase program remains available but will be used prudently; update to be provided in Q4 report.
• Expect to significantly reduce cash burn going forward.

Business Commentary:

* Operational Turnaround Initiatives: - NextPlat Corp implemented operational changes that led to significant reductions in operating expenses by nearly 40%, benefiting the company's financial structure and efficiency. - The improvements were driven by cost-cutting measures, leaner workforce initiatives, and targeted investments in business development.

• Healthcare Segment Performance:
• The healthcare operations segment saw a decline of approximately $1.5 million in revenue, primarily due to reduced 340B contract revenue.

• However, the segment also experienced a 5% increase in pharmacy prescription revenues and a notable 16% revenue increase from Q2 to Q3, largely due to higher reimbursement rates despite a decline in total prescriptions filled.

• E-commerce Segment Stability:

• The e-commerce segment reported a modest 4% decline in revenue, with the decrease attributed to lower hardware sales and increased airtime costs.

• Despite this, the segment maintained record levels of high-margin recurring revenue, showcasing the resilience of NextPlat's e-commerce operations.

• 340B Business Recovery:

• The 340B business saw a strong rebound with October 2025 monthly revenue increasing by over 140% from its lowest month earlier in the year.

• This recovery was driven by targeted service improvements, stronger customer engagement, and the re-engagement of former clients and new covered entities.

• Capital Management and Share Repurchase:

• NextPlat began repurchasing common shares under its Authorized Share Repurchase Program, with 130,549 shares repurchased in Q3.
• This initiative is part of the company's broader strategy to maintain liquidity and streamline its cost structure, reflecting confidence in its long-term financial health.

Sentiment Analysis:

Overall Tone: Neutral

• Management: "improvements were evident late in the third quarter and have continued into the fourth quarter" and targets "operational break-even in the second half of 2026." At the same time revenue fell to $13.8M (down 11% YOY) and gross margin declined to 19.9% from 23.2%, while operating expenses fell ~40% to $4.7M.

Q&A:

• Question from Investor (Submitted): What are the current plans for the buyback? Do you intend to increase the level of activity and pace?
  Response: Buyback program remains available but will be used prudently while prioritizing other critical investments; company will monitor the market and provide an update in the Q4 report.

• Question from Investor (Submitted): How does the additional 180-day extension from NASDAQ change your plans to increase the stock price to regain compliance?
  Response: The extension doesn't change near-term plans; management remains focused on improving financial results and will be more proactive engaging investors beginning early next year.

• Question from Investor (Submitted): Have your views on China changed given the lingering uncertainties?
  Response: China remains an opportunity for non-U.S.-made Opco products; demand is strong when inventory is available, margins remain attractive despite high marketing costs; Tmall approval secured for Florida Sunshine pending import certifications.

• Question from Investor (Submitted): Can you comment on the status of the ongoing lawsuits?
  Response: Cannot comment on specifics; two matters have been resolved and management is working with counsel to resolve the remaining matter as quickly as possible.

Contradiction Point 1

Share Buyback Program

It involves the company's intention and commitment to its share buyback program, which is a significant financial decision impacting shareholder value.

What are your current buyback plans? Are you planning to increase the activity level and pace? - Deutsche Bank Securities

2025Q3: We are monitoring the market, being prudent with cash deployment, and balancing critical investments. Share repurchase updates will follow in our fourth quarter report. - David Phipps(CEO)

What is the status of the share buyback? - Charles Fernandez (NextPlat Corporation)

2025Q1: Currently, we have not repurchased any shares under the buyback program. This is due to blackout periods and the prohibition from conducting transactions with material non-public information, including our recent statements regarding tariffs. We intend to keep the share buyback as an option but will continually evaluate cash uses to determine which investments produce the most long-term shareholder value while complying with all SEC guidelines. - Charles Fernandez(CEO & Executive Chairman)

Contradiction Point 2

Addressing NASDAQ Minimum Bid Requirement

It pertains to the company's strategy and timeline for addressing a critical regulatory requirement, which is crucial for maintaining their stock listing and investor confidence.

How does the 180-day extension from NASDAQ affect your plans to increase the stock price to comply? - BMO Capital Markets

2025Q3: The extension doesn't immediately change our plans. We remain focused on improving financial results, which will boost investor confidence. Increased engagement with new investors is planned for early next year. - David Phipps(CEO)

What is the company planning to address the NASDAQ letter and minimum bid requirement? - Charles Fernandez (NextPlat Corporation)

2025Q1: The NASDAQ process for compliance affords us an initial six-month period to address the share price, as well as a subsequent six-month period, assuming we continue to meet all our listing requirements. During this initial period, we intend to continue working to improve the financial results of the company and potentially complete some of our strategic alternatives I described earlier. So, these efforts and continued communication with investors, we believe we can address the share price issue. - Charles Fernandez(CEO & Executive Chairman)