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What were the key takeaways from Solesence's earnings call?

- **Revenue Growth Halted**: Q3 2025 revenue down 14% YoY to $14.5M, but full-year 2025 expected to grow $12M vs. 2024.
- **Gross Margin Strain**: 23% gross margin (-13pts YoY) due to inefficiencies, but CFO targets 2024 levels within 2 quarters.
- **Operational Turnaround**: $600k+ annual savings from facility consolidation, 25% labor cost reduction per unit, and new leadership team focused on execution.
- **Future Ambition**: 2026 growth multiple of industry rate, targeting 30%+ gross margin as floor, with long-term goal of 40%+ through technology leadership.

**【Management Opening Remarks】**
- CEO Kevin Cureton emphasizes the first quarter without year-over-year revenue growth in 2 years, citing challenging comparisons to Q3 2024. 
- Acknowledges past underperformance due to product design, labor efficiency, and inventory control, but expresses confidence in future growth driven by strategic brand partners.
- Highlights reorganization of R&D and quality teams into the Innovation and Product Integrity Group, led by industry-recognized expert Yoana Dvorzsak.
- Notes $64 million in open orders for 2025, up from $34 million in Q3 2024, signaling strong demand despite short-term inventory conservatism.

**【CEO Commentary】**
- Identifies 3 key areas of improvement:
  1. **Product Design**: Unified team ensures products meet exacting specifications for performance, cost, and manufacturability.
  2. **Labor Efficiency**: 25% YoY reduction in labor cost per unit, 10% improvement in Overall Equipment Effectiveness (OEE), and $600k+ annual savings from facility consolidation.
  3. **Inventory Control**: Enhanced surveillance of material handling and waste, with leadership from beauty industry veterans.
- Full-year 2025 revenue expected to grow $12 million vs. 2024, despite Q3 decline.

**【CFO Financial Commentary】**
- Q3 2025 Results:
  - Revenue: $14.5M (-14% YoY)
  - Gross Margin: 23% (-13pts YoY) due to manufacturing inefficiencies
  - Net Loss: $1.1M vs. $3M profit YoY
  - Adjusted EBITDA: -$435k vs. $3.6M YoY
- One-time expenses include:
  - $400k severance costs
  - $1.2M ERC payment (CARES Act relief)
  - NASDAQ listing costs
- Operating expenses up 45% YoY to $4.2M due to legal, HR, and investor relations investments.

**【Q&A Highlights】**
- **Revenue Growth Concerns**: CEO reaffirms full-year 2025 growth of $10M+ despite Q3 decline, driven by brand partners outperforming market.
- **Gross Margin Recovery**: CFO expects indirect cost improvements to return margins to 2024 levels within 2 quarters.
- **Operational Mistakes**: CEO acknowledges past errors but highlights new leadership team's focus on detail-oriented execution.
- **2026 Outlook**: CEO projects growth multiple of industry rate, targeting 30%+ gross margin as floor, with long-term goal of 40%+ margins through technology leadership.


Solesence, Inc. (SLSN) Q3 2025 Earnings Call Transcript

Revenue

Sales and Services Revenue

Financing Services Revenue

Other Revenue

Cost of Revenue

Cost of Goods and Services

Cost of Financing Services

Other Cost

Gross Profit

Other Operating Income

Operating Expenses

Selling, General and Administrative Expenses

Selling and Marketing Expenses

General and Administrative Expenses

Research and Development Expenses

Loss on Bad Debts

Loss on Impairment of Other Assets

Loss on Disposal of Assets

Other Operating Expenses

Operating Income

Non-Operating Income (Loss)

Income (Loss) from Affiliates

Income (Loss) from Associates

Income (Loss) from Joint ventures

Gain (Loss) on Other Investment

Gain (Loss) on Change in Fair Value

Gain (Loss) on Foreign Currency Exchange

Other Non-Operating Income (Loss)

Net Interest Expense

Interest Expense

Interest Income

Pretax Income From Continuing Operations

Income Tax Expense

Current Income Tax

Deferred Income Tax

Income Tax Adjustments

Net Income from Continuing Operations

Income from Discontinued Operations

Other Items Before Net Income

Net Income

Net Income Attributable to Minority Interests

Net Income Attributable to Owners of the Company

Preferred Stock Dividends

Other Adjustments

Net Income Attributable to Common Stockholders

Other Comprehensive Income

Total Comprehensive Income

Total Comprehensive Income Attributable to Minority Interests

Total Comprehensive Income Attributable to Owners of the Company

Basic EPS

Basic EPS from Continuing Operations

Basic EPS from Discontinued Operations

Diluted EPS

Diluted EPS from Continuing Operations

Diluted EPS from Discontinued Operations

SLSN

SLSN fundamentals

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