Nexgel, Inc. ((NXGL)) has held its Q2 earnings call. Read on for the main highlights of the call.
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NEXGEL, Inc. recently held its earnings call, revealing a balanced sentiment that highlighted both significant achievements and ongoing challenges. The company showcased strong revenue growth and expanded partnerships, underscoring successful product launches and strategic agreements. However, the call also pointed to ongoing losses, delays in key partnerships, and underutilized capacity as areas needing improvement.
Revenue and Gross Margin Growth
NEXGEL reported impressive financial results for Q2 2025, with revenue reaching approximately $2.9 million, marking a remarkable 100% year-over-year increase. The company’s gross margins also saw a substantial improvement, rising to 43.6% from 20.3% in Q2 2024. This growth reflects the company’s effective strategies in enhancing profitability.
Contract Manufacturing Surge
The earnings call highlighted a significant surge in contract manufacturing revenue, which increased to $863,000 in Q2 2025, representing a 103% rise from the previous year. This growth was driven by heightened demand from existing customers and the acquisition of new global corporate clients.
Consumer Products Growth
NEXGEL’s consumer products segment demonstrated robust performance, with revenue rising by 95% year-over-year in Q2 2025. This growth was supported by the expansion of the brand portfolio and the successful launch of new Silly George products.
New Partnerships and Product Launches
The company announced a new agreement with iRhythm to supply hydrogels for their Zio ECG heart monitor, alongside the expansion of its product line with new beauty and skincare products. These strategic moves are expected to enhance NEXGEL’s market presence and product offerings.
STADA Partnership Expansion
NEXGEL expanded its partnership with STADA, securing $1 million in non-dilutive funding to support product launches and marketing initiatives. This collaboration is poised to introduce more products in the future, further solidifying the company’s growth trajectory.
Ongoing Losses
Despite the positive revenue growth, NEXGEL reported a net loss of $670,000 for Q2 2025. However, this marks an improvement from the $890,000 loss in Q2 2024, indicating progress in narrowing financial deficits.
Delays in Key Partnerships
The anticipated launch of the AbbVie partnership has faced multiple delays, now expected to occur in 2026. This postponement has impacted revenue expectations, highlighting a challenge in meeting strategic timelines.
Limited Retail Presence
NEXGEL is in ongoing discussions with retailers, primarily focusing on private label opportunities. However, a significant retail presence is still projected to be 8-10 months away, indicating a gradual approach to expanding retail reach.
Low Plant Utilization
The company acknowledged low plant utilization, with capacity use only in the high teens percentage-wise. This underutilization presents an area for operational improvement to optimize production capabilities.
Forward-Looking Guidance
Looking ahead, NEXGEL provided optimistic guidance, projecting $13 million in revenue for 2025 and achieving positive EBITDA. The company also secured $1 million in non-dilutive funding from STADA to support its growth initiatives. These forecasts reflect confidence in continued financial performance and strategic advancements.
In summary, NEXGEL’s earnings call painted a picture of robust growth and strategic partnerships, tempered by challenges such as ongoing losses and delays in key initiatives. The company’s forward-looking guidance suggests a positive trajectory, with expectations of continued revenue growth and operational improvements. Investors and market watchers will be keenly observing how NEXGEL navigates these opportunities and challenges in the coming quarters.