Nexgel, Inc. ((NXGL)) has held its Q3 earnings call. Read on for the main highlights of the call.
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In the latest earnings call, Nexgel, Inc. presented a balanced view of its recent performance, highlighting notable improvements in gross profit margins and strategic partnerships. The company also discussed product expansions, although it faced challenges with flat revenue growth and logistical delays.
Improved Gross Profit Margins
Nexgel reported a significant improvement in its gross profit margins for Q3 2025, which rose to 42.4% from 39.3% in the same quarter of the previous year. This increase reflects the company’s efforts in optimizing its cost structure and enhancing operational efficiency.
Contract Manufacturing Growth
The company’s contract manufacturing segment showed slight growth, with revenues totaling $907,000 in Q3 2025. Strong partnerships, notably with Cintas, have been pivotal in driving this performance, contributing to the overall stability of this revenue stream.
Strategic Partnerships
A key highlight from the call was Nexgel’s new agreement with iRhythm, which involves supplying hydrogels for their Zio ECG heart monitoring system. This partnership is expected to generate significant orders in Q4 2025, showcasing Nexgel’s strategic focus on expanding its market reach.
Product Expansion and Market Approvals
Nexgel has been actively launching new products in the consumer segment, including expanded beauty lines and skincare solutions. Additionally, the company’s Metagel product received approval from Health Canada to sell SilverSeal, marking a significant milestone in its product expansion strategy.
Non-Dilutive Financing
The company bolstered its financial position with a $1 million non-dilutive financing from Stada. This funding is intended to support product launches and marketing efforts, providing a solid foundation for future growth initiatives.
Flat Revenue Growth
Despite various advancements, Nexgel’s revenue for Q3 2025 remained flat year-over-year at $2.9 million. Both contract manufacturing and branded product revenues were stable, indicating a need for further growth catalysts.
Logistical Delays
Unforeseen logistical delays impacted Nexgel’s inventory movement, causing some product launches to be pushed to late September. This delay could potentially affect revenue by $100,000 to $200,000, highlighting the challenges in supply chain management.
AbbVie Partnership Uncertainty
The call also addressed uncertainties surrounding the partnership with AbbVie, as they took a large impairment charge on a recycling device. This raises concerns about future orders and the stability of this partnership.
Forward-Looking Guidance
Looking ahead, Nexgel provided optimistic guidance for the remainder of 2025. The company expects fourth-quarter revenues to increase sequentially, potentially setting a record. Full-year revenues are projected to range between $12 and $12.5 million, contingent on a strong holiday season. Nexgel is also focused on narrowing its adjusted EBITDA loss, with expectations to approach breakeven in the fourth quarter. The company aims to leverage its partnerships and product launches to drive growth.
In summary, Nexgel’s earnings call painted a picture of a company making strategic moves to enhance profitability and expand its market presence. While challenges such as flat revenue growth and logistical issues persist, the company’s forward-looking guidance and strategic partnerships offer a promising outlook for the future.