Strata Skin Sciences ((SSKN)) has held its Q3 earnings call. Read on for the main highlights of the call.
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The recent earnings call for Strata Skin Sciences presented a mixed sentiment, reflecting both positive advancements and notable challenges. While the company celebrated significant strides in expanding its addressable markets and achieving successful litigation outcomes, these were overshadowed by a decline in total and equipment revenue, primarily due to international trade challenges.
Expansion of CPT Codes
The historic expansion of CPT codes for Strata’s XTRAC 308-nanometer excimer laser, set to take effect on January 1, 2027, was a major highlight. This expansion will significantly broaden reimbursement eligibility to cover multiple inflammatory and autoimmune skin conditions, effectively tripling the company’s addressable market.
Elevate360 Program Success
Since its inception in 2025, the Elevate360 program has been a success story, with 99 clinics reporting an average growth of 7% year over year. The gross billings per device increased by 8.5% compared to 2024, marking the highest figures since 2022.
International Expansion
Strata made significant progress in its international expansion efforts, particularly with regulatory approval and initial commercial placements of its technologies in Mexico, marking a crucial step forward.
Successful Litigation Outcomes
The company achieved a legal victory with an injunction against LaserOptik, which not only limited damages but also allowed 20 clinics to return, contributing over $1 million in annual revenue.
Improved Financial Metrics
Strata reported improved financial metrics, with adjusted EBITDA turning positive compared to a negative $240,000 in the previous year, driven by reduced operating expenses.
Decline in Total Revenue
Despite these successes, total revenue for 2025 was $6.9 million, reflecting a 20% decline compared to 2024, largely due to a challenging international environment.
Decrease in Equipment Revenue
Equipment revenue saw a significant decrease, dropping by 60% compared to the prior year period, highlighting the impact of international trade issues.
International Trade Challenges
The company’s international revenue was notably pressured by the current trade policy of the United States, which particularly affected performance in China.
Forward-Looking Guidance
Looking ahead, Strata Skin Sciences remains optimistic about its strategic initiatives and financial performance for the third quarter of 2025. The anticipated expansion of CPT codes for the XTRAC laser is expected to significantly broaden reimbursement eligibility, potentially tripling the addressable patient market. Despite a 20% decline in total revenue, the company maintained a gross profit margin of 60% and saw a 4.1% growth in recurring revenue. Strata continues to focus on international expansion and litigation efforts to reclaim market share, expressing confidence in the long-term growth opportunities.
In conclusion, the earnings call for Strata Skin Sciences highlighted a mixed sentiment, with significant advancements in market expansion and litigation success tempered by revenue declines due to international trade challenges. The company’s forward-looking guidance remains optimistic, with strategic initiatives aimed at expanding reimbursement eligibility and international market penetration.