STRATA Skin Sciences, Inc. reported its financial results for the nine months ended September 30, 2024, revealing a decline in total revenues and an increase in net losses compared to the previous fiscal period. Total revenues for the nine months were $23.986 million, down from $24.669 million in the same period of 2023. For the third quarter, revenues slightly decreased to $8.797 million from $8.852 million year-over-year. The company attributed this decline to challenges in its Dermatology Procedures Equipment segment, which saw revenues drop from $8.724 million to $8.570 million over the nine-month period.

Despite the revenue decline, STRATA reported an increase in gross profit for the third quarter, rising to $5.307 million from $4.954 million in 2023, driven by improved margins in the Dermatology Recurring Procedures segment. Gross profit as a percentage of revenues increased to 60.3% in Q3 2024, compared to 56.0% in Q3 2023. However, for the nine-month period, gross profit decreased to $13.324 million from $13.660 million, reflecting a slight decline in profitability.

Operating expenses for the third quarter rose to $6.960 million from $5.569 million in the prior year, contributing to a loss from operations of $(1.653) million, compared to $(0.615) million in Q3 2023. The net loss for the third quarter was $(2.122) million, a significant increase from $(1.053) million in the same quarter of the previous year. For the nine months, the net loss improved to $(5.589) million from $(7.036) million, indicating a reduction in losses despite the revenue decline.

On the balance sheet, total assets decreased to $40.205 million from $42.016 million as of December 31, 2023. Current liabilities increased to $14.046 million, up from $12.174 million, while total stockholders’ equity fell to $9.343 million from $12.688 million. The company reported cash and cash equivalents of $7.062 million, a slight increase from $6.784 million at the end of 2023.

Strategically, STRATA has been focusing on its recurring revenue model through its XTRAC systems, with 873 systems placed in the U.S. and 39 internationally as of September 30, 2024. The company is also navigating supply chain challenges due to the Russia-Ukraine conflict, which has affected the availability of noble gases essential for its laser operations. Additionally, STRATA is appealing sales tax assessments from New York and California, which could impact its financial position.

In terms of financing, STRATA amended its credit facility in June 2023, allowing for additional borrowing, and has an equity distribution agreement to raise up to $8.900 million in common stock. The company believes its current cash position and anticipated revenues will meet its working capital needs for at least the next 12 months.