The following is a summary of the STRATA Skin Sciences, Inc. (SSKN) Q3 2024 Earnings Call Transcript:

Financial Performance:

• STRATA Skin Sciences reported a Q3 2024 revenue of $8.8 million, a decline of 1% year-over-year.

• Gross margin increased to 60.3%, showing improvement for the third consecutive quarter.

• Achieved first operating profit since 2018 when excluding a one-time accrual related to a sales tax audit.

• Total operating expenses for Q3 2024 were $7 million, reduced by 7% year-over-year when adjusted for the one-time accrual.

Business Progress:

• Revenue per XTRAC device grew by 2% year-over-year.

• Strategic removal of underperforming XTRAC units aligns with efficiency goals.

• Continued expansion and promising results in Direct to Consumer (DTC) initiatives, significantly increasing new patient appointments.

• Deployment of TheraClearX devices increased along with securing insurance preauthorizations for acne treatments, enhancing treatment adoption.

Opportunities:

• Expanding DTC initiatives, especially focusing on utilization of Spanish language efforts to broaden market reach.

• Increasing the installed base and use of TheraClearX devices for acne treatment supported by positive study outcomes and professional endorsements.

Risks:

• Revenue declines in recurring billings underscore the challenge of reversing negative trends in this area.

• Legal issues from sales tax audit and ongoing litigation indicate potential financial and reputational risks.

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