NexGel Reports 121.6% Revenue Growth to $2.8 Million in Latest Quarter

NexGel, Inc. reported significant financial growth in its latest quarterly results, with revenues reaching $2.8 million for the three months ended March 31, 2025, a 121.6% increase from $1.3 million in the same period last year. The company's gross profit also improved markedly, rising to $1.2 million, compared to $160,000 in the prior year, reflecting a gross margin of 42.3% versus 12.6% in 2024. This growth is attributed primarily to increased sales in both contract manufacturing and branded consumer products, particularly following the acquisition of the Silly George brand.

Operating expenses for the quarter increased to $2 million, up from $1 million in the previous year, driven by higher selling, general, and administrative costs, which rose by 90.9% to $2 million. This increase was largely due to higher compensation and benefits, share-based compensation, and significant marketing expenditures aimed at promoting the company's consumer products. Despite the rise in expenses, NexGel reported a reduced net loss of $712,000, down from $853,000 in the prior year, indicating improved operational efficiency.

In terms of strategic developments, NexGel has made notable acquisitions, including the purchase of the Silly George assets in May 2024 and the Kenkoderm skincare line in December 2023. These acquisitions are expected to enhance the company's product offerings and market presence. Additionally, NexGel formed a joint venture with CG Laboratories, which is anticipated to bolster its converting and packaging capabilities. The company is also exploring new product channels in cosmetics and medical devices, aiming to expand its customer base and revenue streams.

Operationally, NexGel's customer base has grown, with a notable increase in user engagement metrics linked to its branded consumer products. The company reported a cash balance of $1.2 million as of March 31, 2025, down from $1.8 million at the end of 2024, and a working capital of $2.2 million. The company continues to face challenges, including a reliance on a limited number of customers for a significant portion of its revenue, which poses risks to its financial stability.

Looking ahead, NexGel's management has indicated that while the company expects to continue incurring losses in the near term, it is focused on achieving profitable operations through strategic initiatives and potential capital raises. The company is committed to maintaining its existing contract manufacturing business while expanding its catalog of consumer products and exploring new market opportunities. However, management has acknowledged the uncertainty surrounding its ability to secure additional funding, which is critical for its growth and operational sustainability.