Quarta-Rad Reports 49.2% Revenue Growth to $32.9 Million in Q1 2025 Despite Net Loss

Quarta-Rad, Inc. reported a net revenue of $32.9 million for the first quarter of 2025, marking a 49.2% increase from $22.0 million in the same period of 2024. This growth was primarily driven by the performance of its subsidiary, Sellavir, which generated $30,000 in revenue, a significant increase from zero in the prior year. However, the company also faced challenges, as its core business, Quarta-Rad, saw a substantial decline in sales, dropping 86.9% to $2.9 million, attributed to decreased demand for its RD1503 model.

The company's cost of goods sold (COGS) rose sharply by 234.1% to $34.2 million, largely due to increased sales from Sellavir. Operating expenses also increased by 19.1% to $88.5 million, driven by stock-based compensation related to Sellavir. Despite the revenue growth, Quarta-Rad reported a net loss of $77.4 million, a 15.5% improvement compared to a loss of $91.7 million in the first quarter of 2024. The decrease in net loss was primarily due to the increased revenue from Sellavir.

In terms of operational developments, Quarta-Rad's total assets decreased slightly to $575.4 million as of March 31, 2025, from $577.8 million at the end of 2024. The company’s cash reserves also fell to $49.8 million from $63.0 million. The total liabilities increased to $438.8 million, up from $401.0 million, reflecting a rise in accounts payable and accrued expenses. The company’s stockholders’ equity decreased to $136.5 million, down from $176.8 million, primarily due to the net loss incurred during the quarter.

Quarta-Rad is currently focusing on expanding its operations in the artificial intelligence sector through Sellavir, which is developing a call center software platform named CenterEye. This strategic shift aims to enhance call center operations using advanced analytics and AI technologies. The company is also exploring plans to potentially spin off its current operations to better support its evolving business model. Management has indicated that while they do not anticipate hiring additional employees in the near term, they will continue to invest in software development and marketing efforts to drive growth.

Looking ahead, Quarta-Rad's management remains cautious about the company's financial health, citing ongoing operating losses and a working capital deficit of $382.1 million as of March 31, 2025. The company is committed to maintaining adequate working capital and adhering to prudent financial forecasting as it navigates these challenges. The outlook for the upcoming quarters will depend on the successful execution of its strategic initiatives, particularly in the AI-driven software market.