XWELL, Inc. Reports 17% Revenue Decline in Q2 2025, Operating Loss Widens

XWELL, Inc. reported a decline in financial performance for the second quarter of 2025, with total revenue decreasing by 17% to $7.7 million compared to $9.3 million in the same period last year. For the first half of 2025, revenue also fell by 18% to $14.7 million from $18 million in the prior year. The decrease was attributed primarily to reduced revenue from the XpresTest segment, which previously benefited from additional CDC-related contracts, and a decline in XpresSpa services, which had seen increased surge billing in 2024.

The company's cost of sales for the second quarter decreased by 5% to $5.9 million, down from $6.2 million in the previous year, reflecting lower product costs and reduced labor expenses due to store closures. However, the gross profit margin was impacted, resulting in a gross profit of $1.8 million, down from $3.1 million a year earlier. XWELL's operating loss widened to $2.7 million for the quarter, compared to a loss of $1.9 million in Q2 2024, with total operating expenses remaining relatively stable at $4.5 million.

In terms of strategic developments, XWELL completed a private placement of 4,000 shares of Series G Convertible Preferred Stock in January 2025, raising approximately $3.7 million in net proceeds. This capital is intended to support ongoing operations and strategic initiatives. The company also reported a significant change in its equity structure, with the issuance of preferred stock leading to a total equity of $3.7 million as of June 30, 2025, down from $7.7 million at the end of 2024.

Operationally, XWELL has been focusing on expanding its geographic footprint and enhancing its service offerings. As of June 30, 2025, the company operated 17 domestic XpresSpa locations and 11 international locations, including in major airports across the United States, the Netherlands, and the United Arab Emirates. The company is also exploring opportunities to leverage its wellness services beyond airport locations, aiming to enhance its retail strategy and product offerings.

Looking ahead, XWELL expressed concerns regarding its ability to continue as a going concern due to recurring losses and insufficient liquidity. The company is actively pursuing cost reduction strategies and exploring additional financing options to improve its cash position. Management has indicated that without successful capital raising efforts, it may need to reduce operations or seek mergers to sustain its business. The company remains committed to returning to profitability and enhancing its operational efficiency in the coming quarters.