8-K: NEXGEL Reports Q3 2025 Results, Narrows Adjusted EBITDA Loss

NEXGEL, a hydrogel product provider, announced third quarter 2025 financial results, showing flat revenue but a sequential narrowing of its Adjusted EBITDA loss.

Summary

• Net Revenue for Q3 2025 was $2.93 million, a slight decrease from $2.94 million in Q3 2024 and an increase from $2.88 million in Q2 2025.
• Gross Profit for Q3 2025 was $1.24 million, up from $1.16 million in Q3 2024 but down from $1.26 million in Q2 2025.
• Gross Profit Margin improved to 42.4% in Q3 2025, compared to 39.3% in Q3 2024 and 43.6% in Q2 2025.
• Net loss attributable to NEXGEL stockholders was $0.65 million in Q3 2025, narrowing from $0.69 million in Q3 2024 and $0.67 million in Q2 2025.
• EBITDA (non-GAAP) was ($0.55) million in Q3 2025, compared to ($0.49) million in Q3 2024 and ($0.53) million in Q2 2025.
• Adjusted EBITDA (non-GAAP) was ($0.35) million in Q3 2025, flat compared to ($0.35) million in Q3 2024, but a sequential narrowing from ($0.42) million in Q2 2025.
• Cash balance as of September 30, 2025, was approximately $938 thousand.
• Restricted cash balance as of September 30, 2025, was $920 thousand, related to $1 million in non-dilutive capital received from STADA.
• As of November 11, 2025, NEXGEL had 8,143,133 shares of common stock outstanding.

Sentiment

Score: 6

Explanation: The company demonstrated improved gross profit margins and a sequential narrowing of its Adjusted EBITDA loss, alongside securing non-dilutive capital for future growth initiatives. However, revenue remained flat year-over-year, and overall EBITDA worsened.

Positives

• Gross Profit increased to $1.24 million in Q3 2025 from $1.16 million in Q3 2024.
• Gross Profit Margin improved to 42.4% in Q3 2025 from 39.3% in Q3 2024.
• Net loss attributable to stockholders narrowed to $0.65 million in Q3 2025 from $0.69 million in Q3 2024.
• Adjusted EBITDA loss narrowed sequentially to ($0.35) million in Q3 2025 from ($0.42) million in Q2 2025.
• Secured $1 million in non-dilutive capital from STADA to support upcoming product launches and marketing efforts.
• Growth in the contract manufacturing segment, driven by strong partnerships like Cintas and the successful onboarding of new global customers, demonstrates market confidence in the company's hydrogel technology.
• Consumer brands are gaining traction with new product launches across beauty and skincare, reflecting innovation and quality.

Negatives

• Net Revenue was flat year-over-year at $2.93 million in Q3 2025 compared to $2.94 million in Q3 2024.
• EBITDA (non-GAAP) worsened to ($0.55) million in Q3 2025 from ($0.49) million in Q3 2024.
• Selling, general and administrative expenses slightly increased to $1.96 million in Q3 2025 from $1.94 million in Q3 2024.
• Cash and cash equivalents decreased to $938 thousand as of September 30, 2025, from $1,807 thousand as of December 31, 2024.
• Total current liabilities increased to $3,308 thousand as of September 30, 2025, from $2,470 thousand as of December 31, 2024.
• Total stockholders equity decreased to $5,576 thousand as of September 30, 2025, from $6,080 thousand as of December 31, 2024.

Risks

• Forward-looking statements involve known and unknown risks, uncertainties, and other factors which may cause actual results, performance, or achievements to be materially different from any anticipated results, performance, or achievements.
• Additional risks and uncertainties that could impact forward-looking statements are detailed in the Company's Annual Report on Form 10-K for the year ended December 31, 2024, specifically under the 'Risk Factors' section.

Future Outlook

Management remains committed to building on momentum, driving sustainable growth, and expanding the reach of innovative products across both contract manufacturing and consumer brands businesses.

Management Comments

• "While our revenue was flat year-over-year and sequentially, our Adjusted EBITDA loss continued to narrow sequentially as a result of consistent performance in contract manufacturing and consumer branded products and maintaining discipline in our operational efficiencies." Adam Levy, Chief Executive Officer of NEXGEL.
• "Growth in our contract manufacturing segment, driven by strong partnerships like Cintas, and the successful onboarding of new global customers, continues to demonstrate the markets confidence in our advanced hydrogel technology." Adam Levy, Chief Executive Officer of NEXGEL.
• "At the same time, our consumer brands are gaining traction with new product launches across beauty and skincare that reflect our innovation and quality." Adam Levy, Chief Executive Officer of NEXGEL.
• "Looking ahead, we remain committed to building on this momentum, driving sustainable growth, and expanding the reach of our innovative products across both our contract manufacturing and consumer brands businesses." Adam Levy, Chief Executive Officer of NEXGEL.

Industry Context

The company operates in the healthcare, beauty, and over-the-counter (OTC) product sectors, specializing in hydrogel technology. Its strategy involves both contract manufacturing for leading consumer healthcare companies and developing its own consumer brands, indicating a diversified approach within these markets. The mention of new global customers and product launches suggests an active and competitive market environment.

Comparison to Industry Standards

• NA

Related Party Transactions

• Accounts payable related party was $421 thousand as of September 30, 2025, compared to $531 thousand as of December 31, 2024.

Stakeholder Impact

• Shareholders: Net loss attributable to stockholders narrowed, which is a positive. However, common stock outstanding increased from 7,638,497 shares (Dec 31, 2024) to 8,142,766 shares (Sep 30, 2025), indicating some dilution.
• Customers: Continued growth in contract manufacturing and new product launches in consumer brands suggest ongoing product development and service.
• Creditors: Total current liabilities increased, but the company secured non-dilutive capital, which could improve liquidity for future operations.

Next Steps

• Building on momentum, driving sustainable growth, and expanding the reach of innovative products across both contract manufacturing and consumer brands businesses.
• Upcoming product launches and marketing efforts supported by STADA capital.

Key Dates

Recommendation

The company's third-quarter results present a mixed financial picture. While the improvement in gross profit margin and the sequential narrowing of the Adjusted EBITDA loss are positive indicators of operational efficiency, the flat year-over-year revenue growth and a worsening EBITDA suggest challenges in top-line expansion. The $1 million non-dilutive capital from STADA is a favorable development for future product launches. However, without stronger revenue growth or a clear path to profitability, a "Hold" recommendation is prudent, awaiting further evidence of sustained operational improvements and market penetration.

Keywords

NEXGEL, NXGL, financial results, Q3 2025, hydrogel, healthcare products, beauty products, OTC products, contract manufacturing, consumer brands, EBITDA, financial reporting