Crescita Therapeutics (CTX) Q2 2024 earnings summary

Executive summary

• Q2 2024 revenue was $4.1M, down 21% year-over-year, mainly due to lower manufacturing sales after order cancellations by a major client.

• Gross profit was $2.2M, with a net loss of $0.9M, and adjusted EBITDA of $(0.7)M, both declining from the prior year.

• Cash at quarter-end was $9.0M, reflecting asset acquisition and share repurchases, with working capital of $12.0M.

• Skincare segment grew 10.7% year-over-year, partially offsetting manufacturing declines.

• Major business developments included new manufacturing and distribution agreements and the acquisition of Occy Laboratoire Inc.'s assets.

Financial highlights

• Gross margin declined to 54.7% from 59.5% in Q2 2023, with gross profit falling to $2.2M from $3.1M.

• Operating expenses remained stable at $3.3M.

• Net loss widened to $0.9M from $0.3M in Q2 2023; loss per share was $(0.05) vs. $(0.01) last year.

• Adjusted EBITDA fell to $(0.7)M from $0.2M year-over-year.

• Cash provided by operating activities was $0.5M, up from $0.1M in Q2 2023.

Outlook and guidance

• Sufficient liquidity to fund operations and growth, with $9.0M in cash and a $3.5M undrawn credit facility.

• New manufacturing contract amendment secures US$10M over four years starting 2025, and a healthcare supply agreement could generate up to $6M annually.

• Regulatory approval and launch of MicronJet device in Canada anticipated in H1 2025.