Solesence (SLSN) Q3 2024 earnings summary

Executive summary

• Achieved record Q3 2024 revenue of $16.9 million, up from $8.0 million in Q3 2023, and net income of $3 million, reversing a $1.4 million loss in Q3 2023.

• Nine-month 2024 revenue reached $40 million, surpassing full-year 2023 by $2.5 million, with net income of $4.8 million versus a $2.3 million loss last year.

• Growth was driven by Solésence and Personal Care Ingredients, offsetting declines in Advanced Materials and medical diagnostics.

• Largest customers accounted for 62% of Q3 2024 revenue, down from 71% in Q3 2023.

• Expanded production capacity with new automation and three additional ISO 6 clean rooms.

Financial highlights

• Q3 2024 gross profit was $13.4 million, representing 34% of sales, and gross margin for Q3 was 36%, up from 19% in Q3 2023.

• Q3 adjusted EBITDA was $3.6 million, compared to a loss of $0.8 million in Q3 2023.

• Cash at September 30, 2024 was $2.9 million, up from $1.7 million at year-end 2023.

• Booked and open orders as of 9/30/2024 totaled $34 million, 80% higher than the prior year, with over a third expected to be recognized in Q4.

• Accounts receivable increased to $8.7 million and inventory to $15.0 million at September 30, 2024.

Outlook and guidance

• 2024 revenue is expected to exceed $50 million, with potential to reach the mid- to upper-$50 million range.

• Management anticipates continued strong customer demand into 2025, with record Q4 2024 and Q1 2025 revenues expected.

• Double-digit revenue growth projected for 2025, though not at the same rapid pace as previous years.

• Capital spending for 2024 is expected to be $1M–$2M, funded by profits, loans, and possible new debt.

• Inflation and supply chain costs may impact margins if not fully passed through to customers.