Strata Skin Sciences, Inc.

Good afternoon, and welcome to the Strata Skin Sciences First Quarter 2025 Financial Results Conference Call. All participants will be in a listen-only mode. If you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, and then one. To withdraw your questions, you may press star and two. As a note, today's event is being recorded. At this time, I'd like to turn the floor over to Jules Abraham from the company's investor relations firm, Core IR. Sir, please go ahead.

Jules Abraham Thank you, operator. Good afternoon, and thank you for participating in today's conference call. Earlier this afternoon, the company released its financial results for the quarter ended March 31st, 2025. A copy of that press release can be found on the company's website at www.strataskinsciences.com under the Investors tab. Joining me on today's earnings call from Strataskin Sciences management team are Dr. Dola Raffaele, Chief Executive Officer, and John Gillings, Vice President, Finance. During this call, management will be making forward-looking statements, including statements that address Strataskin Sciences' expectations for future performance or operational results. Board-looking statements involve risks and other factors that may cause actual results to differ materially from those statements. For more information about these risks, please refer to the risk factors described in Stratiskin Science's most recently filed annual report on Form 10-K and subsequent periodic reports filed with the SEC and Stratiskin Science's press release that accompanies this call, particularly the cautionary statements within. The content of this call contains time-sensitive information that is accurate only as of today, May 14th, 2025. Except as required by law, Strata Skin Sciences disclaims any obligation to publicly update or revise any information to reflect events or circumstances that occur after this call. It's now my pleasure to turn the call over to CEO, Dr. Dolev Raffaele. Dolev.

Thank you, Jules, and good afternoon to everyone on the call. During the first quarter of 2025, we continue to execute on the multifaceted turnaround strategy we introduced a little over a year ago. Our strategy focuses on generating higher per device recurring revenue by optimizing extract device placements and use in our partnership model-driven physician practice. We are succeeding in assisting our installed base, achieving higher numbers of procedures and optimally utilizing the resources we provide. Through our Elevate360 consulting model, facilitating higher patient conversion and increased device utilization in underperforming dermatology partner clinics. We are also seeing strong performance generated from our expanding direct-to-consumer marketing efforts, which have achieved increased extract leads and thereby more robust patient appointments volume, and higher device utilization. These efforts coalesce with strong performance, growing recurring revenue per device across our domestic install base of approximately 850 devices. This approach is building a more efficient, more profitable business for our stakeholders with growth in recurring revenue and higher margins with lower operating expenses. We are helping our partner clinics that seize upon the opportunity to grow with us, create better opportunities and better experiences for those patients who are more likely to be treated at a more dedicated and experienced clinic. The opportunity to increase utilization of extract devices is significant. Moreover, we are seeing positive results from the refocus of our DTC strategy. We generated over 1,000 appointments in the first quarter with number of unique patients for which Strata has handled insurance benefits being up 33% versus Q1 of 2024, combining both organic and DTC growth. In addition, we continue to expand our Elevate360 consulting program, which we began rolling out in Q4 2024. By providing deeper analytics, we are helping physicians understand and realize the financial opportunities associated with patients they already see in their clinic and those they have prescribed but did not follow through with extra scheduling. The process helps implement better practices in their clinic operations. In addition, Elevate360 provides them with comprehensive resources and hands-on assistance to execute those best practices, resulting in significant improvement within their clinics in just about every facet of their operations. While we are still in the early stages of implementation, initial results have shown dramatic increases in existing device utilization within the small number of clinics already affected. as well as growing demand for expanding the number of clinics utilizing extract from physicians who previously struggled to fully utilize the device. Dovetailing with this, our discipline in removing underutilizing devices ensure we can supply these additional devices in the most capital-efficient way, often with only very minor refurbishment work. Our LLV360 consulting program does require significant time from our sales and clinical staff, so broad expansion across our domestic market is expected to be a multi-quarter effort, but the potential payoff is significant. As a framework of reference, average revenue of extract device in the U.S. in 2024 was roughly $22,000. In 2019, Average revenue per extract device in the U.S. was nearly $30,000. On 850 devices, roughly our current U.S. install base, this would generate an additional $6.8 million of revenue with only very modest increase in the cost of sales from depreciation of any refurbishment work. Our Q1 2025 marks the fourth consecutive quarter of a year-over-year growth in average net recurring revenue per device in the US. A strong indication that our strategy is delivering the intended results. The last time the company had four quarters in a row of year-over-year growth in net recurring revenue per device in the US was 2019. We're actively tackling the headwinds of our gross domestic recurring billing has experienced caused by combination of changes in reimbursement rates and challenges in broader indication coverage beyond psoriasis by working with KOLs, the American Academy of Dermatology, the American Medical Association, as well as legislature in an effort to expand coverage. The AMA has recently held a CPT editorial panel discussion that reviewed the potential indication expansion of the ExCimer laser CPT codes, and Strata anticipates favorable outcomes in the near future, building on the same panel decision to narrow the use of these codes to only ExCimer laser technology earlier in 2024. Turning briefly to the TheraClear X device, we reached an installed base of 160 TheraClear X devices in the U.S. at the end of the first quarter, up from 140 devices at the end of Q1 2024. In addition, while TheraClear remains a smaller portion of our revenue, it is steadily gaining traction, having grown in excess of 50% on a year-over-year basis in six of our last seven quarters, including Q1 2025. As mentioned previously, Strata focuses on partner clinics that adopt the billing of the insurance-reimbursed CPT codes for use of the TheraClearX device over clinics that opt for cash payments. And the 1,000 patients submitted for reimbursement in Q1 2025 show a 138% increase over the 438 submitted just a year ago, with preauthorized rates exceeding 85%. Our international business achieved another strong quarter with sales of $2.5 million, up 8% versus the prior year period, with equipment sales up 13% and recurring treatments revenue up 27%, partially offset by a decline of 5% in parts and maintenance. Performance in the first quarter was strong. We are pleased with the traction our turnaround strategy has gained and the increase in demand for cost-efficient and effective treatments in international markets. Anecdotally, we have shared over social media an image of one of our devices in China that has treated in nine years 9,876 patients with just over 6.8 million doses. The same clinic now uses four new devices in two locations. While we are Cautiously eyeing the potential negative impact of tariffs on near-term sales, we look forward to the expansion of the number of clinics and devices used in all of our international markets as we deploy recurring revenue placements in addition to the traditional capital sales model. Now I'd like to turn the call over to John, who will review our financial results in more detail. John?