XWELL Q2 2025 Earnings Call Transcript

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Provided by Quartr
August 14, 2025

Key Takeaways

  • Positive Sentiment: ExWell secured a multi-year partnership as the official wellness spa of the Orlando Magic, boosting brand visibility across digital, in-arena assets, and live activations in a strategic Florida market.
  • Positive Sentiment: The company expanded its relationship with Priority Pass, enabling members to access ExWell’s zero-gravity massage chairs, hydro massage, Serigen beds, and other high-impact treatments at US and international airports.
  • Positive Sentiment: ExWell opened a new off-airport wellness center in **Clearwater, Florida**, and introduced a flexible membership model for seamless access across airport and local locations, diversifying its footprint.
  • Positive Sentiment: The traveler-based genomic surveillance program with the CDC was extended for three years, reaffirming ExWell’s role in US biosecurity and securing ongoing funding in recent legislation.
  • Negative Sentiment: Second quarter revenue rose sequentially to $7.7 million, but ExWell reported an increased operating loss of $2.7 million and a net loss of $2.3 million, highlighting continued profitability challenges.
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Earnings Conference Call
XWELL Q2 2025
00:00 / 00:00

There are 3 speakers on the call.

Operator

Greetings. Welcome to ExWell's Second Quarter twenty twenty five Earnings Conference Call. During today's call, all parties will be in a listen only mode. As a reminder, this conference call is being recorded on 08/14/2025. I would now like to turn the conference over to Ian Brown, Chief Financial Officer.

Operator

Please go ahead.

Speaker 1

Good day, everyone. Welcome to ExWell's conference call to review our second quarter twenty twenty five financial results. Joining me on today's call is Ezra Ernst, Exwell's Chief Executive Officer. We have posted our earnings release on the Investor Relations section of our website located at www.exwell.com. A link to the webcast of today's conference call can also be found on our site.

Speaker 1

Before turning the call over to Ezra for his prepared remarks, we need to advise you of the following. Comments made on today's call may contain forward looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These forward looking statements are based on current assumptions as of the date of this call and webcast and opinions that involve a variety of known and unknown risks and uncertainties. Actual results may differ materially from those contained in or suggested by such forward looking statements. Important factors that might cause such differences include those set forth from time to time in our SEC filings including our annual report on Form 10 ks as well as our other current and periodic reports that we file with the SEC.

Speaker 1

With that said, I'd now like to turn the call over to Ezra.

Speaker 2

Thanks, Ian. We appreciate everyone joining us today. The ExWell team delivered a solid second quarter, underscoring a strong momentum and progress we're seeing across our business. We're currently executing a focused multi pronged strategy to broaden our operational footprint, expand access to our wellness services, and deepen engagement with new and existing customers. We believe these efforts are already translating into measurable results.

Speaker 2

Operationally, over the past several months, we've had multiple key milestones that reflect our ability to scale beyond the airport and into dynamic high growth customer wellness markets. Florida is an example of one of those markets. In June, we were proud to be named the official wellness spa of the Orlando Magic. A multi year partnership, this agreement significantly boosts our brand visibility through year round exposure across the Magic's digital and in arena assets, including their scoreboard, the LED signage, app integration, sweepstakes and co branded events. We're particularly excited about the opportunity to host live activations this upcoming NBA season, directly engaging with fans and bringing our mission of accessible wellness to the community.

Speaker 2

As we've said, Florida is one of our strategic priority markets and this partnership represents a pivotal step in expanding our reach and establishing the brand beyond travel centric environments. We also recently deepened our partnership with Priority Pass, the world's leading airport experiences program. Our expanded relationship broadens member access to ExWell's offerings across our US and international airport spa network. As part of this program, Priority Pass members can now enjoy a curated set of high impact treatments ranging from zero gravity massage chairs, hydro massage, Serigen therapeutic beds, and more. All designed to support circulation, stress release, and overall wellness.

Speaker 2

This expanded offering aligns directly with our mission to transport airport time into moments of meaningful self care and underscore ExWell's commitment to delivering high impact wellness solutions to travelers where and when they need them the most. Additionally, we're also seeing nice momentum within our wellness retail with particular success in high demand categories such as transdermal patches and premium vitamins. These products are resonating well with our health conscious customers and travelers. I'm also proud to share that XpresSpa was recently named one of Yelp's most loved airport brands, ranking number 10 out of 25 based on millions of traveler reviews. This recognition by our customer base reinforces the strong brand equity we built and highlights the growing demand for accessible, high quality wellness experiences.

Speaker 2

We also recently unveiled a redesigned digital platform at xwell.com. It integrates all of our brands into one seamless user first experience. Customers can now discover wellness locations, connect with spa staff, and schedule services with just a few clicks. Next, beginning with our New York JFK locations, we are rebranding our flagship ExpressVAS stores under the Exwell name. As part of a broader digital and brand evolution, this initiative underscores our commitment to unifying all Exwell offerings under one cohesive wellness forward identity that better represents the breadth of services we provide and the vision guiding our future.

Speaker 2

As I shared in my December letter to shareholders, this transformation is more than just cosmetic. Whether a customer engages with us at an international airport terminal or steps into one of our brick and mortar retail locations, they will encounter a consistent elevated standard of care. A standard that embodies actual core values of accessibility, innovation, and expert led wellness. We are also continuing plans to expand beyond the airport environment and then to key local markets with the introduction of new brick and mortar retail wellness centers. These off airport locations offer a curated array of health, wellness, and beauty treatments.

Speaker 2

Each delivering a cohesive elevated expert led actual experience to an even broader audience. This summer marked a major milestone with the opening of our new wellness center in Clearwater, Florida. This location was modeled after our successful Naples Wax Centers. The Clearwater location delivers a premium experience focused on performance based skincare and wellness treatments. Our guests can choose from waxing and facials with additional services such as massage, injectables, IV therapy, and compression services launching soon.

Speaker 2

All treatments are delivered by an experienced health care professional, reinforcing our commitment to expert led care. To further enhance accessibility and customer loyalty, we've also introduced a flexible membership model that provides seamless access across both our Clearwater Center and our airport locations nationwide, making consistent self care more accessible and rewarding. As we grow our wellness footprint, we're focusing on creating integrated high impact experiences that blend health, beauty, and convenience into a single cohesive offering. In addition, we're preparing to open our new tech forward wellness destination in New York City's Penn Station. This grab and go tech forward destination will be focused on serving commuters, neighborhood locals, and tourists with wellness focused retail, autonomous massage, and nail care services, enabling seamless and efficient experiences.

Speaker 2

We are also continuing to pursue strategic acquisitions of medical spas in key metropolitan markets. As possible entry points, we're targeting cities such as Orlando, Dallas, Salt Lake City, each offering strong population growth, high disposable income, and a deeply embedded wellness culture. Through MedSpa expansion, we aim to introduce a state of the art wellness and beauty treatments, AI driven personalization and innovative skincare. Services can range from facial aesthetics and injectables to body sculpting, laser therapy, massage, wellness recovery, and even physician guided weight loss programs. Strategically, this initiative aligns with the rapidly expanding global medical spa market, which as I discussed last December is benefiting from strong momentum within the rapidly expanding wellness market, and has an expected compound annual growth rate of more than 15%, and a total addressable market projected to surpass approximately 49,000,000,000 by 02/1930.

Speaker 2

Next, through our ongoing partnership with the CDC, Exwole remains at the forefront of US biosecurity. In March, we successfully secured a three year extension of our traveler based genomic surveillance program. Through this engagement and in partnership with the CDC and Ginkgo Bioworks Holdings, we remain a vital contributor to national public health. Along with our partners, we're leveraging our infrastructure and expertise to support national biosecurity efforts. And we have shown value time and time again as an early warning system for dangerous pathogens.

Speaker 2

We are gratified that our TGS program was recognized as a critical initiative by the incoming administration And that funding for this program was included in the recently passed legislation. So in summary, we've made meaningful progress against our priorities. We're diversifying access points, elevating brand relevance, and engaging with consumers wherever wellness matters the most, whether that's at an airport, in local communities, or across our digital platforms. Additionally, our operating results are beginning to reflect the strength of our execution. This positive momentum has also been recognized by the market as reflected by our successful compliance with the NASDAQ's minimum bid price requirement.

Speaker 2

Collectively, our success is driven by ExWell's exceptional team Across every role from our frontline public health and biosecurity professionals, to our highly trained massage therapists and beauty and wellness consultants, ExWell's people are dedicated to helping our customers and communities thrive. And we remain deeply committed to recognizing, developing, and supporting our team for the critical contributions they make every day. As we look ahead to the 2025 and beyond, we remain committed to driving aligned growth, both in and out of the airport. With a differentiated brand, accelerated momentum, and a clear strategic roadmap, Exwell is uniquely positioned to lead the evolution of modern self care. Additionally, backed by our longstanding partnership with the CDC and continued operational discipline, I believe we are well equipped to meet the increasing demand for integrated high impact wellness solution.

Speaker 2

Just as important as we grow, we remain focused on managing resources responsibly and optimizing efficiencies to drive profitability. In short, I believe we have the right strategy, the right team, the right culture in place to drive sustained growth and create long term value for our stakeholders. And now, Ian, I turn it over to you.

Speaker 1

Thank you, Ezra. I'm now going to provide a brief synopsis of our second quarter financial results. However, for details please refer to the 10 Q filed with the SEC. Turning to our performance, second quarter twenty twenty five total revenue increased sequentially to approximately 7,700,000 from $7,000,000 in the 2025. Second quarter twenty twenty five revenue primarily consisted of approximately $4,900,000 from EXPRESS PA locations, approximately 2,200,000.0 from Express Test which includes X Wells biosurveillance partnership and its HyperPoint business.

Speaker 1

In addition approximately 647,000 from Naples Wax Center. From a year over year comparison, it's worth noting that our twenty twenty four second quarter total revenue of $9,300,000 included additional CDC revenue as we provided more services to airports than above the base contract amounts, which resulted in increased surge billing prices. Turning to expenses, our second quarter twenty twenty five total cost of sales decreased year over year to $5,900,000 from $6,200,000 while general and administrative expenses decreased year over year to $4,300,000 from $4,700,000 Demonstrating our cost cutting efforts and initiatives, second quarter total operating expenses decreased year over year to $4,500,000 from $5,000,000 We reported an operating loss of approximately $2,700,000 compared to an operating loss of approximately $1,900,000 in the prior year second quarter. Our net loss attributable to ExVel was approximately $2,300,000 compared to a net loss of approximately $2,000,000 in the prior year second quarter. Turning to our balance sheet, as of 06/30/2025, we had approximately $5,300,000 of cash and cash equivalents and $2,900,000 in marketable securities, total assets of approximately $11,800,000 and no long term debt.

Speaker 1

Looking ahead, we remain focused on continued improvements in execution, including enhanced operational processes. Thank you for joining us and we look forward to speaking with you all again in months ahead. We'll now turn the call back to the operator.

Operator

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.

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