Next Science (ASX: $NXS) Quarterly Business Update

Next Science Limited (ASX: $NXS) has reported a business update and quarterly cashflow report for the quarter ended 31 March 2024. The company completed a sales restructure aimed at significantly reducing costs, resulting in net savings of approximately US$6m on an annualized basis. The 1Q FY24 Product Sales were US$5.5m, up 19% on pcp, with 1Q FY24 Direct Product Sales of US$4.3m, up 50% on pcp. The company reaffirmed its FY24 guidance for revenue of US$36m-40m and aims to be EBITDA and cashflow positive in 2H FY24.

Executive Commentary on Sales Restructure and Future Outlook

As flagged at the 4Q FY23 result, the March quarter has been an important time for Next Science as we restructured our sales team and transformed our go-to-market strategy. We consolidated our sales leadership, reducing headcount and implemented a unified field strategy to meet customer demand for access to our entire product suite. This will drive efficiencies from the top down and maximize revenue potential within our existing customer base. We have also restructured the DME sales force, converting some of the team from direct to agency reps, leading to a more flexible and expandable sales force. We expect sales growth to return in 2Q FY24. Our focus is on achieving significant topline growth in FY24 and an EBITDA and cashflow positive position in the second half. We draw confidence from the strong foundation for future growth that we have put in place during 1Q FY24 as well as the improvement in our cash burn as we exited the quarter.

Summary of Quarterly Performance and Future Prospects

Next Science (ASX: $NXS) completed a sales restructure aimed at reducing costs and increasing the variability of the sales cost base, resulting in net savings of approximately US$6m on an annualized basis. The company reported 1Q FY24 Product Sales of US$5.5m, up 19% on pcp, with 1Q FY24 Direct Product Sales of US$4.3m, up 50% on pcp. The gross margin showed continued improvement at 79%, reflecting focus on revenue quality within the DME. Next Science reaffirmed its guidance for FY24 revenue of US$36m-40m and aims to be EBITDA and cashflow positive in 2H FY24. The company is exploring funding options to provide a buffer against unexpected financial challenges and to capitalize on investment opportunities. The sales restructure is expected to lead to improved productivity and efficiency of the sales team while reducing the cost base and increasing its variability. Next Science is focused on achieving significant topline growth in FY24 and is confident in its future prospects.