NextPlat (NXPL) Q3 2026 Earnings Call Transcript

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DATE

Thursday, Nov. 12, 2026

CALL PARTICIPANTS

• Chief Executive Officer - David Phipps
• Chief Financial Officer - Amanda Ferrio
• Vice President of Healthcare Operations - Birute Norkute

TAKEAWAYS

• Total Net Revenue -- $10.5 million, reflecting a decrease from $13.8 million in the prior year period due to operational restructuring and evolving healthcare reimbursement dynamics.
• Consolidated Gross Profit -- $3.7 million, representing an increase from $2.7 million in the prior year period driven by a shift toward higher-margin contracted services.
• Consolidated Gross Margin -- 35%, increasing from approximately 20% in the prior year period as a result of refocusing on high-margin contracted healthcare sales.
• Healthcare Segment Revenue -- $6.7 million, compared to $10.1 million in the third quarter of 2025.
• Contracted Pharmacy Revenue -- $2.4 million, representing a fourfold increase from $0.6 million in the prior year period.
• 340B Contract Revenue -- $2.2 million, following a $1.6 million increase over year-ago levels.
• Healthcare Gross Margin -- 41%, increasing from 18% in the prior year period although declining 5 percentage points sequentially.
• E-commerce Segment Revenue -- $3.8 million, representing 3% growth compared to the prior year period.
• E-commerce Sequential Sales -- 6% decline, which management attributed to normal business seasonality.
• Operating Expenses -- $4.5 million, a 10% decrease from $5 million in the prior year period due to disciplined cost controls.
• Salaries and Wages -- $2.3 million, a 12% decrease compared to the prior year period.
• Operating Loss -- $0.8 million, representing a 65% reduction from the $2.2 million loss reported in the third quarter of 2025.
• Segment Operating Income -- $0.2 million, reflecting the combined profitability of the healthcare and e-commerce segments before corporate overhead.
• Corporate Overhead -- $1 million, which the company is actively working to reduce.
• Cash Balance -- $11.2 million, a decline from $11.9 million in the second quarter driven by professional fees and public company expenses.
• Working Capital -- $13.5 million, supporting the company's liquidity position.
• Scott's Pharmacy Acquisition Price -- $1.5 million, completed as an all-cash transaction on Oct. 1, 2026.
• Scott's Pharmacy Q4 Guidance -- $1.2 million in revenue and $150,000 in net profit, based on current activity levels.
• ATM Program Proceeds -- $140,000, raised through the sale of shares in the fourth quarter.
• Medication Fulfillment Facility Impact -- $0.3 million sequential decline in revenue, caused by the closure of a customer facility at the beginning of the quarter.
• New 340B Contracts -- Three new entities secured in the third quarter, bringing the 2026 annual total to 14.
• Global E-commerce Reach -- Over 115 countries, with new distribution through Decathlon across 20 countries.
• 340B Onboarding Timeline -- 90 days, representing the average time before newly registered entities generate initial prescription revenue.

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RISKS

• Phipps stated, "year-over-year total pharmacy prescription revenue was down as anticipated, primarily reflecting lower payer reimbursement rates, prescription volume decreases, and payer mix," noting these pressures affect independent pharmacies industrywide.
• Norkute warned that "some clinics grow, they choose to establish their own pharmacies, bringing prescription fulfillment in-house," which causes fluctuations in retail volume.
• Norkute indicated that "Medicare's Maximum Fair Price program has also affected prescription economics compared with 2025."
• Ferrio noted a sequential decline in gross profit was partly due to "the impact of the closure of one of the two medication fulfillment facilities at the beginning of the quarter."

SUMMARY

NextPlat Corp (NASDAQ:NXPL) reported a shift in its revenue composition toward higher-margin healthcare services during the third quarter. Management stated that total net revenue decreased compared with the prior year period, reflecting operational restructuring and changing reimbursement dynamics in the healthcare sector. The company completed the acquisition of Scott's Pharmacy in October and expanded its physical pharmacy footprint with a new location in Jacksonville. In the e-commerce segment, the company established a sales agreement with Decathlon to distribute satellite connectivity products across 20 countries. Management indicated that the company remains debt-free and is focused on diversifying revenue through new e-commerce platforms and automated prescription dispensing solutions.

• The company delayed the launch of its healthcare e-commerce website from the third quarter to Nov. 2026 to optimize the platform for scale.
• Management is advancing an automated prescription dispensing initiative, with the first point-of-care kiosk currently being installed.
• E-commerce operations generated record levels of high-margin recurring airtime contract revenue despite seasonal shifts in hardware demand.
• Phipps noted that the company is exploring pharmacy expansion opportunities outside of Florida, stating, "we continue to see interest from pharmacy operators from both inside and outside the state."
• The company continues to incur legal expenses related to an ongoing lawsuit, which management stated they are working to resolve quickly to protect shareholder interests.
• The global e-commerce segment expanded onto European marketplaces including Mountain Warehouse and Easy Shop to increase consumer reach.

INDUSTRY GLOSSARY

• 340B: A federal program that requires pharmaceutical manufacturers to provide outpatient drugs to eligible healthcare organizations at significantly reduced prices.
• ATM Program: An at-the-market equity offering program that allows a company to sell its shares directly into the public market at prevailing prices.
• Florida Sunshine: A company-owned brand of vitamins and supplements sold through its healthcare platforms.
• HRSA: The Health Resources and Services Administration, which oversees the registration of entities participating in the 340B Drug Pricing Program.
• MSS: Mobile Satellite Services, providing voice and data communication via satellite-enabled devices.
• PharmCo: NextPlat's pharmacy business brand used for its retail and contracted service locations.
• SolarTrack: A solar-powered IoT tracking device used for monitoring remote assets.

Full Conference Call Transcript

Operator: Welcome to the NextPlat Corp third quarter 2026 earnings conference call. Certain statements made during this conference call constitute forward-looking statements. These statements include the capabilities and success of the company's business and any of its products, services, or solutions. The words believe, forecast, project, intend, expect, plan, should, would, and similar expressions, and all statements which are not historical facts are intended to identify forward-looking statements. These forward-looking statements involve and are subject to known and unknown risks, uncertainties, and other factors, any of which could cause the company to not achieve some or all of its goals or the company's previously reported actual results, performance, financial, or operating, including those expressed or implied by such forward-looking statements.

More detailed information about the company and the risk factors that may affect the realization of forward-looking statements is set forth in the company's filings with the Securities and Exchange Commission, the SEC, copies of which may be obtained from the SEC's website at www.sec.gov. The company assumes no and hereby disclaims any obligation to update the forward-looking statements made during this conference call. Joining us on the call today are David Phipps, Chief Executive Officer, Amanda Ferrio, Chief Financial Officer, and Birute Norkute, Vice President of Healthcare Operations. I will now turn the call over to David Phipps for opening remarks.

David Phipps: Good morning and welcome to NextPlat's third quarter 2026 results conference call. Thank you for joining us. On today's call, as is customary, we will highlight some of the ongoing developments in the business and discuss our continued improvement in our operating results. I will begin today's call by briefly recapping the results of the third quarter, then turn the call over to Birute Norkute, our Vice President of Healthcare Operations, to discuss that segment in more detail, and then to Amanda Ferrio, our Chief Financial Officer, to review our financial results. Following that, I will make closing remarks and then conclude the conference call by responding to questions that were submitted by our shareholders.

The third quarter results demonstrate the impact of our efforts to refocus and turn around our business. As you can clearly see from our year-over-year results, we have generated dramatic improvements across nearly all key financial metrics, most notably in our margins and in the substantial reduction in operating losses. On a sequential basis, while we continue to face some healthcare-related challenges, such as in our existing retail business, which Birute and Amanda will comment on, it is clear that our focus on pursuing higher-margin revenue, like that in our contracted 340B business, is able to generate the types of positive returns we had anticipated.

This, combined with our strategy to selectively grow our pharmacy footprint through profitable acquisitions like our recent Scott's Pharmacy purchase, is expected to improve our retail prescription performance. We remain committed to driving both top-line growth and bottom-line profitability in the business, two key factors we believe will generate shareholder value. At this point, I'd now like to review our business and provide some additional insights, which I believe will add some useful perspective on the developments and trends occurring at NextPlat. In our healthcare segment in the third quarter, our higher-margin contracted healthcare service business continues to deliver increased 340B prescription volumes as newly added contracted customers in this segment complete their onboarding.

Quarterly contracted pharmacy revenues increased nearly 300% versus year-ago levels, reflecting the new customers secured in late 2025 and early 2026. On a sequential quarterly basis, however, we did experience a decline in our contracts with medication fulfillment facilities of approximately $0.3 million due to a customer's closure of one of the two facilities we serve, with resultant prescription volume decreases. Our efforts to profitably expand our business through acquisitions such as Scott's, as well as the continued business development focus on introducing higher-margin services, are expected to offset some of this decline in the near term.

As has been the trend, year-over-year total pharmacy prescription revenue was down as anticipated, primarily reflecting lower payer reimbursement rates, prescription volume decreases, and payer mix, all revenue pressures affecting independent retail pharmacies broadly across the industry. This is something Birute and Amanda will comment on shortly. I would like to note that the addition of our new Scott's Pharmacy in Pensacola, as well as incremental contributions from our recently opened Jacksonville location, are expected to help offset some of these declines going forward. The Scott's operation has been performing well since we purchased it on October the first, with margins ahead of our expectations.

Scott's is anticipated to contribute approximately $1.2 million in quarterly revenues and $150,000 in net profits during the fourth quarter, based on current activity levels. We expect revenues, margins, and profitability to grow at Scott's as we roll out new services and seek to secure new contracted clients in the area during 2027. In terms of new contract additions, during the third quarter, we secured three new 340B contracts, bringing the annual total to 14. As we noted previously, the onboarding of 340B entities can take around 90 days on average before initial prescriptions are received, so we're still in the early stages with many of these new clients.

We believe each will contribute to growth throughout the remainder of the year and through early 2027. For the retail pharmacy business, as I noted earlier and last quarter, while there continue to be challenges here, we believe our diversified business model built around well-managed community pharmacies, combined with the addition of our contracted service offerings, will allow us to profitably grow this business. Finally, we continue to focus on actively expanding the scale and scope of our healthcare business through two key pathways. Through the physical offline expansion of our PharmCo Pharmacy footprint, this effort includes adding locations in new markets, such as our acquisition of Scott's in Pensacola and the opening of our new location in Jacksonville.

We continue to explore not only additional pharmacy acquisitions, but also new delivery models, such as the automated dispensing at point of care, as we announced recently. Also online, through the launch of our new e-commerce healthcare website, which will feature an array of popular prescription medications and over-the-counter products, including our Florida Sunshine brand of premium vitamins and supplements. We had originally expected the site to go live before the end of the third quarter, but due to additional time needed to fully optimize the platform for e-commerce at scale, it was delayed slightly, and we now expect the site to go live this month.

As a reminder, this new healthcare e-commerce website will allow us to leverage our relationships with current and potential customers as part of our go-to-market plans. Collectively, we believe these initiatives and others we are considering can not only differentiate our services, but also make them attractive to providers while delivering enhanced value to patients. Now turning to our e-commerce segment, here are the most recent highlights. The global demand for satellite-based connectivity products continues to be strong. In the quarter, we generated sales from customers in more than 115 countries and produced record levels of high-margin recurring airtime contract revenue.

Sales at leading e-commerce marketplace sites like Amazon remain strong, which is important as we move into what is traditionally a slower seasonal period. To capitalize on this demand, we are continuing to diversify our global reach. That is why we are pleased to have recently expanded our consumer sales channels through an agreement with Decathlon, the world's largest sporting goods retailer, which has begun selling an array of satellite connectivity products to its online customers in 20 countries. The expansion of our e-commerce network of branded storefronts and marketplaces on major international e-commerce sites and specialized retail destinations like Decathlon furthers our ability to capture an even greater share of global category spending.

We believe that this expanded reach will continue contributing to sustained and predictable growth in this part of our business. We have also expanded onto other leading European marketplaces, including Mountain Warehouse and the newly launched Easy Shop, further increasing our reach to customers who prefer to shop online, with additional marketplaces expected later this year. At this point, I would now like to turn the call over to Birute for her update.

Birute Norkute: Thank you, David. During the third quarter, our healthcare operations continued to deliver significantly stronger profitability compared with the prior year. Our gross margin for the current quarter reached a little over 41%, up from 18% a year earlier, although it declined approximately 5 percentage points sequentially from the prior quarter. A significant contributor to the decline in profitability was the permanent closure of a customer's medication fulfillment facility that we had previously served. Because that business carried particularly strong margins, its loss had a disproportionate impact on our profitability. Turning to retail, prescription volumes remained below prior year levels, reflecting changes in payer mix and shifts in our customer relationships.

We fulfill prescriptions for numerous healthcare clinics and continue establishing new partnerships. However, as some clinics grow, they choose to establish their own pharmacies, bringing prescription fulfillment in-house. This contributes to fluctuations in our retail volumes and reinforces the importance of continually developing new customer relationships. It is also why we are looking into novel services, such as automated dispensing at the point of care, something we believe will not only strengthen our relationships with existing customers, but also differentiate us from our competitors and help attract new customers. Medicare's Maximum Fair Price program has also affected prescription economics compared with 2025, although we did not experience a significant additional impact during the third quarter.

Meanwhile, long-term care prescription volumes remain stable, while our 340B volumes continue to grow as previously contracted covered entities became operational. The quarterly HRSA registration process creates a natural delay between signing new agreements and generating prescription revenue. These market conditions reinforce the importance of diversifying our healthcare business across multiple revenue streams and patient populations, an approach central to our healthcare growth plans. As David mentioned, our expansion into Pensacola and Jacksonville supports this strategy, providing opportunities to grow retail prescriptions while introducing additional pharmacy services to new healthcare partners. As we previously announced, we are also advancing our automated prescription dispensing initiative with our first point-of-care kiosk currently on its way for installation.

In parallel, we are developing new partnership opportunities involving innovative medication management, customized packaging, and home delivery solutions designed to improve medication adherence while creating additional recurring retail prescription revenue opportunities. Across our pharmacy network, our priorities remain disciplined purchasing, effective inventory management, and operational efficiency as we continue building a more diversified and sustainable healthcare business. That concludes my remarks. Back to you, David.

David Phipps: Thank you, Birute. At this point, I will turn the call over to Amanda to discuss our financial results for the quarter ended September 30, 2026.

Amanda Ferrio: Thank you, David. Good morning, everyone. Third quarter results show continued year-over-year improvement in gross margin, operating expenses, and operating loss, driven by our shift toward contracted healthcare services. Sequentially, results were softer than the second quarter, and I will walk through the drivers of that. Unless I note otherwise, the figures I will discuss are rounded. Precise amounts are in the press release and the soon-to-be-filed Form 10-Q. For the third quarter of 2026, total net revenues were $10.5 million compared to $13.8 million in the prior year period. The year-over-year decline continues to reflect the operational restructuring and evolving reimbursement dynamics within our healthcare business.

As we have previously indicated, we believe the more important trend here is our ability to generate strong margins on every dollar of revenue. Within our healthcare operations, total third-quarter revenue was $6.7 million compared to $10.1 million in the third quarter of 2025. Despite the decline, the composition of healthcare revenue continued to shift towards higher value and more sustainable revenue streams, such as our 340B contract services. Pharmacy contract revenue was $2.4 million compared to $0.6 million a year ago, roughly four times the prior year level, driven primarily by a $1.6 million increase in 340B contract revenue.

Although retail pharmacy prescription volume declined and reimbursement rates remain under pressure, by expanding our pharmacy footprint with our new location in Jacksonville and the Q4 acquisition of Scott's Pharmacy in the Pensacola area, we anticipate improvements in prescription volume and customer reach. Looking at our e-commerce operations, this segment continued to be a steady performer and remained an important contributor to the overall business. E-commerce revenue increased 3% versus the year-ago period. On a sequential basis, we did see about a 6% decline in overall sales, which was largely expected given normal seasonality in the business. Third-quarter gross margin remained consistent at 24% when compared to the prior year period.

As this business continues to expand its reach, serving additional global markets for both consumer and enterprises, we believe that this segment remains well-positioned to provide consistent cash flow generation and long-term growth opportunities. Turning to profitability, consolidated gross profit for the quarter was $3.7 million compared to $2.7 million in the prior year period, reflecting the positive impacts of our increased focus on higher-margin contracted services. It was down sequentially, however, from Q2 due to the declines in prescription volume as well as the impact of the closure of one of the two medication fulfillment facilities at the beginning of the quarter.

Consolidated gross margins remained at the higher end of the expected range at 35% versus nearly 20% a year ago, again reflecting the positive impact of our refocusing efforts on higher-margin contracted healthcare sales to improve revenue quality. Operating expenses were generally in line with expectations, and we maintained disciplined cost controls across the business. Q3 operating expenses were $4.5 million, a decrease of about 10% from $5 million recorded in Q3 2025, and down sequentially from $4.8 million recorded in Q2 2026. Salaries, wages, and payroll taxes declined about 12% to $2.3 million. Operating loss for the third quarter was $0.8 million compared to $2.2 million in the prior year period, representing a nearly 65% reduction.

From a segment perspective, it is important to note that our healthcare operations once again generated positive operating income during the quarter. Combined segment income was $0.2 million. Corporate overhead of $1 million brings that to our consolidated operating loss of $0.8 million. We remain diligent in reducing our corporate overhead cost layer. On the balance sheet, we ended the quarter with $11.2 million in cash, a slight sequential decline from the $11.9 million reported in the second quarter, primarily driven by the increase in professional fees and public company expenses. Q3 2026 working capital was $13.5 million. Looking ahead, the acquisition of Scott's Pharmacy was an all-cash transaction of $1.5 million, which will reduce our quarterly cash balance.

Also, during Q4, we began selling shares under the at-the-market program we established in May, raising over $140,000 in net proceeds. We continue to maintain a healthy liquidity position and a conservative balance sheet with no meaningful debt, which we believe provides flexibility to support growth initiatives, strategic opportunities, and continued operational execution. I encourage you to review our financial statements and disclosures in our quarterly report on Form 10-Q for additional detail. That concludes my remarks. Back to you, David.

David Phipps: Thanks, Amanda. I will now make some closing remarks and then move on to the Q&A. While we are generally pleased with our overall performance and excited by the expansion of our PharmCo business, we recognize there is still work to do as we continue to drive top-line growth and bottom-line profitability. As we said previously, we recognize that the nature of the healthcare business can be dynamic, therefore, we should expect some volatility in that segment, especially as it relates to the retail business. That is why, through selective profitable acquisitions and our strict focus on a diversified model of combining retail with high-value, high-margin contract healthcare services, we are confident that we can address these challenges.

Thanks to our solid financial foundation, we can focus our attention on the future, our growth, and profitability. In healthcare, we continue our focus on both organic growth and growth through accretive acquisitions. We are fully confident that by combining retail, specialty, institutional, 340B, and government services through a single pharmacy operation, we can support multiple patient populations and healthcare partners while benefiting from diversification. That is why we are eager to expand our footprint while the mass retail chains are increasingly cutting back. In e-commerce, we are also focused on diversification and growth, as evidenced by initiatives such as our new online healthcare marketplace and consumer-focused sales channels with Decathlon.

Global demand for satellite-based connectivity remains high, by creating an expanded platform across international markets and customer segments, from retail to enterprise to government, we are increasingly able to meet the needs of customers on a 24/7, 365 basis. For our investors, we are keenly aware of the volatility in today's market, especially for small-cap companies like ours, and are prepared to navigate it. Supported by a healthy financial foundation, we are successfully executing on our plans, as evidenced by the broad improvements we are reporting in this business. We remain focused on driving top and bottom-line results and creating sustainable shareholder value over the short and long term. We remain excited about the progress we are making.

We are addressing the challenges we see in our business and are confident in our ability to achieve even more in the months ahead. We wish to thank our shareholders for their continued support on our journey. At this point, we will now conduct the Q&A portion of today's call. We have again asked investors and shareholders to submit their questions in advance, and we would like to thank all of you who did. Question number one: Now that you have completed the acquisition in Pensacola, what is next? Are you still looking at additional acquisitions in the pharmacy space? What about opportunities beyond Florida?

While we are focusing on expanding our footprint in Florida, we continue to see interest from pharmacy operators from both inside and outside the state, which could represent major expansion opportunities for us. We will only pursue opportunities that meet or exceed our strict requirements in terms of contributing significant revenue and generating good margins and bottom-line profitability for our business. We will announce developments here when they occur. Question number two: Now that you are getting ready to launch the new healthcare e-commerce site, what are your expectations in terms of contributions to the business? The website represents a new revenue stream for the company, one we believe complements our existing business.

We expect to provide updates and progress reports on this new revenue source in the coming quarters. Question number three: Does the company have any update on the status of the ongoing lawsuit? The situation here remains very much the same as it has been over the past few months. As evidenced by the expenses we continue to incur, our legal counsel and our insurance company remain very active in resolving this matter as quickly as possible while protecting the long-term interests of our shareholders. That was the final question that we received from our investors. Thank you all again for submitting them.

Please remember that you can submit your questions to our investor relations email, investors@nextplat.com, or to our IR contact listed on our press releases, Michael Glickman at mike@mwgco.net. That concludes our earnings conference call. We look forward to continuing to share our progress with you in the weeks and months ahead. Have a nice rest of your day. Thank you.

Operator: This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.

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