Strata Skin Sciences Navigates Challenging Market, Sees Promise in Expanded Reimbursement

November 13, 2025

Revenue Dip Offset by Strategic Initiatives

Strata Skin Sciences, Inc. reported its third-quarter results today, revealing a 21% year-over-year decline in revenue to $6.9 million. While the revenue contraction presents a challenge, the company highlighted strategic initiatives aimed at bolstering long-term growth, including an expansion of CPT codes for its XTRAC system and a focus on building recurring revenue streams. The net loss narrowed to $1.6 million, an improvement over the same period last year, signaling potential operational efficiencies.

“The market remains dynamic, and we are actively adapting our strategies to navigate the challenges while capitalizing on opportunities,” said a company spokesperson. “We believe our commitment to innovation and patient care will drive sustainable growth.”

XTRAC System and Expanding Reimbursement Landscape

The XTRAC system, a 308 nanometer excimer laser used to treat psoriasis, vitiligo, and other skin disorders, remains central to Strata Skin Sciences’ product portfolio. A significant development impacting the system’s future is the recent expansion of Current Procedural Terminology (CPT) codes for XTRAC treatment. This expansion, recognized by the Centers for Medicare and Medicaid Services (CMS), is poised to triple the covered patient population in the U.S., potentially unlocking substantial growth opportunities.

“The expanded CPT codes are a game-changer for us,” explained a medical professional familiar with the technology. “It significantly increases the accessibility of XTRAC treatment for patients who previously may not have been covered by insurance.”

The company is actively working with healthcare providers and insurance payers to ensure smooth implementation of the new codes and maximize patient access to treatment. While the initial impact of the expansion will be seen in future quarters, the company believes it represents a significant long-term growth driver.

Diversification with TheraClearX and Partnership Model

Beyond the XTRAC system, Strata Skin Sciences is diversifying its product offerings with the TheraClearX Acne Therapy System. The company aims to deploy 200 TheraClearX devices by the end of 2025, further expanding its reach in the dermatology market. The initial reception has been positive, particularly in markets where acne is a prevalent concern.

However, the company is experiencing a shift in its sales model. A 60% year-over-year decrease in equipment revenue underscores this change. This is due in part to a strategic pivot toward a partnership model, where clinics pay a fee per treatment rather than purchasing the equipment outright. This model aims to reduce the financial burden on practices and increase access to the technology for both providers and patients.

“We are seeing a growing demand for flexible financing options in the dermatology space,” noted an industry analyst. “The partnership model allows clinics to offer innovative treatments without the significant upfront investment.”

Financial Health and Future Outlook

As of September 30, 2025, Strata Skin Sciences reported $7.1 million in cash and cash equivalents, bolstered by a $2.2 million net raise through a direct offering during the quarter. Despite the revenue decline, the narrowed net loss and slightly positive adjusted EBITDA indicate some operational improvements. However, the company's stock price experienced a decline following the earnings release, reflecting investor concerns about the financial challenges and bearish technical indicators.

The company is actively managing costs and prioritizing investments in areas with the highest potential for growth. Positive developments in ongoing litigation against a competitor are expected to recapture lost partner clinics and contribute to future revenue. Additionally, new peer-reviewed publications validating combination therapies for vitiligo are bolstering the clinical evidence supporting the XTRAC system.

The company hopes the CPT expansion, combined with its evolving business model, will generate more sustainable revenues moving forward. The company views expanding its product portfolio with TheraClearX and its partnership model as crucial steps toward securing a stronger position in a competitive market.