Impressive Results from XpresCheck Enhanced by Positive Change in Revenue Recognition

  • XpresSpa Group reported 3Q21 revenues of $26.8 million compared to $9.1 million for 2Q21 and $0.02 million in 3Q20. XpresCheck contributed $25.4 million to revenue, while the legacy spa business contributed the remaining $1.4 million.
  • The company also had record profitability with EBITDA of $8.7 million and net income per share of $0.05, demonstrating the strong operating leverage of the XpresCheck model.
  • In early July, the company was able to determine that it actually has a variable interest in the medical corporations that provide services under the XpresCheck banner, and thus it should recognize the whole revenue and expenses of these corporations, and not just the fees they pay to XpresSpa Group. This new revenue recognition methodology will give investors better insight into the economics of the business.
  • Patient volume in 3Q21 increased 23% over 2Q21 to 113,000, compared to 92,000 in 2Q21. The percentage of rapid tests increased from 43% of all COVID tests in 2Q21 to 67% of all COVID tests in 3Q21. The increase in volume combined with the improved mix of the more expensive rapid test ($200 to $250 per rapid test versus $75 for the standard PCR test) contributed to the strong top and bottom line results.
  • These strong results were achieved despite continued increases in overall vaccination rates, both in the US and overseas, and appear to validate our opinion that COVID tests will continue to be required by many countries even for vaccinated travelers.
  • The company did not formally change the guidance it provided at a financial conference in September, which back then did not yet reflect the strong 3Q results and the change in revenue recognition methodology. Note that Q4 could also be helped by the reopening of the US to non-US citizen travelers; many of these travelers will need negative COVID tests prior to re-entering their countries of origin following their visits to the US, and this could benefit XpresCheck.
  • Treat launch is continuing with the first physical location set to open at JFK Terminal 4 in December 2021. We are excited to see how this third leg of the story develops and contributes to the overall growth of the company.
  • The strong operating results allowed the company to generate cash from operations and to further strengthen its balance sheet, which had $103 million in net cash at the end of the quarter. The company bought back 250,000 shares under its buy-back program (regulatory blackouts prevented more activity), but more is likely to come, in particular at the current valuation.

XpresSpa Group provides health and wellness services out of 24 US and 6 international airport locations. Its XpresSpa legacy business operated 43 spas in 21 airports prior to the COVID-19 pandemic. When the pandemic started, the spas had to be closed; the company pivoted and developed XpresCheck, a business offering rapid COVID-19 testing services with currently 14 locations in 12 airports, primarily targeting passengers bound for international destinations that require negative COVID tests for entry. XpresCheck has also secured a first contract with the Centers for Disease Control and Prevention (CDC) to conduct testing and biosurveillance for inbound international passengers. While the company has started to selectively reopen some of its XpresSpa locations, it is also developing Treat, a new multichannel health and wellness brand. It has already launched the brand’s website,, as well as the Treat app. It will open the first Treat airport location in 4Q21 at JFK Terminal 4. Treat will expand on the spa and testing services offered by XpresSpa and XpresCheck and will have an extensive suite of health and wellness goods and services, including testing, vaccines, anxiety care, emergency prescriptions, vitamin IV therapies, as well as wellness offerings such as fitness, yoga, and guided meditation services.


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