NextPlat Expects Q1 2026 Gross Margins to Jump to 34+%, Operating Expenses to Decline 8+% From Q4 2025 and Achieve Positive Operating Income in Q3

Broad sequential operating improvements continue to be driven by management's strategic business refocusing and growth initiatives put into place starting in the third quarter of 2025 and are now delivering meaningful sequential and year-over-year progress against growth and profitability objectives. Key financial metrics expected in the first quarter of 2026 include:

• Healthcare Operations Revenue Improvement: Momentum in the Company's Healthcare Operations segment continues to build driven by direct engagement initiatives with existing 340B customers and the addition of medication fulfilment contracts secured late last year, highlighted by the recent signing of five 340B contracts, a new single quarter record. These new 340B entities are currently onboarding and are expected to commence activities in July 2026. As expected, total Q1 2026 Healthcare Operations revenue is anticipated to sequentially decline to approximately $6.7 million from $9.6 million in Q4 2025 as the Company's turnaround continues to prioritize contracted services which deliver improved profitability compared to the traditional retail pharmacy business.
• Gross Margin Improvement: Consolidated gross margins in the first quarter of 2026 are expected to exceed 34%, a dramatic improvement from approximately 20% reported for the full year ended December 31, 2025. As a result of the Company's focus on contracted services, despite lower overall Healthcare Operations revenue expected in Q1 2026, this operating segment's margin is anticipated to grow to nearly 39%, up approximately 115% sequentially from Q4 2025 and up approximately 99% from Q1 2025. Increasing levels of higher margin 340B and medication fulfilment contracted services revenue are expected to maintain elevated healthcare margins throughout the remainder of 2026.
• Operational Process Efficiency and Cost Reduction: The Company anticipates a sequential decrease of over $0.4 million or approximately 9% in total operating expenses in Q1 2026 vs. Q4 2025 reflecting success in the Company's turnaround efforts to streamline the business. Based upon continued growth in higher-margin contracted healthcare services revenue combined with prudent expense controls, the Company anticipates achieving positive operating income in Q3 2026.
• Solid Liquidity: The Company's operations continue to be supported by a solid balance sheet with expected cash of approximately $11 million, working capital of approximately $14.3 million, and zero unsecured debt as of March 31, 2026. Management expects second quarter cash balances will increase from Q1 levels due to the timing of certain payments received by the Company after the close of the first quarter.

"As expected, the positive impacts of our turnaround initiatives are now contributing to improved operating metrics, trends we believe will significantly drive both top and bottom-line results starting in the second quarter and continuing throughout the remainder of 2026," said David Phipps, CEO and President of NextPlat. "The strength we are seeing in our business is broad-based, reflecting improved healthcare operations and a steadily growing pipeline in our e-commerce communications division with international government and military customers. Looking ahead, we are committed to supporting our organic growth in healthcare services, our recently announced nationwide expansion, and capitalizing on opportunities that can quickly and profitably add scale to our business, all with the goal of delivering an improved bottom-line later this year."