GrabAGun Digital Holdings Inc. (PEW) Earnings

Management highlights

• Core Business Performance & Customer Metrics - Grab a Gun grew total revenue 11.1% YoY, outpacing the broader firearms industry which saw adjusted NICS background checks grow only 1.6% YoY, indicating ongoing market share gains - Customer lifetime value grew 4.2% YoY, repeat purchase rate held steady, and mobile engagement drove 67% of total traffic and 64% of total Q1 revenue, with mobile delivering higher conversion rates and structurally lower transaction costs than traditional retail • New Business Milestones - Launched Pew Logistics, an ATF-compliant white-label direct-to-consumer fulfillment platform purpose-built for firearms manufacturers, in January 2026. The platform solves industry friction from regulatory complexity, enabling manufacturers to capture first-party customer data and direct demand instead of losing sales to third-party retailers - Onboarded two manufacturer clients: Kel-Tec Weapons (first launch in January) and Deria Arms (added in March), demonstrating appeal across domestic and international manufacturers - The Shoot and Subscribe ammunition subscription service, launched in Q4 2025, continues to gain early adoption, introducing a predictable recurring revenue model to the firearms e-commerce category • Infrastructure Investment - Outfitting the new headquarters and fulfillment facility (acquired in Q4 2025), which is 2.5x larger than the current footprint, and remains on track to be fully operational in Q4 2026. The facility will support long-term growth for both core D2C and scaled Pew Logistics operations • Capital Allocation Strategy - Maintains a fortress balance sheet with $106.4 million in cash and minimal debt, with suppliers effectively co-funding growth via $9.2 million in inventory against $13 million in accounts payable - Repurchased $2.4 million of common stock under the $20 million share repurchase authorization, with ~$9 million remaining. Management continues to evaluate opportunistic repurchases while preserving balance sheet flexibility - M&A activity: The pipeline remains active, but management maintains a disciplined approach, targeting acquisitions in the tens of millions that meet return thresholds and enhance platform capabilities, and will not overpay for deals to hit arbitrary growth targets • Regulatory Opportunity - The ATF has proposed new regulations that would allow remote compliant firearm transfers and direct-to-home delivery, which would be the most significant distribution change to the industry in decades. Grab a Gun's 15 years of built-out digital compliance and operational infrastructure positions the company uniquely to capitalize on this change if finalized

Guidance

No explicit full-year financial guidance was provided. Management reaffirmed its long-term strategic guidance, including: - Continued focus on scaling Pew Logistics by onboarding additional manufacturers throughout 2026 - Expectations that Pew Logistics will contribute increasingly meaningful revenue over time, with a structurally higher margin profile (above 70% gross margin) that will be accretive to overall company margins as its revenue share grows - The new fulfillment facility will be fully operational by Q4 2026, supporting growth beyond 2026 - Management will continue pursuing market share gains in the core D2C business while making disciplined investments to capture long-term growth opportunities

Segment performance

Core Direct-to-Consumer (D2C) E-commerce: Total Q1 2026 net sales were $25.9 million, an 11.1% year-over-year (YoY) increase from $23.3 million in Q1 2025. Firearm product sales contributed $21.7 million (83.8% of total net sales), growing 10.5% YoY. Non-firearm product sales contributed $4.1 million (15.8% of total net sales), growing 10.4% YoY. The Shoot and Subscribe ammunition subscription segment, launched in Q4 2025, contributed 50% of total ammunition revenue. Pew Logistics: The new white-label fulfillment business processed $1.3 million in gross merchandise value in Q1 2026 and has not yet meaningfully contributed to net revenue. Gross profit for the total company was $2.8 million (10.7% of net sales) in Q1 2026, up from $2.2 million (9.6% of net sales) in Q1 2025. Total operating expenses were $5.4 million, up from $2.2 million YoY. Net loss was $1.8 million, and adjusted EBITDA was a $2 million loss, compared to a $0.5 million loss in Q1 2025.

Risks & headwinds

• Forward-looking statements (including guidance, growth projections, and regulatory outcomes) are subject to known and unknown risks and uncertainties that could cause actual results to differ materially from projections, including general macroeconomic and market uncertainty - The proposed ATF regulatory changes are not yet finalized, and the final outcome and industry impact remain uncertain - Pew Logistics is a new, early-stage business with unproven scale, and growth depends on successfully onboarding additional manufacturers and delivering on its value proposition, which may not meet expectations - M&A activity carries execution and pricing risk, as potential targets may not meet the company's disciplined return and strategic requirements

Analyst Q&A

• Q: What drove the company's outperformance vs. the broader industry this quarter, what was the impact of March geopolitical disruption, and what have early 2026 demand trends looked like post-quarter? /

  A: Most growth comes from consistent platform optimization to reduce purchase friction, favorable product mix, and expanded marketing capabilities across social media and other channels that have driven higher consumer traffic. Quarterly performance was stable month-over-month with no significant, sustained demand spikes from geopolitical events, and the linear upward growth trend has continued into April and May 2026.

• Q: What is the pipeline for new Pew Logistics manufacturing clients, and how should investors expect this business to ramp? /

  A: Pew Logistics launched only in mid-January 2026 with its first client, so it is still in an early stage. Management expects the cadence of new manufacturer onboarding to accelerate as existing clients deliver proven results, demonstrating the value of capturing direct customer data and higher margins compared to the existing third-party retail model.

• Q: Is the assumption that Pew Logistics has a materially higher gross margin than core D2C e-commerce correct? /

  A: Yes, this is correct. Pew operates on a revenue share model plus pick and package fees, and has a gross margin profile upwards of 70%, which is significantly higher than the gross margin of the core hard goods e-commerce business, leveraging existing Grab a Gun infrastructure for minimal incremental cost.

• Q: What is the current status of the M&A pipeline and what organic capital expenditures should investors expect for the rest of 2026? /

  A: The M&A pipeline remains full, but management maintains a disciplined approach and will not overpay for assets just to close deals. Deals that meet the company's strict return and strategic framework will be acted on quickly. Organic capital deployment will primarily go toward expanding inventory capacity at the new fulfillment facility to support both core D2C and Pew Logistics growth, with the majority of available capital still earmarked for M&A.