Stran & Company, Inc. Q2 FY2025 earnings call

• Strong financial performance: Sales increased 95.2% to approximately $32.6 million in Q2 2025, gross profit rose over 80% to ~$9.9 million, and net profit was $643,000.
• Segment performance: Stran segment had $21.8M revenue, SLS segment had $10.8M revenue in Q2.
• Industry recognitions: Ranked 12th in PPAI 100 and #23 in ASI Counselor Top 40 Distributors List.
• Governance milestones: Welcomed 3 new board members with relevant skills.
• Compliance: Fully compliant with NASDAQ continuing listing requirements.
• Liquidity: Maintained ~$18.1 million in cash, cash equivalents, and investments as of June 30, 2025.
• Share repurchases: Repurchased over 110,000 shares during Q2.

In the second quarter of 2025, Stran's core Stran business segment generated $21.8 million in revenue. The Stran Loyalty Solutions segment contributed $10.8 million in revenue. For the 3 months ended June 30, 2025, the Stran segment had sales of approximately $21.8 million and the SLS segment had $10.8 million. For the 6 months ended June 30, 2025, the Stran segment's sales were approximately $42.7 million and the SLS segment's sales were approximately $18.6 million. Gross profit margin stood at 30.3% for the quarter, with the Stran segment improving to 34.9% and the SLS segment operating at 21%.

• Excited about second half growth, aiming for continued top line growth.
• Expect to continue 30% organic growth seen in Q2 and 20%+ organic growth in 6 months.
• Balance growth through organic, acquisition, and cost management.
• Plan to continue share buybacks, viewing it as a way to add shareholder value.

Q: Just want to first congratulate you on the very strong results this quarter, and it seems like everything is firing on all cylinders. My first question is, I know you don't provide guidance, but can you give some color on the outlook for the second half and in particular, what your expectations are in terms of organic growth?

A: Sure. Yes. Thank you. So we are very excited about the changes that we made within our organization to really concentrate on our business model of getting more business from our existing customers, getting new business, expanding our offerings and really just advancing our technology. So we're excited to continue our top line growth. So as you saw, we had 30% organic growth in Q2, and we had over 20% organic growth in -- for the 6 months. So we're continuing with that to really diversify our client base, expand our client base and really just continue to work on balancing between growing the business through both organic and acquisition as well as cost management. That's one of the things that we've talked about is managing our costs, working on profitability, and that's what we're really concentrating on. So we're excited about the second half of the year. Historically, the second half of the year has been for the Stran segment, our strongest part of the year because of the holidays and the end of the year. So we're looking forward to that and ramping up to that once the fall comes and very excited for the outlook of our top line revenue growth to be significant by the end of the year.

Q: You've also mentioned share buybacks in the past. Can you give your thoughts on any plans to buy back stock going forward?

A: Yes. So we look at our stock, obviously, we feel that we're undervalued. So we look at buying back the stock when we can. We are limited to volume restrictions of what we can buy back. We authorized -- the Board had authorized a $10 million share buyback. We've executed less than $4 million of that. In the quarter alone, we put in a 10b5 program where we could buy during the blackout window. Historically, we could only buy during an open window right after we reported up to, I think it was 45 days post that, that we could buy in the open market, and we were doing that. We executed that in Q1 when we could and then we put in the 10b5 program where we automatically would buy regardless of the blackout window. So we look at buying our own business at a very reasonable and valued price. So we will continue to do that and balance that by managing our cash while also taking advantage of buying ourselves for -- at a discount. So we want to -- we will absolutely continue with our buyback and find ways to continue to add shareholder value. The more we buy back, the more value our shareholders have and own in the company, and that's what we want to do. So we're excited to continue that buyback.