Q4 2025 Synergy CHC Corp Earnings Call
Jack Ross: In 2025 hasn't been lost. The demand remains intact, the brand is strong, and our international strategy continues to be focused on scalable capital efficient expansion. Before I turn the call over to Jamie, I want to touch on another development that further supports our international growth strategy. During 2025, we established our wholly owned subsidiary in Mexico, and in December, we initiated our first product shipments to Costco de México. On the beverage side of our business, during Q1 2026, we have generated over $600,000 in gross revenue, surpassing the entire 2025 revenue, which now equates to $2.5 million run rate for 2026.
Jack Ross: We have shipped our FOCUSfactor in energy RTDs and shots to new key distribution locations, including EG America, the parent company of Cumberland Farms convenience stores, Wakefern Food Corp., Indian Nation Wholesale, McCool Distributors, Mancini Beverage, Tenace Incubation, and Pine State Beverage, to name a few. We have millions of cans of RTDs and shots in stock and ready to ship, and we expect 2026 to be a foundational growth year for our beverage division. We continue to execute on our supplement side as well, having just shipped three new SKUs to all 1,600 Kroger locations. One initiative that we did not achieve in 2025 was turning back on the TV advertising, which is hugely important for our existing store growth.
Jack Ross: We will be diligently working towards executing this in 2026 to drive same store growth within our key retailers. If the results that we achieved in the past hold true, we expect to see at least a 15% lift in same store sales once the TV advertising is up and running. With those updates, I'd like to turn the call over to our Chief Financial Officer, Jaime Fickett. Jaime.
One initiative that we did not achieve in 2025 was turning back on the TV advertising, which is usually important for our existing store growth. We will be diligently working towards executing this in 2026 to drive the same growth with our key retailers.
If the results that we achieved in the past hold true, we expect to see at least a 15% lift in same-store sales once the TV advertising is up and running.
Jaime Fickett: Thank you, Jack. I'll now review our financial results. Beginning with Q4, net revenue was $6.07 million, compared to $10.27 million in the year ago quarter, a 41% decrease versus the prior year. The decrease was due to the termination of the license agreement of $2.9 million. Without that reversal, net revenue was $8.97 million, a 12.7% decrease. Gross margin for Q4 was 36.6%, compared to 63.3% in the same quarter last year. The decrease in gross margin was primarily driven by the termination of the license agreement of $2.9 million and a write-off of obsolete inventory of $1.04 million. Without those two items, gross margin would have been 68.8%, an increase from prior year.
I would like to turn the call over to our Chief Financial Officer, Jaime Fickett. Jaime?
Beginning with fourth quarter, revenue was $6.07 million, compared to a 10.27% decrease versus the prior year. The decrease was due to termination of the license agreement, $2.9 million. Without that reversal, net revenue was $8.97 million, a 12.7% decrease.
Jaime Fickett: Operating expenses for Q4 were $15.53 million, compared to $5.14 million in the year ago quarter. The increase in operating expenses was largely due to one-time item of an allowance for bad debt of $6.6 million and the write-off of prepaid media credits of $0.9 million. Without those two items, operating expenses would have been $8 million. The majority of the increase was due to professional fees for our corporate development. Loss from operations for Q4 2025 was $13.31 million, compared to income from operations of $1.35 million in Q4 2024.
Gross margin for the fourth quarter was 36.6%, compared to 63.3% in the same quarter last year. The decreasing gross margin was primarily driven by termination of the license agreement of $2.9 million, and the write-off of obsolete inventory of $1.04 million. Those were the two items. Gross margin would have been 68.8% and increased by year.
Operating expenses for the fourth quarter were $15.5 million, compared to 5.14% operating expenses, largely due to one-time items of an allowance for bad debt, $6.6 million, and write-off of prepaid media, credit of $0.9 million. Without these two items, operating expenses would have been $8 million, with the majority of the increase due to professional fees for our corporate development.
Jaime Fickett: As discussed, this is largely due to one-time items of allowance of bad debts of $6.66 million, termination of the license agreement of $2.9 million, write-off of the obsolete inventory of $1.04 million, and the write-off of a prepaid media credit of $0.9 million. Without those one-time items, loss from operations would have been $1.85 million, which is impacted by the increased professional fees for our corporate development. Net loss for Q4 was $14.82 million or $1.35 per diluted share, compared to net income of $105.7 thousand or $0.01 per diluted share income in Q4 of 2024.
Loss from operations for the fourth quarter of 2025 was $13.31 million, compared to income from operations of $1.35 million in the fourth quarter of 2024 as discussed. This is largely due to the one-time items of an allowance for bad debt of $6.66 million, termination of the Life+ agreement of $2.9 million, write-off of obsolete inventory of $1.04 million, and the write-off of a prepaid media credit of $0.9 million. Without these one-time items, loss from operations would have been $1.85 million, impacted by increased professional fees for our corporate development.
Jaime Fickett: This is largely due to one-time items of allowance of bad debt of $6.66 million, termination of the license agreement of $2.9 million, write-off of obsolete inventory of $1.04 million, and the write-off of prepaid media credits of $0.9 million. Without those one-time items, net loss would have been $3.35 million, which is impacted by the increased professional fees for corporate development. EBITDA loss for Q4 was $13.28 million, compared to EBITDA income of $1.68 million in Q4 of 2024. Adjusted EBITDA loss for Q4 was $4.48 million, compared to adjusted EBITDA income of $2.79 million in Q4 of 2024. Now turning to our full year results.
Net loss in the fourth quarter, the last Q4, the fourth quarter, was $14.82 million or $1.35 per diluted share, compared to net income of $105.7 thousand or $0.01 per diluted share. In the fourth quarter of 2024, this is largely due to one-time items: an allowance of $6.966 million, termination of license agreement of $2.9 million, write-off of obsolete inventory of $1.04 million, and the write-off of prepaid media credit at $0.9 million. Without these one-time losses, net loss would have been $3.35 million, which is impacted by the increase in professional fees for corporate development.
Of $1.68 million in the fourth quarter of 2024 adjusted. But a loss for the fourth quarter was $4.48 million, compared to adjusted EBITDA income of $2.79 million in the fourth quarter of 2024.
Jaime Fickett: For the full year of 2025, revenue was $30.38 million, compared to $34.83 million in the year ago period. Without reversing the $2.9 million in license revenue, our net revenue would have been $33.28 million in 2025. Gross margin for the full year of 2025 was 66.8%, compared to 67.9% in the year ago period. Without the previously discussed inventory write-off, gross margin would have been 70.3% and increased over prior year. Operating expenses for the year were $28.76 million, compared to $17.84 million a year ago.
Now, turn to our full-year results.
For the full year of 2025, revenue was $30.38 million compared to $34.83 million in the year ago period. Without reversing the $2.9 million license revenue, our net revenue would have been $33.28 million in 2025.
Gross margin for the full year of 2025 was 66.8% compared to 67.9% a year ago. Period. Without the previously discussed inventory write-off, margin would have been 70.3%, an increase over the prior year.
Jaime Fickett: Without the one-time items previously mentioned, operating expenses would have been $21.24 million, which is impacted by the increased professional fees for corporate development. Loss from operations for the year was $8.46 million, compared to income from operations of $5.8 million a year ago. The decrease is also due to the one-time items, as discussed. Without them, the full year income from operations would have been $3 million, impacted by increased professional fees for corporate development. Net loss for the year was $12.3 million, or $1.27 per diluted share, compared to net income of $2.1 million or $0.28 per diluted share a year ago. This is also due to the one-time items, as discussed, offset by a gain on the settlement of our notes payable of $2.15 million.
Operating expenses for the year were $28.76 million, compared to $17.84 million a year ago. But at the one-time items previously mentioned in operating expenses, operating expenses would have been $21.24 million. This is impacted by increased professional fees and corporate development.
Loss from operations for the year was $8.46 million compared to income from operations of $5.8 million a year ago. The decrease is also due to the one-time items that we discussed. Without accounting for those, the full year income from operations would have been $3 million, impacted by increased professional fees for corporate development.
Jaime Fickett: Without those items, the full year net loss would have been $3.03 million, which again is impacted by the increased professional fees for our corporate development. EBITDA loss was $6.19 million in 2025 compared to EBITDA of $6.46 million a year ago. Adjusted EBITDA income was $800,000 compared to adjusted EBITDA income of $7.35 million a year ago. Moving to our balance sheet and cash flow. As of December 31, 2025, we had cash and cash equivalents of $2.6 million compared to $687,900 as of December 31, 2024. Inventory was at $3.7 million at the end of Q4 compared to $1.7 million at the end of 2024.
Net loss for the year was $12.3 million, or $0.27 per diluted share, compared to net income of $2.1 million, or $0.28 per diluted share a year ago. This is all due to the one-time item, as discussed, by gain on the settlement of our notes payable, $2.15 million. Without those items, the full year net loss would have been 3.33%.
But a loss was $6.19 million in 2025 compared to EVA of $6.46 million. A year ago, adjusted income was $800,000 compared to a net income of $7.35 million a year ago.
Jaime Fickett: At the end of 31 December 2025, we had $33.3 million in total liabilities compared to $33 million in total liabilities 31 December 2024. At 31 December 2025, we had a working capital surplus of $1.78 million as compared to a working capital deficit of $1.12 million as of 31 December 2024. For the twelve months ended 31 December 2025, our cash used in operating activities was $2.6 million compared to cash used in operating activities of $4.8 million at 31 December 2024. The decrease primarily reflects higher non-cash charges, including bad debt write-offs, and stock-based compensation, as well as improved cash collections and accounts receivable, partially offset by the increased inventory investment and the gain on the settlement of debt. Now I will turn the call back to the operator.
Moving to our balance sheet and cash flow as of December 31st, 2025, we had cash and cash equivalents of $2.6 million compared to $687,990 in 2024. We have $33.3 million in total liabilities compared to $33 million in total liabilities at December 31st, 2024. At December 31st, 2025, we had a working capital surplus of $1.78 million as compared to a working capital deficit of $1.12 million as of December 31st, 2024.
Operator: Thank you, ma'am. To ask a question, please press star one one on your telephone and wait for your name to be announced. To withdraw your question, please press star one one again. Our first question will come from Sean McGowan with Roth Capital Partners. Please proceed.
For the 12 months ended December 31, 2025, our cash used in operating activities was $2.6 million, compared to cash used in operating activities of $4.8 million at December 31, 2024. The decrease primarily reflects higher non-cash charges, including bad debt write-off and stock compensation, as well as improved cash collections in accounts receivable, partially offset by increased inventory investment and the gain on settlement of debt. Now, I will turn the call back to the operator.
Thank you, ma'am.
You have a good question. Please press star 1 1 on your telephone, wait for your name to be announced to withdraw your question. Please press star 1 1 1 again.
Sean McGowan: Good morning. Can you hear me okay?
And our first question will come from Champs with Roth Capital Partners. Please proceed.
Jack Ross: We can. Good morning, Sean.
Sean McGowan: Great. Good morning. On your comments on the RTD, you know, year to date being better than all of last year, it kind of implies that the Q4 was, I don't know, maybe 200,000 or something. What is still going on there that kept that from being a lot higher in the Q4?
Uh, good morning. Can you hear me? Okay, we can’t. Good morning, sh. Um, on your comments on the RTD, uh, you know, your day being better than all of last year. It kind of implies the fourth order was, I don’t know, maybe $200,000 or something. And so what, what, what is still going on there? That’d definitely be a lot higher in the fourth quarter.
Jack Ross: As you know, we just raised the money to actually build the inventory in August. You know, to actually get the inventory built, you know, takes time, meaning, you know, 8 to 12 weeks to build the inventory. We just really received the majority of the RTD inventory in-house in December. That's, you know, that's what affected that.
We, as you know, we just raised the money to actually build inventory in August, and you know, this—to actually get the inventory built—um, you know, takes time, meaning, you know, 8 to 12 weeks to build the inventory. So we really, we just really received the, the majority of the RDD inventory in the house in December.
Sean McGowan: Okay. Looking at some of the other lines was, like, let's say, compared to Q3, was Flat Tummy up?
So that's, um, you know, that's what affected that.
Jack Ross: No, Flat Tummy continues to decline. You know, the weight loss business is being heavily impacted by the GLP-1. It seems that, you know, the whole industry's moved to those. We'll be making a strategic decision on Flat Tummy in the near future.
Okay. Uh, and looking at some of the other line was, um, I could take care to the third quarter. Was flat, tell me up.
Sean McGowan: Okay. On the core supplement group, what's going on there?
Can he continue to decline? Um, you know, the weight loss business is being heavily impacted by the GLP-1. Um, it seems that, um, you know, the whole industry's moved to those, so, um, they will be making a strategic decision on Flat Tummy in the near future.
Jack Ross: The core supplement group, I think, you know, is relatively strong. We continue to, you know, add key retailers like Kroger we mentioned. Although the TV advertising is very key to that, you know, same store growth. You know, we have our competitors, we all know who the competitors are pounding the TV airwaves every single day and night. You know, we need to get that TV turned back on.
Okay, and then on the core supplement group, or what's going on there,
Sean McGowan: Okay. What do you think the outlook is gonna be, with a lot of these one-time things behind you regarding gross margin?
Uh, the core problem, though, I think, um, you know, is relatively strong. We continue to, you know, add key details. Like, like Kroger, we mentioned—although the TV average thing is very key to that, um, you know, same store growth. You know, we have our competitors—um, we all know who the competitors are—pounding the TV airwaves every single day and night. Um, and, um, you know, we need to get that TV turned back on.
Okay. And, uh, what do you think the outlook is going to be, uh, with all of these, kind of, things behind regarding Ghost, Martin?
Jack Ross: Jamie, you wanna talk to that?
Jaime Fickett: Sure. We anticipate gross margin to maintain its current level or increase. Again, it was impacted largely by those one-time items. Other than that, our gross margin remains stable.
Uh, Jamie, do you want to talk to that?
Sean McGowan: Do you mean, when you say at the current level, you mean excluding those one-time items?
Sure. Um, we anticipate gross margin to maintain, um, its current level or increase. Um, again, it was impacted largely by those one-time items. Um, but other than that, our remainder remains stable.
Jaime Fickett: Yes. Sorry. Like, as I read in the script.
Sean McGowan: Right. Okay.
Jaime Fickett: We look at it normalized.
Sean McGowan: Okay. Has there been any other changes to your approach, you know, kind of go-to-market strategy on the RTD, as you know, look to roll that out?
Do you mean that when you say 'current level,' you're excluding those one-time items? Yes. Sorry. Like, as I read in this, when we look at it, it's normalized.
Jack Ross: No, I think, you know, again, it's a sales cycle, Sean, right? So, you know, these things are all driven by planograms. So, you know, you really get, you know, twice a year where you can really, you know, quote unquote gain meaningful distribution in, we'll call it, the major chains. Certainly, you can add, you know, the smaller chains in the meantime, but, you know, we continue with the sales cycle. You know, we do expect, this is big news, we do expect to have some Costco road shows coming up in different regions, and we expect to have a BJ's roadshow coming up. So, there should be some meaningful growth there on the beverage side.
Okay, um, have there been any other changes to your approach? You know, kind of go-to-market strategy on the RTD, uh, as you roll that out.
No, I think, you know, again, it's a sales cycle, Sean, right? So, you know, these things are all driven by planars.
So, you know, we really, you know, twice a year where you can really, you know, call gaming full distribution with all the major chains. Certainly, you can add, you can add, you know, smaller chains in the meantime. But, you know, um, you know, we can continue with the sales cycle. Um, you know, we do, um, we do expect, um, this big news, we do expect to have some, um,
Sean McGowan: Okay. All right. Thank you.
Some Costco road shows coming up in different regions, and we expect to have a few days' road show coming up, so there should be some meaningful growth there on the website.
Jack Ross: Okay.
Okay, all right. Thank you.
Operator: As a reminder, if you'd like to ask a question at this time, please press star one one on your touchtone phone. Our next question will come from Edward Woo with Ascendiant Capital Markets. Please proceed.
Okay.
As a reminder, if you'd like to ask a question at this time, please press star 1-1-1 on your touchtone phone.
Edward Woo: Yes, thanks for taking my question and congratulations on the, you know, the growth in Mexico. You guys recently formed a subsidiary in Mexico. Are there other international markets that you plan on, you know, creating a subsidiary to, you know, ship directly in those markets?
Jack Ross: Edward, good speaking with you today. No, we don't have any other plans on opening international markets directly at this time. Although Mexico is a massive opportunity for us, you know, to build out the retail network there. You know, having that subsidiary there allows us to do that. As you can see, you know, we've started a lot of initiatives last year, and you know, for Synergy, 2026 is about executing against those initiatives. Get those TVs turned back on, get the same store sales growing, get the opportunities in Mexico that we've already identified up and running, and continue to grow our beverage business. That's the FOCUSfactor for 2026.
And our next question comes from Edward Woo with Sending Capital. Please proceed. Yes, thanks for taking my question, and congratulations on, you know, the growth in Mexico. You guys recently formed the subsidiary in Mexico. Are there other international markets that you plan on, you know, creating a subsidiary to, you know, ship directly into the market?
Edward, uh, good speaking with you today. Um, no we don't have any other, um, any other plans on an international market directly at this time. Um, although Mexico a mass opportunity for us, you know, to build out the the retail Network there. Um, so you know, having that situation there, um, allows us to do that. Um, but, but as you can see, you know, we started a lot of issues last year and, you know, for for Synergy 2026 about executing against those initiatives, it does give you turn back on get the same store sales growing get the opportunities in Mexico that we've already identified up and running and continue to grow our beverage business. That's the focus for 2026.
Edward Woo: Great. Well, thanks for answering my questions, and I wish you guys good luck. Thank you.
Jack Ross: Thank you.
Great. Well, thanks for answering my questions, and I wish you guys good luck. Thank you. Thank you.
Operator: At this time, this concludes our question and answer session. I would now like to turn the call back over to Mr. Ross for closing remarks.
Jack Ross: Thank you, everyone, for joining the earnings call today. We look forward to speaking to you shortly as we report our Q1 of 2026 results. Thank you.
At this time, this concludes our question-and-answer session. I would like to turn the call back over to Mr. Ross for closing remarks.
Operator: Ladies and gentlemen, this does conclude today's teleconference. You may disconnect your lines at this time. Thank you for your participation.
Thank you, everyone, for joining the earnings call today. We look forward to speaking to you shortly as we, uh, report our fourth quarter 2025 results. Thank you.
Ladies and gentlemen, this does conclude today's teleconference. You may disconnect your lines at this time. Thank you for your participation.