Grabagun Digital Q2 Earnings Call Highlights

Second-quarter revenue rose 9.4% to $23.2 million, while gross profit increased 39% to $3.1 million and gross margin expanded to 13.5%. Growth was driven by higher-priced firearms, larger customer orders, pricing optimization and favorable product mix.

Operating expenses climbed to $5.7 million due to public-company costs, PEW Logistics investments and added infrastructure, resulting in a $1.8 million net loss and $1.7 million adjusted EBITDA loss. PEW Logistics is expanding, while leadership changes: The platform processed more than $1.9 million in gross merchandise value and added Backwoods Suppressors as its third manufacturer partner. CFO and co-founder Justin Hilty plans to retire and will be succeeded by Jonathan Terry, formerly of YETI.

Grabagun Digital reported second-quarter revenue growth and a sharp improvement in gross margin as higher-priced firearms sales, pricing initiatives and product mix supported profitability at the gross-profit level. The company also highlighted early progress at its PEW Logistics platform and announced a planned chief financial officer transition. Second-quarter net revenue rose 9.4% to $23.2 million from $21.2 million in the prior-year period. Firearms product sales increased 8.5% to $19.3 million, while non-firearms product sales grew 7% to $3.6 million despite what management described as continued softness in ammunition demand across the broader firearms industry.

Chief Executive Officer Marc Nemati said firearms growth was driven primarily by higher average order values and a shift toward higher-priced products. During the question-and-answer session, Nemati said the higher order values reflected both sales of higher-quality, higher-priced firearms and additional accessories in customer baskets.

Gross profit increased 39% to $3.1 million, compared with $2.2 million a year earlier. Gross margin expanded approximately 290 basis points to 13.5% of net sales from 10.6% in the prior-year quarter. Nemati attributed the gain to the company’s AI-driven pricing optimization, favorable product mix, sourcing capabilities and initial contributions from PEW Logistics. Chief Financial Officer Justin Hilty said the margin improvement was driven by a mix shift toward higher-margin firearm categories and continued pricing optimization initiatives. Sales and marketing expense remained at approximately 1% of net revenue, according to Nemati, who said the company’s technology, supplier relationships and customer trust have helped maintain a lean customer-acquisition profile.

However, operating expenses rose to $5.7 million from $1.5 million in the prior-year period. Hilty said the increase reflected costs associated with operating as a public company, investments in PEW Logistics and additional headcount and infrastructure to support growth initiatives. He noted that the comparable 2025 period occurred before the company became public. The company reported a net loss of $1.8 million, compared with net income of $0.8 million a year earlier. Adjusted EBITDA was a loss of $1.7 million, versus adjusted EBITDA of $0.9 million in the prior-year quarter. Management said it has reached the final quarter of year-over-year comparisons affected by incremental public-company costs. Beginning next quarter, Hilty said expense comparisons should become more comparable on a like-for-like basis. Nemati added that general and administrative expenses should moderate as initial public-company costs normalize, though some additional expenses tied to the company’s growth efforts may ...