Digital Brands Group (DBGI) investor relations material

Executive summary

• Net revenues for Q2 2025 were $2.3M, down from $3.4M in Q2 2024, mainly due to dropping a low-margin wholesale account and limited marketing spend early in the year.

• Net loss for Q2 2025 was $2.1M, an improvement from $3.5M in Q2 2024, driven by lower operating and interest expenses.

• Gross margin declined to 32% in Q2 2025 from 46% in Q2 2024, impacted by inventory write-offs and lower sales.

• Operating expenses decreased by $1.2M year-over-year due to significant headcount reductions and cost-cutting measures.

• Recent capital raises and cost reductions have alleviated prior going concern doubts, with management confident in meeting obligations for the next 12 months.

Financial highlights

• Six-month net revenues were $4.1M, down from $7.0M year-over-year, reflecting the loss of a major wholesale account and reduced marketing.

• Six-month net loss was $4.2M, flat compared to the same period last year, despite lower revenues.

• Gross profit for the six months was $1.5M, down from $3.3M year-over-year; gross margin fell to 38% from 47%.

• Cash used in operating activities increased to $6.1M for the six months ended June 30, 2025, compared to $2.8M in the prior year.

• Cash provided by financing activities was $6.5M, up from $3.0M year-over-year, mainly from equity offerings.

Outlook and guidance

• Management expects wholesale revenue to recover in the second half of 2025 as a key account doubles its domestic retail doors and expands internationally.

• Gross margins are expected to improve with higher e-commerce mix and increased leverage of fixed costs.

• Additional $0.7M in operating expense reductions anticipated over the next 12 months.

• Recent capital raises and cash on hand are expected to fund operations and obligations for at least the next year.