Compass Diversified (CODI) Q2 2025 earnings summary

Executive summary

• Net revenues for Q2 2025 increased 12.2% year-over-year to $478.7 million, with six-month sales at $932.5 million, driven by growth in branded consumer and industrial segments, offset by divestitures and market conditions.

• Net loss attributable to Holdings for Q2 2025 was $51.2 million, compared to $73.1 million in Q2 2024, reflecting higher impairment and interest expenses, partially offset by improved gross profit.

• Adjusted EBITDA for Q2 2025 was $46.5 million, with six months at $92.1 million, up from $88.4 million in the prior year.

• The Honey Pot Co. acquisition and Lifoam integration contributed to revenue and profit growth, while the sale of Crosman and ongoing issues at Lugano negatively impacted results.

• The company is focused on updating financial reporting and maintaining strong operating performance across subsidiaries.

Financial highlights

• Q2 2025 net revenues: $478.7 million (up 12.2% YoY); six months ended June 30, 2025: $932.5 million (up 11.3% YoY).

• Gross profit for Q2 2025: $208.5 million (43.6% margin); six months: $404.6 million (43.4% margin).

• Net loss from continuing operations for Q2 2025: $80.8 million, compared to $104.0 million in Q2 2024.

• Interest expense increased to $34.1 million in Q2 2025 (up 15.2% YoY), mainly due to higher debt and Lugano-related financing.

• Impairment expense of $31.5 million in Q2 2025, primarily related to Lugano's long-lived assets.

Outlook and guidance

• Full-year 2025 subsidiary Adjusted EBITDA is expected to be $330 million to $360 million, excluding Lugano Holding, Inc.

• Management continues to focus on liquidity, deleveraging, and operational improvements, with ongoing evaluation of subsidiary divestitures and strategic transactions.

• Capital expenditures for 2025 are expected to be $50–60 million.

• Substantial doubt remains about the company's ability to continue as a going concern within one year due to covenant compliance risks and reliance on forbearance agreements.

• Guidance is not reconciled to GAAP due to uncertainty and variability of reconciling items.