Flexible Solutions International (FSI) Q2 2026 earnings summary

Executive summary

• Q2 revenue was $7,610,148, down 14% from $8,867,132; excluding the prior-year $2.5M nonrecurring R&D payment, recurring sales were higher YoY.

• Q2 net loss was $1,912,967, or $0.15/share, versus net income of $2,028,912, or $0.16/share; scale-up and training costs weighed on results.

• Six-month revenue was $15.9M versus $18.8M; net loss was $2.15M compared with prior-year net income of $1.88M.

• Gross margins declined amid food-grade product ramp-up and Panama startup costs; three customers represented 54% of Q2 sales, up from 45% a year earlier.

• Management expects Q3 profitability and rapidly rising Q4 profits as food contracts ramp and Panama improves.

Financial highlights

• Q2 revenue was $7,610,148 versus $8,867,132 in Q2 2025; six-month revenue was $15.9M versus $18.8M.

• Q2 net loss was $1,912,967, or $0.15/share, versus net income of $2,028,912, or $0.16/share; pretax loss was $2,339,928 versus prior-year pretax income of $3,161,390.

• Six-month gross profit was $1.60M versus $7.34M; gross margin was 10.1%, down from 39%.

• Six-month operating cash flow was $3.5M versus $4.7M; working capital was $18.7M at June 30, 2026, down from $24.2M at year-end 2025.

• Food-contract training and Illinois and Panama scale-up costs were expensed as incurred, while Q2 revenue was insufficient to offset them.

Outlook and guidance

• Management expects Q3 profitability and rapidly rising Q4 profits; the January food contract began volume production late in Q2, with significant Q3 billing and faster Q4 growth expected.

• Q3 revenue projections: Panama $3M, ENP above $5M, and NanoChem above $4M; the food-contract ramp is expected to support NanoChem growth.

• The two larger food contracts are expected to grow toward estimated maximum revenue above $50M annually over the next four to six quarters; the August contract has a five-year term and minimum annual revenue of $6.5M.

• FL LLC territory rights are expected to recover $5M-$7M in annual revenue over the next 12 months; historical customers are already placing direct orders.

• Management expects possible customer price increases in Q3 or Q4 unless oil and raw-material costs decline significantly; no significant capital requirements beyond cash on hand are anticipated over the next 12 months.