Gifty (GIFT) Q1 2025 earnings summary

Executive summary

• Net sales for Q1 2025 were $22.3M, up from $21.5M in Q1 2024, with gross profit rising to $3.6M from $3.3M year-over-year.

• Net loss for Q1 2025 was $3.2M, slightly higher than the $3.19M loss in Q1 2024, despite improved gross margin and lower interest expense.

• CardCash accounted for 98% of revenues, with Restaurant.com contributing the remainder.

• Management continues to express substantial doubt about the company's ability to continue as a going concern due to recurring losses and negative cash flows.

Financial highlights

• Gross margin improved to 14.7% in Q1 2025 from 13.8% in Q1 2024.

• Operating expenses increased to $6.75M from $6.2M, driven by higher stock-based compensation and payroll.

• Modified EBITDA for Q1 2025 was $(626K), compared to $(658K) in Q1 2024.

• Cash and cash equivalents at March 31, 2025, were $2.1M, with negative working capital of $2.1M.

Outlook and guidance

• Management anticipates continued pressure on liquidity and the need to raise additional capital to fund operations and achieve profitability.

• Cash balance is expected to last until approximately December 2025, with ongoing uncertainty about future financing.