Gifty (GIFT) Q2 2024 earnings summary

Executive summary

• Net sales for Q2 2024 were $20.0M, down 5.1% year-over-year, with a focus on improving gross margin to 16.3% from 12.4% last year.

• Net loss for Q2 2024 was $7.7M, compared to $0.7M in Q2 2023, driven by higher stock-based compensation and operating costs.

• The company completed the acquisition of CardCash in December 2023, significantly impacting financial reporting and comparability.

Financial highlights

• Six-month net sales ended June 30, 2024, were $41.5M, down 8.2% year-over-year; gross margin improved to 15.7% from 12.2%.

• Six-month net loss was $10.9M, compared to $1.1M in the prior year.

• Modified EBITDA for the six months was $(1.0)M, compared to $(0.1)M in the prior year.

• Cash at June 30, 2024, was $4.7M, with a working capital deficit of $1.0M.

Outlook and guidance

• Management anticipates continued increases in selling, general, and administrative expenses as the company grows and operates as a public entity.

• There is substantial doubt about the company's ability to continue as a going concern without additional financing.