Odd Burger (ODD) Q4 2024 earnings summary

Executive summary

• Odd Burger Corporation reported a net loss of $2.13M for the year ended September 30, 2024, a significant improvement from the $4.60M net loss in 2023, driven by cost reductions and improved gross margin.

• Total revenue declined 4.4% year-over-year to $3.10M, primarily due to transitioning corporate stores to franchised locations and a slight decrease in franchise revenue.

• The company continues to focus on a franchise-driven growth model, with 18 locations open and 7 more under development, and 136 units committed through area representative agreements.

• Management highlights material uncertainty regarding the company's ability to continue as a going concern due to recurring losses, negative cash flows, and a working capital deficit.

Financial highlights

• Revenue for FY2024 was $3.10M, down from $3.24M in FY2023; food sales declined by $143.7K, offset by a modest increase in manufacturing revenue.

• Gross margin improved to 33.4% from 26.0% year-over-year, reflecting operational efficiencies and cost controls.

• Operating expenses dropped 37.6% to $3.33M, with significant reductions in SG&A, salaries, and professional fees.

• Net loss per share improved to $0.02 from $0.05 year-over-year.

• Cash used in operating activities was $621.6K, a reduction from $1.25M in the prior year.

Outlook and guidance

• The company expects franchise revenue to grow in FY2025 as more locations are franchised and area representative agreements are executed.

• Management plans to continue expanding through franchising, reducing capital requirements and focusing on food manufacturing growth via Preposterous Foods.

• Additional capital raises are anticipated to support ongoing operations and expansion.