Splash Beverage Group (SBEV) Q2 2024 earnings summary

Executive summary

• Q2 2024 revenue was $1.1 million, down from $5.2 million in Q2 2023, mainly due to sharp declines in e-commerce sales from inventory shortages and liquidity constraints.

• Net loss for Q2 2024 was $5.3 million ($0.11 per share), a slight improvement from $5.6 million in Q2 2023, attributed to lower debt discount expense.

• Despite financial headwinds, significant distribution wins and new retail authorizations were achieved, setting up momentum for the second half of 2024 and 2025.

• The company continues to focus on building beverage brands with growth potential, leveraging US distribution and expanding internationally.

• Liquidity challenges persist, with only $8,298 in cash at June 30, 2024, and a working capital deficit.

Financial highlights

• Six-month revenue ended June 30, 2024 was $2.6 million, down from $11 million in the prior year period, with e-commerce revenue dropping $7.6 million and beverage sales down $0.8 million.

• Gross profit for Q2 2024 was $244,000, up from $164,000 in Q1 but down from $1.8 million in Q2 2023; gross margin expanded from 11% in Q1 to 23% in Q2.

• Operating expenses for Q2 2024 were $3.9 million, down from $6.0 million in Q2 2023, mainly due to reduced marketing, freight, and Amazon fees.

• Interest expense for Q2 2024 was $0.6 million, up from $0.2 million in Q2 2023, due to new loans and higher rates.

• Cash and cash equivalents at June 30, 2024 were $8,298, down from $379,978 at December 31, 2023.

Outlook and guidance

• Revenue guidance for 2024 is $9–10 million, and for 2025 is $38–42 million, driven by organic growth and a relaunch of the Qplash e-commerce platform.

• Gross margins are expected to reach the high 20s in 2024 and high 30s in 2025, with EBITDA projected to be negative $9 million in 2024, turning positive by late Q2 or early Q3 2025.

• Management plans to raise up to $8 million for acquisitions, equipment, and working capital.

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

• Projections exclude any impact from potential M&A, which would be accretive.