Turning Point Brands (TPB) Q2 2025 earnings summary

Executive summary

• Q2 2025 net sales rose 25.1% year-over-year to $116.6 million, driven by a 651% surge in Modern Oral sales to $30.1 million, now 26% of total revenue, and strong Stoker's segment growth, while Zig-Zag sales declined.

• Adjusted EBITDA increased 14.8% to $30.5 million, and net income attributable to shareholders rose 11% to $14.5 million.

• Gross margin improved to 57.1%, up from 54.1% year-over-year, reflecting favorable product mix and higher-margin contributions.

• The company completed the divestiture of its CDS segment, now reported as discontinued operations.

• Modern Oral products were the primary growth driver, offsetting declines in Zig-Zag cigar and paper products.

Financial highlights

• Q2 2025 net sales: $116.6 million (+25.1% YoY); six months: $223.1 million (+26.5% YoY).

• Adjusted EBITDA for Q2 2025: $30.5 million (+14.8% YoY); six months: $58.2 million (+13.6% YoY).

• Gross profit for Q2 2025: $66.6 million (+32.2% YoY); gross margin: 57.1%.

• SG&A expenses increased to $40.3 million, driven by Modern Oral expansion and higher freight and marketing costs.

• Free cash flow for the quarter was $11.2 million; cash on hand at June 30, 2025 was $109.9 million.

Outlook and guidance

• Full-year 2025 Adjusted EBITDA guidance raised to $110.0–114.0 million from $108.0–113.0 million.

• Modern Oral (nicotine pouch) sales guidance increased to $100.0–110.0 million for the year.

• Effective income tax rate expected to be 23%–26% going forward.

• CapEx for 2025 budgeted at $4–$5 million, with an additional $3–$5 million for Modern Oral PMTAs.

• Company is evaluating the impact of new U.S. tax legislation (OBBBA) signed in July 2025.