Executive Summary

Q2 FY2025 revenue was $7.73M, down 8.2% year-over-year due to holiday timing shifting Cyber Monday into Q3; gross margin remained strong at 71.1%, and diluted EPS was $0.08 versus $0.05 in the prior year .
Operating leverage was mixed: OpEx rose to 62.4% of sales from 59.3% YoY; Adjusted EBITDA fell to $1.01M (13.1% margin) from $1.43M (16.9% margin), reflecting lower volumes and fixed-cost absorption .
Management emphasized multi-channel expansion (over 1,000 retail locations, including Bass Pro Shops, Scheel’s, select Walmart) and product innovation (successor to TRACKR earmuffs slated for 1H CY2025), supported by $5.2M cash and no anticipated external funding needs .
Shares rose ~0.4% since the Q2 release, with narrative supportive of distribution breadth and product pipeline despite near-term margin compression .

What Went Well and What Went Wrong

Retail footprint and channel diversification: “We are in over 1,000 retail locations, including Bass Pro Shops, Scheel’s, and select Walmart stores,” with plans to expand by “an order of magnitude” while maintaining margin discipline .
Sustained gross margin quality: Gross profit margin was 71.1% in Q2, demonstrating premium positioning despite promotional activity and timing effects .
Strong liquidity and self-funded growth: Cash increased to $5.2M at Q2-end, enabling internal financing of growth initiatives without reliance on external markets .

Top-line decline and EBITDA compression: Revenue fell 8.2% YoY to $7.73M; Adjusted EBITDA decreased to $1.01M and margin contracted to 13.1% from 16.9% .
Operating expense intensity: OpEx rose to 62.4% of sales vs. 59.3% in the prior year, pressuring operating income (down to $0.67M from $1.26M) .
Holiday timing headwind: Management noted the Black Friday/Cyber Monday shift into Q3 versus Q2 last year, pushing DTC sales recognition out of the quarter and impacting Q2 comparability .

Metric	Q1 FY2025 (Aug 31, 2024)	Q2 FY2025 (Nov 30, 2024)	Q3 FY2025 (Feb 28, 2025)
Revenue ($USD Millions)	$5.85	$7.73	$6.92
Gross Profit ($USD Millions)	$4.15	$5.50	$4.97
Gross Margin (%)	71.0%	71.1%	71.7%
Operating Expenses ($USD Millions)	$4.29	$4.83	$4.38
OpEx as % of Sales (%)	73.4%	62.4%	63.3%
Operating Income ($USD Millions)	-$0.14	$0.67	$0.58
Net Income ($USD Millions)	-$0.11	$0.63	$0.58
Diluted EPS ($)	-$0.02	$0.08	$0.07
Adjusted EBITDA ($USD Millions)	N/A	$1.01	$0.89
Adjusted EBITDA Margin (%)	N/A	13.1%	12.9%
Cash & Equivalents ($USD Millions)	$4.15	$5.21	$4.74
Cash From Operations (Period-to-Date) ($USD Millions)	$0.90 (Q1)	$1.90 (six months)	$1.73 (nine months)

Metric	Q2 FY2024 (Nov 30, 2023)	Q2 FY2025 (Nov 30, 2024)	YoY Change
Revenue ($USD Millions)	$8.42	$7.73	-8.2%
Gross Margin (%)	74.3%	71.1%	-320 bps
OpEx as % of Sales (%)	59.3%	62.4%	+310 bps
Operating Income ($USD Millions)	$1.26	$0.67	-46.7%
Net Income ($USD Millions)	$1.02	$0.63	-37.7%
Diluted EPS ($)	$0.05	$0.08	+$0.03
Adjusted EBITDA ($USD Millions)	$1.43	$1.01	-28.9%
Adjusted EBITDA Margin (%)	16.9%	13.1%	-380 bps

Segment breakdown (if disclosed): Not disclosed in filings or press release exhibits for Q2 FY2025 .

KPIs

KPI	Q1 FY2025	Q2 FY2025	Q3 FY2025
Weighted Avg Diluted Shares	6,172,379	8,168,657	8,202,402
Retail Locations	~1,000+	~1,000+	~1,000+ (continued expansion)
Adjusted EBITDA Margin (%)	N/A	13.1%	12.9%
Cash & Equivalents ($M)	$4.15	$5.21	$4.74

Metric	Period	Previous Guidance	Current Guidance	Change
Company revenue	FY2025/Q3 run-rate	None provided	None provided	Maintained: No formal guidance
Gross margin	FY2025	None provided	None provided	Maintained: No formal guidance
OpEx	FY2025	None provided	“Financial discipline” focus (qualitative)	Maintained (qualitative)
Product launch (TRACKR successor)	1H CY2025	Not previously disclosed as dated guidance	Launch expected 1H CY2025	New timeline noted
Funding	FY2025	Not previously stated	“No anticipated reliance on external market funding”	New qualitative guidance

No numeric ranges were provided; management commentary was directional.

Earnings call transcript for Q2 FY2025 was not available in source materials; themes are derived from press releases.

Topic	Previous Mentions (Q1 FY2025)	Previous Mentions (Q3 FY2025)	Current Period (Q2 FY2025)	Trend
Distribution expansion	Expanding into new channels, diversifying business mix	Multi-channel growth; deeper retail distribution; new geographies	Over 1,000 retail locations; plan to expand by an order of magnitude	Accelerating
DTC holiday timing	Not highlighted	Benefited from Cyber Monday timing shift into Q3	Timing shift moved sales out of Q2 into Q3	Neutral (calendar effect)
Product innovation	Ongoing investment in compelling new products	Emphasis on core business and execution	TRACKR successor slated for 1H CY2025; maintain tech leadership	Positive pipeline
Tariffs/supply chain strategy	Macro/trade policy risks flagged generically	Accelerating supply chain transition; plan domestic manufacturing leadership relocation	No explicit tariff update; focus on distribution/product	Building resilience (noted in Q3)
Funding/liquidity	Cash increased; operations funding noted	Cash $4.7M; positive adj. EBITDA, stronger OCF	Cash $5.2M; no external funding anticipated	Strengthening liquidity

“We are in over 1,000 retail locations, including Bass Pro Shops, Scheel’s, and select Walmart stores… we would like to expand our retail presence by an order of magnitude… A core corporate value at AXIL is achieving efficient profitability” — Jeff Toghraie, CEO .
“We expect to establish additional international distribution agreements… and launch the successor series to our TRACKR earmuffs in the first half of calendar year 2025” .
“Our solid cash position of $5.2 million at the end of 2Q25 enables us to internally finance our strategic growth plans, with no anticipated reliance on external market funding” .
Non-GAAP framework: Adjusted EBITDA adds back stock-based compensation; Q2 adjustments included $304.6K SBC; Q2 Adjusted EBITDA was $1.01M (13.1% margin) versus $1.43M (16.9%) last year .

Q2 FY2025 earnings call transcript was not available in our documents corpus; as such, Q&A highlights and any call-based guidance clarifications cannot be provided.

S&P Global consensus estimates for Q2 FY2025 could not be retrieved due to API rate limits; therefore, estimate comparisons and beat/miss determinations are unavailable at this time. Values retrieved from S&P Global are unavailable.

Near-term revenue softness was largely calendar-driven; expect partial catch-up in Q3 from Cyber Monday timing shift, as indicated by subsequent Q3 results and commentary .
Multi-channel strategy is gaining traction; expanding retail presence (>1,000 locations) should diversify demand beyond online and support more stable volume over time .
Margin profile remains premium (≈71% GM), but operating expense intensity and lower volumes compressed EBITDA; watch OpEx discipline and volume recovery to restore operating leverage .
Liquidity is solid ($5.2M cash, positive OCF), with management targeting internal funding of growth; reduces financing risk amid macro uncertainty .
Product catalyst: TRACKR successor in 1H CY2025 could drive upgrade cycles and retail sell-through; monitor launch execution and consumer reception .
Macro/trade: Company flagged tariff/supply chain actions in Q3; ongoing transition and potential domestic manufacturing could mitigate future cost volatility and improve control over COGS .
Trading setup: With estimate color unavailable, narrative hinges on Q3 follow-through, retail expansion updates, and product launch milestones; price reaction modestly positive post-Q2 .