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Brilliant Earth Group, Inc. (BRLT)·Q2 2025 Earnings Summary

Executive Summary

  • Q2 2025 net sales rose 3.3% YoY to $108.9M, beating S&P Global Street consensus of $103.8M by ~$5.1M; S&P “Primary EPS” came in at $0.01 vs consensus of -$0.01 (BRLT’s GAAP diluted EPS was -$0.01; adjusted diluted EPS was $0.01). Management raised full‑year net sales growth guidance to +2.5%–4% (from +1%–3%) and reiterated FY adjusted EBITDA margin of 3%–4% . Street values marked with * are from S&P Global.
    Actuals: revenue $108.9M ; GAAP EPS -$0.01 . Street consensus: revenue $103.77M*, “Primary EPS” -$0.0115*; “Primary EPS” actual 0.01*.
  • Profitability exceeded guidance: adjusted EBITDA $3.2M (2.9% margin) vs Q2 guide of -$1.5M to +$2.0M; gross margin 58.3% (down 250 bps YoY) as higher gold costs and tariffs were partially offset by pricing and procurement optimization .
  • Demand/KPIs were strong: total orders +18% YoY; engagement ring and wedding/anniversary band units up high-single digits; fine jewelry bookings +38% YoY; AOV -12.6% YoY to $2,074 on mix shift toward fine jewelry and sub‑$5K engagement rings .
  • Capital allocation and balance sheet catalysts: announced a one-time $0.25 per share dividend payable Sept 8, 2025; prepaid and terminated debt facility on Aug 4, leaving zero debt; net cash ended Q2 at $98.8M (+5% YoY) .
  • Outlook catalysts: Q3 2025 guide: net sales +8%–10% YoY; adjusted EBITDA $3M–$4.5M; management sees Q3-to-date acceleration and is using AI/ML to drive marketing and OpEx efficiency, while actively navigating new U.S. tariffs on India effective Aug 27 via supply diversification and dynamic pricing .

What Went Well and What Went Wrong

What Went Well

  • Outperformed guidance and Street: revenue beat with stronger orders and fine jewelry growth; adjusted EBITDA exceeded the high end of quarterly guidance .
    CEO: “significantly exceeding both Net Sales and Adjusted EBITDA expectations and our guidance” .
  • Mix-driven demand strength: total orders +18% YoY; high-single-digit unit growth in engagement and bands; fine jewelry bookings +38% YoY; improved showroom walk‑ins (+81% YoY retail orders) .
  • Capital strength and returns: net cash ~$98.8M; debt fully repaid; one-time $0.25 dividend announced, underscoring confidence and flexibility .

What Went Wrong

  • Gross margin compression: 58.3% (down 250 bps YoY) on higher gold and tariff impacts, partly offset by pricing/procurement gains .
  • AOV pressure: -12.6% YoY to $2,074 on mix shift to fine jewelry and relatively stronger sub‑$5K engagement rings; this weighed on adjusted EBITDA YoY (-41.9%) despite a beat vs guide .
  • Expense leverage mixed: employee costs and other G&A rose as a % of sales YoY (as adjusted), reflecting showroom expansion and prudent investments; adjusted EBITDA margin 2.9% vs 5.2% last year .

Financial Results

Quarterly progression

MetricQ4 2024Q1 2025Q2 2025
Net Sales ($M)119.5 93.9 108.9
Gross Margin (%)59.6% 58.6% 58.3%
GAAP Diluted EPS ($)0.02 -0.03 -0.01
Adjusted EBITDA ($M)6.9 1.1 3.2
Adjusted EBITDA Margin (%)5.8% 1.1% 2.9%

Q2 2025 vs prior year and vs Street

MetricQ2 2024Q2 2025 ActualQ2 2025 Street ConsensusSurprise
Revenue ($M)105.4 108.9 103.77*+$5.13M / +4.9% vs est
“Primary EPS” ($)0.03 0.01 -0.0115*+$0.0215

Notes: Street figures (*) from S&P Global; BRLT’s reported GAAP diluted EPS was -$0.01; “Primary EPS” used by S&P aligns with adjusted diluted EPS reported at $0.01 . Values marked with * retrieved from S&P Global.

KPIs and operating metrics

KPIQ4 2024Q1 2025Q2 2025
Total Orders58,357 45,535 52,535
AOV ($)2,048 2,062 2,074
Repeat Orders YoY+18% +13% +11%
Net (Loss) / Income ($M)2.6 -3.3 -1.1
Net Cash ($M, period-end)106 92.5 98.8

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Net Sales GrowthFY 2025+1% to +3% YoY +2.5% to +4% YoY Raised
Adjusted EBITDA MarginFY 2025~3% to 4% ~3% to 4% Maintained
Net Sales GrowthQ3 2025—+8% to +10% YoY New
Adjusted EBITDA ($)Q3 2025—$3M to $4.5M New
One-time DividendCapital return—$0.25/share; pay 9/8/25; record 8/22/25 New
Debt FacilityCapital structureOutstanding term loan Repaid $34.8M; facility terminated 8/4/25 Delevered to zero debt

Outlook sensitivity: FY and Q3 guidance reflect metal prices/tariffs as of Aug 5 and exclude impacts from subsequent announcements or price fluctuations .

Earnings Call Themes & Trends

TopicPrevious Mentions (Q4’24 and Q1’25)Current Period (Q2’25)Trend
AI/Technology & efficiencyUsing data-first pricing engine; planned AI to drive marketing leverage and OpEx efficiency Leveraging AI/ML to drive marketing leverage and OpEx efficiency; OpEx % improved; marketing -180 bps YoY Improving execution
Supply chain & tariffsLimited China exposure; nimble pricing/procurement to mitigate metals/tariffs New 25% U.S. tariff on India (eff. Aug 27); BRLT confident due to diversified supply chain and dynamic pricing New headwind, mitigated
Product performanceFine jewelry bookings surged in holidays; engagement units stabilizing; sub‑$5K strength Fine jewelry bookings +38% YoY; engagement & bands units up high-single digits; AOV down on mix Positive units; mix dilutive to AOV
Marketing efficiencyAchieved leverage in 2024, targeted more in 2025 Q2 marketing 24.1% of sales vs 25.9% prior year; -180 bps leverage Improving
Showrooms/omnichannel40 showrooms; plan 2–3 adds; try‑on bars 42 showrooms; Alpharetta opening; walk-in retail orders +81% YoY Expanding; strong traffic
Capital allocationBuilding net cash, modest buybacks One-time $0.25 dividend; paid off term loan; zero debt Shareholder-friendly actions

Management Commentary

  • “We outperformed the industry, gaining share… significantly exceeding both Net Sales and Adjusted EBITDA expectations and our guidance.” — Beth Gerstein, CEO
  • “Gross margin was primarily driven by higher gold costs and tariffs… partially offset by optimization of our pricing engine, procurement efficiencies…” — Jeff Kuo, CFO
  • “Our geographic supply chain diversity… nimble… dynamic pricing model… enable us to respond quickly to… tariffs.” — Jeff Kuo, CFO
  • “Fine jewelry bookings grew 38% year-over-year... Mother's Day… exceptionally strong.” — Beth Gerstein, CEO

Q&A Highlights

  • Fine jewelry vs margins/AOV: Mix shift to fine jewelry (lower ticket) and sub‑$5K engagement rings continues; management is strategically leaning into fine jewelry growth even as AOV declines .
  • Capital deployment: One-time dividend and debt payoff reflect strong cash generation; balance sheet remains robust to fund showrooms, tech/AI and brand investments .
  • Consumer and price tier: Strength below $1,000 in fine jewelry; engagement ring demand strongest under $5,000; repeat orders healthy .
  • Tariffs: New 25% tariff on India is industry-wide; BRLT expects to mitigate via supply diversification and dynamic pricing; most of Q3 will be complete by effective date .
  • Showroom uplift: Strong walk-in traffic; retail orders without appointments +81% YoY; fine jewelry fastest growth in showrooms .

Estimates Context

  • Q2 2025: Revenue $108.936M vs S&P consensus $103.767M*; S&P “Primary EPS” $0.01 vs -$0.0115*; indicates a clear beat on both revenue and S&P-tracked EPS. Actual GAAP diluted EPS was -$0.01 (company reported) . Values marked with * are from S&P Global.
  • Forward context (for orientation): FY 2025 S&P consensus revenue $437.767M* and “Primary EPS” $0.0575*; company raised FY net sales growth guide to +2.5%–4% and reiterated 3%–4% adjusted EBITDA margin, implying potential upward revisions if momentum sustains . Values marked with * are from S&P Global.

Values marked with * in this section were retrieved from S&P Global.

Key Takeaways for Investors

  • Positive demand momentum with clear share gains: orders +18% YoY and strong unit growth in engagement and bands offset AOV pressure from mix; Street beat and raised revenue guide should support sentiment .
  • Gross margin headwind manageable: gold and tariff pressures compressed GM YoY, but pricing/procurement tools and diversified sourcing underpin FY margin framework and EBITDAm guide .
  • Catalysts: one-time $0.25 dividend and debt payoff to zero leverage; Q3 guide embeds acceleration; brand amplification (Beyoncé, Madison Keys) and showroom expansion drive traffic .
  • KPI trajectory constructive: improving sequentially from Q1 to Q2 on sales, adjusted EBITDA, unit growth; net cash remains strong at ~$98.8M .
  • Watch items: tariff implementation (India, eff. Aug 27), metal price volatility, and AOV pressure from fine jewelry mix; management’s dynamic pricing and supply diversification are the key mitigants .
  • Near-term trading setup: Raised FY guide + special dividend + deleveraging provide supportive catalysts; any clarity on tariff impact and continued order momentum could extend outperformance .
  • Medium-term thesis: omnichannel and data-driven model, fine jewelry optionality, and marketing efficiency (AI/ML) support pathway to management’s medium-term targets (low-teens net sales growth, double-digit adj. EBITDA margin by 2027) .