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Bespoke Extracts, Inc. (BSPK)·Q2 2025 Earnings Summary

Executive Summary

  • Q2 revenue rose 40.4% year over year to $0.391M and 48.4% sequentially, driven by record pre-roll production and new products; gross margin expanded 1,250 bps YoY to 50.6% and net loss narrowed to $0.205M .
  • Management guided Q3 revenue to $0.425M–$0.450M, citing momentum in Fresh Joints, Doobskis, Dutch Blunts, and third-party processing; they also expect further gross margin improvement in Q3 vs. Q2 .
  • Q2 operating efficiency improved (smaller operating loss) as SG&A remained contained; interest expense rose with higher secured debt balances, but overall net loss improved YoY and QoQ .
  • Liquidity and solvency remain key risks: cash ended Q2 at $1.4k, working capital deficit of ~$1.33M, and “substantial doubt” going-concern language; pending legal matters add overhang .

What Went Well and What Went Wrong

What Went Well

  • Revenue acceleration and mix: Q2 sales increased 40.4% YoY and 48.4% QoQ, supported by record pre-roll output and strong uptake of Doobskis and Dutch Blunts alongside continued Fresh Joints growth .
  • Margin expansion: Gross margin reached 50.6% (+1,250 bps YoY) on cost efficiencies in raw materials, packaging, and labor despite higher sampling for product launches .
  • Positive management momentum: “We produced and shipped a record number of pre-rolls during the quarter,” and achieved “strong market share gains in the Colorado pre-roll segment,” positioning for sustained growth .

What Went Wrong

  • Liquidity constraints and going-concern: Cash of $1.4k, significant current liabilities, and ongoing operating cash burn prompted “substantial doubt” about the company’s ability to continue as a going concern .
  • Higher interest burden: Interest expense rose sharply to $43.1k in Q2 (vs. $10.7k in Q2’24) amid added senior secured notes, partially offsetting operating improvements .
  • Legal overhang: A vendor lawsuit (~$35.6k) and a threatened employment-related claim could be distracting and, if adverse, materially affect results; amounts reserved for the vendor claim .

Financial Results

MetricQ2 2024Q1 2025Q2 2025
Revenue ($)$278,163 $263,159 $390,553
Gross Profit ($)$106,117 $110,779 $197,499
Gross Margin (%)38.1% 42.1% 50.6%
Total Operating Expenses ($)$356,360 $356,117 $359,457
Operating Income (Loss) ($)$(250,243) $(245,338) $(161,958)
Interest Expense ($)$10,652 $15,183 $43,148
Net Income (Loss) ($)$(260,895) $(260,521) $(205,106)
Diluted EPS ($)$(0.03) $(0.02) $(0.02)
Diluted Shares (Basic & Diluted)10,168,220 11,153,220 11,153,220

KPIs and Operating Metrics

KPIQ2 2024Q1 2025Q2 2025
Joints Produced (units)102,148 113,428 177,995
Cash and Equivalents ($)—$30,365 $1,363
Accounts Receivable, net ($)—$36,757 $101,007

Notes: Company operates as a single reportable segment (no segment table applicable) .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent Guidance / ActualChange
Revenue ($)Q2 2025>$385,000 (guided on July 1) $390,553 actual Achieved/Exceeded guidance
Gross MarginQ2 2025“Improvement” vs prior quarter (qualitative) 50.6% actual Improved YoY and QoQ
Revenue ($)Q3 2025—$425,000–$450,000 New guidance
Gross MarginQ3 2025—“Improved vs Q2 2025” (qualitative) New qualitative guide

Earnings Call Themes & Trends

TopicPrevious Mentions (Q-2 and Q-1)Current Period (Q2 2025)Trend
Product performanceRebrand to The Joint Company; launched Doobskis & Dutch Blunts; Fresh Joints growth despite 8.8% CO market contraction in Q1 .Record pre-roll output; continued Fresh Joints growth; meaningful penetration of Doobskis & Dutch Blunts .Improving (volume & mix) .
Cost efficiency & marginsQ1 noted efficiencies in raw materials, packaging, labor; guided gross margin improvement .Gross margin 50.6% (+1,250 bps YoY) on sustained cost savings; guiding further Q3 improvement .Improving .
Third-party processingQ1 emphasized scaled white-label/processing .“Strong growth” in third-party processing with new contracts .Improving .
Macro/Colorado marketQ1 cited 8.8% CO market contraction YoY .“Challenging Colorado cannabis market” backdrop persists .Mixed (macro headwinds persist) .
Regional/expansionExploring other states (e.g., MA, NY) .Continues exploring MA/NY expansion .Stable (early-stage) .
Regulatory/legalNo specific calls in Q1 filings beyond routine risk disclosures .Vendor lawsuit (~$35.6k) and threatened ex-employee litigation; company will defend claims .Deteriorating (added legal noise) .
R&D executionQ1 R&D $8.6k (new product development) .No R&D line in Q2 table; focus on production scaling .Stable/low spending .

Management Commentary

  • “Second quarter revenue was $390,553… Gross margin of 50.6%… As we continue the Colorado expansion of The Joint Company, we produced and shipped a record number of pre-rolls during the quarter.” — Michael Feinsod, CEO .
  • “Strong market share gains in the Colorado pre-roll segment… we remain confident in our team’s capabilities and strategic approach to thrive amid ongoing market challenges.” — President Hunter Garth .
  • Q1 context: “Rebranded to The Joint Company and introduced Doobskis and Dutch Blunts… Despite an 8.8% contraction in Colorado’s regulated cannabis market… we achieved year-over-year growth.” — CEO .

Q&A Highlights

  • Not available in company materials reviewed for Q2 2025; the quarter’s disclosures consisted of the 10‑Q and press release .

Estimates Context

  • Wall Street consensus (S&P Global) for Q2 and Q3 2025 revenue and EPS was unavailable for BSPK at the time of this analysis; as a result, no beat/miss vs. consensus can be computed. If/when coverage emerges, consensus should incorporate Q3 revenue guidance of $0.425M–$0.450M and implied margin improvement .

Key Takeaways for Investors

  • Execution is improving: sequential revenue growth (+48.4% QoQ) and gross margin expansion to 50.6% indicate better throughput and mix; unit production hit a record, validating the TJC brand rollout and new SKUs .
  • Guidance implies continued momentum: Q3 revenue outlook of $0.425–$0.450M and qualitative gross margin improvement suggest another quarter of sequential gains if execution holds .
  • Balance sheet is the gating factor: de minimis cash ($1.4k), significant current liabilities, and going-concern language point to financing needs that could dilute equity or constrain growth until addressed .
  • Interest burden rising: higher secured debt drove Q2 interest expense to $43.1k; managing financing costs will be important to translate operating gains into bottom-line improvement .
  • Legal noise present: a vendor suit (~$35.6k) and a threatened employment claim add risk, though amounts are modest; monitor for resolution and cash impacts .
  • Watch KPIs: pre-roll units produced, third‑party processing wins, and gross margin trajectory are the clearest real-time indicators as the company scales output and mix .

Supporting detail and disclosures:

  • Q2 press release with financial highlights and operational metrics .
  • Q2 10‑Q with full financial statements, liquidity, and going‑concern discussion .
  • Q1 press release and 10‑Q for trend and product/macro context .