FITLIFE BRANDS, INC. (FTLF)·Q3 2025 Earnings Summary

Executive Summary

• Q3 2025 revenue rose 47% year over year to $23.5M, driven primarily by the Irwin Naturals acquisition; gross margin compressed to 37.2% (38.9% ex non-cash inventory step-up) and net income fell to $0.9M as M&A costs, lower margins, and a tax true-up weighed on EPS ($0.09 diluted) .
• Versus S&P Global consensus, revenue was essentially in-line, but EPS missed materially and EBITDA was modestly below: Revenue $23.5M vs $23.9M*, Adjusted EBITDA $3.67M vs $3.78M*, EPS $0.09 vs $0.27*; miss largely reflects Irwin-related non-recurring costs and weaker gross margins, including whey inflation and mix .
  Values retrieved from S&P Global.*
• Operationally, MusclePharm’s wholesale-led growth (+55% YoY) came with margin pressure (19.8% GM) amid heavy promotions and whey cost inflation (forward buys up to $6.30/lb with further Q2’26 inflation risk); management is preparing price increases effective Jan 1 to mitigate .
• Irwin integration is tracking: $6.8M revenue in ~7.5 weeks, GM 32.2% (37.9% ex step-up); Amazon channel launched Oct 11 and is running at $10k/day ($3.6M annualized) with only 116/242 listings active, supporting an improving margin mix and revenue ramp into Q4 and 2026 .
• Near-term watch items: emerging broad consumer softness (Amazon subscription count deceleration since September; softer October), remaining ~$0.65M inventory step-up amortization through Q4, and term loan amortization beginning late December (deleveraging path) .

What Went Well and What Went Wrong

• What Went Well

  • MusclePharm delivered strong organic growth: revenue +55% YoY with wholesale +112% as new distribution and stronger sell-in supported top-line expansion .
  • Irwin is off to a solid start: ~$6.8M revenue (95% wholesale) in ~7.5 weeks; GM would have been 37.9% excluding inventory step-up; Amazon ramp now ~$10k/day with only 116/242 listings live, implying run-rate upside as FitLife becomes primary seller .
  • Legacy FitLife ex-MRC grew: wholesale +3% and online +14%, highlighting resilient non-MRC brand performance and continued channel strength online .

• What Went Wrong

  • Margin compression: consolidated GM fell to 37.2% (from 43.8%), driven by Irwin’s lower wholesale mix, MusclePharm promotions, and whey inflation; contribution margin also declined to 31.4% (from 37.0%) .
  • EPS declined to $0.09 (from $0.21) on M&A expenses ($0.82M), inventory step-up amortization ($0.39M), and a sizable tax true-up; EBITDA held better but still trailed expectations modestly .
  • Consumer softness: management cited a cross-brand slowdown beginning in September, including first-time declines in Amazon subscribers (net basis) and slower wholesale replenishment, adding uncertainty to near-term sell-through .

Financial Results

Headline vs Estimates (Q3 2025)

Values retrieved from S&P Global.*

P&L Trend

Channel Mix

Brand Grouping Breakdown (Q3 2025)

KPIs and Non-GAAP Adjustments

• Adjusted EBITDA (Q3): $3.79M; add-backs include M&A ($0.82M), stock comp ($0.13M), inventory step-up amortization ($0.39M), write-off deferred financing costs ($0.05M) .
• Inventory step-up amortization remaining ~ $0.65M to flow through Q4; then normalized GM thereafter .
• Subscribers: historically ~104k and ~30% of online revenue as of mid-May; management noted first modest (≈1%) net subscriber declines since September (Amazon) .

Guidance Changes

Earnings Call Themes & Trends

Management Commentary

• “MusclePharm organic revenue [up] 55%… Legacy FitLife organic revenue excluding MRC [up] 8%… margins… lower… primarily due to increasing protein costs, which we are currently choosing to absorb as we continue to fight for increased distribution and sell-through.”
• “Irwin is also off to a good start… Our first sale of Irwin products on Amazon occurred on October 11, 2025… currently around $10,000 per day… As other sellers run out of inventory, we expect to become the primary seller on all of our listings.”
• “Our primary concerns right now relate to the increasing cost of whey protein… and general consumer weakness… consumer sentiment benchmarks being close to all-time lows.”

Q&A Highlights

• Inventory step-up: ~$1.045M total; ~$0.39M recognized in Q3; ~$0.65M to flow through Q4, then “numbers will be clean.”
• Whey costs and pricing: Forward-bought for Q1’26 at up to $6.30/lb, working on Q2’26 (“starting with a seven”); price increases communicated for Jan 1 to offset .
• Subscriptions: Historically 20–25% of online pre-Irwin; Irwin had near-zero; recent net subscriber declines ~1% (Amazon) flagged as unusual; no granular add/cancel data provided by Amazon .
• Irwin Amazon strategy: Pulled wholesale from primary 3P seller (~$0.5M/quarter) to internalize higher-margin retail; Amazon run-rate ~$7–9M potential across listings over time once FitLife is primary seller on all SKUs .
• Packaging friction: Amazon requires bubble wrap for glass bottles; considering plastic for high-volume SKUs to reduce prep costs longer term .
• Taxes: Elevated Q3 effective rate due to 2024 return true-up; long-term steady-state ~24–25% .

Estimates Context

• Q3 2025 vs S&P Global consensus: Revenue $23.485M vs $23.875M* (slight miss); Adjusted EBITDA $3.666M vs $3.780M* (slight miss); Diluted EPS $0.09 vs $0.27* (material miss) .
  Values retrieved from S&P Global.*
• Likely estimate revisions: EPS/EBITDA for near-term quarters may be trimmed for whey inflation, inventory step-up through Q4, and softer consumer commentary; potential partial offset in 2026 from MusclePharm pricing actions and Irwin Amazon ramp .

Key Takeaways for Investors

• EPS miss was largely driven by transitory factors (Irwin transaction expenses, inventory step-up, tax true-up) alongside mix and input cost pressure; EBITDA held up better, aided by Irwin contribution .
• Watch January 1 pricing on MusclePharm to gauge the balance between margin recovery and volume retention under elevated whey costs; mgmt sees room to offset some inflation .
• Irwin provides structural upside: Amazon internalization and SG&A/supply chain efficiencies can lift margins; ramp evidence (>$3.6M annualized on 116/242 listings) suggests 2026 tailwinds .
• Consumer softness is the key near-term macro risk, with signs across channels; October was softer than expected—track Q4 velocity and wholesale replenishment patterns closely .
• Channel mix is shifting back toward wholesale (56% of revenue in Q3), which supports top-line but can compress gross margins versus online-heavy quarters; mix should improve as Irwin retail ramps .
• Balance sheet leverage stepped up post-acquisition (term loan and revolver usage), but amortization begins late Q4; FCF conversion and debt paydown cadence will be important monitors .
• For positioning, emphasis on integration execution (Irwin), pricing power in sports nutrition, and stabilization of MRC traffic should drive medium-term multiple support if EBITDA inflects in 2026 .

Notes and sources: All figures and quotes cited from FitLife’s Q3 2025 8-K and press release, and Q3 2025 earnings call transcript; prior-quarter references from Q2/Q1 filings and calls. Specific citations inline. .