LENDWAY, INC. (LDWY)·Q3 2025 Earnings Summary

Executive Summary

• Quarter ended September 30, 2025 (company’s fiscal Q1 2026 after switching to a June 30 year-end) showed pronounced seasonality: revenue fell to $5.15M, gross margin turned negative (−1.2%), and operating loss widened, reflecting an intentional shift of tulip stem production earlier in the year and higher input costs including tariffs .
• No Wall Street consensus estimates were available via S&P Global for revenue/EPS/EBITDA for this quarter, so no beat/miss determination can be made (S&P Global indicates no estimates on file).
• Management emphasized confidence heading into the peak spring season after purchasing bulbs and preparing growing programs; they expect revenue and gross margin to improve in the remaining quarters of FY 2026, while acknowledging tariff- and cost-related headwinds .
• Balance sheet shows seasonal build: working capital increased to $11.26M and total debt rose to $45.48M to fund bulb purchases; CFO used was $9.9M in the quarter, consistent with seasonal inventory positioning .

What Went Well and What Went Wrong

• What Went Well

  • Proactive positioning for peak season: “buying our bulbs and preparing our growing programs for the upcoming busy season,” with management “set [the Company] up to capture the full potential of the peak season ahead” .
  • Clear qualitative outlook: management expects revenue and gross margins to improve in the remaining quarters of FY 2026 as more bulbs are grown into stems for sale .
  • Liquidity planning consistent with seasonality: working capital increased to $11.26M and cash rose to $1.84M, supported by credit draws and new notes to fund bulb purchases .

• What Went Wrong

  • Revenue compression and margin pressure: net revenue declined to $5.15M (YoY down from $6.63M; QoQ down from $23.18M) and gross margin turned −1.2%, driven by fewer stems available to sell this quarter due to earlier growing for spring demand, higher bulb costs, and new tariffs on bulbs .
  • Profitability erosion: operating loss widened to $(3.04)M (vs $(1.35)M YoY), EBITDA loss increased to $(2.39)M (vs $(0.57)M YoY), and net loss from continuing ops widened to $(3.37)M (vs $(1.46)M YoY), with FX losses also rising .
  • Cash burn and leverage up: cash used in operations was $9.9M (vs $7.6M YoY) and total debt increased to $45.48M from $34.08M at June 30 to finance bulb inventory for the spring season .

Financial Results

• Income statement and cash flow (oldest → newest across columns)

• Component EBITDA (Bloomia vs corporate overhead)

• Balance sheet KPIs (oldest → newest across columns)

• Estimates vs Actuals (S&P Global)
  • S&P Global showed no consensus estimates for Q3 2025, so no beat/miss can be calculated. Actuals are shown above from company filings .

Guidance Changes

• Management provided qualitative commentary but no numeric guidance ranges.

No guidance was provided for OpEx, operating margin, OI&E, tax rate, or dividends in the quarter’s materials .

Earnings Call Themes & Trends

(No public call transcript was located; themes below are drawn from recent quarterly press releases.)

Management Commentary

• “This quarter reflects the natural seasonality of our business, but we’re encouraged by the momentum we’re building… we feel as confident as ever in our future.” — Mark Jundt, Chairman & Co-CEO .
• “This quarter is an important quarter in terms of buying our bulbs and preparing our growing programs for the upcoming busy season… set ourselves up to capture the full potential of the peak season ahead.” — Dan Philp, Co-CEO .
• Prior quarter color: “record-breaking Mother’s Day sales… exceeded our [market share] goal” — Dan Philp .

Q&A Highlights

• Not applicable; analysis is based on the company’s press release as no public call transcript was available in the period’s materials .

Estimates Context

• S&P Global showed no Wall Street consensus for Q3 2025 EPS, revenue, or EBITDA; therefore, no beat/miss analysis can be determined for this quarter (S&P Global indicates no estimates on file).
• Given the deliberate shift of stems to spring and current tariff/cost dynamics, sell-side models (if/when available) may need to emphasize heavier seasonality into the March/June quarters and incorporate higher bulb cost/tariff assumptions with partial price pass-through .

Key Takeaways for Investors

• The quarter’s weak prints are consistent with deliberate seasonality management: earlier stem growing for spring and fewer stems in the September quarter, plus tariff-driven cost pressure turning gross margin negative; management expects revenue and margin to improve in subsequent quarters as bulbs are converted to stems .
• Profitability deterioration (EBITDA loss $(2.39)M vs $(0.57)M YoY) and wider operating loss reflect lower volume and higher input costs; FX losses also weighed on results .
• Seasonal working capital expansion and higher revolver usage increased debt to $45.48M; monitor covenant headroom, borrowing capacity, and interest expense into the spring ramp .
• Pricing actions are underway to mitigate tariffs and bulb cost inflation, but the degree and timing of pass-through vs retailer elasticity remain key for margin recovery .
• The near-term trading setup hinges on execution into the February–May peak (Valentine’s, Easter, Mother’s Day) following the inventory build; positive spring updates could be a catalyst to reset sentiment after a seasonally weak quarter .
• With no consensus estimates on file, position sizing should reflect higher uncertainty; watch for any formal guidance, additional financing updates, and evidence of gross margin stabilization as bulbs move through the pipeline .

References: Company 8-K and press releases covering Mar 31, 2025 , Jun 30, 2025 , and Sep 30, 2025 .