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Leatt Corp (LEAT)·Q2 2025 Earnings Summary

Executive Summary

  • Q2 2025 revenue rose 61% year over year to $16.18M and gross margin expanded to 43%; diluted EPS was $0.18 as net income swung to $1.14M from a loss in Q2 2024, marking the fourth straight quarter of growth .
  • Sequentially, revenue improved from $15.37M in Q1 2025 and materially from $11.20M in Q4 2024, with broad-based strength across categories and channels; consumer direct grew 35% YoY and global dealer sales increased 45% .
  • Management highlighted ongoing sell-through and re-stocking momentum, while cautioning tariff uncertainty and rising working capital needs; liquidity strengthened with $15.73M cash and a 7.4x current ratio .
  • Post-quarter, the Board authorized a share repurchase program up to $750,000, a potential stock support catalyst alongside award wins at Eurobike for the 5.0 Gravity Helmet and 6.0 HydraDri Jacket .

What Went Well and What Went Wrong

What Went Well

  • Category breadth: Body armor +48%, helmets +117%, other products +65%, and neck braces +19% YoY, reflecting product innovation and expanding rider appeal .
  • Channel strength: Consumer direct +35% YoY; global dealer sales +45% YoY, with U.S. dealer direct returning to growth despite residual inventory headwinds .
  • Strategic validation: “The second quarter of 2025 was a fantastic quarter... fourth consecutive quarter of growth and third consecutive quarter of double-digit growth” — CEO Sean Macdonald .

What Went Wrong

  • Tariffs remain an overhang: Management flagged U.S. tariff risk potentially impacting inflation, uncertainty, and demand, requiring active cost-of-sales management and supplier/customer coordination .
  • Working capital intensity: Management expects working capital investments to rise as ordering patterns improve, implying potential future cash cycle elongation despite stronger liquidity .
  • Brick-and-mortar volatility: Although improving in Q2, U.S. MOTO/MTB dealers had been managing elevated inventories and industry turmoil, which could intermittently weigh on channel sell-through .

Financial Results

MetricQ4 2024Q1 2025Q2 2025
Revenue ($USD)$11,200,000 $15,367,864 $16,176,339
Diluted EPS ($USD)$(0.07) $0.17 $0.18
Gross Margin (%)41% 44% 43%
Net Income ($USD)$(446,459) $1,121,124 $1,138,734

YoY Q2 comparison:

MetricQ2 2024Q2 2025
Revenue ($USD)$10,078,695 $16,176,339
Diluted EPS ($USD)$(0.16) $0.18
Gross Profit ($USD)$3,921,413 $6,889,193
Net Income ($USD)$(1,057,363) $1,138,734

Segment/product category breakdown (Q2 2025 vs Q2 2024):

CategoryYoY Revenue Change ($USD)YoY Growth (%)
Body Armor (incl. upper body, limb, footwear)+$2,700,000 +48%
Helmets+$1,680,000 +117%
Other Products/Parts/Accessories (incl. apparel, goggles, components)+$1,600,000 +65%
Neck Braces+$110,000 +19%

Key operating metrics and liquidity:

KPIQ4 2024Q1 2025Q2 2025
Consumer Direct Sales YoY Growth (%)+15% +14% +35%
Dealer Sales YoY Growth (%)N/A−9% (U.S. brick-and-mortar) +45% (global dealer)
International Distributor Sales YoY Growth (%)+24% (Q4) +79% N/A
Cash & Cash Equivalents ($USD)$12,368,100 $12,699,342 $15,726,188
Current Ratio (x)5.2x 7.3x 7.4x
Cash Flow from Operations ($USD)$2,793,192 (FY 2024) $768,124 (Q1 2025) $4,114,440 (6M 2025)

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
RevenueH2 2025None providedManagement “expects [revenue] trend to continue as re-ordering patterns improve and filter through to revenues” Qualitative only
Working Capital InvestmentH2 2025None provided“We do expect working capital investments to increase in the coming periods... confident [in] sufficient liquidity to fuel this growth” Introduced qualitative
Tariff Impact2025None provided“Tariffs could impact inflation, uncertainty, and demand; working closely with suppliers and customers to mitigate” Qualitative risk reiteration
Capital Returns2025None providedShare repurchase program up to $750,000 authorized (expires 12/31/2025) New program

Earnings Call Themes & Trends

Note: No Q2 2025 earnings call transcript was available in our sources; the call was scheduled for Aug 7, 2025 (10:00 am ET) .

TopicPrevious Mentions (Q4 2024, Q1 2025)Current Period (Q2 2025)Trend
Inventory digestion / sell-throughQ4: International distributor sales +24% as inventory digested ; Q1: International distributors +79% as constrained ordering improved Continued sell-through and re-stocking dynamics fueling growth Improving through cycle
Tariffs / macroQ4: Geo-political/economic headwinds could impact demand ; Q1: Trade war risk to consumer confidence/inflation Tariffs could impact inflation and demand; active mitigation Persistent risk, managed
Product innovationQ4: Advancing ADV gear; multiple awards ; Q1: Strong ADV pipeline and helmet demand Multiple Eurobike awards; double-digit growth across all major categories Strengthening
Channel mixQ4: Consumer direct +15% YoY ; Q1: Consumer direct +14%, U.S. dealer −9% Consumer direct +35%, global dealer +45% (U.S. dealers stabilizing) Broadening growth
Liquidity / working capitalQ4: Cash $12.37M, current ratio 5.2x ; Q1: Cash $12.70M, CR 7.3x Cash $15.73M, CR 7.4x; expect higher working capital to support growth Improving liquidity, higher WC needs
Capital return—Share repurchase program up to $750k authorized New lever

Management Commentary

  • “The second quarter of 2025 was a fantastic quarter for Leatt, with strong revenue growth and profitability… fourth consecutive quarter of growth and third consecutive quarter of double-digit growth” — CEO Sean Macdonald .
  • “Gross profit as a percentage of sales continued to improve… increasing from 39% in the second quarter of 2024 to 43% this quarter” — CEO Sean Macdonald .
  • “Dealer direct MOTO and MTB sales in the U.S. were another highlight, returning to growth… participation and demand for our products remain strong” — CEO Sean Macdonald .
  • “We continue to manage our costs of sales actively and are working closely with suppliers and customers to mitigate tariff risks and costs as possible” — CEO Sean Macdonald .
  • “We were honored… with awards for our ability to consistently develop technical innovations… 5.0 Gravity Helmet [Gold] and 6.0 HydraDri Jacket [Performance Clothing]” — Dr. Christopher Leatt .

Q&A Highlights

  • No Q2 2025 earnings call transcript was available; the company hosted the call on Aug 7, 2025, with replay details provided, but no transcript was accessible in our sources .
  • Guidance clarifications and tone shifts cannot be assessed without transcript; management’s press release tone emphasized confidence in growth, innovation, and liquidity while acknowledging tariff risks .

Estimates Context

  • Wall Street consensus (S&P Global) for Q2 2025 EPS and revenue was unavailable; no active quarterly consensus counts were returned. As such, we cannot assess beats/misses versus consensus and recommend treating the strong YoY and sequential improvements as fundamental positives, independent of sell-side benchmarks. Values retrieved from S&P Global.*

Key Takeaways for Investors

  • Revenue momentum broadens: Q2 revenue +61% YoY to $16.18M with all major categories posting double-digit growth; helmets +117% signal strong innovation-led demand .
  • Margin and profitability inflection: GM at 43% and diluted EPS $0.18; net income $1.14M vs a prior-year loss underscores operating leverage and improved cost discipline .
  • Channel normalization: Consumer direct +35% and global dealer +45% indicate improving re-stocking and sell-through trends; U.S. brick-and-mortar stabilization is a key monitor .
  • Liquidity supports growth: Cash $15.73M, CR 7.4x, and 6M CFO $4.11M provide flexibility as working capital investment rises with demand recovery .
  • Policy risk remains: Tariff uncertainty could pressure costs and demand; management is actively mitigating via supplier/customer engagement—watch for incremental updates .
  • Capital return introduces support: $750k share repurchase program authorized post-quarter adds optionality for shareholder returns amid strengthening fundamentals .
  • Near-term setup: With sell-through momentum and product awards, the narrative favors continued revenue expansion; absent consensus, traders should focus on sequential growth cadence, channel KPIs, and any tariff developments as primary stock drivers .