Executive Summary

Q2 2021 revenue was $14.9M, up 14% sequentially vs Q1, but down year-over-year; gross margin compressed to 14.6% due to sharp increases in protein prices, partially offset by a 15% decline in operating expenses .
The quarter turned to a net loss of $2.3M (-$0.07 EPS) vs a small profit in Q1 2021 and a $0.3M loss in Q2 2020; Adjusted EBITDA was -$0.9M vs +$0.5M in Q1 and +$0.7M in Q2 2020 .
Management confirmed August 2021 launch of MP Performance Energy and reiterated a $30M annual sales target for MP and FitMiss energy products in 2023, highlighting brand leverage and distributor readiness as growth catalysts .
Estimates comparison was unavailable: S&P Global consensus EPS and revenue data could not be retrieved due to missing CIQ mapping for MSLPQ; no beat/miss assessment can be made relative to Street expectations (S&P Global consensus unavailable).

What Went Well and What Went Wrong

What Went Well

Sequential topline acceleration: “we were able to finish the second quarter with a 14% increase in net revenue over the first quarter of 2021” .
Cost discipline: Operating expenses declined ~$0.7M (15%) in Q2; management has focused on cost containment as part of its turnaround strategy .
Energy beverages expansion: “officially rollout MP Performance Energy drink later this month… believe… $30 million of MP and FitMiss Energy product sales in 2023” .

What Went Wrong

Gross margin compression: GM fell to 14.6% in Q2 2021 from 28.1% in Q1 and 29.3% in Q2 2020 due to protein price inflation, pressuring profitability .
Profitability reversal: Net income of $94K in Q1 shifted to a Q2 net loss of $2.3M; Adjusted EBITDA moved from +$0.5M in Q1 to -$0.9M in Q2 .
Limited visibility on consensus positioning: Street estimates were not available via S&P Global for comparison, constraining external context on the magnitude of the miss/beat (S&P Global consensus unavailable).

Financial Results

Quarterly Comparison (oldest → newest)

Metric	Q4 2020	Q1 2021	Q2 2021
Revenue ($USD Millions)	$15.13	$13.12	$14.91
Gross Margin %	31.7%	28.1%	14.6%
Total Operating Expenses ($USD Millions)	$3.74	$3.42	$3.92
Net Income (Loss) ($USD Millions)	$2.82	$0.09	$(2.25)
Diluted EPS ($USD)	$0.06	$0.00	$(0.07)
Adjusted EBITDA ($USD Millions)	$0.93	$0.48	$(0.88)

YoY Comparison (Q2 2020 vs Q2 2021)

Metric	Q2 2020	Q2 2021
Revenue ($USD Millions)	$16.99	$14.91
Gross Margin %	29.3%	14.6%
Total Operating Expenses ($USD Millions)	$4.63	$3.92
Net Income (Loss) ($USD Millions)	$(0.25)	$(2.25)
Diluted EPS ($USD)	$(0.01)	$(0.07)
Adjusted EBITDA ($USD Millions)	$0.70	$(0.88)

KPIs and Balance Sheet Snapshot

KPI	Dec 31, 2020	Jun 30, 2021
Cash and Equivalents ($USD Millions)	$2.00	$1.02
Accounts Receivable, Net ($USD Millions)	$7.49	$5.56
Inventory ($USD Millions)	$1.03	$1.56
Line of Credit ($USD Millions)	$0.74	$2.46
Obligation under Secured Borrowing ($USD Millions)	$7.10	$5.30
Total Liabilities ($USD Millions)	$37.42	$37.21
Stockholders’ Deficit ($USD Millions)	$(24.42)	$(26.27)

Note: Q2 2021 sequential revenue growth was 14% vs Q1 2021 per management commentary .

Segment Breakdown

The company does not provide segment-level revenue/margin breakdowns in the Q2 2021 materials .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Energy Beverage Sales (MP + FitMiss)	FY 2023	None disclosed	$30M annual sales target	Introduced
Product Launch Timing	Aug 2021	Summer 2021 expected (Q1 PR)	“Official rollout later this month” (Aug)	Confirmed timing
Profitability Outlook	N/A	Turnaround focus, profitability achieved in FY20/Q4	“Well positioned to return to profitability when the protein market normalizes”	Qualitative reaffirmation

No explicit numeric guidance was provided for Q3/FY2021 revenue, margins, OpEx, OI&E, tax rate, or dividends in Q2 materials .

Earnings Call Themes & Trends

(Transcript for Q2 2021 was not retrievable due to database inconsistency; themes derived from the official Q2 press release and prior quarter releases.)

Topic	Previous Mentions (Q4 2020 and Q1 2021)	Current Period (Q2 2021)	Trend
Supply chain and protein price inflation	Profitable FY20/Q4 despite Covid; omni-channel expansion and cost reductions	Protein prices “significant increases” reducing gross margins; supply chain challenges persist	Deteriorated GM; ongoing headwinds
Cost containment/OpEx discipline	OpEx down ~$6.8M in FY20; continued focus on profitability	Operating expenses declined ~$0.7M (15%) in Q2	Continued discipline
Energy beverage expansion	Announced expansion into new categories; set to launch in Summer 2021 with a major distributor	MP Performance Energy official rollout in Aug; $30M 2023 sales target (MP + FitMiss)	Executing; clear revenue ambition
Omni-channel/customer reach	Increased online penetration with largest customers (FY20/Q4)	Reinforced brand strength and distribution via signed energy distributors	Broadening channels
Profitability trajectory	FY20 “turned a profit” first time; Q1 2021 profit despite shortages	Q2 net loss; management expects return to profitability as protein prices normalize	Near-term pressure; conditional recovery

Management Commentary

Ryan Drexler (CEO): “I’m encouraged… we were able to finish the second quarter with a 14% increase in net revenue over the first quarter of 2021… we experienced significant increases in protein prices… which reduced our gross margins, however this was partially offset by a 15% reduction in operating expenses. With the strength of our brand… we are well positioned to return to profitability when the protein market normalizes.”
Ryan Drexler (CEO): “We are excited to officially rollout MP Performance Energy drink later this month… we believe… $30 million of MP and FitMiss Energy product sales in 2023… This is only the beginning for our Company’s expansion…”
Sabina Rizvi (President & CFO, Q1 context): “We have delivered positive profit for the last two quarters… the turnaround strategy… to dramatically restructure MusclePharm and increase our focus on profitability is working… expansion into the energy beverage market is only the beginning…”
Ryan Drexler (FY20/Q4 context): “We executed at the highest level… turning a profit for the first time in our Company’s history. We reduced operating expenses by 29%, expanded our gross margins to over 30% and strategically expanded our omni-channel strategy…”

Q&A Highlights

The Q2 2021 earnings call transcript could not be accessed due to a document retrieval inconsistency; thus specific Q&A themes, analyst questions, and management clarifications are not available for synthesis (earnings call transcript unavailable) .

Estimates Context

S&P Global consensus estimates for EPS and revenue (Q4 2020, Q1 2021, Q2 2021) were unavailable due to missing CIQ mapping for MSLPQ in the SPGI database; therefore, we cannot provide vs-consensus comparisons or assess beats/misses for Q2 2021 (S&P Global consensus unavailable).

Key Takeaways for Investors

Sequential demand improved: revenue grew 14% vs Q1, indicating near-term momentum despite supply constraints .
Margin pressure is the key swing factor: gross margin fell to 14.6% on protein cost inflation; watch for normalization to drive a return to profitability per management .
Energy beverage launch is a tangible growth catalyst: August rollout with eight distributors and a $30M 2023 sales goal provides a new revenue vector beyond core protein powders .
Cost discipline remains a support: OpEx declined ~15% in Q2; maintaining this trajectory can cushion margin volatility .
Balance sheet tighter liquidity: cash decreased to ~$1.0M at quarter-end; monitor working capital and financing lines while scaling energy beverages .
Without consensus estimates, trade setups hinge on operational milestones: near-term focus on successful energy launch and margin recovery; medium-term thesis ties to omni-channel execution and category expansion .
Cross-quarter narrative: from FY20/Q4 profitability to Q1 profitability despite shortages, then Q2 margin shock—stock likely to be sensitive to protein input cost trends and sell-through of new energy SKUs .

MusclePharm Corp (MSLPQ)·Q2 2021 Earnings Summary